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[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4080 Introduced in House (IH)]

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.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Veterans Entrepreneurship Promotion 
Act of 1996''.

SEC. 2. PURPOSES AND DEFINITIONS.

    (a) Purposes.--The purposes of this Act are--
            (1) to foster enhanced entrepreneurship among veterans by 
        providing increased opportunities;
            (2) to vigorously promote the legitimate interests of 
        business concerns owned and controlled by eligible veterans; 
        and
            (3) to ensure that those concerns receive a fair share of 
        purchases made by the Federal Government.
    (b) Definitions.--For the purposes of this Act, the following 
definitions apply:
            (1) Administration.--The term ``Administration'' means the 
        Small Business Administration.
            (2) Administrator.--The term ``Administrator'' means the 
        Administrator of the Small Business Administration.
            (3) Eligible veteran; small business concern owned and 
        controlled by eligible veterans.--The terms ``eligible 
        veteran'' and ``small business concern owned and controlled by 
        eligible veterans'' have the meaning such terms have in section 
        3(n) of the Small Business Act, as added by section 3 of this 
        Act.

SEC. 3. SMALL BUSINESS ACT DEFINITIONS.

    Section 3 of the Small Business Act (15 U.S.C. 632) is amended by 
adding at the end the following new subsection:
    ``(o) For purposes of this Act--
            ``(1) the term `eligible veteran' means any person who--
                    ``(A) is a disabled veteran, as such term is 
                defined in section 4211(3) of title 38, United States 
                Code; or
                    ``(B) served on active duty during a period of war 
                or in a campaign or expedition for which a campaign 
                badge is authorized and was discharged or released from 
                such duty with other than a dishonorable discharge; and
            ``(2) the term `small business concern owned and controlled 
        by eligible veterans' means a small business concern--
                    ``(A) which is at least 51 percent owned by one or 
                more eligible veterans, or in the case of a publicly 
                owned business, at least 51 percent of the stock of 
                which is owned by one or more eligible veterans; and
                    ``(B) whose management and daily business 
                operations are controlled by such veterans.''.

SEC. 4. PROCUREMENT ASSISTANCE.

    (a) Government-Wide Goals.--Subsection (g)(1) of section 15 of the 
Small Business Act (15 U.S.C. 644) is amended--
            (1) in the first sentence, by inserting ``small business 
        concerns owned and controlled by eligible veterans,'' after 
        ``small business concerns,'';
            (2) by inserting after the second sentence the following: 
        ``The Government-wide goal for participation by small business 
        concerns owned and controlled by eligible veterans shall be 
        established at not less than 5 percent of the total value of 
        all prime contract and subcontract awards for each fiscal 
        year.''; and
            (3) in the second to last sentence, by inserting ``small 
        business concerns owned and controlled by eligible veterans,'' 
        after ``small business concerns,''.
    (b) Annual Participation Goals.--Subsection (g)(2) of section 15 of 
the Small Business Act (15 U.S.C. 644) is amended--
            (1) in the first sentence, by inserting ``by small business 
        concerns owned and controlled by eligible veterans,'' after 
        ``small business concerns,'';
            (2) in the second sentence, by inserting ``small business 
        concerns owned and controlled by eligible veterans,'' after 
        ``small business concerns,'';
            (3) in the fourth sentence, by inserting ``small business 
        concerns owned and controlled by eligible veterans, 
        participation by'' after ``including participation by''; and
            (4) in subparagraph (B), by striking ``under the program 
        established under section 8(a)'' and inserting ``under the 
        programs established under sections 8(a) and 30''.

SEC. 5. REPORTING.

    (a) Reports to Small Business Administration.--Subsection (h)(1) of 
section 15 of the Small Business Act (15 U.S.C. 644) is amended by 
inserting ``small business concerns owned and controlled by eligible 
veterans,'' after ``small business concerns,''.
    (b) Reports to the President and Congress.--Subsection (h)(2) of 
section 15 of the Small Business Act (15 U.S.C. 644) is amended--
            (1) by inserting ``and Congress'' before the period at the 
        end of the first sentence;
            (2) in subparagraphs (A), (D), and (E), by inserting 
        ``small business concerns owned and controlled by eligible 
        veterans,'' after ``small business concerns,''; and
            (3) in subparagraph (D)(ii), by inserting ``small business 
        concerns owned and controlled by eligible veterans and 
        competition restricted to'' after ``restricted to''.

SEC. 6. SUBCONTRACTING.

    (a) Statement of Policy.--Paragraph (1) of section 8(d) of the 
Small Business Act (15 U.S.C. 637(d)) is amended by inserting ``small 
business concerns owned and controlled by eligible veterans,'' after 
``small business concerns,'' in the first and second sentences.
    (b) Contract Clause.--The contract clause specified in section 
8(d)(3) of the Small Business Act (15 U.S.C. 637(d)(3)) is amended as 
follows:
            (1) Subparagraph (A) of such clause is amended by inserting 
        ``small business concerns owned and controlled by eligible 
        veterans,'' after ``small business concerns,'' in the first and 
        second sentences.
            (2) Subparagraph (E) of such clause is redesignated as 
        subparagraph (F) and the following new subparagraph is inserted 
        after subparagraph (D) of such clause:
            ``(E) The term `small business concern owned and controlled 
        by eligible veterans' shall mean a small business concern--
                    ``(i) which is at least 51 per centum owned by one 
                or more eligible veterans; or, in the case of any 
                publicly owned business, at least 51 per centum of the 
                stock of which is owned by one or more eligible 
                veterans; and
                    ``(ii) whose management and daily business 
                operations are controlled by such veterans.
        The contractor shall treat as eligible veterans all individuals 
        who are eligible veterans within the meaning of section 3(n) of 
        the Small Business Act.''.
            (3) Subparagraph (F) of such clause, as redesignated by 
        paragraph (2) of this subsection, is amended by inserting 
        ``small business concern owned and controlled by eligible 
        veterans,'' after ``small business concern,''.
    (c) Conforming Amendments.--Section 8(d) of the Small Business Act 
(15 U.S.C. 637(d)) is amended--
            (1) by inserting ``small business concerns owned and 
        controlled by eligible veterans,'' after ``small business 
        concerns,'' in paragraphs (4)(D), (6)(A), (6)(C), (6)(F), and 
        (10)(B); and
            (2) in paragraph (4)(E), by striking ``small business 
        concerns and'' and inserting ``small business concerns, small 
        business concerns owned and controlled by eligible veterans,''.

SEC. 7. INFORMATION COLLECTION.

    (a) Information on Federal Procurement Practices.--The 
Administrator shall, for each fiscal year--
            (1) obtain information concerning the procurement practices 
        and procedures of each Federal agency having procurement 
        authority; and
            (2) make such information available to any small business 
        concern requesting it.
    (b) Identification of Small Businesses Owned by Eligible 
Veterans.--The Secretary of Veterans Affairs shall, in consultation 
with the Assistant Secretary of Labor for Veterans' Employment and 
Training and the Administrator, engage in affirmative efforts each 
fiscal year to identify small business concerns owned and controlled by 
eligible veterans in the United States. The Secretary shall inform each 
small business concern identified under this paragraph that information 
on Federal procurement is available from the Administrator.

SEC. 8. STATE OF SMALL BUSINESS REPORT.

