II 

118TH CONGRESS 

1ST SESSION S. 2720 

To amend the Small Business Act regarding Federal contract requirements. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 5, 2023 

Ms. ERNST introduced the following bill; which was read twice and referred 

to the Committee on Small Business and Entrepreneurship 

A BILL 

To amend the Small Business Act regarding Federal contract 

requirements. 

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 ‘‘Accountability and 

5 Clarity in Contracts to Engage Small Suppliers and Small 

6 Businesses Act’’. 

7 SEC. 2. SMALL BUSINESS INDUSTRIAL BASE FEDERAL CON8 TRACTING MATTERS. 

9 (a) ACCESSIBILITY AND CLARITY IN SMALL BUSI10 NESS CONTRACTS.— 

11 (1) DEFINITIONS.—In this section— 


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1 (A) the term ‘‘covered notice’’ means a no2 tice pertaining to small business concerns, such 

3 as a sources sought notice or solicitation re4 stricted to competition among small business 

5 concerns or covered small business concerns, 

6 published by a Federal agency on SAM.gov or 

7 any successor website marketing Federal con8 tract opportunities; 

9 (B) the term ‘‘covered small business con10 cern’’ means— 

11 (i) a small business concern owned 

12 and controlled by women, a small business 

13 concern owned and controlled by veterans, 

14 a small business concern owned and con15 trolled by service-disabled veterans, or a 

16 qualified HUBZone small business con17 cern, as those terms are defined in section 

18 3 of the Small Business Act (15 U.S.C. 

19 632); and 

20 (ii) a socially and economically dis21 advantaged small business concern, as de22 fined in section 8(a)(4)(A) of the Small 

23 Business Act (15 U.S.C. 637(a)(4)(A)); 

24 and 


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1 (C) the terms ‘‘Federal agency’’ and 

2 ‘‘small business concern’’ have the meanings 

3 given those terms in section 3 of the Small 

4 Business Act (15 U.S.C. 632). 

5 (2) INCLUSION OF KEY WORDS IN NOTICES FOR

6 SMALL BUSINESS CONTRACT ACTIONS.—Each cov7 ered notice shall, to the maximum extent practicable, 

8 include key words and contract requirements in the 

9 title or description of the covered notice such that 

10 small business concerns seeking contract opportuni11 ties using the search function of SAM.gov or any 

12 successor website can easily identify and understand 

13 those opportunities. 

14 (3) PLAIN LANGUAGE.— 

15 (A) IN GENERAL.—Each covered notice 

16 shall be written in a manner that is clear, con17 cise, and accessible to the reader such that a 

18 small business concern can easily understand 

19 the intent of the Federal agency. 

20 (B) EXCEPTION.—If the covered notice 

21 cannot meet the requirement under subpara22 graph (A) due to requirements applicable to the 

23 covered notice from regulation or law, the Fed24 eral agency shall include with the covered notice 

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1 tents of the covered notice, written in a clear, 

2 concise, and accessible manner, such that a 

3 small business concern can easily understand 

4 the intent of the Federal agency. 

5 (4) ATTACHMENTS.—A Federal agency may not 

6 meet the requirement in paragraph (2) by only in7 cluding key words and contract requirements in a 

8 document that is attached to the covered notice. 

9 (5) RULEMAKING.—Not later than 90 days 

10 after the date of enactment of this Act, the Adminis11 trator of the Small Business Administration shall 

12 promulgate regulations to carry out this section. 

13 (b) PRIORITIZING ENGAGING MORE SMALL BUSI14 NESSES IN FEDERAL PROCUREMENT.— 

15 (1) IN GENERAL.—Section 15 of the Small 

16 Business Act (15 U.S.C. 644) is amended— 

17 (A) in subsection (g)— 

18 (i) by inserting after ‘‘(g)’’ the fol19 lowing: ‘‘GOALS FOR PARTICIPATION OF

20 SMALL BUSINESS CONCERNS IN PROCURE21 MENT CONTRACTS.—’’; and 

22 (ii) in paragraph (1)— 

23 (I) in subparagraph (A)(i), by 

24 striking the second sentence; and 


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1 (II) by adding at the end the fol2 lowing: 

