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76–467 2012

MARKUP OF H.R. 3985, H.R. 3987, H.R. 4081, 

H.R. 4203, AND H.R. 4206 

HEARING 

BEFORE THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

HEARING HELD 

MARCH 22, 2012 

Small Business Committee Document Number 112–060 

Available via the GPO Website: www.fdsys.gov 


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HOUSE COMMITTEE ON SMALL BUSINESS 

SAM GRAVES, Missouri, Chairman 

ROSCOE BARTLETT, Maryland 

STEVE CHABOT, Ohio 

STEVE KING, Iowa 

MIKE COFFMAN, Colorado 

MICK MULVANEY, South Carolina 

SCOTT TIPTON, Colorado 

CHUCK FLEISCHMANN, Tennessee 

JEFF LANDRY, Louisiana 

JAIME HERRERA BEUTLER, Washington 

ALLEN WEST, Florida 

RENEE ELLMERS, North Carolina 

JOE WALSH, Illinois 

LOU BARLETTA, Pennsylvania 

RICHARD HANNA, New York 

NYDIA VELA ́ ZQUEZ, New York, Ranking Member 

KURT SCHRADER, Oregon 

MARK CRITZ, Pennsylvania 

JASON ALTMIRE, Pennsylvania 

YVETTE CLARKE, New York 

JUDY CHU, California 

DAVID CICILLINE, Rhode Island 

CEDRIC RICHMOND, Louisiana 

GARY PETERS, Michigan 

BILL OWENS, New York 

BILL KEATING, Massachusetts 

LORI SALLEY, Staff Director 

PAUL SASS, Deputy Staff Director 

BARRY PINELES, General Counsel 

MICHAEL DAY, Minority Staff Director 


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C O N T E N T S 

OPENING STATEMENTS 

Page 

Hon. Sam Graves ..................................................................................................... 1 

Hon. Nydia Vela ́zquez ............................................................................................. 2 

WITNESSES 

None 

APPENDIX 

Prepared Statements: 

None 

Questions for the Record: 

None 

Answers for the Record: 

None 

Additional Materials for the Record: 

None 


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MARKUP OF H.R. 3985, H.R. 3987, H.R. 4081, 

H.R. 4203, AND H.R. 4206 

WEDNESDAY, MARCH 22, 2012 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SMALL BUSINESS, 

Washington, DC. 

The Committee met, pursuant to call, at 10:00 a.m., in Room 

2360, Rayburn House Office Building. Hon. Sam Graves [chairman 

of the Committee] presiding. 

Present: Representatives Graves, Bartlett, Chabot, King, Coffman, Mulvaney, Tipton, Landry, Herrera Beutler, West, Ellmers, 

Walsh, Barletta, Hanna, Schilling, Vela ́zquez, Schrader, Critz, 

Clarke, Chu, Cicilline, Richmond, Hahn, Peters, Owens, Keating. 

Chairman GRAVES. Good morning. I will call this Committee 

hearing to order. 

The Committee is in the midst of an effort to enact comprehensive reform of government contracting to help small businesses. 

Our efforts began with 10 hearings on contracting topics. And this 

was followed by the introduction of 8 contracting bills supported by 

over 20 trade associations. Last week, the Committee marked up 

four of those bills, plus two additional bills introduced by the minority. This week, we are going to mark up the remaining four 

bills, plus a bill introduced by the Ranking Member. And I believe 

this is a testament to the importance of government contracting for 

small businesses, and I think it is a tribute to the bipartisan nature of this Committee. 

While we are going to briefly discuss each of the bills individually before we mark it up, I want to emphasize how important 

these issues are to small businesses and taxpayers. The federal 

government regularly spends over half a trillion dollars on federal 

contracts each year, and has spent over $100 billion so far this 

year. When small businesses compete for those contracts, something important happens: we get jobs created, innovation occurs, 

competition brings down prices. So, in short, when small businesses win, we all win. 

Today we are examining some of the key issues for small businesses such as who is actually small. We are making sure that the 

programs intended to help small businesses deliver results and do 

not inadvertently harm the very businesses they are supposed to 

help. We are halting unjustified contract bundling, which will result in more competition; we are standardizing the assistance we 

provide to the subcategories of small businesses; and we are protecting the taxpayers against fraud. 


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All of these issues deserve support, and I look forward to working 

with all of you today to move these bills one step closer to becoming 

law. 

And I now recognize Ranking Member Vela ́zquez. 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman. Small businesses 

continue to be at the center of the economy, creating nearly twothirds of net employment gains. Seizing on this job-creating power 

is essential to move the economy forward. As a result, it is important that we help lay the foundation for their success. 

One way to do this is to provide entry for small enterprises into the federal procurement marketplace. As a $500 billion market for 

goods and services, the government buys everything from paper to 

furniture, to aircraft carriers. At every point in this procurement 

process small firms should have an opportunity to compete for the 

government’s business. Unfortunately, this vision is far from reality. The government continues to struggle to meet the 23 percent 

goal for small firms and has not even come close to achieving the 

5 percent goal for women-owned businesses. Fraud in contracting 

programs continues to increase as contracts are still being channeled to ineligible companies. And finally, contract bundling and 

consolidations remain a key problem and small businesses lack the 

tools and resources to fight back. 

Tackling these problems is the right thing to do and I am hopeful 

that the legislation we consider today will take steps in the right 

direction. In this regard, I want to thank the chairman for continuing to work with us in a bipartisan manner on these bills. 

And I thank the chairman and I yield back the balance of my 

time. 

Chairman GRAVES. All right. We will be marking up the five contracting bills. We are going to do it in the order that they were— 

that we noticed them out. 

The first bill is H.R. 3985, the ‘‘Building Better Business Partnerships Act of 2012.’’ It was introduced by Mr. Schilling and Ms. 

Chu. I now yield to Mr. Schilling to speak on 3985. 

Mr. SCHILLING. Thank you, Chairman, and thank you, Ranking 

Member Vela ́zquez. I want to thank Representative Chu for her 

work on H.R. 3985 and the efforts of the Committee to reform the 

federal contracting process. 

I have owned my small pizzeria for more than 15 years and understand firsthand how difficult and basically limiting some federal 

programs can be for small business owners to navigate and access 

through. Contracting with the federal government is really no different. 

I have heard from numerous job creators in my district about 

how valuable winning and retaining federal contracts are to growing their business and how the end results affects men and women 

they employ. Most recently, we helped a gentleman navigate successfully through and gain a Navy contract, which was a great win 

for our area. 

With unemployment over 9 percent in my home state of Illinois, 

every job counts. The bill we have introduced focuses on improving 

and streamlining 13 mentor-prote ́ge ́ programs, which pair new 

businesses looking to increase their government contracts with 

more experienced businesses. 


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The GAO report released last year revealed there are a number 

of issues that need to be addressed with the mentor-prote ́ge ́ program. First, the GAO report revealed duplication among programs, 

creating more unnecessary paperwork for businesses. Secondly, 

participants risk losing their small affiliation when working with 

other businesses. And thirdly, some programs lack accountability. 

And lastly, the majority of our small businesses do not qualify to 

participate. 

H.R. 3985 addresses these issues by placing the SBA in charge 

of overseeing and setting standards for the 13 existing programs 

based on the concerns I have just listed. It also requires the SBA 

to collect data from the agencies regarding the number and types 

of participants, including the number of HUBZone, veteran-, and 

women-owned businesses. Data showing the ability of businesses to 

retain these contracts is also required and must be submitted to 

Congress. 

Ultimately, our bill will improve mentor-prote ́ge ́ programs, making it easier for small firms to compete for and win contracts, enabling them to grow, create jobs, and get folks back to work. 

I thank you for the opportunity and urge Members of the Committee to support H.R. 3985. 

Chairman GRAVES. And I yield to Ranking Member Vela ́zquez. 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman. Mentor-prote ́ge ́ programs have been successful across 13 federal agencies to enhance 

the ability of small firms to compete for federal government contracts by furnishing them with a system to improve their performance. To this point the GAO reported at a Small Business Committee hearing last year that all—all—13 agencies have established 

policies and procedures for administering and monitoring their programs. GAO found that agencies have requirements in place to conduct periodic reviews as well as controls to help ensure that mentors and prote ́ge ́s meet eligibility criteria and benefit from participation in the program. 

As a result of GAO’s findings, it seems to me unnecessary and 

potentially problematic that the legislation will require the SBA to 

approve all mentor-prote ́ge ́ programs government-wide. Given 

SBA’s track record of delay and inaction, the agency could effectively shut down these initiatives across the government by merely 

delaying an approval or disapproval decision. 

And I want to be on record on this. I do not want to see that 

these programs are shut down and then members will call me or 

you, Mr. Chairman, to question why is it that we allow for this program to expire. While the true benefits of this program are uncertain, it is not advisable in this stage of the recovery to discontinue 

any source of small business support simply because the SBA is 

unable to act timely to approve otherwise well-functioning mentorprote ́ge ́ programs as it was substantiated by the GAO report. In 

fact, the GAO analysis suggests that the programs are operating 

well without any additional bureaucratic layer of oversight. Plus, 

given SBA’s poor track record of oversight of the HUBZone program, it gives me little comfort that we are handing the agency a 

similar responsibility. 

With these concerns in mind, I hope that the legislation will continue to be improved as it heads to the floor. Mentor-prote ́ge ́ proVerDate Mar 15 2010 23:58 Dec 14, 2012 Jkt 076467 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 E:\HR\OC\A467.XXX A467

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grams remain an important resource for many small businesses, 

enabling them to learn the ropes from more experienced contractors. Improving them is important, but we must make sure that future changes do not undermine the very strength of those mentorprote ́ge ́ programs in existence today. 

And with that, I yield back the balance of my time. 

Chairman GRAVES. Do other Members wish to be recognized for 

a statement on H.R. 3985? Ms. Chu. 

Ms. CHU. I hear over and over again from small businesses one 

question: How do I break into federal contracting? With average 

annual spending at $500 billion there is no better way for small 

businesses to expand during these tough times than through federal contracts. 

Historically, however, it has been difficult for small businesses to 

gain a toehold in the federal procurement system. To help small 

businesses gain entry into the federal marketplace, mentor-prote ́ge ́

programs were established. This program allows smaller firms the 

opportunity to work directly with larger vendors. This can provide 

them with vital experience and lead to future opportunities, which 

will, hopefully, lead to getting more federal contracts in the hands 

of small business. 

The Building Better Businesses Partnership Act of 2012 will help 

small firms break into federal contracting by making it easier for 

them to join mentor-prote ́ge ́ programs. This bill will streamline the 

process by putting these programs under one agency, the SBA, and 

create better oversight over the programs so that small businesses 

truly benefit from the agreements. It will address the GAO report 

issues by determining how well the program goals have been 

achieved. 

Helping small businesses win contracts will help put Americans 

back to work. And with two out of every three jobs coming from 

small businesses, this bill will help the true driving force behind 

America’s economy. 

I ask my colleagues on the Small Business Committee for their 

support. Thank you, and I yield back. 

Chairman GRAVES. Does any other Member wish to be heard on 

the bill? 

The Committee now moves consideration of H.R. 3985. Clerk, 

please report the title of the bill. 

The CLERK. H.R. 3985: To amend the Small Business Act with 

respect to mentor-prote ́ge ́ programs and for other purposes. 

Chairman GRAVES. Without objection H.R. 3985 is considered 

read and open for amendment at any point. 

[The bill H.R. 3985 follows:] 


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US AU"H''''CM'~ (;OVfRNM£NT 

INfORMATION 

C,PO~ 

112TH COKGmJSS H R 3985 2D SESSIO':-< • • 

To amend the Small Business Act with respect to mentor-protege programs, 

and for other purposes. 

IN THE HOUSE OP REPRESEi\TATIVES 

FgBRVARY 8, 2012 

Mr. SCHILUNG (for himself and ]\:Is. Cm!) introdueed the following bill; which 

was referred to the Committee on Small Business 

A BILL 

To amend the Small Business Act with respect to mentorprotege programs, 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 "Building Better Busi5 ness Partnerships Act of 2012". 

6 SEC. 2. MENTOR·PROTEGE PROGRAMS. 

7 The Small Business Aet (15 U.S.C. 631 et seq.) IS 

8 amended9 (1) by redesignating section 45 as section 46; 

10 and 
6 


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1 (2) by inserting after section 44 the follmving: 

2 "SEC. 45. MENTOR·PROTEGE PROGRAMS. 

3 "(a) ADMT~lSTRATION PROGR&"'I.-

4 "(1) A"CTHORITY.-The Administrator IS au5 thorized to establish a mentor-protege program for 

6 all small business concerns. 

7 "(2) MODEL FOR PROGRAM.-The mentor-pro8 tege program established under paragraph (1) shall 

9 be identical to the mentor-protege program of the 

10 Administration for small business concerns that par11 ticipate in the program under section 8(a) of this 

12 Act (as in effect on the date of enactment of the 

13 Building Better Business Partnerships Act of 2012), 

14 except that the Administrator may modify the pro15 gram to the extent necessary given the types of 

16 small business concerns included as proteges. 

17 "(b) PIWGRAMS OF OTHER AGENCIES.-

18 "(1) APPROVAl, REQUIRED.-Except as pro19 vided in this subsection, a Federal department or 

20 agency may not carry out a mentor-protcge program 

21 for small business concerns unless22 "(A) the head of the department or agency 

23 submits a plan to the Administrator for the 

24 program; and 

oHR 3985 III 
7 


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1 "(B) the Administrator approves such 

2 plan. 

3 "(2) BASIS FOR APPROVAL.-l'he Adminis4 trator shall approve or disapprove a plan submitted 

5 under paragraph (1) based on whether the program 

6 proposed7 "(A) will assist proteges to compete for 

8 Federal prime contracts and subcontracts; and 

9 "(B) complies with the regulations issued 

10 under paragraph (3). 

11 "(3) REGl~LATIO~S.-Not later than 270 days 

12 after the date of enactment of the Building Better 

13 Business Partnerships Act of 2012, the Adminis14 trator shall issue, subject to notice and comment, 

] 5 regulations with respect to mentor-protege pro16 grams, which shall ensure that such programs im17 prove the ability of proteges to compete for };'ederal 

18 prime contracts and subcontracts and which shall 

19 address, at a minimum, the follmving: 

20 "(A) Eligibility criteria for program par21 ticipants, including any restrictions on the llum22 bel' of mentor-protege relationships permitted 

23 for each participant. 

24 "(B) l'he types of developmental assistance 

25 to be provided by mentors, including how the 

.HR 3985 IH 
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1 assistance provided shall improve the competi2 tive viability of the proteges. 

3 "(C) \v11ether any developmental assist4 ance provided by a mentor may affect the sta5 tus of a program participant as a small bus1-

6 ness concern due to affiliation. 

7 "(D) The length of mentor-protege reIa8 tioJlships. 

9 "(E) '1'he effect of mentor-protege relatioll10 ships on contracting. 

11 "(P) Benefits that may accrue to a mentor 

12 as a result of program participation. 

13 "( G) Reporting requirements during pro14 gram participation. 

15 "(H) Postparticipation reporting require16 ments. 

17 "(1) The need for a mentor-protege pair, if 

18 accepted to participate as a pair in a melltor19 protege program of any Federal department or 

20 agency, to be accepted to participate as a pair 

21 in all Federal mentor-protege programs. 

22 "( J) Actions to be taken to ensure benefits 

23 for proteges. 

24 "( 4) IJIl\IITATIO;,J ON APPLICABILITY.-Xotwith25 standing the provisions of subsection (b) (1), the pro-

.RR 3985 IH 
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1 visions of subsection (b) (1) shall apply to the fol2 lowing: 

3 "(A) Any mentor-protege program of the 

4 Department of Defense in effect on the date of 

5 enactment of the Building Better Business 

6 Partnerships Act of 2012. 

7 "(B) .Any mentoring assistance provided 

8 under a Small Business Innovation Research 

9 Program or a Small Business Technology 

10 Transfer Program. 

11 "(C) Until the date that is 1 year after the 

12 date on which the Administrator issues regula13 tions under paragraph (3), any Pederal depart14 ment or agency operating a mentor-protege pro15 gram in effect on the date of enaetment of the 

16 Building Better Business Partnerships Act of 

17 2012. 

18 "(c) REPORTI~G.-

19 "(1) I~ GEXERAL.-Xot later than 2 years 

20 after the date of enactment of the Building Better 

21 Business Partnerships Act of 2012, and annually 

22 thereafter, the Administrator shall submit to the 

23 Committee on Small Business of the House of Rep24 resentatives and the Committee on Small Business 

25 and Entrepreneurship of the Senate a report that-

.HR 3985 IH 
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1 "(A) identifies each Federal mentor-pro2 tege program; 

3 "(B) specifies the number of participants 

4 in each such program, including the number of 

5 participants that are6 '(0) small business concerns; 

7 "(ii) small business concerns ovvned 

8 and controlled by service-disabled veterans; 

9 "(iii) qualified HUBZone small busi10 ness concerns; 

11 "(iv) small business concerns owned 

12 and controlled by socially and economically 

13 disadvantaged indiv~duals; or 

14 "(v) small business concerns owned 

15 and controlled by women; 

16 "(C) describes the type of assistance pro17 vided to proteges under each such progTam; 

18 "(D) describes the benefits provided to 

19 mentors under each such program; and 

20 "(E) describes the progress of proteges 

21 under cach such program with respect to com22 peting for 11~ederal prime contracts and sub23 contracts. 

24 "(2) PROVISIO:\T OF INFORMATION.-'l'he head 

25 of each Federal department or agency carrying out 

.HR 3985 m 
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a mentor-protege program shall provide to the Ad2 ministrator, upon request, the information necessary 

3 for the Administrator to submit a report required 

4 under paragraph (1). 

5 "( d) DEFINITIONs.-In this section, the follovving 

6 definitions apply: 

7 "(1) MENTOR.-'rhe term 'mentor' means a 

8 for-profit business concern, of any size, that9 "(A) has the ability to assist and commits 

10 to assisting a protege to competc for Federal 

11 prime contracts and subcontracts; and 

12 "(B) satisfies any other requirements HUB posed by the Administrator. 

