II 

109TH CONGRESS 

1ST SESSION S. 137 

To modify the contract consolidation requirements in the Small Business 

Act, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 24, 2005 

Mr. KERRY introduced the following bill; which was read twice and referred 

to the Committee on Small Business and Entrepreneurship 

A BILL 

To modify the contract consolidation requirements in the 

Small Business Act, 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 Fed5 eral Contractor Safeguard Act of 2005’’. 

6 SEC. 2. CONTRACT CONSOLIDATION. 

7 (a) DEFINITIONS.—Section 3(o) of the Small Busi8 ness Act (15 U.S.C. 632(o)) is amended to read as follows: 

9 ‘‘(o) DEFINITIONS RELATING TO CONSOLIDATION OF

10 CONTRACT REQUIREMENTS.—For purposes of this Act— 
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1 ‘‘(1) the terms ‘consolidation of contract re2 quirements’ and ‘consolidation’, with respect to con3 tract requirements of a military department, De4 fense Agency, Department of Defense Field Activity, 

5 or any other Federal department or agency having 

6 contracting authority mean a use of a solicitation to 

7 obtain offers for a single contract or a multiple 

8 award contract to satisfy 2 or more requirements of 

9 that department, agency, or activity for goods or 

10 services that— 

11 ‘‘(A) have previously been provided to or 

12 performed for that department, agency, or ac13 tivity under 2 or more separate contracts that 

14 are smaller in cost than the total cost of the 

15 contract for which the offers are solicited; or 

16 ‘‘(B) are of a type capable of being pro17 vided or performed by a small business concern 

18 for that department, agency, or activity under 

19 2 or more separate contracts that are smaller in 

20 cost than the total cost of the contract for 

21 which the offers are solicited; 

22 ‘‘(2) the term ‘multiple award contract’ 

23 means— 

24 ‘‘(A) a contract that is entered into by the 

25 Administrator of General Services under the 
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1 multiple award schedule program referred to in 

2 section 2302(2)(C) of title 10, United States 

3 Code; 

4 ‘‘(B) a multiple award task order contract 

5 or delivery order contract that is entered into 

6 under the authority of sections 2304a through 

7 2304d of title 10, United States Code, or sec8 tions 303H through 303K of the Federal Prop9 erty and Administrative Services Act of 1949 

10 (41 U.S.C. 253h through 253k); and 

11 ‘‘(C) any other indeterminate delivery, in12 determinate quantity contract that is entered 

13 into by the head of a Federal agency with 2 or 

14 more sources pursuant to the same solicitation; 

15 and 

16 ‘‘(3) the term ‘senior procurement executive’ 

17 means— 

18 ‘‘(A) with respect to a military department, 

19 the official designated under section 16(3) of 

20 the Office of Federal Procurement Policy Act 

21 (41 U.S.C. 414(3)) as the senior procurement 

22 executive for the military department; 

23 ‘‘(B) with respect to a Defense Agency or 

24 a Department of Defense Field Activity, the of-
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1 ficial so designated for the Department of De2 fense; and 

3 ‘‘(C) with respect to a Federal department 

4 or agency other than those referred to in sub5 paragraphs (A) and (B), the official so des6 ignated by that department or agency.’’. 

7 (b) PROCUREMENT STRATEGIES.—Section 15(e) of 

8 the Small Business Act (15 U.S.C. 644(e)) is amended— 

9 (1) in paragraph (2)— 

10 (A) by striking ‘‘.— 

11 ‘‘(A) IN GENERAL ’’; and 

12 (B) by striking subparagraphs (B) and 

13 (C); and 

14 (2) by amending paragraph (3) to read as fol15 lows: 

16 ‘‘(3) LIMITATION ON USE OF ACQUISITION

17 STRATEGIES INVOLVING CONSOLIDATION.— 

18 ‘‘(A) CERTAIN DEFENSE CONTRACT RE19 QUIREMENTS.—An official of a military depart20 ment, defense agency, or Department of De21 fense Field Activity shall not execute an acqui22 sition strategy that includes a consolidation of 

23 contract requirements of the military depart24 ment, agency, or activity with a total value in 
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1 excess of $5,000,000, unless the senior procure2 ment executive first— 

3 ‘‘(i) conducts market research; 

4 ‘‘(ii) identifies any alternative con5 tracting approaches that would involve a 

6 lesser degree of consolidation of contract 

7 requirements; and 

8 ‘‘(iii) determines that the consolida9 tion is necessary and justified. 