3 ‘‘(C) REQUIREMENT.—In meeting each of 

4 the goals under subparagraph (A), the Govern5 ment shall ensure the participation of a broad 

6 spectrum of small business concerns from a 

7 wide variety of industries.’’; 

8 (B) in subsection (h)(1)— 

9 (i) in subparagraph (C), by striking 

10 ‘‘and’’ at the end; 

11 (ii) in subparagraph (D), by striking 

12 the period at the end and inserting ‘‘; 

13 and’’; and 

14 (iii) by adding at the end the fol15 lowing: 

16 ‘‘(E) the information described in clauses 

17 (ii) through (iv) of subsection (y)(2)(B).’’; and 

18 (C) in subsection (y)— 

19 (i) in paragraph (2)— 

20 (I) by redesignating subpara21 graphs (A) and (B) as clauses (i) and 

22 (ii), respectively, and adjusting the 

23 margins accordingly; 

24 (II) by inserting before clause (i), 

25 as so redesignated, the following: 


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1 ‘‘(A) GOALS.—’’; 

2 (III) in clause (i), as so redesig3 nated, by inserting ‘‘PRIME CONTRACT

4 GOALS.—’’ before ‘‘A determination’’; 

5 (IV) in clause (ii), as so redesig6 nated, by inserting ‘‘SUBCONTRACT

7 GOALS.—’’ before ‘‘A determination’’; 

8 (V) by striking subparagraphs 

9 (C) and (D) and inserting the fol10 lowing: 

11 ‘‘(B) COMPOSITION OF THE SMALL BUSI12 NESS INDUSTRIAL BASE.— 

13 ‘‘(i) TOTAL NUMBER OF SMALL BUSI14 NESS CONCERNS.—The number of small 

15 business concerns, small business concerns 

16 owned and controlled by service-disabled 

17 veterans, qualified HUBZone small busi18 ness concerns, small business concerns 

19 owned and controlled by socially and eco20 nomically disadvantaged individuals, and 

21 small business concerns owned and con22 trolled by women— 

23 ‘‘(I) awarded prime contracts 

24 during the fiscal year compared to the 

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1 down by North American Industry 

2 Classification System code, if avail3 able; and 

4 ‘‘(II) awarded subcontracts dur5 ing the fiscal year compared to the 

6 prior fiscal year, including a break7 down by North American Industry 

8 Classification System code, if avail9 able. 

10 ‘‘(ii) MATURITY OF SMALL BUSINESS

11 CONCERNS.—A breakdown of the number 

12 of new small business entrants, recent 

13 small business entrants, and established 

14 small business concerns awarded prime 

15 contracts or subcontracts during the fiscal 

16 year, including a breakdown of such enti17 ties that are small business concerns 

18 owned and controlled by service-disabled 

19 veterans, qualified HUBZone small busi20 ness concerns, small business concerns 

21 owned and controlled by socially and eco22 nomically disadvantaged individuals, and 

23 small business concerns owned and con24 trolled by women. 


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1 ‘‘(iii) DOLLAR DISTRIBUTION AMONG

2 SMALL BUSINESS CONCERNS.—The total 

3 dollar value of prime contract awards for 

4 the top 20 small business concerns that re5 ceived the most Federal procurement fund6 ing in the fiscal year, compared to the 

7 combined total dollar value for the remain8 ing small business concerns, and a com9 parison of that data with the prior fiscal 

10 year. 

11 ‘‘(iv) SMALL BUSINESS PARTICIPA12 TION BY INDUSTRY.—The total dollar 

13 value of prime contract awards made to 

14 small business concerns in all industry sec15 tors and sorted by highest dollar amount 

16 per major industry sector to the least, in17 cluding— 

18 ‘‘(I) the number of individual 

19 small business contractors awarded 

20 contracts in each industry sector; and 

21 ‘‘(II) the top 10 industries in 

22 which small business concerns, small 

23 business concerns owned and con24 trolled by service-disabled veterans, 

25 qualified HUBZone small business 


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1 concerns, small business concerns 

2 owned and controlled by socially and 

3 economically disadvantaged individ4 uals, and small business concerns 

5 owned and controlled by women par6 ticipate, compared to the 10 indus7 tries in which those concerns have the 