14 "(2) MENTOR-PROTEGE PIWGRA:\f.-The term 

15 'mentor-protege program' means a program that 

16 pairs a mentor with a protege for the purpose of as17 sistillg the protege to compete for Federal prime 

18 contracts and subcontracts. 

19 "(3) PnOTEGE.-The term 'protege' means a 

20 small business coneern that21 "(A) is eligible to enter into Federal prime 

22 contracts and subcontracts; and 

23 "(B) satisfies any other requirements 1m24 posed by the Administrator.". 

o 

.HR 3985 ill 
12 

Chairman GRAVES. Does anyone have an amendment? I believe, 

Ms. Chu, you have an amendment. 

Ms. CHU. Yes, sir. Yes. Mr. Chairman, I have a perfecting 

amendment to H.R. 3985. 

Chairman GRAVES. Clerk, please report the amendment. 

The CLERK. Amendment 1 to H.R. 3985 offered by Ms. Chu of 

California. 

Chairman GRAVES. Without objection the amendment is considered as read. The gentlelady has five minutes. 

[Amendment 1 to H.R. 3985 offered by Ms. Chu follows:] 


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F:IMI 2\CHu\CHU_053.XML 

AMENDMENT TO H.R. 3985 

OFFERED BY Ms. CHU OF CALIFORNIA 

Page 4, line 23, strike the period at the end and insert the follovving: ", and to protect proteges against actions by the mentor that-" 

1 

2 

3 

4 

5 

(0 may adversely affect the proteges 

statns as a small business; or 

(ii) provide disproportionate economic 

benefits to the mentor relative to those 

provided the protege. 

Page 7, line 24, insert after "the Administrator." 

the following: 

6 "(e) CURRENT ME::\TTOR PROTEGE AGREEMENTS.-

7 Mentors and proteges with approved agreement in a pro8 gram operating pursuant. t.o subsection (b)( 4)(C) shall be 

9 permitted to continue their relationship according to the 

10 terms speeified in their agreement until the expiration 

11 date specified in the ag1:'eement. 

12 "(f) StTI3l1TISSION OF AGE::\TCY PLANs.-Agencies op13 erating mentor protege programs pursuant to subsection 

14 (b)(4)(C) must submit the plans specified in subsection 

15 (b)(l)(A) to the Administrator ,vithin 6 months of the prof:IVHlCI0320121032012.194.xml 

March 20, 2012 (4:43 p.m.) 

(52088412) 
14 


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F:\M12\CHU\CHU_053XML 

2 

mulgation of 1111es required by subsection (b)(3). The Ad2 ministratol' shall provide initial comments on each plan 

3 ,,'ithin 60 days of receipt, and final approval or denial of 

4 each plan with 180 days of receipt.". 

Page 7, insert after line 24 the following: 

5 SEC. 3. GOVERNMENT ACCOUNTABILITY OFFICE REPORT. 

6 Not later than the date that is 2 years after the agen7 cies operating subject to section 45(b)(4)(C) of'the Small 

8 Business Act have their plans approved or denied by the 

9 Administrator, the Comptroller General of' the United 

10 States shall conduct a study toII (1) update the study required by section 1345 

12 of'the Small Business Jobs Act of 2010 (Pub. 1jaw 

13 11] -240); 

14 (2) examine whether potential affiliation issues 

15 between mentors and proteges under the prior pro16 grams have been resolved by enactment of this Act; 

17 and 

18 (3) examine whether the regulations issued pur19 suant to section 45(b)(3)(1) of' the Small Business 

20 Act have illcrcased opportunities for mentor-protege 

21 pairs, and if they have decreased the paperwork re22 quired for such pairs participating in programs at 

23 multiple agencies. 

f:WHLCI0320121032012.194.xml 

March 20, 2012 (4:43 p.m.) 

(52088412) 
15 

Ms. CHU. Mr. Chair, I have a perfecting amendment to the 

Building Better Business Partnerships Act. The amendment clarifies that program regulations must protect prote ́ge ́s against actions 

that negatively impact them or provide disproportionate benefits to 

the mentor. It also allows for current mentor-prote ́ge ́ agreements 

to be grandfathered into the new program until the expiration date 

of their agreement. 

The amendment also says that agencies operating mentorprote ́ge ́ programs will be allowed six months after the regulations 

are transmitted to submit their mentor-prote ́ge ́ plans and then provide a detailed timeline for SBA’s approval of these plans. 

Finally, the amendment requires a GAO report to assess the impact of the changes to the mentor-prote ́ge ́ program. 

This amendment was crafted with input from the majority and 

minority sides of the Committee and strengthens the language of 

the bill. I ask for the Committee’s support. 

Chairman GRAVES. Does any other Member wish to be heard on 

the amendment? Mr. Schilling. 

Mr. SCHILLING. Yes, thank you. I believe this is a good amendment that makes H.R. 3985 stronger, more accountable, and further protects small businesses, and I urge Members to support 

Representative Chu’s amendment. 

Chairman GRAVES. Does any other Member wish to be heard on 

the amendment? 

Seeing none, the gentlelady’s amendment, I think it furthers the 

intention of the bill and it was done through bipartisan discussions. 

So with that, I am very pleased to support the gentlelady’s amendment. 

And a question. The question is on the amendment offered by 

Ms. Chu. All those in favor say aye. 

[A chorus of ayes.] 

Chairman GRAVES. Opposed no. 

[No response.] 

Chairman GRAVES. In the opinion of the chair the ayes have it. 

The ayes do have it. The amendment is agreed to. 

Does any other Member wish to be recognized for an amendment? 

Seeing none, the question is on agreeing to H.R. 3985 as amended. All those in favor say aye. 

[A chorus of ayes.] 

Chairman GRAVES. All opposed no. 

[No response.] 

Chairman GRAVES. It is the opinion of the chair that the ayes 

have it. H.R. 3985 is agreed to without objection. A quorum being 

present, the bill is favorably reported to the House. And without 

objection the Committee staff is authorized to correct punctuation 

and make other necessary technical changes and conforming 

changes. 

Our next bill for consideration is H.R. 3987, the ‘‘Small Business 

Protection Act of 2012,’’ which is introduced by Mr. Walsh and Mr. 

Connolly. I now yield to Mr. Walsh to speak on 3987. 

Mr. WALSH. Thank you, Mr. Chairman, and thank you, Ranking 

Member Vela ́zquez. As you know, the SBA has proposed radically 

new size standards for small business government contracting that 


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do not just alter the size standard for each industry, but, in some 

instances, actually combine several different industries into a new 

common group under a single size standard. The problem is that 

in creating these new common groups SBA, by its own analysis, is 

excluding legitimate small businesses from small business contracting programs and allowing large businesses to participate in 

the same programs. 

For example, let us look at architecture and engineering firms. 

SBA’s own metrics and analysis shows that architecture firms 

should have a small business size standard of $7 million and engineering firms of 25.5 million. Yet, SBA has decided to combine 

them into a common group and assign them a size standard of 7 

million, which is completely inappropriate for either of them. In the 

one instance it legitimately excludes small businesses from competing for government contracts and in the other it forces legitimate small businesses to compete against much larger firms. In 

fact, the American Institute of Architecture has estimated that this 

new size standard will include 98 percent of all architecture firms. 

I think we can all agree that situations like this are not in the 

best interest of small businesses. After all, size standards do not 

exist for the ease of the SBA, but for the benefit of America’s small 

businesses. The Small Business Protection Act is simple: It protects 

legitimate small businesses in government contracting by requiring 

that the size standard assigned to each new common group is appropriate for each industry included in that group. Without this bill 

small businesses, the backbone of the American economy, will be 

driven out of competition for government contracts. 

And I yield back. 

Chairman GRAVES. I now recognize Ranking Member Vela ́zquez 

for opening comments. 

Ms. VELA ́ ZQUEZ. Mr. Chairman, the complexity of size standards 

is only exceeded by the process in which they are set and revised. 

Providing greater transparency to this complicated machinery is 

important. While SBA has recently taken major actions on size 

standards, this proposal will obviously have no effect on them. 

However, increasing small businesses’ awareness of the size 

standard process during the proposed rulemaking stage is essential. To this point it is important that SBA provide the public with 

a competitive landscape of the affected industry. The approach the 

agency used to determine the new standard, the source of the agency’s data, and the specific impact on the industry, such openness 

will only enhance small businesses’ ability to understand what has 

become an opaque decision-making process at the agency. Given 

the size standard determinations can limit firms’ ability to secure 

government contracts, receiving training or secure financing, it is 

vital that these decisions are done in the most transparent fashion 

possible. Bringing sunlight to this shadowy area of the SBA should 

be a priority. 

And for that, I thank you and I yield back the balance of my 

time. 

Chairman GRAVES. Does any other Member wish to be recognized 

for a statement on H.R. 3987? 


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Seeing none, I think this bill addresses a central issue of the 

Committee’s work and that is what is a small business. So without 

objection, would the clerk please report them? 

The CLERK. H.R. 3987: To amend the Small Business Act with 

respect to small business concerning size standards and for other 

purposes. 

Chairman GRAVES. Without objection H.R. 3987 is considered 

read and open for amendment at any point. 

[The bill H.R. 3987 follows:] 


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US AUTHfNTICA·""9 GOVf'RNMENT 

INFORMATlON ~ 

CPo" 

112TII COKGRESS H R 3987 2D SESSION • • 

To amend the Small Business Aet with respect to small business concern 

size standards, and for other purposes. 

IN THE HOUSE OJ:;' REPRESENTATIVES 

FEBRUARY 8, 2012 

JUr. WALSH of Illinois (for himself and :\ilr. CONXOLLY of Virginia) introduced 

the following bill; whidl was referred to the Committee on Small Business 

A BILL 

To amend the Small Business Act vvith respect to small 

business concern size standards, 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 "Small Business Pl'otec5 tion Act of 2012". 

6 SEC. 2. SMALL BUSINESS CONCERN SIZE STANDARDS. 

7 Seetion 3 of the Small Business Act (15 U.S.C. 632) 

8 is amended9 (1) by inserting after the seetioll enumerator 

10 the follmvillg: "DEFINITIONS."; and 
19 


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2 

1 (2) in subsection (al2 (A) by striking the subsection enumerator 

3 and inserting the follmvillg: 

4 "(a) S:\TALL BUSINESS COKCERNS.-"; 

5 (B) in paragraph (1) by striking "(1) For 

6 the purposes" and inserting the following: 

7 "(1) I~ GENERAL.-For the purposes"; 

8 (C) in paragraph (3) by striking "(3) 

9 'V-heu establishing" and inserting the following: 

10 "(3) VARIATION BY I~DUSTRY A~D COKSIDER11 ATION OF OTHER ~~ACTORS.-\Vhen establishing"; 

12 (D) by mming paragraph (5), including 

13 each subparagraph and clause therein, 2 ems to 

14 the right; and 

15 (E) by adding at the end the follmving: 

16 "(6) COM::IION SIZE STANDARDS.-In carrying 

17 out this subsection, the Administrator may establish 

18 or approve a single size standard for a grouping of 

19 four digit Xorth American Industrial Classification 

20 codes only if the ~Admil1istrator makes publicly avail21 able, Hot later than the date on \vhich such size 

22 standard is established or approved, a justification 

23 demonstrating that such size standard is appropriate 

24 for each indi,idual industry classification included in 

25 the grouping' . 

• HR 3987 IH 
20 


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1 "(7) PROPOSED RVLE MAKIXG.-In conducting 

2 rulcmaking to revise, modify or establish size stand3 ards pursuant to this section, the Administrator 

4 shall consider and address the follmving: 

5 "(A) a detailed description of the industry 

6 for which the new size standard is proposed; 

7 "(B) an analysis of the competitive envi8 ronment for that industry; 

9 "(C) the approach the Administrator used 

10 to develop the proposed standard including the 

11 source of all data used to develop the proposed 

12 rulemaking; and 

13 "(D) the anticipated effect of the proposed 

14 rulemaking on the industry, including the num15 bel' of concerns not currently considered small 

16 that would be considered small under the pro17 posed rulemaking and the number of concerns 

18 currently considered small that would be 

19 deemed other than small under the proposed 

20 rulemaking.". 

o 

.HR 3987 IH 
21 

Chairman GRAVES. Does any Member have an amendment? I 

think, Mr. Walsh, you do. 

Mr. WALSH. Yes, Mr. Chairman. My amendment makes two—— 

Chairman GRAVES. Let the clerk report it. 

Mr. WALSH. Amendment Number 1. 

The CLERK. Amendment Number 1 to H.R. 3987 offered by Mr. 

Walsh of Illinois. 

Chairman GRAVES. Without objection the amendment is considered read. The gentleman has five minutes. 

[Amendment 1 to H.R. 3987 offered by Mr. Walsh follows:] 


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F:\M 12\ W ALSIL\ W ALSIL_020.xML 

AMENDMENT TO H.R. 3987 

OFFERED BY MR. WALSH OF ILLINOIS 

Beginning on page 3, line 1, strike "In conducting" 

and all that follows through "the following" on line 4, 

and insert the follUY'ling: "In conducting mlemakillg to 

revise, modify or establish size standards pursuant to this 

section, the Administrator shall consider, and address, 

and make publicly available as part of the notice of proposed mle making and notice of final rule each of the folluwing". 

Pag'e 3, line 20, insert before the period at the end 

the following: 

1 "(8) ;\!Cl\1BER OF SIZE STAXDAIWS.-The Ad2 ministrator shall not limit the number of size stand3 ards it creates pursuant to paragraph (2), and shall 

4 assign the appropriate size standard to each .:\Ol'th 

5 American Industrial Classification System Code.". 

fWHlCI0320121032012,170,xml 

March 20, 2012 (4:13 p,m,) 

(52088611) 
23 

Mr. WALSH. Thank you, Mr. Chairman. The amendment makes 

two small changes to the Small Business Protection Act. 

First, it requires that the SBA make publicly available its analysis and rationale when revising size standards or creating new 

ones. I think we can all agree, as the Ranking Member said, that 

more transparency here is a good thing and will help prevent further instances like the one we are correcting here. 

Second, it prohibits SBA from artificially limiting the number of 

size standards. Our goal with this entire process is for the SBA to 

create and maintain the most accurate size standards possible. 

This amendment keeps the SBA from choosing administrative ease 

over the correct number of size standards. 

Thank you, Mr. Chairman, and I yield back. 

Chairman GRAVES. Does any other Member wish to be heard on 

the amendment? 

Seeing none, the amendment as developed through discussion—— 

Ms. VELA ́ ZQUEZ. Yes, Mr. Chairman, I would like—— 

Chairman GRAVES. Oh, yes, absolutely. 

Ms. VELA ́ ZQUEZ. I would like to say something about this amendment. 

Chairman GRAVES. Of course. 

Ms. VELA ́ ZQUEZ. Mr. Chairman, this amendment will guarantee 

that SBA does not try to make the industry fit the size standard, 

but that an individual size standard will be created for each industry. While the amendment made great strides in trying to guarantee fair process for small businesses, the amendment and corresponding bill still failed to provide an agency appeal process for 

small businesses if they feel the size standard does not adequately 

represent their industry. Instead, small businesses will be faced 

with either expending their limited time and money to challenge 

the size standard or, the more likely scenario, accept the standard 

developed by SBA and be excluded from small businesses programming. 

I hope that as we move forward with this piece of legislation and 

on future bills we can come up with a meaningful option for small 

businesses to challenge unfair standards. Thank you. 

Chairman GRAVES. Does any other Member wish to be heard on 

the amendment? 

The basis of the SBA’s size standards, I think, should be public 

so that businesses can better understand the SBA’s rationale and 

challenge it when appropriate. Furthermore, I think SBA should 

not be allowed to force over 1,100 industries into 16 size standards. 

The facts, not SBA’s administrative ease, should dictate the size 

standards, and I do support the amendment. 

So with that, the question is on the amendment offered by Mr. 

Walsh. All those in favor say aye. 

[A chorus of ayes.] 

Chairman GRAVES. All opposed no. 

[No response.] 

Chairman GRAVES. In the opinion of the chair the ayes have it. 

The amendment is agreed to. 

Does any other Member wish to offer an amendment? 


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Seeing none, the question is on agreeing to H.R. 3987 as amended. All those in favor say aye. 

[A chorus of ayes.] 

Chairman GRAVES. All opposed no. 

[No response.] 

Chairman GRAVES. In the opinion of the chair the ayes have it. 

H.R. 3987 is agreed to without objection. A quorum being present, 

the bill is favorably reported to the House. And without objection 

the Committee staff is authorized to correct punctuation and make 

other necessary technical corrections and conforming changes. 

With that, our next bill for consideration is H.R. 4081, the ‘‘Contractor Opportunity Protection Act of 2012,’’ which I introduced 

with Mr. West. This bill addresses what may be the top complaint 

I received from small business contractors, which is contract bundling or the process of taking what could be several small contracts 

and packing them together as one large contract that is simply too 

big for small businesses to compete. Sometimes bundling is justified, in which case it can proceed. But in other cases, it needlessly 

shuts down so many small businesses. 

This bill does four things. First, it clarifies the definition of ‘‘bundling’’ so that we can capture construction contracts. Second, it improves processes by eliminating the needless and duplicative distinctions between bundling and consolidation. And third, it makes 

the process objective and transparent using boards of contract appeals and Government Accountability Office’s existing contracting 

appeals process to ensure that a neutral third-party makes decisions about bundling and to give small businesses a voice in this 

process. And finally, it holds agencies accountable. 

This bill requires agencies to demonstrate that the anticipated 

savings on a bundled contract actually materialize before they continue bundling a successor contract. I want to emphasize that I 

think this is one of the most important bills that we can pass if 

we want to help small businesses compete and save taxpayers 

money, and I urge the Committee to support it. 

I now recognize Ranking Member Vela ́zquez for her statement. 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman. This is a good bill, 

straightforward. And for the longest time now at every meeting 

that we have done, hearing, in terms of contracting, we hear time 

and time again how contract bundling and contract consolidation is 

hurting small businesses. In fiscal year 2011, for instance, more than $50 billion worth of 

contracts were awarded through bundled or consolidated contracts. 

