I
106TH CONGRESS
1ST SESSION
H. R. 366
To amend the Small Business Act to establish programs and undertake
efforts to assist and promote the creation, development, and growth
of small business concerns owned and controlled by veterans of service
in the Armed Forces, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 19, 1999
Mr. FILNER introduced the following bill; which was referred to the Commit-
tee on Small Business, and in addition to the Committee on Veterans’
Affairs, for a period to be subsequently determined by the Speaker, in
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned
A BILL
To amend the Small Business Act to establish programs
and undertake efforts to assist and promote the creation,
development, and growth of small business concerns
owned and controlled by veterans of service in the Armed
Forces, 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 Entrepre-
neurship Promotion Act of 1999’’.
SEC. 2. PURPOSES AND DEFINITIONS.
(a) PURPOSES.—The purposes of this Act are—
(1) to foster enhanced entrepreneurship among
veterans by providing increased opportunities;
(2) to vigorously promote the legitimate inter-
ests of business concerns owned and controlled by el-
igible veterans; and
(3) to ensure that those concerns receive a fair
share of purchases made by the Federal Govern-
ment.
(b) DEFINITIONS.—For the purposes of this Act, the
following definitions apply:
(1) ADMINISTRATION.—The term ‘‘Administra-
tion’’ means the Small Business Administration.
(2) ADMINISTRATOR.—The term ‘‘Adminis-
trator’’ means the Administrator of the Small Busi-
ness Administration.
(3) ELIGIBLE VETERAN; SMALL BUSINESS CON-
CERN OWNED AND CONTROLLED BY ELIGIBLE VET-
ERANS.—The terms ‘‘eligible veteran’’ and ‘‘small
business concern owned and controlled by eligible
veterans’’ have the meaning such terms have in sec-
tion 3(o) of the Small Business Act, as added by
section 3 of this Act.
SEC. 3. SMALL BUSINESS ACT DEFINITIONS.
Section 3 of the Small Business Act (15 U.S.C. 632)
is amended by adding at the end the following new sub-
section:
‘‘(o) For purposes of this Act—
‘‘(1) the term ‘eligible veteran’ means any per-
son who—
‘‘(A) is a disabled veteran, as such term is
defined in section 4211(3) of title 38, United
States Code; or
‘‘(B) served on active duty during a period
of war or in a campaign or expedition for which
a campaign badge is authorized and was dis-
charged or released from such duty with other
than a dishonorable discharge; and
‘‘(2) the term ‘small business concern owned
and controlled by eligible veterans’ means a small
business concern—
‘‘(A) which is at least 51 per centum
owned by one or more eligible veterans, or in
the case of a publicly owned business, at least
51 per centum of the stock of which is owned
by one or more eligible veterans; and
‘‘(B) whose management and daily busi-
ness operations are controlled by such veter-
ans.’’.
SEC. 4. PROCUREMENT ASSISTANCE.
(a) GOVERNMENT-WIDE GOALS.—Subsection (g)(1)
of section 15 of the Small Business Act (15 U.S.C. 644)
is amended—
(1) in the first sentence, by inserting ‘‘small
business concerns owned and controlled by eligible
veterans,’’ after ‘‘small business concerns,’’;
(2) by inserting after the second sentence the
following: ‘‘The Government-wide goal for participa-
tion by small business concerns owned and con-
trolled by eligible veterans shall be established at not
less than 5 per centum of the total value of all prime
contract and subcontract awards for each fiscal
year.’’; and
(3) in the second to last sentence, by inserting
‘‘small business concerns owned and controlled by el-
igible veterans,’’ after ‘‘small business concerns,’’.
(b) ANNUAL
PARTICIPATION
GOALS.—Subsection
(g)(2) of section 15 of the Small Business Act (15 U.S.C.
644) is amended—
(1) in the first sentence, by inserting ‘‘by small
business concerns owned and controlled by eligible
veterans,’’ after ‘‘small business concerns,’’;
(2) in the second sentence, by inserting ‘‘small
business concerns owned and controlled by eligible
veterans,’’ after ‘‘small business concerns,’’;
(3) in the fourth sentence, by inserting ‘‘small
business concerns owned and controlled by eligible
veterans, participation by’’ after ‘‘including partici-
pation by’’; and
(4) in subparagraph (B), by striking ‘‘under the
program established under section 8(a)’’ and insert-
ing ‘‘under the programs established under sections
8(a) and 30’’.
