Defending America's Small Contractors Act of 2016

To amend the Small Business Act to improve transparency and clarity for small businesses, to clarify the role of small business advocates, to increase opportunities for competition in subcontracting, and for other purposes. 1. Short title (a) Short title This Act may be cited as the Defending America’s Small Contractors Act of 2016 (b) Table of contents The table of contents for this Act is as follows: Sec. 1. Short title. Title I—Improving Transparency and Clarity for Small Businesses Sec. 101. Plain language rewrite of requirements for small business procurements. Sec. 102. Improving reporting on small business goals. Sec. 103. Transparency in small business goals. Sec. 104. Uniformity in procurement terminology. Title II—Clarifying the Roles of Small Business Advocates Sec. 201. Scope of review by procurement center representatives. Sec. 202. Responsibilities of Commercial Market Representatives. Sec. 203. Duties of the Office of Small and Disadvantaged Business Utilization. Sec. 204. Improving contractor compliance. Sec. 205. Responsibilities of Business Opportunity Specialists. Title III—Strengthening Opportunities for Competition in Subcontracting Sec. 301. Good faith in subcontracting. Sec. 302. Pilot program to provide opportunities for qualified subcontractors to obtain past performance ratings. Title IV—Mentor-Protege Programs Sec. 401. Amendments to the Mentor-Protege Program of the Department of Defense. Sec. 402. Improving cooperation between the mentor-protege programs of the Small Business Administration and the Department of Defense. Title V—Miscellaneous Sec. 501. Improving education on small business regulations. Sec. 502. Protecting task order competition. Sec. 503. Improvements to size standards for small agricultural producers. Sec. 504. Uniformity in service-disabled veteran definitions. Sec. 505. GAO review of the Office of Government Contracting and Business Development of the Small Business Administration. Sec. 506. Required reports pertaining to capital planning and investment control. Sec. 507. GAO review of surety bonds. I Improving Transparency and Clarity for Small Businesses 101. Plain language rewrite of requirements for small business procurements Section 15(a) of the Small Business Act ( 15 U.S.C. 644(a) (a) Small business procurements (1) In general For purposes of this Act, small business concerns shall receive any award or contract if such award or contract is, in the determination of the Administrator and the contracting agency, in the interest of— (A) maintaining or mobilizing the full productive capacity of the United States; (B) war or national defense programs; or (C) assuring that a fair proportion of the total purchase and contracts for goods and services of the Government in each industry category (as described under paragraph (2)) are awarded to small business concerns. (2) Industry category defined (A) In general In this subsection, the term industry category (i) due to special capital equipment needs; (ii) due to special labor requirements; (iii) due to special geographic requirements, except as provided in subparagraph (B); (iv) due to unique Federal buying patterns or requirements; or (v) to recognize a new industry. (B) Exception for geographic requirements The Administrator may not further segment an industry category based on geographic requirements unless— (i) the Government typically designates the geographic area where work for contracts for goods or services is to be performed; (ii) Government purchases comprise the major portion of the entire domestic market for such goods or services; and (iii) it is unreasonable to expect competition from business concerns located outside of the general geographic area due to the fixed location of facilities, high mobilization costs, or similar economic factors. (3) Determinations with respect to awards or contracts Determinations made pursuant to paragraph (1) may be made for individual awards or contracts, any part of an award or contract or task order, or for classes of awards or contracts or task orders. (4) Increasing prime contracting opportunities for small business concerns (A) Description of covered proposed procurements The requirements of this paragraph shall apply to a proposed procurement that includes in its statement of work goods or services currently being supplied or performed by a small business concern and, as determined by the Administrator— (i) is in a quantity or of an estimated dollar value which makes the participation of a small business concern as a prime contractor unlikely; (ii) in the case of a proposed procurement for construction, if such proposed procurement seeks to bundle or consolidate discrete construction projects; or (iii) is a solicitation that involves an unnecessary or unjustified bundling of contract requirements. (B) Notice to procurement center representatives With respect to proposed procurements described in subparagraph (A), at least 30 days before issuing a solicitation and concurrent with other processing steps required before issuing the solicitation, the contracting agency shall provide a copy of the proposed procurement to the procurement center representative of the contracting agency (as described in subsection (l)) along with a statement explaining— (i) why the proposed procurement cannot be divided into reasonably small lots (not less than economic production runs) to permit offers on quantities less than the total requirement; (ii) why delivery schedules cannot be established on a realistic basis that will encourage the participation of small business concerns in a manner consistent with the actual requirements of the Government; (iii) why the proposed procurement cannot be offered to increase the likelihood of the participation of small business concerns; (iv) in the case of a proposed procurement for construction, why the proposed procurement cannot be offered as separate discrete projects; or (v) why the agency has determined that the bundling of contract requirements is necessary and justified. (C) Alternatives to increase prime contracting opportunities for small business concerns If the procurement center representative believes that the proposed procurement will make the participation of small business concerns as prime contractors unlikely, the procurement center representative, within 15 days after receiving the statement described in subparagraph (B), shall recommend to the contracting agency alternative procurement methods for increasing prime contracting opportunities for small business concerns. (D) Failure to agree on an alternative procurement method If the procurement center representative and the contracting agency fail to agree on an alternative procurement method, the Administrator shall submit the matter to the head of the appropriate department or agency for a determination. (5) Contracts for sale of Government property With respect to a contract for the sale of Government property, small business concerns shall receive any such contract if, in the determination of the Administrator and the disposal agency, the award of such contract is in the interest of assuring that a fair proportion of the total sales of Government property be made to small business concerns. (6) Sale of electrical power or other propery Nothing in this subsection shall be construed to change any preferences or priorities established by law with respect to the sale of electrical power or other property by the Federal Government. (7) Costs exceeding fair market price A contract may not be awarded under this subsection if the cost of the contract to the awarding agency exceeds a fair market price. . 