I

104TH CONGRESS

2D SESSION H. R. 4080

To amend the Small Business Act to establish programs and undertake

efforts to assist and promote the creation, development, and growth

of small business concerns owned and controlled by veterans of service

in the Armed Forces, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 17, 1996

Mr. FILNER introduced the following bill; which was referred to the Committee on Small Business, and in addition to the Committee on Veterans’

Affairs, for a period to be subsequently determined by the Speaker, in

each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To amend the Small Business Act to establish programs

and undertake efforts to assist and promote the creation,

development, and growth of small business concerns

owned and controlled by veterans of service in the Armed

Forces, 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 ‘‘Veterans Entrepre5 neurship Promotion Act of 1996’’.
2

•HR 4080 IH

1 SEC. 2. PURPOSES AND DEFINITIONS.

2 (a) PURPOSES.—The purposes of this Act are—

3 (1) to foster enhanced entrepreneurship among

4 veterans by providing increased opportunities;

5 (2) to vigorously promote the legitimate inter6 ests of business concerns owned and controlled by el7 igible veterans; and

8 (3) to ensure that those concerns receive a fair

9 share of purchases made by the Federal Govern10 ment.

11 (b) DEFINITIONS.—For the purposes of this Act, the

12 following definitions apply:

13 (1) ADMINISTRATION.—The term ‘‘Administra14 tion’’ means the Small Business Administration.

15 (2) ADMINISTRATOR.—The term ‘‘Adminis16 trator’’ means the Administrator of the Small Busi17 ness Administration.

18 (3) ELIGIBLE VETERAN; SMALL BUSINESS CON19 CERN OWNED AND CONTROLLED BY ELIGIBLE VET20 ERANS.—The terms ‘‘eligible veteran’’ and ‘‘small

21 business concern owned and controlled by eligible

22 veterans’’ have the meaning such terms have in sec23 tion 3(n) of the Small Business Act, as added by

24 section 3 of this Act.
3

•HR 4080 IH

1 SEC. 3. SMALL BUSINESS ACT DEFINITIONS.

2 Section 3 of the Small Business Act (15 U.S.C. 632)

3 is amended by adding at the end the following new sub4 section:

5 ‘‘(o) For purposes of this Act—

6 ‘‘(1) the term ‘eligible veteran’ means any per7 son who—

8 ‘‘(A) is a disabled veteran, as such term is

9 defined in section 4211(3) of title 38, United

10 States Code; or

11 ‘‘(B) served on active duty during a period

12 of war or in a campaign or expedition for which

13 a campaign badge is authorized and was dis14 charged or released from such duty with other

15 than a dishonorable discharge; and

16 ‘‘(2) the term ‘small business concern owned

17 and controlled by eligible veterans’ means a small

18 business concern—

19 ‘‘(A) which is at least 51 percent owned by

20 one or more eligible veterans, or in the case of

21 a publicly owned business, at least 51 percent

22 of the stock of which is owned by one or more

23 eligible veterans; and

24 ‘‘(B) whose management and daily busi25 ness operations are controlled by such veter26 ans.’’.
4

•HR 4080 IH

1 SEC. 4. PROCUREMENT ASSISTANCE.

2 (a) GOVERNMENT-WIDE GOALS.—Subsection (g)(1)

3 of section 15 of the Small Business Act (15 U.S.C. 644)

4 is amended—

5 (1) in the first sentence, by inserting ‘‘small

6 business concerns owned and controlled by eligible

7 veterans,’’ after ‘‘small business concerns,’’;

8 (2) by inserting after the second sentence the

9 following: ‘‘The Government-wide goal for participa10 tion by small business concerns owned and con11 trolled by eligible veterans shall be established at not

12 less than 5 percent of the total value of all prime

13 contract and subcontract awards for each fiscal

14 year.’’; and

15 (3) in the second to last sentence, by inserting

16 ‘‘small business concerns owned and controlled by el17 igible veterans,’’ after ‘‘small business concerns,’’.

18 (b) ANNUAL PARTICIPATION GOALS.—Subsection

19 (g)(2) of section 15 of the Small Business Act (15 U.S.C.

20 644) is amended—

21 (1) in the first sentence, by inserting ‘‘by small

22 business concerns owned and controlled by eligible

23 veterans,’’ after ‘‘small business concerns,’’;

24 (2) in the second sentence, by inserting ‘‘small

25 business concerns owned and controlled by eligible

26 veterans,’’ after ‘‘small business concerns,’’;
5

•HR 4080 IH

1 (3) in the fourth sentence, by inserting ‘‘small

2 business concerns owned and controlled by eligible

3 veterans, participation by’’ after ‘‘including partici4 pation by’’; and

5 (4) in subparagraph (B), by striking ‘‘under the

6 program established under section 8(a)’’ and insert7 ing ‘‘under the programs established under sections

8 8(a) and 30’’.

9 SEC. 5. REPORTING.

10 (a) REPORTS TO SMALL BUSINESS ADMINISTRA11 TION.—Subsection (h)(1) of section 15 of the Small Busi12 ness Act (15 U.S.C. 644) is amended by inserting ‘‘small

13 business concerns owned and controlled by eligible veter14 ans,’’ after ‘‘small business concerns,’’.

15 (b) REPORTS TO THE PRESIDENT AND CONGRESS.—

16 Subsection (h)(2) of section 15 of the Small Business Act

17 (15 U.S.C. 644) is amended—

18 (1) by inserting ‘‘and Congress’’ before the pe19 riod at the end of the first sentence;

20 (2) in subparagraphs (A), (D), and (E), by in21 serting ‘‘small business concerns owned and con22 trolled by eligible veterans,’’ after ‘‘small business

23 concerns,’’; and

24 (3) in subparagraph (D)(ii), by inserting ‘‘small

25 business concerns owned and controlled by eligible
6

•HR 4080 IH

1 veterans and competition restricted to’’ after ‘‘re2 stricted to’’.

3 SEC. 6. SUBCONTRACTING.

4 (a) STATEMENT OF POLICY.—Paragraph (1) of sec5 tion 8(d) of the Small Business Act (15 U.S.C. 637(d))

6 is amended by inserting ‘‘small business concerns owned

7 and controlled by eligible veterans,’’ after ‘‘small business

8 concerns,’’ in the first and second sentences.

9 (b) CONTRACT CLAUSE.—The contract clause speci10 fied in section 8(d)(3) of the Small Business Act (15

11 U.S.C. 637(d)(3)) is amended as follows:

12 (1) Subparagraph (A) of such clause is amend13 ed by inserting ‘‘small business concerns owned and

14 controlled by eligible veterans,’’ after ‘‘small busi15 ness concerns,’’ in the first and second sentences.

16 (2) Subparagraph (E) of such clause is redesig17 nated as subparagraph (F) and the following new

18 subparagraph is inserted after subparagraph (D) of

19 such clause:

20 ‘‘(E) The term ‘small business concern owned

21 and controlled by eligible veterans’ shall mean a

22 small business concern—

23 ‘‘(i) which is at least 51 per centum owned

24 by one or more eligible veterans; or, in the case

25 of any publicly owned business, at least 51 per
7

•HR 4080 IH

1 centum of the stock of which is owned by one

2 or more eligible veterans; and

3 ‘‘(ii) whose management and daily business

4 operations are controlled by such veterans.

5 The contractor shall treat as eligible veterans all in6 dividuals who are eligible veterans within the mean7 ing of section 3(n) of the Small Business Act.’’.

8 (3) Subparagraph (F) of such clause, as redes9 ignated by paragraph (2) of this subsection, is

10 amended by inserting ‘‘small business concern owned

11 and controlled by eligible veterans,’’ after ‘‘small

12 business concern,’’.

13 (c) CONFORMING AMENDMENTS.—Section 8(d) of

14 the Small Business Act (15 U.S.C. 637(d)) is amended—

15 (1) by inserting ‘‘small business concerns owned

16 and controlled by eligible veterans,’’ after ‘‘small

17 business concerns,’’ in paragraphs (4)(D), (6)(A),

18 (6)(C), (6)(F), and (10)(B); and

19 (2) in paragraph (4)(E), by striking ‘‘small

20 business concerns and’’ and inserting ‘‘small busi21 ness concerns, small business concerns owned and

22 controlled by eligible veterans,’’.
8

•HR 4080 IH

1 SEC. 7. INFORMATION COLLECTION.

2 (a) INFORMATION ON FEDERAL PROCUREMENT

3 PRACTICES.—The Administrator shall, for each fiscal

4 year—

5 (1) obtain information concerning the procure6 ment practices and procedures of each Federal agen7 cy having procurement authority; and

8 (2) make such information available to any

9 small business concern requesting it.

