I 
108TH CONGRESS 
1ST SESSION H. R. 1712
To amend the Small Business Act to establish a development program for 
small business concerns owned and controlled by qualified service-disabled 
veterans, to reauthorize the programs of the National Veterans Business 
Development Corporation, to establish a Government-wide procurement 
goal for small business concerns owned and controlled by veterans, and 
for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 10, 2003
Mr. EVANS (for himself, Mr. FILNER, Mr. MICHAUD, and Ms. HOOLEY of Or-
egon) introduced the following bill; which was referred to the Committee 
on Small Business 
A BILL 
To amend the Small Business Act to establish a development 
program for small business concerns owned and con-
trolled by qualified service-disabled veterans, to reauthor-
ize the programs of the National Veterans Business De-
velopment Corporation, to establish a Government-wide 
procurement goal for small business concerns owned and 
controlled by veterans, 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 Federal Pro-
curement Opportunity Act of 2003’’. 
SEC. 2. DEVELOPMENT PROGRAM FOR SMALL BUSINESS 
CONCERNS OWNED AND CONTROLLED BY 
QUALIFIED SERVICE-DISABLED VETERANS. 
(a) ESTABLISHMENT
OF
PROGRAM.—The Small 
Business Act (15 U.S.C. 631 et seq.) is amended by redes-
ignating section 36 as section 37 and by inserting after 
section 35 the following new section: 
‘‘SEC. 36. DEVELOPMENT PROGRAM FOR SMALL BUSINESS 
CONCERNS OWNED AND CONTROLLED BY 
QUALIFIED SERVICE-DISABLED VETERANS. 
‘‘(a) IN GENERAL.—In accordance with this section, 
the Administrator shall establish a development program 
for small business concerns owned and controlled by quali-
fied service-disabled veterans. The program established 
under this section shall be similar to the program de-
scribed in sections 7(j) and 8(a). 
‘‘(b) ASSISTANCE AND SERVICES; RULES.—The pro-
gram established under this section shall provide assist-
ance and services, and be governed by rules, similar to 
the assistance and services provided under, and rules de-
scribed in, subsections (a)(20) and (j) of section 7 and 
section 8(a). 
‘‘(c) DEFINITIONS.—For purposes of this section:
‘‘(1) 
QUALIFIED
SERVICE-DISABLED
VET-
ERAN.—The term ‘qualified service-disabled veteran’ 
means a service-disabled veteran who is economically 
disadvantaged within the meaning of section 8(a)(6), 
except that, solely for purposes of determining per-
sonal income under this section, no amount received 
by such veteran by reason of such veteran’s service-
connected disability or service as a member of the 
Armed Forces shall be taken into account in deter-
mining whether such veteran is economically dis-
advantaged. 
‘‘(2) SMALL BUSINESS CONCERN OWNED AND 
CONTROLLED
BY
QUALIFIED
SERVICE-DISABLED 
VETERANS.—The term ‘small business concern 
owned and controlled by qualified service-disabled 
veterans’ has the meaning given the term ‘small 
business concern owned and controlled by service-
disabled veterans’ in section 3(q)(2), except that 
‘qualified service-disabled veteran’ shall be sub-
stituted for ‘service-disabled veteran’.’’. 
(b) 
CONFORMING
AMENDMENT.—Section 
16(d)(1)(B) of the Small Business Act (15 U.S.C. 
645(d)(1)(B)) is amended by inserting ‘‘or 36’’ after ‘‘sec-
tion 8(a)’’.
SEC. 3. REAUTHORIZATION OF PROGRAMS OF THE NA-
TIONAL VETERANS BUSINESS DEVELOPMENT 
CORPORATION AND THE ADVISORY COM-
MITTEE ON VETERANS AFFAIRS. 
