I

103D CONGRESS

2D SESSION H. R. 5271

To amend the Small Business Act to make modifications to the small business

and capital ownership development program, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

OCTOBER 7, 1994

Mr. MFUME (for himself, Mr. CONYERS, Mr. FLAKE, Ms. ROYBAL-ALLARD,

Ms. VELA ́ZQUEZ, and Mr. TUCKER) introduced the following bill; which

was referred to the Committee on Small Business

A BILL

To amend the Small Business Act to make modifications

to the small business and capital ownership development

program, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Minority Enterprise

5 Development Act of 1994’’.
2

•HR 5271 IH

1 TITLE I—AMENDMENTS TO MI2 NORITY SMALL BUSINESS

3 AND CAPITAL OWNERSHIP

4 DEVELOPMENT PROGRAM

5 SEC. 101. MINORITY ENTERPRISE DEVELOPMENT PRO6 GRAM.

7 (a) ESTABLISHMENT.—Section 7(j)(10) of the Small

8 Business Act (15 U.S.C. 636(j)(10)) is amended—

9 (1) by striking ‘‘(10) There is established’’ and

10 all that follows before subparagraph (A) and insert11 ing the following:

12 ‘‘(10)(A) There is established within the Administra13 tion a Minority Enterprise Development Program (herein14 after in this subsection referred to as the ‘Program’),

15 which shall be administered by the Associate Adminis16 trator for Minority Enterprise Development in accordance

17 with this paragraph and section 8(a).’’;

18 (2) by striking subparagraph (B); and

19 (3) by striking ‘‘(A) The Program’’ and insert20 ing ‘‘(B) The Program’’.

21 (b) ASSISTANCE UNDER THE PROGRAM.—Section

22 7(j)(10)(B)(i) of the Small Business Act, as redesignated

23 by subsection (a) of this section, is amended by inserting

24 ‘‘Phase III of’’ after ‘‘small business concerns participat25 ing in’’.
3

•HR 5271 IH

1 (c) CONFORMING AMENDMENTS.—The Small Busi2 ness Act (15 U.S.C. 601 et seq.) is amended by striking

3 ‘‘Minority Small Business and Capital Ownership Devel4 opment’’ and inserting ‘‘Minority Enterprise Develop5 ment’’ each place it appears in sections 7(j)(10)(G),

6 7(j)(11)(A), 7(j)(11)(E), 7(j)(11)(H), 7(j)(11)(I),

7 8(a)(18)(C)(ii)(III), and 8(a)(20)(B).

8 SEC. 102. GRANDFATHERING PROVISION.

9 Section 7(j)(10(C) of the Small Business Act (15

10 U.S.C. 636(j)(10)(C)) is amended to read as follows:

11 ‘‘(C) A small business concern participating in

12 any program or activity conducted under the author13 ity of this paragraph or eligible for the award of

14 contracts pursuant to section 8(a) on the date of the

15 enactment of the Minority Enterprise Development

16 Act of 1994 shall be permitted continued participa17 tion in Phase III of the Program for the remaining

18 period of its original program term. Any such firm

19 that has not been awarded a contract pursuant to

20 section 8(a) may elect to suspend its participation in

21 Phase III in order to participate in Phase II. Upon

22 the award of a contract pursuant to section 8(a) or

23 the completion of a development agreement, the sus24 pension of time for participation in Phase III shall

25 cease.’’.
4

•HR 5271 IH

1 SEC. 103. BUSINESS PLAN.

2 Section 7(j)(10)(D) of the Small Business Act (15

3 U.S.C. 636(j)(10)(D)) is amended—

4 (1) in clause (i), by inserting ‘‘Phase III’’ after

5 ‘‘Promptly after’’;

6 (2) in clause (ii), by striking ‘‘The plans’’ in the

7 matter preceding subclause (I) and inserting ‘‘The

8 business plans’’;

9 (3) by amending clause (iii)(IV) to read as fol10 lows:

11 ‘‘(IV) A transition management plan

12 outlining specific steps to enhance the

13 prospect of profitable business operations

14 after the expiration of the 9-year Phase III

15 program term specified in paragraph

16 (15).’’;

17 (4) in clause (iii)—

18 (A) in the first sentence by striking ‘‘Each

19 Program Participant’’ and inserting ‘‘Each

20 Phase III Program Participant’’; and

21 (B) in the forth sentence by striking ‘‘the

22 transitional stage’’ and inserting ‘‘Phase III’’;