    Section 303(e) of the Small Business and Economic Policy Act of 
1980 (15 U.S.C. 631b(e)) is amended--
            (1) in paragraph (1), by striking ``and'' after the 
        semicolon;
            (2) in paragraph (2), by striking the period at the end and 
        inserting a semicolon; and
            (3) by adding at the end the following new paragraph:
            ``(3) small business concerns owned and controlled by 
        eligible veterans.''.

SEC. 9. LOANS TO VETERANS.

    (a) Participation in Loans.--Section 7(a) of the Small Business Act 
(15 U.S.C. 636) is amended by adding at the end the following new 
paragraph:
    ``(25)(A) The Administration is empowered to make loans either 
directly or in cooperation with banks or other financial institutions 
through agreements to participate on an immediate or deferred 
(guaranteed) basis to small business concerns eligible for assistance 
under section 30. Such assistance may be provided only if the 
Administration determines that--
                    ``(i) the type and amount of such assistance 
                requested by such concern is not otherwise available on 
                reasonable terms from other sources;
                    ``(ii) with such assistance such concern has a 
                reasonable prospect for operating soundly and 
                profitably within a reasonable period of time;
                    ``(iii) the proceeds of such assistance will be 
                used within a reasonable time for plant construction, 
                conversion, or expansion, including the acquisition of 
                equipment, facilities, machinery, supplies, or material 
                or to supply such concern with working capital to be 
                used in the manufacture of articles, equipment, 
                supplies, or material for defense or civilian 
                production or as may be necessary to ensure a well-
                balanced national economy; and
                    ``(iv) such assistance is of such sound value as 
                reasonably to assure that the terms under which it is 
                provided will not be breached by the small business 
                concern.
            ``(B)(i) No loan shall be made under this paragraph if the 
        total amount outstanding and committed (by participation or 
        otherwise) to the borrower would exceed $750,000.
            ``(ii) Subject to the provisions of clause (i), in 
        agreements to participate in loans on a deferred (guaranteed) 
        basis, participation by the Administration shall be not less 
        than 85 per centum of the balance of the financing outstanding 
        at the time of disbursement.
            ``(iii) The rate of interest on financings made on a 
        deferred (guaranteed) basis shall be legal and reasonable.
            ``(iv) Financings made pursuant to this paragraph shall be 
        subject to the following limitations:
                    ``(I) No immediate participation may be purchased 
                unless it is shown that a deferred participation is not 
                available.
                    ``(II) No direct financing may be made unless it is 
                shown that a participation is unavailable.
            ``(C) A direct loan or the Administration's share of an 
        immediate participation loan made pursuant to this paragraph 
        shall be any secured debt instrument--
                    ``(i) that is subordinated by its terms to all 
                other borrowings of the issuer;
                    ``(ii) the rate of interest on which shall not 
                exceed the current average market yield on outstanding 
                marketable obligations of the United States with 
                remaining periods to maturity comparable to the average 
                maturities of such loan and adjusted to the nearest 
                one-eighth of 1 per centum;
                    ``(iii) the term of which is not more than 25 
                years; and
                    ``(iv) the principal on which is amortized at such 
                rate as may be deemed appropriate by the 
                Administration, and the interest on which is payable 
                not less often than annually.''.
    (b) Regulations.--Not later than 90 days after the date of the 
enactment of this Act, the Administrator shall issue regulations which 
ensure that--
            (1) the maturity for a loan to an eligible veteran in which 
        the Administration participates is the longest feasible term 
        commensurate with the repayment ability of the eligible 
        veteran, except that the maturity for such a loan may exceed 12 
        years only if the loan is made to finance real estate or the 
        construction or acquisition of equipment which has a useful 
        life which exceeds 12 years; and
            (2) in assessing the collateral of borrowers for the 
        purpose of making loans in which the Administration 
        participates, the lender makes a favorable value assessment of 
        such collateral when determining the overall probability of 
        recovery in the event of liquidation.

SEC. 10. ENTREPRENEURIAL TRAINING, COUNSELING, AND MANAGEMENT 
              ASSISTANCE.

    The Administrator shall take such actions as may be necessary to 
ensure that small business concerns owned and controlled by eligible 
veterans have access to programs established under the Small Business 
Act which provide entrepreneurial training, business development 
assistance, counseling, and management assistance to small business 
concerns. Such programs include the Small Business Development Center, 
Small Business Institute, Service Corps of Retired Executives (SCORE), 
and Active Corps of Executives (ACE) programs.

SEC. 11. GRANTS FOR ELIGIBLE VETERANS OUTREACH PROGRAMS.

    Section 8(b) of the Small Business Act (15 U.S.C. 637(b)) is 
amended--
            (1) by striking ``and'' at the end of paragraph (15);
            (2) by striking the period at the end of the first 
        paragraph (16) and inserting ``; and'';
            (3) by striking the second paragraph (16); and
            (4) by adding at the end the following new paragraph:
            ``(17) to make grants to, and enter into contracts and 
        cooperative agreements with, educational institutions, private 
        businesses, veterans' nonprofit community-based organizations, 
        and Federal, State, and local departments and agencies for the 
        establishment and implementation of outreach programs for 
        eligible veterans.''.

SEC. 12. OUTREACH PROGRAM FOR ELIGIBLE VETERANS.

    The Administrator, the Secretary of Veterans Affairs, and the 
Assistant Secretary of Labor for Veterans' Employment and Training 
shall establish an interagency working group to develop a comprehensive 
outreach program to assist eligible veterans. Such outreach program 
shall include business training and management assistance, employment 
and relocation counseling, and dissemination of information on veterans 
benefits, veterans entitlements, and the Veterans Business Opportunity 
and Development Program established under section 30 of the Small 
Business Act, as inserted by section 14 of this Act.

SEC. 13. ASSOCIATE ADMINISTRATOR FOR VETERANS PROGRAMS.

    Section 4(b)(1) of the Small Business Act (15 U.S.C. 633(b)(1)) is 
amended--
            (1) by striking ``four'' in the fifth sentence and 
        inserting ``five''; and
            (2) by inserting after the fifth sentence the following new 
        sentence:
``One of the Associate Administrators shall be designated at the time 
of his appointment as the Associate Administrator for Veterans Programs 
who shall be a career employee in the Senior Executive Service and who 
shall be responsible to the Administrator for the formulation and 
execution of policies and programs under this Act which provide 
assistance to small business concerns owned and controlled by eligible 
veterans, including programs established under section 30.''.

SEC. 14. ESTABLISHMENT OF VETERANS BUSINESS OPPORTUNITY AND DEVELOPMENT 
              PROGRAM.