10 ‘‘(B) CERTAIN CIVILIAN AGENCY CON11 TRACT REQUIREMENTS.—The head of a Federal 

12 agency not described in subparagraph (A) that 

13 has contracting authority shall not execute an 

14 acquisition strategy that includes a consolida15 tion of contract requirements of the agency with 

16 a total value in excess of $2,000,000, unless the 

17 senior procurement executive of the agency 

18 first— 

19 ‘‘(i) conducts market research; 

20 ‘‘(ii) identifies any alternative con21 tracting approaches that would involve a 

22 lesser degree of consolidation of contract 

23 requirements; and 

24 ‘‘(iii) determines that the consolida25 tion is necessary and justified. 
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1 ‘‘(C) ADDITIONAL REQUIREMENTS FOR

2 HIGHER VALUE CONSOLIDATED CONTRACTS.— 

3 In addition to meeting the requirements under 

4 subparagraph (A) or (B), a procurement strat5 egy by a civilian agency that includes a consoli6 dated contract valued at more than $5,000,000, 

7 or by a defense agency that includes a consoli8 dated contract valued at more than $7,000,000 

9 shall include— 

10 ‘‘(i) an assessment of the specific im11 pediments to participation by small busi12 ness concerns as prime contractors that 

13 will result from the consolidation; 

14 ‘‘(ii) the identification of the alter15 native strategies that would reduce or min16 imize the scope of the consolidation and 

17 the rationale for not choosing those alter18 natives; 

19 ‘‘(iii) actions designed to maximize 

20 small business participation as prime con21 tractors, including provisions that encour22 age small business teaming for the consoli23 dated requirement; and 

24 ‘‘(iv) actions designed to maximize 

25 small business participation as subcontrac-
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1 tors (including suppliers) at any tier under 

2 the contract or contracts that may be 

3 awarded to meet the requirements. 

4 ‘‘(D) NECESSARY AND JUSTIFIED.—A sen5 ior procurement executive may determine that 

6 an acquisition strategy involving a consolidation 

7 of contract requirements is necessary and justi8 fied for purposes of subparagraph (A), (B), or 

9 (C), if the benefits of the acquisition strategy 

10 substantially exceed the benefits of each of the 

11 possible alternative contracting approaches 

12 identified under clause (ii) of any of those sub13 paragraphs, as applicable. Savings in adminis14 trative or personnel costs alone shall not con15 stitute, for such purpose, a sufficient justifica16 tion for a consolidation of contract require17 ments in a procurement, unless the total 

18 amount of the cost savings is expected to be 

19 substantial in relation to the total cost of the 

20 procurement. 

21 ‘‘(E) BENEFITS.—Benefits considered for 

22 purposes of this paragraph may include cost 

23 and, regardless of whether quantifiable in dollar 

24 amounts— 

25 ‘‘(i) quality; 
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1 ‘‘(ii) acquisition cycle; 

2 ‘‘(iii) terms and conditions; and 

3 ‘‘(iv) any other benefit directly related 

4 to national security or homeland defense.’’. 

5 (c) ADDITIONAL TO TECHNICAL ADVISERS.—Section 

6 15(k) of the Small Business Act (15 U.S.C. 644(k)) is 

7 amended— 

8 (1) in paragraph (5), by striking ‘‘bundled con9 tract’’ and inserting ‘‘consolidated contract’’; and 

10 (2) in paragraph (8), by striking ‘‘representa11 tive—’’ and inserting ‘‘representative at each major 

12 procurement center under subsection (l)(1)—’’. 

