SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Small Business Contracting Program Improvements 
Act’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
TITLE I—ENSURING GOVERNMENT CONTRACT OPPORTUNITIES 
FOR SMALL BUSINESS CONCERNS OWNED AND CONTROLLED 
BY SERVICE-DISABLED VETERANS 
Sec. 101. Expanding procurement opportunities. 
Sec. 102. Penalties for misrepresentation. 
Sec. 103. Implementation of Executive Order 13360. 
TITLE II—PROTECTING TAXPAYERS AND ENSURING PROGRAM 
CONSISTENCY 
Sec. 201. Requiring business integrity of small business concerns. 
Sec. 202. Establishment of goals. 
Sec. 203. Small business concern subcontracting policy. 
Sec. 204. Increased size of available contracts. 
TITLE III—EXPANDING OPPORTUNITIES FOR WOMEN 
ENTREPRENEURS 
Sec. 301. Implement the women’s procurement program. 
TITLE IV—STRENGTHENING COMMUNITY DEVELOPMENT 
Sec. 401. On-site verification. 
Sec. 402. Limitation on construction contracts. 
Sec. 403. Allowing small business concerns that are not HUBZone program 
participants to protest HUBZone awards. 
TITLE V—MODERNIZING THE 8(a) PROGRAM 
Sec. 501. Modernizing the section 8(a) program net worth limitations. 
Sec. 502. Extension of the section 8(a) program term. 
Sec. 503. Report on implementation. 
Sec. 504. Allowing small business concerns that are not section 8(a) program 
participants to protest section 8(a) awards. 
TITLE VI—OTHER MATTERS 
Sec. 601. Affiliation for certain franchises. 
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TITLE 
I—ENSURING 
GOVERN-
MENT CONTRACT OPPORTU-
NITIES FOR SMALL BUSINESS 
CONCERNS OWNED AND CON-
TROLLED 
BY 
SERVICE-DIS-
ABLED VETERANS 
SEC. 101. EXPANDING PROCUREMENT OPPORTUNITIES. 
(a) SERVICE-DISABLED VETERANS.—Section 36(a) 
of the Small Business Act (15 U.S.C. 657f(a)) is amend-
ed— 
(1) in the matter preceding paragraph (1), by 
striking ‘‘may’’ and inserting ‘‘shall’’; and 
(2) in paragraph (1), by striking ‘‘and the con-
tracting officer’’ and all that follows through ‘‘con-
tracting opportunity’’. 
(b) HUBZONE.—Section 31(b)(2)(B) of such Act 
(15 U.S.C. 657a(b)(2)(B)) is amended by striking ‘‘shall’’ 
and inserting ‘‘may’’. 
SEC. 102. PENALTIES FOR MISREPRESENTATION. 
Section 16(d)(1) of the Small Business Act (15 
U.S.C. 645(d)(1)) is amended by inserting ‘‘a ‘small busi-
ness concern owned and controlled by service-disabled vet-
erans’,’’ before ‘‘or a ‘small business concern owned and 
controlled by women’ ’’. 
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SEC. 103. IMPLEMENTATION OF EXECUTIVE ORDER 13360. 
Section 36 of the Small Business Act (15 U.S.C. 
657f) is amended by adding at the end the following new 
subsection: 
‘‘(f) IMPLEMENTATION
OF
EXECUTIVE
ORDER 
13360.—The Administrator shall— 
‘‘(1) provide small business concerns owned and 
controlled by service-disabled veterans with informa-
tion and assistance concerning participation in Fed-
eral contracting; 
‘‘(2) advise and assist other agencies in their 
strategies to expand procurement opportunities for 
such concerns; and 
‘‘(3) make training assistance on Federal con-
tract law, procedures, and practices available to such 
concerns.’’. 
TITLE 
II—PROTECTING 
TAX-
PAYERS AND ENSURING PRO-
GRAM CONSISTENCY 
SEC. 201. REQUIRING BUSINESS INTEGRITY OF SMALL 
BUSINESS CONCERNS. 
The Small Business Act (15 U.S.C. 631 et seq.) is 
amended by adding at the end the following new section: 
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‘‘SEC. 38. REQUIRING BUSINESS INTEGRITY OF SMALL 
BUSINESS CONCERNS. 
‘‘(a) 
SECTION
8(a) 
PROGRAM
BACKGROUND 
CHECK.—No applicant may be approved for participation 
in the section 8(a) program unless the Administrator first 
performs a background check on the applicant and deter-
mines that the applicant does not lack business integrity. 
‘‘(b) HUBZONE PROGRAM BACKGROUND CHECK.— 
No award of a second contract under the authority of sec-
tion 31(b)(2)(A) or 31(b)(2)(B) may be made unless the 
Administrator first performs a background check on the 
applicant and determines that the applicant does not lack 
business integrity. 