10 (b) IDENTIFICATION OF SMALL BUSINESSES OWNED

11 BY ELIGIBLE VETERANS.—The Secretary of Veterans Af12 fairs shall, in consultation with the Assistant Secretary of

13 Labor for Veterans’ Employment and Training and the

14 Administrator, engage in affirmative efforts each fiscal

15 year to identify small business concerns owned and con16 trolled by eligible veterans in the United States. The Sec17 retary shall inform each small business concern identified

18 under this paragraph that information on Federal pro19 curement is available from the Administrator.

20 SEC. 8. STATE OF SMALL BUSINESS REPORT.

21 Section 303(e) of the Small Business and Economic

22 Policy Act of 1980 (15 U.S.C. 631b(e)) is amended—

23 (1) in paragraph (1), by striking ‘‘and’’ after

24 the semicolon;

25 (2) in paragraph (2), by striking the period at

26 the end and inserting a semicolon; and
9

•HR 4080 IH

1 (3) by adding at the end the following new

2 paragraph:

3 ‘‘(3) small business concerns owned and con4 trolled by eligible veterans.’’.

5 SEC. 9. LOANS TO VETERANS.

6 (a) PARTICIPATION IN LOANS.—Section 7(a) of the

7 Small Business Act (15 U.S.C. 636) is amended by adding

8 at the end the following new paragraph:

9 ‘‘(25)(A) The Administration is empowered to make

10 loans either directly or in cooperation with banks or other

11 financial institutions through agreements to participate on

12 an immediate or deferred (guaranteed) basis to small busi13 ness concerns eligible for assistance under section 30.

14 Such assistance may be provided only if the Administra15 tion determines that—

16 ‘‘(i) the type and amount of such assist17 ance requested by such concern is not otherwise

18 available on reasonable terms from other

19 sources;

20 ‘‘(ii) with such assistance such concern has

21 a reasonable prospect for operating soundly and

22 profitably within a reasonable period of time;

23 ‘‘(iii) the proceeds of such assistance will

24 be used within a reasonable time for plant con25 struction, conversion, or expansion, including
10

•HR 4080 IH

1 the acquisition of equipment, facilities, machin2 ery, supplies, or material or to supply such con3 cern with working capital to be used in the

4 manufacture of articles, equipment, supplies, or

5 material for defense or civilian production or as

6 may be necessary to ensure a well-balanced na7 tional economy; and

8 ‘‘(iv) such assistance is of such sound

9 value as reasonably to assure that the terms

10 under which it is provided will not be breached

11 by the small business concern.

12 ‘‘(B)(i) No loan shall be made under this para13 graph if the total amount outstanding and commit14 ted (by participation or otherwise) to the borrower

15 would exceed $750,000.

16 ‘‘(ii) Subject to the provisions of clause (i), in

17 agreements to participate in loans on a deferred

18 (guaranteed) basis, participation by the Administra19 tion shall be not less than 85 per centum of the bal20 ance of the financing outstanding at the time of dis21 bursement.

22 ‘‘(iii) The rate of interest on financings made

23 on a deferred (guaranteed) basis shall be legal and

24 reasonable.
11

•HR 4080 IH

1 ‘‘(iv) Financings made pursuant to this para2 graph shall be subject to the following limitations:

3 ‘‘(I) No immediate participation may be

4 purchased unless it is shown that a deferred

5 participation is not available.

6 ‘‘(II) No direct financing may be made un7 less it is shown that a participation is unavail8 able.

9 ‘‘(C) A direct loan or the Administration’s

10 share of an immediate participation loan made pur11 suant to this paragraph shall be any secured debt in12 strument—

13 ‘‘(i) that is subordinated by its terms to all

14 other borrowings of the issuer;

15 ‘‘(ii) the rate of interest on which shall not

16 exceed the current average market yield on out17 standing marketable obligations of the United

18 States with remaining periods to maturity com19 parable to the average maturities of such loan

20 and adjusted to the nearest one-eighth of 1 per

21 centum;

22 ‘‘(iii) the term of which is not more than

23 25 years; and

24 ‘‘(iv) the principal on which is amortized at

25 such rate as may be deemed appropriate by the
12

•HR 4080 IH

1 Administration, and the interest on which is

2 payable not less often than annually.’’.

3 (b) REGULATIONS.—Not later than 90 days after the

4 date of the enactment of this Act, the Administrator shall

5 issue regulations which ensure that—

6 (1) the maturity for a loan to an eligible vet7 eran in which the Administration participates is the

8 longest feasible term commensurate with the repay9 ment ability of the eligible veteran, except that the

10 maturity for such a loan may exceed 12 years only

11 if the loan is made to finance real estate or the con12 struction or acquisition of equipment which has a

13 useful life which exceeds 12 years; and

14 (2) in assessing the collateral of borrowers for

15 the purpose of making loans in which the Adminis16 tration participates, the lender makes a favorable

17 value assessment of such collateral when determin18 ing the overall probability of recovery in the event of

19 liquidation.

20 SEC. 10. ENTREPRENEURIAL TRAINING, COUNSELING, AND

21 MANAGEMENT ASSISTANCE.

22 The Administrator shall take such actions as may be

23 necessary to ensure that small business concerns owned

24 and controlled by eligible veterans have access to programs

25 established under the Small Business Act which provide
13

•HR 4080 IH

1 entrepreneurial training, business development assistance,

2 counseling, and management assistance to small business

3 concerns. Such programs include the Small Business De4 velopment Center, Small Business Institute, Service Corps

5 of Retired Executives (SCORE), and Active Corps of Ex6 ecutives (ACE) programs.

7 SEC. 11. GRANTS FOR ELIGIBLE VETERANS OUTREACH

8 PROGRAMS.

9 Section 8(b) of the Small Business Act (15 U.S.C.

10 637(b)) is amended—

11 (1) by striking ‘‘and’’ at the end of paragraph

12 (15);

13 (2) by striking the period at the end of the first

14 paragraph (16) and inserting ‘‘; and’’;

15 (3) by striking the second paragraph (16); and

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

17 paragraph:

18 ‘‘(17) to make grants to, and enter into con19 tracts and cooperative agreements with, educational

20 institutions, private businesses, veterans’ nonprofit

21 community-based organizations, and Federal, State,

22 and local departments and agencies for the estab23 lishment and implementation of outreach programs

24 for eligible veterans.’’.
14

•HR 4080 IH

1 SEC. 12. OUTREACH PROGRAM FOR ELIGIBLE VETERANS.

2 The Administrator, the Secretary of Veterans Affairs,

3 and the Assistant Secretary of Labor for Veterans’ Em4 ployment and Training shall establish an interagency

5 working group to develop a comprehensive outreach pro6 gram to assist eligible veterans. Such outreach program

7 shall include business training and management assist8 ance, employment and relocation counseling, and dissemi9 nation of information on veterans benefits, veterans enti10 tlements, and the Veterans Business Opportunity and De11 velopment Program established under section 30 of the

12 Small Business Act, as inserted by section 14 of this Act.

13 SEC. 13. ASSOCIATE ADMINISTRATOR FOR VETERANS PRO14 GRAMS.

15 Section 4(b)(1) of the Small Business Act (15 U.S.C.

16 633(b)(1)) is amended—

17 (1) by striking ‘‘four’’ in the fifth sentence and

18 inserting ‘‘five’’; and

19 (2) by inserting after the fifth sentence the fol20 lowing new sentence:

21 ‘‘One of the Associate Administrators shall be designated

22 at the time of his appointment as the Associate Adminis23 trator for Veterans Programs who shall be a career em24 ployee in the Senior Executive Service and who shall be

25 responsible to the Administrator for the formulation and

26 execution of policies and programs under this Act which
15

•HR 4080 IH

1 provide assistance to small business concerns owned and

2 controlled by eligible veterans, including programs estab3 lished under section 30.’’.