13 (d) PROCUREMENT CENTER REPRESENTATIVES.— 

14 Section 15(l) of the Small Business Act (15 U.S.C. 644(l)) 

15 is amended— 

16 (1) by redesignating paragraphs (2) through 

17 (7) as paragraphs (3) through (8), respectively; 

18 (2) by striking ‘‘(l)(1)’’ and inserting ‘‘(2)’’; 

19 (3) by inserting before paragraph (2), as redes20 ignated, the following: 

21 ‘‘(l)(1) The Administration shall assign not fewer 

22 than 1 procurement center representative at each major 

23 procurement center, in addition to not fewer than 1 for 

24 each State.’’; 
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1 (4) in paragraph (2), as redesignated, by strik2 ing ‘‘to the representative referred to in subsection 

3 (k)(6)’’ and inserting ‘‘to the traditional procure4 ment center representative and the commercial mar5 ket representative, with each such position filled by 

6 a different individual, and each such representative 

7 having separate and distinct duties and responsibil8 ities.’’; and 

9 (5) by striking ‘‘paragraph (2)’’ each place that 

10 term appears and inserting ‘‘paragraph (3)’’. 

11 (e) REPORT REQUIREMENTS.—Section 15(p)(4)(B) 

12 of the Small Business Act (15 U.S.C. 644(p)(4)(B)) is 

13 amended— 

14 (1) in clause (i), by striking ‘‘and’’ at the end; 

15 (2) in clause (ii), by striking the period at the 

16 end and inserting the following: ‘‘; and’’; and 

17 (3) by adding at the end the following: 

18 ‘‘(iii) a description of best practices 

19 for maximizing small business prime and 

20 subcontracting opportunities.’’. 

21 (f) CONFORMING AMENDMENTS.—Section 15(p) of 

22 the Small Business Act (15 U.S.C. 644(p)) is amended— 

23 (1) in the subsection heading, by striking 

24 ‘‘BUNDLED CONTRACTS’’ and inserting ‘‘CONSOLI25 DATED CONTRACTS’’; 
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1 (2) in the heading to paragraph (1), by striking 

2 ‘‘BUNDLED CONTRACT’’ and inserting ‘‘CONSOLI3 DATED CONTRACT’’; 

4 (3) in the heading to paragraph (4), by striking 

5 ‘‘CONTRACT BUNDLING’’ and inserting ‘‘CONTRACT

6 CONSOLIDATION’’; 

7 (4) by striking ‘‘bundled contracts’’ each place 

8 that term appears and inserting ‘‘consolidated con9 tracts’’; 

10 (5) by striking ‘‘bundled contract’’ each place 

11 that term appears and inserting ‘‘consolidated con12 tract’’; 

13 (6) by striking ‘‘bundling of contract require14 ments’’ each place that term appears and inserting 

15 ‘‘consolidation of contract requirements’’; 

16 (7) in paragraph (4)(B)(ii), by striking ‘‘pre17 viously bundled’’ and inserting ‘‘previously consoli18 dated’’; 

19 (8) in paragraph (4)(B)(ii)(I), by striking 

20 ‘‘were bundled’’ and inserting ‘‘were consolidated’’; 

21 (9) in paragraph (4)(B)(ii)(II)(bb), by striking 

22 ‘‘bundling the contract requirements’’ and inserting 

23 ‘‘the consolidation of contract requirements’’; and 
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1 (10) in paragraph (4)(B)(ii)(II)(cc), by striking 

2 ‘‘bundled status’’ and inserting ‘‘consolidated sta3 tus’’. 

4 SEC. 3. AGENCY ACCOUNTABILITY. 

5 (a) IN GENERAL.—Each procurement employee— 

6 (1) shall communicate to their subordinates the 

7 importance of achieving small business goals; and 

8 (2) shall have as an annual performance evalua9 tion factor, if appropriate, the success of that pro10 curement employee in small business utilization, in 

11 accordance with the goals established under this sec12 tion. 

13 (b) DEFINITION.—As used in this section, the term 

14 ‘‘procurement employee’’ means a senior procurement ex15 ecutive, senior program manager, or small and disadvan16 taged business utilization manager of a Federal agency 

17 having contracting authority. 