‘‘(c) RANDOM BACKGROUND CHECK.—The Adminis-
trator shall have random background checks performed on 
owners and officers of small business concerns that have 
been awarded a contract under section 8(m), 36(a), or 
36(b) to determine whether such owners and officers lacks 
business integrity.’’. 
SEC. 202. ESTABLISHMENT OF GOALS. 
(a) 
ESTABLISHMENT
OF
GOVERNMENT-WIDE 
GOALS.—Section 15(g)(1) of the Small Business Act (15 
U.S.C. 644(g)(1)) is amended by striking the first sen-
tence and inserting ‘‘The President shall annually estab-
lish Government-wide goals for procurement contracts 
awarded to small business concerns, small business con-
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cerns owned and controlled by service-disabled veterans, 
qualified HUBZone small business concerns, small busi-
ness concerns owned and controlled by socially and eco-
nomically disadvantaged individuals, small business con-
cerns participating in the program established by section 
8(a), and small business concerns owned and controlled 
by women.’’. 
(b) TECHNICAL CORRECTIONS.—Section 15 of the 
Small Business Act (15 U.S.C. 644) is amended— 
(1) in subsection (g) by adding at the end the 
following: 
‘‘(3) Each agency shall, in consultation with the Ad-
ministrator, establish goals for the usage, as prime con-
tractors, of small business concerns that participate in the 
program under section 8(a).’’; and 
(2) in subsection (h) by adding at the end the 
following: 
‘‘(4) Each prime contractor shall, in consultation 
with the Administrator, establish goals for the usage, as 
subcontractors, of small business concerns that participate 
in the program under section 8(a).’’. 
SEC. 203. SMALL BUSINESS CONCERN SUBCONTRACTING 
POLICY. 
Section 8(d)(1) of the Small Business Act (15 U.S.C. 
637(d)(1)) is amended by striking the first sentence and 
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inserting ‘‘It is the policy of the Unites States that small 
business concerns, small business concerns owned and con-
trolled by veterans, small business concerns owned and 
controlled 
by 
service-disabled 
veterans, 
qualifying 
HUBZone small business concerns, small business con-
cerns owned and controlled by socially and economically 
disadvantaged individuals, small business concerns partici-
pating in the program established by section 8(a), and 
small business concerns owned and controlled by women, 
shall have the maximum practicable opportunity to partici-
pate in the performance contracts let by any Federal agen-
cy, including contracts and subcontracts for subsystems, 
assemblies, components, and related services for major 
systems.’’. 
SEC. 204. INCREASED SIZE OF AVAILABLE CONTRACTS. 
(a) 
SECTION
8(a) 
PROGRAM.—Section 
8(a)(1)(D)(i)(II) of the Small Business Act (15 U.S.C. 
637(a)(1)(D)(i)(II)) is amended— 
(1) by striking ‘‘$5,000,000’’ and inserting 
‘‘$5,500,000’’; and 
(2) by striking ‘‘$3,000,000’’ and inserting 
‘‘$5,100,000’’. 
(b) HUBZONE PROGRAM.—Section 31(b)(2)(A)(ii) 
of such Act (15 U.S.C. 657a(b)(2)(A)(ii)) is amended— 
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(1) by striking ‘‘$5,000,000’’ and inserting 
‘‘$5,500,000’’; and 
(2) by striking ‘‘$3,000,000’’ and inserting 
‘‘$5,100,000’’. 
(c) SERVICE-DISABLED VETERAN PROGRAM.—Sec-
tion 36(a)(2) of such Act (15 U.S.C. 657f(a)(2)) is 
amended— 
(1) by striking ‘‘$5,000,000’’ and inserting 
‘‘$5,500,000’’; and 
(2) by striking ‘‘$3,000,000’’ and inserting 
‘‘$5,100,000’’. 
TITLE III—EXPANDING OPPOR-
TUNITIES FOR WOMEN EN-
TREPRENEURS 
SEC. 301. IMPLEMENT THE WOMEN’S PROCUREMENT PRO-
GRAM. 
Subsection (m) of section 8 of the Small Business Act 
(15 U.S.C. 637(m)) is amended— 
(1) by striking paragraphs (1) through (4) and 
inserting the following: 
‘‘(1) DEFINITION.—In this subsection, the term 
‘small business concern owned and controlled by 
women’ has the meaning given such term in section 
3(n), except that ownership shall be determined 
without regard to any community property law. 
