I
104TH CONGRESS
2D SESSION
H. R. 4313
To amend the Small Business Act to strengthen existing protections for
small business participation in Federal contracting opportunities, to pro-
vide for assessments of the impacts on small businesses of the steadily
increasing use of contract bundling by the procurement activities of
the various Federal agencies, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 28, 1996
Mrs. MEYERS of Kansas introduced the following bill; which was referred to
the Committee on Small Business, and in addition to the Committee on
Government Reform and Oversight, for a period to be subsequently deter-
mined by the Speaker, in each case for consideration of such provisions
as fall within the jurisdiction of the committee concerned
A BILL
To amend the Small Business Act to strengthen existing
protections for small business participation in Federal
contracting opportunities, to provide for assessments of
the impacts on small businesses of the steadily increasing
use of contract bundling by the procurement activities
of the various Federal agencies, 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 AND TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Small Business Opportunity Preservation Act of 1996’’.
(b) TABLE OF CONTENTS.—
Sec. 1. Short title and table of contents.
Sec. 2. Statement of policy.
Sec. 3. Definition of contract bundling.
Sec. 4. Assessing proposed contract bundling.
Sec. 5. Fostering contractor teaming.
Sec. 6. Reporting of bundled contract opportunities.
Sec. 7. Evaluating subcontract participation in awarding contracts.
Sec. 8. Improved notice of subcontracting opportunities.
Sec. 9. Deadlines for issuance of regulations.
SEC. 2. STATEMENT OF POLICY.
(a) SUSTAINING SMALL BUSINESS PARTICIPATION IN
GOVERNMENT CONTRACTING DESPITE CONTRACT BUN-
DLING.—Section 2 of the Small Business Act (15 U.S.C.
631) is amended by adding at the end the following new
subsection:
‘‘(j) In complying with the statement of congressional
policy expressed in subsection (a)(2)(B), relating to foster-
ing the participation of small business concerns in the con-
tracting opportunities of the Government, each Federal
agency, to the maximum practicable extent, shall—
‘‘(1) comply with the provisions of this Act ex-
pressing congressional intent to foster the participa-
tion of small business concerns as prime contractors,
especially section 15;
‘‘(2) structure its contracting requirements to
facilitate competition by and among small business
concerns, taking all reasonable steps to eliminate ob-
stacles to their participation;
‘‘(3) avoid the bundling of contract require-
ments that preclude small business participation as
prime contractors; and
‘‘(4) comply with the provisions of this Act ex-
pressing congressional intent to foster the participa-
tion of small business concerns as subcontractors
(including suppliers), especially section 8(d).’’.
(b) CONFORMING AMENDMENT.—Section 2(a) of the
Small Business Act (15 U.S.C. 631(a)) is amended—
(1) in the first sentence, by striking ‘‘The es-
sence’’ and inserting ‘‘(1) The essence’’; and
(2) by striking the fifth sentence and inserting
the following:
‘‘(2) It is the declared policy of the Congress that
the government should aid, counsel, assist, and protect,
in so far as is possible, the interests of small business con-
cerns in order to—
‘‘(A) preserve free competitive enterprise;
‘‘(B) insure that a fair proportion of the total
purchases for property or services (including con-
struction) be placed with small business concerns as
prime contractors or subcontractors (including sup-
pliers);
‘‘(C) insure that a fair proportion of the total
sales of Government property be made to small busi-
ness concerns; and
‘‘(D) maintain and strengthen the overall econ-
omy of the Nation.’’.
SEC. 3. DEFINITION OF CONTRACT BUNDLING.
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 the purposes of this Act, the terms ‘contract
bundling’, ‘bundled contract’, and ‘bundling of contract re-
quirements’ mean the practice of consolidating two or
more procurement requirements of a type that were pre-
viously solicited and awarded as separate smaller contracts
into a single contract solicitation likely to be unsuitable
for award to a small business concern because of—
‘‘(1) the diversity and size of the elements of
performance specified;
‘‘(2) the aggregate dollar value of the antici-
pated award;
‘‘(3) the geographical dispersion of the contract
performance sites; or
‘‘(4) any combination of the factors described in
paragraphs (1), (2), and (3).’’.