    The Small Business Act (15 U.S.C. 631 et seq.) is amended by 
redesignating section 30 as section 31 and by inserting after section 
29 the following new section:
    ``Sec. 30. (a)(1) It shall be the duty of the Administration and it 
is hereby empowered, whenever it determines such action is necessary or 
appropriate--
            ``(A) to enter into contracts with the United States 
        Government and any department, agency, or officer thereof 
        having procurement powers obligating the Administration to 
        furnish articles, equipment, supplies, services, or materials 
        to the Government or to perform construction work for the 
        Government. In any case in which the Administration certifies 
        to any officer of the Government having procurement powers that 
        the Administration is competent and responsible to perform any 
        specific Government procurement contract to be let by any such 
        officer, such officer shall be authorized in his discretion to 
        let such procurement contract to the Administration upon such 
        terms and conditions as may be agreed upon between the 
        Administration and the procurement officer. Whenever the 
        Administration and such procurement officer fail to agree, the 
        matter shall be submitted for determination to the Secretary or 
        the head of the appropriate department or agency by the 
        Administrator. Not later than 5 days from the date the 
        Administration is notified of a procurement officer's adverse 
        decision, the Administration may notify the contracting officer 
        of the intent to appeal such adverse decision, and within 15 
        days of such date the Administrator shall file a written 
        request for a reconsideration of the adverse decision with the 
        Secretary of the department or agency head. For the purposes of 
        this subparagraph, a procurement officer's adverse decision 
        includes a decision not to make available for award pursuant to 
        this subsection a particular procurement requirement or the 
        failure to agree on the terms and conditions of a contract to 
        be awarded under the authority of this subsection. Upon receipt 
        of the notice of intent to appeal, the Secretary of the 
        department or agency head shall suspend further action 
        regarding the procurement until a written decision on the 
        Administrator's request for reconsideration has been issued by 
        such Secretary or agency head, unless such officer makes a 
        written determination that urgent and compelling circumstances 
        which significantly affect interests of the United States will 
        not permit waiting for a reconsideration of the adverse 
        decision. If the Administrator's request for reconsideration is 
        denied, the Secretary of the department or agency head shall 
        specify the reasons why the selected firm was determined to be 
        incapable to perform the procurement requirement, and the 
        findings supporting such determination, which shall be made a 
        part of the contract file for the requirement. A contract may 
        not be awarded under this subsection if the award of the 
        contract would result in a cost to the awarding agency which 
        exceeds a fair market price;
            ``(B) to arrange for the performance of such procurement 
        contracts by negotiating or otherwise letting subcontracts to 
        small business concerns owned and controlled by eligible 
        veterans for construction work, services, or the manufacture, 
        supply, assembly of such articles, equipment, supplies, 
        materials, or parts thereof, or servicing or processing in 
        connection therewith, or such management services as may be 
        necessary to enable the Administration to perform such 
        contracts; and
            ``(C) to make an award to a small business concern owned 
        and controlled by eligible veterans which has completed its 
        period of program participation as prescribed by subsection 
        (b)(6), if--
                    ``(i) the contract will be awarded as a result of 
                an offer (including price) submitted in response to a 
                published solicitation relating to a competition 
                conducted pursuant to subparagraph (D); and
                    ``(ii) the prospective contract awardee was a 
                program participant eligible for award of the contract 
                on the date specified for receipt of offers contained 
                in the contract solicitation.
            ``(D)(i) A contract opportunity offered for award pursuant 
        to this subsection shall be awarded on the basis of competition 
        restricted to eligible program participants if--
                    ``(I) there is a reasonable expectation that at 
                least two eligible program participants will submit 
                offers and that award can be made at a fair market 
                price, and
                    ``(II) the anticipated award price of the contract 
                (including options) will exceed $5,000,000 in the case 
                of a contract opportunity assigned a standard 
                industrial classification code for manufacturing and 
                $3,000,000 (including options) in the case of all other 
                contract opportunities.
            ``(ii) The Associate Administrator for Veteran Programs, on 
        a nondelegable basis, is authorized to approve a request from 
        an agency to award a contract opportunity under this subsection 
        on the basis of a competition restricted to eligible program 
        participants even if the anticipated award price is not 
        expected to exceed the dollar amounts specified in clause 
        (i)(II). Such approvals shall be granted only on a limited 
        basis.
    ``(2)(A) Any program participant selected by the Administration to 
perform a contract to be let pursuant to this subsection shall, when 
practicable, participate in any negotiation of the terms and conditions 
of such contract.
    ``(B)(i) For purposes of paragraph (1), a `fair market price' shall 
be determined by the agency offering the procurement requirement to the 
Administration, in accordance with clauses (ii) and (iii).
    ``(ii) The estimate of a current fair market price for a new 
procurement requirement, or a requirement that does not have a 
satisfactory procurement history, shall be derived from a price or cost 
analysis. Such analysis may take into account prevailing market 
conditions, commercial prices for similar products or services, or data 
obtained from any other agency. Such analysis shall consider such cost 
or pricing data as may be timely submitted by the Administration.
    ``(iii) The estimate of a current fair market price for a 
procurement requirement that has a satisfactory procurement history 
shall be based on recent award prices adjusted to ensure comparability. 
Such adjustments shall take into account differences in quantities, 
performance times, plans, specifications, transportation costs, 
packaging and packing costs, labor and materials costs, overhead costs, 
and any other additional costs which may be deemed appropriate.
    ``(C) An agency offering a procurement requirement for potential 
award pursuant to this subsection shall, upon the request of the 
Administration, promptly submit to the Administration a written 
statement detailing the method used by the agency to estimate the 
current fair market price for such contract, identifying the 
information, studies, analyses, and other data used by such agency. The 
agency's estimate of the current fair market price (and any supporting 
data furnished to the Administration) shall not be disclosed to any 
potential offeror (other than the Administration).
    ``(D) A small business concern selected by the Administration to 
perform or negotiate a contract to be let pursuant to this subsection 
may request the Administration to protect the agency's estimate of the 
fair market price for such contract pursuant to paragraph (1)(A).
    ``(3) In order to be eligible for selection by the Administration 
to perform or negotiate a contract to be let pursuant to this 
subsection a small business concern owned and controlled by eligible 
veterans shall meet certification requirements contained in regulations 
issued by the Administrator. Such certification requirements shall 
include:
            ``(A) A requirement that such concern certify on an annual 
        basis that it meets the requirements of section 3(n) concerning 
        ownership and control by eligible veterans. Certification of 
        ownership and control by eligible veterans shall be accompanied 
        by documentation obtained from the Secretary of Veterans 
        Affairs by such concern which verifies that individuals who own 
        and control such concern are eligible veterans as defined in 
        section 3(n).
            ``(B) A requirement that such concern certify that it has 
        been in business as a small business concern owned and 
        controlled by eligible veterans for the 1 year period beginning 
        before the date of application for program participation; 
        except that the Administrator may waive such requirement in 
        appropriate cases.
            ``(C) A requirement that such concern certify that it has 
        not received and will not assert eligibility to receive a 
        procurement contract pursuant to section 8(a) of this Act.
    ``(4) The Administrator shall also issue regulations establishing a 
limitation on the personal net worth of a program participant.
            ``(A) Each program participant shall annually submit to the 
        Administration--
                    ``(i) a personal financial statement for each owner 