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‘‘(III) all business concerns in 
the United States relative to the dol-
lar amounts of Federal contracts 
awarded to small business concerns 
owned and controlled by women; and 
‘‘(IV) small business concerns 
owned and controlled by women that 
have demonstrated an interest in or 
that have secured government con-
tracts relative to the dollar amounts 
of Federal contracts awarded. 
‘‘(B) DETERMINATION BY HEAD OF DE-
PARTMENT
OR
AGENCY.—Until such time as 
the Administrator completes the identification 
of industries required by subparagraph (A), the 
determination as to whether an industry is one 
in which small business concerns owned and 
controlled by women are under-represented in 
Federal contracting shall be made by the head 
of the department or agency for which the con-
tract is to be performed. 
‘‘(C) DEADLINE.—Not later than 90 days 
after the date of the enactment of this subpara-
graph, the Administrator shall— 
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‘‘(i) ensure the completion of the first 
study required by subparagraph (A); 
‘‘(ii) approve national certifying enti-
ties 
for 
the 
purposes 
of 
paragraph 
(2)(B)(ii); 
‘‘(iii) establish procedures required by 
paragraph (5)(A); and 
‘‘(iv) establish standards described in 
paragraph (2)(B)(iii).’’; 
(2) in paragraph (5), by striking ‘‘(2)(F)’’ in 
each place it appears and inserting ‘‘(2)(B)’’; and 
(3) in paragraph (5), by adding at the end the 
following new subparagraph: 
‘‘(D) PROTESTS BY SMALL BUSINESS CON-
CERNS.—For purposes of this paragraph, the 
term ‘interested party’ shall include any small 
business concern.’’. 
TITLE IV—STRENGTHENING 
COMMUNITY DEVELOPMENT 
SEC. 401. ON-SITE VERIFICATION. 
Section 31(b) of the Small Business Act (15 U.S.C. 
657a(b)) is amended by adding at the end the following: 
‘‘(5) ON-SITE VERIFICATION OF STATUS.— 
‘‘(A) VERIFICATION.—When a small busi-
ness concern that has previously been awarded 
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a contract under paragraph (2)(A) or (2)(B) is 
to be awarded a second contract under para-
graph (2)(A) or (2)(B), the Administrator shall 
perform an on-site inspection to determine 
whether such small business concern is a quali-
fied HUBZone small business concern. This 
paragraph does not require such an inspection 
before the award of a third or subsequent con-
tract. This paragraph does not prevent a second 
contract from being awarded before such in-
spection is completed. 
‘‘(B) NOTIFICATION BY SMALL BUSINESS 
CONCERN.—The Administrator shall require a 
small business concern to notify the Adminis-
trator, prior to being awarded a second contract 
under paragraph (2)(A) or (2)(B), of such busi-
ness concern’s attempt to be awarded a second 
contract under paragraph (2)(A) or (2)(B). Not 
later than 90 days after the date of the enact-
ment of this subparagraph, the Administrator 
shall establish procedures to implement this 
subparagraph.’’. 
SEC. 402. LIMITATION ON CONSTRUCTION CONTRACTS. 
Section 31(b) of the Small Business Act (15 U.S.C. 
657a(b)) is amended by adding at the end the following: 
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‘‘(6) LIMIT HUBZONE PROGRAM CONSTRUCTION 
CONTRACTS IN OR NEAR A HUBZONE.—A small busi-
ness concern may not obtain a construction contract 
by reason of the HUBZone program unless the con-
struction project is located in or near the HUBZone 
in which the small business concern has its principal 
place of business. The Administrator shall prescribe 
standards for determining when a project is located 
‘near’ a HUBZone for purposes of this paragraph, 
except that under no circumstances can a project lo-
cated more than 150 miles from a HUBZone be lo-
cated ‘near’ that HUBZone.’’. 
SEC. 403. ALLOWING SMALL BUSINESS CONCERNS THAT 
ARE NOT HUBZONE PROGRAM PARTICIPANTS 
TO PROTEST HUBZONE AWARDS. 
Section 31(c) of the Small Business Act (15 U.S.C. 
657a(c)) is amended by adding at the end the following 
new paragraph: 
‘‘(5) PROTESTS
BY
SMALL
BUSINESS
CON-
CERNS.—For purposes of this subsection, the term 
‘interested party’ shall include any small business 
concern.’’. 
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TITLE V—MODERNIZING THE 
8(a) PROGRAM 
SEC. 501. MODERNIZING THE SECTION 8(a) PROGRAM NET 
WORTH LIMITATIONS. 
