I
105TH CONGRESS
1ST SESSION
H. R. 168
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
JANUARY 7, 1997
Mr. FILNER introduced the following bill; which was referred to the Commit-
tee 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 jurisdic-
tion 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 Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Veterans Entrepre-
neurship Promotion Act of 1997’’.
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 inter-
ests of business concerns owned and controlled by el-
igible veterans; and
(3) to ensure that those concerns receive a fair
share of purchases made by the Federal Govern-
ment.
(b) DEFINITIONS.—For the purposes of this Act, the
following definitions apply:
(1) ADMINISTRATION.—The term ‘‘Administra-
tion’’ means the Small Business Administration.
(2) ADMINISTRATOR.—The term ‘‘Adminis-
trator’’ means the Administrator of the Small Busi-
ness Administration.
(3) ELIGIBLE VETERAN; SMALL BUSINESS CON-
CERN OWNED AND CONTROLLED BY ELIGIBLE VET-
ERANS.—The terms ‘‘eligible veteran’’ and ‘‘small
business concern owned and controlled by eligible
veterans’’ have the meaning such terms have in sec-
tion 3(o) 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 sub-
section:
‘‘(o) For purposes of this Act—
‘‘(1) the term ‘eligible veteran’ means any per-
son 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 dis-
charged 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 per centum
owned by one or more eligible veterans, or in
the case of a publicly owned business, at least
51 per centum of the stock of which is owned
by one or more eligible veterans; and
‘‘(B) whose management and daily busi-
ness operations are controlled by such veter-
ans.’’.
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 participa-
tion by small business concerns owned and con-
trolled by eligible veterans shall be established at not
less than 5 per centum 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 el-
igible 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 partici-
pation by’’; and
(4) in subparagraph (B), by striking ‘‘under the
program established under section 8(a)’’ and insert-
ing ‘‘under the programs established under sections
8(a) and 30’’.
SEC. 5. REPORTING.
(a) REPORTS
TO SMALL BUSINESS ADMINISTRA-
TION.—Subsection (h)(1) of section 15 of the Small Busi-
ness Act (15 U.S.C. 644) is amended by inserting ‘‘small
business concerns owned and controlled by eligible veter-
ans,’’ 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 pe-
riod at the end of the first sentence;
(2) in subparagraphs (A), (D), and (E), by in-
serting ‘‘small business concerns owned and con-
trolled 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 ‘‘re-
stricted to’’.
SEC. 6. SUBCONTRACTING.
(a) STATEMENT OF POLICY.—Paragraph (1) of sec-
tion 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 speci-
fied 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 amend-
ed by inserting ‘‘small business concerns owned and
controlled by eligible veterans,’’ after ‘‘small busi-
ness concerns,’’ in the first and second sentences.
(2) Subparagraph (E) of such clause is redesig-
nated 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 in-
dividuals who are eligible veterans within the mean-
ing of section 3(o) of the Small Business Act.’’.
(3) Subparagraph (F) of such clause, as redes-
ignated 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 busi-
ness 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 procure-
ment practices and procedures of each Federal agen-
cy 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 Af-
fairs 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 con-
trolled by eligible veterans in the United States. The Sec-
retary shall inform each small business concern identified
under this paragraph that information on Federal pro-
curement 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 ‘‘; and’’; and
(3) by adding at the end the following new
paragraph:
‘‘(3) small business concerns owned and con-
trolled 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 busi-
ness concerns eligible for assistance under section 30.
Such assistance may be provided only if the Administra-
tion determines that—
‘‘(i) the type and amount of such assistance re-
quested 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 profit-
ably 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 mate-
rial or to supply such concern with working capital
to be used in the manufacture of articles, equipment,
supplies, or material for defense or civilian produc-
tion or as may be necessary to ensure a well bal-
anced 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 busi-
ness concern.