                upon whom eligibility was based; and
                    ``(ii) such other information as the Administration 
                may deem necessary to make the determinations required 
                by this paragraph.
            ``(B)(i) Whenever, on the basis of information provided by 
        a program participant pursuant to subparagraph (A) or 
        otherwise, the Administration has reason to believe that the 
        amount of funds or other assets withdrawn from a program 
        participant for the personal benefit of its owners or any 
        person or entity affiliated with such owners may have been 
        unduly excessive, the Administration shall conduct a review to 
        determine whether such withdrawal of funds or other assets was 
        detrimental to the achievement of the targets, objectives, and 
        goals contained in such program participant's business plan.
            ``(ii) If the Administration determines, pursuant to such 
        review, that funds or other assets have been withdrawn to the 
        detriment of the program participant's business, the 
        Administration shall--
                    ``(I) initiate a proceeding to terminate the 
                program participant pursuant to subsection (b)(1)(F), 
                subject to the right to a hearing under paragraph (6); 
                or
                    ``(II) require an appropriate reinvestment of funds 
                or other assets and such other steps as the 
                Administration may deem necessary to ensure the 
                protection of the concern.
            ``(C) Whenever the Administration computes personal net 
        worth for any purpose under this paragraph, it shall exclude 
        from such computation--
                    ``(i) the value of investments that eligible 
                veteran owners have in their concerns, except that such 
                value shall be taken into account under this paragraph 
                when comparing such concerns to other concerns in the 
                same business area that are owned by other than 
eligible veterans;
                    ``(ii) the equity that eligible veteran owners have 
                in their primary personal residences, except that any 
                portion of such equity that is attributable to unduly 
                excessive withdrawals from a program participant or a 
                concern applying for program participation shall be 
                taken into account.
    ``(5)(A) No small business concern shall be deemed eligible for any 
assistance pursuant to this subsection unless the Administration 
determines that with contract, financial, technical, and management 
support the small business concern will be able to perform contracts 
which may be awarded to such concern under paragraph (1)(B).
    ``(B) Limitations established by the Administration in its 
regulations and procedures restricting the award of contracts pursuant 
to this subsection to a limited number of standard industrial 
classification codes in an approved business plan shall not be applied 
in a manner that inhibits the logical business progression by a 
participating small business concern into areas of industrial endeavor 
where such concern has the potential for success.
    ``(6)(A) Subject to the provisions of subparagraph (E), the 
Administrator, prior to taking any action described in subparagraph 
(B), shall provide the small business concern that is the subject of 
such action, an opportunity for a hearing on the record, in accordance 
with chapter 5 of title 5, United States Code.
    ``(B) The actions referred to in subparagraph (A) are--
            ``(i) denial of program admission based upon a negative 
        determination pursuant to paragraph (4);
            ``(ii) a termination pursuant to subsection (b)(1)(F);
            ``(iii) a graduation pursuant to subsection (b)(1)(H); and
            ``(iv) the denial of a request to issue a waiver pursuant 
        to paragraph (15)(B).
    ``(C) The Administrator's proposed action, in any proceeding 
conducted under the authority of this paragraph, shall be sustained 
unless it is found to be arbitrary, capricious, or contrary to law.
    ``(D) A decision rendered pursuant to this paragraph shall be the 
final decision of the Administration and shall be binding upon the 
Administration and those within its employ.
    ``(E) The adjudicator selected to preside over a proceeding 
conducted under the authority of this paragraph shall decline to accept 
jurisdiction over any matter that--
            ``(i) does not, on its face, allege facts that, if proven 
        to be true, would warrant reversal or modification of the 
        Administration's position;
            ``(ii) is untimely filed;
            ``(iii) is not filed in accordance with the rules of 
        procedure governing such proceedings; or
            ``(iv) has been decided by or is the subject of an 
        adjudication before a court of competent jurisdiction over such 
        matters.
    ``(F) Proceedings conducted pursuant to the authority of this 
paragraph shall be completed and a decision rendered, insofar as 
practicable, within 90 days after a petition for a hearing is filed 
with the adjudicating office.
    ``(7) The Administration shall develop and implement an outreach 
program to inform and recruit small business concerns to apply for 
eligibility for assistance under this subsection. Such program shall 
make a sustained and substantial effort to solicit applications for 
certification from small business concerns located in areas of 
concentrated unemployment or underemployment or within labor surplus 
areas and within States having relatively few program participants and 
from small business concerns owned and controlled by eligible veterans 
in industry categories that have not substantially participated in the 
award of contracts let under the authority of this subsection.
    ``(8) To the maximum extent practicable, construction subcontracts 
awarded by the Administration pursuant to this subsection shall be 
awarded within the county or State where the work is to be performed.
    ``(9)(A) The Administration shall require each concern eligible to 
receive subcontracts pursuant to this subsection to annually prepare 
and submit to the Administration a capability statement. Such statement 
shall briefly describe such concern's various contract performance 
capabilities and shall contain the name and telephone number of the 
veterans business counselor assigned such concern. The Administration 
shall separate such statements by those primarily dependent upon local 
contract support and those primarily requiring a national marketing 
effort. Statements primarily dependent upon local contract support 
shall be disseminated to appropriate buying activities in the marketing 
area of the concern. The remaining statements shall be disseminated to 
the directors of small and disadvantaged business utilization for the 
appropriate agencies who shall further distribute such statements to 
buying activities with such agencies that may purchase the types of 
items or services described on the capability statements.
    ``(B) Contracting activities receiving capability statements shall, 
within 60 days after receipt, contact the relevant veterans business 
counselor to indicate the number, type, and approximate dollar value of 
contract opportunities that such activities may be awarding over the 
succeeding 12-month period and which may be appropriate to consider for 
award to those concerns for which it has received capability 
statements.
    ``(10)(A) A concern may not be awarded a contract under this 
subsection as a small business concern unless the concern agrees that--
            ``(i) in the case of a contract for services (except 
        construction), at least 50 percent of the cost of contract 
        performance incurred for personnel shall be expended for 
        employees of the concern; and
            ``(ii) in the case of a contract for procurement of 
        supplies (other than procurement from a regular dealer in such 
        supplies), the concern will perform work for at least 50 
        percent of the cost of manufacturing the supplies (not 
        including the cost of materials).
    ``(B) The Administration may change the percentage under clause (i) 
or (ii) of subparagraph (A) if the Administrator determines that such 
change is necessary to reflect conventional industry practices among 
business concerns that are below the numerical size standard for 
businesses in that industry category. A percentage established under 
the preceding sentence may not differ from a percentage established 
under section 15(o).
    ``(C) The Administration shall establish, through public 
rulemaking, requirements similar to those specified in subparagraph (A) 
to be applicable to contracts for general and specialty construction 
and to contracts for any other industry category not otherwise subject 
to the requirements of such subparagraph. The percentage applicable to 
any such requirement shall be determined in accordance with 
subparagraph (B), except that such a percentage may not differ from a 
percentage established under section 15(o) for the same industry 
category.
    ``(11)(A) An otherwise responsible business concern that is in 
compliance with the requirements of subparagraph (B) shall not be 
denied the opportunity to submit and have considered its offer for any 
procurement contract for the supply of a product to be let pursuant to 
this subsection or subsection (a) of section 15 solely because such 
concern is other than the actual manufacturer or processor of the 
product to be supplied under the contract.
    ``(B) To be in compliance with the requirements referred to in 
subparagraph (A), such a business concern shall--
            ``(i) be primarily engaged in the wholesale or retail 
        trade;