4 SEC. 14. ESTABLISHMENT OF VETERANS BUSINESS OPPOR5 TUNITY AND DEVELOPMENT PROGRAM.

6 The Small Business Act (15 U.S.C. 631 et seq.) is

7 amended by redesignating section 30 as section 31 and

8 by inserting after section 29 the following new section:

9 ‘‘SEC. 30. (a)(1) It shall be the duty of the Adminis10 tration and it is hereby empowered, whenever it deter11 mines such action is necessary or appropriate—

12 ‘‘(A) to enter into contracts with the United

13 States Government and any department, agency, or

14 officer thereof having procurement powers obligating

15 the Administration to furnish articles, equipment,

16 supplies, services, or materials to the Government or

17 to perform construction work for the Government.

18 In any case in which the Administration certifies to

19 any officer of the Government having procurement

20 powers that the Administration is competent and re21 sponsible to perform any specific Government pro22 curement contract to be let by any such officer, such

23 officer shall be authorized in his discretion to let

24 such procurement contract to the Administration

25 upon such terms and conditions as may be agreed
16

•HR 4080 IH

1 upon between the Administration and the procure2 ment officer. Whenever the Administration and such

3 procurement officer fail to agree, the matter shall be

4 submitted for determination to the Secretary or the

5 head of the appropriate department or agency by the

6 Administrator. Not later than 5 days from the date

7 the Administration is notified of a procurement offi8 cer’s adverse decision, the Administration may notify

9 the contracting officer of the intent to appeal such

10 adverse decision, and within 15 days of such date

11 the Administrator shall file a written request for a

12 reconsideration of the adverse decision with the Sec13 retary of the department or agency head. For the

14 purposes of this subparagraph, a procurement offi15 cer’s adverse decision includes a decision not to

16 make available for award pursuant to this subsection

17 a particular procurement requirement or the failure

18 to agree on the terms and conditions of a contract

19 to be awarded under the authority of this subsection.

20 Upon receipt of the notice of intent to appeal, the

21 Secretary of the department or agency head shall

22 suspend further action regarding the procurement

23 until a written decision on the Administrator’s re24 quest for reconsideration has been issued by such

25 Secretary or agency head, unless such officer makes
17

•HR 4080 IH

1 a written determination that urgent and compelling

2 circumstances which significantly affect interests of

3 the United States will not permit waiting for a re4 consideration of the adverse decision. If the Admin5 istrator’s request for reconsideration is denied, the

6 Secretary of the department or agency head shall

7 specify the reasons why the selected firm was deter8 mined to be incapable to perform the procurement

9 requirement, and the findings supporting such deter10 mination, which shall be made a part of the contract

11 file for the requirement. A contract may not be

12 awarded under this subsection if the award of the

13 contract would result in a cost to the awarding agen14 cy which exceeds a fair market price;

15 ‘‘(B) to arrange for the performance of such

16 procurement contracts by negotiating or otherwise

17 letting subcontracts to small business concerns

18 owned and controlled by eligible veterans for con19 struction work, services, or the manufacture, supply,

20 assembly of such articles, equipment, supplies, mate21 rials, or parts thereof, or servicing or processing in

22 connection therewith, or such management services

23 as may be necessary to enable the Administration to

24 perform such contracts; and
18

•HR 4080 IH

1 ‘‘(C) to make an award to a small business con2 cern owned and controlled by eligible veterans which

3 has completed its period of program participation as

4 prescribed by subsection (b)(6), if—

5 ‘‘(i) the contract will be awarded as a re6 sult of an offer (including price) submitted in

7 response to a published solicitation relating to

8 a competition conducted pursuant to subpara9 graph (D); and

10 ‘‘(ii) the prospective contract awardee was

11 a program participant eligible for award of the

12 contract on the date specified for receipt of of13 fers contained in the contract solicitation.

14 ‘‘(D)(i) A contract opportunity offered for

15 award pursuant to this subsection shall be awarded

16 on the basis of competition restricted to eligible pro17 gram participants if—

18 ‘‘(I) there is a reasonable expectation that

19 at least two eligible program participants will

20 submit offers and that award can be made at

21 a fair market price, and

22 ‘‘(II) the anticipated award price of the

23 contract (including options) will exceed

24 $5,000,000 in the case of a contract oppor25 tunity assigned a standard industrial classifica-
19

•HR 4080 IH

1 tion code for manufacturing and $3,000,000

2 (including options) in the case of all other con3 tract opportunities.

4 ‘‘(ii) The Associate Administrator for Veteran

5 Programs, on a nondelegable basis, is authorized to

6 approve a request from an agency to award a con7 tract opportunity under this subsection on the basis

8 of a competition restricted to eligible program par9 ticipants even if the anticipated award price is not

10 expected to exceed the dollar amounts specified in

11 clause (i)(II). Such approvals shall be granted only

12 on a limited basis.

13 ‘‘(2)(A) Any program participant selected by the Ad14 ministration to perform a contract to be let pursuant to

15 this subsection shall, when practicable, participate in any

16 negotiation of the terms and conditions of such contract.

17 ‘‘(B)(i) For purposes of paragraph (1), a ‘fair market

18 price’ shall be determined by the agency offering the pro19 curement requirement to the Administration, in accord20 ance with clauses (ii) and (iii).

21 ‘‘(ii) The estimate of a current fair market price for

22 a new procurement requirement, or a requirement that

23 does not have a satisfactory procurement history, shall be

24 derived from a price or cost analysis. Such analysis may

25 take into account prevailing market conditions, commer-
20

•HR 4080 IH

1 cial prices for similar products or services, or data ob2 tained from any other agency. Such analysis shall consider

3 such cost or pricing data as may be timely submitted by

4 the Administration.

5 ‘‘(iii) The estimate of a current fair market price for

6 a procurement requirement that has a satisfactory pro7 curement history shall be based on recent award prices

8 adjusted to ensure comparability. Such adjustments shall

9 take into account differences in quantities, performance

10 times, plans, specifications, transportation costs, packag11 ing and packing costs, labor and materials costs, overhead

12 costs, and any other additional costs which may be deemed

13 appropriate.

14 ‘‘(C) An agency offering a procurement requirement

15 for potential award pursuant to this subsection shall, upon

16 the request of the Administration, promptly submit to the

17 Administration a written statement detailing the method

18 used by the agency to estimate the current fair market

19 price for such contract, identifying the information, stud20 ies, analyses, and other data used by such agency. The

21 agency’s estimate of the current fair market price (and

22 any supporting data furnished to the Administration) shall

23 not be disclosed to any potential offeror (other than the

24 Administration).
21

•HR 4080 IH

1 ‘‘(D) A small business concern selected by the Admin2 istration to perform or negotiate a contract to be let pur3 suant to this subsection may request the Administration

4 to protect the agency’s estimate of the fair market price

5 for such contract pursuant to paragraph (1)(A).

6 ‘‘(3) In order to be eligible for selection by the Ad7 ministration to perform or negotiate a contract to be let

8 pursuant to this subsection a small business concern

9 owned and controlled by eligible veterans shall meet cer10 tification requirements contained in regulations issued by

11 the Administrator. Such certification requirements shall

12 include:

13 ‘‘(A) A requirement that such concern certify

14 on an annual basis that it meets the requirements

15 of section 3(n) concerning ownership and control by

16 eligible veterans. Certification of ownership and con17 trol by eligible veterans shall be accompanied by doc18 umentation obtained from the Secretary of Veterans

19 Affairs by such concern which verifies that individ20 uals who own and control such concern are eligible

21 veterans as defined in section 3(n).

22 ‘‘(B) A requirement that such concern certify

23 that it has been in business as a small business con24 cern owned and controlled by eligible veterans for

25 the 1 year period beginning before the date of appli-
22

•HR 4080 IH

1 cation for program participation; except that the Ad2 ministrator may waive such requirement in appro3 priate cases.

4 ‘‘(C) A requirement that such concern certify

5 that it has not received and will not assert eligibility

6 to receive a procurement contract pursuant to sec7 tion 8(a) of this Act.

8 ‘‘(4) The Administrator shall also issue regulations

9 establishing a limitation on the personal net worth of a

10 program participant.

11 ‘‘(A) Each program participant shall annually

12 submit to the Administration—

13 ‘‘(i) a personal financial statement for each

14 owner upon whom eligibility was based; and

15 ‘‘(ii) such other information as the Admin16 istration may deem necessary to make the de17 terminations required by this paragraph.

