656 
amount paid to the concern under a contract in that 
category. 
‘‘(2) UNIFORMITY.—A requirement established 
under paragraph (1) shall apply to all covered small 
business concerns. 
‘‘(3) CONSTRUCTION PROJECTS.—The Adminis-
trator shall establish, through public rulemaking, re-
quirements similar to those specified in paragraph 
(1) to be applicable to contracts for general and spe-
cialty construction and to contracts for any other in-
dustry category not otherwise subject to the require-
ments of such paragraph. The percentage applicable 
to any such requirement shall be determined in ac-
cordance with paragraph (2). 
‘‘(e) DEFINITIONS.—In this section, the following defi-
nitions apply: 
‘‘(1) COVERED SMALL BUSINESS CONCERN.—The 
term ‘covered small business concern’ means a busi-
ness concern that— 
‘‘(A) with respect to a contract awarded 
under section 8(a), is a small business concern 
eligible to receive contracts under that section; 
‘‘(B) with respect to a contract awarded 
under section 8(m)— 
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‘‘(i) is a small business concern owned 
and controlled by women (as defined in that 
section); or 
‘‘(ii) is a small business concern owned 
and controlled by women (as defined in that 
section) that is not less than 51 percent 
owned by 1 or more women who are eco-
nomically disadvantaged (and such owner-
ship is determined without regard to any 
community property law); 
‘‘(C) with respect to a contract awarded 
under section 15(a), is a small business concern; 
‘‘(D) with respect to a contract awarded 
under section 31, is a qualified HUBZone small 
business concern; or 
‘‘(E) with respect to a contract awarded 
under section 36, is a small business concern 
owned and controlled by service-disabled vet-
erans. 
‘‘(2) SIMILARLY
SITUATED
ENTITY.—The term 
‘similarly situated entity’ means a subcontractor 
that— 
‘‘(A) if a subcontractor for a small business 
concern, is a small business concern; 
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‘‘(B) if a subcontractor for a small business 
concern eligible to receive contracts under section 
8(a), is such a concern; 
‘‘(C) if a subcontractor for a small business 
concern owned and controlled by women (as de-
fined in section 8(m)), is such a concern; 
‘‘(D) if a subcontractor for a small business 
concern owned and controlled by women (as de-
fined in section 8(m)) that is not less than 51 
percent owned by 1 or more women who are eco-
nomically disadvantaged (and such ownership is 
determined without regard to any community 
property law), is such a concern; 
‘‘(E) if a subcontractor for a qualified 
HUBZone small business concern, is such a con-
cern; or 
‘‘(F) if a subcontractor for a small business 
concern owned and controlled by service-disabled 
veterans, is such a concern.’’. 
SEC. 1652. PENALTIES. 
Section 16 of the Small Business Act (15 U.S.C. 645) 
is amended by adding at the end the following: 
‘‘(g) SUBCONTRACTING LIMITATIONS.— 
‘‘(1) IN GENERAL.—Whoever violates a require-
ment established under section 45 shall be subject to 
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the penalties prescribed in subsection (d), except that, 
for an entity that exceeded a limitation on subcon-
tracting under such section, the fine described in sub-
section (d)(2)(A) shall be treated as the greater of— 
‘‘(A) $500,000; or 
‘‘(B) the dollar amount expended, in excess 
of permitted levels, by the entity on subcontrac-
tors. 
‘‘(2) MONITORING.—Not later than 1 year after 
the date of enactment of this subsection, the Adminis-
trator shall take such actions as are necessary to en-
sure that an existing Federal subcontracting reporting 
system is modified to notify the Administrator, the 
appropriate Director of the Office of Small and Dis-
advantaged Business Utilization, and the appropriate 
contracting officer if a requirement established under 
section 45 is violated.’’. 
SEC. 1653. CONFORMING AMENDMENTS. 