            ``(ii) be a small business concern under the numerical size 
        standard for the Standard Industrial Classification Code 
        assigned to the contract solicitation on which the offer is 
        being made;
            ``(iii) be a regular dealer, as defined pursuant to section 
        35(a) of title 41, United States Code (popularly referred to as 
        the Walsh-Healey Public Contracts Act), in the product to be 
        offered the Government; and
            ``(iv) represent that it will supply the product of a 
        domestic small business manufacturer or processor, unless a 
        waiver of such requirement is granted--
                    ``(I) by the Administrator, after reviewing a 
                determination by the contracting officer that no small 
                business manufacturer or processor can reasonably be 
                expected to offer a product meeting the specifications 
                (including period for performance) required of an 
                offeror by the solicitation; or
                    ``(II) by the Administrator for a product (or class 
                of products), after determining that no small business 
                manufacturer or processor is available to participate 
                in the Federal procurement market.
    ``(12)(A) No person within the employ of the Administration shall, 
during the term of such employment and for a period of 2 years after 
such employment has been terminated, engage in any activity or 
transaction specified in subparagraph (B) with respect to any program 
participant certified during such person's term of employment, if such 
person participated personally (either directly or indirectly) in 
decisionmaking responsibilities relating to such program participant or 
with respect to the administration of any assistance provided to 
program participants generally under this subsection or subsection (b).
    ``(B) The activities and transactions prohibited by subparagraph 
(A) include--
            ``(i) the buying, selling, or receiving (except by 
        inheritance) of any legal or beneficial ownership of stock or 
        any other ownership interest or the right to acquire any such 
        interest;
            ``(ii) the entering into or execution of any written or 
        oral agreement (whether or not legally enforceable) to purchase 
        or otherwise obtain any right or interest described in clause 
        (i); and
            ``(iii) the receipt of any other benefit or right that may 
        be an incident of ownership.
    ``(C)(i) The employees designated in clause (ii) shall annually 
submit a written certification to the Administration regarding 
compliance with the requirements of this paragraph.
    ``(ii) The employees referred to in clause (i) are--
            ``(I) regional administrators;
            ``(II) district directors;
            ``(III) the Associate Administrator for Veterans Programs;
            ``(IV) employees whose principal duties relate to the award 
        of contracts or the provision of other assistance pursuant to 
        this subsection or subsection (b); and
            ``(V) such other employees as the Administrator may deem 
        appropriate.
    ``(iii) Any present or former employee of the Administration who 
violates this paragraph shall be subject to a civil penalty, assessed 
by the Attorney General, that shall not exceed 300 percent of the 
maximum amount of gain such employee realized or could have realized as 
a result of engaging in those activities and transactions prescribed by 
subparagraph (B).
    ``(iv) In addition to any other remedy or sanction provided for 
under law or regulation, any person who falsely certifies pursuant to 
clause (i) shall be subject to a civil penalty under the Program Fraud 
Civil Remedies Act of 1986 (31 U.S.C. 3801-3812).
    ``(13)(A) Any employee of the Administration who has authority to 
take, direct others to take, recommend, or approve any action with 
respect to any program or activity conducted pursuant to this 
subsection or subsection (b), shall not, with respect to any such 
action, exercise or threaten to exercise such authority on the basis of 
the political activity or affiliation of any party. Employees of the 
Administration shall expeditiously report to the Inspector General of 
the Administration any such action for which such employee's 
participation has been solicited or directed.
    ``(B) Any employee who willfully and knowingly violates 
subparagraph (A) shall be subject to disciplinary action, imposed by 
the Administrator, which may consist of separation from service, 
reduction in grade, suspension, or reprimand.
    ``(C) Subparagraph (A) shall not apply to any action taken as a 
penalty or other enforcement of a violation of any law, rule, or 
regulation prohibiting or restricting political activity.
    ``(D) The prohibitions of subparagraph (A), and remedial measures 
provided for under subparagraphs (B) and (C) with regard to such 
prohibitions, shall be in addition to, and not in lieu of, any other 
prohibitions, measures, or liabilities that may arise under any other 
provision of law.
    ``(14)(A) Small business concerns participating in the program 
under subsection (b) and eligible to receive contracts pursuant to this 
subsection shall semiannually report to their assigned veterans 
business counselor the following:
            ``(i) A listing of any agents, representatives, attorneys, 
        accountants, consultants, and other parties (other than 
        employees) receiving compensation to assist in obtaining a 
        Federal contract for such program participant.
            ``(ii) The amount of compensation received by any person 
        listed under clause (i) during the relevant reporting period 
        and a description of the activities performed in return for 
        such compensation.
    ``(B) The veterans business counselor shall promptly review and 
forward such report to the Associate Administrator for Veterans 
Programs. Any report that raises a suspicion of improper activity shall 
be reported immediately to the Inspector General of the Administration.
    ``(C) The failure to submit a report pursuant to the requirements 
of this subsection and applicable regulations shall be considered `good 
cause' for the initiation of a termination proceeding pursuant to 
subsection (b)(1)(F).
    ``(15)(A) Subject to the provisions of subparagraph (B), a contract 
(including options) awarded pursuant to this subsection shall be 
performed by the concern that initially received such contract. 
Notwithstanding the provisions of the preceding sentence, if the owner 
or owners upon whom eligibility was based relinquish ownership or 
control of such concern, or enter into any agreement to relinquish such 
ownership or control, such contract or option shall be terminated for 
the convenience of the Government, except that no repurchase costs or 
other damages may be assessed against such concerns due solely to the 
provisions of this subparagraph.
    ``(B) The Administrator may, as a matter of discretion and on a 
nondelegable basis, waive the requirements of subparagraph (A) if 
requested to do so prior to the actual relinquishment of ownership or 
control. In addition to the requirement of the preceding sentence, a 
waiver may be given only if any of the following conditions exist:
            ``(i) It is necessary for the owners of the concern to 
        surrender partial control of such concern on a temporary basis 
        in order to obtain equity financing.
            ``(ii) The head of the contracting agency for which the 
        contract is being performed certifies that termination of the 
        contract would severely impair attainment of the agency's 
        program objectives or missions.
            ``(iii) Ownership and control of the concern that is 
        performing the contract will pass to another small business 
        concern that is a program participant, but only if the 
        acquiring firm would otherwise be eligible to receive the award 
        directly pursuant to this subsection.
            ``(iv) The individuals upon whom eligibility was based are 
        no longer able to exercise control of the concern due to 
        incapacity or death.
            ``(v) In order to raise equity capital, it is necessary for 
        the owners of the concern upon whom eligibility was based to 
        relinquish ownership of a majority of the voting stock of such 
        concern, but only if--
                    ``(I) such concern has exited the eligible veterans 
                business opportunity and development assistance 
                program;
                    ``(II) such owners will maintain ownership of the 
                largest single outstanding block of voting stock 
                (including stock held by affiliated parties); and
                    ``(III) such owners will maintain control of daily 
                business operations.
    ``(C) Concerns performing contracts awarded pursuant to this 
subsection shall be required to notify the Administration immediately 
upon entering an agreement (either oral or in writing) to transfer all 
or part of its stock or other ownership interest to any other party.
    ``(D) Notwithstanding any other provision of law, for the purposes 
of determining ownership and control of a concern under this section, 
any potential ownership interests held by investment companies licensed 
under the Small Business Investment Act of 1958 shall be treated in the 
same manner as interests held by the individuals upon whom eligibility 
is based.
    ``(b)(1) There is established within the Administration an eligible 
veterans business opportunity and development assistance program 
(hereinafter in this section referred to as the `program') which shall 
provide assistance exclusively for small business concerns eligible to 
receive contracts pursuant to subsection (a). The program, and all 
