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).
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 1999, 2000, and 2001.
(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 1999;
(B) $200,000 for fiscal year 2000; and
(C) $175,000 for fiscal year 2001.
(3) To carry out section 8(b)(18) of the Small
Business Act, as added by section 11 of this Act,
$1,250,000 per fiscal year for each of fiscal years
1999, 2000, and 2001.
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