(a) REAUTHORIZATION OF PROGRAMS OF NATIONAL 
VETERANS BUSINESS DEVELOPMENT CORPORATION.—
Subsection (k) of section 33 of the Small Business Act 
(15 U.S.C. 657c(k)) is amended by striking paragraphs 
(1) and (2) and inserting the following new paragraphs: 
‘‘(1) IN GENERAL.—Subject to paragraph (2), 
there are authorized to be appropriated to the Cor-
poration to carry out this section—
‘‘(A) $2,000,000 for each of fiscal years 
2003 and 2004; and 
‘‘(B) $1,000,000 for each of fiscal years 
2005 and 2006. 
‘‘(2) MATCHING REQUIREMENT.—The amount 
made available to the Corporation for any fiscal year 
may not exceed the amount that the Corporation 
certifies that it will provide for that fiscal year from 
sources other than the Federal Government.’’. 
(b) NATIONAL VETERANS BUSINESS DEVELOPMENT 
CORPORATION REPORTS.—Subsection (g) of section 33 of 
the Small Business Act (15 U.S.C. 657c(g)) is amended 
to read as follows: 
‘‘(g) REPORTS.—
‘‘(1) ANNUAL REPORT.—On or before October 
1 of each year, the Board of Directors shall transmit 
to the President, the Committees on Veterans Af-
fairs of the House of Representatives and of the 
Senate, the Committee on Small Business of the 
House of Representatives, and the Committee on 
Small Business and Entrepreneurship of the Senate 
a report describing the activities and accomplish-
ments of the Corporation for the preceding year. 
Such report shall include—
‘‘(A) the Corporation’s findings regarding 
the efforts of Federal, State, and private orga-
nizations to assist veterans in the formation 
and expansion of small business concerns; 
‘‘(B) a description of the progress made by 
the Corporation during such year in achieving 
its specified annual performance goals and ob-
jectives; and 
‘‘(C) any revisions to annual performance 
goals or indicators required to achieve specified 
strategic goals and objectives. 
‘‘(2) 5-YEAR STRATEGIC PLAN.—On or before 
October 1, 2003, and every 5 years thereafter, the 
Board of Directors shall transmit to the President, 
the Committees on Veterans Affairs of the House of
Representatives and of the Senate, the Committee 
on Small Business of the House of Representatives, 
and the Committee on Small Business and Entrepre-
neurship of the Senate a report describing the stra-
tegic objectives of the Corporation for the 5-year pe-
riod beginning on such date. Such report shall in-
clude—
‘‘(A) a comprehensive mission statement 
covering the major functions and operations of 
the Corporation; 
‘‘(B) the general outcome related strategic 
goals and objectives for each of the major func-
tions and operations of the Corporation; 
‘‘(C) a description of the means and strate-
gies, addressing both financial and non-finan-
cial resources, to be employed by the Corpora-
tion to achieve those specified strategic goals 
and objectives; 
‘‘(D) a description of the annual output 
and outcome related performance strategies, 
with associated performance goals and indica-
tors, to be employed by the Corporation to help 
achieve the general goals and objectives con-
tained in the strategic plan;
‘‘(E) an identification of key factors that 
could affect the achievement of the Corpora-
tions general goals and objectives; and 
‘‘(F) a description of the program evalua-
tions and performance indicators to be used by 
the Corporation to assess its achievement of 
strategic and annual performance goals and ob-
jectives. 
‘‘(3) 5-YEAR
BUSINESS
PLAN.—On or before 
October 1, 2003, and every 5 years thereafter, the 
Board of Directors shall transmit to the President, 
the Committees on Veterans Affairs of the House of 
Representatives and of the Senate, the Committee 
on Small Business of the House of Representatives, 
and the Committee on Small Business and Entrepre-
neurship of the Senate a report describing the finan-
cial objectives of the Corporation for the 5-year pe-
riod beginning on such date. Such report shall in-
clude a description of the specific plans to be imple-
mented to achieve such objectives and the require-
ments of paragraphs (2) and (3) of subsection (k) 
and to provide for the long-term financial viability of 
the Corporation. 