102. Improving reporting on small business goals Section 15(h)(2)(E) of the Small Business Act ( 15 U.S.C. 644(h)(2)(E) (1) in clause (i)— (A) in subclause (III), by striking and (B) by adding at the end the following new subclauses: (V) that were purchased by another entity after the initial contract was awarded and as a result of the purchase, would no longer be deemed to be small business concerns for purposes of the initial contract; and (VI) that were awarded using a procurement method that restricted competition to small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, small business concerns owned and controlled by women, or a subset of any such concerns; ; (2) in clause (ii)— (A) in subclause (IV), by striking and (B) by adding at the end the following new subclauses: (VI) that were purchased by another entity after the initial contract was awarded and as a result of the purchase, would no longer be deemed to be small business concerns owned and controlled by service-disabled veterans for purposes of the initial contract; and (VII) that were awarded using a procurement method that restricted competition to qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, small business concerns owned and controlled by women, or a subset of any such concerns; ; (3) in clause (iii)— (A) in subclause (V), by striking and (B) by adding at the end the following new subclauses: (VII) that were purchased by another entity after the initial contract was awarded and as a result of the purchase, would no longer be deemed to be qualified HUBZone small business concerns for purposes of the initial contract; and (VIII) that were awarded using a procurement method that restricted competition to small business concerns owned and controlled by service-disabled veterans, small business concerns owned and controlled by socially and economically disadvantaged individuals, small business concerns owned and controlled by women, or a subset of any such concerns; ; (4) in clause (iv)— (A) in subclause (V), by striking and (B) by adding at the end the following new subclauses: (VII) that were purchased by another entity after the initial contract was awarded and as a result of the purchase, would no longer be deemed to be small business concerns owned and controlled by socially and economically disadvantaged individuals for purposes of the initial contract; and (VIII) that were awarded using a procurement method that restricted competition to small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by women, or a subset of any such concerns; ; (5) in clause (v)— (A) in subclause (IV), by striking and (B) in subclause (V), by inserting and (C) by adding at the end the following new subclause: (VI) that were purchased by another entity after the initial contract was awarded and as a result of the purchase, would no longer be deemed to be small business concerns owned by an Indian tribe other than an Alaska Native Corporation for purposes of the initial contract; ; (6) in clause (vi)— (A) in subclause (IV), by striking and (B) by adding at the end the following new subclause: (VI) that were purchased by another entity after the initial contract was awarded and as a result of the purchase, would no longer be deemed to be small business concerns owned by a Native Hawaiian Organization for purposes of the initial contract; ; (7) in clause (vii)— (A) in subclause (IV), by striking and (B) by adding at the end the following new subclause: (VI) that were purchased by another entity after the initial contract was awarded and as a result of the purchase, would no longer be deemed to be small business concerns owned by an Alaska Native Corporation for purposes of the initial contract; and ; and (8) in clause (viii)— (A) in subclause (VII), by striking and (B) in subclause (VIII), by striking and (C) by adding at the end the following new subclauses: (IX) that were purchased by another entity after the initial contract was awarded and as a result of the purchase, would no longer be deemed to be small business concerns owned and controlled by women for purposes of the initial contract; and (X) that were awarded using a procurement method that restricted competition to small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, or a subset of any such concerns; and . 103. Transparency in small business goals Section 15(g) of the Small Business Act is amended by adding at the end the following new paragraph: (4) Determinations of the total value of contract awards For purposes of the goals established under paragraphs (1) and (2), the total value of contract awards for a fiscal year may not be determined in a manner that excludes the value of a contract based on— (A) where the contract is awarded; (B) where the contract is performed; (C) whether the contract is mandated by Federal law to be performed by an entity other than a small business concern; (D) whether funding for the contract is made available in an appropriations Act, if the contract is subject to the requirements of chapter 33 chapter 137 (E) whether the contract is otherwise subject to the Federal Acquisition Regulation. . 104. Uniformity in procurement terminology (a) In general Section 15(j)(1) of the Small Business Act ( 15 U.S.C. 644(j)(1) greater than $2,500 but not greater than $100,000 greater than the micro-purchase threshold, but not greater than the simplified acquisition threshold (b) Technical amendment Section 3(m) of the Small Business Act ( 15 U.S.C. 632(m) (m) Definitions pertaining to contracting In this Act: (1) Prime contract The term prime contract (2) Prime contractor The term prime contractor (3) Simplified acquisition threshold The term simplified acquisition threshold (4) Micro-purchase threshold The term micro-purchase threshold (5) Total purchase and contracts for property and services The term total purchases and contracts for property and services . II Clarifying the Roles of Small Business Advocates 201. Scope of review by procurement center representatives Section 15(l) of the Small Business Act ( 15 U.S.C. 644(l) (9) Scope of Review The Administrator shall not limit the scope of review by the Procurement Center Representative for any solicitation of a contract or task order without regard to whether the contract or task order or part of the contract or task order is set aside for small business concerns, whether 1 or more contract or task order awards are reserved for small business concerns under a multiple award contract, or whether or not the solicitation would result in a bundled or consolidated contract (as defined in subsection (s)) or a bundled or consolidated task order. . 202. Responsibilities of Commercial Market Representatives Section 4(h) of the Small Business Act (as added by section 865 of the National Defense Authorization Act for Fiscal Year 2016 ( Public Law 114–92 (1) in the subsection heading, by striking Certification requirements for (2) in paragraph (2), by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively (and conforming the margins accordingly); (3) by amending clause (ii) (as so redesignated) to read as follows: (ii) Application The requirements of clause (i) shall be included in any initial job posting for the position of a commercial market representative and shall apply to any person appointed as a commercial market representative after November 25, 2015. ; (4) in clause (i) (as so redesignated), by striking paragraph (1) subparagraph (A) (5) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively (and conforming the margins accordingly); (6) in subparagraph (A) (as so redesignated), by striking paragraph (2) subparagraph (B) (7) by inserting before subparagraph (A) (as so redesignated) the following: (1) Duties The principal duties of a Commercial Market Representative employed by the Administrator and reporting to the senior official appointed