23 and

24 (5) in clause (iv), by striking ‘‘Each Program

25 Participant’’ and inserting ‘‘Each Phase III Pro26 gram Participant’’.
5

•HR 5271 IH

1 SEC. 104. USE OF CONTRACT SUPPORT LEVELS.

2 Section 7(j)(10)(D) of the Small Business Act (15

3 U.S.C. 636(j)(10)(D)) is further amended by adding at

4 the end the following new clause:

5 ‘‘(v) The forecasts of overall business activity con6 tained in the business plan of a Program Participant or

7 the estimate contained in the section 8(a) contract support

8 level of such firm shall not be used by the Administration

9 to make a determination that such firm is ineligible for

10 the award of a contract to be awarded pursuant to section

11 8(a).’’.

12 SEC. 105. PHASE III REQUIREMENTS.

13 Section 7(j)(10)(I) of the Small Business Act (15

14 U.S.C. 636(j)(10)(I)) is amended—

15 (1) in clause (i), by striking ‘‘During the devel16 opmental stage of its participation in the Program,’’

17 and inserting ‘‘During its first 4 years of participa18 tion in Phase III of the Program,’’;

19 (2) in clause (ii), by striking ‘‘During the tran20 sitional stage of the Program’’ and inserting ‘‘Dur21 ing years 5 through 9 of its participation in Phase

22 III of the Program,’’;

23 (3) by amending clause (iii)(I) to read as fol24 lows:

25 ‘‘(I) establish business activity targets ap26 plicable to Program Participants during the 5th
6

•HR 5271 IH

1 year and each succeeding year of the concern’s

2 participation in Phase III which reflect a rea3 sonably consistent increase in contracts award4 ed other than pursuant to section 8(a) and are

5 expressed as a percentage of total sales cor6 responding to the concern’s fiscal year;’’; and

7 (4) in clause (iii)(IV) by inserting ‘‘in Phase III

8 of the Program’’ after ‘‘performance’’.

9 SEC. 106. IMPROVED STATUS PROTEST SYSTEM.

10 Section 7(j)(10)(J) of the Small Business Act (15

11 U.S.C. 636(j)(10)(J)) is amended by striking clause (ii)

12 and inserting the following new clauses:

13 ‘‘(ii) A protest may be brought regarding a self14 certification by a business concern regarding its sta15 tus as a small business concern owned and con16 trolled by socially and economically disadvantaged

17 individuals by—

18 ‘‘(I) another person with a direct economic

19 interest in the award of the contract or sub20 contract under which such business has alleg21 edly made the false certification regarding its

22 status as a small business concern owned and

23 controlled by socially and economically dis24 advantaged individuals;
7

•HR 5271 IH

1 ‘‘(II) a prime contractor receiving specific

2 and credible information that an actual or pro3 spective subcontractor or supplier has falsely

4 certified its status as a small business concern

5 owned and controlled by socially and economi6 cally disadvantaged individuals;

7 ‘‘(III) a contracting officer receiving a self8 certification regarding an actual or prospective

9 contractor’s status, which such officer reason10 ably believes to be false; or

11 ‘‘(IV) the Associate Administrator for Mi12 nority Enterprise Development.

13 ‘‘(iii) The Office of Hearings and Appeals shall

14 hear appeals regarding the status of a concern as a

15 small business concern owned and controlled by so16 cially and economically disadvantaged individuals for

17 purposes of any program or activity conducted under

18 section 8(d) or any other Federal law that refers to

19 such section for a definition of program eligibility.

20 ‘‘(iv) A decision issued pursuant to clause (iii)

21 shall—

22 ‘‘(I) be made available to all parties to the

23 proceeding;

24 ‘‘(II) be published in full text; and
8

•HR 5271 IH

1 ‘‘(III) include findings of fact and conclu2 sions of law, with specific reasons supporting

3 such findings and conclusions, on each material

4 issue of fact and law of decisional significance

5 regarding the disposition of the protest.

6 ‘‘(v) A decision issued pursuant to clause (iii)

7 shall be considered a final agency action, and shall

8 be subject to judicial review under section 553 of

9 title 5, United States Code.