‘‘(4) AUDITED
FINANCIAL
STATEMENTS.—On 
or before October 1, 2003, and every 2 years there-
after, the Board of Directors shall transmit to the 
President, the Committees on Veterans Affairs of 
the House of Representatives and of the Senate, the 
Committee on Small Business of the House of Rep-
resentatives, and the Committee on Small Business 
and Entrepreneurship of the Senate an audited fi-
nancial statement of the Corporation. Such state-
ment shall be prepared by an independent external 
auditor and shall be conducted in accordance with 
generally accepted government auditing standards.’’. 
(c) ADVISORY COMMITTEE ON VETERANS BUSINESS 
AFFAIRS.—Subsection (h) of section 203 of the Veterans 
Entrepreneurship and Small Business Development Act of 
1999 is amended by striking ‘‘2004’’ and inserting 
‘‘2009’’. 
SEC. 4. ESTABLISHMENT OF GOVERNMENT-WIDE PRO-
CUREMENT GOAL FOR SMALL BUSINESS CON-
CERNS OWNED AND CONTROLLED BY VET-
ERANS; 
AUTHORIZATION 
OF 
RESTRICTED 
COMPETITION TO ACHIEVE GOALS; ETC. 
(a) IN GENERAL.—Section 15(g) of the Small Busi-
ness Act (15 U.S.C. 644(g)) is amended to read as follows: 
‘‘(g) GOVERNMENT-WIDE AND AGENCY SMALL BUSI-
NESS PROCUREMENT GOALS.—
‘‘(1) ESTABLISHMENT BY PRESIDENT OF GOV-
ERNMENT-WIDE GOALS.—The President shall annu-
ally establish Government-wide goals for procure-
ment contracts awarded to each specified category of 
small business concerns. 
‘‘(2) SMALL BUSINESS CONCERNS.—The Gov-
ernment-wide goal for participation by small busi-
ness concerns in prime contracts or applicable sub-
contracts shall be established at not less than 28 
percent of the total value of all prime contract 
awards for each fiscal year. 
‘‘(3) SMALL BUSINESS CONCERNS OWNED AND 
CONTROLLED BY VETERANS.—The Government-wide 
goal for participation by small business concerns 
owned and controlled by veterans in prime contracts 
or applicable subcontracts shall be established at not 
less than 3 percent of the total value of all prime 
contract awards for each fiscal year. 
‘‘(4) SMALL BUSINESS CONCERNS OWNED AND 
CONTROLLED
BY
SERVICE-DISABLED
VETERANS.—
The Government-wide goal for participation by small 
business concerns owned and controlled by service-
disabled veterans in prime contracts or applicable 
subcontracts shall be established at not less than 3
percent of the total value of all prime contract 
awards for each fiscal year. 
‘‘(5) QUALIFIED
HUBZONE
SMALL
BUSINESS 
CONCERNS.—The Government-wide goal for partici-
pation by qualified HUBZone small business con-
cerns in prime contracts or applicable subcontracts 
shall be established at not less than 3 percent of the 
total value of all prime contract awards for each fis-
cal year. 
‘‘(6) SMALL BUSINESS CONCERNS OWNED AND 
CONTROLLED BY SOCIALLY AND ECONOMICALLY DIS-
ADVANTAGED INDIVIDUALS.—The Government-wide 
goal for participation by small business concerns 
owned and controlled by socially and economically 
disadvantaged individuals in prime contracts or ap-
plicable subcontracts shall be established at not less 
than 5 percent of the total value of all prime con-
tract awards for each fiscal year. 
‘‘(7) SMALL BUSINESS CONCERNS OWNED AND 
CONTROLLED
BY
WOMEN.—The Government-wide 
goal for participation by small business concerns 
owned and controlled by women in prime contracts 
or applicable subcontracts shall be established at not 
less than 5 percent of the total value of all prime 
contract awards for each fiscal year.
‘‘(8) AGENCY GOALS.—
‘‘(A) IN GENERAL.—Each Federal agency 
shall have annual goals that present, for that 
agency, the maximum practicable opportunity 
for each specified category of small business 
concerns to perform prime contracts let by such 
agency and subcontracts under such prime con-
tracts. 