by the Administrator with responsibilities under sections 8, 15, 31, and 36 (or the designee of such official) shall be to advance the policies established in section 8(d)(1) relating to subcontracting. Such duties shall include— (A) helping prime contractors to find small business concerns that are capable of performing subcontracts; (B) for contractors awarded contracts containing the clause described in section 8(d)(3), providing— (i) counseling on the contractor’s responsibility to maximize subcontracting opportunities for small business concerns; (ii) instruction on methods and tools to identify potential subcontractors that are small business concerns; and (iii) assistance to increase awards to subcontractors that are small business concerns through visits, training, and reviews of past performance; (C) providing counseling on how a small business concern may promote its capacity to contractors awarded contracts containing the clause described in section 8(d)(3); and (D) conducting periodic reviews of contractors awarded contracts containing the clause described in section 8(d)(3) to assess compliance with subcontracting plans required under section 8(d)(6). (2) Certification requirements . 203. Duties of the Office of Small and Disadvantaged Business Utilization Section 15(k) of the Small Business Act ( 15 U.S.C. 644(k) Public Law 114–92 (1) by striking section 8, 15 or 44 section 8, 15, 31, 36, or 44 (2) by striking sections 8 and 15 sections 8, 15, 31, 36, and 44 (3) in paragraph (10), by striking section 8(a) section 8, 15, 31, or 36 (4) by redesignating paragraphs (15), (16), and (17) as paragraphs (16), (17), and (18), respectively; (5) by inserting after paragraph (14) the following new paragraph: (15) shall review purchases made by the agency greater than the micro-purchase threshold, and less than the simplified acquisition threshold to ensure that the purchases have been made in compliance with the provisions of this Act and have been properly recorded in the Federal Procurement Data System, if the method of payment is a purchase card issued by the Department of Defense pursuant to section 2784 of title 10, United States Code, or by the head of an executive agency pursuant to section 1909 of title 41, United States Code; ; and (6) in paragraph (17) (as so redesignated)— (A) in subparagraph (B), by striking and (B) in subparagraph (C), by striking the period at the end and inserting ; and (C) by adding at the end the following new subparagraph: (D) any failure of the agency to comply with section 8, 15, 31, or 36. . 204. Improving contractor compliance (a) Requirements for the Office of Small and Disadvantaged Business Utilization Section 15(k) of the Small Business Act ( 15 U.S.C. 644(k)(8) (1) by redesignating paragraphs (16), (17), and (18) as paragraphs (17), (18), and (19), respectively; and (2) by inserting after paragraph (15) the following new paragraph: (16) shall provide assistance to a small business concern awarded a contract or subcontract under this Act or under title 10 or title 41, United States Code, in finding resources for education and training on compliance with contracting regulations (including the Federal Acquisition Regulation) after award of such a contract or subcontract. . (b) Requirements under the Mentor-Protege Program of the Department of Defense Section 831(e)(1) of the National Defense Authorization Act for Fiscal Year 1991 ( Public Law 101–510 10 U.S.C. 2302 (1) in subparagraph (B), by striking and (2) in subparagraph (C), by striking the period at the end and inserting ; and (3) by inserting at the end the following new subparagraph: (D) the assistance the mentor firm will provide to the protege firm in understanding contract regulations of the Federal Government and the Department of Defense (including the Federal Acquisition Regulation and the Defense Federal Acquisition Regulation Supplement) after award of a subcontract under this section, if applicable. . (c) Resources for small business concerns Section 15 of the Small Business Act ( 15 U.S.C. 644 (t) Post-Award compliance resources The Administrator shall provide to small business development centers and entities participating in the Procurement Technical Assistance Cooperative Agreement Program under chapter 142 . (d) Requirements for procurement center representatives Section 15(l)(2) of the Small Business Act ( 15 U.S.C. 644(l)(2) (1) by redesignating subparagraph (I) as subparagraph (J); (2) in subparagraph (H), by striking and (3) by inserting after subparagraph (H) the following new subparagraph: (I) assist small business concerns with finding resources for education and training on compliance with contracting regulations (including the Federal Acquisition Regulation) after award of a contract or subcontract; and . (e) Requirements under the mentor-Protege program of the Small Business Administration Section 45(b)(3) of the Small Business Act ( 15 U.S.C. 657r(b)(3) (K) The extent to which assistance with compliance with the requirements of contracting with the Federal Government after award of a contract or subcontract under this section. . 205. Responsibilities of Business Opportunity Specialists Section 4(g) of the Small Business Act (as added by section 865 of the National Defense Authorization Act for Fiscal Year 2016 ( Public Law 114–92 (1) in the subsection heading, by striking Certification requirements for (2) in paragraph (2), by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively (and conforming the margins accordingly); (3) by amending clause (ii) (as so redesignated) to read as follows: (ii) Application The requirements of clause (i) shall be included in any initial job posting for the position of a Business Opportunity Specialist and shall apply to any person appointed as a Business Opportunity Specialist after January 3, 2013. ; (4) in clause (i) (as so redesignated), by striking paragraph (1) subparagraph (A) (5) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively (and conforming the margins accordingly); (6) in subparagraph (A) (as so redesignated), by striking paragraph (2) subparagraph (B) (7) by inserting before subparagraph (A) (as so redesignated) the following: (1) Duties The exclusive duties of a Business Opportunity Specialist employed by the Administrator and reporting to the senior official appointed by the Administrator with responsibilities under sections 8, 15, 31, and 36 (or the designee of such official) shall be to implement sections 7, 8, and 45 and to complete other duties related to contracting programs under this Act. Such duties shall include— (A) with respect to small business concerns eligible to receive contracts and subcontracts pursuant to section 8(a)— (i) providing guidance, counseling, and referrals for assistance with technical, management, financial, or other matters that will improve the competitive viability of such concerns; (ii) identifying causes of success or failure of such concerns; (iii) providing comprehensive assessments of such concerns, including identifying the strengths and weaknesses of such concerns; (iv) monitoring and documenting compliance with the requirements of sections 7 and 8 and any regulations implementing those sections; (v) explaining the requirements of sections 7, 8, 15, 31, 36 and 45; and (vi) advising on compliance with contracting regulations (including the Federal Acquisition Regulation) after award of such a contract or subcontract; (B) reviewing and monitoring compliance with mentor-protege agreements under section 45; (C) representing the interests of the Administrator and small business concerns in the award, modification, and administration of contracts and subcontracts awarded pursuant to section 8(a); and (D) reporting fraud or abuse under section 7, 8, 