18 ‘‘(B)(i) Whenever, on the basis of information

19 provided by a program participant pursuant to sub20 paragraph (A) or otherwise, the Administration has

21 reason to believe that the amount of funds or other

22 assets withdrawn from a program participant for the

23 personal benefit of its owners or any person or en24 tity affiliated with such owners may have been un25 duly excessive, the Administration shall conduct a
23

•HR 4080 IH

1 review to determine whether such withdrawal of

2 funds or other assets was detrimental to the achieve3 ment of the targets, objectives, and goals contained

4 in such program participant’s business plan.

5 ‘‘(ii) If the Administration determines, pursuant

6 to such review, that funds or other assets have been

7 withdrawn to the detriment of the program partici8 pant’s business, the Administration shall—

9 ‘‘(I) initiate a proceeding to terminate the

10 program participant pursuant to subsection

11 (b)(1)(F), subject to the right to a hearing

12 under paragraph (6); or

13 ‘‘(II) require an appropriate reinvestment

14 of funds or other assets and such other steps as

15 the Administration may deem necessary to en16 sure the protection of the concern.

17 ‘‘(C) Whenever the Administration computes

18 personal net worth for any purpose under this para19 graph, it shall exclude from such computation—

20 ‘‘(i) the value of investments that eligible

21 veteran owners have in their concerns, except

22 that such value shall be taken into account

23 under this paragraph when comparing such

24 concerns to other concerns in the same business
24

•HR 4080 IH

1 area that are owned by other than eligible vet2 erans;

3 ‘‘(ii) the equity that eligible veteran owners

4 have in their primary personal residences, ex5 cept that any portion of such equity that is at6 tributable to unduly excessive withdrawals from

7 a program participant or a concern applying for

8 program participation shall be taken into ac9 count.

10 ‘‘(5)(A) No small business concern shall be deemed

11 eligible for any assistance pursuant to this subsection un12 less the Administration determines that with contract, fi13 nancial, technical, and management support the small

14 business concern will be able to perform contracts which

15 may be awarded to such concern under paragraph (1)(B).

16 ‘‘(B) Limitations established by the Administration

17 in its regulations and procedures restricting the award of

18 contracts pursuant to this subsection to a limited number

19 of standard industrial classification codes in an approved

20 business plan shall not be applied in a manner that inhib21 its the logical business progression by a participating

22 small business concern into areas of industrial endeavor

23 where such concern has the potential for success.

24 ‘‘(6)(A) Subject to the provisions of subparagraph

25 (E), the Administrator, prior to taking any action de-
25

•HR 4080 IH

1 scribed in subparagraph (B), shall provide the small busi2 ness concern that is the subject of such action, an oppor3 tunity for a hearing on the record, in accordance with

4 chapter 5 of title 5, United States Code.

5 ‘‘(B) The actions referred to in subparagraph (A)

6 are—

7 ‘‘(i) denial of program admission based upon a

8 negative determination pursuant to paragraph (4);

9 ‘‘(ii) a termination pursuant to subsection

10 (b)(1)(F);

11 ‘‘(iii) a graduation pursuant to subsection

12 (b)(1)(H); and

13 ‘‘(iv) the denial of a request to issue a waiver

14 pursuant to paragraph (15)(B).

15 ‘‘(C) The Administrator’s proposed action, in any

16 proceeding conducted under the authority of this para17 graph, shall be sustained unless it is found to be arbitrary,

18 capricious, or contrary to law.

19 ‘‘(D) A decision rendered pursuant to this paragraph

20 shall be the final decision of the Administration and shall

21 be binding upon the Administration and those within its

22 employ.

23 ‘‘(E) The adjudicator selected to preside over a pro24 ceeding conducted under the authority of this paragraph

25 shall decline to accept jurisdiction over any matter that—
26

•HR 4080 IH

1 ‘‘(i) does not, on its face, allege facts that, if

2 proven to be true, would warrant reversal or modi3 fication of the Administration’s position;

4 ‘‘(ii) is untimely filed;

5 ‘‘(iii) is not filed in accordance with the rules

6 of procedure governing such proceedings; or

7 ‘‘(iv) has been decided by or is the subject of

8 an adjudication before a court of competent jurisdic9 tion over such matters.

10 ‘‘(F) Proceedings conducted pursuant to the author11 ity of this paragraph shall be completed and a decision

12 rendered, insofar as practicable, within 90 days after a

13 petition for a hearing is filed with the adjudicating office.

14 ‘‘(7) The Administration shall develop and implement

15 an outreach program to inform and recruit small business

16 concerns to apply for eligibility for assistance under this

17 subsection. Such program shall make a sustained and sub18 stantial effort to solicit applications for certification from

19 small business concerns located in areas of concentrated

20 unemployment or underemployment or within labor sur21 plus areas and within States having relatively few program

22 participants and from small business concerns owned and

23 controlled by eligible veterans in industry categories that

24 have not substantially participated in the award of con25 tracts let under the authority of this subsection.
27

•HR 4080 IH

1 ‘‘(8) To the maximum extent practicable, construc2 tion subcontracts awarded by the Administration pursuant

3 to this subsection shall be awarded within the county or

4 State where the work is to be performed.

5 ‘‘(9)(A) The Administration shall require each con6 cern eligible to receive subcontracts pursuant to this sub7 section to annually prepare and submit to the Administra8 tion a capability statement. Such statement shall briefly

9 describe such concern’s various contract performance ca10 pabilities and shall contain the name and telephone num11 ber of the veterans business counselor assigned such con12 cern. The Administration shall separate such statements

13 by those primarily dependent upon local contract support

14 and those primarily requiring a national marketing effort.

15 Statements primarily dependent upon local contract sup16 port shall be disseminated to appropriate buying activities

17 in the marketing area of the concern. The remaining state18 ments shall be disseminated to the directors of small and

19 disadvantaged business utilization for the appropriate

20 agencies who shall further distribute such statements to

21 buying activities with such agencies that may purchase the

22 types of items or services described on the capability state23 ments.

24 ‘‘(B) Contracting activities receiving capability state25 ments shall, within 60 days after receipt, contact the rel-
28

•HR 4080 IH

1 evant veterans business counselor to indicate the number,

2 type, and approximate dollar value of contract opportuni3 ties that such activities may be awarding over the succeed4 ing 12-month period and which may be appropriate to con5 sider for award to those concerns for which it has received

6 capability statements.

7 ‘‘(10)(A) A concern may not be awarded a contract

8 under this subsection as a small business concern unless

9 the concern agrees that—

10 ‘‘(i) in the case of a contract for services (ex11 cept construction), at least 50 percent of the cost of

12 contract performance incurred for personnel shall be

13 expended for employees of the concern; and

14 ‘‘(ii) in the case of a contract for procurement

15 of supplies (other than procurement from a regular

16 dealer in such supplies), the concern will perform

17 work for at least 50 percent of the cost of manufac18 turing the supplies (not including the cost of mate19 rials).

20 ‘‘(B) The Administration may change the percentage

21 under clause (i) or (ii) of subparagraph (A) if the Admin22 istrator determines that such change is necessary to re23 flect conventional industry practices among business con24 cerns that are below the numerical size standard for busi25 nesses in that industry category. A percentage established
29

•HR 4080 IH

1 under the preceding sentence may not differ from a per2 centage established under section 15(o).

3 ‘‘(C) The Administration shall establish, through

4 public rulemaking, requirements similar to those specified

5 in subparagraph (A) to be applicable to contracts for gen6 eral and specialty construction and to contracts for any

7 other industry category not otherwise subject to the re8 quirements of such subparagraph. The percentage applica9 ble to any such requirement shall be determined in accord10 ance with subparagraph (B), except that such a percent11 age may not differ from a percentage established under

12 section 15(o) for the same industry category.

13 ‘‘(11)(A) An otherwise responsible business concern

14 that is in compliance with the requirements of subpara15 graph (B) shall not be denied the opportunity to submit

16 and have considered its offer for any procurement contract

17 for the supply of a product to be let pursuant to this sub18 section or subsection (a) of section 15 solely because such

19 concern is other than the actual manufacturer or proc20 essor of the product to be supplied under the contract.