To address this, the legislation before us makes several key statutory changes. Most importantly, it expands the definition of what 

a bundled contract is and requires review by the SBA and procurement center representatives before the proposed procurement could 

occur, changes that were included in H.R. 1873, which this Committee approved in the 110th Congress. 

Similarly, an appeal process is included that enables both the 

SBA and affected small businesses to request further action to 

unbundle contracts. These are positive changes that will help small 

firms. 

However, changes to laws without an accompanying increase in 

enforcement personnel may do more harm than good. And in this 


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regard, there is a glaring lack in oversight when trying to stop contract bundling. While government procurement spending has more 

than doubled between 2001 and 2010, from 233 billion to 536 billion, resources dedicated to anti-bundling efforts have dwindled. So 

while the statutory changes in this legislation are welcome, it is 

unfortunate that we are not adding more cops on the beat. 

Do not get me wrong, this legislation makes positive changes, but 

without adequate enforcement, small businesses may be left out 

without the real change they crave. 

And with that, I yield back. 

Chairman GRAVES. Are there any other Members who wish to 

make a statement on 4081? 

Mr. OWENS. Mr. Chairman. 

Chairman GRAVES. Yes, sir. 

Mr. OWENS. Thank you. A question actually. Has any analysis 

been done to determine whether or not this will increase costs for 

government agencies if you fail to bundle what would be called 

small contracts? 

Chairman GRAVES. Barry. 

COUNSEL. I am not sure I actually understand the question. The 

concept of contract bundling implies that the federal agency has 

done an assessment as to whether or not it is actually saving 

money by taking contracts that were previously done by small businesses and combining them. 

Mr. OWENS. So then, in fact, if I am understanding your response, even though you did not understand my question, in fact, 

they have done an analysis that the bundle is actually cheaper before they would go ahead and bundle. 

COUNSEL. There is nothing currently in law or changes being 

made in H.R. 4081 that prevents the government from bundling. It 

prevents the government from bundling when the government does 

not obtain what are called substantial measurable benefits. Those 

may be cost savings, they may be savings related to the delivery 

of the product as opposed to necessarily the actual cost savings. In 

other words, there may be other values that the government captures other than purely costs associated with the savings. 

Mr. OWENS. Okay. Thank you. 

COUNSEL. Mm-hmm. 

Chairman GRAVES. Any other Member wish to be heard on H.R. 

4081? 

Clerk, please report the title of the bill. 

The CLERK. H.R. 4081: To amend the Small Business Act to consolidate and revise provisions related to contract bundling and for 

other purposes. 

Chairman GRAVES. Without objection H.R. 4081 is considered as 

read and open for amendment at any point. 

[The bill H.R. 4081 follows:] 


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AUT)-,'ENT1CATED? 

V!. GOVERN"lENT 

lNfORMATION 

GPO 

112TH COKGRESS H R 4081 2D Sf~SSIO'" • • 

To amend the Small Business Act to consolidate and revise provisions relatiug 

to contraet bundling, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

F'EBlWAHY 17, 2012 

NIr. GRAVER of :\1issouri (for himself and Mr. WEST) introduced the following 

bill; which was referred to the Committee on Small Business 

A BILL 

To amend the Small Business Act to consolidate and revise 

provisions relating to contract bundling, and for other 

purposes, 

1 Be it enacted by the Senate and House of Representa2 tivl'~ of the Un'ited States of Arner'ica -in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 'rhis Act may be cited as the "Contractor Oppo1'-

5 tunity Protection Act of 2012". 

6 SEC. 2. CONSOLIDATION OF PROVISIONS RELATING TO 

7 CONTRACT BUNDLING. 

8 Section 44 of the Small Business Act (15 U.S.C. 

9 657 q) is amended to read as follows: 
27 


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2 

1 "SEC. 44. CONTRACT BUNDLING. 

2 "(a) DEFINITIONS.-In this Act: 

3 "(1) BUKDLED CONTRACT.-The term 'bundled 

4 contract'-

5 "(A) means a contract that is entered into 

6 to meet procurement requirements that are 

7 combined in a bundling of contract require8 ments, without regard to whether a study of the 

9 effects of the solicitation on Federal officers or 

10 employees has been made; and 

11 "(B) does not include12 "(i) a contract 'with an aggregate dol13 lar value below the dollar threshold; or 

14 "(ii) a single award contract for the 

15 acquisition of a weapons system acquired 

16 through a major defense acquisition. 

17 "(2) BUKDLING 1IETHODOLOGY.-The term 

18 'bundling methodology' means19 "(A) a solicitation to obtain offers for a 

20 single contract or a multiple award contract; 

21 "(B) a solicitation of offers for the 

22 issuance of a task or a delivery order under an 

23 existing single or multiple award contract; or 

24 "(C) the creation of any new procurement 

25 requirements that permits a combination of 

26 contract requirements, including any combina-

.HR 4081 m 
28 


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3 

1 tion of contract requirements or order require2 ments. 

3 "(3) BUJ\DLING OF COJ\TRACT REQUIRE4 MEJ'\Ts.-rrhe term 'bundling of contract require5 ments', with respect to the contract requirements of 

6 a ~~ederal agency7 "(A) means the use of any bundling meth8 odology to satisfy 2 or more procurement re9 quirements for new or existing goods or services 

10 provided to or performed for the ~'ederal agen11 cy, including any construction services, that is 

12 likely to be unsuitable for award to a small13 business COHcern due to14 "(i) the diversity, size, or specialized 

15 nature of the clements of the performance 

16 specified; 

17 "(ii) the aggregate dollar value of the 

18 anticipated award; 

19 "(iii) the geographical dispersion of 

20 the contract performance sites; or 

21 "(iv) any combination of the factors 

22 described in clauses (i), (ii), and (iii); and 

23 "(B) docs not include the use of' a bUll24 dling methodology for an anticipated award 

.HR 40811H 
29 


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4 

1 with an aggregate dollar value below the dollar 

2 threshold. 

3 "(4) CHIEF ACQVISITION OFFICER.-The term 

4 'Chief Acquisition Officer' means the employee of a 

5 Federal agency desig11ated as the Chief Acquisition 

6 Officer for the Federal agency under section 16(a) 

7 of the Office of Federal Procurement Policy Act (41 

8 U.S.C. 1702(a». 

9 "(5) CONTR.~CT.-The term 'contract' includes, 

10 for purposes of this section, any task order made 

11 pursuant to an indefinite quantity, indefinite deliv12 ery contract. 

13 "(6) DOLLAR TIIRESHOIJD.-The term 'dollar 

14 threshold' means15 "(A) in the case of a contract for construc16 tion, $5,000,000; and 

17 "(B) in any other case, $2,000,000. 

18 "(7) l\IAJOR DEFENSE ACQVISITIOK PRO19 GRA:VI.-The term 'major defense acquisition pro20 gram' has the meaning given in section 2430(a) of 

21 title 10, United States Code. 

22 "(8) PROCUREMENT REQUIREMENT.-The term 

23 'procurement requirement' means a determination 

24 by an agency that a specified good or service IS 

25 needed to satisfy the mission of the agency. 

-HR 4081 IH 
30 


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5 

1 "(9) SEKIOR PROCURE:\IENT EXECUTIVE.-The 

2 term 'senior procurement executive' means an offi3 cial designated under section 16( c) of the Office of 

4 Federal Procurement Policy Act (41 U.S.C. 

5 1702( c)) as the senior procurement executive for a 

6 :B' ederal agency. 

7 "(b) POLICY.-The head of each Federal agency shall 

8 ensure that the decisions made by the Federal agency re9 garding bundling of contract requirements of the I;lederal 

10 agency are made "lith a view to providing small business 

11 concerns with appropriate opportunities to participate as 

12 prime contractors and subcontractors in the procurements 

13 of the Federal agency. 

14 "(c) CONTRACT BUNDLING.-

15 "(1) PROPOSED PROCTREl\fENTS.-Paragraphs 

16 (2) through (4) shall apply to to a proposed procure17 ment if the proposed procurement18 "(A) would adversely affect one or more 

19 small business concerns, including the potential 

20 loss of' an existing contract; 

21 "(B) includes, in its statement of work, 

22 goods or services23 "(i)(I) currently being performed by a 

24 small business; and 

.HR 4081 m 
31 


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1 "(II) if thc proposed procurement is 

2 in a quantity or estimated dollar value the 

3 magnitude of which rcnders small busincss 

4 primc contract participation unlikely; or 

5 "(ii)(I) that are of a type that the Ad6 ministrator through market research can 

7 demonstrate that two or more small busi8 nesses are capable of performing; and 

9 "(II) if thc proposed procurement 

10 would he combined "lith othcr reqmrc11 ments for goods and services; 

12 "(C) is for construction andl3 "(i) seeks to package or combine dis14 erete eonstruction projeets; or 

15 "(ii) the value of the goods or services 

16 subjeet to the contract exceeds the dollar 

17 threshold; or 

18 "(D) is determined by the Administrator 

19 to have a solicitation that involves an unneces20 sal'y or unjustified bundling of contract require21 ments. 

22 "(2) RESPONSIBILITY OF nm PROCUREMENT 

23 ACTIVITY.-At least 45 days prior to the issuance of 

24 a solicitation, the Procurement Activity shall notifY 

25 and provide a copy of the proposed procurement to 

.HR 4081 IH 
32 


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1 the procurement center representative assigned to 

2 the Procurement Activity. '1'he 45-day notification 

3 process under this paragraph shall occur concur4 rently ,vith other processing steps required prior to 

5 issuance of the solicitation. The notice shall include 

6 a statement setting forth the proposed procurement 

7 strategy required by subsection (e), and e}.lllaining8 "(A) why the proposed acquisition cannot 

9 be divided into reasonably small lots (not less 

10 than economic production runs) to permit offers 

11 on quantities less than the total requirement; 

12 "(B) if applicable, a list of the incumbent 

13 contractors disaggregated by and including 

14 names, addresses, and whether or not the COll15 tractor is a small business concern; 

16 "(C) a description of the industries that 

17 might be interested in bidding on the contract 

18 requirements; 

19 "(D) the number of small businesses listed 

20 111 the industry categories that could be ex21 eluded from future bidding if the contract is a 

22 bundled contract, including any small business 

23 bidders that had bid on previous procurement 

24 requirements that are included in the bundling 

25 of contract requirements; 

.HR 4081 m 
33 


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1 "(E) why the delivery schedules cannot be 

2 established on a realistic basis that ,vill encour3 age small business participation to the e:xi,ent 

4 consistent with the actual requirements of the 

5 Government; 

6 "CF') why the proposed acquisition cannot 

7 be offered so as to make small business partici8 pation likely; 

9 "(G) why construction cannot be procured 

10 as separate discrete projects; and 

11 "(ll) why the ag'ency has determined that 

12 the bundled contract is necessary and justified, 

13 "(3) PCBLICATION 01" NOTICE S'!'A'l'E;\1E)J,!,,-

14 Concurrently, the statement required in paragraph 

15 (2) shall be published in the Federal contracting op16 portunities database. 

17 "(4) HECO:VIPE'l'ITIOK 01" A PREVIOUSLY Bl~)J18 DI~ED CONTHACT.-If the proposed procurement is a 

19 prcviously bundled contract that is to be recompeted 

20 as a bundled contract, the Administrator shall deter21 mine, ''lith the assistance of the agency proposing 

22 the procurement23 "(A) the amount of savings and benefits 

24 (in accordance with subsection (d) ) achieved 

25 under the bundling of contract requirements; 

.HR 4081 m 
34 


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"(B) whether sueh savings and benefits 

2 will continue to be realized if the contract re3 mains bundled, and whether such savings and 

4 benefits would be greater if the procurement re5 quirements were divided into separate solicita6 tions suitable for award to small business con7 cerns; 

8 "(C) the dollar value of subcontracts 

9 awarded to small business concerns under the 

10 bundled contract, disaggregated by Xorth 

11 American Industrial Classification Code; 

12 "(D) the percentage of subcontract dollars 

13 awarded to small businesses under the bundled 

14 contract, disaggregated by North l'\.merican Iu15 dustrial Classification Code; and 

16 "(E) the dollar amount and percentage of 

17 prime contract dollars awarded to small busi18 nesses in the primary Xorth American Indus19 trial Classification Code for that bundled COll20 tract during each of the two fiscal years pre21 ceding the award of the bundled contract and 

22 during each fiscal year of the performance of 

23 the bundled contract. 

24 "(5) FAILURE TO PROVIDE ~OTICE.-If no no25 tification of the proposed procurement or accom-

.HR 4081 IH 
35 


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1 panying statement is received, but the Administrator 

2 determines that the proposed procurement is a pro3 posed procurement described in paragraph (1), then 

4 the Administrator shall require that such a stateS ment of work be completed by the Procurement Ac6 tivityand sent to the procurement center representa7 tive and postpone the solicitation process for at least 

8 10 days but not more than 45 days to allow the Ad9 ministrator to review the statement and make rec10 ommendations as described in this section before the 

11 procurement process is continued. 

12 "(6) RESPOKSIBILITY OF THE PIWCCREl\fENT 

13 CENTER REPRESENTATIVE.-Withill 15 days after 

14 receipt of the proposed procurement and accom15 panying statement, if the procurement center rep16 resentative believes that the procurement as pro17 posed ,,,,ill render small business prime contract par18 ticipation unlikely, the representative shall rec19 ommend to the Procurement Activity alternative pro20 curement methods which would increase small busi21 ness prime contracting opportunities. 

22 "(7) DISAGREEMENT BETWEEK THE ADl\HKIS23 TRATION AND THE PHOCUREl\fENT ACTIYITY.-

24 "(A) IN GEKEHAL.-If a small business 

25 concern would be adversely affected, directly or 

.HR 4081111 
36 


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1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

11 

indirectly, by the proposed procurement, and 

that small business concern or a trade association of which that small business concern is a 

member so requests, the Administrator may 

take action under this paragraph to further the 

interests of small businesses. 

"(B) APPEAL TO AGE:"JCY HEAD.-First, 

the proposed procurement shall be submitted 

for determination to the head of the contracting 

agency by the Administrator. 

"(C) FAIL"CRE TO AGREE.-Whenever the 

Administrator and the head of the contracting 

agency fail to agree-

.HR 4081 m 

"(i) the Administrator, ,,-ithin ten 

days after such decision, may file an appeal with the appropriate ag'ency hoard of 

contraet appeals; 

"(ii) the board shall provide the Administrator and the head of the contracting agency the opportunity to provide 

their views on the disputed contract, except 

that no oral testimony or oral argument 

shall be permitted; and 

"(iii) the board shall render its decision, which shall be final agency action for 
37 


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12 

purposes of chapter 7 of title 5, United 

2 States Code, within 30 days after the ap3 peal has been filed. 

4 "(D) APPEAL BY AFF'ECTED S~IALIJ BI~SI5 NESS CONCERN TO GAo.-Should the Adminis6 trator choose not to pursue an appeal the ap7 propriate board of contract appeals, a small 

8 business concern that ,vould be adversely af9 feoted, directly or indirectly, by the procure10 ment as proposed, or a trade association that 

11 includes such a small business concern as a 

12 member, may bring a protest to the Govern13 ment Accountability Office. If the protest is 

14 brought by a trade association, the trade asso15 ciation shall not be required to identifY a spe16 cific member in connection with the protest. 

17 "(d) lVlARKET RESEARCH.-

18 "(1) IN GENEHAL.-Before proceeding \vith an 

19 acquisitioll strategy that could lead to a contract 

20 containing bundling of contract requirements, the 

21 head of an agency shall conduct market research to 

22 determine whether bundling of the requirements is 

23 necessary and justified. 

24 "(2) 11~ACTORS.-For purposes of subsection 

25 (c)(I), bundling of contract requirements may be de-

-RR 4081 IH 
38 


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1 termil1(~d as being necessary and justified if, as com2 pared to the benefits that would be derived from 

3 contracting to meet those requirements if not bun4 dIed, the Federal Government would derive from the 

5 bundling of contract requircmcnts measurably sub6 stantial benefits, including any combination of bene7 fits that, in combination, are measurably substantial. 

8 "(3) BENEFITS.-For the purposes of bundling 

9 of contract requirements, benefits describcd in para10 graph (2) may include the folIo-wing: 

11 "(A) Cost savings. 

12 "(B) Quality improvements. 

13 "(C) Reductioll in acquisition cycle timcs. 

14 "(D) Better terms and conditions. 

15 "(E) Any other benefits. 

16 "(4) REm;cTIOK OF COSTS KOT DETER:'IIINA17 TIVE.-For purposes of this subsection: 

18 "(1\) Cost savings shall not include any re19 duction in the usc of military interdepartmental 

20 purchase requests or any similar transfer funds 

21 among Federal agencies for the usc of a con22 tract issued by another Pederal agency. 

23 "(B) The reduction of administrative or 

24 personnel costs alone shall not be a justification 

25 for bundling of contract requirements unless 

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1 the cost savings are expected to be substantial 

2 in relation to the dollar value of the procure3 mellt requirements to be bundled. 

4 "(5) LEvIITATIO~ ON ACQ"UISITIOK STRATEGY.-

5 The head of a Federal agency may not carry out an 

6 acquisition strategy that includes a bundling of con7 tract requirements valued in excess of the dollar 

8 threshold, unless the senior procurement executive 

9 or, if applicable, Chief Acquisition Officer for the 

10 Federal agency, before carrying out the acquisition 

11 strategy certifies to the head of the Federal agency 

12 that steps ,,,'ill be taken to include small business 

13 concerns in the acquisition strate6'Y. 

