be economically disadvantaged for the term of 
the program. 
(C) PERSONAL
NET
WORTH.—In deter-
mining personal net worth for the purpose of 
program entry, the Administrator shall exclude 
from such determination the following: 
(i) The value of any investment of a 
disadvantaged owner have in the small 
business concern, 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 socially 
disadvantaged persons. 
(ii) The equity of a disadvantaged 
owner in a primary personal residence. 
(D) MAXIMUM NET WORTH.—The Admin-
istrator shall not establish a maximum net 
worth that prohibits program entry of less than 
$750,000. 
(b) MODIFICATIONS TO DEVELOPMENTAL PHASE.— 
(1) ELIGIBILITY
FOR
RESTRICTED
COMPETI-
TION CONTRACTS.—A small business concern par-
ticipating in the developmental phase of such pro-
gram, shall be eligible to enter into a contract 
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awarded using procedures other than competitive 
procedures that— 
(A) is assigned an industrial classification 
code for manufacturing and is valued at not 
more than $10,000,000; or 
(B) is assigned an industrial classification 
code other than a code for manufacturing and 
is valued at not more than $6,000,0000. 
(2) DURATION OF PHASE.—A small business 
concern participating in such program shall complete 
the developmental phase of the program in six years. 
(c) MODIFICATIONS TO TRANSITIONAL PHASE.— 
(1) 
REDUCTION
OF
SOLE
SOURCE
CON-
TRACTS.—In each year of the transitional phase, a 
small business concern participating in such pro-
gram shall— 
(A) reduce by 25 percent the aggregate 
value of the contracts it performs that are 
awarded using procedures other than competi-
tive procedures; and 
(B) increase the aggregate value of the 
contracts (awarded under this section or other-
wise) it performs that are awarded using com-
petitive procedures. 
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(2) ELIGIBILITY
FOR
RESTRICTED
COMPETI-
TION CONTRACTS.—A small business concern par-
ticipating in the transitional phase of such program, 
shall be eligible to enter into a contract awarded 
using procedures other than competitive procedures 
that— 
(A) is assigned an industrial classification 
code for manufacturing and is valued at not 
more than $10,000,000; or 
(B) is assigned an industrial classification 
code other than a code for manufacturing and 
is valued at not more than $6,000,0000. 
(d) EFFECTIVE DATE FOR MODIFICATIONS TO THE 
8(a) PROGRAM.— 
(1) IN GENERAL.—This Act shall apply with re-
spect to small business concerns that apply to the 
program under section 8(a) of the Small Business 
Act after the date of the enactment of this Act. 
(2) TRANSITIONAL
RULE.—A small business 
concern participating in the program under section 
8(a) of the Small Business Act (15 U.S.C. 637(a)) 
may participate for not more than ten years. 
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