21 ‘‘(B) To be in compliance with the requirements re22 ferred to in subparagraph (A), such a business concern

23 shall—

24 ‘‘(i) be primarily engaged in the wholesale or

25 retail trade;
30

•HR 4080 IH

1 ‘‘(ii) be a small business concern under the nu2 merical size standard for the Standard Industrial

3 Classification Code assigned to the contract solicita4 tion on which the offer is being made;

5 ‘‘(iii) be a regular dealer, as defined pursuant

6 to section 35(a) of title 41, United States Code

7 (popularly referred to as the Walsh-Healey Public

8 Contracts Act), in the product to be offered the Gov9 ernment; and

10 ‘‘(iv) represent that it will supply the product of

11 a domestic small business manufacturer or proc12 essor, unless a waiver of such requirement is grant13 ed—

14 ‘‘(I) by the Administrator, after reviewing

15 a determination by the contracting officer that

16 no small business manufacturer or processor

17 can reasonably be expected to offer a product

18 meeting the specifications (including period for

19 performance) required of an offeror by the so20 licitation; or

21 ‘‘(II) by the Administrator for a product

22 (or class of products), after determining that no

23 small business manufacturer or processor is

24 available to participate in the Federal procure25 ment market.
31

•HR 4080 IH

1 ‘‘(12)(A) No person within the employ of the Admin2 istration shall, during the term of such employment and

3 for a period of 2 years after such employment has been

4 terminated, engage in any activity or transaction specified

5 in subparagraph (B) with respect to any program partici6 pant certified during such person’s term of employment,

7 if such person participated personally (either directly or

8 indirectly) in decisionmaking responsibilities relating to

9 such program participant or with respect to the adminis10 tration of any assistance provided to program participants

11 generally under this subsection or subsection (b).

12 ‘‘(B) The activities and transactions prohibited by

13 subparagraph (A) include—

14 ‘‘(i) the buying, selling, or receiving (except by

15 inheritance) of any legal or beneficial ownership of

16 stock or any other ownership interest or the right to

17 acquire any such interest;

18 ‘‘(ii) the entering into or execution of any writ19 ten or oral agreement (whether or not legally en20 forceable) to purchase or otherwise obtain any right

21 or interest described in clause (i); and

22 ‘‘(iii) the receipt of any other benefit or right

23 that may be an incident of ownership.

24 ‘‘(C)(i) The employees designated in clause (ii) shall

25 annually submit a written certification to the Administra-
32

•HR 4080 IH

1 tion regarding compliance with the requirements of this

2 paragraph.

3 ‘‘(ii) The employees referred to in clause (i) are—

4 ‘‘(I) regional administrators;

5 ‘‘(II) district directors;

6 ‘‘(III) the Associate Administrator for Veterans

7 Programs;

8 ‘‘(IV) employees whose principal duties relate to

9 the award of contracts or the provision of other as10 sistance pursuant to this subsection or subsection

11 (b); and

12 ‘‘(V) such other employees as the Administrator

13 may deem appropriate.

14 ‘‘(iii) Any present or former employee of the Adminis15 tration who violates this paragraph shall be subject to a

16 civil penalty, assessed by the Attorney General, that shall

17 not exceed 300 percent of the maximum amount of gain

18 such employee realized or could have realized as a result

19 of engaging in those activities and transactions prescribed

20 by subparagraph (B).

21 ‘‘(iv) In addition to any other remedy or sanction pro22 vided for under law or regulation, any person who falsely

23 certifies pursuant to clause (i) shall be subject to a civil

24 penalty under the Program Fraud Civil Remedies Act of

25 1986 (31 U.S.C. 3801–3812).
33

•HR 4080 IH

1 ‘‘(13)(A) Any employee of the Administration who

2 has authority to take, direct others to take, recommend,

3 or approve any action with respect to any program or ac4 tivity conducted pursuant to this subsection or subsection

5 (b), shall not, with respect to any such action, exercise

6 or threaten to exercise such authority on the basis of the

7 political activity or affiliation of any party. Employees of

8 the Administration shall expeditiously report to the In9 spector General of the Administration any such action for

10 which such employee’s participation has been solicited or

11 directed.

12 ‘‘(B) Any employee who willfully and knowingly vio13 lates subparagraph (A) shall be subject to disciplinary ac14 tion, imposed by the Administrator, which may consist of

15 separation from service, reduction in grade, suspension,

16 or reprimand.

17 ‘‘(C) Subparagraph (A) shall not apply to any action

18 taken as a penalty or other enforcement of a violation of

19 any law, rule, or regulation prohibiting or restricting polit20 ical activity.

21 ‘‘(D) The prohibitions of subparagraph (A), and re22 medial measures provided for under subparagraphs (B)

23 and (C) with regard to such prohibitions, shall be in addi24 tion to, and not in lieu of, any other prohibitions, meas-
34

•HR 4080 IH

1 ures, or liabilities that may arise under any other provision

2 of law.

3 ‘‘(14)(A) Small business concerns participating in the

4 program under subsection (b) and eligible to receive con5 tracts pursuant to this subsection shall semiannually re6 port to their assigned veterans business counselor the fol7 lowing:

8 ‘‘(i) A listing of any agents, representatives, at9 torneys, accountants, consultants, and other parties

10 (other than employees) receiving compensation to as11 sist in obtaining a Federal contract for such pro12 gram participant.

13 ‘‘(ii) The amount of compensation received by

14 any person listed under clause (i) during the rel15 evant reporting period and a description of the ac16 tivities performed in return for such compensation.

17 ‘‘(B) The veterans business counselor shall promptly

18 review and forward such report to the Associate Adminis19 trator for Veterans Programs. Any report that raises a

20 suspicion of improper activity shall be reported imme21 diately to the Inspector General of the Administration.

22 ‘‘(C) The failure to submit a report pursuant to the

23 requirements of this subsection and applicable regulations

24 shall be considered ‘good cause’ for the initiation of a ter25 mination proceeding pursuant to subsection (b)(1)(F).
35

•HR 4080 IH

1 ‘‘(15)(A) Subject to the provisions of subparagraph

2 (B), a contract (including options) awarded pursuant to

3 this subsection shall be performed by the concern that ini4 tially received such contract. Notwithstanding the provi5 sions of the preceding sentence, if the owner or owners

6 upon whom eligibility was based relinquish ownership or

7 control of such concern, or enter into any agreement to

8 relinquish such ownership or control, such contract or op9 tion shall be terminated for the convenience of the Govern10 ment, except that no repurchase costs or other damages

11 may be assessed against such concerns due solely to the

12 provisions of this subparagraph.

13 ‘‘(B) The Administrator may, as a matter of discre14 tion and on a nondelegable basis, waive the requirements

15 of subparagraph (A) if requested to do so prior to the ac16 tual relinquishment of ownership or control. In addition

17 to the requirement of the preceding sentence, a waiver

18 may be given only if any of the following conditions exist:

19 ‘‘(i) It is necessary for the owners of the con20 cern to surrender partial control of such concern on

21 a temporary basis in order to obtain equity financ22 ing.

23 ‘‘(ii) The head of the contracting agency for

24 which the contract is being performed certifies that

25 termination of the contract would severely impair at-
36

•HR 4080 IH

1 tainment of the agency’s program objectives or mis2 sions.

3 ‘‘(iii) Ownership and control of the concern that

4 is performing the contract will pass to another small

5 business concern that is a program participant, but

6 only if the acquiring firm would otherwise be eligible

7 to receive the award directly pursuant to this sub8 section.

9 ‘‘(iv) The individuals upon whom eligibility was

10 based are no longer able to exercise control of the

11 concern due to incapacity or death.

12 ‘‘(v) In order to raise equity capital, it is nec13 essary for the owners of the concern upon whom eli14 gibility was based to relinquish ownership of a ma15 jority of the voting stock of such concern, but only

16 if—

17 ‘‘(I) such concern has exited the eligible

18 veterans business opportunity and development

19 assistance program;

20 ‘‘(II) such owners will maintain ownership

21 of the largest single outstanding block of voting

22 stock (including stock held by affiliated par23 ties); and

24 ‘‘(III) such owners will maintain control of

25 daily business operations.
37

•HR 4080 IH

1 ‘‘(C) Concerns performing contracts awarded pursu2 ant to this subsection shall be required to notify the Ad3 ministration immediately upon entering an agreement (ei4 ther oral or in writing) to transfer all or part of its stock

5 or other ownership interest to any other party.

