I
103D CONGRESS
2D SESSION
H. R. 5271
To amend the Small Business Act to make modifications to the small business
and capital ownership development program, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 7, 1994
Mr. MFUME (for himself, Mr. CONYERS, Mr. FLAKE, Ms. ROYBAL-ALLARD,
Ms. VELA´ZQUEZ, and Mr. TUCKER) introduced the following bill; which
was referred to the Committee on Small Business
A BILL
To amend the Small Business Act to make modifications
to the small business and capital ownership development
program, 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 ‘‘Minority Enterprise
Development Act of 1994’’.
TITLE I—AMENDMENTS TO MI-
NORITY 
SMALL 
BUSINESS
AND 
CAPITAL 
OWNERSHIP
DEVELOPMENT PROGRAM
SEC. 101. MINORITY ENTERPRISE DEVELOPMENT PRO-
GRAM.
(a) ESTABLISHMENT.—Section 7(j)(10) of the Small
Business Act (15 U.S.C. 636(j)(10)) is amended—
(1) by striking ‘‘(10) There is established’’ and
all that follows before subparagraph (A) and insert-
ing the following:
‘‘(10)(A) There is established within the Administra-
tion a Minority Enterprise Development Program (herein-
after in this subsection referred to as the ‘Program’),
which shall be administered by the Associate Adminis-
trator for Minority Enterprise Development in accordance
with this paragraph and section 8(a).’’;
(2) by striking subparagraph (B); and
(3) by striking ‘‘(A) The Program’’ and insert-
ing ‘‘(B) The Program’’.
(b) ASSISTANCE UNDER
THE PROGRAM.—Section
7(j)(10)(B)(i) of the Small Business Act, as redesignated
by subsection (a) of this section, is amended by inserting
‘‘Phase III of’’ after ‘‘small business concerns participat-
ing in’’.
(c) CONFORMING AMENDMENTS.—The Small Busi-
ness Act (15 U.S.C. 601 et seq.) is amended by striking
‘‘Minority Small Business and Capital Ownership Devel-
opment’’ and inserting ‘‘Minority Enterprise Develop-
ment’’ each place it appears in sections 7(j)(10)(G),
7(j)(11)(A), 
7(j)(11)(E), 
7(j)(11)(H), 
7(j)(11)(I),
8(a)(18)(C)(ii)(III), and 8(a)(20)(B).
SEC. 102. GRANDFATHERING PROVISION.
Section 7(j)(10(C) of the Small Business Act (15
U.S.C. 636(j)(10)(C)) is amended to read as follows:
‘‘(C) A small business concern participating in
any program or activity conducted under the author-
ity of this paragraph or eligible for the award of
contracts pursuant to section 8(a) on the date of the
enactment of the Minority Enterprise Development
Act of 1994 shall be permitted continued participa-
tion in Phase III of the Program for the remaining
period of its original program term. Any such firm
that has not been awarded a contract pursuant to
section 8(a) may elect to suspend its participation in
Phase III in order to participate in Phase II. Upon
the award of a contract pursuant to section 8(a) or
the completion of a development agreement, the sus-
pension of time for participation in Phase III shall
cease.’’.
SEC. 103. BUSINESS PLAN.
Section 7(j)(10)(D) of the Small Business Act (15
U.S.C. 636(j)(10)(D)) is amended—
(1) in clause (i), by inserting ‘‘Phase III’’ after
‘‘Promptly after’’;
(2) in clause (ii), by striking ‘‘The plans’’ in the
matter preceding subclause (I) and inserting ‘‘The
business plans’’;
(3) by amending clause (iii)(IV) to read as fol-
lows:
‘‘(IV) A transition management plan
outlining specific steps to enhance the
prospect of profitable business operations
after the expiration of the 9-year Phase III
program term specified in paragraph
(15).’’;
(4) in clause (iii)—
(A) in the first sentence by striking ‘‘Each
Program Participant’’ and inserting ‘‘Each
Phase III Program Participant’’; and
(B) in the forth sentence by striking ‘‘the
transitional stage’’ and inserting ‘‘Phase III’’;
and
(5) in clause (iv), by striking ‘‘Each Program
Participant’’ and inserting ‘‘Each Phase III Pro-
gram Participant’’.
SEC. 104. USE OF CONTRACT SUPPORT LEVELS.
Section 7(j)(10)(D) of the Small Business Act (15
U.S.C. 636(j)(10)(D)) is further amended by adding at
the end the following new clause:
‘‘(v) The forecasts of overall business activity con-
tained in the business plan of a Program Participant or
the estimate contained in the section 8(a) contract support
level of such firm shall not be used by the Administration
to make a determination that such firm is ineligible for
the award of a contract to be awarded pursuant to section
8(a).’’.
SEC. 105. PHASE III REQUIREMENTS.
Section 7(j)(10)(I) of the Small Business Act (15
U.S.C. 636(j)(10)(I)) is amended—
(1) in clause (i), by striking ‘‘During the devel-
opmental stage of its participation in the Program,’’
and inserting ‘‘During its first 4 years of participa-
tion in Phase III of the Program,’’;
(2) in clause (ii), by striking ‘‘During the tran-
sitional stage of the Program’’ and inserting ‘‘Dur-
ing years 5 through 9 of its participation in Phase
III of the Program,’’;
(3) by amending clause (iii)(I) to read as fol-
lows:
‘‘(I) establish business activity targets ap-
plicable to Program Participants during the 5th
year and each succeeding year of the concern’s
participation in Phase III which reflect a rea-
sonably consistent increase in contracts award-
ed other than pursuant to section 8(a) and are
expressed as a percentage of total sales cor-
responding to the concern’s fiscal year;’’; and
(4) in clause (iii)(IV) by inserting ‘‘in Phase III
of the Program’’ after ‘‘performance’’.
SEC. 106. IMPROVED STATUS PROTEST SYSTEM.
Section 7(j)(10)(J) of the Small Business Act (15
U.S.C. 636(j)(10)(J)) is amended by striking clause (ii)
and inserting the following new clauses:
‘‘(ii) A protest may be brought regarding a self-
certification by a business concern regarding its sta-
tus as a small business concern owned and con-
trolled by socially and economically disadvantaged
individuals by—
‘‘(I) another person with a direct economic
interest in the award of the contract or sub-
contract under which such business has alleg-
edly made the false certification regarding its
status as a small business concern owned and
controlled by socially and economically dis-
advantaged individuals;
pant, grant an exemption pursuant to clause
(i), if—
‘‘(I) the Program Participant provides
certification, in the form prescribed by the
Administration, that the firm was unable
to obtain the requisite bonding from cor-
porate surety bonding firms;
‘‘(II) the Program Participant has
provided for the protection of persons fur-
nishing materials or labor under the con-
tract by arranging for—
‘‘(aa) the direct disbursement of
funds owed to such persons by the
procuring agency or through an es-
crow account provided by any bank
the deposits of which are insured by
the United States Government; or
‘‘(bb) irrevocable letters of credit
(or other alternatives to surety bond-
ing acceptable to the procuring agen-
cy); and
‘‘(III) the award value of the contract
for which the exemption is being sought
does not exceed $1,000,000.