15, 31, 36 or 45 or any regulations implementing such sections. (2) Certification requirements . III Strengthening Opportunities for Competition in Subcontracting 301. Good faith in subcontracting (a) Transparency in subcontracting goals Section 8(d)(9) of the Small Business Act ( 15 U.S.C. 637(d)(9) (1) by striking (9) The failure (9) Material breach The failure ; (2) in subparagraph (A), by striking or (3) in subparagraph (B), by inserting or (4) by inserting after subparagraph (B) the following: (C) assurances provided under paragraph (6)(E), . (b) Authority of the Administrator of the Small Business Administration Section 8(d)(11) of the Small Business Act ( 15 U.S.C. 637(d)(11) (1) by striking (11) In the case of (11) Authority of Administrator In the case of ; and (2) in subparagraph (B), by striking , which shall be advisory in nature, (c) Review and acceptance of subcontracting plans Section 8(d) of the Small Business Act ( 15 U.S.C. 637(d) (17) Review and acceptance of subcontracting plans (A) Definition In this paragraph, the term covered small business concerns (i) small business concerns; (ii) qualified HUBZone small business concerns; (iii) small business concerns owned and controlled by veterans; (iv) small business concerns owned and controlled by service-disabled veterans; (v) small business concerns owned and controlled by socially and economically disadvantaged individuals, as defined in paragraph (3)(C); and (vi) small business concerns owned and controlled by women. (B) Delayed acceptance of plan Except as provided in subparagraph (E), if a procurement center representative or commercial market representative determines that a subcontracting plan required under paragraph (4) or (5) fails to provide the maximum practicable opportunity for covered small business concerns to participate in the performance of the contract to which the plan applies, the representative may delay acceptance of the plan in accordance with subparagraph (C). (C) Process for delayed acceptance (i) In general Except as provided in clause (ii), a procurement center representative or commercial market representative who makes a determination under subparagraph (B) with respect to a subcontracting plan may delay acceptance of the plan for a 30-day period by providing written notice of the determination to the head of the procuring activity of the contracting agency that includes recommendations for altering the plan to provide the maximum practicable opportunity described in that subparagraph. (ii) Exception In the case of the Department of Defense— (I) a procurement center representative or commercial market representative who makes a determination under subparagraph (B) with respect to a subcontracting plan may delay acceptance of the plan for a 15-day period by providing written notice of the determination to appropriate personnel of the Department of Defense that includes recommendations for altering the plan to provide the maximum practicable opportunity described in that subparagraph; and (II) the authority of a procurement center representative or commercial market representative to delay acceptance of a subcontracting plan as provided in subparagraph (B) does not include the authority to delay the award or performance of the contract concerned. (D) Disagreements If a procurement center representative or commercial market representative delays the acceptance of a subcontracting plan under subparagraph (C) and does not reach agreement with the head of the procuring activity of the contracting agency to alter the plan to provide the maximum practicable opportunity described in subparagraph (B) not later than 30 days after the date on which written notice was provided, the disagreement shall be submitted to the head of the contracting agency by the Administrator for a final determination. (E) Exception A procurement center representative or commercial market representative may not delay the acceptance of a subcontracting plan if the head of the contracting agency certifies that the need of the agency for the supplies or services is of such an unusual and compelling urgency that the United States would be seriously injured unless the agency is permitted to accept the subcontracting plan. . (d) Good faith compliance Not later than 270 days after the date of enactment of this Act, the Administrator of the Small Business Administration shall issue regulations providing examples of activities that would be considered a failure to make a good faith effort to comply with the requirements imposed on an entity (other than a small business concern as defined under section 3 of the Small Business Act ( 15 U.S.C. 632 15 U.S.C. 637(d) 302. Pilot program to provide opportunities for qualified subcontractors to obtain past performance ratings Section 8(d) of the Small Business Act ( 15 U.S.C. 637(d) (18) Pilot program providing past performance ratings for other small business subcontractors (A) Establishment The Administrator shall establish a pilot program for a small business concern performing as a first tier subcontractor for a covered contract (as defined in paragraph 13(A)) to request a past performance rating in the system used by the Federal Government to monitor or record contractor past performance. (B) Application A small business concern described in subparagraph (A) shall submit an application to the appropriate official for a past performance rating. Such application shall include written evidence of the past performance factors for which the small business concern seeks a rating and a suggested rating. (C) Determination The appropriate official shall submit the application from the small business concern to the contracting officer (or a designee of such officer) for the covered contract and to the prime contractor for review. The contracting officer (or designee) and the prime contractor shall, not later than 30 days after receipt of the application, submit to the appropriate official a response regarding the application. (i) Agreement on rating If the contracting officer (or designee) and the prime contractor agree on a past performance rating, or if either the contracting officer (or designee) or the prime contractor fail to respond and the responding individual agrees with the rating of the applicant small business concern, the appropriate official shall enter the agreed-upon past performance rating in the system described in subparagraph (A). (ii) Disagreement on rating If the contracting officer (or designee) and the prime contractor fail to respond within 30 days or if they disagree about the rating, or if either the contracting officer (or designee) or the prime contractor fail to respond and the responding individual disagrees with the rating of the applicant small business concern, the contracting officer (or designee) or the prime contractor shall submit a notice contesting the application to appropriate official. The appropriate official shall follow the requirements of subparagraph (D). (D) Procedure for rating Not later than 14 calendar days after receipt of a notice under subparagraph (C)(ii), the appropriate official shall submit such notice to the applicant small business concern. Such concern may submit comments, rebuttals, or additional information relating to the past performance of such concern not later 14 calendar days after receipt of such notice. The appropriate official shall enter the into the system described in subparagraph (A) a rating that is neither favorable nor unfavorable along with the initial application from the small business concern, the responses of the contracting officer (or designee) and the prime contractor, and any additional information provided by the small business concern. (E) Use of information A small business subcontractor