178 
(1) shall maintain a degree of oversight of entities receiving economic 
injury disaster loans under section 221102 of this title that is greater 
than the degree of oversight maintained on November 25, 2015; and 
(2) may consider— 
(A) scheduled site visits to ensure borrower eligibility and com-
pliance with requirements established by the Administrator; and 
(B) reviews of the use of the loan proceeds by an entity de-
scribed in that section to ensure compliance with requirements es-
tablished by the Administrator. 
§ 221115. Interest rates 
(a) IN GENERAL.—Notwithstanding any other provision of law, except as 
provided in subsection (b), the interest rate on the Administrator’s share 
of a loan under the disaster loan program shall not exceed— 
(1) the average annual interest rate on all interest-bearing obliga-
tions of the United States then forming a part of the public debt as 
computed at the end of the fiscal year next preceding the date of the 
loan and adjusted to the nearest 0.125 percent; plus 
(2) 0.25 percent. 
(b) LOANS UNDER SECTION 221101 OR 221102.—Notwithstanding any 
other provision of law, the interest rate on the Federal share of a loan 
under section 221101 or 221102 of this title, determined as of the date on 
which the disaster commenced, shall be— 
(1) in the case of a homeowner unable to secure credit elsewhere, 
the lesser of— 
(A) a rate prescribed by the Administrator, not to exceed half 
a rate determined by the Secretary of the Treasury taking into 
consideration the current average market yield on outstanding 
marketable obligations of the United States with remaining peri-
ods to maturity comparable to the average maturities of such 
loans plus an additional charge of not to exceed 1 percent per year 
as determined by the Administrator, and adjusted to the nearest 
0.125 percent; or 
(B) 4 percent per year; 
(2) in the case of a homeowner able to secure credit elsewhere, the 
lesser of— 
(A) a rate prescribed by the Administrator, not to exceed a rate 
determined by the Secretary of the Treasury taking into consider-
ation the current average market yield on outstanding marketable 
obligations of the United States with remaining periods to matu-
rity comparable to the average maturities of such loans plus an 
additional charge of not to exceed 1 percent per year as deter-
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mined by the Administrator, and adjusted to the nearest 0.125 
percent; or 
(B) 8 percent per year; 
(3) in the case of a business concern, private nonprofit organization, 
or other concern (including an agricultural cooperative) unable to ob-
tain credit elsewhere, not to exceed 4 percent per year; or 
(4) in the case of a business concern able to obtain credit elsewhere, 
a rate prescribed by the Administrator, not to exceed the lowest of— 
(A) the rate prevailing in the private market for similar loans; 
(B) the rate prescribed by the Administrator as the maximum 
interest rate for deferred participation (guaranteed) loans under 
the general business loan program; or 
(C) 8 percent per year. 
§ 221116. Maximum term 
No loan under the disaster loan program (including any renewal or exten-
sion of a loan) may be made for a period or periods exceeding— 
(1) 30 years; or 
(2) in the case of a loan to a business concern under section 
221115(b)(2)(D) of this title that is able to obtain credit elsewhere, 7 
years. 
§ 221117. Deferment of repayment 
(a) IN GENERAL.—In making a loan under this chapter, the Adminis-
trator may provide the person receiving the loan an option to defer repay-
ment on the loan. 
(b) DEFERMENT PERIOD.—The period of a deferment under subsection 
(a) shall not exceed 4 years. 
§ 221118. Suspension of payments 
(a) IN GENERAL.—The Administrator may consent to a suspension in the 
payment of principal and interest on, and to an extension in the maturity 
of, the Federal share of a loan under the disaster loan program, for a period 
not to exceed 5 years, if— 
(1) the borrower under the loan is a homeowner or a small business 
concern; 
(2) the loan was made to enable— 
(A) the homeowner to repair or replace his or her home; or 
(B) the small business concern to repair or replace plant or 
equipment that was damaged or destroyed as the result of a dis-
aster described in clause (i) or (ii) of section 221102(b)(2)(A) of 
this title; and 
(3) the Administrator determines that the suspension is necessary to 
avoid severe financial hardship. 