‘‘(B)(i) No loan shall be made under this paragraph
if the total amount outstanding and committed (by partici-
pation or otherwise) to the borrower would exceed
$750,000.
‘‘(ii) Subject to the provisions of clause (i), in agree-
ments 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 out-
standing 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 pur-
chased unless it is shown that a deferred participa-
tion 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 ex-
ceed the current average market yield on outstand-
ing marketable obligations of the United States with
remaining periods to maturity comparable to the av-
erage 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 Ad-
ministration, 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 vet-
eran in which the Administration participates is the
longest feasible term commensurate with the repay-
ment 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 con-
struction 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 Adminis-
tration participates, the lender makes a favorable
value assessment of such collateral when determin-
ing 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 De-
velopment Center, Small Business Institute, Service Corps
of Retired Executives (SCORE), and Active Corps of Ex-
ecutives (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 con-
tracts and cooperative agreements with, educational
institutions, private businesses, veterans’ nonprofit
community-based organizations, and Federal, State,
and local departments and agencies for the estab-
lishment 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’ Em-
ployment and Training shall establish an interagency
working group to develop a comprehensive outreach pro-
gram to assist eligible veterans. Such outreach program
shall include business training and management assist-
ance, employment and relocation counseling, and dissemi-
nation of information on veterans benefits, veterans enti-
tlements, and the Veterans Business Opportunity and De-
velopment Program established under section 30 of the
Small Business Act, as inserted by section 14 of this Act.
SEC. 13. ASSOCIATE ADMINISTRATOR FOR VETERANS PRO-
GRAMS.
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 fol-
lowing new sentence:
‘‘One of the Associate Administrators shall be designated
at the time of his appointment as the Associate Adminis-
trator for Veterans Programs who shall be a career em-
ployee 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 estab-
lished under section 30.’’.
SEC. 14. ESTABLISHMENT OF VETERANS BUSINESS OPPOR-
TUNITY AND DEVELOPMENT PROGRAM.
The Small Business Act (15 U.S.C. 631 et seq.) is
amended by redesignating sections 30 and 31 as sections
31 and 32, respectively, and by inserting after section 29
the following new section:
‘‘SEC. 30. (a)(1) It shall be the duty of the Adminis-
tration and it is hereby empowered, whenever it deter-
mines 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 re-
sponsible to perform any specific Government pro-
curement 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 procure-
ment officer. Whenever the Administration and such
procurement officer fail to agree, the matter shall be
has completed its period of program participation as
prescribed by subsection (b)(6), if—
‘‘(i) the contract will be awarded as a re-
sult of an offer (including price) submitted in
response to a published solicitation relating to
a competition conducted pursuant to subpara-
graph (D); and
‘‘(ii) the prospective contract awardee was
a program participant eligible for award of the
contract on the date specified for receipt of of-
fers 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 pro-
gram 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 oppor-
tunity assigned a standard industrial classifica-
tion code for manufacturing and $3,000,000
(including options) in the case of all other con-
tract opportunities.
‘‘(ii) The Associate Administrator for Veteran
Programs, on a nondelegable basis, is authorized to
approve a request from an agency to award a con-
tract opportunity under this subsection on the basis
of a competition restricted to eligible program par-
ticipants 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 Ad-
ministration 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 pro-
curement requirement to the Administration, in accord-
ance 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, commer-
cial prices for similar products or services, or data ob-
tained 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 pro-
curement 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, packag-
ing 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, stud-
ies, 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 Admin-
istration to perform or negotiate a contract to be let pur-
suant 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 Ad-
ministration 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 cer-
tification 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(o) concerning ownership and control by
eligible veterans. Certification of ownership and con-
trol by eligible veterans shall be accompanied by doc-
umentation obtained from the Secretary of Veterans
Affairs by such concern which verifies that individ-
uals who own and control such concern are eligible
veterans as defined in section 3(o).