18 SEC. 4. SMALL BUSINESS PARTICIPATION IN PRIME CON19 TRACTING. 

20 (a) RESERVED CONTRACTS.—Section 15(j) of the 

21 Small Business Act (15 U.S.C. 644(j)) is amended by add22 ing at the end the following: 

23 ‘‘(4) Any adjustment to the simplified acquisition 

24 threshold (as defined in section 4(11) of the Office of Fed25 eral Procurement Policy Act (41 U.S.C. 403(11))), shall 
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1 be immediately matched by an identical adjustment to the 

2 small business reserve for purposes of this subsection.’’. 

3 (b) PARTICIPATION IN MULTIPLE AWARD CON4 TRACTS.—Section 15(j) of the Small Business Act (15 

5 U.S.C. 644(j)) is amended— 

6 (1) in paragraph (2), by striking ‘‘(2) In car7 rying out paragraph (1)’’ and inserting ‘‘(3) In car8 rying out paragraphs (1) and (2)’’; 

9 (2) in paragraph (3), by striking ‘‘(3) Nothing 

10 in paragraph (1)’’ and inserting ‘‘(4) Nothing in this 

11 subsection’’; and 

12 (3) by inserting after paragraph (1) the fol13 lowing: 

14 ‘‘(2)(A) In the case of orders under multiple award 

15 contracts, including Federal Supply Schedule contracts 

16 and multi-agency contracts, that are subject to the small 

17 business reserve, contracting officers shall consider not 

18 fewer than 2 small business concerns if such small busi19 ness concerns can offer the items sought by the con20 tracting officer on competitive terms, with respect to price, 

21 quality, and delivery schedule, with the goods or services 

22 available in the market. 

23 ‘‘(B) If only 1 small business concern can satisfy the 

24 requirement, the contracting officer shall include such 

25 small business concern in their evaluation.’’. 
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1 (c) REPORT REQUIREMENT.— 

2 (1) IN GENERAL.—Not less than once every 

3 180 days, the Comptroller General of the United 

4 States shall submit a report on the level of participa5 tion in multiple award contracts, including the Fed6 eral Supply Schedule to— 

7 (A) the Small Business Administration; 

8 (B) the Committee on Small Business and 

9 Entrepreneurship of the Senate; and 

10 (C) the Committee on Small Business of 

11 the House of Representatives. 

12 (2) CONTENTS.—Each report submitted under 

13 paragraph (1) shall contain, for the 6-month report14 ing period— 

15 (A) the total number of multiple award 

16 contracts; 

17 (B) the total number of small business 

18 concerns that received multiple award contracts; 

19 (C) the total number of orders; 

20 (D) the total value of orders; 

21 (E) the number of orders received by small 

22 business concerns; 

23 (F) the value of orders received by small 

24 business concerns; 
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1 (G) the number of small business concerns 

2 that received orders; and 

3 (H) such other information that the Comp4 troller General considers relevant. 

5 SEC. 5. SMALL BUSINESS PARTICIPATION IN SUBCON6 TRACTING. 

7 (a) CERTIFICATIONS REQUIRED.—Section 8(d)(6) of 

8 the Small Business Act (15 U.S.C. 637(d)(6)) is amend9 ed— 

10 (1) in subparagraph (E), by striking ‘‘and’’ at 

11 the end; 

12 (2) in subparagraph (F), by striking the period 

13 at the end and inserting ‘‘; and’’; and 

14 (3) by adding at the end the following: 

15 ‘‘(G) certification that the offeror or bidder will 

16 acquire articles, equipment, supplies, services, or 

17 materials, or obtain the performance of construction 

18 work from small business concerns in the amount 

19 and quality used in preparing the bid or proposal, 

20 unless such small business concerns are no longer in 

21 business or can no longer meet the quality, quantity, 

22 or delivery date.’’. 

23 (b) PENALTIES FOR FALSE CERTIFICATIONS.—Sec24 tion 16(f) of the Small Business Act (15 U.S.C. 645(f)) 
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1 is amended by striking ‘‘of this Act’’ and inserting ‘‘or 

2 the reporting requirements of section 8(d)(11)’’. 