SEC. 5. REPORTING.
(a) REPORTS
TO SMALL BUSINESS ADMINISTRA-
TION.—Subsection (h)(1) of section 15 of the Small Busi-
ness Act (15 U.S.C. 644) is amended by inserting ‘‘small
business concerns owned and controlled by eligible veter-
ans,’’ after ‘‘small business concerns,’’.
(b) REPORTS TO THE PRESIDENT AND CONGRESS.—
Subsection (h)(2) of section 15 of the Small Business Act
(15 U.S.C. 644) is amended—
(1) by inserting ‘‘and Congress’’ before the pe-
riod at the end of the first sentence;
(2) in subparagraphs (A), (D), and (E), by in-
serting ‘‘small business concerns owned and con-
trolled by eligible veterans,’’ after ‘‘small business
concerns,’’; and
(3) in subparagraph (D)(ii), by inserting ‘‘small
business concerns owned and controlled by eligible
veterans and competition restricted to’’ after ‘‘re-
stricted to’’.
SEC. 6. SUBCONTRACTING.
(a) STATEMENT OF POLICY.—Paragraph (1) of sec-
tion 8(d) of the Small Business Act (15 U.S.C. 637(d))
is amended by inserting ‘‘small business concerns owned
and controlled by eligible veterans,’’ after ‘‘small business
concerns,’’ in the first and second sentences.
(b) CONTRACT CLAUSE.—The contract clause speci-
fied in section 8(d)(3) of the Small Business Act (15
U.S.C. 637(d)(3)) is amended as follows:
(1) Subparagraph (A) of such clause is amend-
ed by inserting ‘‘small business concerns owned and
controlled by eligible veterans,’’ after ‘‘small busi-
ness concerns,’’ in the first and second sentences.
(2) Subparagraphs (E) and (F) of such clause
are redesignated as subparagraphs (F) and (G), re-
spectively, and the following new subparagraph is in-
serted after subparagraph (D) of such clause:
‘‘(E) The term ‘small business concern owned
and controlled by eligible veterans’ shall mean a
small business concern—
‘‘(i) which is at least 51 per centum owned
by one or more eligible veterans; or, in the case
of any publicly owned business, at least 51 per
centum of the stock of which is owned by one
or more eligible veterans; and
‘‘(ii) whose management and daily business
operations are controlled by such veterans.
The contractor shall treat as eligible veterans all in-
dividuals who are eligible veterans within the mean-
ing of section 3(o) of the Small Business Act.’’.
(3) Subparagraph (F) of such clause, as redes-
ignated by paragraph (2) of this subsection, is
amended by inserting ‘‘small business concern owned
and controlled by eligible veterans,’’ after ‘‘small
business concern,’’.
(c) CONFORMING AMENDMENTS.—Section 8(d) of
the Small Business Act (15 U.S.C. 637(d)) is amended
by inserting ‘‘small business concerns owned and con-
trolled by eligible veterans,’’ after ‘‘small business con-
cerns,’’ in paragraphs (4)(D), (4)(E), (6)(A), (6)(C),
(6)(F), and (10)(B).
SEC. 7. INFORMATION COLLECTION.
(a) INFORMATION
ON
FEDERAL
PROCUREMENT
PRACTICES.—The Administrator shall, for each fiscal
year—
(1) obtain information concerning the procure-
ment practices and procedures of each Federal agen-
cy having procurement authority; and
(2) make such information available to any
small business concern requesting it.
(b) IDENTIFICATION OF SMALL BUSINESSES OWNED
BY ELIGIBLE VETERANS.—The Secretary of Veterans Af-
fairs shall, in consultation with the Assistant Secretary of
Labor for Veterans’ Employment and Training and the
Administrator, engage in affirmative efforts each fiscal
year to identify small business concerns owned and con-
trolled by eligible veterans in the United States. The Sec-
retary shall inform each small business concern identified
under this paragraph that information on Federal pro-
curement is available from the Administrator.
SEC. 8. STATE OF SMALL BUSINESS REPORT.
Section 303(e) of the Small Business and Economic
Policy Act of 1980 (15 U.S.C. 631b(e)) is amended—
(1) in paragraph (1), by striking ‘‘and’’ after
the semicolon;
(2) in paragraph (2), by striking the period at
the end and inserting ‘‘; and’’; and
(3) by adding at the end the following new
paragraph:
‘‘(3) small business concerns owned and con-
trolled by eligible veterans.’’.