(a) MODIFICATIONS TO 8(a) PROGRAM.—Notwith-
standing any provision of the Small Business Act (15 
U.S.C. 631 et seq.), the Administrator shall administer 
the program under section 8(a) of such Act with the fol-
lowing modifications: 
(1) DETERMINATION
FOR
TERM
OF
PRO-
GRAM.—For the purpose of this section, an indi-
vidual who has been determined by the Adminis-
trator to be economically disadvantaged at the time 
of program entry shall be deemed to be economically 
disadvantaged for the term of the program. 
(2) MATTERS EXCLUDED.—In determining per-
sonal net worth, the Administrator shall exclude 
from such determination the following: 
(A) The value of any investment of an eco-
nomically disadvantaged owner in the small 
business concern, except that such value shall 
be taken into account under this paragraph 
when comparing such concerns to other con-
cerns in the same business area that are owned 
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by other than socially disadvantaged individ-
uals. 
(B) The equity of an economically dis-
advantaged owner in a primary personal resi-
dence. 
(3) MAXIMUM NET WORTH.—When considering 
an individual’s net worth for the purpose of deter-
mining the degree of diminished credit and capital 
opportunities of such individual, the Administrator 
shall consider an individual net worth of $550,000 
or less as tending to show diminished credit and 
capital opportunities. 
(b) EFFECTIVE DATE FOR MODIFICATIONS TO THE 
8(a) PROGRAM.—This section shall apply with respect to 
small business concerns that apply to the program under 
section 8(a) of the Small Business Act (15 U.S.C. 637(a)) 
after the date of the enactment of this Act. 
SEC. 502. EXTENSION OF THE SECTION 8(a) PROGRAM 
TERM. 
(a) PROGRAM TERM.—The program term for the pro-
gram under section 8(a) of the Small Business Act shall 
be 10 years. The first 6 years shall be the developmental 
phase, and the last 4 years shall be the transitional phase. 
(b) EFFECTIVE DATE FOR MODIFICATIONS TO THE 
8(a) PROGRAM.— 
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(1) IN GENERAL.—This section shall apply with 
respect to small business concerns that apply to the 
program under section 8(a) of the Small Business 
Act (15 U.S.C. 637(a)) after the date of the enact-
ment of this Act. 
(2) TRANSITIONAL
RULE.—A small business 
concern participating in the program under section 
8(a) of such Act (15 U.S.C. 637(a)) may participate 
for not more than 10 years. 
SEC. 503. REPORT ON IMPLEMENTATION. 
Section 155 of the Small Business Reauthorization 
and Manufacturing Assistance Act of 2004 (15 U.S.C. 
657g) is amended by adding at the end the following: ‘‘An-
nually, concurrent with the submission of the Small Busi-
ness Administration’s budget request to the Congress, the 
Administrator shall submit to the Committee on Small 
Business and Entrepreneurship of the Senate and the 
Committee on Small Business of the House of Representa-
tives a report detailing progress the Administrator has 
made towards the implementation of this section.’’. 
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SEC. 504. ALLOWING SMALL BUSINESS CONCERNS THAT 
ARE NOT SECTION 8(a) PROGRAM PARTICI-
PANTS TO PROTEST SECTION 8(a) AWARDS. 
Section 8(a) of the Small Business Act (15 U.S.C. 
637(a)) is amended by adding at the end the following 
new paragraph: 
‘‘(22) Rules similar to the rules of paragraphs 
(5) and (6) of subsection (m) shall apply for pur-
poses of this subsection.’’. 
TITLE VI—OTHER MATTERS 
SEC. 601. AFFILIATION FOR CERTAIN FRANCHISES. 
Section 3(a) of the Small Business Act (15 U.S.C. 
632(a)) is amended by adding at the end the following 
new paragraph: 
‘‘(5) SPECIAL RULE RELATING TO FRANCHISES 
IN
THE
TEMPORARY
EMPLOYEE
SERVICES
INDUS-
TRY.—In determining whether a franchisee is affili-
ated with a franchisor in the temporary employee 
services industry, the Administrator shall— 
‘‘(A) disregard— 
‘‘(i) whether the franchisor finances 
the payroll of the temporary staffing per-
sonnel (including billing, collecting, and re-
mitting client fees); and 
‘‘(ii) whether the temporary staffing 
personnel are treated as employees or inde-
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pendent contractors of the franchisor for 
tax or other purposes; and 
‘‘(B) consider the processing of payroll and 
billing by a franchisor as customary and com-
mon practice in the temporary employee serv-
ices industry that does not provide probative 
weight.’’. 
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Union Calendar No. 254 
110TH CONGRESS 
1ST SESSION 
H. R. 3867 
[Report No. 110–400] 
A BILL 
To update and expand the procurement programs 
of the Small Business Administration, and for 
other purposes. 
OCTOBER 22, 2007 
Committed to the Committee of the Whole House on the 
State of the Union and ordered to be printed 
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