other services and activities authorized under this subsection and 
subsection (a), shall be managed by the Associate Administrator for 
Veterans Programs under the supervision of, and responsible to, the 
Administrator:
            ``(A) The program shall--
                    ``(i) assist small business concerns participating 
                in the program (either through public or private 
                organizations) to develop and maintain comprehensive 
                business plans which set forth the program 
                participant's specific business targets, objectives, 
                and goals developed and maintained in conformity with 
                subparagraph (D);
                    ``(ii) provide for such other nonfinancial services 
                as deemed necessary for the establishment, 
                preservation, and growth of small business concerns 
                participating in the program, including (I) loan 
                packaging, (II) financial counseling, (III) marketing 
                assistance, and (IV) management assistance;
                    ``(iii) assist small business concerns 
                participating in the program to obtain equity and debt 
                financing;
                    ``(iv) establish regular performance monitoring and 
                reporting systems for small business concerns 
                participating in the program to assure compliance with 
                their business plans;
                    ``(v) analyze and report the causes of success and 
                failure of small business concerns participating in the 
                program; and
                    ``(vi) provide assistance necessary to help small 
                business concerns participating in the program to 
                procure surety bonds, including (I) the preparation of 
                application forms required to receive a surety bond, 
                (II) special management and technical assistance 
                designed to meet specific needs of small business 
                concerns participating in the program and which have 
                received or are applying to receive a surety bond, and 
                (III) preparation of all forms necessary to receive a 
                surety bond guarantee from the Administration pursuant 
                to title IV, part B of the Small Business Investment 
                Act of 1958.
            ``(B) Small business concerns eligible to receive contracts 
        pursuant to subsection (a) shall participate in the program.
            ``(C)(i) A small business concern participating in any 
        program or activity conducted under the authority of this 
        subsection shall be permitted continued participation and 
        eligibility in such program or activity for a period of 5 years 
        from the date of certification for program participation.
            ``(ii) Nothing contained in this subparagraph shall be 
        deemed to prevent the Administration from instituting a 
        termination or graduation pursuant to subparagraph (F) or (J) 
        for issues unrelated to the expiration of any time period 
        limitation.
            ``(D)(i) Promptly after certification under paragraph (2) a 
        program participant shall submit a business plan (hereinafter 
        in this section referred to as the `plan') as described in 
        clause (ii) of this subparagraph for review by the veterans 
        business counselor assigned to assist such program participant. 
        The plan may be a revision of a preliminary business plan 
        submitted by the program participant or required by the 
        Administration as a part of the application for certification 
        under this section. Such plan, and subsequent modifications 
        submitted under clause (iii) of this subparagraph, shall be 
        approved by the veterans business counselor prior to the 
        program participant being eligible for award of a contract 
        pursuant to subsection (a).
            ``(ii) The plans submitted under this subparagraph shall 
        include the following:
                    ``(I) An analysis of market potential and other 
                business analyses estimating the program participant's 
                prospects for profitable operations during the term of 
                program participation and after graduation.
                    ``(II) An analysis of the program participant's 
                strengths and weaknesses with particular attention to 
                financial, managerial, technical, and personnel 
                conditions which are likely to impede small business 
                concerns from receiving contracts other than those 
                awarded under subsection (a).
                    ``(III) Specific targets, objectives, and goals for 
                the business development of the program participant 
                during the next and succeeding years utilizing the 
                results of the analyses conducted pursuant to 
                subclauses (I) and (II).
                    ``(IV) A transition management plan outlining 
                specific steps to assure profitable business operations 
                after graduation (to be incorporated into the program 
                participant's plan during the first year of the 
                transitional stage of program participation).
                    ``(V) Estimates of contract awards pursuant to 
                subsection (a) and from other sources which the program 
                participant will require to meet the specific targets, 
                objectives, and goals for the years covered by its 
                plan. The estimates established shall be consistent 
                with the provisions of subparagraph (I) and subsection 
                (a).
            ``(iii) Each program participant shall annually review its 
        currently approved plan with its veterans business counselor 
        and modify such plan as may be appropriate. Any modified plan 
        shall be submitted to the Administration for approval. The 
        currently approved plan shall be considered valid until such 
        time as a modified plan is approved by the veterans business 
        counselor. Annual reviews pertaining to years in the 
        transitional stage of program participation shall require, as 
        appropriate, a written verification that such program 
        participant has complied with the requirements of subparagraph 
        (I).
            ``(iv) Each program participant shall annually forecast its 
        needs for contract awards under subsection (a) for the next 
        program year and the succeeding program year during the review 
        of its business plan, conducted pursuant to clause (iii). Such 
        forecast shall be known as the section 30(a) contract support 
        level and shall be included in the program participant's 
        business plan. Such forecast shall include--
                    ``(I) the aggregate dollar value of contract 
                support to be sought under subsection (a), reflecting 
                compliance with the requirements of subparagraph (I),
                    ``(II) the types of contract opportunities being 
                sought, identified by Standard Industrial 
                Classification (SIC) Code or otherwise,
                    ``(III) such other information as may be requested 
                by the veterans business counselor to provide effective 
                business development assistance to the program 
                participant.
            ``(E) A small business concern participating in the program 
        conducted under the authority of this subsection and eligible 
        for the award of contracts pursuant to subsection (a) shall be 
        denied all such assistance if such concern--
                    ``(i) voluntarily elects not to continue 
                participation;
                    ``(ii) participates in the program for a period in 
                excess of the time limits prescribed by paragraph (6);
                    ``(iii) is terminated pursuant to a termination 
                proceeding conducted in accordance with subsection 
                (a)(6); or
                    ``(iv) is graduated pursuant to a graduation 
                proceeding conducted in accordance with subsection 
                (a)(6).
            ``(F) For the purposes of this section, the terms 
        `terminated' or `termination' mean the total denial or 
        suspension of any assistance provided pursuant to this section 
        prior to the graduation of the participating small business 
        concern pursuant to subparagraph (H) or the expiration of the 
        maximum program participation in terms prescribed by paragraph 
        (6). An action for termination shall be based upon good cause, 
        including--
                    ``(i) the failure by such concern to maintain its 
                eligibility for program participation;
                    ``(ii) a demonstrated pattern of unjustified 
                delinquent performance or terminations for default with 
                respect to contracts awarded under the authority of 
                subsection (a);
                    ``(iii) a demonstrated pattern of failing to make 
                required submissions or responses to the Administration 
                in a timely manner;
                    ``(iv) the willful violation of any rule or 
                regulation of the Administration pertaining to material 
                issues;
                    ``(v) the debarment of the concern or its eligible 
                veteran owners by any agency pursuant to subpart 9.4 of 
                title 48, Code of Federal Regulations (or any successor 
                regulation); or
                    ``(vi) the conviction of the eligible veteran owner 