‘‘(B) A requirement that such concern certify
that it has been in business as a small business con-
cern owned and controlled by eligible veterans for
the 1 year period beginning before the date of appli-
cation for program participation; except that the Ad-
ministrator may waive such requirement in appro-
priate 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 sec-
tion 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 Admin-
istration may deem necessary to make the de-
terminations required by this paragraph.
‘‘(B)(i) Whenever, on the basis of information
provided by a program participant pursuant to sub-
paragraph (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 en-
tity affiliated with such owners may have been un-
duly excessive, the Administration shall conduct a
review to determine whether such withdrawal of
funds or other assets was detrimental to the achieve-
ment 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 partici-
pant’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 en-
sure the protection of the concern.
‘‘(C) Whenever the Administration computes
personal net worth for any purpose under this para-
graph, 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 vet-
erans;
‘‘(ii) the equity that eligible veteran owners
have in their primary personal residences, ex-
cept that any portion of such equity that is at-
tributable to unduly excessive withdrawals from
a program participant or a concern applying for
program participation shall be taken into ac-
count.
‘‘(5)(A) No small business concern shall be deemed
eligible for any assistance pursuant to this subsection un-
less the Administration determines that with contract, fi-
nancial, 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 inhib-
its 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 de-
scribed in subparagraph (B), shall provide the small busi-
ness concern that is the subject of such action, an oppor-
tunity 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 para-
graph, 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 pro-
ceeding 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 modi-
fication 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 jurisdic-
tion over such matters.
‘‘(F) Proceedings conducted pursuant to the author-
ity 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 sub-
stantial effort to solicit applications for certification from
small business concerns located in areas of concentrated
unemployment or underemployment or within labor sur-
plus 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 con-
tracts let under the authority of this subsection.
‘‘(8) To the maximum extent practicable, construc-
tion 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 con-
cern eligible to receive subcontracts pursuant to this sub-
section to annually prepare and submit to the Administra-
tion a capability statement. Such statement shall briefly
describe such concern’s various contract performance ca-
pabilities and shall contain the name and telephone num-
ber of the veterans business counselor assigned such con-
cern. 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 sup-
port shall be disseminated to appropriate buying activities
in the marketing area of the concern. The remaining state-
ments 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 state-
ments.
‘‘(B) Contracting activities receiving capability state-
ments shall, within 60 days after receipt, contact the rel-
evant veterans business counselor to indicate the number,
type, and approximate dollar value of contract opportuni-
ties that such activities may be awarding over the succeed-
ing 12-month period and which may be appropriate to con-
sider 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 (ex-
cept construction), at least 50 per centum 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 per centum of the cost of manu-
facturing the supplies (not including the cost of ma-
terials).
‘‘(B) The Administration may change the percentage
under clause (i) or (ii) of subparagraph (A) if the Admin-
istrator determines that such change is necessary to re-
flect conventional industry practices among business con-
cerns that are below the numerical size standard for busi-
nesses in that industry category. A percentage established
under the preceding sentence may not differ from a per-
centage 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 gen-
eral and specialty construction and to contracts for any
other industry category not otherwise subject to the re-
quirements of such subparagraph. The percentage applica-
ble to any such requirement shall be determined in accord-
ance with subparagraph (B), except that such a percent-
age 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 subpara-
graph (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 sub-
section or subsection (a) of section 15 solely because such
concern is other than the actual manufacturer or proc-
essor of the product to be supplied under the contract.
‘‘(B) To be in compliance with the requirements re-
ferred 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 nu-
merical size standard for the Standard Industrial
Classification Code assigned to the contract solicita-
tion 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 Gov-
ernment; and
‘‘(iv) represent that it will supply the product of
a domestic small business manufacturer or proc-
essor, unless a waiver of such requirement is grant-
ed—
‘‘(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 so-
licitation; 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 procure-
ment market.