SEC. 9. LOANS TO VETERANS.
(a) PARTICIPATION IN LOANS.—Section 7(a) of the
Small Business Act (15 U.S.C. 636) is amended by adding
at the end the following new paragraph:
‘‘(27)(A) The Administration is empowered to make
loans either directly or in cooperation with banks or other
financial institutions through agreements to participate on
an immediate or deferred (guaranteed) basis to small busi-
ness concerns eligible for assistance under section 30.
Such assistance may be provided only if the Administra-
tion determines that—
‘‘(i) the type and amount of such assistance re-
quested by such concern is not otherwise available
on reasonable terms from other sources;
‘‘(ii) with such assistance such concern has a
reasonable prospect for operating soundly and profit-
ably within a reasonable period of time;
‘‘(iii) the proceeds of such assistance will be
used within a reasonable time for plant construction,
conversion, or expansion, including the acquisition of
equipment, facilities, machinery, supplies, or mate-
rial or to supply such concern with working capital
to be used in the manufacture of articles, equipment,
supplies, or material for defense or civilian produc-
tion or as may be necessary to ensure a well bal-
anced national economy; and
‘‘(iv) such assistance is of such sound value as
reasonably to assure that the terms under which it
is provided will not be breached by the small busi-
ness concern.
‘‘(B)(i) No loan shall be made under this paragraph
if the total amount outstanding and committed (by partici-
pation or otherwise) to the borrower would exceed
$750,000.
‘‘(ii) Subject to the provisions of clause (i), in agree-
ments to participate in loans on a deferred (guaranteed)
basis, participation by the Administration shall be not less
than 85 per centum of the balance of the financing out-
standing at the time of disbursement.
‘‘(iii) The rate of interest on financings made on a
deferred (guaranteed) basis shall be legal and reasonable.
‘‘(iv) Financings made pursuant to this paragraph
shall be subject to the following limitations:
‘‘(I) No immediate participation may be pur-
chased unless it is shown that a deferred participa-
tion is not available.
‘‘(II) No direct financing may be made unless
it is shown that a participation is unavailable.
‘‘(C) A direct loan or the Administration’s share of
an immediate participation loan made pursuant to this
paragraph shall be any secured debt instrument—
‘‘(i) that is subordinated by its terms to all
other borrowings of the issuer;
‘‘(ii) the rate of interest on which shall not ex-
ceed the current average market yield on outstand-
ing marketable obligations of the United States with
remaining periods to maturity comparable to the av-
erage maturities of such loan and adjusted to the
nearest one-eighth of 1 per centum;
‘‘(iii) the term of which is not more than 25
years; and
‘‘(iv) the principal on which is amortized at
such rate as may be deemed appropriate by the Ad-
ministration, and the interest on which is payable
not less often than annually.’’.
(b) REGULATIONS.—Not later than 90 days after the
date of the enactment of this Act, the Administrator shall
issue regulations which ensure that—
(1) the maturity for a loan to an eligible vet-
eran in which the Administration participates is the
longest feasible term commensurate with the repay-
ment ability of the eligible veteran, except that the
maturity for such a loan may exceed 12 years only
if the loan is made to finance real estate or the con-
struction or acquisition of equipment which has a
useful life which exceeds 12 years; and
(2) in assessing the collateral of borrowers for
the purpose of making loans in which the Adminis-
tration participates, the lender makes a favorable
value assessment of such collateral when determin-
ing the overall probability of recovery in the event of
liquidation.
SEC. 10. ENTREPRENEURIAL TRAINING, COUNSELING, AND
MANAGEMENT ASSISTANCE.
The Administrator shall take such actions as may be
necessary to ensure that small business concerns owned
and controlled by eligible veterans have access to programs
established under the Small Business Act which provide
entrepreneurial training, business development assistance,
counseling, and management assistance to small business
concerns. Such programs include the Small Business De-
velopment Center, Small Business Institute, Service Corps
of Retired Executives (SCORE), and Active Corps of Ex-
ecutives (ACE) programs.
SEC. 11. GRANTS FOR ELIGIBLE VETERANS OUTREACH
PROGRAMS.
Section 8(b) of the Small Business Act (15 U.S.C.