3 SEC. 6. EVALUATING SUBCONTRACT PARTICIPATION IN 

4 AWARDING CONTRACTS. 

5 (a) SIGNIFICANT FACTORS.—Section 8(d)(4)(G) of 

6 the Small Business Act (15 U.S.C. 637(d)(4)(G)) is 

7 amended by striking ‘‘a bundled’’ and inserting ‘‘any’’. 

8 (b) EVALUATION REPORTS.—Section 8(d)(10) of the 

9 Small Business Act (15 U.S.C. 637(d)(10)) is amended— 

10 (1) by striking ‘‘is authorized to’’ and inserting 

11 ‘‘shall’’; 

12 (2) in subparagraph (B), by striking ‘‘and’’ at 

13 the end; 

14 (3) in subparagraph (C), by striking the period 

15 at the end and inserting ‘‘; and’’; and 

16 (4) by adding at the end the following: 

17 ‘‘(D) report the results of each evaluation under 

18 subparagraph (C) to the appropriate contracting of19 ficers.’’. 

20 (c) CENTRALIZED DATABASE; PAYMENTS PENDING

21 REPORTS.—Section 8(d) of the Small Business Act (15 

22 U.S.C. 637(d)) is amended— 

23 (1) by redesignating paragraph (11) as para24 graph (14); and 
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1 (2) by inserting after paragraph (10) the fol2 lowing: 

3 ‘‘(11) CERTIFICATION.—A report submitted by the 

4 prime contractor pursuant to paragraph (6)(E) to deter5 mine the attainment of a subcontract utilization goal 

6 under any subcontracting plan entered into with a Federal 

7 agency under this subsection shall contain the name and 

8 signature of the president or chief executive officer of the 

9 contractor, certifying that the subcontracting data pro10 vided in the report are accurate and complete. 

11 ‘‘(12) CENTRALIZED DATABASE.—The results of an 

12 evaluation under paragraph (10)(C) shall be included in 

13 a national centralized governmentwide database. 

14 ‘‘(13) PAYMENTS PENDING REPORTS.—Each Federal 

15 agency having contracting authority shall ensure that the 

16 terms of each contract for goods and services includes a 

17 provision allowing the contracting officer of an agency to 

18 withhold an appropriate amount of payment with respect 

19 to a contract (depending on the size of the contract) until 

20 the date of receipt of complete, accurate, and timely sub21 contracting reports in accordance with paragraph (11).’’. 

22 (d) REFERRAL OF MATERIAL BREACH TO INSPEC23 TORS GENERAL.—Section 8(d)(8) of the Small Business 

24 Act (15 U.S.C. 637(d)(8)) is amended by adding at the 

25 end the following: ‘‘A material breach described in this 
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1 paragraph shall be referred for investigation to the Inspec2 tor General (or the equivalent) of the affected agency.’’. 

3 SEC. 7. BUSINESSLINC REPORT TO CONGRESS. 

4 Section 8(n) of the Small Business Act (15 U.S.C. 

5 637(n)) is amended— 

6 (1) by redesignating paragraph (3) as para7 graph (4); and 

8 (2) by adding after paragraph (2) the following: 

9 ‘‘(3) ANNUAL REPORT.— 

10 ‘‘(A) IN GENERAL.—The Associate Admin11 istrator of Business Development of the Admin12 istration shall collect data on the 

13 BusinessLINC program and submit an annual 

14 report by April 30 of each year on the effective15 ness of the program to the Committee on Small 

16 Business and Entrepreneurship of the Senate 

17 and the Committee on Small Business of the 

18 House of Representatives. 

19 ‘‘(B) CONTENTS.—The report submitted 

20 under subparagraph (A) shall include— 

21 ‘‘(i) the number of programs adminis22 tered in each State; 

23 ‘‘(ii) the corresponding grant awards 

24 and the date of each award; 
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1 ‘‘(iii) the dollar amount of the con2 tracts in effect in each State as a result of 

3 the BusinessLINC program; and 

4 ‘‘(iv) the number of teaming arrange5 ments or partnerships created as a result 

6 of the BusinessLINC program.’’. 

Æ