6 ‘‘(D) Notwithstanding any other provision of law, for

7 the purposes of determining ownership and control of a

8 concern under this section, any potential ownership inter9 ests held by investment companies licensed under the

10 Small Business Investment Act of 1958 shall be treated

11 in the same manner as interests held by the individuals

12 upon whom eligibility is based.

13 ‘‘(b)(1) There is established within the Administra14 tion an eligible veterans business opportunity and develop15 ment assistance program (hereinafter in this section re16 ferred to as the ‘program’) which shall provide assistance

17 exclusively for small business concerns eligible to receive

18 contracts pursuant to subsection (a). The program, and

19 all other services and activities authorized under this sub20 section and subsection (a), shall be managed by the Asso21 ciate Administrator for Veterans Programs under the su22 pervision of, and responsible to, the Administrator:

23 ‘‘(A) The program shall—

24 ‘‘(i) assist small business concerns partici25 pating in the program (either through public or
38

•HR 4080 IH

1 private organizations) to develop and maintain

2 comprehensive business plans which set forth

3 the program participant’s specific business tar4 gets, objectives, and goals developed and main5 tained in conformity with subparagraph (D);

6 ‘‘(ii) provide for such other nonfinancial

7 services as deemed necessary for the establish8 ment, preservation, and growth of small busi9 ness concerns participating in the program, in10 cluding (I) loan packaging, (II) financial coun11 seling, (III) marketing assistance, and (IV)

12 management assistance;

13 ‘‘(iii) assist small business concerns par14 ticipating in the program to obtain equity and

15 debt financing;

16 ‘‘(iv) establish regular performance mon17 itoring and reporting systems for small business

18 concerns participating in the program to assure

19 compliance with their business plans;

20 ‘‘(v) analyze and report the causes of suc21 cess and failure of small business concerns par22 ticipating in the program; and

23 ‘‘(vi) provide assistance necessary to help

24 small business concerns participating in the

25 program to procure surety bonds, including (I)
39

•HR 4080 IH

1 the preparation of application forms required to

2 receive a surety bond, (II) special management

3 and technical assistance designed to meet spe4 cific needs of small business concerns partici5 pating in the program and which have received

6 or are applying to receive a surety bond, and

7 (III) preparation of all forms necessary to re8 ceive a surety bond guarantee from the Admin9 istration pursuant to title IV, part B of the

10 Small Business Investment Act of 1958.

11 ‘‘(B) Small business concerns eligible to receive

12 contracts pursuant to subsection (a) shall participate

13 in the program.

14 ‘‘(C)(i) A small business concern participating

15 in any program or activity conducted under the au16 thority of this subsection shall be permitted contin17 ued participation and eligibility in such program or

18 activity for a period of 5 years from the date of cer19 tification for program participation.

20 ‘‘(ii) Nothing contained in this subparagraph

21 shall be deemed to prevent the Administration from

22 instituting a termination or graduation pursuant to

23 subparagraph (F) or (J) for issues unrelated to the

24 expiration of any time period limitation.
40

•HR 4080 IH

1 ‘‘(D)(i) Promptly after certification under para2 graph (2) a program participant shall submit a busi3 ness plan (hereinafter in this section referred to as

4 the ‘plan’) as described in clause (ii) of this subpara5 graph for review by the veterans business counselor

6 assigned to assist such program participant. The

7 plan may be a revision of a preliminary business

8 plan submitted by the program participant or re9 quired by the Administration as a part of the appli10 cation for certification under this section. Such plan,

11 and subsequent modifications submitted under

12 clause (iii) of this subparagraph, shall be approved

13 by the veterans business counselor prior to the pro14 gram participant being eligible for award of a con15 tract pursuant to subsection (a).

16 ‘‘(ii) The plans submitted under this subpara17 graph shall include the following:

18 ‘‘(I) An analysis of market potential and

19 other business analyses estimating the program

20 participant’s prospects for profitable operations

21 during the term of program participation and

22 after graduation.

23 ‘‘(II) An analysis of the program partici24 pant’s strengths and weaknesses with particular

25 attention to financial, managerial, technical,
41

•HR 4080 IH

1 and personnel conditions which are likely to im2 pede small business concerns from receiving

3 contracts other than those awarded under sub4 section (a).

5 ‘‘(III) Specific targets, objectives, and

6 goals for the business development of the pro7 gram participant during the next and succeed8 ing years utilizing the results of the analyses

9 conducted pursuant to subclauses (I) and (II).

10 ‘‘(IV) A transition management plan out11 lining specific steps to assure profitable busi12 ness operations after graduation (to be incor13 porated into the program participant’s plan

14 during the first year of the transitional stage of

15 program participation).

16 ‘‘(V) Estimates of contract awards pursu17 ant to subsection (a) and from other sources

18 which the program participant will require to

19 meet the specific targets, objectives, and goals

20 for the years covered by its plan. The estimates

21 established shall be consistent with the provi22 sions of subparagraph (I) and subsection (a).

23 ‘‘(iii) Each program participant shall annually

24 review its currently approved plan with its veterans

25 business counselor and modify such plan as may be
42

•HR 4080 IH

1 appropriate. Any modified plan shall be submitted to

2 the Administration for approval. The currently ap3 proved plan shall be considered valid until such time

4 as a modified plan is approved by the veterans busi5 ness counselor. Annual reviews pertaining to years

6 in the transitional stage of program participation

7 shall require, as appropriate, a written verification

8 that such program participant has complied with the

9 requirements of subparagraph (I).

10 ‘‘(iv) Each program participant shall annually

11 forecast its needs for contract awards under sub12 section (a) for the next program year and the suc13 ceeding program year during the review of its busi14 ness plan, conducted pursuant to clause (iii). Such

15 forecast shall be known as the section 30(a) contract

16 support level and shall be included in the program

17 participant’s business plan. Such forecast shall in18 clude—

19 ‘‘(I) the aggregate dollar value of contract

20 support to be sought under subsection (a), re21 flecting compliance with the requirements of

22 subparagraph (I),

23 ‘‘(II) the types of contract opportunities

24 being sought, identified by Standard Industrial

25 Classification (SIC) Code or otherwise,
43

•HR 4080 IH

1 ‘‘(III) such other information as may be

2 requested by the veterans business counselor to

3 provide effective business development assist4 ance to the program participant.

5 ‘‘(E) A small business concern participating in

6 the program conducted under the authority of this

7 subsection and eligible for the award of contracts

8 pursuant to subsection (a) shall be denied all such

9 assistance if such concern—

10 ‘‘(i) voluntarily elects not to continue par11 ticipation;

12 ‘‘(ii) participates in the program for a pe13 riod in excess of the time limits prescribed by

14 paragraph (6);

15 ‘‘(iii) is terminated pursuant to a termi16 nation proceeding conducted in accordance with

17 subsection (a)(6); or

18 ‘‘(iv) is graduated pursuant to a gradua19 tion proceeding conducted in accordance with

20 subsection (a)(6).

21 ‘‘(F) For the purposes of this section, the terms

22 ‘terminated’ or ‘termination’ mean the total denial

23 or suspension of any assistance provided pursuant to

24 this section prior to the graduation of the participat25 ing small business concern pursuant to subpara-
44

•HR 4080 IH

1 graph (H) or the expiration of the maximum pro2 gram participation in terms prescribed by paragraph

3 (6). An action for termination shall be based upon

4 good cause, including—

5 ‘‘(i) the failure by such concern to main6 tain its eligibility for program participation;

7 ‘‘(ii) a demonstrated pattern of unjustified

8 delinquent performance or terminations for de9 fault with respect to contracts awarded under

10 the authority of subsection (a);

11 ‘‘(iii) a demonstrated pattern of failing to

12 make required submissions or responses to the

13 Administration in a timely manner;

14 ‘‘(iv) the willful violation of any rule or

15 regulation of the Administration pertaining to

16 material issues;

17 ‘‘(v) the debarment of the concern or its el18 igible veteran owners by any agency pursuant

19 to subpart 9.4 of title 48, Code of Federal Reg20 ulations (or any successor regulation); or

21 ‘‘(vi) the conviction of the eligible veteran

22 owner or an officer of the concern for any of23 fense indicating a lack of business integrity in24 cluding any conviction for embezzlement, theft,

25 forgery, bribery, falsification or violation of sec-
45

•HR 4080 IH

1 tion 16. For purposes of this clause, no termi2 nation action shall be taken with respect to an

3 eligible veteran owner solely because of the con4 viction of an officer of the concern (who is other

5 than an eligible veteran owner) unless such

6 owner conspired with, abetted, or otherwise

7 knowingly acquiesced in the activity or omission

8 that was the basis of such officer’s conviction.