637(b)) is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(16);
(2) by striking the period at the end of para-
graph (17) and inserting ‘‘; and’’; and
(3) by adding at the end the following new
paragraph:
‘‘(18) to make grants to, and enter into con-
tracts and cooperative agreements with, educational
institutions, private businesses, veterans’ nonprofit
community-based organizations, and Federal, State,
and local departments and agencies for the estab-
lishment and implementation of outreach programs
for eligible veterans.’’.
SEC. 12. OUTREACH PROGRAM FOR ELIGIBLE VETERANS.
The Administrator, the Secretary of Veterans Affairs,
and the Assistant Secretary of Labor for Veterans’ Em-
ployment and Training shall establish an interagency
working group to develop a comprehensive outreach pro-
gram to assist eligible veterans. Such outreach program
shall include business training and management assist-
ance, employment and relocation counseling, and dissemi-
nation of information on veterans benefits, veterans enti-
tlements, and the Veterans Business Opportunity and De-
velopment Program established under section 30 of the
Small Business Act, as inserted by section 14 of this Act.
SEC. 13. ASSOCIATE ADMINISTRATOR FOR VETERANS PRO-
GRAMS.
Section 4(b)(1) of the Small Business Act (15 U.S.C.
633(b)(1)) is amended—
(1) by striking ‘‘four’’ in the fifth sentence and
inserting ‘‘five’’; and
(2) by inserting after the fifth sentence the fol-
lowing new sentence:
‘‘One of the Associate Administrators shall be designated
at the time of his appointment as the Associate Adminis-
trator for Veterans Programs who shall be a career em-
ployee in the Senior Executive Service and who shall be
responsible to the Administrator for the formulation and
execution of policies and programs under this Act which
provide assistance to small business concerns owned and
controlled by eligible veterans, including programs estab-
lished under section 30.’’.
SEC. 14. ESTABLISHMENT OF VETERANS BUSINESS OPPOR-
TUNITY AND DEVELOPMENT PROGRAM.
The Small Business Act (15 U.S.C. 631 et seq.) is
amended by redesignating sections 30, 31, and 32 as sec-
tions 31, 32, and 33, respectively, and by inserting after
section 29 the following new section:
‘‘SEC. 30. (a)(1) It shall be the duty of the Adminis-
tration and it is hereby empowered, whenever it deter-
mines such action is necessary or appropriate—
‘‘(A) to enter into contracts with the United
States Government and any department, agency, or
officer thereof having procurement powers obligating
the Administration to furnish articles, equipment,
supplies, services, or materials to the Government or
to perform construction work for the Government.
In any case in which the Administration certifies to
any officer of the Government having procurement
powers that the Administration is competent and re-
sponsible to perform any specific Government pro-
curement contract to be let by any such officer, such
officer shall be authorized in his discretion to let
such procurement contract to the Administration
upon such terms and conditions as may be agreed
upon between the Administration and the procure-
ment officer. Whenever the Administration and such
procurement officer fail to agree, the matter shall be
submitted for determination to the Secretary or the
head of the appropriate department or agency by the
Administrator. Not later than 5 days from the date
the Administration is notified of a procurement offi-
cer’s adverse decision, the Administration may notify
the contracting officer of the intent to appeal such
adverse decision, and within 15 days of such date
the Administrator shall file a written request for a
reconsideration of the adverse decision with the Sec-
retary of the department or agency head. For the
purposes of this subparagraph, a procurement offi-
cer’s adverse decision includes a decision not to
make available for award pursuant to this subsection
a particular procurement requirement or the failure
to agree on the terms and conditions of a contract
to be awarded under the authority of this subsection.
Upon receipt of the notice of intent to appeal, the
Secretary of the department or agency head shall
suspend further action regarding the procurement
until a written decision on the Administrator’s re-
quest for reconsideration has been issued by such
Secretary or agency head, unless such officer makes
a written determination that urgent and compelling
circumstances which significantly affect interests of
the United States will not permit waiting for a re-
consideration of the adverse decision. If the Admin-
istrator’s request for reconsideration is denied, the
Secretary of the department or agency head shall
specify the reasons why the selected firm was deter-
mined to be incapable to perform the procurement
requirement, and the findings supporting such deter-
mination, which shall be made a part of the contract
file for the requirement. A contract may not be
awarded under this subsection if the award of the
contract would result in a cost to the awarding agen-
cy which exceeds a fair market price;
‘‘(B) to arrange for the performance of such
procurement contracts by negotiating or otherwise
letting subcontracts to small business concerns
owned and controlled by eligible veterans for con-
struction work, services, or the manufacture, supply,
assembly of such articles, equipment, supplies, mate-
rials, or parts thereof, or servicing or processing in
connection therewith, or such management services
as may be necessary to enable the Administration to
perform such contracts; and
‘‘(C) to make an award to a small business con-
cern owned and controlled by eligible veterans which
has completed its period of program participation as
prescribed by subsection (b)(6), if—
‘‘(i) the contract will be awarded as a re-
sult of an offer (including price) submitted in
response to a published solicitation relating to
a competition conducted pursuant to subpara-
graph (D); and
‘‘(ii) the prospective contract awardee was
a program participant eligible for award of the
ing and packing costs, labor and materials costs, overhead
costs, and any other additional costs which may be deemed
appropriate.