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(b) PURCHASE OF PARTICIPATION OR ASSUMPTION OF OBLIGATION.— 
During any period in which principal and interest charges are suspended 
under subsection (a), the Administrator shall, on the request of any person 
having a participation in the loan, purchase the participation, or assume the 
obligation of the borrower, for the balance of the period, to make principal 
and interest payments on the non-Federal share of the loan, if— 
(1) the Administrator determines that the action is necessary to 
avoid a default; and 
(2) the borrower agrees to make payments to the Administrator in 
an aggregate amount equal to the amount paid in the borrower’s behalf 
by the Administrator, in such manner and at such times (during or 
after the term of the loan) as the Administrator determines having due 
regard for the purposes sought to be achieved by this subsection. 
§ 221119. Participation in loans on deferred basis 
In an agreement to participate in a loan on a deferred basis under the 
disaster loan program, participation by the Administrator shall not be in ex-
cess of 90 percent of the balance of the loan outstanding at the time of 
disbursement. 
§ 221120. Assistance and counseling for disaster victims 
In administering the disaster assistance programs, to the maximum ex-
tent possible, the Administrator shall provide assistance and counseling to 
disaster victims in— 
(1) filing applications (including the provision of information relevant 
to loan processing); and 
(2) loan closing and prompt disbursement of loan proceeds. 
§ 221121. Priority in allocating funds 
In administering the disaster assistance programs, to the maximum ex-
tent possible, the Administrator shall give the disaster loan program a high 
priority in allocating funds for administrative expenses. 
§ 221122. Prohibition of cancellation of certain disaster 
loans 
No portion of a loan under section 221101 or 221102 of this title shall 
be subject to cancellation under any provision of law. 
§ 221123. Prohibition of net earnings clauses 
In making a loan under this chapter, the Administrator shall not require 
the borrower to pay any nonamortized amount for the 1st 5 years after re-
payment begins. 
§ 221124. Biennial disaster simulation exercise 
(a) IN GENERAL.—The Administrator shall conduct a disaster simulation 
exercise at least once every 2 fiscal years. 
(b) REQUIREMENTS.—A disaster simulation exercise shall— 
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(1) include the participation of, at a minimum, not fewer than 50 
percent of the individuals in the disaster reserve corps; and 
(2) test, at maximum capacity, all of the information technology and 
telecommunications systems of the Administrator that are vital to the 
activities of the Administrator during a disaster. 
(c) REPORT.—The Administrator shall include in a report under section 
107118(g) of this title a report on a disaster simulation exercise conducted 
under subsection (a). 
§ 221125. Disaster planning responsibilities 
(a) DEFINITIONS.—In this section: 
(1) DISASTER PLANNING OFFICER.—The term ‘‘disaster planning of-
ficer’’ means the individual to whom the disaster planning function of 
the Administrator is assigned under subsection (b). 
(2) STATE.—The term ‘‘State’’ means a State of the United States, 
the District of Columbia, Puerto Rico, the Northern Mariana Islands, 
the Virgin Islands, Guam, American Samoa, and any territory or pos-
session of the United States. 
(b) ASSIGNMENT OF SBA DISASTER PLANNING RESPONSIBILITIES.—The 
disaster planning function of the Administrator shall be assigned to an indi-
vidual appointed by the Administrator who— 
(1) is not an employee of the Office of Disaster Assistance of SBA; 
(2) has proven management ability; 
(3) has substantial knowledge in the field of disaster readiness and 
emergency response; and 
(4) has demonstrated significant experience in the area of disaster 
planning. 
(c) RESPONSIBILITIES.—The disaster planning officer shall report di-
rectly and solely to the Administrator and shall be responsible for— 
(1) developing, implementing, and maintaining the comprehensive 
disaster response plan under section 221126 of this title; 
(2) ensuring that there are in-service and pre-service training proce-
dures for SBA disaster response staff; 
(3) coordinating and directing SBA training exercises relating to dis-
asters, including disaster simulation exercises and disaster exercises co-
ordinated with other government agencies; and 
(4) other responsibilities relevant to disaster planning and readiness, 
as determined by the Administrator. 