                or an officer of the concern for any offense indicating 
                a lack of business integrity including any conviction 
                for embezzlement, theft, forgery, bribery, 
                falsification or violation of section 16. For purposes 
                of this clause, no termination action shall be taken 
                with respect to an eligible veteran owner solely 
                because of the conviction of an officer of the concern 
                (who is other than an eligible veteran owner) unless 
                such owner conspired with, abetted, or otherwise 
                knowingly acquiesced in the activity or omission that 
                was the basis of such officer's conviction.
            ``(G) The Director of the Division may initiate a 
        termination proceeding by recommending such action to the 
        Associate Administrator for Veterans Programs. Whenever the 
        Associate Administrator, or a designee of such officer, 
        determines such termination is appropriate, within 15 days 
        after making such a determination the program participant shall 
        be provided a written notice of intent to terminate, specifying 
        the reasons for such action. No program participant shall be 
        terminated from the program pursuant to subparagraph (F) 
        without first being afforded an opportunity for a hearing in 
        accordance with subsection (a)(6).
            ``(H) For the purposes of this section, the term 
        `graduated' or `graduation' means that the program participant 
        is recognized as successfully completing the program by 
        substantially achieving the targets, objectives, and goals 
        contained in the concern's business plan.
            ``(I)(i) During the developmental stage of its 
        participation in the program, a program participant shall take 
        all reasonable efforts within its control to attain the targets 
        contained in its business plan for contracts awarded other than 
        pursuant to subsection (a) (hereinafter referred to as 
        `business activity targets'). Such efforts shall be made a part 
        of the business plan and shall be sufficient in scope and 
        duration to satisfy the Administration that the program 
        participant will engage in a reasonable marketing strategy that 
        will maximize its potential to achieve its business activity 
        targets.
            ``(ii) During the transitional stage of the program, a 
        program participant shall be subject to regulations regarding 
        business activity targets that are promulgated by the 
        Administration pursuant to clause (iii).
            ``(iii) The regulations referred to in clause (ii) shall--
                    ``(I) establish business activity targets 
                applicable to program participants during the 4th and 
                5th year of program participation; such targets, for 
                such period of time, shall reflect a reasonably 
consistent increase in contracts awarded other than pursuant to 
subsection (a), expressed as a percentage of total sales;
                    ``(II) require a program participant to attain its 
                business activity targets;
                    ``(III) provide that, before the receipt of any 
                contract to be awarded pursuant to subsection (a), the 
                program participant (if it is in the transitional 
                stage) must certify that it has complied with the 
                regulations promulgated pursuant to subclause (II), or 
                that it is in compliance with such remedial measures as 
                may have been ordered pursuant to regulations issued 
                under subclause (V);
                    ``(IV) require the Administration to review each 
                program participant's performance regarding attainment 
                of business activity targets during periodic reviews of 
                such participant's business plan; and
                    ``(V) authorize the Administration to take 
                appropriate remedial measures with respect to a program 
                participant that has failed to attain a required 
                business activity target for the purpose of reducing 
                such participant's dependence on contracts awarded 
                pursuant to subsection (a), including assisting the 
                program participant to expand the dollar volume of its 
                competitive business activity or limiting the dollar 
                volume of contracts awarded to the program participant 
                pursuant to subsection (a); except for actions that 
                would constitute a termination, remedial measures taken 
                pursuant to this subclause shall not be reviewable 
                pursuant to subsection (a)(6).
    ``(2)(A) The Associate Administrator for Veterans Programs shall be 
responsible for coordinating and formulating policies relating to 
Federal assistance to small business concerns eligible to receive 
contracts pursuant to subsection (a).
    ``(B) Any individual upon whom eligibility is based pursuant to 
subsection (a), shall be permitted to assert such eligibility for only 
1 small business concern.
    ``(C) No concern, previously eligible for the award of contracts 
pursuant to subsection (a), shall be subsequently recertified for 
program participation if its prior participation in the program was 
concluded for any of the reasons described in paragraph (1)(E).
    ``(D) A concern eligible for the award of contracts pursuant to 
this subsection shall remain eligible for such contracts if there is a 
transfer of ownership and control (as defined pursuant to subsection 
(a)(3)) to individuals who are determined to be eligible veterans 
pursuant to subsection (a). In the event of such a transfer, the 
concern, if not terminated or graduated, shall be eligible for a period 
of continued participation in the program not to exceed the time 
limitations prescribed in paragraph (6).
    ``(E) There is established a Division of Program Certification and 
Eligibility (hereinafter referred to as the `Division') that shall be 
made part of the Office of Veterans Programs. The Division shall be 
headed by a Director who shall report directly to the Associate 
Administrator for Veterans Programs. The Division shall establish field 
offices within such regional offices of the Administration as may be 
necessary to perform efficiently its functions and responsibilities.
    ``(F) Subject to the provisions of subsection (a)(6), the functions 
and responsibility of the Division are to--
            ``(i) receive, review, and evaluate applications for 
        certification pursuant to paragraphs (3) and (4) of subsection 
        (a);
            ``(ii) advise each program applicant within 15 days after 
        the receipt of an application as to whether such application is 
        complete and suitable for evaluation and, if not, what matters 
        must be rectified;
            ``(iii) render recommendations on such applications to the 
        Associate Administrator for Veterans Programs;
            ``(iv) review and evaluate financial statements and other 
        submissions from concerns participating in the program 
        established by this subsection to ascertain continued 
        eligibility to receive subcontracts pursuant to subsection (a);
            ``(v) make a request for the initiation of termination or 
        graduation proceedings, as appropriate, with the Associate 
        Administrator for Veterans Programs;
            ``(vi) decide protests from applicants that have been 
        denied program admission; and
            ``(vii) decide protests regarding the status of a concern 
        as a concern owned and controlled by eligible veterans for 
        purposes of any program or activity conducted under the 
        authority of subsection (d) of section 8, or any other 
        provision of Federal law that references such subsection for a 
        definition of program eligibility; and
            ``(viii) implement such policy directives as may be issued 
        by the Associate Administrator for Veterans Programs pursuant 
        to subparagraph (H) regarding, among other things, the 
        geographic distribution of concerns to be admitted to the 
        program and the industrial make-up of such concerns.
    ``(G) An applicant shall not be denied admission into the program 
due solely to a determination by the Division that specific contract 
opportunities are unavailable to assist in the development of such 
concern unless--
            ``(i) the Government has not previously procured and is 
        unlikely to procure the types of products or services offered 
        by the concern; or
            ``(ii) the purchases of such products or services by the 
        Federal Government will not be in quantities sufficient to 
        support the developmental needs of the applicant and other 
        program participants providing the same or similar items or 
        services.
    ``(H) Thirty days before the conclusion of each fiscal year, the 
Director of the Division shall review all concerns that have been 
admitted into the program during the preceding 12-month period. The 
review shall ascertain the number of entrants, their geographic 
distribution and industrial classification. The Director shall also 
estimate the expected growth of the program during the next fiscal year 
and the number of additional veterans business counselors, if any, that 
will be needed to meet the anticipated demand for the program. The 
findings and conclusions of the Director shall be reported to the 
Associate Administrator for Veterans Programs by September 30 of each 
year. Based on such report and such additional data as may be relevant, 