8 least participation.’’; and 

9 (VI) in subparagraph (E), by 

10 striking ‘‘(E)’’ and inserting ‘‘(C) 

11 OTHER FACTORS.—’’; and 

12 (ii) in paragraph (3), by striking sub13 paragraphs (A) and (B) and inserting the 

14 following: 

15 ‘‘(A) not more than 40 percent of the score 

16 on the dollar value of prime contracts described 

17 in paragraph (2)(A), as determined by the Ad18 ministrator; 

19 ‘‘(B) not less than 30 percent of the score 

20 on the information provided in paragraph 

21 (2)(B), as determined by the Administrator; 

22 and 

23 ‘‘(C) the appropriate percent of the score 

24 on the information provided in paragraph 

25 (2)(C), as determined by the Administrator.’’. 


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1 (2) REGULATIONS.—Not later than 90 days 

2 after the date of enactment of this Act, the Adminis3 trator of the Small Business Administration shall 

4 issue regulations to define the terms ‘‘new small 

5 business entrant’’, ‘‘recent small business entrant’’, 

6 and ‘‘established small business concern’’ for pur7 poses of subparagraph (B)(ii) of section 15(y)(2) of 

8 the Small Business Act (15 U.S.C. 644(y)(2)), as 

9 added by paragraph (1). 

10 (c) LIMITATION ON FEDERAL AGENCY CREDIT FOR

11 MEETING CONTRACTING GOALS.—Section 15(g) of the 

12 Small Business Act (15 U.S.C. 644(g)), as amended by 

13 subsection (b), is amended by adding at the end the fol14 lowing: 

15 ‘‘(4) LIMITATION ON CREDIT FOR MEETING

16 CONTRACTING GOALS.— 

17 ‘‘(A) DEFINITIONS.—In this paragraph— 

18 ‘‘(i) the term ‘covered category of 

19 small business concern’ means— 

20 ‘‘(I) a small business concern 

21 owned and controlled by service-dis22 abled veterans; 

23 ‘‘(II) a qualified HUBZone small 

24 business concern; 


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1 ‘‘(III) a small business concern 

2 owned and controlled by socially and 

3 economically disadvantaged individ4 uals; or 

5 ‘‘(IV) a small business concern 

6 owned and controlled by women; and 

7 ‘‘(ii) the term ‘credit’ means the value 

8 of a prime contract. 

9 ‘‘(B) GENERAL RULE.—A Federal agency 

10 may allocate credit for a single prime contract 

11 awarded to a small business concern not more 

12 than 2 times for purposes of demonstrating 

13 compliance with the goals of the Federal agency 

14 established under paragraph (2)(A). 

15 ‘‘(C) ALLOCATION OF CREDIT.— 

16 ‘‘(i) FIRST ALLOCATION.—The first 

17 allocation of credit described in subpara18 graph (B) shall be applied towards the 

19 goal of the Federal agency established 

20 under paragraph (2)(A) for participation 

21 by small business concerns. 

22 ‘‘(ii) SECOND ALLOCATION.—A second 

23 allocation of credit described in subpara24 graph (B) shall be applied as follows: 


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1 ‘‘(I) If the prime contract was 

2 awarded as a sole-source contract or 

3 through competition restricted to a 

4 covered category of small business 

5 concern, the credit shall be applied to6 wards the goal of the Federal agency 

7 established under paragraph (2)(A) 

8 for participation by the applicable cov9 ered category of small business con10 cern. 

11 ‘‘(II) If the prime contract was 

12 not awarded as a sole-source contract 

13 or through competition restricted to a 

14 covered category of small business 

15 concern, the credit may only be ap16 plied towards a single goal of the Fed17 eral agency established under para18 graph (2)(A), determined at the elec19 tion of the contracting officer, for par20 ticipation by a covered category of 

21 small business concern that is applica22 ble to the recipient of the prime con23 tract, without regard to whether the 

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1 fies as more than 1 covered category 

2 of small business concern.’’. 