(d) COORDINATION.—In carrying out the responsibilities described in sub-
section (c), the disaster planning officer shall coordinate with— 
(1) the Office of Disaster Assistance of SBA; 
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(2) the Administrator of the Federal Emergency Management Agen-
cy; and 
(3) other Federal, State, and local disaster planning offices, as nec-
essary. 
(e) RESOURCES.—The Administrator shall ensure that the disaster plan-
ning officer has adequate resources to carry out the responsibilities de-
scribed in subsection (c). 
§ 221126. Disaster response plan 
(a) DEFINITION OF STATE.—In this section, the term ‘‘State’’ means a 
State of the United States, the District of Columbia, Puerto Rico, the 
Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, and 
any territory or possession of the United States. 
(b) PLAN.— 
(1) IN GENERAL.—The Administrator shall develop, implement, and 
maintain a comprehensive written disaster response plan. 
(2) CONTENTS.—The disaster response plan shall include the fol-
lowing: 
(A) For each SBA region, a description of the disasters most 
likely to occur in the SBA region. 
(B) For each disaster described under subparagraph (A)— 
(i) an assessment of the disaster; 
(ii) an assessment of the demand for SBA assistance most 
likely to occur in response to the disaster; 
(iii) an assessment of the needs of SBA, with respect to 
such resources as information technology, telecommuni-
cations, human resources, and office space, to meet the de-
mand referred to in clause (ii); and 
(iv) guidelines pursuant to which the Administrator will co-
ordinate with other Federal agencies and with State and local 
authorities to best respond to the demand described in clause 
(ii) and to best use the resources referred to in clause (iii). 
(c) PLAN REVISION.— 
(1) IN GENERAL.—The Administrator shall update the disaster re-
sponse plan— 
(A) annually; and 
(B) following any major disaster relating to which the Adminis-
trator declares eligibility for additional disaster assistance under 
section 221108 of this title. 
(2) EXTREME VOLUME OF APPLICATIONS.— 
(A) IN GENERAL.—The Administrator shall revise the disaster 
response plan (or any successor to the plan) to incorporate the Ad-
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ministrator’s response to a situation in which an extreme volume 
of applications are received during the period of time immediately 
following a disaster. 
(B) CONTENTS.—A revision under subparagraph (A) shall in-
clude— 
(i) a plan to ensure that sufficient human and technological 
resources are made available; and 
(ii) a plan to prevent delays in loan processing. 
(d) REQUIRED KNOWLEDGE.—The Administrator shall carry out sub-
sections (b) and (c)(1) through an individual with substantial knowledge in 
the field of disaster readiness and emergency response. 
(e) REPORT.—The Administrator shall include in a report under section 
107118(g) of this title a report on the disaster response plan. 
§ 221127. Coordination of disaster assistance programs with 
FEMA 
(a) IN GENERAL.—The Administrator shall ensure that the SBA disaster 
assistance programs are coordinated, to the maximum extent practicable, 
with the disaster assistance programs of the Federal Emergency Manage-
ment Agency. 
(b) REGULATIONS.— 
(1) IN GENERAL.—The Administrator, in consultation with the Ad-
ministrator of the Federal Emergency Management Agency, shall es-
tablish regulations to ensure that each application for disaster assist-
ance is submitted as quickly as practicable to SBA or directed to the 
appropriate agency under the circumstances. 
(2) REVISION.—The regulations shall be revised annually. 
(c) REPORT.—The Administrator shall include in a report under section 
107118(g) of this title a report on the regulations under subsection (b). 
§ 221128. Plans to secure sufficient office space 
(a) IN GENERAL.—The Administrator shall develop long-term plans to se-
cure sufficient office space to accommodate an expanded workforce in times 
of disaster. 
(b) REPORT.—The Administrator shall include in a report under section 
107118(g) of this title a report on the plans developed under subsection (a). 
§ 221129. Bond guarantees in procurements relating to a 
major disaster 
(a) IN GENERAL.—Except as provided in subsection (b), and notwith-
standing any other provision of law, for any procurement relating to a major 
disaster, the Administrator may, on such terms and conditions as the Ad-
ministrator may prescribe, guarantee and enter into commitments to guar-
antee a surety against loss resulting from a breach of the terms of a bid 
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bond, payment bond, performance bond, or bonds ancillary thereto, by a 
principal on any total work order or contract amount at the time of bond 
execution that does not exceed $5,000,000. 