‘‘(12)(A) No person within the employ of the Admin-
istration 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 partici-
pant 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 adminis-
tration 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 writ-
ten or oral agreement (whether or not legally en-
forceable) 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 Administra-
tion 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 as-
sistance 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 Adminis-
tration who violates this paragraph shall be subject to a
civil penalty, assessed by the Attorney General, that shall
not exceed 300 per centum of the maximum amount of
gain such employee realized or could have realized as a
result of engaging in those activities and transactions pre-
scribed by subparagraph (B).
‘‘(iv) In addition to any other remedy or sanction pro-
vided 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 ac-
tivity 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 In-
spector 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 vio-
lates subparagraph (A) shall be subject to disciplinary ac-
tion, 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 polit-
ical activity.
‘‘(D) The prohibitions of subparagraph (A), and re-
medial measures provided for under subparagraphs (B)
and (C) with regard to such prohibitions, shall be in addi-
tion to, and not in lieu of, any other prohibitions, meas-
ures, 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 con-
tracts pursuant to this subsection shall semiannually re-
port to their assigned veterans business counselor the fol-
lowing:
‘‘(i) A listing of any agents, representatives, at-
torneys, accountants, consultants, and other parties
(other than employees) receiving compensation to as-
sist in obtaining a Federal contract for such pro-
gram participant.
‘‘(ii) The amount of compensation received by
any person listed under clause (i) during the rel-
evant reporting period and a description of the ac-
tivities performed in return for such compensation.
‘‘(B) The veterans business counselor shall promptly
review and forward such report to the Associate Adminis-
trator for Veterans Programs. Any report that raises a
suspicion of improper activity shall be reported imme-
diately 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 ter-
mination 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 ini-
tially received such contract. Notwithstanding the provi-
sions 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 op-
tion shall be terminated for the convenience of the Govern-
ment, 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 discre-
tion and on a nondelegable basis, waive the requirements
of subparagraph (A) if requested to do so prior to the ac-
tual 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 con-
cern to surrender partial control of such concern on
a temporary basis in order to obtain equity financ-
ing.
‘‘(ii) The head of the contracting agency for
which the contract is being performed certifies that
termination of the contract would severely impair at-
tainment of the agency’s program objectives or mis-
sions.
‘‘(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 sub-
section.
‘‘(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 nec-
essary for the owners of the concern upon whom eli-
gibility was based to relinquish ownership of a ma-
jority 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 par-
ties); and
‘‘(III) such owners will maintain control of
daily business operations.
‘‘(C) Concerns performing contracts awarded pursu-
ant to this subsection shall be required to notify the Ad-
ministration immediately upon entering an agreement (ei-
ther 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 inter-
ests 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 Administra-
tion an eligible veterans business opportunity and develop-
ment assistance program (hereinafter in this section re-
ferred 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 sub-
section and subsection (a), shall be managed by the Asso-
ciate Administrator for Veterans Programs under the su-
pervision of, and responsible to, the Administrator:
‘‘(A) The program shall—
‘‘(i) assist small business concerns partici-
pating 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 tar-
gets, objectives, and goals developed and main-
tained in conformity with subparagraph (D);
‘‘(ii) provide for such other nonfinancial
services as deemed necessary for the establish-
ment, preservation, and growth of small busi-
ness concerns participating in the program, in-
cluding (I) loan packaging, (II) financial coun-
seling, (III) marketing assistance, and (IV)
management assistance;
‘‘(iii) assist small business concerns par-
ticipating in the program to obtain equity and
debt financing;
‘‘(iv) establish regular performance mon-
itoring 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 suc-
cess and failure of small business concerns par-
ticipating 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 spe-
cific needs of small business concerns partici-
pating in the program and which have received
or are applying to receive a surety bond, and
(III) preparation of all forms necessary to re-
ceive a surety bond guarantee from the Admin-
istration 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 au-
thority of this subsection shall be permitted contin-
ued participation and eligibility in such program or
activity for a period of 5 years from the date of cer-
tification 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 para-
graph (2) a program participant shall submit a busi-
ness plan (hereinafter in this section referred to as
the ‘plan’) as described in clause (ii) of this subpara-
graph 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 re-
quired by the Administration as a part of the appli-
cation 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 pro-
gram participant being eligible for award of a con-
tract pursuant to subsection (a).