may use a past performance rating given under this paragraph to establish its past performance for a prime contract. (F) Duration The pilot program established under this paragraph shall terminate 3 years after the date on which the first small business concern receives a past performance rating for performance as a first tier subcontractor. (G) Report The Comptroller General of the United States shall begin an assessment of the pilot program 1 year after the establishment of such program. Not later than 6 months after beginning such assessment, the Comptroller General shall submit a report to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives, which shall include— (i) the number of small business concerns that have received past performance ratings under the pilot program; (ii) the number of applications in which the contracting officer (or designee) or the prime contractor contested the application of the small business concern; (iii) any suggestions or recommendations the Comptroller General or the small business concerns participating in the program have to address disputes between the small business concern, the contracting officer (or designee), and the prime contractor on past performance ratings; and (iv) any suggestions or recommendation the Comptroller General has to improve the operation of the pilot program. (H) Appropriate official defined In this paragraph, the term appropriate official . IV Mentor-Protege Programs 401. Amendments to the Mentor-Protege Program of the Department of Defense Section 831 of the National Defense Authorization Act for Fiscal Year 1991 ( Public Law 101–510 10 U.S.C. 2302 (1) in subsection (d)— (A) by amending paragraph (1) to read as follows: (1) prior to the approval of that agreement, the Administrator of the Small Business Administration had made no finding of affiliation between the mentor firm and the protege firm; ; (B) by redesignating paragraph (2) as paragraph (3); and (C) by inserting after paragraph (1) the following new paragraph: (2) (A) the Administrator of the Small Business Administration does not have a current finding of affiliation between the mentor firm and protege firm; or (B) the Secretary, after considering the regulations promulgated by the Administrator of the Small Business Administration regarding affiliation— (i) does not have reason to believe that the mentor firm affiliated with the protege firm; or (ii) has received a formal determination of no affiliation between the mentor firm and protege firm from the Administrator after having submitted a question of affiliation to the Administrator; and ; (2) in subsection (n), by amending paragraph (9) to read as follows: (9) The term affiliation ; and (3) in subsection (f)(6)— (A) in subparagraph (B), by striking or (B) in subparagraph (C), by striking the period at the end and inserting ; or (C) by adding at the end the following: (D) women’s business centers described in section 29 of the Small Business Act ( 15 U.S.C. 656 . 402. Improving cooperation between the mentor-protege programs of the Small Business Administration and the Department of Defense Section 45(b)(4) of the Small Business Act ( 15 U.S.C. 657r(b)(4) V Miscellaneous 501. Improving education on small business regulations Section 15 of the Small Business Act ( 15 U.S.C. 644 (u) Regulatory changes and training materials Not less than annually, the Administrator shall provide to the Defense Acquisition University (established under section 1746 of title 10, United States Code), the Federal Acquisition Institute (established under section 1201 of title 41, United States Code), the individual responsible for mandatory training and education of the acquisition workforce of each agency (described under section 1703(f)(1)(C) of title 41, United States Code), small business development centers, and entities participating in the Procurement Technical Assistance Cooperative Agreement Program under chapter 142 (1) a list of all changes made in the prior year to regulations promulgated— (A) by the Administrator that affect Federal acquisition; and (B) by the Federal Acquisition Council that implement changes to this Act; and (2) any materials the Administrator has developed to explain, train, or assist Federal agencies or departments or small business concerns to comply with the regulations specified in paragraph (1). . 502. Protecting task order competition Section 4106(f) of title 41, United States Code, is amended by striking paragraph (3). 503. Improvements to size standards for small agricultural producers (a) Amendment to definition of agricultural enterprises Paragraph (1) of section 18(b) of the Small Business Act ( 15 U.S.C. 647(b)(1) businesses small business concerns (b) Equal treatment of small farms Paragraph (1) of section 3(a) of the Small Business Act ( 15 U.S.C. 632(a)(1) operation: Provided, operation. (c) Updated size standards (1) In general Not later than 18 months after the date of enactment of this section, the Administrator of the Small Business Administration shall, by rule, establish size standards in accordance with section 3 of the Small Business Act ( 15 U.S.C. 632 (2) Review Size standards established under subsection (a) are subject to the rolling review procedures established under section 1344(a) of the Small Business Jobs Act of 2010 ( 15 U.S.C. 632 504. Uniformity in service-disabled veteran definitions (a) Small business definition of small business concern consolidated Section 3(q) of the Small Business Act ( 15 U.S.C. 632(q) (1) by amending paragraph (2) to read as follows: (2) Small business concern owned and controlled by service-disabled veterans The term small business concern owned and controlled by service-disabled veterans (A) A small business concern— (i) not less than 51 percent of which is owned by one or more service-disabled veterans or, in the case of any publicly owned business, not less than 51 percent of the stock (not including any stock owned by an ESOP) of which is owned by one or more service-disabled veterans; and (ii) the management and daily business operations of which are controlled by one or more service-disabled veterans or, in the case of a veteran with permanent and severe disability, the spouse or permanent caregiver of such veteran. (B) A small business concern— (i) not less than 51 percent of which is owned by one or more service-disabled veterans with a disability that is rated by the Secretary of Veterans Affairs as a permanent and total disability who are unable to manage the daily business operations of such concern; or (ii) in the case of a publicly owned business, not less than 51 percent of the stock (not including any stock owned by an ESOP) of which is owned by one or more such veterans. (C) (i) During the time period described in clause (ii), a small business concern that was a small business concern described in subparagraph (A) or (B) immediately prior to the death of a service-disabled veteran who was the owner of the concern, the death of whom causes the concern to be less than 51 percent owned by one or more service-disabled veterans, if— (I) the surviving spouse of the deceased veteran acquires such veteran’s ownership interest in such concern; (II) such veteran had a service-connected disability (as defined in section 101(16) of title 38, United States Code) rated as 100 percent disabling under the laws administered by the Secretary of Veterans Affairs or such veteran died as a result of a service-connected disability; and (III) immediately prior to the death of such veteran, and during the period described in clause (ii), the small business concern is included in the database described in section 8127(f) of title 38, United States Code. (ii) The time period described in this clause is the time period