(b) INCREASE IN AMOUNT.—On request of the head of any Federal agen-
cy (other than SBA) involved in reconstruction efforts in response to a 
major disaster, the Administrator may guarantee and enter into a commit-
ment to guarantee a surety against loss under subsection (a) on any total 
work order or contract amount at the time of bond execution that does not 
exceed $10,000,000. 
(c) LIMITATION ON USE OF OTHER FUNDS.—The Administrator may 
carry out this section only with amounts appropriated in advance specifically 
to carry out this section. 
§ 221130. Civil penalty 
A person that wrongfully misapplies the proceeds of a loan made under 
the disaster loan program shall be liable to the Administrator for a civil 
penalty in the amount that is equal to 1.5 times the original principal 
amount of the loan. 
Chapter 223—Private Disaster Assistance 
Program 
Sec. 
223101.
Definitions. 
223102.
Program. 
223103.
Use of loans. 
223104.
Online applications. 
223105.
Maximum amounts. 
223106.
Terms and conditions. 
223107.
Lenders. 
223108.
Fees. 
223109.
Documentation. 
223110.
Purchase of loans. 
223111.
Regulations. 
223112.
Authorization of appropriations. 
§ 223101. Definitions 
In this chapter: 
(1) ELIGIBLE INDIVIDUAL.—The term ‘‘eligible individual’’ means an 
individual who is eligible for disaster assistance under section 221101 
of this title relating to a major disaster relating to which the Adminis-
trator declares eligibility for additional disaster assistance under sec-
tion 221108 of this title. 
(2) MAJOR DISASTER AREA.—The term ‘‘major disaster area’’ means 
an area for which the President declares a major disaster relating to 
which the Administrator declares eligibility for additional disaster as-
sistance under section 221108 of this title, during the period of the 
major disaster declaration. 
(3) QUALIFIED PRIVATE LENDER.—The term ‘‘qualified private lend-
er’’ means a privately-owned bank or other lending institution that— 
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(A) is not a preferred lender; and 
(B) the Administrator determines meets the criteria established 
under section 223111 of this title. 
(4) SMALL BUSINESS CONCERN.—The term ‘‘small business concern’’ 
means a small business concern (as defined in section 101102 or 
301101 of this title). 
§ 223102. Program 
The Administrator shall carry out a program, to be known as the private 
disaster assistance program, under which the Administrator may guarantee 
timely payment of principal and interest, as scheduled, on any loan made 
to a small business concern located in a major disaster area or to an eligible 
individual. 
§ 223103. Use of loans 
A loan guaranteed by the Administrator under this chapter may be used 
for any purpose authorized under chapter 221. 
§ 223104. Online applications 
(a) ESTABLISHMENT OF PROCESS.—The Administrator may establish, di-
rectly or through an agreement with another entity, an online application 
process for loans guaranteed under this chapter. 
(b) OTHER FEDERAL ASSISTANCE.—The Administrator may coordinate 
with the head of any other appropriate Federal agency so that any applica-
tion submitted through an online application process established under this 
section may be considered for any other Federal assistance program for dis-
aster relief. 
(c) CONSULTATION.—In establishing an online application process under 
this section, the Administrator shall consult with appropriate persons from 
the public and private sectors, including private lenders. 
§ 223105. Maximum amounts 
(a) GUARANTEE PERCENTAGE.—The Administrator may guarantee not 
more than 85 percent of a loan under this chapter. 
(b) LOAN AMOUNT.—The maximum amount of a loan guaranteed under 
this chapter shall be $2,000,000. 
§ 223106. Terms and conditions 
A loan guaranteed under this chapter shall be made under the same 
terms and conditions as a loan under chapter 221. 
§ 223107. Lenders 
(a) IN GENERAL.— 
(1) LOANS TO AN ELIGIBLE INDIVIDUAL.—A loan guaranteed under 
this chapter made to an eligible individual may be made by a preferred 
lender. 