‘‘(C) An agency offering a procurement requirement
for potential award pursuant to this subsection shall, upon
the request of the Administration, promptly submit to the
Administration a written statement detailing the method
used by the agency to estimate the current fair market
price for such contract, identifying the information, stud-
ies, analyses, and other data used by such agency. The
agency’s estimate of the current fair market price (and
any supporting data furnished to the Administration) shall
not be disclosed to any potential offeror (other than the
Administration).
‘‘(D) A small business concern selected by the Admin-
istration to perform or negotiate a contract to be let pur-
suant to this subsection may request the Administration
to protect the agency’s estimate of the fair market price
for such contract pursuant to paragraph (1)(A).
‘‘(3) In order to be eligible for selection by the Ad-
ministration to perform or negotiate a contract to be let
pursuant to this subsection a small business concern
owned and controlled by eligible veterans shall meet cer-
tification requirements contained in regulations issued by
‘‘(A) Each program participant shall annually
submit to the Administration—
‘‘(i) a personal financial statement for each
owner upon whom eligibility was based; and
‘‘(ii) such other information as the Admin-
istration may deem necessary to make the de-
terminations required by this paragraph.
‘‘(B)(i) Whenever, on the basis of information
provided by a program participant pursuant to sub-
paragraph (A) or otherwise, the Administration has
reason to believe that the amount of funds or other
assets withdrawn from a program participant for the
personal benefit of its owners or any person or en-
tity affiliated with such owners may have been un-
duly excessive, the Administration shall conduct a
review to determine whether such withdrawal of
funds or other assets was detrimental to the achieve-
ment of the targets, objectives, and goals contained
in such program participant’s business plan.
‘‘(ii) If the Administration determines, pursuant
to such review, that funds or other assets have been
withdrawn to the detriment of the program partici-
pant’s business, the Administration shall—
‘‘(I) initiate a proceeding to terminate the
program participant pursuant to subsection
(b)(1)(F), subject to the right to a hearing
under paragraph (6); or
‘‘(II) require an appropriate reinvestment
of funds or other assets and such other steps as
the Administration may deem necessary to en-
sure the protection of the concern.
‘‘(C) Whenever the Administration computes
personal net worth for any purpose under this para-
graph, it shall exclude from such computation—
‘‘(i) the value of investments that eligible
veteran owners have in their concerns, except
that such value shall be taken into account
under this paragraph when comparing such
concerns to other concerns in the same business
area that are owned by other than eligible vet-
erans;
‘‘(ii) the equity that eligible veteran owners
have in their primary personal residences, ex-
cept that any portion of such equity that is at-
tributable to unduly excessive withdrawals from
a program participant or a concern applying for
program participation shall be taken into ac-
count.
‘‘(5)(A) No small business concern shall be deemed
eligible for any assistance pursuant to this subsection un-
less the Administration determines that with contract, fi-
nancial, technical, and management support the small
business concern will be able to perform contracts which
may be awarded to such concern under paragraph (1)(B).
‘‘(B) Limitations established by the Administration
in its regulations and procedures restricting the award of
contracts pursuant to this subsection to a limited number
of standard industrial classification codes in an approved
business plan shall not be applied in a manner that inhib-
its the logical business progression by a participating
small business concern into areas of industrial endeavor
where such concern has the potential for success.
‘‘(6)(A) Subject to the provisions of subparagraph
(E), the Administrator, prior to taking any action de-
scribed in subparagraph (B), shall provide the small busi-
ness concern that is the subject of such action, an oppor-
tunity for a hearing on the record, in accordance with
chapter 5 of title 5, United States Code.