3 (d) TESTIMONY ON SMALL BUSINESS ENGAGEMENT

4 BEFORE CONGRESS.—Section 15(g) of the Small Busi5 ness Act (15 U.S.C. 644(g)), as amended by subsections 

6 (b) and (c), is amended— 

7 (1) in paragraph (2)— 

8 (A) by striking ‘‘(2) (A) The head’’ and in9 serting the following: 

10 ‘‘(2) AGENCY GOALS.— 

11 ‘‘(A) ESTABLISHMENT.—The head’’; 

12 (B) by moving subparagraphs (B), (C), 

13 and (D) 2 ems to the right; 

14 (C) in subparagraph (B), by inserting 

15 ‘‘REQUIREMENTS FOR GOALS.—’’ before ‘‘Goals 

16 established’’; 

17 (D) in subparagraph (C), by inserting 

18 ‘‘FAILURE TO AGREE ON GOALS.—’’ before 

19 ‘‘Whenever’’; 

20 (E) in subparagraph (D), by inserting 

21 ‘‘PLAN FOR ACHIEVING GOALS.—’’ before 

22 ‘‘After establishing’’; 

23 (F) in subparagraph (E), by inserting 

24 ‘‘CONSIDERATIONS FOR ACHIEVING GOALS.—’’ 

25 before ‘‘The head’’; 


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1 (G) in subparagraph (F)— 

2 (i) by inserting ‘‘COMMUNICATION OF

3 GOALS.—’’ after (F); 

4 (ii) by striking ‘‘(i) Each’’ and insert5 ing: 

6 ‘‘(i) IN GENERAL.—Each’’; and 

7 (iii) by striking ‘‘(ii) A procurement’’ 

8 and inserting: 

9 ‘‘(ii) PROCUREMENT EMPLOYEE OR

10 PROGRAM MANAGER DEFINED.—A procure11 ment’’; and 

12 (H) by adding at the end the following: 

13 ‘‘(G) REMEDIATION.—Any Federal agency 

14 failing to receive a score equivalent to a letter 

15 grade of ‘A’ or above in a letter graded rating 

16 system, as established under subsection (y), in 

17 a fiscal year shall— 

18 ‘‘(i) submit to the Committee on 

19 Small Business and Entrepreneurship of 

20 the Senate and the Committee on Small 

21 Business of the House of Representatives 

22 the report required under subsection 

23 (h)(1); and 

24 ‘‘(ii) testify before the Committee on 

25 Small Business and Entrepreneurship of 


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1 the Senate and the Committee on Small 

2 Business of the House of Representatives 

3 on the reasons for failing to meet a letter 

4 grade of ‘A’ or above, and the details of 

5 the report submitted under clause (i), in 

6 particular the justifications and remedi7 ation plan described in subparagraphs (C) 

8 and (D) of subsection (h)(1).’’; and 

9 (2) by striking ‘‘(3) First’’ and inserting the 

10 following: 

11 ‘‘(3) DEPARTMENT OF ENERGY SUB12 CONTRACTS.—First’’. 

13 (e) EVALUATION OF OFFERS FOR CONTRACTS IN14 CLUDING SUBCONTRACTING PLANS.—Section 8(d)(4) of 

15 the Small Business Act (15 U.S.C. 637(d)(4)) is amend16 ed— 

17 (1) by moving subparagraph (G) 2 ems to the 

18 left; and 

19 (2) in subparagraph (G)— 

20 (A) in the matter preceding clause (i), by 

21 striking ‘‘bundled contract where the head of 

22 the agency determines that the contract offers 

23 a significant opportunity for subcontracting’’ 

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1 tracting plan required under this paragraph or 

2 paragraph (5)’’; and 

3 (B) in clause (i), by striking ‘‘the rate pro4 vided under the subcontracting plan for small 

5 business participation’’ and inserting ‘‘a de6 scription of the extent to which the offeror pro7 poses to use small business concerns as sub8 contractors at any tier’’. 