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(2) LOANS TO A SMALL BUSINESS CONCERN.—A loan guaranteed 
under this chapter made to a small business concern may be made by 
a qualified private lender or by a preferred lender that also makes 
loans to eligible individuals. 
(b) COMPLIANCE.—If the Administrator determines that a preferred lend-
er knowingly failed to comply with the underwriting standards for loans 
guaranteed under this chapter or violated the terms of the standard oper-
ating procedure agreement between the preferred lender and the Adminis-
trator, the Administrator shall do 1 or both of the following: 
(1) Exclude the preferred lender from participating in the private 
disaster assistance program. 
(2) Exclude the preferred lender from participating in the preferred 
lender program for a period of not more than 5 years. 
§ 223108. Fees 
(a) IN GENERAL.—The Administrator shall not collect a guarantee fee 
under this chapter. 
(b) ORIGINATION FEE.—The Administrator may pay a qualified private 
lender or preferred lender an origination fee for a loan guaranteed under 
this chapter in an amount agreed on in advance between the qualified pri-
vate lender or preferred lender and the Administrator. 
§ 223109. Documentation 
(a) IN GENERAL.—A qualified private lender or preferred lender may use 
its own loan documentation for a loan guaranteed by the Administrator 
under this chapter, to the extent authorized by the Administrator. 
(b) NOT PART OF QUALIFICATION CRITERIA.—The ability of a lender to 
use its own loan documentation for a loan guaranteed under this chapter 
shall not be considered part of the criteria for becoming a qualified private 
lender under the regulations promulgated under section 223111 of this title. 
§ 223110. Purchase of loans 
The Administrator may enter into an agreement with a qualified private 
lender or preferred lender to purchase any loan guaranteed under this chap-
ter. 
§ 223111. Regulations 
The Administrator shall promulgate regulations establishing permanent 
criteria for qualified private lenders. 
§ 223112. Authorization of appropriations 
(a) IN GENERAL.—Amounts necessary to carry out this chapter shall be 
made available from amounts appropriated to SBA to carry out chapter 
221. 
(b) AUTHORITY TO REDUCE INTEREST RATES AND OTHER TERMS AND 
CONDITIONS.—Funds appropriated to SBA to carry out this chapter may 
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be used by the Administrator to meet the loan terms and conditions speci-
fied in section 223106 of this title. 
Chapter 225—Immediate Disaster 
Assistance Program 
Sec. 
225101.
Definition of program. 
225102.
Program. 
225103.
Eligibility. 
225104.
Use of proceeds. 
225105.
Loan terms. 
225106.
Approval or disapproval. 
§ 225101. Definition of program 
In this chapter, the term ‘‘program’’ means the immediate disaster assist-
ance program established under section 225102 of this title. 
§ 225102. Program 
The Administrator shall carry out a program, to be known as the imme-
diate disaster assistance program, under which the Administrator partici-
pates on a deferred (guaranteed) basis in 85 percent of the balance of the 
financing outstanding at the time of disbursement of the loan if the balance 
is less than or equal to $25,000 for business concerns affected by a disaster. 
§ 225103. Eligibility 
To receive a loan guarantee under section 225102 of this title, an appli-
cant shall apply for, and meet basic eligibility standards for, a loan under 
chapter 221 or 223. 
§ 225104. Use of proceeds 
A business concern that receives a loan under chapter 221 or 223 shall 
use the proceeds of the loan to repay all loans guaranteed under section 
225102 of this title, if any, before using the proceeds for any other purpose. 
§ 225105. Loan terms 
(a) NO PREPAYMENT PENALTY.—There shall be no prepayment penalty 
on a loan guaranteed under section 225102 of this title. 
(b) REPAYMENT.—A business concern that receives a loan guaranteed 
under section 225102 of this title and that is disapproved for a loan under 
chapter 221 or 223 shall repay the loan guaranteed under section 225102 
of this title not later than the date established by the Administrator, which 
shall not be earlier than 10 years after the date on which the loan guaran-
teed under section 225102 of this title is disbursed. 