‘‘(B) NOT LESS THAN GOVERNMENT-WIDE 
GOALS.—No Federal agency may have an agen-
cy goal under subparagraph (A) which is less 
than the corresponding Government-wide goal 
established by the President under paragraph 
(1). 
‘‘(C) PROCEDURE FOR ESTABLISHMENT.—
Each year, the Administration and the head of 
each Federal agency shall jointly establish the 
goals described in subparagraph (A) for such 
agency. Whenever the Administration and the 
head of any Federal agency fail to agree on es-
tablished goals, the disagreement shall be sub-
mitted to the Administrator of the Office of 
Federal Procurement Policy for final deter-
mination.
‘‘(D) EXPANSION OF PARTICIPATION.—For 
the purpose of establishing goals under this 
paragraph, the head of each Federal agency 
shall make consistent efforts to annually expand 
participation by small business concerns from 
each industry category in procurement con-
tracts of the agency, including participation by 
each specified category of small business con-
cerns. The head of each Federal agency, in at-
tempting to attain such participation, shall con-
sider—
‘‘(i) contracts awarded as the result of 
unrestricted competition; 
‘‘(ii) contracts awarded as the result 
of restricted competition under this section 
and under the programs established under 
sections 8(a), 31, and 36; and 
‘‘(iii) subcontracts awarded pursuant 
to subcontracting plans required under 
paragraphs (4) or (5) of section 8(d). 
‘‘(9) DOUBLE COUNTING PROHIBITED.—In the 
case of a small business concern that is part of more 
than 1 specified subcategory of small business con-
cerns, with respect to any prime contract or sub-
contract awarded to such concern, a Federal agency
shall treat such concern as part of only 1 such speci-
fied subcategory for purposes of this subsection. 
‘‘(10) RESTRICTION ON USE OF FUNDS IN CASE 
OF FAILURE TO ACHIEVE GOALS.—
‘‘(A) IN GENERAL.—In the case of fiscal 
year 2004 and each fiscal year thereafter, if an 
agency fails to meet the Government-wide goal 
established under this subsection for such fiscal 
year with respect to any specified subcategory 
of small business concerns, the applicable 
amount of any amounts appropriated or other-
wise made available to such agency for the fol-
lowing fiscal year shall be used only for—
‘‘(i) procurements under any prime 
contract awarded to such specified sub-
category of small business concerns, and 
‘‘(ii) that portion of procurements 
under any prime contract (with respect to 
which a subcontracting plan is required 
under paragraph (4) or (5)) which is at-
tributable to the goal for the utilization as 
subcontractors of such specified sub-
category of small business concerns under 
such plan.
‘‘(B) APPLICABLE AMOUNT.—For purposes 
of this paragraph, the term ‘applicable amount’ 
means, with respect to any agency that fails to 
meet a Government-wide goal for a fiscal year 
with respect to any specified subcategory of 
small business concerns, the applicable percent-
age for such fiscal year of the total value of all 
prime contract awards made by such agency for 
such fiscal year. 
‘‘(C) 
APPLICABLE
PERCENTAGE.—For 
purposes of this paragraph: 
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii), the term ‘applicable 
percentage’ means, with respect to any 
specified subcategory of small business 
concerns, the Government-wide percentage 
goal for participation by such specified 
subcategory of small business concerns for 
the fiscal year. 
‘‘(ii) TRANSITION
RULES.—In the 
case of fiscal years 2004 through 2008: 
‘‘(I) 3 PERCENT
GOALS.—With 
respect to small business concerns 
owned and controlled by veterans, 
small business concerns owned and
controlled by service-disabled veterans, 
and qualified HUBZone small busi-
ness concerns, the applicable percent-
age shall be determined in accordance 
with the following table:
‘‘In the case of 
The applicable 
fiscal year: 
percentage is: 
2004 ..........................................................................
0.5%
2005 ..........................................................................
1%
2006 ..........................................................................
1.5%
2007 ..........................................................................
2%
2008 ..........................................................................
2.5%.
