II 

112TH CONGRESS 

1ST SESSION S. 1590 

To require the Administrator of the Small Business Administration to develop 

a new classification system for small business size determinations and 

to promulgate rules to eliminate the nonmanufacturer exception to small 

business size determinations, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 21, 2011 

Mrs. MCCASKILL introduced the following bill; which was read twice and 

referred to the Committee on Small Business and Entrepreneurship 

A BILL 

To require the Administrator of the Small Business Administration to develop a new classification system for small 

business size determinations and to promulgate rules to 

eliminate the nonmanufacturer exception to small business size determinations, 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 ‘‘Fairness for Small 

5 Businesses in Federal Contracting Act of 2011’’. 


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1 SEC. 2. NEW CLASSIFICATION SYSTEM FOR SMALL BUSI2 NESS SIZE DETERMINATIONS. 

3 (a) IN GENERAL.—Section 3(a)(2) of the Small Busi4 ness Act (15 U.S.C. 632(a)(2)) is amended by adding at 

5 the end the following: 

6 ‘‘(D) REVISION OF CLASSIFICATION.— 

7 ‘‘(i) IN GENERAL.—Not later than 

8 180 days after the date of enactment of 

9 the Fairness for Small Businesses in Fed10 eral Contracting Act of 2011, and in con11 sultation with the Federal Acquisition Reg12 ulatory Council, the Administrator shall es13 tablish a classification system for indus14 tries for purposes of determining whether 

15 business concerns meet the size standards 

16 established under this paragraph that re17 places the North American Industrial Clas18 sification System. 

19 ‘‘(ii) AMENDMENT OF FAR.—The Fed20 eral Acquisition Regulatory Council shall 

21 amend the Federal Acquisition Regulation 

22 as appropriate to integrate the classifica23 tion system established under clause (i). 

24 ‘‘(iii) INTEGRATION OF SYSTEM.—The 

25 Administrator of General Services shall in26 tegrate the classification system estabVerDate Mar 15 2010 02:14 Sep 23, 2011 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1590.IS S1590

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1 lished under clause (i) into the Integrated 

2 Acquisition Environment. 

3 ‘‘(iv) CRITERIA.—The classification 

4 system established under clause (i) shall— 

5 ‘‘(I) consist of not more than 20 

6 industries; 

7 ‘‘(II) include as industries manu8 facturing, construction, professional 

9 services, wholesale, and retail indus10 tries; and 

11 ‘‘(III) be based on market condi12 tions as identified by the most recent 

13 Economic Census of the United 

14 States. 

15 ‘‘(v) REVIEWS.—The Administrator 

16 shall review the classification system estab17 lished under clause (i) as part of the re18 view of size standards under section 1344 

19 of the Small Business Jobs Act of 2010 

20 (15 U.S.C. 632 note). 

21 ‘‘(vi) REPORT.—Not later than 180 

22 days after the date on which the Adminis23 trator establishes the classification system 

24 under clause (i), the Administrator shall 

25 submit to Congress a report on the estabVerDate Mar 15 2010 02:14 Sep 23, 2011 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1590.IS S1590

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1 lishment and use of the classification sys2 tem.’’. 

3 (b) TECHNICAL AND CONFORMING AMENDMENTS.— 

4 The Small Business Investment Act of 1958 (15 U.S.C. 

5 661 et seq.) is amended— 

6 (1) in section 501(e)(6)(A) (15 U.S.C. 

7 695(e)(6)(A)), by striking ‘‘in sector 31, 32, or 33 

8 of the North American Industrial Classification Sys9 tem’’ and inserting ‘‘as ‘manufacturing’ under the 

10 classification system established under section 

11 3(a)(2)(D) of the Small Business Act (15 U.S.C. 

12 632(a)(2)(D))’’; and 

13 (2) in section 502(2)(B)(i) (15 U.S.C. 

14 696(2)(B)(i)), by striking ‘‘in sector 31, 32, or 33 

15 of the North American Industrial Classification Sys16 tem’’ and inserting ‘‘as ‘manufacturing’ under the 

17 classification system established under section 

18 3(a)(2)(D) of the Small Business Act (15 U.S.C. 

19 632(a)(2)(D))’’. 

20 SEC. 3. ELIMINATING THE NONMANUFACTURER EXCEP21 TION TO SMALL BUSINESS SIZE DETERMINA22 TIONS. 

23 (a) DEFINITIONS.—In this section— 

24 (1) the term ‘‘manufacturing’’— 


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1 (A) means being engaged in the mechan2 ical, physical, or chemical transformation of 

3 materials, substances, or components into new 

4 products; and 

5 (B) does not include construction; and 

6 (2) the term ‘‘offeror’’ means the bidder on a 

7 contract solicitation. 

8 (b) REGULATIONS.—Not later than 120 days after 

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

10 the Small Business Administration shall promulgate regu11 lations that— 

12 (1) eliminate the nonmanufacturer exception to 

13 small business size determinations under section 

14 121.402(b) of title 13 and section 19.102(f) of title 

15 48, Code of Federal Regulations; 

16 (2) require contracting officers to use the size 

17 standards established by the Administrator for retail 

18 and wholesale industries in procurements for prod19 ucts and services by the Federal Government that 

20 are not manufactured by the offeror; and 

21 (3) require contracting officers to only use size 

22 standards established by the Administrator for man23 ufacturing industries if the Federal Government 

24 issues a contract for the purchase of a product or 


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1 good and the product or good is manufactured by 

2 the offeror. 

Æ 


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