9 ‘‘(G) The Director of the Division may initiate

10 a termination proceeding by recommending such ac11 tion to the Associate Administrator for Veterans

12 Programs. Whenever the Associate Administrator, or

13 a designee of such officer, determines such termi14 nation is appropriate, within 15 days after making

15 such a determination the program participant shall

16 be provided a written notice of intent to terminate,

17 specifying the reasons for such action. No program

18 participant shall be terminated from the program

19 pursuant to subparagraph (F) without first being af20 forded an opportunity for a hearing in accordance

21 with subsection (a)(6).

22 ‘‘(H) For the purposes of this section, the term

23 ‘graduated’ or ‘graduation’ means that the program

24 participant is recognized as successfully completing

25 the program by substantially achieving the targets,
46

•HR 4080 IH

1 objectives, and goals contained in the concern’s busi2 ness plan.

3 ‘‘(I)(i) During the developmental stage of its

4 participation in the program, a program participant

5 shall take all reasonable efforts within its control to

6 attain the targets contained in its business plan for

7 contracts awarded other than pursuant to subsection

8 (a) (hereinafter referred to as ‘business activity tar9 gets’). Such efforts shall be made a part of the busi10 ness plan and shall be sufficient in scope and dura11 tion to satisfy the Administration that the program

12 participant will engage in a reasonable marketing

13 strategy that will maximize its potential to achieve

14 its business activity targets.

15 ‘‘(ii) During the transitional stage of the pro16 gram, a program participant shall be subject to reg17 ulations regarding business activity targets that are

18 promulgated by the Administration pursuant to

19 clause (iii).

20 ‘‘(iii) The regulations referred to in clause (ii)

21 shall—

22 ‘‘(I) establish business activity targets ap23 plicable to program participants during the 4th

24 and 5th year of program participation; such

25 targets, for such period of time, shall reflect a
47

•HR 4080 IH

1 reasonably consistent increase in contracts

2 awarded other than pursuant to subsection (a),

3 expressed as a percentage of total sales;

4 ‘‘(II) require a program participant to at5 tain its business activity targets;

6 ‘‘(III) provide that, before the receipt of

7 any contract to be awarded pursuant to sub8 section (a), the program participant (if it is in

9 the transitional stage) must certify that it has

10 complied with the regulations promulgated pur11 suant to subclause (II), or that it is in compli12 ance with such remedial measures as may have

13 been ordered pursuant to regulations issued

14 under subclause (V);

15 ‘‘(IV) require the Administration to review

16 each program participant’s performance regard17 ing attainment of business activity targets dur18 ing periodic reviews of such participant’s busi19 ness plan; and

20 ‘‘(V) authorize the Administration to take

21 appropriate remedial measures with respect to a

22 program participant that has failed to attain a

23 required business activity target for the purpose

24 of reducing such participant’s dependence on

25 contracts awarded pursuant to subsection (a),
48

•HR 4080 IH

1 including assisting the program participant to

2 expand the dollar volume of its competitive

3 business activity or limiting the dollar volume of

4 contracts awarded to the program participant

5 pursuant to subsection (a); except for actions

6 that would constitute a termination, remedial

7 measures taken pursuant to this subclause shall

8 not be reviewable pursuant to subsection (a)(6).

9 ‘‘(2)(A) The Associate Administrator for Veterans

10 Programs shall be responsible for coordinating and formu11 lating policies relating to Federal assistance to small busi12 ness concerns eligible to receive contracts pursuant to sub13 section (a).

14 ‘‘(B) Any individual upon whom eligibility is based

15 pursuant to subsection (a), shall be permitted to assert

16 such eligibility for only 1 small business concern.

17 ‘‘(C) No concern, previously eligible for the award of

18 contracts pursuant to subsection (a), shall be subsequently

19 recertified for program participation if its prior participa20 tion in the program was concluded for any of the reasons

21 described in paragraph (1)(E).

22 ‘‘(D) A concern eligible for the award of contracts

23 pursuant to this subsection shall remain eligible for such

24 contracts if there is a transfer of ownership and control

25 (as defined pursuant to subsection (a)(3)) to individuals
49

•HR 4080 IH

1 who are determined to be eligible veterans pursuant to

2 subsection (a). In the event of such a transfer, the con3 cern, if not terminated or graduated, shall be eligible for

4 a period of continued participation in the program not to

5 exceed the time limitations prescribed in paragraph (6).

6 ‘‘(E) There is established a Division of Program Cer7 tification and Eligibility (hereinafter referred to as the

8 ‘Division’) that shall be made part of the Office of Veter9 ans Programs. The Division shall be headed by a Director

10 who shall report directly to the Associate Administrator

11 for Veterans Programs. The Division shall establish field

12 offices within such regional offices of the Administration

13 as may be necessary to perform efficiently its functions

14 and responsibilities.

15 ‘‘(F) Subject to the provisions of subsection (a)(6),

16 the functions and responsibility of the Division are to—

17 ‘‘(i) receive, review, and evaluate applications

18 for certification pursuant to paragraphs (3) and (4)

19 of subsection (a);

20 ‘‘(ii) advise each program applicant within 15

21 days after the receipt of an application as to whether

22 such application is complete and suitable for evalua23 tion and, if not, what matters must be rectified;
50

•HR 4080 IH

1 ‘‘(iii) render recommendations on such applica2 tions to the Associate Administrator for Veterans

3 Programs;

4 ‘‘(iv) review and evaluate financial statements

5 and other submissions from concerns participating

6 in the program established by this subsection to as7 certain continued eligibility to receive subcontracts

8 pursuant to subsection (a);

9 ‘‘(v) make a request for the initiation of termi10 nation or graduation proceedings, as appropriate,

11 with the Associate Administrator for Veterans Pro12 grams;

13 ‘‘(vi) decide protests from applicants that have

14 been denied program admission; and

15 ‘‘(vii) decide protests regarding the status of a

16 concern as a concern owned and controlled by eligi17 ble veterans for purposes of any program or activity

18 conducted under the authority of subsection (d) of

19 section 8, or any other provision of Federal law that

20 references such subsection for a definition of pro21 gram eligibility; and

22 ‘‘(viii) implement such policy directives as may

23 be issued by the Associate Administrator for Veter24 ans Programs pursuant to subparagraph (H) re25 garding, among other things, the geographic dis-
51

•HR 4080 IH

1 tribution of concerns to be admitted to the program

2 and the industrial make-up of such concerns.

3 ‘‘(G) An applicant shall not be denied admission into

4 the program due solely to a determination by the Division

5 that specific contract opportunities are unavailable to as6 sist in the development of such concern unless—

7 ‘‘(i) the Government has not previously pro8 cured and is unlikely to procure the types of prod9 ucts or services offered by the concern; or

10 ‘‘(ii) the purchases of such products or services

11 by the Federal Government will not be in quantities

12 sufficient to support the developmental needs of the

13 applicant and other program participants providing

14 the same or similar items or services.

15 ‘‘(H) Thirty days before the conclusion of each fiscal

16 year, the Director of the Division shall review all concerns

17 that have been admitted into the program during the pre18 ceding 12-month period. The review shall ascertain the

19 number of entrants, their geographic distribution and in20 dustrial classification. The Director shall also estimate the

21 expected growth of the program during the next fiscal year

22 and the number of additional veterans business coun23 selors, if any, that will be needed to meet the anticipated

24 demand for the program. The findings and conclusions of

25 the Director shall be reported to the Associate Adminis-
52

•HR 4080 IH

1 trator for Veterans Programs by September 30 of each

2 year. Based on such report and such additional data as

3 may be relevant, the Associate Administrator shall, by Oc4 tober 31 of each year, issue policy and program directives

5 applicable to such fiscal year that—

6 ‘‘(i) establish priorities for the solicitation of

7 program applications from underrepresented regions

8 and industry categories;

9 ‘‘(ii) assign staffing levels and allocate other

10 program resources as necessary to meet program

11 needs; and

12 ‘‘(iii) establish priorities in the processing and

13 admission of new program participants as may be

14 necessary to achieve an equitable geographic dis15 tribution of concerns and a distribution of concerns

16 across all industry categories in proportions needed

17 to increase significantly contract awards to small

18 business concerns owned and controlled by eligible

19 veterans. When considering such increase the Ad20 ministration shall give due consideration to those in21 dustrial categories where Federal purchases have

22 been substantial but where the participation rate of

23 such concerns has been limited.