‘‘(D) Any determination by an agency head to issue
a contract solicitation with no revision of the procurement
strategy (or the proposed solicitation) shall be supported
by findings and an assessment addressing the matters de-
scribed in subparagraph (E). Such determination and
findings shall be submitted to the Administrator.
‘‘(E) The findings accompanying a determination
made pursuant to subparagraph (D) shall include—
‘‘(i) the estimated benefits of the proposed bun-
dling of contract requirements, including improved
performance of programmatic objectives to be met
by the contract, savings in terms of acquisition costs
and contract administration costs, and how such es-
timated benefits were calculated;
‘‘(ii) specific adverse impacts on the participa-
tion of small business concerns as prime contractors,
especially small business concerns that are perform-
ing (or have previously performed) contracts of the
type that are proposed for inclusion in the solicita-
tion for the bundled contract;
‘‘(iii) specific actions to foster the participation
of small businesses in the performance of the bun-
dled contract as subcontractors (including suppliers)
at various tiers; and
‘‘(iv) such other matters as the agency head
considers appropriate.
‘‘(F) Unless otherwise authorized by the head of the
agency for urgent and compelling reasons, the solicitation
shall not be issued until the determination under subpara-
graph (D) has been made by such agency head and sub-
mitted to the Administrator.’’.
(b) CONFORMING AMENDMENT.—Section 15(a) of
the Small Business Act (15 U.S.C. 644(a)) is amended
by striking the third, fourth, fifth, and sixth sentences.
(c) RESPONSIBILITIES OF AGENCY SMALL BUSINESS
ADVOCATES.—Section 15(k) of the Small Business Act
(15 U.S.C. 644(k)) is amended—
(1) by redesignating paragraphs (5), (6), (7),
(8), and (9) as paragraphs (6), (7), (8), (9), and
(10), respectively; and
(2) by adding after paragraph (4) the following
new paragraph (5):
‘‘(5) identify and report on proposed solicita-
tions that represent bundling of contract require-
ments, and work with the agency acquisition officials
and the Administration to revise the procurement
strategies for such proposed solicitations to increase
the probability of participation by small businesses
as prime contractors, or to facilitate small business
participation as subcontractors and suppliers, if a
solicitation for a bundled contract is to be issued,’’.
SEC. 5. FOSTERING CONTRACTOR TEAMING.
Section 15(b) of the Small Business Act (15 U.S.C.
644(b)), as amended by section 2, is further amended by
adding at the end the following new paragraph:
‘‘(3)(A) A small business concern intending to
submit an offer for an anticipated bundled contract
may propose to the Administration for approval a
team of subcontractors meeting the requirements of
subparagraph (B) without regard to the require-
ments of subsection (o) or the regulations of the Ad-
ministration regarding findings of affiliation or con-
trol, either direct or indirect.
‘‘(B) A subcontracting team proposed under
subparagraph (A) may include—
‘‘(i) other small business concerns; and
‘‘(ii) business concerns other than small
business concerns, whose aggregate participa-
tion may not represent more than 25 percent of
the anticipated total value of the contract.
‘‘(C) Any subcontracting team proposed under
subparagraph (A) and approved by the Adminis-
trator shall be subject to such alternative require-
ments regarding subcontracting and affiliation or
control as may be specified by the Administrator.’’.
SEC. 6. REPORTING OF BUNDLED CONTRACT OPPORTUNI-
TIES.
(a) DATA COLLECTION REQUIRED.—The Federal
Procurement Data System described in section 6(d)(4)(A)
of the Office of Federal Procurement Policy Act (41
U.S.C. 405(d)(4)(A)) shall be modified to collect data re-
garding contract bundling. The data shall reflect the de-
termination made by the employee of the Small Business
Administration exercising the responsibilities of section
15(b) of the Small Business Act (15 U.S.C. 644(b)) (as
amended by section 3) regarding whether a particular so-
licitation constitutes contract bundling.