(a) HUBZONES.—Section 3(p)(5) of the Small Busi-
ness Act (15 U.S.C. 632(p)(5)) is amended— 
(1) in subparagraph (A)(i) by striking subclause 
(III) and inserting the following: 
‘‘(III) with respect to any sub-
contract entered into by the small busi-
ness concern pursuant to a contract 
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awarded to the small business concern 
under section 31, the small business 
concern will ensure that the require-
ments of section 45 are satisfied; and’’; 
(2) by striking subparagraphs (B) and (C); and 
(3) by redesignating subparagraph (D) as sub-
paragraph (B). 
(b) ENTITIES ELIGIBLE FOR CONTRACTS UNDER SEC-
TION 8(a).—Section 8(a) of such Act (15 U.S.C. 637(a)) 
is amended by striking paragraph (14) and inserting the 
following: 
‘‘(14) LIMITATIONS
ON
SUBCONTRACTING.—A 
concern may not be awarded a contract under this 
subsection as a small business concern unless the con-
cern agrees to satisfy the requirements of section 45.’’. 
(c) SMALL BUSINESS CONCERNS.—Section 15 of such 
Act (15 U.S.C. 644) is amended by striking subsection (o) 
and inserting the following: 
‘‘(o) LIMITATIONS ON SUBCONTRACTING.—A concern 
may not be awarded a contract under subsection (a) as a 
small business concern unless the concern agrees to satisfy 
the requirements of section 45.’’. 
SEC. 1654. REGULATIONS. 
Not later than 180 days after the date of enactment 
of this Act, the Administrator of the Small Business Admin-
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istration shall issue guidance with respect to compliance 
with the changes made to the Small Business Act by the 
amendments in this part, with opportunities for notice and 
comment. 
Subpart B—Subcontracting Plans 
SEC. 1655. SUBCONTRACTING PLANS. 
(a) SUBCONTRACTING REPORTING REQUIREMENTS.— 
(1) IN GENERAL.—Section 8(d)(6) of the Small 
Business Act (15 U.S.C. 637(d)(6)) is amended— 
(A) by striking ‘‘(6) Each subcontracting 
plan’’ and inserting the following: 
‘‘(6) SUBCONTRACTING PLAN REQUIREMENTS.— 
Each subcontracting plan’’; 
(B) by amending subparagraph (E) to read 
as follows: 
‘‘(E) assurances that the offeror or bidder 
will— 
‘‘(i) submit— 
‘‘(I) not later than 180 days after 
the date on which performance under 
the applicable contract begins, and 
every 180 days thereafter until con-
tract performance ends, a report that 
describes all subcontracting activities 
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under the contract during the pre-
ceding 180-day period; 
‘‘(II) not later than 1 year after 
the date on which performance under 
the applicable contract begins, and an-
nually thereafter until contract per-
formance ends, a report that describes 
all subcontracting activities under the 
contract that have occurred before the 
date on which the report is submitted; 
and 
‘‘(III) not later than 30 days after 
the date on which performance under 
the applicable contract ends, a report 
that describes all subcontracting activi-
ties under the contract; and 
‘‘(ii) cooperate with any study or sur-
vey required by the applicable Federal agen-
cy or the Administration to determine the 
extent of compliance by the offeror or bidder 
with the subcontracting plan;’’; and 
(C) by moving the margins for subpara-
graphs (A), (B), (C), (D), and (F) 2 ems to the 
right (so that the align with subparagraph (E), 
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as amended by subparagraph (B) of this para-
graph). 
(2) REPORTING SYSTEM MODIFICATION.— 
(A) IN GENERAL.—Not later than 1 year 
after the date of enactment of this part, the Ad-
ministrator of the Small Business Administra-
tion shall take such actions as are necessary to 
ensure that the Federal subcontracting reporting 
system to which covered reports are submitted is 
modified to notify the Administrator, the appro-
priate contracting officer, and the appropriate 
Director of Small and Disadvantaged Business 
Utilization if an entity fails to submit a re-
quired covered report. If the Administrator does 
not modify the subcontracting reporting system 
on or before the date that is 1 year after the date 
of enactment of this part, the Administrator may 
not carry out or establish any pilot program 
until the date the Administrator modifies the re-
porting system. 