24 ‘‘(I)(i) The Administration shall conduct an evalua25 tion of a program participant’s eligibility for continued
53

•HR 4080 IH

1 participation in the program whenever it receives specific

2 and credible information alleging that such program par3 ticipant no longer meets the requirements for program eli4 gibility. Upon making a finding that a program partici5 pant is no longer eligible, the Administration shall initiate

6 a termination proceeding in accordance with subparagraph

7 (F). A program participant’s eligibility for award of any

8 contract under the authority of subsection (a) may be sus9 pended or terminated pursuant to subpart 9.4 of title 48,

10 Code of Federal Regulations (or any successor regulation).

11 ‘‘(ii) No award shall be made pursuant to subsection

12 (a) to other than a small business concern.

13 ‘‘(3)(A) The Administration shall segment the pro14 gram into two stages: a developmental stage; and a transi15 tional stage.

16 ‘‘(B) The developmental stage of program participa17 tion shall be designed to assist the concern to access its

18 markets and to strengthen its financial and managerial

19 skills.

20 ‘‘(C) The transitional stage of program participation

21 shall be designed to prepare such concern for graduation

22 from the program.

23 ‘‘(4) A program participant, if otherwise eligible,

24 shall be qualified to receive the following assistance during
54

•HR 4080 IH

1 the stages of program participation specified in paragraph

2 (3):

3 ‘‘(A) Contract support pursuant to subsection

4 (a).

5 ‘‘(B) Financial assistance pursuant to section

6 7(a).

7 ‘‘(C) Training assistance whereby the Adminis8 tration shall conduct training sessions to assist indi9 viduals and enterprises eligible to receive contracts

10 under subsection (a) in the development of business

11 principles and strategies to enhance their ability to

12 successfully compete for contracts in the market13 place.

14 ‘‘(D) Joint ventures, leader-follow arrange15 ments, and teaming agreements between the pro16 gram participant and other program participants

17 and other business concerns with respect to con18 tracting opportunities for the research, development,

19 full-scale engineering or production of major sys20 tems. Such activities shall be undertaken on the

21 basis of programs developed by the agency respon22 sible for the procurement of the major system, with

23 the assistance of the Administration.

24 ‘‘(E) Transitional management business plan25 ning training and technical assistance.
55

•HR 4080 IH

1 ‘‘(5) Program participants in the developmental stage

2 of program participation shall be eligible for the assistance

3 provided by subparagraphs (A), (B), and (C) of paragraph

4 (4). Program participants in the transitional stage of pro5 gram participation shall be eligible for the assistance pro6 vided by subparagraphs (A), (B), (D), and (E) of para7 graph (4).

8 ‘‘(6) Subject to the provisions of paragraph (1)(C),

9 a small business concern may receive developmental assist10 ance under the program and contracts under subsection

11 (a) for a total period of not longer than 5 years, measured

12 from the date of its certification under the authority of

13 such section, of which—

14 ‘‘(A) no more than 3 years may be spent in the

15 developmental stage of program participation; and

16 ‘‘(B) no more than 2 years may be spent in the

17 transitional stage of program participation.

18 ‘‘(7)(A) The Administrator shall develop and imple19 ment a process for the systematic collection of data on

20 the operations of the program established pursuant to

21 paragraph (1).

22 ‘‘(B) Not later than April 30 of each year, the Ad23 ministrator shall submit a report to the Congress on the

24 program that shall include the following:
56

•HR 4080 IH

1 ‘‘(i) The average personal net worth of individ2 uals who own and control concerns that were ini3 tially certified for participation in the program dur4 ing the immediately preceding fiscal year. The Ad5 ministrator shall also indicate the dollar distribution

6 of net worths, at $50,000 increments, of all such in7 dividuals.

8 ‘‘(ii) A description and estimate of the benefits

9 and costs that have accrued to the economy and the

10 Government in the immediately preceding fiscal year

11 due to the operations of those business concerns that

12 were performing contracts awarded pursuant to sub13 section (a).

14 ‘‘(iii) A listing of all participants in the pro15 gram during the preceding fiscal year identifying, by

16 State and by Region, for each firm: the name of the

17 concern, the race or ethnicity, and gender of the eli18 gible veteran owners, the dollar value of all contracts

19 received in the preceding year, the dollar amount of

20 advance payments received by each concern pursu21 ant to contracts awarded under subsection (a), and

22 a description including (if appropriate) an estimate

23 of the dollar value of all benefits received pursuant

24 to paragraphs (4) and (5) and section 7(a) during

25 such year.
57

•HR 4080 IH

1 ‘‘(iv) The total dollar value of contracts and op2 tions awarded during the preceding fiscal year pur3 suant to subsection (a) and such amount expressed

4 as a percentage of total sales of (I) all firms partici5 pating in the program during such year; and (II) of

6 firms in each of the 5 years of program participa7 tion.

8 ‘‘(v) A description of such additional resources

9 or program authorities as may be required to pro10 vide the types of services needed over the next 2-

11 year period to service the expected portfolio of firms

12 certified pursuant to subsection (a).

13 ‘‘(vi) The total dollar value of contracts and op14 tions awarded pursuant to subsection (a), at such

15 dollar increments as the Administrator deems appro16 priate, for each four digit Standard Industrial Clas17 sification (SIC) Code under which such contracts

18 and options were classified.

19 ‘‘(C) The first report required by subparagraph (B)

20 shall pertain to the first fiscal year beginning after the

21 date of the enactment of this section.

22 ‘‘(c) In carrying out its functions under this section,

23 the Administration is authorized—

24 ‘‘(1) to utilize, with their consent, the services

25 and facilities of Federal agencies without reimburse-
58

•HR 4080 IH

1 ment, and, with the consent of any State or political

2 subdivision of a State, accept and utilize the services

3 and facilities of such State or subdivision without re4 imbursement;

5 ‘‘(2) to accept, in the name of the Administra6 tion, and employ or dispose of in furtherance of the

7 purposes of this Act, any money or property, real,

8 personal, or mixed, tangible, or intangible, received

9 by gift, devise, bequest, or otherwise;

10 ‘‘(3) to accept voluntary and uncompensated

11 services, notwithstanding the provisions of section

12 1342 of title 31, United States Code; and

13 ‘‘(4) to employ experts and consultants or orga14 nizations thereof as authorized by section 3109 of

15 title 5, United States Code; except that no individual

16 may be employed under the authority of this sub17 section for more than 100 days in any fiscal year;

18 to compensate individuals so employed at rates not

19 in excess of the daily equivalent of the highest rate

20 payable under section 5332 of such title, including

21 travel time; and to allow them, while away from

22 their homes or regular places of business, travel ex23 penses (including per diem in lieu of subsistence) as

24 authorized by section 5703 of such title for persons

25 in the Government service employed intermittently,
59

•HR 4080 IH

1 while so employed: Provided, however, That contracts

2 for such employment may be renewed annually.’’.

3 SEC. 16. AUTHORIZATION OF APPROPRIATIONS.

4 There is authorized to be appropriated the following

5 amounts:

6 (1) For salaries and expenses of the Office of

7 Veterans Programs of the Small Business Adminis8 tration and its divisions $4,000,000 per fiscal year

9 for each of fiscal years 1997, 1998, and 1999.

10 (2) For training and education of personnel in

11 the Office of Veterans Programs of the Small Busi12 ness Administration and its divisions—

13 (A) $350,000 for fiscal year 1997;

14 (B) $200,000 for fiscal year 1998; and

15 (C) $175,000 for fiscal year 1999.

16 (3) To carry out section 8(b)(17) of the Small

17 Business Act, as added by section 11 of this Act,

18 $1,250,000 per fiscal year for each of fiscal years

19 1997, 1998, and 1999.

Æ