‘‘(II) 5 PERCENT GOALS.—With 
respect to small business concerns 
owned and controlled by socially and 
economically disadvantaged individ-
uals and small business concerns 
owned and controlled by women, the 
applicable percentage shall be deter-
mined in accordance with the fol-
lowing table:
‘‘In the case of 
The applicable 
fiscal year: 
percentage is: 
2004 ..........................................................................
1%
2005 ..........................................................................
2%
2006 ..........................................................................
3%
2007 ..........................................................................
4%
2008 ..........................................................................
5%.
‘‘(11) RESTRICTED COMPETITION TO ACHIEVE 
GOALS.—
‘‘(A) IN
GENERAL.—In accordance with 
this paragraph, a contracting officer may re-
strict competition for any contract for the pro-
curement of goods or services by the Federal 
Government to any specified category of small 
business concerns, if—
‘‘(i) the contracting officer has a rea-
sonable expectation that two or more small 
business concerns of such category will 
submit offers for the contract; 
‘‘(ii) the anticipated award price of 
the contract (including options) does not 
exceed the simplified acquisition threshold; 
‘‘(iii) in the estimation of the con-
tracting officer, the contract award can be 
made at a fair and reasonable price; 
‘‘(iv) the award of such contract to a 
small business concern of such category 
will not result in the agency exceeding the 
greater of the Government-wide goal or the 
agency goal under this subsection with re-
spect to such category; and 
‘‘(v) each of the concerns—
‘‘(I) is certified by the Adminis-
trator or any person or entity ap-
proved by the Administrator as a
small business concern of such cat-
egory; or 
‘‘(II) certifies to the contracting 
officer that it is a small business con-
cern of such category and provides 
adequate documentation, in accord-
ance with standards established by the 
Administration, to support such cer-
tification. 
‘‘(B) RELATIONSHIP
TO
OTHER
CON-
TRACTING
PREFERENCES.—A 
procurement 
shall not be made from a source on the basis 
of a preference provided in subparagraph (A), 
if the procurement would otherwise be made 
from a different source under section 4124 or 
4125 of title 18, United States Code, or the 
Javits-Wagner-O’Day Act (41 U.S.C. 46 et 
seq.). 
‘‘(C) VERIFICATION
OF
ELIGIBILITY.—In 
carrying out this paragraph, the Administrator 
shall establish procedures relating to— 
‘‘(i) the filing, investigation, and dis-
position by the Administration of any chal-
lenge to the eligibility of a small business 
concern to receive assistance under this
small business concerns for purposes of this 
paragraph shall be subject to— 
‘‘(i) section 1001 of title 18, United 
States Code; and 
‘‘(ii) sections 3729 through 3733 of 
title 31, United States Code. 
‘‘(G) CONTRACTING
OFFICER.—For pur-
poses of this paragraph, the term ‘contracting 
officer’ has the meaning given such term in sec-
tion 27(f)(5) of the Office of Federal Procure-
ment Policy Act (41 U.S.C. 423(f)(5)). 
‘‘(12) APPLICABLE SUBCONTRACTS.—For pur-
poses of this subsection, the term ‘applicable sub-
contract’ means any subcontract under a contract 
that is subject to the requirements of paragraph (4) 
or (5) of section 8(d).’’. 
(b) CONFORMING AMENDMENTS.—Section 15(h)(2) 
of the Small Business Act (15 U.S.C. 644(h)(2)) is 
amended by striking subparagraphs (D), (E), and (F), 
and inserting the following new subparagraphs: 
‘‘(D) The total number and dollar value of 
prime contracts awarded to each specified category 
of small business concerns through—
‘‘(i) noncompetitive negotiation;
‘‘(ii) competition restricted to such speci-
fied category; and 
‘‘(iii) unrestricted competition. 
‘‘(E) The total number and dollar value of ap-
plicable subcontracts (as defined in subsection 
(g)(12)) awarded to each specified category of small 
business concerns. 
‘‘(F) The information described in subpara-
graphs (D) and (E) stated separately with respect to 
each agency.’’. 
SEC. 5. REQUIREMENTS RELATED TO SUBCONTRACTING 
PLANS. 