10 ‘‘(vi) If a firm engages in a pattern of misrepre11 sentations regarding the status of the firm in viola12 tion of section 16(d)(1), the Administration or the

13 aggrieved executive agency shall initiate an action to

14 impose an appropriate penalty under section

15 16(d)(2).’’.

16 SEC. 107. CONTINUED PROGRAM PARTICIPATION.

17 Section 7(j)(11)(D) of the Small Business Act (15

18 U.S.C. 636(j)(11)(D)) is amended to read as follows:

19 ‘‘(D)(i) A Program Participant shall remain eligible

20 for participation in the Program after a transfer of an

21 ownership interest in the firm if ownership and control

22 (as required by section 8(a)(4)) is retained by the socially

23 and economically disadvantaged individuals upon whom

24 Program eligibility is based.
9

•HR 5271 IH

1 ‘‘(ii) A Program Participant shall remain eligible for

2 participation in the Program after transfer of ownership

3 and control (as required by section 8(a)(4)) to individuals

4 who are determined to be socially and economically dis5 advantaged pursuant to section 8(a). Unless graduated or

6 terminated, the Program Participant shall be eligible for

7 a period of continued Program participation not to exceed

8 the period described in paragraph (15).

9 ‘‘(iii) A Program Participant that is a tribally owned

10 corporation may remain eligible for participation in the

11 Program with other than a Native American as the firm’s

12 chief executive officer (or chief operating officer), if the

13 governing body of the Indian tribe certifies to the Admin14 istration that it was unable to hire a qualified Native

15 American after conducting a national recruitment for such

16 an individual.’’.

17 SEC. 108. PROGRAM ADMISSION.

18 Section 7(j)(11)(F) of the Small Business Act (15

19 U.S.C. 636(j)(11)(F)) is amended to read as follows:

20 ‘‘(F) Subject to the provisions of section 8(a)(9), the

21 Division shall—

22 ‘‘(i) make recommendations on requests for re23 consideration of denied applications for entry into

24 Phase III of the Program to the Associate Adminis25 trator for Minority Enterprise Development;
10

•HR 5271 IH

1 ‘‘(ii) make requests for the initiation of suspen2 sion, termination, or graduation proceedings, as ap3 propriate, to the Associate Administrator for Minor4 ity Enterprise Development; and

5 ‘‘(iii) implement such policy directives as may

6 be issued by the Associate Administrator for Minor7 ity Enterprise Development pursuant to subpara8 graph (I) regarding, among other things, the geo9 graphic distribution of concerns to be admitted into

10 the Program and the industrial makeup of such con11 cerns.’’.

12 SEC. 109. PROGRAM PHASES.

13 (a) ESTABLISHMENT.—Section 7(j)(12) of the Small

14 Business Act (15 U.S.C. 636(j)(12)) is amended to read

15 as follows:

16 ‘‘(12)(A) The Administration shall segment the Pro17 gram into 3 phases: a startup phase, a developmental

18 phase, and a section 8(a) contracting phase, which shall

19 be known as Phase I, Phase II, and Phase III, respec20 tively.

21 ‘‘(B) The startup phase of program participation

22 shall be designed to assist newly formed or forming con23 cerns in overcoming their economic disadvantage by pro24 viding such assistance as may be necessary and appro-
11

•HR 5271 IH

1 priate to achieve a business foundation adequate for fu2 ture growth.

3 ‘‘(C) The developmental stage of program participa4 tion shall be designed to assist the concern in its effort

5 to overcome its economic disadvantage by providing such

6 assistance as may be necessary and appropriate to access

7 its markets and to strengthen its financial and managerial

8 skills.

9 ‘‘(D) The section 8(a) contracting stage of program

10 participation shall be designed to overcome, insofar as

11 practicable, the remaining elements of economic disadvan12 tage, and to further develop the concern towards economic

13 viability.’’.