beginning on the date of the veteran’s death and ending on the earlier of— (I) the date on which the surviving spouse remarries; (II) the date on which the surviving spouse relinquishes an ownership interest in the small business concern; or (III) the date that is 10 years after the date of the death of the veteran. ; and (2) by adding at the end the following new paragraphs: (6) ESOP The term ESOP employee stock ownership plan section 4975(e)(7) 26 U.S.C. 4975(e)(7) (7) Surviving spouse The term surviving spouse . (b) Veterans affairs definition of small business concern consolidated (1) In general Section 8127 of title 38, United States Code, is amended— (A) by striking subsection (h) and redesignating subsections (i) through (l) as subsections (h) through (k), respectively; and (B) in subsection (k), as so redesignated— (i) by amending paragraph (2) to read as follows: (2) The term small business concern owned and controlled by veterans 15 U.S.C. 632(q)(3) ; and (ii) by adding at the end the following new paragraph: (3) The term small business concern owned and controlled by veterans with service-connected disabilities small business concern owned and controlled by service-disabled veterans 15 U.S.C. 632(q)(2) . (2) Conforming amendments Such section is further amended— (A) in subsection (b), by inserting or a small business concern owned and controlled by veterans with service-connected disabilities a small business concern owned and controlled by veterans (B) in subsection (c), by inserting or a small business concern owned and controlled by veterans with service-connected disabilities a small business concern owned and controlled by veterans (C) in subsection (d) by inserting or small business concerns owned and controlled by veterans with service-connected disabilities small business concerns owned and controlled by veterans (D) in subsection (f)(1), by inserting , small business concerns owned and controlled by veterans with service-connected disabilities, small business concerns owned and controlled by veterans (c) Technical correction Section 8(d)(3) of the Small Business Act ( 15 U.S.C. 637(d)(3) (H) In this contract, the term small business concern owned and controlled by service-disabled veterans . (d) Regulations relating to database of the Secretary of Veterans Affairs (1) Requirement to use certain Small Business Administration regulations Section 8127(f)(4) of title 38, United States Code, is amended by striking verified verified, using regulations issued by the Administrator of the Small Business Administration with respect to the status of the concern as a small business concern and the ownership and control of such concern, (2) Prohibition on Secretary of Veterans Affairs issuing certain regulations Section 8127(f) of title 38, United States Code, is amended by adding at the end the following new paragraph: (7) The Secretary may not issue regulations related to the status of a concern as a small business concern and the ownership and control of such small business concern. . (e) Delayed effective date The amendments made by subsections (a), (b), (c), and (d) shall take effect on the date on which the Administrator of the Small Business Administration and the Secretary of Veterans Affairs jointly issue regulations implementing such sections. Such date shall be not later than 18 months after the date of enactment of this Act. (f) Appeals of inclusion in database (1) In general Section 8127(f) of title 38, United States Code, as amended by section 504(d)(2), is further amended by adding at the end the following new paragraph: (8) (A) If the Secretary does not verify a concern for inclusion in the database under this subsection based on the status of the concern as a small business concern or the ownership or control of the concern, the concern may appeal the denial of verification to the Office of Hearings and Appeals of the Small Business Administration (as established under section 5(i) of the Small Business Act). The decision of the Office of Hearings and Appeals shall be considered a final agency action. (B) (i) If an interested party challenges the inclusion in the database of a small business concern owned and controlled by veterans or a small business concern owned and controlled by veterans with service-connected disabilities based on the status of the concern as a small business concern or the ownership or control of the concern, the challenge shall be heard by the Office of Hearings and Appeals of the Small Business Administration as described in subparagraph (A). The decision of the Office of Hearings and Appeals shall be considered final agency action. (ii) In this subparagraph, the term interested party (I) the Secretary; and (II) in the case of a small business concern that is awarded a contract, the contracting officer of the Department or another small business concern that submitted an offer for the contract that was awarded to the small business concern that submitted an offer under clause (i). (C) For each fiscal year, the Secretary shall reimburse the Administrator of the Small Business Administration in an amount necessary to cover any cost incurred by the Office of Hearings and Appeals of the Small Business Administration for actions taken by the Office under this paragraph. The Administrator is authorized to accept such reimbursement. The amount of any such reimbursement shall be determined jointly by the Secretary and the Administrator and shall be provided from fees collected by the Secretary under multiple-award schedule contracts. Any disagreement about the amount shall be resolved by the Director of the Office of Management and Budget. . (2) Effective date Paragraph (8) of subsection (f) of title 38, United States Code, as added by paragraph (1), shall apply with respect to a verification decision made by the Secretary of Veterans Affairs on or after the date of the enactment of this Act. 505. GAO review of the Office of Government Contracting and Business Development of the Small Business Administration (a) Study Not later than 60 days after the date of the enactment of this Act, the Comptroller General of the United States shall initiate a review of the Office of Government Contracting and Business Development of the Small Business Administration. Such review shall examine— (1) the extent to which the personnel of the Small Business Administration who carry out procurement and business development programs report to the Office of Government Contracting and Business Development; (2) whether greater efficiency and consistency in the certification process of procurement and business development programs could be achieved by creating a single organizational unit of employees to process all certifications required by procurement and business development programs; (3) whether greater efficiency and efficacy in the performance of procurement and business development programs could be achieved by improving the alignment of the field personnel assigned to such programs; (4) how the Office of Government Contracting and Business Development could improve its staffing of regulatory drafting functions and its coordination with the Federal Acquisition Regulatory Council to ensure timely rulemaking by the Small Business Administration; and (5) any other areas in which the Comptroller General determines that the Small Business Administration could improve its performance with respect to procurement and business development programs. (b) Report Not later than 1 year after initiating the review required by paragraph (1), the Comptroller General shall submit a report including the results of the review, along with any recommendations for improvements or other suggestions with respect to procurement and business development programs, to the Committee on Small Business of the House of Representatives and the Committee on Small Business and Entrepreneurship of the Senate. (c) Procurement and business development program defined In this Act, the term procurement and business development program 15 U.S.C. 631 et seq. 506. Required reports pertaining to capital planning and investment control The information described in 11302(c)(3)(B)(ii) of title 40, United States Code, shall be submitted to the Senate Committee on Small Business and Entrepreneurship and the Committee on Small Business of the House of Representatives within 10 days of transmittal to the Director. 