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 ‘‘Incentivizing Fairness 
in Subcontracting Act’’. 
SEC. 2. SMALL BUSINESS LOWER-TIER SUBCONTRACTING. 
Section 8(d) of the Small Business Act (15 U.S.C. 
637(d)) is amended— 
(1) by amending paragraph (16) to read as fol-
lows: 
‘‘(16) CREDIT
FOR
CERTAIN
SMALL
BUSINESS 
CONCERN SUBCONTRACTORS.— 
‘‘(A) IN GENERAL.—For purposes of deter-
mining whether or not a prime contractor has 
attained the percentage goals specified in para-
graph (6)— 
‘‘(i) if the subcontracting goals pertain 
only to a single contract with the Federal 
agency, the prime contractor may elect to 
receive credit for small business concerns 
performing as first tier subcontractors or 
subcontractors at any tier pursuant to the 
subcontracting plans required under para-
graph (6)(D) in an amount equal to the 
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dollar value of work awarded to such small 
business concerns; and 
‘‘(ii) if the subcontracting goals per-
tain to more than one contract with one or 
more Federal agencies, or to one contract 
with more than one Federal agency, the 
prime contractor may only count first tier 
subcontractors that are small business con-
cerns. 
‘‘(B) COLLECTION AND REVIEW OF DATA ON 
SUBCONTRACTING PLANS.—The head of each con-
tracting agency shall ensure that— 
‘‘(i) the agency collects and reports 
data on the extent to which contractors of 
the agency meet the goals and objectives set 
forth in subcontracting plans submitted 
pursuant to this subsection; and 
‘‘(ii) the agency periodically reviews 
data collected and reported pursuant to sub-
paragraph (A) for the purpose of ensuring 
that such contractors comply in good faith 
with the requirements of this subsection and 
subcontracting plans submitted by the con-
tractors pursuant to this subsection. 
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‘‘(C) RULE OF CONSTRUCTION.—Nothing in 
this paragraph shall permit lower-tier subcon-
tracting goaling requirements of prime contrac-
tors that are eligible to receive lower-tier subcon-
tracting credit under this paragraph.’’; and 
(2) by adding at the end the following: 
‘‘(18) DISPUTE PROCESS FOR NON-PAYMENT TO 
SUBCONTRACTORS.— 
‘‘(A) NOTICE TO AGENCY.—With respect to 
a contract with a Federal agency, a subcon-
tractor of a prime contractor on such contract 
may, if the subcontractor has not received pay-
ment for work performed within 90 days of the 
completion of such work, notify the Office of 
Small and Disadvantaged Business Utilization 
(‘OSDBU’) of the Federal agency and the prime 
contractor of such lack of payment, if such notice 
is provided to the agency within the 15-day pe-
riod following the end of such 90 days. 
‘‘(B) AGENCY DETERMINATION.— 
‘‘(i) IN GENERAL.—Upon receipt of a 
notice described under subparagraph (A), 
the OSDBU shall verify whether such lack 
of payment has occurred and determine 
whether such lack of payment is due to an 
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undue restriction placed on the prime con-
tractor by an action of the Federal agency. 
‘‘(ii) RESPONSE DURING DETERMINA-
TION.—During the period in which the 
OSDBU is making the determination under 
clause (i), the prime contractor may re-
spond to both the subcontractor and the 
OSDBU with relevant verifying documenta-
tion to either prove payment or allowable 
status of nonpayment. 
‘‘(C) 
CURE
PERIOD.—If 
the 
OSDBU 
verifies the lack of payment under subparagraph 
(B) and determines that such lack of payment is 
not due to an action of the Federal agency, the 
OSDBU shall notify the prime contractor and 
provide the prime contractor with a 15-day pe-
riod in which the prime contractor may make 
the payment owed to the subcontractor. 
‘‘(D) RESULT
OF
NONPAYMENT.—If, after 
notifying the prime contractor under subpara-
graph (C), the OSDBU determines that the 
prime contractor has not fully paid the amount 
owed within the 15-day cure period described 
under subparagraph (C), the OSDBU shall en-
sure that such failure to pay is reflected in the 
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Contractor Performance Assessment Reporting 
system.’’. 
SEC. 3. MAINTENANCE OF RECORDS WITH RESPECT TO 
CREDIT UNDER A SUBCONTRACTING PLAN. 
Section 8(d)(6) of the Small Business Act (15 U.S.C. 
637(d)(6)) is amended— 
(1) by redesignating subparagraphs (G) and (H) 
as subparagraphs (H) and (I), respectively; and 
(2) by inserting after subparagraph (F) the fol-
lowing: 
‘‘(G) a recitation of the types of records the suc-
cessful offeror or bidder will maintain to demonstrate 
that procedures have been adopted to substantiate the 
credit the successful offeror or bidder will elect to re-
ceive under paragraph (16)(A)(i);’’. 
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Union Calendar No. 733 
115TH CONGRESS 
2D SESSION 
H. R. 6367 
[Report No. 115–942] 
A BILL 
To amend the Small Business Act to specify what 
credit is given for certain subcontractors and to 
provide a dispute process for non-payment to 
subcontractors, and for other purposes. 
SEPTEMBER 12, 2018 
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union, 
and ordered to be printed 
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