14 (b) MAXIMUM PERIOD OF PARTICIPATION IN EACH

15 PHASE.—Section 7(j)(15) of the Small Business Act (15

16 U.S.C. 636(j)(15)) is amended to read as follows:

17 ‘‘(15) An eligible small business concern may receive

18 developmental assistance under the Program for the fol19 lowing periods as measured from the date of entry into

20 the applicable phase of the Program—

21 ‘‘(A) not more than 2 years may be spent in

22 Phase I of program participation;

23 ‘‘(B) not more than 3 years may be spent in

24 Phase II of program participation; and
12

•HR 5271 IH

1 ‘‘(C) not more than 9 years may be spent in

2 Phase III of program participation.’’.

3 SEC. 110. DEVELOPMENTAL ASSISTANCE AUTHORIZED FOR

4 PROGRAM PARTICIPANTS.

5 Section 7(j)(13) of the Small Business Act (15

6 U.S.C. 636(j)) is amended—

7 (1) in the matter preceding subparagraph (A),

8 by striking ‘‘during the stages of program participa9 tion specified in paragraph 12’’ and inserting ‘‘dur10 ing its term of participation in the Program’’; and

11 (2) by striking subparagraph (J).

12 SEC. 111. TEST PROGRAM FOR USE OF SURETY BOND

13 WAIVERS.

14 Section 7(j)(13)(D) of the Small Business Act (15

15 U.S.C. 636(j)(13)(D)) is amended—

16 (1) by striking clauses (i) through (iii);

17 (2) by striking ‘‘(D) A maximum’’ and inserting

18 ‘‘(D)(i) A maximum’’;

19 (3) by striking ‘‘, except that, such exemptions

20 may be granted under this subparagraph only if—

21 ’’ and inserting a period; and

22 (4) by adding at the end the following new

23 clauses:

24 ‘‘(ii) The agency with contracting authority

25 may, upon the request of the Program Partici-
13

•HR 5271 IH

1 pant, grant an exemption pursuant to clause

2 (i), if—

3 ‘‘(I) the Program Participant provides

4 certification, in the form prescribed by the

5 Administration, that the firm was unable

6 to obtain the requisite bonding from cor7 porate surety bonding firms;

8 ‘‘(II) the Program Participant has

9 provided for the protection of persons fur10 nishing materials or labor under the con11 tract by arranging for—

12 ‘‘(aa) the direct disbursement of

13 funds owed to such persons by the

14 procuring agency or through an es15 crow account provided by any bank

16 the deposits of which are insured by

17 the United States Government; or

18 ‘‘(bb) irrevocable letters of credit

19 (or other alternatives to surety bond20 ing acceptable to the procuring agen21 cy); and

22 ‘‘(III) the award value of the contract

23 for which the exemption is being sought

24 does not exceed $1,000,000.
14

•HR 5271 IH

1 ‘‘(iii) The authority to grant an exemption

2 under clause (ii) shall cease to be effective on

3 September 30, 1997.’’.

4 SEC. 112. STRATEGIC ALLIANCES.

5 Section 7(j)(14) of the Small Business Act (15

6 U.S.C. 636(j)) is amended to read as follows:

7 ‘‘(14)(A) Small business concerns that have com8 pleted the 9-year Phase III program term specified in

9 paragraph (15) (in this paragraph referred to as a ‘‘Pro10 gram Graduate’’) shall be authorized to assist Phase III

11 Program Participants, determined by the Administration

12 to be eligible for such assistance, to develop within the

13 Program.

14 ‘‘(B) A Program Graduate may provide assistance to

15 a Phase III Program Participant under this paragraph—

16 ‘‘(i) by providing, among other things, manage17 rial assistance, technical assistance, and financial

18 support; and

19 ‘‘(ii) by entering into subcontracts for the per20 formance of specific contracts awarded under section

21 8(a).

22 ‘‘(C) In determining the eligibility of a small business

23 concern to receive assistance or contracts under this sub24 section or section 8(a), the Administration shall not take
15

•HR 5271 IH

1 into account any assistance received under this paragraph

2 from a Program Graduate.’’.

3 SEC. 113. BUSINESS LOANS.

4 Section 7(a)(20)(B)(ii) of the Small Business Act (15

5 U.S.C. 636(a)(20)(B)(ii)) is amended by striking ‘‘be not

6 less than 85 per centum’’ and inserting ‘‘not exceed 95

7 percent of the balance of the financing outstanding at the

8 time of disbursement where the purpose of the financing

9 is to finance government contracts, and shall not exceed

10 90 percent of the balance of the financing outstanding at

11 the time of disbursement where the purpose of the financ12 ing is for general working capital as a line of credit’’.