507. GAO review of surety bonds Not later than 60 days after the date of the enactment of this Act, the Comptroller General of the United States shall initiate a review of surety bonds as they apply to federal small business procurement contracts. The review shall examine how frequently bonding requirements are waived by federal agencies, an explanation of the standard and process for waiving the requirements, an explanation of the review process for such waivers, and in cases when bond requirements are waived, how results compare to instances where requirements are not waived, and the process that whistleblowers go through when instances of fraud related to surety bonds are reported. July 25, 2016 Reported from the Committee on Small Business July 25, 2016 The Committees on Armed Services Oversight and Government Reform Veterans’ Affairs

Summary: Defending America's Small Contractors Act of 2016 TITLE I--IMPROVING TRANSPARENCY AND CLARITY FOR SMALL BUSINESSES (Sec. 101) This bill amends the Small Business Act to revise requirements for increasing prime federal contracting opportunities for small business concerns, and determining awards or contracts for the sale of government property to such concerns. (Sec. 102) The bill revises requirements for annual Small Business Administration (SBA) reports to the President and Congress analyzing the number and dollar amount of prime contracts awarded by federal agencies each fiscal year to small business concerns. The SBA shall include in such annual reports awards to these small business concerns that were purchased by another entity after the initial contract was awarded. The small business concern would no longer be deemed to be a small business because of such purchase. The SBA must also report on awards to small businesses that were awarded using a procurement method other than a small business set-aside, preference, or full and open competition. (Sec. 103) For purposes of government-wide and agency-wide procurement goals for small business concerns, the total value of federal procurement contract awards to small business concerns for a fiscal year may not be determined in a manner that excludes the value of a contract based on where the contract is awarded, where it is performed, or whether: the contract is required by federal law to be performed by an entity other than a small business concern; funding for the contract is made available in an appropriations Act, if the contract is subject to requirements for civilian procurement planning and solicitation or military procurement as well as the Federal Acquisition Regulation (FAR); or whether the contract is otherwise subject to the FAR. (Sec. 104) The bill amends the Small Business Act to revise the range of the anticipated value of federal procurement contracts that must be reserved exclusively for small business concerns. The range shall be between the micro-purchase threshold ($3,000) and the simplified acquisition threshold ($100,000). (Currently the range of the anticipated value must be between $2,500 and $100,000.) For purposes of federal procurement contracting, the term total purchases and contracts for property and services shall mean total number and total dollar amount of contracts and orders for property and services. TITLE II--CLARIFYING THE ROLES OF SMALL BUSINESS ADVOCATES (Sec. 201) The Small Business Act is amended to prohibit the SBA from limiting the scope of review by the Procurement Center Representative (PCR) for any solicitation of a contract or task order without regard to whether: the contract or task order or part of it is set aside for small business concerns, one or more contract or task order awards are reserved for small business concerns under a multiple award contract, or whether or not the solicitation would result in a bundled or consolidated contract or task order. The SBA must take these matters into consideration when limiting the scope of the PCR review for any such solicitation. (Sec. 202) The bill makes a technical amendment to apply the Level I Federal Acquisition Certification in Contracting, or the equivalent Department of Defense (DOD) certification requirement, to persons appointed as Commercial Market Representatives (CMRs) after November 25, 2015 (the date of enactment of the National Defense Authorization Act of Fiscal Year 2016). The bill also specifies the principal duties of CMRs, who are government contracting staff stationed at area SBA offices and reporting to specified senior SBA officers. These principal duties must advance SBA policies relating to specified subcontracting criteria. (Sec. 203) The bill also allows for the management of each Office of Small and Disadvantaged Business Utilization (OSDBU) to be vested in an individual whose primary responsibilities were for the functions and duties of: (1) the procurement program for small business concerns owned and controlled by service-disabled veterans, and (2) the Historically Underutilized Business Zones (HUBZone) program. The OSDBU of each federal agency with procurement powers shall review agency purchases ranging between the micro-purchase threshold and the simplified acquisition threshold to ensure that they have been made to comply with the Act and have been properly recorded in the Federal Procurement Data System, if the method of payment is a purchase card issued by the DOD or by an executive agency head. This bill requires the OSDBU to report annually to specified congressional committees on any federal agency failure to comply with certain requirements of the Act. (Sec. 204) Each OSDBU shall assist a small business concern awarded a federal contract or subcontract under the Act, or under military or civilian procurement law, in finding resources for education and training on compliance with contracting regulations after such an award. The National Defense Authorization Act for Fiscal Year 1991 is amended to require agreements under the Mentor-Protege Program of DOD to include, if applicable, the assistance the mentor firm will give the protege firm in understanding contract regulations of the federal government and the DOD after the award of a subcontract. The Small Business Act is amended to require the SBA to give small business development centers and entities participating in the Procurement Technical Assistance Cooperative Agreement (PTACA) Program a list of resources for small business concerns seeking education and assistance on post-award compliance with contracting regulations. This bill authorizes a PCR to assist small business concerns with finding resources for education and training on compliance with post-award contracting regulations. The SBA shall issue regulations to address the extent to which assistance under a mentor-protege program to improve the ability of proteges to compete for federal prime contracts and subcontracts complies with post-award federal contracting requirements. (Sec. 205) This bill also specifies the exclusive duties of Business Opportunity Specialists (BOSs) employed by the SBA and reporting to specified senior SBA officers. BOSs shall implement SBA requirements (in addition to other duties