§ 225106. Approval or disapproval 
The Administrator shall ensure that each applicant for a loan under the 
program receives a decision approving or disapproving the application within 
36 hours after the Administrator receives the application. 
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Chapter 227—Expedited Disaster Assist-
ance Business Loan Guarantee Program 
Sec. 
227101.
Definition of program. 
227102.
Program. 
227103.
Consultation. 
227104.
Regulations. 
§ 227101. Definition of program 
In this chapter, the term ‘‘program’’ means the expedited disaster assist-
ance business loan guarantee program established under section 227102 of 
this title. 
§ 227102. Program 
The Administrator shall establish and implement an expedited disaster 
assistance business loan guarantee program under which the Administrator 
may, on an expedited basis, guarantee timely payment of principal and in-
terest, as scheduled on any loan made to an eligible small business concern 
under section 221108 of this title. 
§ 227103. Consultation 
In establishing the program, the Administrator shall consult with— 
(1) appropriate personnel (including SBA district office personnel) of 
SBA; 
(2) appropriate technical assistance providers (including small busi-
ness development centers); 
(3) appropriate lenders and credit unions; and 
(4) the Committee on Small Business and Entrepreneurship of the 
Senate and Committee on Small Business of the House of Representa-
tives. 
§ 227104. Regulations 
(a) IN GENERAL.—The Administrator shall issue regulations establishing 
and implementing the program in accordance with this chapter. 
(b) CONTENTS.—The regulations shall— 
(1) identify whether appropriate uses of funds under the program 
may include— 
(A) paying employees; 
(B) paying bills and other financial obligations; 
(C) making repairs; 
(D) purchasing inventory; 
(E) restarting or operating a small business concern in the com-
munity in which the small business concern was conducting oper-
ations prior to the applicable major disaster or in a neighboring 
area in the disaster area; or 
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(F) covering additional costs until the small business concern is 
able to obtain funding through insurance claims, Federal assist-
ance programs, or other sources; and 
(2) set the terms and conditions of any loan made under the pro-
gram. 
(c) TERMS AND CONDITIONS.—A loan guaranteed by the Administrator 
under the program— 
(1) shall be for not more than $150,000; 
(2) shall be a short-term loan, not to exceed 180 days, except that 
the Administrator may extend the term as the Administrator deter-
mines to be appropriate on a case-by-case basis; 
(3) shall have an interest rate not to exceed 300 basis points above 
the interest rate established by the Board of Governors of the Federal 
Reserve System that 1 bank charges another for reserves that are lent 
on an overnight basis on the date on which the loan is made; 
(4) shall have no prepayment penalty; 
(5) may be made only to a borrower that meets the requirements for 
a loan under chapter 221; 
(6) may be refinanced as part of any subsequent disaster assistance 
provided under chapter 221; 
(7) may receive expedited loss verification and loan processing, if the 
applicant— 
(A) is a major source of employment in the disaster area (which 
shall be determined in the same manner as under section 
221103(e)(2) of this title); or 
(B) is vital to recovery efforts in the region (including providing 
debris removal services, manufactured housing, or building mate-
rials); and 
(8) shall be subject to such additional terms as the Administrator 
determines to be appropriate. 
Division F—Business Development 
Program 
Chapter 231—General Provisions 
Sec. 
231101.
Definitions. 
231102.
Establishment of business development program. 
231103.
Unemployed or low-income individuals. 
231104.
Restrictions on activities of SBA employees. 
231105.
Encouragement of subcontracts. 
231106.
Federal contracts, subcontracts, and deposits. 
231107.
Business opportunity specialists. 
231108.
Requests for investigation. 
231109.
Use of procurement authority. 
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§ 231101. Definitions 
In this division: 
(1) ASSOCIATE
ADMINISTRATOR.—The term ‘‘Associate Adminis-
trator’’ means the Associate Administrator for Minority Small Business 
and Capital Ownership Development. 
(2) BUSINESS ACTIVITY TARGET.—The term ‘‘business activity tar-
get’’ means a target contained in a business plan for contracts awarded 
other than through the program. 
(3) BUSINESS OPPORTUNITY SPECIALIST.—The term ‘‘business op-
portunity specialist’’ means an SBA employee responsible for providing 
business development assistance to a program participant. 