(B) COVERED REPORT DEFINED.—In this 
paragraph, the term ‘‘covered report’’ means a 
report submitted in accordance with assurances 
provided under section 8(d)(6)(E) of the Small 
Business Act (15 U.S.C. 637(d)(6)(E)). 
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(b) FAILURE TO SUBMIT SUBCONTRACTING REPORTS 
AS BREACH OF CONTRACT.—Section 8(d)(8) of such Act (15 
U.S.C. 637(d)(8)) is amended— 
(1) by striking ‘‘(8) The failure’’ and inserting 
the following: 
‘‘(8) MATERIAL BREACH.—The failure’’; 
(2) in subparagraph (A) by striking ‘‘subsection, 
or’’ and inserting ‘‘subsection,’’; 
(3) in subparagraph (B) by striking ‘‘sub-
contract,’’ and inserting ‘‘subcontract, or’’; 
(4) by inserting after subparagraph (B) the fol-
lowing: 
‘‘(C) assurances provided under paragraph 
(6)(E),’’; and 
(5) by moving the margins of subparagraphs 
(A), (B), and the matter following subparagraph (B) 
2 ems to the right. 
(c) AUTHORITY OF SMALL BUSINESS ADMINISTRA-
TION.—Section 8(d)(10) of such Act (15 U.S.C. 637(d)(10)) 
is amended— 
(1) by striking ‘‘(10) In the case of’’ and insert-
ing the following: 
‘‘(10) AUTHORITY OF ADMINISTRATION.—In the 
case of’’; 
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(2) in subparagraph (B) by striking ‘‘, which 
shall be advisory in nature,’’; 
(3) in subparagraph (C) by striking ‘‘, either on 
a contract-by-contract basis, or in the case contrac-
tors’’ and inserting ‘‘as a supplement to evaluations 
performed by the contracting agency, either on a con-
tract-by-contract basis or, in the case of contractors’’; 
and 
(4) by moving the margins of subparagraphs (A) 
through (C) 2 ems to the right. 
(d) APPEALS.—Section 8(d) of such Act (15 U.S.C. 
637(d)) is amended by adding at the end the following: 
‘‘(13) REVIEW
AND
ACCEPTANCE
OF
SUBCON-
TRACTING PLANS.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (E), if a procurement center rep-
resentative or commercial market representative 
determines that a subcontracting plan required 
under paragraph (4) or (5) fails to provide the 
maximum practicable opportunity for covered 
small business concerns to participate in the per-
formance of the contract to which the plan ap-
plies, such representative may delay acceptance 
of the plan in accordance with subparagraph 
(B). 
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‘‘(B) PROCESS.— 
‘‘(i) IN GENERAL.—Except as provided 
in clause (ii), a procurement center rep-
resentative or commercial market represent-
ative who makes the determination under 
subparagraph (A) with respect to a subcon-
tracting plan may delay acceptance of the 
plan for a 30-day period by providing writ-
ten notice of such determination to head of 
the procuring activity of the contracting 
agency. Such notice shall include rec-
ommendations for altering the plan to pro-
vide the maximum practicable opportunity 
described in that subparagraph. 
‘‘(ii) EXCEPTION.—In the case of the 
Department of Defense, a procurement cen-
ter representative or commercial market 
representative who makes the determination 
under subparagraph (A) with respect to a 
subcontracting plan may delay acceptance 
of the plan for a 15-day period by pro-
viding written notice of such determination 
to appropriate personnel of the Department 
of Defense. Such notice shall include rec-
ommendations for altering the plan to pro-
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vide the maximum practicable opportunity 
described in that subparagraph. The author-
ity of a procurement center representative 
or commercial market representative to 
delay acceptance of a subcontracting plan 
as provided in subparagraph (A), does not 
include the authority to delay the award or 
performance of the contract concerned. 