9 (f) RULE OF TWO ANALYSIS APPLIES BEFORE

10 USING A MULTIPLE AWARD CONTRACT.—Section 15(r) of 

11 the Small Business Act (15 U.S.C. 644(r)) is amended— 

12 (1) by redesignating paragraphs (1) and (2) as 

13 subparagraphs (A) and (B), respectively, and adjust14 ing the margins accordingly; 

15 (2) in the matter before subparagraph (A), as 

16 so redesignated, by striking ‘‘Not later than’’ and all 

17 that follows through ‘‘discretion—’’ and inserting 

18 the following: 

19 ‘‘(1) IN GENERAL.—Except as provided in para20 graph (2), Federal agencies shall—’’; 

21 (3) in paragraph (1)(A), as so redesignated, by 

22 adding ‘‘and’’ at the end; 

23 (4) in paragraph (1)(B), as so redesignated, by 

24 striking ‘‘; and’’ and inserting a period; 

25 (5) by striking paragraph (3); and 


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1 (6) by adding at the end the following: 

2 ‘‘(2) EXCEPTIONS.—The requirements in para3 graph (1) shall not apply— 

4 ‘‘(A) in the case of contracts, including or5 ders, awarded under subpart 8.4 of the Federal 

6 Acquisition Regulation (or any successor regu7 lation); or 

8 ‘‘(B) if the contracting officer is unable to 

9 obtain offers from 2 or more small business 

10 concerns that are— 

11 ‘‘(i) competitive with market prices; 

12 and 

13 ‘‘(ii) competitive with regard to the 

14 quality and delivery of the goods or serv15 ices being purchased. 

16 ‘‘(3) SMALL BUSINESS RESERVE.—Notwith17 standing paragraphs (1) and (2), a Federal agency 

18 may reserve 1 or more contract awards for small 

19 business concerns under full and open multiple 

20 award procurements, including the subcategories of 

21 small business concerns identified in subsection 

22 (g)(2).’’. 

23 (g) ALIGNING OSDBU AND PCR COLLABORATION

24 REGARDING BUNDLED OR CONSOLIDATED CONTRACTS.— 


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1 Section 15 of the Small Business Act (15 U.S.C. 644) is 

2 amended— 

3 (1) in subsection (k)— 

4 (A) in paragraph (5)— 

5 (i) by inserting ‘‘or consolidation’’ 

6 after ‘‘bundling’’; 

7 (ii) by inserting ‘‘procurement center 

8 representative,’’ after ‘‘work with the’’; 

9 (iii) by inserting a comma after ‘‘ac10 quisition officials’’; and 

11 (iv) by inserting ‘‘or consolidated’’ 

12 after ‘‘bundled’’; 

13 (B) in paragraph (8), in the matter pre14 ceding subparagraph (A), by inserting ‘‘, as re15 quired under subsection (l)(4)’’ after ‘‘procure16 ment center representative,’’; and 

17 (C) in paragraph (17)— 

18 (i) in subparagraph (B), by striking 

19 ‘‘and’’ at the end; 

20 (ii) by redesignating subparagraph 

21 (C) as subparagraph (D); and 

22 (iii) by inserting after subparagraph 

23 (B) the following: 

24 ‘‘(C) inform the procurement center rep25 resentative at such agency of the notice if the 


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1 notice pertains to contract bundling or consoli2 dation and work with the procurement center 

3 representative and appropriate agency per4 sonnel to increase the opportunity for competi5 tion; and’’; and 

6 (2) in subsection (l)(2)— 

7 (A) by moving subparagraph (A) 2 ems to 

8 the right; 

9 (B) by redesignating subparagraphs (H), 

10 (I), (J), and (K) as subparagraphs (I), (J), 

11 (K), and (L), respectively; 

12 (C) by inserting after subparagraph (G) 

13 the following: 

14 ‘‘(H) consult with the Director of the Of15 fice of Small and Disadvantaged Business Utili16 zation of that agency and appropriate agency 

17 personnel with regard to— 

18 ‘‘(i) proposed solicitations involving 

19 significant bundling or consolidation of 

20 contract requirements as described in sub21 section (k)(5); and 

22 ‘‘(ii) notices by small business con23 cerns of undue restrictions on the ability of 

24 the small business concern to compete for 

25 the award due to significant bundling or 


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1 consolidation of contract requirements, as 

2 described in subsection (k)(17);’’; and 

3 (D) in subparagraph (K), as so redesig4 nated, by adding ‘‘and’’ at the end. 

Æ 


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