‘‘(ii) The plans submitted under this subpara-
graph 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 partici-
pant’s strengths and weaknesses with particular
attention to financial, managerial, technical,
and personnel conditions which are likely to im-
pede small business concerns from receiving
contracts other than those awarded under sub-
section (a).
‘‘(III) Specific targets, objectives, and
goals for the business development of the pro-
gram participant during the next and succeed-
ing years utilizing the results of the analyses
conducted pursuant to subclauses (I) and (II).
‘‘(IV) A transition management plan out-
lining specific steps to assure profitable busi-
ness operations after graduation (to be incor-
porated into the program participant’s plan
during the first year of the transitional stage of
program participation).
‘‘(V) Estimates of contract awards pursu-
ant 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 provi-
sions 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 ap-
proved plan shall be considered valid until such time
as a modified plan is approved by the veterans busi-
ness 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 sub-
section (a) for the next program year and the suc-
ceeding program year during the review of its busi-
ness 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 in-
clude—
‘‘(I) the aggregate dollar value of contract
support to be sought under subsection (a), re-
flecting 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 assist-
ance 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 par-
ticipation;
‘‘(ii) participates in the program for a pe-
riod in excess of the time limits prescribed by
paragraph (6);
‘‘(iii) is terminated pursuant to a termi-
nation proceeding conducted in accordance with
subsection (a)(6); or
‘‘(iv) is graduated pursuant to a gradua-
tion 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 participat-
ing small business concern pursuant to subpara-
graph (H) or the expiration of the maximum pro-
gram 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 main-
tain its eligibility for program participation;
‘‘(ii) a demonstrated pattern of unjustified
delinquent performance or terminations for de-
fault 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 el-
igible veteran owners by any agency pursuant
to subpart 9.4 of title 48, Code of Federal Reg-
ulations (or any successor regulation); or
‘‘(vi) the conviction of the eligible veteran
owner or an officer of the concern for any of-
fense indicating a lack of business integrity in-
cluding any conviction for embezzlement, theft,
forgery, bribery, falsification or violation of sec-
tion 16. For purposes of this clause, no termi-
nation action shall be taken with respect to an
eligible veteran owner solely because of the con-
viction 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 ac-
tion to the Associate Administrator for Veterans
Programs. Whenever the Associate Administrator, or
a designee of such officer, determines such termi-
nation 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 af-
forded 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 busi-
ness 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 tar-
gets’). Such efforts shall be made a part of the busi-
ness plan and shall be sufficient in scope and dura-
tion 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 pro-
gram, a program participant shall be subject to reg-
ulations 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 ap-
plicable 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 at-
tain its business activity targets;
‘‘(III) provide that, before the receipt of
any contract to be awarded pursuant to sub-
section (a), the program participant (if it is in
the transitional stage) must certify that it has
complied with the regulations promulgated pur-
suant to subclause (II), or that it is in compli-
ance 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 regard-
ing attainment of business activity targets dur-
ing periodic reviews of such participant’s busi-
ness 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 formu-
lating policies relating to Federal assistance to small busi-
ness concerns eligible to receive contracts pursuant to sub-
section (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 participa-
tion 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 con-
cern, 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 Cer-
tification and Eligibility (hereinafter referred to as the
‘Division’) that shall be made part of the Office of Veter-
ans 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 evalua-
tion and, if not, what matters must be rectified;
‘‘(iii) render recommendations on such applica-
tions 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 as-
certain continued eligibility to receive subcontracts
pursuant to subsection (a);
‘‘(v) make a request for the initiation of termi-
nation or graduation proceedings, as appropriate,
with the Associate Administrator for Veterans Pro-
grams;
‘‘(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 eligi-
ble 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 pro-
gram eligibility; and
‘‘(viii) implement such policy directives as may