‘‘(C) DISAGREEMENTS.—If a procurement 
center representative or commercial market rep-
resentative delays the acceptance of a subcon-
tracting plan under subparagraph (B) and does 
not reach agreement with head of the procuring 
activity of the contracting agency to alter the 
plan to provide the maximum practicable oppor-
tunity described in subparagraph (A) not later 
than 30 days from the date written notice was 
provided, the disagreement shall be submitted to 
the head of the contracting agency by the Admin-
istrator for a final determination. 
‘‘(D) COVERED SMALL BUSINESS CONCERNS 
DEFINED.—In this paragraph, the term ‘covered 
small business concerns’ means small business 
concerns, qualified HUBZone small business 
concerns, small business concerns owned and 
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controlled by veterans, small business concerns 
owned and controlled by service-disabled vet-
erans, small business concerns owned and con-
trolled by socially and economically disadvan-
taged individuals, and small business concerns 
owned and controlled by women. 
‘‘(E) EXCEPTION.—The procurement center 
representative or commercial market representa-
tive may not delay the acceptance of a subcon-
tracting plan if the appropriate personnel of the 
contracting agency certify that the agency’s need 
for the property or services is of such an unusual 
and compelling urgency that the United States 
would be seriously injured unless the agency is 
permitted to accept the subcontracting plan.’’. 
SEC. 1656. NOTICES OF SUBCONTRACTING OPPORTUNITIES. 
Section 8(k)(1) of the Small Business Act (15 U.S.C. 
637(k)(1)) is amended by striking ‘‘in the Commerce Busi-
ness Daily’’ and inserting ‘‘on the appropriate Federal Web 
site (as determined by the Administrator)’’. 
SEC. 1657. REGULATIONS. 
Not later than 180 days after the date of enactment 
of this Act, the Administrator of the Small Business Admin-
istration shall issue guidance with respect to the changes 
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made to the Small Business Act, with opportunity for notice 
and comment. 
Subpart C—Publication of Certain Documents 
SEC. 1658. PUBLICATION OF CERTAIN DOCUMENTS. 
The Small Business Act (15 U.S.C. 631 et seq.), as 
amended by this part, is further amended by inserting after 
section 45 the following: 
‘‘SEC. 46. PUBLICATION OF CERTAIN DOCUMENTS. 
‘‘A Federal agency, other than the Department of De-
fense, may only convert a function that is being performed 
by a small business concern to performance by a Federal 
employee if the agency has made publicly available the pro-
cedures and methodologies of the agency with respect to de-
cisions to convert a function being performed by a small 
business concern to performance by a Federal employee, in-
cluding procedures and methodologies for determining 
which contracts will be studied for potential conversion; 
procedures and methodologies by which a contract is evalu-
ated as inherently governmental or as a critical agency 
function; and procedures and methodologies for estimating 
and comparing costs.’’. 
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PART V —SMALL BUSINESS CONCERN SIZE 
STANDARDS 
SEC. 1661. SMALL BUSINESS CONCERN SIZE STANDARDS. 
Section 3 of the Small Business Act (15 U.S.C. 632) 
is amended— 
(1) by striking ‘‘SEC. 3.’’ and inserting the fol-
lowing: 
‘‘SEC. 3. DEFINITIONS.’’; and 
(2) in subsection (a)— 
(A) by striking the subsection enumerator 
and inserting the following: 
‘‘(a) SMALL BUSINESS CONCERNS.—’’; 
(B) in paragraph (1) by striking ‘‘(1) For 
the purposes’’ and inserting the following: 
‘‘(1) IN GENERAL.—For the purposes’’; 
(C) in paragraph (3) by striking ‘‘(3) When 
establishing’’ and inserting the following: 
‘‘(3) VARIATION BY INDUSTRY AND CONSIDER-
ATION OF OTHER FACTORS.—When establishing’’; 
(D) by moving paragraph (5), including 
each subparagraph and clause therein, 2 ems to 
the right; and 
(E) by adding at the end the following: 
‘‘(6) PROPOSED RULE MAKING.—In conducting 
rulemaking to revise, modify or establish size stand-
ards pursuant to this section, the Administrator shall 
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consider, and address, and make publicly available as 
part of the notice of proposed rule making and notice 
of final rule each of the following: 
‘‘(A) a detailed description of the industry 
for which the new size standard is proposed; 
‘‘(B) an analysis of the competitive environ-
ment for that industry; 
‘‘(C) the approach the Administrator used 
to develop the proposed standard including the 
source of all data used to develop the proposed 
rulemaking; and 
‘‘(D) the anticipated effect of the proposed 
rulemaking on the industry, including the num-
ber of concerns not currently considered small 
that would be considered small under the pro-
posed rulemaking and the number of concerns 
currently considered small that would be deemed 
other than small under the proposed rulemaking. 