(4) BUSINESS PLAN.—The term ‘‘business plan’’ means the business 
plan of a program participant under section 233118 of this title. 
(5) DIRECTOR.—The term ‘‘Director’’ means the Director of the Di-
vision. 
(6) DISADVANTAGED
OWNER.—The term ‘‘disadvantaged owner’’ 
means an individual on whom eligibility is based for participation in 
the business development program. 
(7) DIVISION.—The term ‘‘Division’’ means the Division of Program 
Certification and Eligibility established by section 103108 of this title. 
(8) ECONOMICALLY
DISADVANTAGED
INDIAN
TRIBE.—The term 
‘‘economically disadvantaged Indian tribe’’ means an Indian tribe that 
the Administrator determines to be economically disadvantaged based 
on consideration of available information such as— 
(A) the per capita income of members of the Indian tribe, ex-
cluding judgment awards; 
(B) the percentage of the local Indian population below the pov-
erty level; and 
(C) the Indian tribe’s access to capital markets. 
(9) EXECUTIVE
AGENCY.—The term ’’executive agency’’ has the 
meaning given the term in section 133 of title 41. 
(10) GRADUATE.—The term ‘‘graduate’’, with reference to a pro-
gram participant, means to graduate the program participant from the 
program under section 233120 of this title. 
(11) INDIAN TRIBE.—The term ‘‘Indian tribe’’ means an Indian 
tribe, band, nation, or other organized group or community of Indians, 
including any Alaska Native village or regional or village corporation 
(within the meaning of the Alaska Native Claims Settlement Act (43 
U.S.C. 1601 et seq.)) that— 
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191 
(A) is recognized as eligible for the special programs and serv-
ices provided by the United States to Indians because of their sta-
tus as Indians; or 
(B) is recognized as such by the State in which the Indian tribe, 
band, nation, group, or community resides. 
(12) PROGRAM.—The term ‘‘program’’ means the business develop-
ment program. 
(13) PROGRAM
PARTICIPANT.—The term ‘‘program participant’’ 
means a small business concern that is participating in the program. 
(14) PROGRAM PARTICIPATION PERIOD.—The term ‘‘program par-
ticipation period’’, with respect to a program participant, means the pe-
riod of program participation applicable to the program participant 
under section 233129 of this title. 
(15) SMALL BUSINESS CONCERN OWNED AND CONTROLLED BY SO-
CIALLY AND ECONOMICALLY DISADVANTAGED INDIVIDUALS.— 
(A) IN GENERAL.—The term ‘‘small business concern owned 
and controlled by socially and economically disadvantaged individ-
uals’’ means a small business concern— 
(i) not less than 51 percent of which is unconditionally 
owned by— 
(I) 1 or more socially and economically disadvantaged 
individuals; 
(II) an economically disadvantaged Indian tribe (or a 
wholly owned business entity of an economically dis-
advantaged Indian tribe); or 
(III) an economically disadvantaged Native Hawaiian 
organization; and 
(ii) the management and daily business operations of which 
are controlled by 1 or more— 
(I) socially and economically disadvantaged individ-
uals; 
(II) members of an economically disadvantaged Indian 
tribe; or 
(III) Native Hawaiian organizations. 
(B) SIZE
DETERMINATION
FOR
INDIAN
TRIBES.—In deter-
mining the size of a concern owned by an economically disadvan-
taged Indian tribe (or a wholly owned business entity of an eco-
nomically disadvantaged Indian tribe) for purposes of subpara-
graph (A), the concern’s size shall be independently determined 
without regard to its affiliation with the Indian tribe, any entity 
of the tribal government, or any other business enterprise owned 
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by the Indian tribe, unless the Administrator determines that 1 or 
more such tribally owned business concerns have obtained, or are 
likely to obtain, a substantial unfair competitive advantage within 
an industry category. 
(16) SOCIALLY AND ECONOMICALLY DISADVANTAGED INDIVIDUAL.— 
(A) IN GENERAL.—The term ‘‘socially and economically dis-
advantaged individual’’ means a member of a group of socially dis-
advantaged individuals whose ability to compete in the free enter-
prise system has been impaired due to diminished capital and 
credit opportunities as compared with others in the same business 
area who are not socially disadvantaged. 