be issued by the Associate Administrator for Veter-
ans Programs pursuant to subparagraph (H) re-
garding, among other things, the geographic dis-
tribution 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 as-
sist in the development of such concern unless—
‘‘(i) the Government has not previously pro-
cured and is unlikely to procure the types of prod-
ucts 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 pre-
ceding 12-month period. The review shall ascertain the
number of entrants, their geographic distribution and in-
dustrial classification. The Director shall also estimate the
expected growth of the program during the next fiscal year
and the number of additional veterans business coun-
selors, 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 Adminis-
trator 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 Oc-
tober 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 dis-
tribution 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 Ad-
ministration shall give due consideration to those in-
dustrial 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 evalua-
tion of a program participant’s eligibility for continued
participation in the program whenever it receives specific
and credible information alleging that such program par-
ticipant no longer meets the requirements for program eli-
gibility. Upon making a finding that a program partici-
pant 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 sus-
pended 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 pro-
gram into two stages: a developmental stage; and a transi-
tional stage.
‘‘(B) The developmental stage of program participa-
tion 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 Adminis-
tration shall conduct training sessions to assist indi-
viduals 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 market-
place.
‘‘(D) Joint ventures, leader-follow arrange-
ments, and teaming agreements between the pro-
gram participant and other program participants
and other business concerns with respect to con-
tracting opportunities for the research, development,
full-scale engineering or production of major sys-
tems. Such activities shall be undertaken on the
basis of programs developed by the agency respon-
sible for the procurement of the major system, with
the assistance of the Administration.
‘‘(E) Transitional management business plan-
ning 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 pro-
gram participation shall be eligible for the assistance pro-
vided by subparagraphs (A), (B), (D), and (E) of para-
graph (4).
‘‘(6) Subject to the provisions of paragraph (1)(C),
a small business concern may receive developmental assist-
ance 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 imple-
ment 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 Ad-
ministrator shall submit a report to the Congress on the
program that shall include the following:
‘‘(i) The average personal net worth of individ-
uals who own and control concerns that were ini-
tially certified for participation in the program dur-
ing the immediately preceding fiscal year. The Ad-
ministrator shall also indicate the dollar distribution
of net worths, at $50,000 increments, of all such in-
dividuals.
‘‘(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 sub-
section (a).
‘‘(iii) A listing of all participants in the pro-
gram 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 eli-
gible veteran owners, the dollar value of all contracts
received in the preceding year, the dollar amount of
advance payments received by each concern pursu-
ant 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 op-
tions awarded during the preceding fiscal year pur-
suant to subsection (a) and such amount expressed
as a percentage of total sales of (I) all firms partici-
pating in the program during such year; and (II) of
firms in each of the 5 years of program participa-
tion.
‘‘(v) A description of such additional resources
or program authorities as may be required to pro-
vide 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 op-
tions awarded pursuant to subsection (a), at such
dollar increments as the Administrator deems appro-
priate, for each four digit Standard Industrial Clas-
sification (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 reimburse-
ment, 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 re-
imbursement;
‘‘(2) to accept, in the name of the Administra-
tion, 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 orga-
nizations thereof as authorized by section 3109 of
title 5, United States Code; except that no individual
may be employed under the authority of this sub-
section 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 ex-
penses (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. 15. 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 Adminis-
tration and its divisions $4,000,000 per fiscal year
for each of fiscal years 1998, 1999, and 2000.
(2) For training and education of personnel in
the Office of Veterans Programs of the Small Busi-
ness Administration and its divisions—
(A) $350,000 for fiscal year 1998;
(B) $200,000 for fiscal year 1999; and
(C) $175,000 for fiscal year 2000.
(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
1998, 1999, and 2000.
Æ