14 "(e) STfu\TEGY SPECIFICATIONS.-If the head of a 

15 contracting agency determines that an acquisition plan or 

16 proposed procurement strate6'Y for a procurement involves 

17 a bundling of contract requirements, the proposed acquisi18 tion plan or procurement strategy shall19 "(1) identify specifically the benefits anticipated 

20 to be derived from the bundling of contract require21 ments; 

22 "(2) set forth an assessment of the specific im23 pediments to participation by small business con24 cerns as prime contractors that result from thc bun25 dlillg of contract requirements and specify actions 

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1 designed to maximize small business participation as 

2 subcontractors (including suppliers) at various ticrs 

3 under the contract or contracts that are awarded to 

4 meet the requirements; and 

5 "(3) in elude a specific determination that the 

6 anticipated measurable benefits of the proposed bun7 dIed contract justifY its use. 

8 "(f) COKTRACT TKL\IING.-In the case of a solicita9 tion of offers for a bundled contract that is issued by the 

10 head of an agency, a small-business concern may submit 

11 an offer that provides for usc of a particular team of sub12 contractors for the performance of the contract. The head 

13 of the agency shall evaluate the offer in the same manner 

14 as other offers, vvith due consideration to the capabilities 

15 of all of the proposed subcontractors. If a small business 

16 concern teams under this paragraph, it shall not affect 

17 its status as a small business concern for any other pur18 pose. 

19 "(g) DATABASE, ANALYSIS, A:.JD A'\~,nTAL REPORT 

20 REGARDIl'\G CONTRACT BUNDLI:.JG.-

21 "(1) DATABASE.-Not later than 180 days 

22 after the date of the enactment of this subsection, 

23 the Administrator shall develop and shall thereafter 

24 maintain a database containing data and informa25 tion regarding-

.DR 4081 m 
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1 "(A) each bundled contract awarded by a 

2 Federal agency; and 

3 "(B) each small business concern that has 

4 been displaced as a prime contractor as a result 

5 of the award of such a contract. 

6 "(2) .l\NALYSIS.-For each bundled contract 

7 that is to be recompeted as a bundled contract, the 

8 Administrator shall determine9 "(A) the amount of savings and benefits 

10 (in accordance with subsection (d)) achieved 

11 under the bundling of contract requirements; 

12 and 

13 "(B) whether such savings and benefits 

14 will continue to be realized if the contract re15 mains bundled, and whether such savings and 

16 benefits would be greater if the procurement re17 quirements were divided into separate solicita18 tions suitable for award to small business con19 cerns. 

20 "(3) ANNUAL REPORT ON CONTRACT BUN21 DUXG.-

22 "(A) IN GENERAIJ.-Not later than 1 year 

23 

24 

25 

after the date of the enactment of this paragraph, and annually in MardI thereafter, the 

Administrator shall transmit a report on con-

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tract bundling to the Committee on Small Business of the House of Representatives and the 

Committee on Small Business and J<Jntrepreneurship of the Senate. 

"(B) COKTENTS.-J<Jach report transmitted under subparagraph (A) shall include-

.HR 4081 IH 

"(i) data on the number, arranged by 

industrial classification, of small business 

concerns displaced as prime contractors as 

a result of the award of bundled contracts 

by Federal agencies; and 

"(ii) a description of the activities 

with respect to previously bundled contracts of each Federal agency during the 

preceding year, including-

"(I) data 011 the number and 

total dollar amount of all contract requirements that were bundled; and 

"(II) with respect to each bundled contract, data or information 

on-

"(aa) the justification for 

the bundling of contract requirements; 
43 


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.HR 4081 m 

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"(bb) the cost savings realized by bundling the contract requirements over the life of the 

contract; 

"( cc) the e;>,.'tent to which 

maintaining the bundled status 

of contract requirements is projected to result in continued cost 

savings; 

"(dd) the extent to which 

the bundling of contract requirements eomplied with the eOlltracting agency's small business 

subeontraeting plan, in eluding 

the total dollar value awarded to 

small business COlwerns as subeon tractors and the total dollar 

value previously awarded to small 

business eoneenlS as prnne contraetors; and 

"( ee) the impaet of the bundling of eontract requirements on 

small business eoneerns unable to 

compete as prime contractors for 

the consolidated requirements 
44 


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1 and on the industries of such 

2 small business concerns, includ3 ing a description of any changes 

4 to the proportion of any such in5 dustry that is composed of small 

6 business concerns. 

7 "(h) BUi'\"DLING ACCOUKTABILITY MEASURES.-

8 "(1) TEAMIKG REQUIRE:\JENTs.-Each Federal 

9 agency shall include in each solicitation for any mul10 tiple award contract above the dollar threshold a 

11 provision soliciting bids from any responsible source, 

12 including responsible small business concerns and 

13 teams or joint ventures of small business concerns. 

14 "(2) POLICIES O:-J REDl;CTION OF CO:-JTRACT 

15 RGNDLIKG.-

16 "(A) Ii'\" GI~NlmAL.-~ot later than 270 

17 days after the date of enactment of this sub18 paragraph, the Federal Acquisition Regulatory 

19 Council, established under section 25(a) of the 

20 Office of Federal Procurement Policy Act (41 

21 U.S.C. 1302(a)), shall amend the Federal Ac22 quisition Reg11lation issued under section 25 of 

23 such Act to--

24 "(i) establish a Governmellt-vvide pol25 icy regarding contract bundling, including 

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20 

regarding the solicitation of teaming and 

joint ventures; and 

"(ii) require that the policy established under clause (i) be published on the 

website of each Pederal agency. 

"(B) R.~TIONALE FOR CONTRACT BUNDUNG.-Not later than 30 days after the date 

on 'which the head of a Federal agency submits 

the report required under section 15(h), the 

head of the :B'ederal agency shall publish on the 

website of the Federal agency a list and rationale for auy bundled contract for which the Federal agency solicited bids or that was awarded 

14 by the :B'ederal agency.". 

15 SEC. 3. REPEAL OF REDUNDANT PROVISIONS. 

16 (a) CERTAIN PROVISIONS REGARDING CON'l'RACT 

17 BUNDLIKG REPEALED.-Sectioll 15(a) of the Small Busi18 ness Act (15 U.S.C. 644(a)), is amended by striking "If 

19 a proposed procurement includes" and all that follows 

20 through "the matter shall be submitted for determination 

21 to the Secretary or the head of the appropriate depart22 ment or agency by the Administrator.". All references in 

23 law to such sentences as they were in effect on the date 

24 that is 1 day prior to the effective elate of this Act shall 

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be deemed to be references to section 44(d), as added by 

2 this Act. 

3 (b) CER'l'AI:-J PRUVISIOKS REGARDlKG lVlARKET RE4 SEARCH REPEAI~ED.-Paragraphs (2) through (4) of sec5 tion 15(e) of the Small Business Act (15 U.S.C. 644(e)) 

6 are repealed. All references in law to such paragraphs, as 

7 in effect on the date that is one day prior to the effective 

8 date of this Act, shall be deemed to be references to sub9 sections (d) through (f), respectively, of section 44 of the 

10 Small Business Act, as added by this section. 

11 (c) CERTAI:-J PROVISIONS REGARDlKG COK'l'RACT 

12 BUNDl~I:-JG DATABASE REPEAI~ED.-

13 (1) Paragraph (1) of section 15(p) of the Small 

14 Business Act (15 U.S.C. G44(p)) is repealed. 

15 (2) Paragraphs (2) through (4) of section 15(p) 

16 of the Small Business Act (15 U.S.C 644(p)) are re17 pealed. All references in law to such paragraphs, as 

18 in effect on the date that is one day prior to the ef19 fectiye date of this Act, shall be deemed to be ref20 erences to paragraphs (1) through (:3), respectively, 

21 of section 44(h) of the Small Business Act, as added 

22 by this Act. 

23 (d) CERTAIK PRO"\"1SIONS REGARDlXG BUKDLI:-JG 

24 ACC01J:-JTABILITY MEASURES REPEALED.-Paragraphs 

25 (1) and (2) of seetion 15(q) of the Small Business Act 

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(15 U.S.C 644(q)) are repealed. All referenees in law to 

2 sueh paragraphs, as in effect on the date that is one day 

3 prior to the effective date of tIllS Act, shall be deemed to 

4 be references to paragraphs (1) and (2), respectively, of 

5 section 44(i) of the Small Business Act, as added by this 

6 Act. 

7 (e) CERTADJ PROVISIO~S REGARDIKG.-Subsection 

8 (0) of section 3 of the Small Business Act (15 U.S.C.) 

9 is repealed. 

10 SEC. 4. TECHNICAL AMENDMENTS. 

11 Sectioll 15 of the Small Business Act (15 U.S.C. 644) 

12 is amended13 (1) in the subsection heading of subsection (p), 

14 to read as follows: "ACCESS TO DATA."; and 

15 (2) in the subsection heading of Rubsection (p), 

16 to read as follows: "REPORTS RELATED TO PRO17 CURE:\IENT CEKTER REPRESE~TATIVES.". 

18 SEC. 5. EXPANSION OF AGENCY'S RESPONSIBILITY. 

19 Section 44(b) of the Small Business Act (15 U.S.C. 

20 657q(b)) is amended by striking "appropriate" and insert21 ing "the ma.ximum practicable". 

o 

.HR 4081 m 
48 

Chairman GRAVES. And I do have an amendment in the nature 

of a substitute, if the clerk would read the amendment. 

The CLERK. Amendment 1: Amendment in the nature of a substitute offered by Chairman Graves of Missouri. 

Chairman GRAVES. Without objection the amendment is considered as read. 

[Amendment 1 to H.R. 4081 offered by Chairman Graves follows:] 


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AMENDMENT TO H.R. 4081 

OFFERED BY MR. GRAVES OF MISSOURI 

Strike all that follows after the enacting clause and 

insert the follmving: 

SECTION 1. SHORT TITLE. 

2 This Act may be cited as the "Contractor Oppor3 tunity Protection Act of 2012". 

4 SEC. 2. CONSOLIDATION OF PROVISIONS RELATING TO 

5 CONTRACT BUNDLING. 

6 Section 44 of the Small Business Act (15 U.S.C. 

7 657q) is amended to read as follmvs: 

8 "SEC. 44. CONTRACT BUNDLING. 

9 "(a) DEF'INITIOxS.-In this Act: 

10 "(1) BUXJ)J;f;D CONTRACT.-The term 'bundled 

11 contract'-

12 "(A) means a contract that is entered into 

13 to meet procurement requirements that are 

14 combined in a bundling of contract require15 ments, without regard to whether a study of the 

16 effects of the solicitation on Federal officers or 

17 employees has been made; and 

18 "(B) does not includef:\VHLCI0314121031412.130.xml (52041614) 

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2 

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6 

2 

"(i) a contract ,vith an aggTegate dollar value below the dollar threshold; or 

"(ii) a single award contract for the 

acquisition of a weapons system acquired 

throug'h a major defense acquisition. 

"(2) BUKDLIXG lVIETHODOLOGY.-The term 

7 'bundling methodology' means8 "(A) a solicitation to obtain offers for a 

9 single contract or a multiple award contract; 

10 

11 

12 

13 

14 

15 

16 

17 

18 

"(B) a solicitation of offers for the 

issuancc of a task or a delivery order under an 

existing single or multiple award contract; or 

"(C) the creation of any new procurement 

requirements that permits a combination of 

contract requir'ements, including any combination of contract requirements or order requirements. 

"(3) BUNDLIKG OF CONTRACT REQURE19 l\IEKTS.-The term 'bundling of contract require20 ments', with respect to the contract requirements of 

21 a Pederal agency22 "(A) means the use of any bundling meth23 odology to satisD' 2 or more procurement re24 quirements for new or existing goods or services 

25 provided to or performed for the Federal agenf:IVHLC\031412\031412.130.xml (52041614) 

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cy, including any constmction services, that is 

2 likely to be unsuitable for award to a small3 business concern due to4 "(i) the diversity, size, or specialized 

5 nature of the elements of the performance 

6 specified; 

7 "(ii) the aggregate dollar value of the 

8 anticipated award; 

9 "(iii) the geographical dispersion of 

1 0 the contract performance sites; or 

11 "(iv) any combination of the factors 

12 described in clauses (i), (ii), and (iii); and 

13 "(E) does not include the use of a bU11-

14 cHing methodology for an anticipated award 

15 'with an aggregate dollar value below the dollar 

16 threshold. 

17 "(4) CHIEP ACQUISITION OPPTcER.-The term 

18 'Chief Acquisition Officer' means the employee of a 

19 Pederal agency designated as the Chief Acquisition 

20 Officer for the I;~ederaI agency under section 16(a) 

21 of the Office of Pederal Procurement Policy Act (41 

22 U.RC. 1702(a)). 

23 "(5) CO:\fTRAcT.-The term 'contract' includes, 

24 for purposes of this section, any task order made 

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1 pursuant to an indefinite quantity, indefinite deliv2 ery contract. 

3 "(6) CONTRACT BUNDLIKG.-The term 'COll4 tract bundling' mcans the process by which a bUll5 dIed contract is created. 

6 "(7) DOLLAl,{ TIIRESHOLD.-The tt:rIll 'dollar 

7 threshold' means8 "(A) in the case of a contract for eonstruc9 tion, $5,000,000; and 

10 "(E) in any other case, $2,000,000. 

11 "(8) ::VIAJOR DEPEKSE ACQUISITIOX PRO12 GRA:\L-The term 'major defense acquisition pro13 gram' has the meaning given in section 2430(a) of 

14 title 10, United States Code. 

15 "(9) PRKVlOl~SI,y BUXDLED COKTRA.CT.-The 

16 term 'previously bnndled contract' means a contract 

17 that is the successor to a contract that required a 

18 bundling analysis, contract for which any of the suc19 cessor contract were designated as a eOllsolidated 

20 contract or bundled contraet in the Federal procure21 mellt database, or a contraet for which the Adminis22 trator designated the prior eOlltract as a bundled 

23 eoutraet. 

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"(10) PROCURE:VIENT ACTIVITY.-The term 

2 'procurement activity' means the Federal agency or 

3 office thereof acquiring goods or services. 

4 "(11) PROGCRElVIENT REQ1~IRE.MEl\T.-The 

5 term 'procurement requirement' means a determina6 tiOIl by an agency that a specified good or service is 

7 needed to satisfy the mission of the agency. 

8 "(12) SEl\IOR PROCUREl\IENT EXECl:TIVE.-

9 The term 'senior procurement executive' means an 

10 official designated under section 16(c) of the Office 

11 of Federal Procurement Policy Act (41 U.S.C. 

12 1702(c)) as the senior procurement executive for a 

13 Federal agency. 

14 "(b) POLICY.-The head of each :F'ederal agency shall 

15 ensure that the decisions made by the Federal agency re16 gardillg contract bundling are made with a view to pro17 viding small business concerns ,vith appropriate opportu18 nities to participate as pI'ime contractors and subcontrac19 tors in the procurements of the Federal agency. 

20 "(c) CONTRACT BUl\DLIl\G.-

21 "(1) PROPOSED PROCURE:\IENTs.-Paragraphs 

22 (2) through (4) shall apply to to a proposed procure23 ment if the proposed procurementf:IVHlCI0314121031412.130.xml (52041614) 

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"(A) would adversely affeet one or more 

small business concerns, including the potential 

loss of an existing contract; 

"(B) includes, in its statement of ,York, 

goods or seryices-

"(i)(I) currently being performed by a 

small business; and 

"(II) if the proposed procurement is 

in a quantity or estimated dollar value the 

magnitude of which renders small business 

prime contract participation unlikely; or 

"(ii)(1) that are of a type that the Administrator through market research can 

demonstrate that two or more small businesses are capable of performing; and 

"(II) if the proposed procurement 

would be combined ,'lith other requirements for goods and services; 

"(C) is for construction and-

"(i) seeks to package or combine discrete construction projccts; or 

"(ii) the value of the goods or serviees 

subject to the contract exceeds the dollar 

threshold; or 

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"(D) is determined by the Administrator 

2 to have a solicitation that involves an unneces3 sary or unjustified bundling of contract require4 ments. 

5 "(2) RESPONSIBILITY OF THE PROCURE:\IEl\T 

6 ACTTVITY.-At least 45 days prior to the issuance of 

7 a solicitation, the Procurement Activity shall notifY 

8 and provide a copy of the proposed procurement to 

9 the procurement center representative assigned to 

10 the Procurement Activity. The 45-day notification 

11 process under this paragraph shall occur concur12 rently with othei' processing steps required prior to 

13 issuance of the solicitation. The notice shall include 

14 a statement setting forth the proposed procurement 

15 strategy required by subsection (e), and16 "(A) eJl.-plaining why the proposed acquisi17 tion cannot be further di\ided into reasonably 

18 small lots or discrete tasks in order to permit 

19 offers by small business concerns; 

20 "(E) listing, if applicable, the incumbent 

21 contractors disaggregatcd by and including 

22 names, addresses, and whether or not the COll23 tractor is a small business cOllcern; 

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"(C) describing the industries that might 

be interested in bidding on the contract requiremcnts; 

"(D) delincating' thc number of slllall business concerns listed in the industry cat.egories 

that. could be excluded from future bidding if 

the contract is a bundled contract, including 

any small business bidders that had bid on previous procurement requirements that are included in the bundling of contract requircments; 

"(E) delineating the number of existing 

small business concerns whose contracts will 

cease if the contract bundling proceeds; 

"(F) explaining' why the delivery schedules 

cannot be established on a realistic basis t.hat 

will encourage slllall business participation to 

the eAi;ent consistent 'with the actual requirements of the Government; 

"( G) explaining why the proposed acquisition cannot be offered so as to make small business participation likely; 

"(II) explaining why construction cannot 

bc procured as separate discr'etc projects; and 

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"(I) explaining why the agency has deter2 mined that the bundled contract is necessary 

3 and justified. 

4 "(3) PUBLICATION OF NOTICE STATEl\fENT.-

5 Concurrently, the statement required in paragraph 

6 (2) shall be published in the Federal contracting op7 portunities database. 

