I 
116TH CONGRESS 
1ST SESSION H. R. 2022 
To establish certain procurement procedures with respect to businesses wholly- 
owned through an ESOP, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 2, 2019 
Mr. BUCSHON introduced the following bill; which was referred to the Com-
mittee on Oversight and Reform, and in addition to the Committees on 
Armed Services, and Small Business, for a period to be subsequently de-
termined by the Speaker, in each case for consideration of such provisions 
as fall within the jurisdiction of the committee concerned 
A BILL 
To establish certain procurement procedures with respect 
to businesses wholly-owned through an ESOP, 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 referred to as the ‘‘ESOP Business 
Act of 2019’’. 
SEC. 2. FINDINGS. 
Congress finds the following: 
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SEC. 
4. 
DEEMING 
OF 
BUSINESSES 
WHOLLY-OWNED 
THROUGH AN ESOP AS SMALL BUSINESS 
CONCERNS. 
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: 
‘‘(10) APPLICATION TO BUSINESSES WHOLLY- 
OWNED THROUGH AN ESOP.— 
‘‘(A) IN
GENERAL.—Notwithstanding the 
requirements relating to size standards in this 
subsection, a business wholly-owned through an 
ESOP shall be deemed to be a small business 
concern for the purposes of any Federal pro-
curement programs. 
‘‘(B) DEFINITION.—The term ‘business 
wholly-owned through an ESOP’ means a busi-
ness for which 100 percent of the outstanding 
stock is held through an employee stock owner-
ship plan (as defined in section 4795(e)(7) of 
the Internal Revenue Code).’’. 
SEC. 5. PRICING PREFERENCE FOR CONTRACTS AWARDED 
TO BUSINESSES WHOLLY-OWNED THROUGH 
AN ESOP. 
(a) PRICING PREFERENCE
FOR DEFENSE CON-
TRACTS.—Section 2304 of title 10, United States Code, 
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is amended by adding at the end the following new sub-
section: 
‘‘(m) For a contract awarded pursuant to this sec-
tion, the head of the agency may enter into a contract 
with a business wholly-owned through an ESOP using a 
price evaluation preference not in excess of 10 percent 
when evaluating an offer received from such a business. 
In this subsection, the term ‘business wholly-owned 
through an ESOP’ means a business for which 100 per-
cent of the outstanding stock is held through an employee 
stock ownership plan (as defined in section 4795(e)(7) of 
the Internal Revenue Code).’’. 
(b) PRICING
PREFERENCE
FOR
CIVILIAN
CON-
TRACTS.—Section 3301 of title 41, United States Code, 
is amended by adding at the end the following new sub-
section: 
‘‘(g) PRICING PREFERENCE FOR CONTRACTS.—For 
a contract awarded pursuant to this section, the head of 
an agency may enter into a contract with a business whol-
ly-owned through an ESOP using a price evaluation pref-
erence not in excess of 10 percent when evaluating an 
offer received from such a business. In this subsection, 
the term ‘business wholly-owned through an ESOP’ means 
a business for which 100 percent of the outstanding stock 
is held through an employee stock ownership plan (as de-
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fined in section 4795(e)(7) of the Internal Revenue 
Code).’’. 
SEC. 6. FOLLOW-ON CONTRACTS FOR BUSINESSES WHOL-
LY-OWNED THROUGH AN ESOP. 
(a) USE
OF NONCOMPETITIVE PROCEDURES
FOR 
DEFENSE CONTRACTS.—Section 2304(d)(1) of title 10, 
United States Code, is amended by adding at the end the 
following new subparagraph: 
‘‘(C) in the case of a follow-on contract for the 
delivery of goods or services that are the same as or 
substantially similar to the goods or services deliv-
ered under a prior contract awarded to a source that 
is a business wholly-owned through an ESOP (as de-
fined in subsection (m)), such goods or services shall 
be deemed to be available only from that source if 
the Secretary rates the performance of that source 
on the prior contract as satisfactory or better (or the 
equivalent) in the applicable past performance data-
base used by the Secretary for making source selec-
tion decisions’’. 
(b) USE OF NONCOMPETITIVE PROCEDURES FOR CI-
VILIAN CONTRACTS.—Section 3304(b) of title 41, United 
States Code, is amended— 
(1) in paragraph (1), by striking ‘‘or’’ after 
‘‘procurement;’’; 
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(2) in paragraph (2)(B), by striking the period 
and inserting ‘‘; or’’; and 
(3) by adding at the end the following: 
‘‘(3) a follow-on contract for the delivery of 
goods or services determined by the head of the ex-
ecutive agency to be substantially similar to the 
goods or services delivered under a prior contract 
awarded to a source that is a business wholly-owned 
through an ESOP, such goods or services shall be 
deemed to be available only from that source if the 
executive agency rates the performance of that 
source on the prior contract as satisfactory or better 
(or the equivalent) in the applicable past perform-
ance database used by the head of the agency for 
making source selection decisions.’’. 
Æ 
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