(b) DEFINITIONS.—For purposes of this section, the
term ‘‘contract bundling’’ has the meaning given such
term in section 3(o) of the Small Business Act (15 U.S.C.
632(o)) (as added by section 2).
SEC. 7. EVALUATING SUBCONTRACT PARTICIPATION IN
AWARDING CONTRACTS.
(a) IN GENERAL.—Section 8(d)(4) of the Small Busi-
ness Act (15 U.S.C. 637(d)(4)) is amended by striking
‘‘(4)(A)’’ and all that follows through the end of subpara-
graph (D) and inserting the following:
‘‘(4)(A) Each solicitation for the award of a contract
(or subcontract) with an anticipated value of $1,000,000,
in the case of a contract for construction (including repair,
alteration, or demolition of existing construction) or
$500,000, in the case of a contract for all other types of
services or supplies, that can reasonably be expected to
offer opportunities for subcontracting in the business
judgment of the contracting officer, shall—
‘‘(i) in the case of a contract to be awarded
using competitive procedures, include solicitation
provisions described in subparagraph (B);
‘‘(ii) in the case of a contract to be awarded
using procedures other than competitive procedures,
require submission and acceptance of a subcontract-
ing plan pursuant to subparagraph (C); and
‘‘(iii) in the case of a subcontract award, re-
quire submission and acceptance of a subcontracting
plan pursuant to subparagraph (D).
‘‘(B) With respect to subcontract participation by the
various types of small business concerns listed in para-
graph (1), the solicitation shall—
‘‘(i) specify, whenever practicable, minimum
percentages for subcontract participation by the var-
ious types of small business concerns listed in para-
graph (1), determined in the exercise of business
judgment by the contracting officer considering the
matters described in subparagraph (F)(iii), that
must be met for an offer to be considered respon-
sive;
‘‘(ii) assign a weight of not less than the nu-
merical equivalent of 5 percent of the total of all
evaluation factors to a contract award evaluation
factor that recognizes incrementally higher sub-
contract participation rates in excess of the mini-
mum percentages, if any;
‘‘(iii) require the successful offeror to submit a
subcontracting plan that incorporates the informa-
tion prescribed in paragraph (6); and
‘‘(iv) assign a significant weight in the evalua-
tion of past performance by offerors in attaining
subcontract participation goals.
‘‘(C)(i) The apparent successful offeror for a contract
to be awarded using procedures other than competitive
procedures shall negotiate with the contracting officer—
‘‘(I) separate goals for subcontract participation
by the various types of small business concerns list-
ed in paragraph (1); and
‘‘(II) a plan for the attainment of the goals that
incorporates the information prescribed in paragraph
(6).
‘‘(ii) The goals and plan shall reflect the maximum
practicable opportunity for participation of small business
concerns in the performance of the contract, considering
the matters described in subparagraph (F)(iii). If, within
the time limits prescribed in the Federal Acquisition Regu-
lation, the apparent successful offeror fails to negotiate
such goals and subcontracting plan, such offeror shall be
ineligible for award of the contract.
‘‘(D) An apparent subcontract awardee shall nego-
tiate with the prime contractor (or higher-tier subcontrac-
tor) a goal for the participation of the various types of
small business concerns listed in paragraph (1), and a
plan for the attainment of those goals which incorporates
the information prescribed in paragraph (6). Such goals
and plan shall reflect the maximum practicable oppor-
tunity for the participation of such small business con-
cerns in the performance of the contract, considering the
matters described in subparagraph (F)(iii).’’.
(b) CONFORMING AMENDMENTS.—Section 8(d) of
the Small Business Act (15 U.S.C. 637(d)) is amended
as follows:
(1) Paragraph (5) is amended to read as fol-
lows:
‘‘(5) øReserved.¿’’.
(2) Paragraph (6) is amended—