8 "(4) REC0:\fPETITION OF A PREVIOUSJ,Y BUN9 DLED CONTRACT.-lf thc proposed procuremcnt is a 

10 prcviously bundled contract, that is to bc recompeted 

11 as a bundled contract, the Administrator shall deter12 mine, vvith thc assistancc of the agency proposing 

13 thc procuremcnt14 "(A) the amount of savings and bcncfits 

15 (in accordance with subsection (d)) achieved 

16 under the bundling of contract rcquircmcnts; 

17 "(E) whctlwr such savings and bcncfits 

18 will continuc to he rcalized if the contract re19 mains bundlcd, and whether such savings and 

20 bcncfits would be gTcater if the procurcmcnt rc21 quirements were divided into separate solicita22 tions suitable for award to small business eon23 ccrns; 

24 

25 

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"(C) the dollar value of subcontracts 

awardcd to small busincss conccrns undcr the 

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1 

2 

3 

4 

5 

6 

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8 

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10 

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12 

13 

14 

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16 

17 

18 

19 

20 

21 

22 

23 

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25 

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bundled contract, dis aggregated by North 

.. American Industrial Classification System 

Code; 

"(D) the pereentage of subcontract dollars 

awarded to small businesses under the bundled 

contract, disaggregated by North American Industrial Classification System Code; and 

"(Bl the dollar amount and percentage of 

prime contract dollars awarded to small businesses in the primary North .A.111erican Industrial Classification System Code for that bundled contract during each of the t'wo fiscal years 

preceding the award of the bundled contract 

and during each fiscal year of the performance 

of the bundled contract. 

"(5) FAITXRB TO PROVIDE NOTICB.-

"(A) No NOTIFICATION RBCBIVlm.-If no 

notification of the proposed procurement or accompanying statement is received, but the AdmillistratoI' determines that the proposed procurement is a proposed procurement described 

in paragraph (1), then the Administrator shall 

require that such a statement of work be completed by the Procnrement Activity and sent to 

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1 pone the solicitation process for at least 10 

2 days but not more than 45 days to allow the 

3 Administrator to revie,v the statement and 

4 make recommendations as described in this sec5 tion before the procurement process is contin6 ned. 

7 "(B) Xo WORK CO:\TTIKUED.-If the Ad8 ministrator requires a Procurement Activity to 

9 provide a statement of work pursuant to sub10 paragraph (A), the Procurement Activity shall 

11 not be permitted to continue with the procure12 ment until such time as the Procurement Activ13 ity complies v,ith the requirements of subpara14 gTaph (A). 

15 "(6) RESPO:\TSIBIUTY UF' THE PROCFRE:\fEKT 

16 CENTER REPRESE:\TTATIVE.-Withill 15 days after 

17 receipt of the proposed procurement and accom18 pauying statement, if the procurement center rep19 resentative believes that the procurement as pro20 posed ,vill render small business prime contract par21 ticipatioll unlikely, the representative shall rec22 ommend to the Procurement Activity alternative pro23 curement methods which would increase small busi24 ness prime contracting opportnllitiE::s. 

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1 "(7) DISAGREEMENT BETWEEN THE AD:vnNIS2 TRATOR A.:\TD THE PROCUREME.:\TT ACTIVITY.-

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

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March 14, 2012 (4:54 p.m.) 

"(A) IN GENERA.L.-The Administrator 

may take action under this paragraph to further the interests of small businesses if-

"(i) a small business concern would be 

adversely affected, directly or indirectly, by 

the proposed procurement, and that small 

business concern or a trade association 

representing' such small business concern 

so requests; or 

"(ii) if the Administrator determines 

that a small business concern would be adversely affected, directly or indirectly, by 

the proposed procurement. 

"(B) ApPEAL TO AGENCY HEAD.-First, 

the proposed procurement shall be submitted 

for determination to the head of the contracting 

agency by the Administrator. 

"(e) FAILURE TO AGREE.-Whellever the 

Administrator and the head of the contracting 

agency fail to agTee-

"(i) the Administrator, within ten 

days after such decision, may file an ap-

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peal with the appropriate agency board of 

contract appeals; 

"(ii) the board shall provide the Administrator and the head of the C011-

tracting agency the opportunity to provide 

their views on the disputed contract, except 

that no oral testimony or oral argument 

shall be permitted; 

"(iii) the board shall permit interested 

bidders to intervene; and 

"(iv) the board shall render its decision, which shall be final agency action for' 

purposes of chapter 7 of title 5, United 

States Code, within 80 days after the appeal has becn filed. 

"(D) .ApPEAL BY AFFECTED S~IALT, BUSIKESS CO~CERK TO GAo.-If the Administrator 

takes no action pursuant to subparagraph (C), 

a small business concern that 'would be adversely affected, directly or indirectly, by the 

procurement as proposed, or a trade association 

that includes such a small business concern as 

a member, may file a protest ,vith the Government Accountability Office. If the protest is 

filed by a trade association, the trade associaf:WHLC\031412\031412.130.xml 

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1 tion shall not be required to identifY a specific 

2 member in connection with the protest. 

3 "(d) MARKET RESEARCH.-

4 "(1) IN GE"'ERAL.-Before proceeding with an 

5 acquisition strategy that could lead to bundled COl1-

6 tracts, the head of an agency shall conduct market 

7 research to determine ""hetller bundling of the re8 quirements is necessary and justified. 

9 "(2) PACTOR8.-Pol' pUll)oses of subsection 

10 (c)(I), a bundled contract is necessary and justified 

11 if the bundling of contract requirements \ ... ill result 

12 in substantial measurable benefits in excess of those 

13 benefits resulting from a procurement of the con14 tract requirements that does not involve contract 

15 bundling. 

16 "(3) BENEFITS.-Por the purposes of bundling 

17 of contract requirements, benefits described in para18 graph (2) may include the follov\ing: 

19 "(A) Cost savings. 

20 "(B) Quality improvements. 

21 "(C) Reduction in acquisition cycle times. 

22 "(D) Better terms and conditions. 

23 "(E) AllY other benefits. 

24 "(4) REDUCTION OF COSTS NOT DETERl\IINA25 TIVE.-Por purposes of this subsection: 

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"(A) Cost savings shall not include any re2 dUCtiOll in the use of military interdepartmental 

3 purchase requests or any similar transfer funds 

4 among Federal agencies for the use of a COll5 tract issued by another Federal agency. 

6 "(B) The reduction of administrative or 

7 personnel costs alone shall not be a justification 

8 for bundling of contract requirements unless 

9 the cost savings are e).."})ected to be substantial 

10 in relation to the dollar value of the procure11 ment requirements to be bundled. 

12 "(5) LIMITATION 0"" ACQI:ISITION STRATEGY.-

13 The head of a Federal agency may l]ot carry out an 

14 acquisition strategy that includes bundled contracts 

15 valued in excess of the dollar threshold, unless the 

16 senior procurement executive or, if applicahle, Chief 

17 Acquisition Officer, for the Federal agency, certifies 

18 to the head of the Federal agency that steps v,rill be 

19 taken to include small husiness concerns in the ac20 quisition strate!-,'Y prior to the implementation of 

21 such acquisition strategy. 

22 "(e) STRATEGY SPECIFICATIONS.-lf the head of a 

23 contracting agency determines that an acquisition plan or 

24 proposed procurement strategy will result in a bundled 

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eontraet, the proposed aequisition plan 01' proeurement 

2 strategy shall3 "(1) identify speeifieally the benefits antieipated 

4 to be derived from the bundling of eontraet require5 ments; 

6 "(2) set forth an assessment of tIle speeific im7 pediments to partieipation by small business con8 cerns as prime contractors that rcsult from the COI1-

9 tract bundling and specify actions designed to maxi10 mize small business participation as subcontraetors 

11 (including suppliers) at various tiers under the con12 tract or contracts that are awarded to meet the re13 quirements; and 

14 "(3) include a specific determination that the 

15 anticipated measurable benefits of the proposed bun16 dIed contract justify its use. 

17 "(f) CONTRACT TEAi\IIKG.-Ill the case of a solicita18 tion of offers for a bundled contraet that is issued by the 

19 head of an ageney, a small-business eoneern may submit 

20 an offer that provides for use of a partieular team of sub21 contractors for the performanee of the contraet. The head 

22 of the ag-eney shall evaluate the offer in the same manner 

23 as other offers, with due eonsideration to the capabilities 

24 of all of the proposed subcontractors. If a small business 

25 eoneern teams under this paragraph, it shall not affeet 

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its status as a small business concern for allY other pur2 pOFle. 

3 "(g) DATABASE, ANALYSIS, AND A.,{NUAL REPORT 

4 REGARDING CONTRACT BeNDLING.-

5 "(1) DATABASE.-Not later than 180 days 

6 after the date of the enactment of this subsection, 

7 the Administrator shall develop and shall thereafter 

8 maintain a database containing data and informa9 tion regarding'-

10 "(A) each bundled contract awarded by a 

11 Federal agency; and 

12 "(B) each small bUFliness concern that has 

13 been displaced as a prime contractor as a reFlult 

14 of the award of such a contract. 

15 "(2) A.,{ALYSIS.-For cach bundled contract 

16 that is to be recompeted, the Administrator shall de17 termine18 "(A) the amount of savings and benefits 

19 realized, in comparison with the savings and 

20 benefits anticipated by the analysis required 

21 under suhsection (d) prior to the contract 

22 award; and 

23 "(B) whether such savings and henefits 

24 will continue to he realized if the contract re25 mains bundled, and whether Fluch savings and 

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2 

3 

4 

5 

18 

benefits would be greater if the procurcmellt requirements were divided into separate solicitations suitable for award to smail business concerns. 

"(3) &'\fNUAL REPORT ON CONTRACT BU:--J6 DLING.-

7 "(A) I:--J GENERAL.-Not later than 1 year 

8 after the date of the enactment of this para9 graph, and annually in March thereafter, the 

10 Administrator shall transmit a report on con11 tract bundling to the Committee on Small Busi12 ness of the House of Representatives and the 

13 Committee on Small Business and Entrepre14 neurship of the Senate. 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

f:IVHLCI0314121031412.130.xml 

March 14, 2012 (4:54 p.m.) 

"(B) CO:--JTENTS.-Each report transmitted nnder suhparagraph (A) shall include-

"(i) data on the number, arranged by 

industrial classification, of small business 

concerns displaced as prime contractors as 

a result of the award of bundled contracts 

by Federal ag'cncies; and 

"(ii) a description of' the activities 

,vith respect to previously bundled contracts of' each Federal agency during' the 

prceeding year, including-

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"(1) data on the number and 

total dollar amount of all contract requirements that were bundled; and 

"(II) vvith respect to each bUlldIed contract, data or information 

011-

"(aa) the justification for 

the bundling of contract requirements; 

"(bb) the cost savings realized by bundling the contract requirements over the life of the 

contract; 

"(cc) the extent to which 

maintaiuing the bundled status 

of contract requirements is projected to result in continued cost 

savings; 

"(dd) the extent to which 

the bundling of contract requirements complied with the COlltracting agency's small business 

subcontracting plan, including 

the total dollar value mvarded to 

small business concerns as sub-
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3 

4 

5 

6 

7 

8 

9 

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contractors and the total dollar 

value previously awarded to small 

business concerns as prime contractors; and 

"(ee) the impact of the bundling of' contract requirements OIl 

small business concerns unable to 

compete as prime contractors for 

the comiolidated requirements 

10 and OIl the industries of' such 

11 small business concerns, includ12 iug a description of any changes 

13 to the proportion of any such in14 dustry that is composed of small 

15 business concerns. 

16 "(h) BUNDLING ACCOCKTABILITY MEASURES.-

17 "(1) TEA:iHNG REQUmEMEKTs.-Each Pederal 

18 agency shall include in each solicitation for any mul19 tiple award contract above the dollar threshold a 

20 provision soliciting bids from any responsible source, 

21 including responsible small business cOllcerns and 

22 teams or joint ventures of' small business concerns. 

23 "(2) POLICIES OK REDCCTION OF CONTI{ACT 

24 BC'JDLING.-

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"(A) I:'-J GENrmAL.-Xot later than 270 

days after the date of enactment of this subparagTaph, the Federal Acquisition Regulatory 

Council, established under section 25(a) of the 

Office of Federal Procurement Policy Act (41 

U.S.C. 1302(a)), shall amend the Federal Acquisition Regulation issued under section 25 of 

such Act to-

"(0 establish a Government-,vide policy regarding contraet bundling; 

"(ii) establish a Government-wide poliey on the solicitation of eontractor teams 

and joiut ventures; and 

"(iii) require that the polieies established uuder elauses (i) and (ii) be published on the website of eaeh Federal ageney. 

"(B) RATIOKALE FOR CONTRACT BUKDLI:'-JG.-Not later than 30 days after the date 

on which the head of a Federal ageney submits 

the report required under section 15(11), the 

head of the Federal agency shall publish on the 

website of the Federal agency a list and ,'ationale for any bundled contract for vvhich the Fedf:IVHLCI0314121031412.130.xml 

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2 

22 

era] agency solicited bids or that was awarded 

by the Federal agency.". 

3 SEC. 3. REPEAL OF REDUNDANT PROVISIONS. 

4 (a) CERTAIN PROVJSIO::-JS REGARDING COKTRACT 

5 BU::-JDLI::-JG REPEALED.-Section 15(a) of the Small Busi6 ness Act (15 U.S.C. 644(a», is amended by striking "If 

7 a proposed procurement includes" and all that follows 

8 through "the matter shall be submitted for determination 

9 to the Secretary or the head of the appropriate depart10 ment or agency by the Administrator.". All references in 

11 law to such sentences as they were in effect on the date 

12 that is 1 day prior to the effective date of this Act shall 

13 be deemed to be references to section 44(d), as added by 

14 this Act. 

15 (b) CERTAIK PROvlSIOKS REGARDING .MARKET RE16 SEARCH HEPEALED.-Paragraphs (2) through (4) of sec17 tiOll 15(e) of the Small Business Act (15 U.S.C. 644(e» 

18 are repealed. All references in law to such paragraphs, as 

19 in effect on the date that is one day prior to the effective 

20 date of this Act, shall be deemed to be references to sub21 sections (d) through (f), respectively, of section 44 of the 

22 Small Business Act, as added by this sectioll. 

23 (c) CERTAI::-J PROVlSIOKS REGAIWIKG COKTRACT 

24 BTiKDLIKG DATABASE HEPEALED.-

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1 (1) Paragraph (1) of section 15(p) of the Small 

2 Business Act (15 U.S.C. 644(p)) is repeaIE~d. 

3 (2) Paragraphs (2) through (4) of section 15(p) 

4 of the Small Business Act (15 U.S.C 644(p)) are re5 pealed. All references in law to such paragraphs, as 

6 in effect on the date that is one day prior to the ef7 fective date of this Act, shall be deemed to be ref8 erences to paragraphs (1) through (3), respectively, 

9 of section 44(h) of the Small Business Act, as added 

10 by this Act. 

11 (d) CERTAI;-J PROV1SIOXS REGARDI;-JG BU;-JDLIXG 

12 ACCOUXTABILITY MEASllRES REPEALED.-Paragraphs 

13 (1) and (2) of section 15(q) of thc Small Business Act 

14 (15 U.S.C 644(q)) are repealed. I'lll references in law to 

15 such para!"Taphs, as in effect on the date that is one day 

16 prior to the effective date of this Act, shall he deemed to 

17 be rcferences to paragraphs (1) and (2), respectively, of 

18 section 44(i) of the Small Business Act, as added by this 

19 Act. 

20 (e) CERTAIX PROVISIO;-JS REGARDI;-JG.-Subsection 

21 (0) of section 8 of the Small Business Act (15 U.S.C.) 

22 is repealed. 

23 SEC. 4. TECHNICAL AMENDMENTS. 

24 Section 15 ofthe Small Business Act (15 U.S.C. 644) 

25 is amendedf:WHLCI0314121031412.130.xml 

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1 (1) in the subsection heading of subsection (p), 

2 to read as follows: "ACCESS TO DATA."; and 

3 (2) in the subsection heading' of subseetion (p), 

4 to read as follows: "REPORTS RELATED TO PRO5 crREMEKT CENTER REPRESENTATIVES.". 

6 SEC. 5. EXPANSION OF AGENCY'S RESPONSIBILITY. 

7 Section 44(b) of the Small Business Act (15 U.S.C. 

8 G57q(b)) is amended by striking "appropriate" and insert9 iug "the ma'limum practicable". 

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73 

Chairman GRAVES. And without objection the amendment is in 

the nature of a substitute. It shall be considered the base text for 

the purpose of the bill. 

Does anyone wish to offer an amendment to that? 

Seeing none, the question is on agreeing to H.R. 4081 as amended. All those in favor say aye. 

[A chorus of ayes.] 

Chairman GRAVES. All opposed no. 

[No response] 

Chairman GRAVES. In the opinion of the chair the ayes have it. 

H.R. 4081, as amended, is agreed to and without objection. A 

quorum being present, the bill is favorably reported to the House. 

And without objection the Committee staff is authorized to correct 

punctuation and make other necessary technical changes and conforming changes. 

Our next bill for consideration is H.R. 4206, the ‘‘Contracting 

Oversight for Small Business Jobs Act of 2012,’’ which is introduced by Mr. Coffman. And I now yield to Mr. Coffman to speak 

on 4206. 

Mr. COFFMAN. Thank you, Mr. Chairman. I am very pleased that 

my legislation, H.R. 4206, the Oversight for Small Business Jobs 

Act of 2012, is being included in today’s markup. Passage of this 

legislation will help small businesses comply with complicated size 

and contracting rules while provided a safe harbor provision for 

those small businesses which are making a good faith effort to comply with those rules. 

The bill goes on to establish real penalties for instances of fraud, 

including suspension or even debarment from eligibility in these 

programs. Such actions will do a great deal to ensure that only 

those firms which are truly eligible are taking part in these programs. 

H.R. 4206 also will raise fraud penalties so that the cost of litigation by the government no longer outweighs possible recovery, further increasing the likelihood that bad actors are identified, appropriately dealt with, and the programs can continue to provide valuable income streams to those small businesses which are truly eligible and will benefit. 

I urge my fellow Committee Members to support H.R. 4206, the 

Oversight for Small Business Jobs Act of 2012. 

Thank you, Mr. Chairman. I yield back the remainder of my 

time. 

Chairman GRAVES. I recognize Ranking Member Vela ́zquez for 

comments. 