related to SBA contracting programs) for: business loans, procurement contracts or subcontracts, and mentor-protege programs. TITLE III--STRENGTHENING OPPORTUNITIES FOR COMPETITION IN SUBCONTRACTING (Sec. 301) The Small Business Act is amended to make it a material breach of the procurement contract if a subcontracting plan fails to include assurances that the offeror or bidder will submit such periodic reports and cooperate in any studies or surveys required by the federal agency or the SBA in order to determine the extent of compliance by the individual with the plan. The findings of an SBA's review of a subcontracting plan shall cease to be advisory in nature only. A federal agency's PCR or CMR may delay acceptance of a subcontracting plan for 30 days (15 days in the case of the DOD) if the plan fails to create the maximum practicable opportunity for certain covered small businesses to participate under the applicable contract. This authority, however, does not allow the PCR or CMR to delay the award or performance of the contract concerned. A PCR or CMR may not delay acceptance of a subcontracting plan if the head of the contracting agency certifies that the agency's need for the supplies or services is of such an unusual and compelling urgency that the United States would be seriously injured unless the agency is permitted to accept it. The SBA shall issue regulations giving examples of activities that would be considered a failure to make a good faith effort to comply with its requirements imposed on certain entities that are awarded prime contracts containing them. (Sec. 302) The SBA shall establish a three-year pilot program for a small business concern performing as a first tier subcontractor under certain federal contracts to request a past performance rating in the system used by the federal government to monitor or record contractor past performance. The GAO shall assess the program and make recommendations on how its operations can be improved. TITLE IV--MENTOR-PROTEGE PROGRAMS (Sec. 401) The bill amends the National Defense Authorization Act for Fiscal Year 1991 to revise the eligibility criteria under the Mentor-Protege Program of the DOD for a mentor firm to receive the award of a federal contract and enter into an agreement with one or more protege firms to provide them certain assistance. Before approval of the agreement, neither the SBA nor DOD may have made any finding of affiliation between the mentor firm and the protege firm, nor must there be any such current finding. Mentor firms may refer protege firms to women's business centers for assistance designed to develop the protege's firm. (Sec. 402) The bill amends the Small Business Act to bar DOD from carrying out a Mentor-Protege Program for a small business unless: (1) it submits a plan to the SBA, and (2) the SBA approves that plan. TITLE V--MISCELLANEOUS (Sec. 501) The bill amends the Small Business Act to require the SBA at least annually to report a list of pertinent regulation changes, together with compliance training materials, to the Defense Acquisition University, the Federal Acquisition Institute, the individual responsible for mandatory training and education of the acquisition workforce of each executive agency, small business development centers, and PTACA participants. (Sec. 502) The bill makes permanent the authority of a contractor to protest the issuance or proposed issuance of a task or delivery order for federal agency procurement of services or property valued in excess of $10 million. (Such authority shall expire September 30, 2016.) (Sec. 503) The bill specifies that any agricultural enterprise (farm) the Act covers is a small business concern regardless of whether its annual receipts, including those of any affiliates, exceed $750,000. The SBA, by rule, shall establish size standards for such agricultural enterprises. (Sec. 504) The bill expands the definition of "small business concern owned and controlled by service-disabled veterans" to include certain small business concerns at least 51% of which, or at least 51% of whose stock (not including any stock owned by an employee stock ownership plan [ESOP]), is owned by one or more veterans with permanent, severe, and total service-connected disabilities rendering them unable to manage daily business operations. This expanded definition also includes a small business concern whose death of its owner causes the concern to be less than 51% owned by one or more service-disabled veterans if: the surviving spouse of the deceased veteran acquires the veteran's ownership interest in the concern; the veteran had a service-connected disability rated as 100% disabling or the veteran died as a result of a service-connected disability; and immediately before the veteran's death, and during a specified time period, the small business concern is included in the database specified in this bill. The specified time period begins on the date of the veteran's death and ends on the earlier of the date: on which the surviving spouse remarries, on which the surviving spouse relinquishes an ownership interest in the small business concern, or that is 10 years after the veteran's death. Before listing a business concern in its database of veteran-owned businesses, the VA must use certain SBA regulations to verify the status of the concern as a small business concern and the concern's ownership and control; but may not issue related regulations of its own. A small business concern may appeal to the SBA Office of Hearings and Appeals (OHA) any denial of verification by the VA for inclusion in the database. The OHA decision shall be considered a final agency action. If an interested party challenges the inclusion of such a small business concern in the database, the challenge shall be heard by the OHA. OHA's decision shall also be considered a final agency action. An interested party includes: the VA; and in the case of a small business concern awarded a contract, the contracting officer of the department or another small business concern that submitted an offer (bid) for such contract. For each fiscal year, the VA shall reimburse the SBA an amount necessary to cover any cost incurred by the OHA for its actions under this bill. The amount of any such reimbursement shall be determined jointly by the VA and the SBA, and shall be taken from fees collected by the VA under multiple-award schedule contracts. The Office of Management and Budget (OMB) shall resolve any disagreement about the amount. (Sec. 505) The bill directs the Government Accountability Office (GAO) to initiate a review of the SBA Office of Government Contracting and Business Development and make recommendations for its improvement or other suggestions for its procurement and business development programs. (Sec. 506) The OMB shall submit within 10 days of receipt to specified congressional committees a list of information from specified federal departments and agencies about each major information technology investment, without regard to whether the investments are for new information technology acquisitions or for operations and maintenance of existing information technology, including data on cost, schedule, and performance. (Sec. 507) The GAO shall initiate a review of surety bonds as they apply to federal small business procurement contracts. The review shall examine: how frequently bonding requirements are waived by federal agencies; an explanation of the standard and process for waiving the requirements; an explanation of the review process for such waivers, and in cases when bond requirements are waived, how results compare to instances where requirements are not waived; and the process that whistleblowers go through when instances of fraud related to surety bonds are reported.