I 

115TH CONGRESS 

2D SESSION H. R. 7206 

To amend titles 41 and 10 of the United States Code to establish certain 

procurement procedures with respect to businesses wholly-owned through 

an ESOP, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 30, 2018 

Mr. BUCSHON introduced the following bill; which was referred to the Committee on Oversight and Government Reform, and in addition to the 

Committee on Armed Services, 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 titles 41 and 10 of the United States Code to 

establish certain procurement procedures with respect 

to businesses wholly-owned through an ESOP, 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 referred to as the ‘‘ESOP Business 

5 Act of 2018’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 


tkelley on DSKBCP9HB2PROD with BILLS
2 

•HR 7206 IH

1 (1) Businesses wholly-owned through an 

2 ESOP— 

3 (A) offer unique benefits to the United 

4 States and to customers of such businesses; 

5 (B) provide better retirement security, 

6 work culture, and wage growth for workers; and 

7 (C) reduce wealth inequality among man8 agers and employees. 

9 (2) Current Federal contracting laws may inad10 vertently exclude businesses wholly-owned through 

11 an ESOP from key projects. 

12 (3) The growth of the number businesses whol13 ly-owned through an ESOP benefits employees of 

14 such businesses. 

15 SEC. 3. SENSE OF CONGRESS. 

16 It is the sense of Congress that— 

17 (1) businesses wholly-owned through an ESOP 

18 are beneficial to the economy; 

19 (2) Congress should provide incentives for busi20 nesses to become businesses wholly-owned through 

21 an ESOP; and 

22 (3) businesses wholly-owned through an ESOP 

23 should be rewarded through the Federal contracting 

24 process for the benefits that such businesses provide. 


tkelley on DSKBCP9HB2PROD with BILLS
3 

•HR 7206 IH

1 SEC. 4. FULL AND OPEN CONTRACT COMPETITION FOR 

2 BUSINESSES WHOLLY-OWNED THROUGH AN 

3 ESOP. 

4 (a) FULL AND OPEN CONTRACT COMPETITION.— 

5 Section 3301 of title 41, United States Code, is amend6 ed— 

7 (1) in subsection (a), by inserting ‘‘in sub8 section (d) and’’ before ‘‘in sections 3303, 3304(a), 

9 and 3305’’; and 

10 (2) by adding at the end the following: 

11 ‘‘(d) BUSINESSES WHOLLY-OWNED THROUGH AN

12 ESOP.—A business wholly-owned through an ESOP may 

13 submit a bid to an executive agency conducting a procure14 ment for property or services under section 3303, 3304(a), 

15 or 3305.’’. 

16 (b) USE OF NONCOMPETITIVE PROCEDURES.—Sec17 tion 3304(b) of title 41, United States Code, is amended— 

18 (1) in paragraph (1), by striking ‘‘or’’ after 

19 ‘‘procurement;’’; 

20 (2) in paragraph (2)(B), by striking the period 

21 and inserting ‘‘; or’’; and 

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

23 ‘‘(3) a follow-on contract for a contract award24 ed to a business wholly-owned through an ESOP if 

25 the executive agency rates the performance of such 

26 business on the original contract as satisfactory or 


tkelley on DSKBCP9HB2PROD with BILLS
4 

•HR 7206 IH

1 better in the Contractor Performance Assessment 

2 Reporting System (or a successor system).’’. 

3 (c) DEFINITION OF BUSINESS WHOLLY-OWNED

4 THROUGH AN ESOP.— 

5 (1) TITLE 10.—Section 2302 of title 10, 

6 United States Code, is amended by adding at the 

7 end the following: 

8 ‘‘(10) The term ‘business wholly-owned through 

9 an ESOP’ has the meaning given the term in section 

10 117 of title 41.’’. 

11 (2) TITLE 41.—Chapter 1 of title 41, United 

12 States Code, is amended by adding after section 116 

13 the following new section: 

14 ‘‘§ 117. Business wholly-owned through an ESOP 

15 ‘‘In this subtitle, the term ‘business wholly-owned 

16 through an ESOP’ means a business for which 100 per17 cent of the outstanding stock is held through an employee 

18 stock ownership plan (as defined in section 4795(e)(7) of 

19 title 26).’’. 

20 (d) PRICING PREFERENCE.—Section 2304 of title 

21 10, United States Code, is amended by adding at the end 

22 the following: 

23 ‘‘(m) For a contract awarded pursuant to this sec24 tion, the head of the agency may enter into a contract 

25 with a business wholly-owned through an ESOP using a 


tkelley on DSKBCP9HB2PROD with BILLS
5 

•HR 7206 IH

1 price evaluation preference not in excess of 10 percent 

2 when evaluating an offer received from such a business.’’. 

3 (e) INCLUSION IN CONTRACT GOALS.—Section 

4 2323(a) of title 10, United States Code, is amended by 

5 adding at the end the following: 

6 ‘‘(4) For the purposes of this subsection, a 

7 business wholly-owned through an ESOP shall be 

8 considered a small business concern.’’. 

Æ 


tkelley on DSKBCP9HB2PROD with BILLS