Ms. VELA ́ ZQUEZ. I congratulate the gentlemen on this legislation. 

As we all know, and we witnessed the GAO report on HUBZones, 

this is the one program that really is being filled with fraud and 

mismanagement. And we all know that this year across the government, federal agencies are unknowingly victims of contracting 

fraud. Investigations conducted by the GAO, as well as the SBA’s 

Inspector General and other agencies, have discovered businesses 

making false statements in order to obtain preferential contracts 

awards under SBA’s small business contracting programs. This has 

included instances of fraud in the SBA’s 8(a), HUBZone, and ServVerDate Mar 15 2010 23:58 Dec 14, 2012 Jkt 076467 PO 00000 Frm 00077 Fmt 6633 Sfmt 6602 E:\HR\OC\A467.XXX A467

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ice-Disabled Veteran Programs, some of which were brought to 

light in testimony before this Committee. 

These instances have become more brazen and not only steal 

money from honest small businesses, but also the taxpayers. Stopping this behavior and making sure that these individuals cannot 

do business with the government is vital. By increasing penalties 

for companies who knowingly misrepresent their status as a small 

business we are helping the small firms who play by the rules and 

who should be rightfully competing for these awards. Strengthening the consequences will make would-be fraudsters think twice 

about scamming the government. Maintaining the integrity of the 

procurement process is a priority, and through weeding out bad actors we can ensure that small businesses and the taxpayers are not 

taken advantage of. 

And with that, I yield back, Mr. Chairman. 

Chairman GRAVES. Does any other Member have a statement on 

H.R. 4206? 

Seeing none, the Committee now moves to consideration of H.R. 

4206. 

Ms. VELA ́ ZQUEZ. She had—— 

Chairman GRAVES. Oh, I am sorry. 

Ms. HAHN. I have an amendment. 

Chairman GRAVES. We have to open it up, so hang on. Clerk, will 

you please report the title of the bill? 

The CLERK. H.R. 4206: To amend the Small Business Act to provide for increased penalties for contracting fraud and for other purposes. 

Chairman GRAVES. Without objection H.R. 4206 is considered as 

read and open for amendment at any point. 

[The bill H.R. 4206 follows:] 


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US AU'H""CAnD;J GOVFRNMENT 

fNfORMATIOI\: " 

GPO~ 

112TH CO:-JGRESS H R 4206 2D SESSIOK 

• • 

To amend the Small Business Act to provide for jm'reased penalties for 

cOlltracting fraud, and for other purposes. 

IX THE HOUSE OF REPRESENTATIVES 

:VL~RCII 19, 2012 

:.\11'. COFFl\L~N of Colorado (for himself and ;\fr. GRAYES of :'\fissouri) introduced the following bill; which was referred to the Committe .. Oil Small 

Business, and in addition to the Committee on the Judiciary, for a period 

to be subsequently determined by the Speaker, in each case for consideration of sueh provisions as fall within the jurisdiction of the committee 

concerned 

A BILL 

To amend the Small Business Act to provide for increased 

penalties for contracting fraud, and for other purposes. 

Be it enacted by the Seru~te and House of Re'PTe.~enta2 tives of the United States of America 1:n Oongress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the "Contracting' Oversight 

5 for Small Business Jobs Act of 2012", 
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1 SEC. 2. INCREASED PENALTIES FOR FRAUD. 

2 (a) IN" GE~EHAh-Chapter 47 of title 18, United 

3 States Code, is amended by adding at the end the fol4 lowing: 

5 "§ 1041. Misrepresentation of status as a small busi6 ness concern 

7 "(a) IN GENEHAL.-Whoever knmvingly8 "(1) falsifies, conceals, or covers up by any 

9 trick, scheme, or device a material fact; 

10 "(2) makes any materially false, fictitious, or 

11 fraudulent statement or representation; or 

12 "(3) makes or uses any false '''Titing or docu13 ment, including electronically, knmving the same to 

14 contain any materially false, fictitious, or fraudulent 

15 statement or entry; 

16 concerning status as a small business concern or compli17 ance with the requirements of the Small Business Act in 

18 an effort to obtain, retain, or complete a federal g'overn19 ment contract shall be fined $1,000,000 or in a sum equal 

20 to twice the amount or value of goods or services under 

21 the contract or order, whichever is gTeater, imprisoned not 

22 more than 5 years, or both.". 

23 (b) TECIIi',ICAL A:,\fENDl\IENT.-The table of sections 

24 for such chapter is amended by inserting after the item 

25 relating to the following section: 

"1041. ~Iisrepreselltatioll of status as a small business eoneern." . 

• HR 4206 1H 
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1 SEC. 3. SAFE HARBOR FOR GOOD FAITH COMPLIANCE EF2 FORTS. 

3 (a) SMALL BCSI~ESS FRAUD.-Section 16(d) of the 

4 Small Business Act (15 U.S.C. 16(d)) is amended by in5 serting after paragraph (2) the follovv1.ng: 

6 "(3) This subsection shall not apply to any COll7 duct in v1.01ation of subseetion (a) if the defendant 

8 acted in reliall(~e on a written advisory opinion from 

9 a licensed attorney who is not an employee of the de10 fendant.". 

11 (b) lVIISREPRESENTATIO~ OF STATUS.-Section 1041 

12 of title 18, United States Code, as added by section 2 of 

13 this Act, is amended by inserting after subsection (a) the 

14 following: 

15 "(b) EXCEPTIO~.-This section shall not apply to 

16 any conduct in violation of paragraph (2) or (3) of sub17 section (a) if the defendant acted iu reliance on a written 

18 advisory opinion from a licensed attorney who is not an 

19 employee of the defendant.". 

20 (c) RE(Hn,ATIONs.-Xot later than 270 days after 

21 the date of enactment of this Act, the Administrator of 

22 the Small Business Administration shall issue rules defin23 ing what constitutes an adequate advisory opinion for pur24 poses of section 16(d)(3) of the Small Business Act. 

25 (d) S}lALL BCSI~ESS COMPLlANCE GCIDE.-Not 

26 later than 270 days after the date of enactment of this 

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Act, the Administrator of the Small Business Administra2 tion shall issue (pursuant to section 212 of the Small 

3 Business Regulatory Enforcement F'airness Aet of 1996) 

4 a compliance guide to assist business concerns in aecu5 rately determining their status as a small business con6 cern. 

7 SEC. 4. OFFICE OF HEARINGS AND APPEALS. 

8 (a) CHIET<' HEARI~G OFFICER.-Section 4(b)(1) of 

9 the Small Business Act is amended by adding at the end 

10 the following: "One shall be designated at the time of his 

11 or her appointment as the Chief Hearing Officer, who 

12 shall head and administer the Office of Hearings and Ap13 peals "ithin the Administration.". 

14 (b) OFFICE 01<' HEARIKGS A~D ApPEALS ESTAB15 LISHED I~ AmnKIsTRATIO~.-Section 5 of the Small 

16 Business Act (15 U.S.C. 634) is amended by adding at 

17 the end the follm>ing: 

18 "(i) OPT<'ICE OF HEARI~GS AKD APPEALS.-

19 "(1) IN GE~ERAr~.-There is established in the 

20 Administration an Offiee of Hearing's and Appeals21 "(A) to impartially decide such matters, 

22 'where Congress designates that a hearing on 

23 the record is required or which the Adminis24 trator designates by regulation or otherwise; 

25 and 

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5 

"(B) which shall contain the Administra2 tion's Freedom of Information/Privacy Acts Of3 fice. 

4 "(2) CHIEF HEARli'\G OFFICER.-The Chief 

5 Hearing Officer shall be a career member of the 

6 Senior Executive Service and an attorney duly li7 censed by any State, commonwealth, territory, or the 

8 District of Columbia. 

9 "(A) DUTIES.-The Chief Hearing Officer 

10 shall11 "(i) serve as the Chief Administrative 

12 Law Judge; and 

13 "(ii) be responsible for the operation 

14 and management of the Office of Hearings 

15 and Appeals, pursuant to the rules of prac16 tice established by the Administrator. 

17 "(B) .ALTERKATIVE DISPUTE RESOLU18 TION.-The Chief Hearing Officer may also as19 Sig11 a matter for mediation or other means of 

20 alternative dispute resolution. 

21 "(3) .ADMINISTIU'l'IVE LAW JUDGES.-

22 "(A) IK GEKER.-\L.-An administrative law 

23 judge shall be an attorney duly licensed by any 

24 State, commonwealth, territory, or the District 

25 of Columbia . 

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"(B) CONDITIOKS OF EMPLOYl\IEKT.-(i) 

An administrative law judge shall serve in the 

excepted service as an employee of the Administration under seetion 2103 of title 5, United 

States Code, and under the supervision of the 

Chief Hearing Officer. 

"(ii) Administrative law judge positions 

shall be classified at Senior Level, as such term 

is defined in sectioll 5376 of title 5, United 

States Code. 

"(iii) Compensation for administrative law 

judge positions shall be set in accordance writh 

the pay rates of section 5376 of title 5, United 

States Code. 

"(C) TREATMENT OF CURREKT PERSONNEL.-An individual serving as a ,Judge in 

the Office of Hearings and Appeals (as that position and office are designated in section 

134.101 of title 13, Code of Federal Regulations (as in effect on January 1, 2012)) on the 

effective date of this subsection shall be considered as qualified to be and redesi6'llated as administrative law judges. 

"(D) PmvERs.-An administrative law 

judge shall have the authority to conduct hear-

.HR 4206 IH 
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1 ings in accordance with sections 554, 556, and 

2 557 of title 5, United States Code.". 

3 SEC. 5. REQUIREMENT FRAUDULENT BUSINESSES BE SUS· 

4 PENDED OR DEBARRED. 

5 (a) I)J GENERAL.-Section 16(d)(2) of the Small 

6 Business Act (15 U.S.C. 645(d)(3)) is amended by strik7 ing "on the basis that such misrepresentation indicates a 

8 lack of business integrity that seriously and directly af9 fects the present responsibility to perform any contract 

10 awarded by the 1;"'ederal Government or a subcontract 

11 under such a contract" and inserting "if the misrepresen12 tation is established by a preponderance of the evidence 

13 (in the case of debarment) or adequate evidence (in the 

14 case of suspension)". 

15 (b) REVISION TO FAR.-Not later than 270 days 

16 after the date of enactment of this Act, the Federal Acqui17 sition Regulation shall be revised to implement the amend18 mellt made by this section. 

19 (c) PUBLICATION OF PROCEDURES REGARDI)JG S()S20 PENSION AND DEBAR:\IE)JT.-Xot later than 270 days 

21 after the date of enactment of this Act, the Administrator 

22 shall publish on the Administration's Web site the stand23 ard operating procedures for suspension and debarment 

24 in effect, and the 11a111e and contact information for the 

25 individual designated by the Administrator as the senior 

.HR 4206 IH 
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1 individual responsible for suspension and debarment pro2 ceedings. 

3 (d) REQUIRED REGULATIOKS.-Not later than 270 

4 days after the date of enactment of this Act, the Adminis5 trator of the Small Business Administration shall issue 

6 regulations defining the term "adequate evidence" for pur7 poses of section 16(d)(2) of the Small BusillessAct. 

8 SEC. 6. ANNUAL REPORT ON SUSPENSIONS AND 

9 DEBARMENTS PROPOSED BY SMALL BUSI· 

10 NESS ADMINISTRATION. 

11 (a) REPORT REQUIRE::\fEKT.-The Administrator of 

12 the Small Business Administration shall submit each year 

13 to the Committee on Small Business and Entrepreneur14 ship of the Senate, and the Committee on Small Business 

15 of the House of Representatives a report on the suspen16 sion and debarment actions taken by the Administrator 

17 during the year preceding the year of submission of the 

18 report. 

19 (b) .M.ATTERS COv'ERED.-The report required by 

20 subsection (a) shall include the following information for 

21 the year covered by the report: 

22 (1) NT;l\IBlm.-'rhe number of contraetors pro23 posed for suspension or debarment . 

• HR 4206 IH 
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(2) SOL'RCE.-'l'he office ,'..-ithill a Federal 

2 agency that originated each proposal for suspension 

3 or debarment. 

4 (3) REASO?'-Js.-The reason for each proposal 

5 for suspension or debarment. 

6 (4) RESUIJTS.-The result of each proposal for 

7 suspension or debarment, and the reason for such 

8 result. 

9 (5) REFERRALS.-The number of suspensions 

10 or debarments referred to the Inspector General of 

11 the Small Business Administration or another agen12 cy, or to the Attorney General (for purposes of this 

13 paragraph, the Administrator may redact identifying 

14 information on names of companies or other infor15 mation in order to protect the integTity of any ongo16 iug criminal or civil investigation). 

17 SEC. 7. SENSE OF CONGRESS. 

18 It is the sense of CongTess that the Administrator 

19 of the Small Business Administration should present to 

20 the Inspector General of the Administration or the Attor21 ney General any evidellce of a violation or potential viola22 tion of sectioll 1041, title 18, United States Code, or sec23 tiol1 16(d) of the Small Business Act, presented in a prooHR 4206 IH 
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1 reeding conducted by the Office of Hearings and Appeals 

2 established in section 4 of this Act. 

o 

.HR 4206 m 
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Chairman GRAVES. Does a Member wish to—or have an amendment? And I know now Ms. Hahn, you are ready. Would the clerk 

please report the amendment? 

The CLERK. Amendment 1 to H.R. 4206 offered by Ms. Hahn of 

California. 

Chairman GRAVES. Without objection the amendment is considered as read. The gentlelady has five minutes. 

[Amendment 1 to H.R. 4206 offered by Ms. Hahn follows:] 


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AMENDMENT TO H.R. 4206 

OFFERED BY Ms. IlAHN OF CALIFORNIA 

Page 4, line 6, insert after the period the following: 

"On the date that the Administrator issues the compliance guide under this section, the Administrator shall 

also issue a version of the compliance guide translated 

into Spanish.". 

f:IVHLCI0320121032012.206.xml 

March 20,2012 (4:58 p.m.) 

(52089612) 
87 

Ms. HAHN. Thank you, Mr. Chairman, Ranking Member 

Vela ́zquez, and thank you to Mr. Coffman for introducing this legislation. I think this is an important step towards ensuring that 

small businesses who are awarded government contracts are actually small businesses. 

Just yesterday, this Committee held a hearing on entrepreneurship, where we learned, among other things, that immigrants were 

more than twice as likely to start businesses as non-immigrants, 

and that Latinos demonstrated the highest entrepreneurial activity 

in 2010, which is a good thing for this country. And given the importance of this bill and the surge in Latino business owners, it 

only makes sense to require that the SBA publish the Small Business Compliance Guide in Spanish as well as English. That is why 

I am offering my amendment to H.R. 4206, the ‘‘Contracting Oversight for Small Business Jobs Act of 2012,’’ which simply requires 

that all the regulations and guides the SBA will produce as a result of this act be made in Spanish. 

Many of the bills we are marking up today aim to increase government contracts to small businesses and to help them succeed. 

My amendment is a simple way, a simple step to make sure that 

these new business owners can comply with the new rules and regulations. 

Just before I came in here I ran into the California Hispanic 

Chamber of Commerce. They are walking the halls of Congress 

today and I am sure that they would agree with this simple step 

and would urge this Committee to accept my amendment. Thank 

you very much. 

Chairman GRAVES. Does any other Member wish to be heard on 

the amendment? 

Ms. HERRERA BEUTLER. Mr. Chairman. 

Chairman GRAVES. Ms. Herrera Beutler. 

Ms. HERRERA BEUTLER. I thank the Chairman and the 

gentlelady for offering the amendment. The only question I would 

have, I guess, is a question for the sponsor, if I can do that. 

What would you say—and as the first Hispanic to represent 

Washington State in the federal government, this is an issue near 

and dear to my heart. What would you say then if there were other 

groups who come forward and ask for this in their language? I 

mean, I am wondering about the slippery slope. 

Ms. HAHN. Well, the greatest slippery slope we could have in this 

country is more people starting their own businesses, expanding, 

hiring, and really turning this economy around. The only reason I 

introduced this specific language was because of what we heard in 

this Committee as Latinos having the highest entrepreneurial activity in 2010, and it certainly would be open to, you know, other 

languages as well. 

I think anything we can do to empower folks in this country to 

succeed—— 

Ms. HERRERA BEUTLER. I would agree and I am reclaiming my 

time on that. I think the most important thing we can do is set up 

people who are coming here to obtain the American dream, set 

them up to succeed. And one of the ways that I found in my family 

is making sure that they are able just to start their business and 

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ing sure that they have the support that they need and obviously 

speaking and being able to communicate in different languages. 

Obviously they are not going to learn every language of somebody 

who walks into their door. 

But I just—I would agree, the goal is to support them. And in 

considering this, that is how I am going to look at it, what is going 

to best set up any immigrant family who wants to come here and 

take hold of the American dream, what is going to set them up for 

success. 

So with that, I yield back. 

Mr. CICILLINE. Mr. Chairman. 

Ms. VELA ́ ZQUEZ. Would the gentlelady yield for a second? 

Ms. HERRERA BEUTLER. I yield. 

Ms. VELA ́ ZQUEZ. Okay. 

Mr. CICILLINE. Mr. Chairman. 

Chairman GRAVES. Does any other Member wish to be heard on 

the amendment? Mr. Cicilline. 

Mr. CICILLINE. Thank you, Mr. Chairman. I want to speak in 

strong support of the amendment and thank the gentlelady from 

California for raising this really important issue. And I come from 

a district where the Latino community has played a very important 

role in rebuilding the economy of Rhode Island. And I recently 

hosted the administrator of the Small Business Administration to 

Rhode Island, and she, too, spoke about nationally the entrepreneurial power and productivity of the Latino community. 

And what I think in particular this bill, which involves the imposition of pretty serious penalties for noncompliance, that in this 

area in particular we should be sure that people are communicated 

with in a way that most effectively shares really vital information 

which has in it penalties of a million dollars. 