‘‘(7) COMMON
SIZE
STANDARDS.—In carrying 
out this subsection, the Administrator may establish 
or approve a single size standard for a grouping of 
four digit North American Industrial Classification 
codes only if the Administrator makes publicly avail-
able, not later than the date on which such size stand-
ard is established or approved, a justification dem-
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onstrating that such size standard is appropriate for 
each individual industry classification included in 
the grouping. 
‘‘(8) NUMBER
OF
SIZE
STANDARDS.—The Ad-
ministrator shall not limit the number of size stand-
ards it creates pursuant to paragraph (2), and shall 
assign the appropriate size standard to each North 
American Industrial Classification System Code’’. 
PART VI —CONTRACT BUNDLING 
SEC. 1671. CONSOLIDATION OF PROVISIONS RELATING TO 
CONTRACT BUNDLING. 
Section 44 of the Small Business Act (15 U.S.C. 657q) 
is amended to read as follows: 
‘‘SEC. 44. CONTRACT BUNDLING. 
‘‘(a) DEFINITIONS.—In this Act: 
‘‘(1) BUNDLED CONTRACT.—The term ‘bundled 
contract’— 
‘‘(A) means a contract that is entered into 
to meet procurement requirements that are com-
bined in a bundling of contract requirements, 
without regard to whether a study of the effects 
of the solicitation on Federal officers or employ-
ees has been made; and 
‘‘(B) does not include— 
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‘‘(i) a contract with an aggregate dol-
lar value below the dollar threshold; or 
‘‘(ii) a single award contract for the 
acquisition of a weapons system acquired 
through a major defense acquisition. 
‘‘(2) BUNDLING METHODOLOGY.—The term ‘bun-
dling methodology’ means— 
‘‘(A) a solicitation to obtain offers for a sin-
gle contract or a multiple award contract; 
‘‘(B) a solicitation of offers for the issuance 
of a task or a delivery order under an existing 
single or multiple award contract; or 
‘‘(C) the creation of any new procurement 
requirements that permits a combination of con-
tract requirements, including any combination 
of contract requirements or order requirements. 
‘‘(3) BUNDLING OF CONTRACT REQUIREMENTS.— 
The term ‘bundling of contract requirements’, with re-
spect to the contract requirements of a Federal agen-
cy— 
‘‘(A) means the use of any bundling meth-
odology to satisfy 2 or more procurement re-
quirements for new or existing goods or services 
provided to or performed for the Federal agency, 
including any construction services, that is likely 
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to be unsuitable for award to a small-business 
concern due to— 
‘‘(i) the diversity, size, or specialized 
nature of the elements of the performance 
specified; 
‘‘(ii) the aggregate dollar value of the 
anticipated award; 
‘‘(iii) the geographical dispersion of the 
contract performance sites; or 
‘‘(iv) any combination of the factors 
described in clauses (i), (ii), and (iii); and 
‘‘(B) does not include the use of a bundling 
methodology for an anticipated award with an 
aggregate dollar value below the dollar threshold. 
‘‘(4) CHIEF
ACQUISITION
OFFICER.—The term 
‘Chief Acquisition Officer’ means the employee of a 
Federal agency designated as the Chief Acquisition 
Officer for the Federal agency under section 1702(a) 
of title 41, United States Code. 
‘‘(5) CONTRACT.—The term ‘contract’ includes, 
for purposes of this section, any task order made pur-
suant to an indefinite quantity, indefinite delivery 
contract. 
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