13 TITLE II—AMENDMENTS TO

14 CONTRACTING PROGRAM

15 SEC. 201. CONTRACT AWARD PROCEDURES.

16 Section 8(a)(1) of the Small Business Act (15 U.S.C.

17 637(a)(1)) is amended by striking ‘‘(a)(1) It shall be the

18 duty’’ and all that follows through subparagraph (D) and

19 inserting the following:

20 ‘‘(a)(1)(A) The Administration shall seek the estab21 lishment of contract goals under section 15(g) which will

22 assure that contracts sufficient to satisfy the contract sup23 port levels identified by participants in the Minority En24 terprise Development Program established by section
16

•HR 5271 IH

1 7(j)(10) are designated by the various Federal agencies

2 for award pursuant to this subsection.

3 ‘‘(B) Except as provided in subparagraph (D), the

4 Administration may enter into prime contracts with pro5 curing agencies and subcontract performance of such con6 tracts to qualified Phase III Program Participants on a

7 sole-source basis or may delegate to procuring agencies

8 under such conditions as the Administration considers ap9 propriate the authority to enter into sole-source contracts

10 with Phase III Program Participants. In any case in which

11 the Administration accepts a requirement for potential

12 award pursuant to this subsection and determines that a

13 particular Phase III Program Participant is eligible for

14 and responsible to perform such contract, the procuring

15 agency contracting officer shall be authorized in the offi16 cer’s discretion to let the procurement contract upon such

17 terms and conditions as may be agreed upon between the

18 procuring agency contracting officer and the Program

19 Participant.

20 ‘‘(C)(i) The Administration shall determine the eligi21 bility of the Program Participant to receive the award in

22 accordance with the eligibility criteria listed in paragraph

23 (16).
17

•HR 5271 IH

1 ‘‘(ii) With respect to an individual contracting oppor2 tunity, the Administration may provide, upon a request

3 by the Program Participant, assistance with respect to—

4 ‘‘(I) the negotiation of the terms and conditions

5 of the award; and

6 ‘‘(II) the resolution of controversies arising

7 from the performance of the contract prior to such

8 contract performance controversies becoming formal

9 contract disputes within the meaning of the Contract

10 Disputes Act of 1978.

11 ‘‘(iii) In the event of an adverse decision by an agency

12 regarding a contracting opportunity, the Administrator

13 may—

14 ‘‘(I) not later than 5 days after receiving notice

15 of such adverse decision, file a notice of intent to ap16 peal with the head of the agency; and

17 ‘‘(II) not later than 15 days after receiving

18 such notice, file an appeal with the head of the agen19 cy requesting reconsideration of the adverse decision.

20 ‘‘(iv) Upon receipt of the notice of intent to file an

21 appeal under clause (iii)(I), further action regarding

22 award of the contract shall be suspended, unless the head

23 of the agency makes a written determination, supported

24 by specific findings, that urgent and compelling cir25 cumstances that significantly affect the interests of the
18

•HR 5271 IH

1 United States will not permit reconsideration of the ad2 verse decision.

3 ‘‘(v) If the head of the agency sustains the adverse

4 decision upon reconsideration, the decision by the head of

5 the agency shall be in writing and shall be supported by

6 specific findings.

7 ‘‘(vi) An adverse decision regarding the responsibility

8 of a Program Participant in competitive awards under this

9 subsection shall be decided pursuant to subsection (b)(7).

10 ‘‘(vii) For the purposes of this subparagraph, an ad11 verse decision by a contracting officer includes—

12 ‘‘(I) failing to respond, within 15 days or such

13 additional time as may be agreed to by the Adminis14 tration, to a request from the Administration to

15 make a specific contracting opportunity available for

16 award pursuant to this subsection;

17 ‘‘(II) declining to make available for award

18 under this subsection a contracting opportunity (or

19 class of contracting opportunities) or failing to sup20 port such a determination with specific findings; and

21 ‘‘(III) failing to reach agreement with the Pro22 gram Participant with respect to the terms and con23 ditions of a contract selected for award under this

24 subsection.
19

•HR 5271 IH

1 ‘‘(D) A contract opportunity offered for award pursu2 ant to this subsection may be awarded as a sole-source

3 contract if the anticipated award price of the contract (in4 cluding options) will not exceed $10,000,000 in the case

5 of a contract opportunity assigned a standard industrial

6 classification code for manufacturing and $7,000,000 (in7 cluding options) in the case of all other contract opportu8 nities.’’.