‘‘(B) The actions referred to in subparagraph (A)
are—
‘‘(i) denial of program admission based upon a
negative determination pursuant to paragraph (4);
‘‘(ii) a termination pursuant to subsection
(b)(1)(F);
‘‘(iii) a graduation pursuant to subsection
(b)(1)(H); and
‘‘(iv) the denial of a request to issue a waiver
pursuant to paragraph (15)(B).
‘‘(C) The Administrator’s proposed action, in any
proceeding conducted under the authority of this para-
graph, shall be sustained unless it is found to be arbitrary,
capricious, or contrary to law.
‘‘(D) A decision rendered pursuant to this paragraph
shall be the final decision of the Administration and shall
be binding upon the Administration and those within its
employ.
‘‘(E) The adjudicator selected to preside over a pro-
ceeding conducted under the authority of this paragraph
shall decline to accept jurisdiction over any matter that—
‘‘(i) does not, on its face, allege facts that, if
proven to be true, would warrant reversal or modi-
fication of the Administration’s position;
‘‘(ii) is untimely filed;
‘‘(iii) is not filed in accordance with the rules
of procedure governing such proceedings; or
‘‘(iv) has been decided by or is the subject of
an adjudication before a court of competent jurisdic-
tion over such matters.
‘‘(F) Proceedings conducted pursuant to the author-
ity of this paragraph shall be completed and a decision
rendered, insofar as practicable, within 90 days after a
petition for a hearing is filed with the adjudicating office.
‘‘(7) The Administration shall develop and implement
an outreach program to inform and recruit small business
concerns to apply for eligibility for assistance under this
subsection. Such program shall make a sustained and sub-
stantial effort to solicit applications for certification from
small business concerns located in areas of concentrated
unemployment or underemployment or within labor sur-
plus areas and within States having relatively few program
participants and from small business concerns owned and
controlled by eligible veterans in industry categories that
have not substantially participated in the award of con-
tracts let under the authority of this subsection.
‘‘(8) To the maximum extent practicable, construc-
tion subcontracts awarded by the Administration pursuant
to this subsection shall be awarded within the county or
State where the work is to be performed.
‘‘(9)(A) The Administration shall require each con-
cern eligible to receive subcontracts pursuant to this sub-
section to annually prepare and submit to the Administra-
tion a capability statement. Such statement shall briefly
describe such concern’s various contract performance ca-
pabilities and shall contain the name and telephone num-
ber of the veterans business counselor assigned such con-
cern. The Administration shall separate such statements
by those primarily dependent upon local contract support
and those primarily requiring a national marketing effort.
Statements primarily dependent upon local contract sup-
port shall be disseminated to appropriate buying activities
in the marketing area of the concern. The remaining state-
ments shall be disseminated to the directors of small and
disadvantaged business utilization for the appropriate
agencies who shall further distribute such statements to
buying activities with such agencies that may purchase the
types of items or services described on the capability state-
ments.
‘‘(B) Contracting activities receiving capability state-
ments shall, within 60 days after receipt, contact the rel-
evant veterans business counselor to indicate the number,
type, and approximate dollar value of contract opportuni-
ties that such activities may be awarding over the succeed-
ing 12-month period and which may be appropriate to con-
sider for award to those concerns for which it has received
capability statements.
‘‘(10)(A) A concern may not be awarded a contract
under this subsection as a small business concern unless
the concern agrees that—
‘‘(i) in the case of a contract for services (ex-
cept construction), at least 50 per centum of the
cost of contract performance incurred for personnel
shall be expended for employees of the concern; and
‘‘(ii) in the case of a contract for procurement
of supplies (other than procurement from a regular
dealer in such supplies), the concern will perform
work for at least 50 per centum of the cost of manu-
facturing the supplies (not including the cost of ma-
terials).
‘‘(B) The Administration may change the percentage
under clause (i) or (ii) of subparagraph (A) if the Admin-
istrator determines that such change is necessary to re-
flect conventional industry practices among business con-
cerns that are below the numerical size standard for busi-
nesses in that industry category. A percentage established
under the preceding sentence may not differ from a per-
centage established under section 15(o).
‘‘(C) The Administration shall establish, through
public rulemaking, requirements similar to those specified
in subparagraph (A) to be applicable to contracts for gen-
eral and specialty construction and to contracts for any
other industry category not otherwise subject to the re-
quirements of such subparagraph. The percentage applica-
ble to any such requirement shall be determined in accord-