And so I would say to the gentlelady that if there is another community, you know, next year or the following year that is present 

in the growing entrepreneurial sector of the economy, we ought to 

be prepared to be sure that that community has this information 

in their language as well. I think this is the beauty of Congress 

meeting regularly, we have the ability to respond emerging new 

communities and new languages, and it is one of the great 

strengths of our country. But I think it is indisputable that in this 

moment the Latino community is playing a very powerful and important and growing and significant role in the development of new 

businesses. And when we are about to enact a set of penalties for 

noncompliance with those, which are very severe, then I think we 

have to go the extra mile to be sure that they are getting that information effectively and, in this case, in their language. So I applaud the gentlelady from California for her visionary thinking in 

this matter. 

I yield back the balance of my time. 

Ms. HAHN. Well said. 

Chairman GRAVES. Mr. Coffman. 

Mr. COFFMAN. Mr. Chairman, government contracting is highly 

technical and requires a master of English. Nobody here is saying 

that these proposals are going to be submitted in other languages 

other than English. And so I think it is an unnecessary cost to 


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have it in a different language than what we are requiring the submission to be in. 

I yield back, Mr. Chairman. 

Ms. VELA ́ ZQUEZ. Mr. Chairman? I rest in support of the gentlelady’s amendment and I am even open to contemplate including 

other languages. You know, at a time when the economy continues 

to struggle and we know that immigrants are an important—they 

play an important role in our economy, we should do everything we 

can to open opportunities, the door of opportunity for immigrants 

entrepreneurs to participate in the federal marketplace. It is not 

only about knowing the penalties if they apply for an award where 

they do not qualify because of their size, but for them to understand what is needed in order to qualify as a small business concern. 

Between 2002 and 2007, the number of Hispanic-owned businesses in the United States increased by 43.7 percent to 2.3 million, more than twice the national rate of 18 percent. Hispanicowned businesses, for example, generated $345.2 billion in sales in 

2007, up 55.5 percent compared with 2005. And this over trend in 

Hispanic-owned businesses is likely to continue as the Census Bureau reported that the U.S. Hispanic population surged 43 percent, 

rising to 50.5 million in 2010 from 35 million. Furthermore, an estimated 45 million of this demographic speak Spanish. 

And I will ask the gentlelady who spoke before that maybe we 

could work together to make sure the resources are included when 

we are reauthorized ESL programs, so that the resources are there 

for those who want to learn English, and believe me, they do. But 

resources are not there for them to be able to have the English language classes that they need. 

As the Hispanic population continues to grow, this amendment 

will ensure that Hispanic-owned businesses have the information 

necessary to determine whether or not they qualify. 

And with that, I yield back. 

Chairman GRAVES. Ms. Ellmers. 

Ms. ELLMERS. I have a question, and it is very simple. Is there 

a cost associated with this? And do we know that number? And I 

guess it would be to the gentlelady who has put forward the 

amendment. 

Ms. HAHN. Thank you. I, at this time, do not have a cost estimate of what this would require, but, you know, again, I think this 

is an important step that we can take to let entrepreneurs, let 

small business folks out there in this country know that we are on 

their side. And, again, what we are enacting today could cost penalties up to a million dollars for some of these small business owners, which I am sure they would argue is not something that would 

be welcome at a time when they are trying to get started. So we 

want them to be in compliance. 

And, you know, current law is vague on what documents must 

be made available in a language other than English and what constitutes a vital document. So I just think that this ensures that our 

policy matches the facts. 

And I think what we want to do in this Committee is, again, be 

on the side of small businesses. We want to empower them. We 

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ernment regulations. And so I think this is an important amendment and it is a simple one. 

Ms. ELLMERS. I want to reclaim the time. 

Chairman GRAVES. Reclaim your time. 

Ms. ELLMERS. I just want to comment then that we do not know 

the cost associated with this, and I think that is something that we 

need to consider. Thank you. 

Chairman GRAVES. Yes. Mr. Hanna. 

Ms. VELA ́ ZQUEZ. We have passed legislation before where the 

Chairman said that he did not do the study. 

Chairman GRAVES. Mr. Hanna. 

Mr. HANNA. If I could ask the gentlelady, Ms. Hahn, why is not 

the overwhelming success of the Hispanic community’s growth evidence that this is not necessary? 

Ms. HAHN. Well, again, this is because we are enacting a new 

law here, so it has nothing to do with previously whether or not 

Latinos have shown that great American entrepreneurial passion. 

This is that we are enacting a new law that could impact them, 

and I think it is only fair and right that we—— 

Mr. HANNA. Well, what I am suggesting—— 

Ms. HAHN [continuing]. Translate this in their own language. 

Mr. HANNA. I appreciate that, but what I am suggesting is that 

that is actually evidence to the contrary, that people are quite capable of managing within the rules that we have. Clearly there is 

a lot to be read, a lot to be done, a lot to be studied, and it is obviously going well. I guess your point would be that they would do 

even better maybe. 

Ms. HAHN. Well, I just think it is the right thing to do when we 

enact a law like this to have it published in Spanish. I come from 

California. 

Mr. HANNA. Sure. 

Ms. HAHN. We do this all the time, so it is interesting I have this 

debate where others do not agree with this. This is like second nature for us, particularly in Los Angeles. 

Mr. HANNA. Yes, ma’am. Thank you. I yield back. 

Chairman GRAVES. Mr. West. 

Mr. WEST. Thank you, Mr. Chairman. And I would like to ask 

the gentlelady from California, do we have the technical manuals 

for a C–17 aircraft in other languages than English? 

Ms. HAHN. I do not know the answer to that. 

Mr. WEST. I can tell you no. Do you have the technical manuals 

for an F–15/F–16 aircraft or, you know, helicopters in other languages than English? 

Ms. HAHN. Well, you know, I do not really see this as being along 

the same subject. 

Mr. WEST. I do because this is the point. If you are a crew chief 

on these aircraft, you are responsible for that aircraft, if that aircraft were to crash we are talking about multimillions of dollars in 

penalties. So if we are not producing, you know, technical manuals 

for the Federal Government, United States military, in languages 

other than English, then why do we need to produce this in a language other than English? 

So I think that the precedent is established. We have one language that we operate in, the Federal Government, and that is 


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English. And what the state of California wants to do, that is fine. 

I can tell you in the state of Florida, in South Florida, that election 

ballots are printed in three different languages and that is Spanish, Creole, and English. That is something they do in South Florida that the Federal Government has not mandated. So I do not 

think that this should be mandated from this Committee or as part 

of this legislation, so I will be voting no on this amendment. 

Ms. HAHN. And I just want to, if I may, reply that, again, this 

is not military contracts we are talking about here. This is small 

business contracts and—— 

Mr. WEST. They are. 

Ms. HAHN. Well, I mean, this is, you know, we are talking about 

a document here that we are considering a vital document. And according to our policy a vital document can be translated in another 

language. 

Chairman GRAVES. Mr. Chabot. 

Mr. CHABOT. Thank you, Mr. Chairman. I would just start off by 

noting to the gentlelady that some of the resistance that you are 

hearing here from our side, I think we want to be welcoming to 

those folks that are here legally in this country. And I know the 

folks in California are oftentimes trendsetters and the rest of us 

sometimes follow along, but the business of this country is generally conducted in English and that has been accepted for a long 

time. Many of us here favor English as the official language of our 

country and I happen to favor that as well. 

We also think that it is in the best interest of groups as quickly 

as possible to learn the language of this country, to learn English, 

and they will be far better off, whether it is in the schools or 

whether it is in the business community or other. Many of us believe that you are unfortunately holding folks back by having exceptions in different languages. They are much better off in the 

long term, and I think there are a number of studies that show 

this, if they learn the language now and operate in that language. 

And I think that this particular amendment is in opposition of 

that. 

So I think that is what you are hearing, at least some of the resistance on this side. We think people are much better off learning 

the language of this country and they will be much further ahead 

much more quickly if they do that. 

I yield back. 

Ms. HAHN. Mr. Chair. 

Mr. SCHRADER. I move the previous question. 

Ms. HAHN. Mr. Chair. 

Chairman GRAVES. The previous question has been moved, but, 

you know—— 

Ms. HAHN. This is such an interesting debate. 

Chairman GRAVES. It is. The thing is we are running out of time 

and we have one more bill to do, but I do not want to cut anybody 

off. I want anybody to be able to speak that wants to speak, but 

we are running out of time. We got Ms. Chu, we got Ms. Clarke, 

and we got Mr. Bartlett. 

Ms. Chu, if you can, please. 

Ms. CHU. I would like to yield to the gentleman from Rhode Island, Mr. Cicilline. 


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Mr. CICILLINE. I thank the gentlelady. I just want to say that I 

think it is important in this discussion to recognize that by suggesting that this amendment, which would require that this information be provided to people in Spanish, does not mean every document, including airplane manuals or every ballot. We are talking 

about in particular how we help small businesses. 

And it is irrefutable when you look at the evidence the role that 

new immigrants play in the start up of new businesses, the role 

that new residents to our country play in beginning and growing 

jobs as a part of creating new businesses. There is a special role 

that new immigrants or immigrants to this country often who do 

not speak English, particularly who speak Spanish, are playing in 

job creation. And so it is very different than—of course, I think everyone would agree it is easier if you move to a country when you 

learn that language and you are able to integrate fully with the 

language of that country. Of course, that is everyone’s hope and 

that will certainly be true. 

But what we are really asking is what is best for our country in 

these early years? And if there is someone who speaks Spanish and 

they are going to start a new business or grow a business, being 

sure that they have information which includes a very serious penalty makes sense. And, you know, to suggest that by doing that we 

are arguing that every plane manual or every ballot also has to be 

in Spanish, that is not the argument. 

This is a population that is starting new businesses. If you look 

at the statistics of what is the percentage of new business in this 

country that are being started, particularly in urban areas, by new 

immigrants, that people have been here less than a couple of years, 

it is staggering. It is the engine of the small business economy in 

this country. And to suggest somehow we should not do everything 

we can to share information with that community in their own language that has very serious penalties I think fundamentally ignores reality, the reality of the Latino presence in the small business economy of this country. 

And I urge people to separate out this notion that we cannot do 

it in this one area without doing it everywhere in government for 

every group. We have the ability to discern situations one from the 

other, and I think this one makes good common sense not only for 

the community that we are reaching here that speaks Spanish, but 

for all of us who benefit from the growth of jobs in these new businesses, in Latino businesses all across this country. 

And with that, I yield back the balance of my time. 

Chairman GRAVES. All right. Yield back to Bartlett. 

Mr. BARTLETT. Thank you. I am really conflicted on this amendment. I have been a very long-time supporter of English first. It is 

the language of commerce in our country. If you do not ultimately 

learn English, you will be relegated generally to entry-level kinds 

of jobs. And so I think that it is essential that we encourage people 

to learn English. But English first does not mean English only. 

Ms. HAHN. That is right. 

Mr. BARTLETT. And I would be more supportive of this amendment if it said that we would provide in digital form for 

downloading a Spanish translation, so that those who needed it 

could get it. I understand the concern of many of those. 


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Ms. HAHN. All right, I like that. 

Mr. BARTLETT. Okay. Well, if I could make a friendly—— 

Ms. HAHN. That is friendly. 

Mr. BARTLETT [continuing]. Perfecting amendment to your 

amendment, I would suggest that we provide this in digital form 

for downloading. I think that does away with almost all the objections on our side. 

Ms. HAHN. I love it. I will accept that friendly amendment. 

Mr. BARTLETT. If we could do that, I think that would help to advance this. 

Ms. HAHN. So moved. 

Chairman GRAVES. We are going to have to have that in writing. 

Mr. COFFMAN. Mr. Chairman, may I offer an amendment to that? 

Chairman GRAVES. No, because that would be in the third degree, but we are going to have to have it writing to be able to do 

it, so we are going to have to recess to be able to do that. 

Mr. BARTLETT. Mr. Chairman, I wonder if we could agree that 

before this goes to the floor that we will work to improve this so 

that she might not withdraw her amendment with the—— 

Chairman GRAVES. I am not going to support the amendment. So 

we can—I mean, I would love to support the gentlelady, but I cannot support this amendment. 

Ms. HAHN. Even if downloaded? 

Mr. BARTLETT. Can we simply move to the last one and they can 

work this while we are doing the last bill and then we come back? 

Ms. VELA ́ ZQUEZ. Maybe we should move to the next bill and let 

them work on which of that amendment. 

Ms. HAHN. Thank you. 

Mr. BARTLETT. Being in writing can be in handwriting, can it 

not? 

Ms. VELA ́ ZQUEZ. Yes. 

Chairman GRAVES. Yes. 

Mr. BARTLETT. Okay. Thank you and I yield back. 

Chairman GRAVES. Pursuant to Rule 10 of the Committee—— 

Ms. CLARKE. Mr. Chairman. 

Chairman GRAVES. Ms. Clarke, you want to be heard on the 

amendment? 

Ms. CLARKE. Yes, I would and thank you, sir. I just wanted to 

add my voice. My colleague, Mr. Hanna, raised a question about 

the fact that we recognize that so many Hispanic businesses already exist and are already being successful, but what is implied 

in there is that all of these businesses are doing business with the 

SBA. That is not accurate. 

What we are trying to do is encourage these businesses to grow 

and many of them are mom-and-pop establishments as most small 

businesses start out. Once these businesses have reached a certain 

size they are often seeking ways to grow. And during that interim 

period, these are immigrants who are learning English. I think 

there is a misrepresentation here that people are not multitasking. 

I think the very first thing that immigrants who speak another 

language try to do is, particularly when they want to go into business, is to begin learning the English language as best they can. 

The challenge is interpreting information, and there is oftentimes not a direct translation of how to do business with the U.S. 


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Government. What this amendment would do is clarify and remove 

the barriers to the understandings and the complexities of doing 

business with the Federal Government, which I believe would certainly help these businesses to expand and to become employers of 

many Americans across the Nation. I think this is a small price to 

pay when you look at the success of these businesses; that is, to 

provide a way for them to interpret our laws and keeping with the 

language that is their first language while, at the same time, learning the native language of this Nation which has been English and 

helping them, therefore, to move forward. 

So I just wanted to correct an assumption that was sort of built 

into your statement, Mr. Hanna. Many of these businesses already 

operate. They have just never done business with the government. 

And this is a way of building a bridge to their access to the programs that we know will help them to expand and become employers in our Nation. 

With that, I yield back. Thank you, Mr. Chairman. 

Ms. HAHN. Well said. 

Mr. HANNA. I will withdraw my perfecting amendment. 

Chairman GRAVES. Does any other Member wish to be heard on 

the amendment? Any other Member wish to be heard on the 

amendment? 

With that, I want to kind of—— 

Mr. CICILLINE. I would like to offer that perfecting amendment 

in substitution, if I may, Mr. Chairman. I think it is an excellent 

suggestion that the sponsor—— 

Chairman GRAVES. We need it in writing. 

Mr. CICILLINE. Pardon me? 

Chairman GRAVES. We need it in writing. 

Ms. CLARKE. We need it in writing. Can we download it? 

Chairman GRAVES. In English. 

Ms. CLARKE. In English. 

Chairman GRAVES. Does any other Member wish to be heard on 

the amendment? And then we are going to postpone proceedings. 

Ms. CLARKE. Mr. Chairman, can we handwrite? 

Ms. VELA ́ ZQUEZ. Yes. 

Chairman GRAVES. Yes, you can handwrite it. 

Ms. CLARKE. Okay. 

Chairman GRAVES. What we will do, pursuant to Rule 10 of the 

Committee’s rules, proceedings on the amendment will be postponed. And we are going to come right back to it just as soon as 

we do the next bill, which is H.R. 4203, the ‘‘Women’s Procurement 

Act of 2012,’’ which is introduced by Ranking Member Vela ́zquez. 

I now recognize Ms. Vela ́zquez for her opening remarks. 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman. The federal government has a 5 percent procurement goal for women-owned businesses, established in 1994, that has never been achieved. In fact, 

last year, the government missed the goal by more than 20 percent. 

As a result, one of the primary obstacles facing women-owned businesses over the last 10 years has been the government’s failure to 

implement the Women’s Procurement Program. Last year, that obstacle was finally removed as the final regulations for the Women’s 

Procurement Program were released and the program was implemented. 


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Through this program women-owned small businesses are now 

eligible for contracts through restricted competition in 83 industries that have historically had underutilization of women-owned 

businesses. However, the program is far from perfect. While parity 

among small businesses contracting programs was achieved two 

years ago, the women’s procurement still lags behind. Simply put, 

contracting offices do not have the options under the Women’s Procurement Program that they do under the HUBZone, 8(a), and 

Service-Disabled Veterans initiatives. To address these issues and 

maintain parity the bills gave federal agencies new tools to award 

contracts to women-owned businesses similar to those that already 

exist for the 8(a), HUBZone, and Service-Disabled Veterans Program. 

For restricted competitions, they will remove the existing caps on 

contracts eligible for set-aside, putting the program on par with 

other small businesses’ contracting programs. Together these 

changes support efforts to maintain parity among all SBA contracting programs while giving contracting officers another tool to 

make awards to these types of companies. 

There is another key problem that is holding back the program. 

The statutes call for businesses to certify their eligibility for the 

program and for these certifications to be verified by either agency 

contracting officers or third parties. What has happened is that the 

agency procurement officers have now become the de facto certifiers, a tedious and exacting role that is causing delays in the program’s roll-out. These procurement officers should not be verifying 

certifications. Instead, they should be working with small businesses to award them contracts. 

Making matters worse, the SBA requested inadequate resources 

to support these certifications, making the document repository, eligibility examinations, and protest process nearly unworkable. To 

address these issues the legislation charges SBA with the responsibility of certifying participants. If SBA is unable to do so, SBA may 

continue to approve third-party certifiers to carry out such responsibility. 

The truth of the matter is that this is SBA’s responsibility and 

they need to step up to the plate and certify women-owned businesses for this program to succeed. Frankly, I think we are growing 

tired of the agency’s excuses that it is someone else’s job to certify 

eligibility for the agency’s very own programs. 

Strengthening the Women’s Procurement Program is critical to 

the 7.8 million women-owned businesses in the United States. 