9 SEC. 202. COMPETITION REQUIREMENTS.

10 Section 8(a)(1)(D) of the Small Business Act (15

11 U.S.C. 637(a)(1)(D)) is amended—

12 (1) by redesignating clause (ii) as clause (iii);

13 and

14 (2) by inserting after clause (i) the following

15 new clause:

16 ‘‘(ii) Whenever a requirements-type contract (includ17 ing a task order contract, indefinite quantity contract, or

18 indefinite delivery contract) is to be awarded, the thresh19 olds for competition required under clause (i)(II) shall be

20 calculated on the basis of the estimated total value of the

21 contract.’’.

22 SEC. 203. TIMELY DETERMINATION OF ELIGIBILITY FOR

23 CONTRACT AWARD.

24 (a) IN GENERAL.—Section 8(a)(16) of the Small

25 Business Act (15 U.S.C. 637(a)(16)) is amended—
20

•HR 5271 IH

1 (1) by redesignating subparagraph (B) as sub2 paragraph (E); and

3 (2) by striking subparagraph (A) and inserting

4 the following:

5 ‘‘(A) Upon receipt of notification that a Federal

6 agency intends to consider a Program Participant for

7 award of a contract pursuant to this subsection (on a com8 petitive or noncompetitive basis), the Administration shall

9 promptly notify the agency regarding the eligibility of the

10 Program Participant for award of the contract, and shall

11 identify all matters that could reasonably be expected to

12 render the Program Participant ineligible at the time of

13 the contract award.

14 ‘‘(B) A Program Participant may be found to be in15 eligible for award of the contract pursuant to this sub16 section, if—

17 ‘‘(i) the Program Participant is not in compli18 ance with its competitive business activity targets es19 tablished pursuant to section 7(j)(10)(I); or

20 ‘‘(ii) the Program Participant has failed to

21 make the submissions required under paragraph

22 (6)(B).

23 ‘‘(C) A small business concern owned and controlled

24 by socially and economically disadvantaged individuals
21

•HR 5271 IH

1 that has completed its Program Participation term pursu2 ant to section 7(j)(15) shall be eligible for award if—

3 ‘‘(i) a requirement has been offered to and ac4 cepted by the Administration for the Program; and

5 ‘‘(ii)(I) in the case of a contract to be competi6 tively awarded, the prospective contract recipient

7 was a Program Participant eligible for award of the

8 contract on the date specified for receipt of offers,

9 and such firm had timely submitted an offer (includ10 ing price); or

11 ‘‘(II) in the case of a contract to be non12 competitively awarded, the prospective contract re13 cipient was a Program Participant eligible for award

14 of the contract on the date specified by the agency

15 contracting officer for the submission of an offer (in16 cluding price).

17 ‘‘(D) If the Administration determines that a Pro18 gram Participant is ineligible for consideration for award

19 of a contract under subparagraph (B) or (C), the deter20 mination shall be supported by specific findings. The de21 termination (and supporting findings) shall be furnished

22 to the Program Participant and to the contracting officer

23 for the agency providing the contracting opportunity.’’.

24 (b) CONFORMING AMENDMENTS.—Section 8(a) of

25 the Small Business Act (15 U.S.C. 637(a)) is amended—
22

•HR 5271 IH

1 (1) in paragraph (3)—

2 (A) by striking subparagraph (A) and in3 serting the following:

4 ‘‘(A) [Reserved].’’; and

5 (B) by striking subparagraph (D) and in6 serting the following:

7 ‘‘(D) Subsequent to the award of a contract under

8 this subsection, if requested by the recipient of the con9 tract, the Administration shall not publicly disclose the

10 agency’s estimate of the fair market price.’’;

11 (2) in paragraph (7), by striking subparagraph

12 (A) and inserting the following:

13 ‘‘(A) [Reserved].’’;

14 (3) in paragraph (12)(A), by striking ‘‘eligible

15 to receive subcontracts’’ and inserting ‘‘eligible for

16 contract awards’’; and

17 (4) in paragraph (9)(B)—

18 (A) in clause (iii), by striking ‘‘and’’;

19 (B) by redesignating clause (iv) as clause

20 (v); and

21 (C) by inserting after clause (iii) the fol22 lowing new clause:

23 ‘‘(iv) a determination of ineligibility for award

24 of a contract pursuant to paragraph (16)(B); and’’.
23

•HR 5271 IH

1 SEC. 204. CONTINUED CONTRACT PERFORMANCE.

2 Section 8(a)(21) of the Small Business Act (15

3 U.S.C. 637(a)(21)) is amended—

4 (1) in subparagraph (B), by striking ‘‘The Ad5 ministrator may, on a nondelegable basis, waive the

6 requirements of subparagraph (A) only if one of the

7 following conditions exist:’’ and inserting ‘‘The re8 quirements of subparagraph (A) may be waived

9 under any of the following circumstances:’’; and

10 (2) by striking subparagraph (C) and inserting

11 the following:

12 ‘‘(C)(i) Except as provided in clause (ii), a request

13 for a waiver pursuant to subparagraph (B) shall be sub14 mitted prior to the actual relinquishment of ownership or

15 control.

16 ‘‘(ii) Under the circumstances described in subpara17 graph (B)(iii), the waiver request shall be made as soon

18 as practicable after the incapacity or death occurs.’’.

19 SEC. 205. TRANSITION COMPETITIONS FOR PROGRAM

20 GRADUATES.

21 Section 8(a) of the Small Business Act (15 U.S.C.

22 637(a)) is amended by adding at the end the following

23 new paragraph:

24 ‘‘(22)(A) A small business concern owned and con25 trolled by socially and economically disadvantaged individ26 uals, which has graduated from the Minority Enterprise
24

•HR 5271 IH

1 Development Program, may participate in the competition

2 for a contracting opportunity to be awarded pursuant to

3 this subsection if—

4 ‘‘(i) the firm is currently performing satisfac5 torily a contract to furnish the same (or substan6 tially similar) products or services under a contract

7 competitively awarded pursuant to paragraph (1);

8 ‘‘(ii) closing date for receipt of proposals for the

9 contracting opportunity is a date after the date on

10 which the firm will no longer be eligible for award

11 of contracts pursuant to paragraph (1);

12 ‘‘(iii) the firm is otherwise eligible to compete

13 for the contract;

14 ‘‘(iv) the Associate Administrator for Minority

15 Enterprise Development grants the firm’s request to

16 participate in the competition otherwise restricted to

17 Program Participants after making a determination

18 that denial of the firm’s request would deprive such

19 firm of 25 percent or more of its revenue; and

20 ‘‘(v) the firm was a Program Participant on

21 September 30, 1994.

22 ‘‘(B) A Program Graduate described in subparagraph

23 (A) shall be ineligible for award of a contract resulting

24 from a competition conducted pursuant to paragraph (1),

25 unless such firm furnishes (and the contracting officer ac-
25

•HR 5271 IH

1 cepts) a plan to subcontract not less than 40 percent of

2 the award value of the contract to one or more Program

3 Participants (of which 20 percent shall be awarded to one

4 or more Program Participants who are emerging small

5 business concerns, unless such awards are impracticable

6 after consultation with the Associate Administrator for the

7 Minority Enterprise Development Program).

8 ‘‘(C) This subparagraph shall take effect on October

9 1, 1994, and shall remain in effect until September 30,

10 1997.’’.

11 SEC. 206. PROCUREMENT PROCEDURES.

12 Section 8(c) of the Small Business Act (15 U.S.C.

13 637(c)) is amended to read as follows:

14 ‘‘(c) PROCUREMENT PROCEDURES.—

15 ‘‘(1) IN GENERAL.—For the purpose of attain16 ing an agency’s goal for the participation of small

17 business concerns owned and controlled by socially

18 and economically disadvantaged individuals pursuant

19 to section 15(g)(1), the head of a participating exec20 utive agency may enter into contracts using—

21 ‘‘(A) less than full and open competition,

22 by restricting the competition for such awards

23 to small business concerns owned and controlled

24 by socially and economically disadvantaged indi25 viduals as defined in subsection (d)(3)(C); and
26

•HR 5271 IH

1 ‘‘(B) a price evaluation preference, of not

2 to exceed 10 percent, when evaluating an offer

3 received from such a small business concern as

4 the result of an unrestricted solicitation.

5 ‘‘(2) DEFINITION.—For the purposes of this

6 subsection, the term ‘participating executive agency’

7 means a Federal agency, as defined in section 3(b),

8 in the executive branch of the Federal Government,

9 other than the Department of Defense.’’.

Æ

HR 5271 IH——2

HR 5271 IH——3