(a) FACTORS FOR EVALUATING OFFERS.—Subpara-
graph (G) of section 8(d)(4) of the Small Business Act 
(15 U.S.C. 637(d)(4)) is amended to read as follows: 
‘‘(G) In the case of any contract that is awarded pur-
suant to the negotiated method of procurement, the fol-
lowing shall be treated as significant factors for purposes 
of evaluating offers for any such contract: 
‘‘(i) A factor that is based on the extent to 
which the subcontracting plan for small business 
participation in the performance of the contract ex-
ceeds the requirement described in paragraph 
(6)(A).
‘‘(ii) A factor that is based on the extent to 
which the subcontracting plan provides for the use 
of small business concerns with respect to which the 
contractor is serving as a mentor under a mentoring 
program established by the agency. 
‘‘(iii) A factor that is based on the extent to 
which the offeror attained applicable goals for small 
business participation in the performance of past 
and current contracts.’’. 
(b) MINIMUM GOAL.—Subparagraph (A) of section 
8(d)(6) of the Small Business Act (15 U.S.C. 637(d)(6)) 
is amended to read as follows: 
‘‘(A) percentage goals for the utilization as sub-
contractors of each specified category of small busi-
ness concerns (determined in accordance with the re-
quirement of section 15(g)(9)), which goal for the 
utilization of small business concerns shall be not 
less than the percentage goal established under sec-
tion 15(g)(2);’’. 
(c) REQUIRED PENALTY FOR MATERIAL BREACH.—
Paragraph (8) of section 8(d) of the Small Business Act 
(15 U.S.C. 637(d)(8)) is amended by adding at the end 
the following: ‘‘If a contracting officer finds the prime con-
tractor or any subcontractor to be in material breach 
under this paragraph, such prime contractor shall pay a
penalty in an amount determined by such officer, except 
that such penalty shall not be less than 10 percent of the 
total dollar value of the contract under which the prime 
contractor or subcontractor is in material breach. Rules 
similar to the rules of paragraph (4)(F)(ii) shall apply for 
purposes of the preceding sentence. Notwithstanding any 
other provision of law, the amount of any penalty collected 
under this paragraph shall be paid over to the agency that 
let the contract and may be retained and used by such 
agency for any operating expense of the agency.’’. 
SEC. 6. DEFINITIONS. 
(a) SERVICE-DISABLED VETERAN.—
(1) IN
GENERAL.—Paragraph (1) of section 
3(q) of the Small Business Act (15 U.S.C. 
632(q)(1)) is amended to read as follows: 
‘‘(1) SERVICE-DISABLED VETERAN.—The term 
‘service-disabled veteran’ means any veteran with a 
disability that is—
‘‘(A) service-connected (as defined in sec-
tion 101(16) of title 38, United States Code); 
and 
‘‘(B) rated at 10 percent or more disabling 
by the Secretary of Veterans Affairs or, in the 
case of a disability not rated by the Secretary 
of Veterans Affairs, by the Secretary concerned
(as defined in section 101(25) of title 38, 
United States Code).’’. 
(2) TRANSITION RULE.—A small business con-
cern that is receiving assistance under this Act (or 
if fully approved to receive such assistance) on the 
date of the enactment of this Act shall not cease to 
qualify for such assistance solely because of the 
amendment made by paragraph (1). The preceding 
sentence shall not make such concern eligible for any 
other assistance. 
(b) SPECIFIED CATEGORIES AND SUBCATEGORIES OF 
SMALL BUSINESS CONCERNS.—Section 3 of the Small 
Business Act (15 U.S.C. 632) is amended by adding at 
the end the following new subsections: 
‘‘(r) SPECIFIED CATEGORY
OF SMALL BUSINESS 
CONCERNS.—For purposes of this Act, each of following 
is a specified category of small business concerns: 
‘‘(1) Small business concerns owned and con-
trolled by veterans. 
‘‘(2) Small business concerns owned and con-
trolled by service-disabled veterans. 
‘‘(3) Qualified HUBZone small business con-
cerns.