Making up nearly 30 percent of all businesses across the country 

and generating $1.2 trillion in revenue, they are a fast-growing sector of the economy. Ensuring that they have access to compete for 

government contracts is essential for their continued growth, and 

I urge a yes vote on this legislation. 

And I yield back the balance of my time. 

Chairman GRAVES. Are there any other Members who wish to be 

recognized for a statement on ranking member’s H.R. 4203? 

Seeing none, I support H.R. 4203. In our last markup I said that 

I did not want to pick winners and losers, but rather ensure that 

all small businesses have the opportunity to compete for contracts. 


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Standardizing the various small business programs to the extent 

possible helps meet that objective. 

And I particularly support removing the caps on competitive contracts. If we believe in the market, why would we say that when 

multiple firms are competing we need to cap the size of the award? 

I think competition will keep the price reasonable, and the contracting officer is required to certify that the price that government 

is paying is fair and reasonable. I do urge the Committee to support the bill. 

The Committee now moves to consideration of H.R. 4203. Clerk, 

please report the title. 

The CLERK. H.R. 4203: To amend the Small Business Act with 

respect to the procurement program for women-owned small business concerns and for other purposes. 

Chairman GRAVES. Without objection H.R. 4203 is considered as 

read and open for amendment. 

[The bill H.R. 4203 follows:] 


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smartinez on DSK6TPTVN1PROD with Insert offset folio 126 here 76467A.070

AUTHENTICATED9 u.s GOV£RNMENT 

INFORMATION 

GPO 

112THCONGRESS H R 4203 2D SESSION 

• • 

1'0 amend the Small Business Act with respeet to the pmcurement program 

for women-owned small business concerns, and for other purposes. 

IN THE HOUSE OF' REPRESEN'rATIVES 

l\L\RCH 19, 2012 

1\1s. VEI.AZQrEZ (for herself, Ms. CumCE of J\"ew York, Ms. Cm::, and Ms. 

tL\H~) introduced the following bill; which was referred to the Committee 

on Small Business 

A BILL 

To amend thc Small Busincss Act 'with respect to the procurcment program for women-owned small business concerns, 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 "\Vomcn's Procurcmcnt 

5 Program Improvemcnt Act of 20J2". 

6 SEC. 2. PROCUREMENT PROGRAM FOR WOMEN·OWNED 

7 SMALL BUSINESS CONCERNS. 

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

9 637(m» is amendcd-
98 


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2 

(1) in paragraph (2)-

2 (A) by striking subparagraph (D); 

3 (B) by redesignating subparagraph (E) as 

4 subparagraph (D) respectively; and 

5 (C) by striking subparagraph (F), and in6 scrting the follow1.ng: 

7 "(E) cach of the concerns8 "(i) is certified by a Federal agency, 

9 a State government, or a national certi10 tying entity approvcd by the Adminis11 trator, as a small business concern oW11ed 

12 and controllcd by women; or 

13 "( ii) is certified by the Administrator 

14 as a small business concern mVl1cd and 

15 controlled by women."; 

16 (2) in paragmph (3), by striking "subpara17 graph (2)(A)" inserting the follm,1.ng: "paragraph 

18 (2)(A) or paragTaph (7)(A)"; 

19 (3) in paragTaph (5) by striking "under para20 graph (2)(F)" each place it appcars and inscrting 

21 "undcr paragmph (2)(E)"; and 

22 (4) by adding at the end thc follm'\1.11g: 

23 "(7) SOLE SOl:RCE CO);TRACTS FOR ECO:--Jmu24 CALLY DISADVANTAGED WO~IE);-OWNED S~IALI, 

25 BlTSINESSES.-In accordance with this scction, a 

.HR 4203 m 
99 


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3 

contracting officer may award a sole source contract 

2 to any small business concern meeting the require3 ments of section 8(m)(2)(A) of this Act if4 "(A) such concern is determined to be a 

5 responsible contract ,:vi.th respect to perform6 ance of such contract opportunity and the con7 tracting officer does not have a reasonable ex8 peetation that 2 or more businesses meeting the 

9 requirements of seetion 8(m)(2)(A) v,i.ll submit 

10 offers; 

11 "(B) the anticipated award price of the 

12 contract (including options) will not exceed13 "(i) $6,500,000 in the case of a COll14 traet opportullity assigned a standard in15 dustrial eode for manufacturing; or 

16 "(ii) $4,000,000 in the ease of allY 

17 other eontraet opportunity; and 

18 "(C) in the estimation of the contracting 

19 officer, the contract award can be made at a 

20 fair and reasonable priee. 

21 "(8) SOLE SOURCI~ COXTRACTS FOR WO!\fE1\-

22 OWXED SMALL RGSIXESSES I1\ SUBSTA1\TIALLY 

23 UXDERREPRESEXTED IXDl:STRIES.-In accordance 

24 ,,,-,i.th this section, a contraeting' officer may award a 

25 sole SOUI'l~e contract to any small business coneerns 

.HR 4203 IH 
100 


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4 

1 meeting the requirements of section 8(m)(3) of this 

2 Act if3 "(A) such concern is determined to be a 

4 responsible contract "lith respect to perform5 ance of such contract opportunity and the con6 tracting officer does not have a reasonable ex7 pectation that 2 or more businesses meeting the 

8 requirements of section 8(m)(3) 'will submit of9 fers; 

10 "(B) the anticipated award price of the 

11 contract (including options) .vill not exceed12 "(i) $6,500,000 in the case of a con13 tract opportunity assigned a standard 111-

14 dustrial code for manufacturing; or 

15 "(ii) $4,000,000 in the case of any 

16 other contract opportunity; and 

17 "(C) in the estimation of the contracting 

18 officer, the contract award can be made at a 

19 fair and reasonable price.". 

o 

.HR 4203 IH 
101 

Chairman GRAVES. Does any Member have an amendment? 

Seeing none, the question is on agreeing to H.R. 4203. All those 

in favor say aye. 

[A chorus of ayes.] 

Chairman GRAVES. All opposed no. 

[No response.] 

Chairman GRAVES. The opinion of the chair is the ayes have it. 

The ayes do have it. H.R. 4203 is agreed to without objection. A 

quorum being present, the bill is favorably reported to the House. 

And without objection the Committee staff is authorized to correct 

punctuation and make other necessary technical changes. 

COUNSEL. We are still waiting on the copies. 

Chairman GRAVES. All right, we are waiting on the copies. 

The Committee previously postponed action on H.R. 4206. Just 

as soon as we have the copies we will move forward. How long is 

it going to take? 

COUNSEL. Two minutes. 

Chairman GRAVES. The Committee previously postponed action 

on H.R. 4206. Without objection we will now resume these discussions. 

Does the gentleman wish to offer a perfecting amendment? The 

amendment is being distributed. The clerk will report the amendment to the amendment. 

The CLERK. Amendment offered by Mr. Cicilline of Rhode Island, 

Perfecting Amendment 1 to H.R. 4206 offered by Ms. Hahn of California. 

Chairman GRAVES. With that, does any other Member wish to be 

heard on the amendment to the amendment? 

Ms. HAHN. Yes, I just want to say again, as we are really working to protect and support job creators, that was really the intention of this amendment. And I think having it available to be 

downloaded really gets rid of the idea that it will cost more in the 

long run. 

Chairman GRAVES. Any other Member wish to be heard on the 

amendment to the amendment? Ms. Clarke? 

Ms. CLARKE. Thank you, Mr. Graves. I just wanted to, again, 

share with my colleagues my support for this amendment and its 

perfecting amendment. I think that we have come to a great compromise here. 

There are hosts of small businesses that are growing across our 

Nation that really rely on us to be helpful to them. I know of the 

concerns of my colleagues on the other side of the aisle. It is my 

hope that this perfecting amendment which provides this online 

will ease any concerns that our colleagues would have. 

Again, it has been my experience that most immigrants really 

desire to learn the English language, particularly those who are involved in commerce. They want to be able to pitch their services, 

their products, and their wares to every American, and they recognize that anything that is a barrier to that is a barrier to their success. 

So my support for this amendment is a bridge-building amendment that enables those who would like to use the services of the 

federal government to expand their businesses, to become employers to all Americans, to have this translation available that enables 


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them to accurately understand what is required by the SBA of 

them to strengthen, build, and to further their pursuits of the 

American dream. 

With that, Mr. Chairman, I yield back. 

Chairman GRAVES. Does any other Member wish to be heard on 

the amendment to the amendment? 

We are going to have votes in five minutes. Does any other Member wish to be heard on the amendment to the amendment? 

Seeing none, I am going to oppose both. I do not support the underlying amendment. I am not going to support the amendment to 

the amendment. 

I believe translating the compliance guidelines into another language is just going to be money that is going to be spent without 

actual benefit. This is 10th government contracting bill we have 

marked up and the last 9 have shown us, if anything, that government contracting is a very technical area. And I am going to back 

up what Mr. Coffman said earlier. In dealing with something technical the choice of words matter and a common language allows us 

to use words with precision. And in the case of compliance guidelines that precision is especially important because it is a legal document. 

The underlying documents themselves are only available in 

English. The Federal Acquisition Regulations is over 2,000 pages of 

regulation that all government contractors need to understand. It 

is only available in English. Solicitations are only available in 

English. Government contracts themselves are only available in 

English. And I think the amendment actually does very little to 

help small businesses and it is going to add to the cost. 

Therefore, I am opposing the amendment to the amendment and 

the underlying amendment. And with that, the question is on the 

amendment offered by Mr. Cicilline to the amendment. All those in 

favor say aye. 

[A chorus of ayes.] 

Chairman GRAVES. All opposed no. 

[A chorus of noes.] 

Ms. HAHN. Mr. Chairman, can we have a recorded vote? 

Chairman GRAVES. A recorded vote has been requested. Clerk, 

please call the roll. 

The CLERK. Chairman Graves. 

Chairman GRAVES. No. 

The CLERK. Chairman Graves votes no. 

Mr. Bartlett. 

Mr. BARTLETT. Yes. 

The CLERK. Mr. Bartlett votes aye. 

Mr. Chabot. 

Mr. CHABOT. No. 

The CLERK. Mr. Chabot votes no. 

Mr. King. 

[No response.] 

The CLERK. Mr. King. 

[No response.] 

The CLERK. Mr. Coffman. 

Mr. COFFMAN. No. 

The CLERK. Mr. Coffman votes no. 


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Mr. Mulvaney. 

Mr. MULVANEY. No. 

The CLERK. Mr. Mulvaney votes no. 

Mr. Tipton. 

Mr. TIPTON. Aye. 

The CLERK. Mr. Tipton votes aye. 

Mr. Landry. 

[No response.] 

The CLERK. Mr. Landry. 

[No response.] 

The CLERK. Ms. Herrera Beutler. 

Ms. HERRERA BEUTLER. No. 

The CLERK. Ms. Herrera Beutler votes no. 

Mr. West. 

Mr. WEST. No. 

The CLERK. Mr. West votes no. 

Mrs. Ellmers. 

Ms. ELLMERS. No. 

The CLERK. Mrs. Ellmers votes no. 

Mr. Walsh. 

Mr. WALSH. No. 

The CLERK. Mr. Walsh votes no. 

Mr. Barletta. 

Mr. BARLETTA. No. 

The CLERK. Mr. Barletta votes no. 

Mr. Hanna. 

Mr. HANNA. Yes. 

The CLERK. Mr. Hanna votes aye. 

Mr. Schilling. 

Mr. SCHILLING. Yes. 

The CLERK. Mr. Schilling votes aye. 

Ranking Member Vela ́zquez. 

Ms. VELA ́ ZQUEZ. Yes. 

The CLERK. Ranking Member Vela ́zquez votes aye. 

Mr. Schrader. 

Mr. SCHRADER. Aye. 

The CLERK. Mr. Schrader votes aye. 

Mr. Critz. 

Mr. CRITZ. Aye. 

The CLERK. Mr. Critz votes aye. 

Ms. Chu—I am sorry, Ms. Clarke. 

Ms. CLARKE. Aye. 

The CLERK. Ms. Clarke votes aye. 

Ms. Chu. 

Ms. CHU. Aye. 

The CLERK. Ms. Chu votes aye. 

Mr. Cicilline. 

Mr. CICILLINE. Aye. 

The CLERK. Mr. Cicilline votes aye. 

Mr. Richmond. 

[No response.] 

The CLERK. Mr. Richmond. 

[No response.] 

The CLERK. Ms. Hahn. 


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Ms. HAHN. Aye. 

The CLERK. Ms. Hahn votes aye. 

Mr. Peters. 

Mr. PETERS. Aye. 

The CLERK. Mr. Peters votes aye. 

Mr. Owens. 

Mr. OWENS. Aye. 

The CLERK. Mr. Owens votes aye. 

Mr. Keating. 

Mr. KEATING. Yes. 

The CLERK. Mr. Keating votes aye. 

Chairman GRAVES. Does any other Member wish to vote? Any 

Member wish to change their vote? 

The CLERK. Fourteen ayes, nine noes. 

Chairman GRAVES. On this vote the ayes are 14, the noes are 9. 

The amendment to the amendment is agreed to. 

The question is now on the underlying amendment by Ms. Hahn. 

All those in favor say aye. 

[A chorus of ayes.] 

Chairman GRAVES. All opposed no. 

[A chorus of noes.] 

Chairman GRAVES. In the opinion of the chair the noes have it. 

Ms. HAHN. Could we have a recorded vote on that as well? 

Chairman GRAVES. A recorded vote has been requested. Will the 

clerk please call the roll? 

The CLERK. Chairman Graves. 

Chairman GRAVES. No. 

The CLERK. Chairman Graves votes no. 

Mr. Bartlett. 

Mr. BARTLETT. Aye. 

The CLERK. Mr. Bartlett votes aye. 

Mr. Chabot. 

Mr. CHABOT. No. 

The CLERK. Mr. Chabot votes no. 

Mr. King. 

[No response.] 

The CLERK. Mr. King. 

[No response.] 

The CLERK. Mr. Coffman. 

Mr. COFFMAN. No. 

The CLERK. Mr. Coffman votes no. 

Mr. Mulvaney. 

Mr. MULVANEY. No. 

The CLERK. Mr. Mulvaney votes no. 

Mr. Tipton. 

Mr. TIPTON. Aye. 

The CLERK. Mr. Tipton votes aye. 

Mr. Landry. 

[No response.] 

The CLERK. Mr. Landry. 

[No response.] 

The CLERK. Ms. Herrera Beutler. 

Ms. HERRERA BEUTLER. No. 

The CLERK. Ms. Herrera Beutler votes no. 


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Mr. West. 

Mr. WEST. No. 

The CLERK. Mr. West votes no. 

Mrs. Ellmers. 

Ms. ELLMERS. No. 

The CLERK. Mrs. Ellmers votes no. 

Mr. Walsh. 

Mr. WALSH. No. 

The CLERK. Mr. Walsh votes no. 

Mr. Barletta. 

Mr. BARLETTA. No. 

The CLERK. Mr. Barletta votes no. 

Mr. Hanna. 

Mr. HANNA. No. 

The CLERK. Mr. Hanna votes no. 

Mr. Schilling. 

Mr. SCHILLING. No. 

The CLERK. Mr. Schilling votes no. 

Ranking Member Vela ́zquez. 

Ms. VELA ́ ZQUEZ. Aye. 

The CLERK. Ranking Member Vela ́zquez votes aye. 

Mr. Schrader. 

Mr. SCHRADER. Aye. 

The CLERK. Mr. Schrader votes aye. 

Mr. Critz. 

Mr. CRITZ. Aye. 

The CLERK. Mr. Critz votes aye. 

Ms. Clarke. 

Ms. CLARKE. Aye. 

The CLERK. Ms. Clarke votes aye. 

Ms. Chu. 

Ms. CHU. Aye. 

The CLERK. Ms. Chu votes aye. 

Mr. Cicilline. 

Mr. CICILLINE. Aye. 

The CLERK. Mr. Cicilline votes aye. 

Mr. Richmond. 

[No response.] 

The CLERK. Mr. Richmond. 

[No response.] 

The CLERK. Ms. Hahn. 

Ms. HAHN. Aye. 

The CLERK. Ms. Hahn votes aye. 

Mr. Peters. 

Mr. PETERS. Aye. 

The CLERK. Mr. Peters votes aye. 

Mr. Owens. 

Mr. OWENS. Aye. 

The CLERK. Mr. Owens votes aye. 

Mr. Keating. 

Mr. KEATING. Yes. 

The CLERK. Mr. Keating votes aye. 

Chairman GRAVES. Any Member wish to change their vote? 

Seeing none—— 


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Ms. VELA ́ ZQUEZ. Mr. Chairman, as a point of clarification, by voting on Ms. Hahn’s amendment we are voting on an amendment 

that was voted on Cicilline, and so the vote on this amendment, 

what it does it makes sure that Mr. Cicilline’s amendment takes 

precedent over Ms. Hahn’s amendment, is it not? 

Chairman GRAVES. No, Ms. Hahn’s amendment has been amended. 

Ms. VELA ́ ZQUEZ. Yeah. So, in fact, they are voting on the language of Mr. Cicilline. 

Chairman GRAVES. Well, they are voting on the language of Ms. 

Hahn. It has been amended by Mr. Cicilline. 

Clerk, please report the—— 

The CLERK. Twelve ayes, 11 noes. 

Chairman GRAVES. What was it? 

The CLERK. Twelve ayes, 11 noes. 

Chairman GRAVES. On this vote the ayes are 12, the noes are 11. 

The amendment is agreed to. 

With that, the question is on H.R. 4206 as amended. All those 

in favor say aye. 

[A chorus of ayes.] 

Chairman GRAVES. All opposed no. 

[A chorus of noes.] 

Chairman GRAVES. In the opinion of the chair, the ayes have it. 

H.R. 4206 is agreed to without objection. A quorum being present, 

the bill is favorably reported to the House without objection. Without objection the Committee staff is authorized to correct punctuation and make other necessary technical corrections and conforming changes. 

With that, that is the five bills. Thanks for everybody being here. 

The markup is adjourned. 

[Whereupon, at 11:16 a.m., the Committee was adjourned.] 


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