the Associate Administrator shall, by October 31 of each year, issue 
policy and program directives applicable to such fiscal year that--
            ``(i) establish priorities for the solicitation of program 
        applications from underrepresented regions and industry 
        categories;
            ``(ii) assign staffing levels and allocate other program 
        resources as necessary to meet program needs; and
            ``(iii) establish priorities in the processing and 
        admission of new program participants as may be necessary to 
        achieve an equitable geographic distribution of concerns and a 
        distribution of concerns across all industry categories in 
        proportions needed to increase significantly contract awards to 
        small business concerns owned and controlled by eligible 
        veterans. When considering such increase the Administration 
        shall give due consideration to those industrial categories 
        where Federal purchases have been substantial but where the 
        participation rate of such concerns has been limited.
    ``(I)(i) The Administration shall conduct an evaluation of a 
program participant's eligibility for continued participation in the 
program whenever it receives specific and credible information alleging 
that such program participant no longer meets the requirements for 
program eligibility. Upon making a finding that a program participant 
is no longer eligible, the Administration shall initiate a termination 
proceeding in accordance with subparagraph (F). A program participant's 
eligibility for award of any contract under the authority of subsection 
(a) may be suspended or terminated pursuant to subpart 9.4 of title 48, 
Code of Federal Regulations (or any successor regulation).
    ``(ii) No award shall be made pursuant to subsection (a) to other 
than a small business concern.
    ``(3)(A) The Administration shall segment the program into two 
stages: a developmental stage; and a transitional stage.
    ``(B) The developmental stage of program participation shall be 
designed to assist the concern to access its markets and to strengthen 
its financial and managerial skills.
    ``(C) The transitional stage of program participation shall be 
designed to prepare such concern for graduation from the program.
    ``(4) A program participant, if otherwise eligible, shall be 
qualified to receive the following assistance during the stages of 
program participation specified in paragraph (3):
            ``(A) Contract support pursuant to subsection (a).
            ``(B) Financial assistance pursuant to section 7(a).
            ``(C) Training assistance whereby the Administration shall 
        conduct training sessions to assist individuals and enterprises 
        eligible to receive contracts under subsection (a) in the 
        development of business principles and strategies to enhance 
        their ability to successfully compete for contracts in the 
        marketplace.
            ``(D) Joint ventures, leader-follow arrangements, and 
        teaming agreements between the program participant and other 
        program participants and other business concerns with respect 
        to contracting opportunities for the research, development, 
        full-scale engineering or production of major systems. Such 
        activities shall be undertaken on the basis of programs 
        developed by the agency responsible for the procurement of the 
        major system, with the assistance of the Administration.
            ``(E) Transitional management business planning training 
        and technical assistance.
    ``(5) Program participants in the developmental stage of program 
participation shall be eligible for the assistance provided by 
subparagraphs (A), (B), and (C) of paragraph (4). Program participants 
in the transitional stage of program participation shall be eligible 
for the assistance provided by subparagraphs (A), (B), (D), and (E) of 
paragraph (4).
    ``(6) Subject to the provisions of paragraph (1)(C), a small 
business concern may receive developmental assistance under the program 
and contracts under subsection (a) for a total period of not longer 
than 5 years, measured from the date of its certification under the 
authority of such section, of which--
            ``(A) no more than 3 years may be spent in the 
        developmental stage of program participation; and
            ``(B) no more than 2 years may be spent in the transitional 
        stage of program participation.
    ``(7)(A) The Administrator shall develop and implement a process 
for the systematic collection of data on the operations of the program 
established pursuant to paragraph (1).
    ``(B) Not later than April 30 of each year, the Administrator shall 
submit a report to the Congress on the program that shall include the 
following:
            ``(i) The average personal net worth of individuals who own 
        and control concerns that were initially certified for 
        participation in the program during the immediately preceding 
        fiscal year. The Administrator shall also indicate the dollar 
        distribution of net worths, at $50,000 increments, of all such 
        individuals.
            ``(ii) A description and estimate of the benefits and costs 
        that have accrued to the economy and the Government in the 
        immediately preceding fiscal year due to the operations of 
        those business concerns that were performing contracts awarded 
        pursuant to subsection (a).
            ``(iii) A listing of all participants in the program during 
        the preceding fiscal year identifying, by State and by Region, 
        for each firm: the name of the concern, the race or ethnicity, 
        and gender of the eligible veteran owners, the dollar value of 
        all contracts received in the preceding year, the dollar amount 
        of advance payments received by each concern pursuant to 
        contracts awarded under subsection (a), and a description 
        including (if appropriate) an estimate of the dollar value of 
        all benefits received pursuant to paragraphs (4) and (5) and 
        section 7(a) during such year.
            ``(iv) The total dollar value of contracts and options 
        awarded during the preceding fiscal year pursuant to subsection 
        (a) and such amount expressed as a percentage of total sales of 
        (I) all firms participating in the program during such year; 
        and (II) of firms in each of the 5 years of program 
        participation.
            ``(v) A description of such additional resources or program 
        authorities as may be required to provide the types of services 
        needed over the next 2-year period to service the expected 
        portfolio of firms certified pursuant to subsection (a).
            ``(vi) The total dollar value of contracts and options 
        awarded pursuant to subsection (a), at such dollar increments 
        as the Administrator deems appropriate, for each four digit 
        Standard Industrial Classification (SIC) Code under which such 
        contracts and options were classified.
    ``(C) The first report required by subparagraph (B) shall pertain 
to the first fiscal year beginning after the date of the enactment of 
this section.
    ``(c) In carrying out its functions under this section, the 
Administration is authorized--
            ``(1) to utilize, with their consent, the services and 
        facilities of Federal agencies without reimbursement, and, with 
        the consent of any State or political subdivision of a State, 
        accept and utilize the services and facilities of such State or 
        subdivision without reimbursement;
            ``(2) to accept, in the name of the Administration, and 
        employ or dispose of in furtherance of the purposes of this 
        Act, any money or property, real, personal, or mixed, tangible, 
        or intangible, received by gift, devise, bequest, or otherwise;
            ``(3) to accept voluntary and uncompensated services, 
        notwithstanding the provisions of section 1342 of title 31, 
        United States Code; and
            ``(4) to employ experts and consultants or organizations 
        thereof as authorized by section 3109 of title 5, United States 
        Code; except that no individual may be employed under the 
        authority of this subsection for more than 100 days in any 
        fiscal year; to compensate individuals so employed at rates not 
        in excess of the daily equivalent of the highest rate payable 
        under section 5332 of such title, including travel time; and to 
        allow them, while away from their homes or regular places of 
        business, travel expenses (including per diem in lieu of 
        subsistence) as authorized by section 5703 of such title for 
        persons in the Government service employed intermittently, 
        while so employed: Provided, however, That contracts for such 
        employment may be renewed annually.''.

SEC. 16. AUTHORIZATION OF APPROPRIATIONS.

    There is authorized to be appropriated the following amounts:
            (1) For salaries and expenses of the Office of Veterans 
        Programs of the Small Business Administration and its divisions 
        $4,000,000 per fiscal year for each of fiscal years 1997, 1998, 
        and 1999.
            (2) For training and education of personnel in the Office 
        of Veterans Programs of the Small Business Administration and 
        its divisions--
                    (A) $350,000 for fiscal year 1997;
                    (B) $200,000 for fiscal year 1998; and
                    (C) $175,000 for fiscal year 1999.
            (3) To carry out section 8(b)(17) of the Small Business 
        Act, as added by section 11 of this Act, $1,250,000 per fiscal 
        year for each of fiscal years 1997, 1998, and 1999.
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