(B) DETERMINATION OF DEGREE OF DIMINISHED CREDIT AND 
CAPITAL OPPORTUNITIES.—In determining the degree of dimin-
ished credit and capital opportunities, the Administrator shall con-
sider, among other things, the assets and net worth of a socially 
disadvantaged individual. 
(C) NET WORTH.—In computing personal net worth for pur-
poses of this paragraph, there shall be excluded— 
(i) the value of investments that disadvantaged owners 
have in their concern, except that the value of such invest-
ments shall be taken into account when comparing the con-
cern to other concerns in the same business area that are 
owned by other than socially disadvantaged persons; and 
(ii) the equity that disadvantaged owners have in their pri-
mary personal residences, except that any portion of such eq-
uity that is attributable to unduly excessive withdrawals from 
a program participant or a concern applying for program par-
ticipation shall be taken into account. 
(17) SOCIALLY DISADVANTAGED INDIVIDUAL.— 
(A) IN
GENERAL.—The term ‘‘socially disadvantaged indi-
vidual’’ means a member of a group of individuals who have been 
subjected to racial or ethnic prejudice or cultural bias because of 
their identity as members of the group without regard to their in-
dividual qualities. 
(B) DETERMINATION.—A determination under subparagraph 
(A) with respect to whether a group has been subjected to preju-
dice or bias shall be made by the Administrator after consultation 
with the Associate Administrator for Minority Small Business and 
Capital Ownership Development. 
(18) TERMINATE.—The term ‘‘terminate’’, with reference to a pro-
gram participant, means to suspend or totally deny assistance to a pro-
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193 
gram participant under the program, prior to the graduation of the 
program participant or prior to the expiration of the program partici-
pant’s program participation period, under section 233121 of this title. 
§ 231102. Establishment of business development program 
There is established within SBA the business development program, 
which shall provide assistance exclusively for small business concerns eligible 
to receive contracts under chapter 233. 
§ 231103. Unemployed or low-income individuals 
The program shall be used to— 
(1) assist in the establishment, preservation, and strengthening of 
small business concerns and improve the managerial skills employed in 
small business concerns, with special attention to, and particular em-
phasis on the preservation or establishment of, small business concerns 
that are— 
(A) located in urban or rural areas with high proportions of un-
employed or low-income individuals; or 
(B) owned by low-income individuals; and 
(2) mobilize for those objectives private as well as public managerial 
skills and resources. 
§ 231104. Restrictions on activities of SBA employees 
(a) ACTIVITIES AND TRANSACTIONS RELATING TO OWNERSHIP OF A 
PROGRAM PARTICIPANT.— 
(1) IN GENERAL.—A person within the employ of SBA shall not, 
during the term of such employment and for a period of 2 years after 
the employment has been terminated, engage in any activity or trans-
action described in paragraph (2) with respect to any program partici-
pant during the person’s term of employment, if the person partici-
pated personally (directly or indirectly)— 
(A) in decisionmaking responsibilities relating to the program 
participant; or 
(B) with respect to the administration of any assistance pro-
vided to program participants generally under the program. 
(2) ACTIVITIES AND TRANSACTIONS.—The activities and transactions 
referred to in paragraph (1) are— 
(A) the buying, selling, or receiving (except by inheritance) of 
any legal or beneficial ownership of stock or any other ownership 
interest or the right to acquire any such interest; 
(B) the entering into or execution of any written or oral agree-
ment (whether or not legally enforceable) to purchase or otherwise 
obtain any right or interest described in subparagraph (A); and 
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(C) the receipt of any other benefit or right that may be an inci-
dent of ownership. 
(3) ANNUAL CERTIFICATION.— 
(A) IN GENERAL.—An employee described in subparagraph (B) 
shall annually submit to the Administrator a written certification 
regarding compliance with this section. 
(B) EMPLOYEE.—The employees referred to in subparagraph 
(A) are— 
(i) a regional administrator; 
(ii) a district director; 
(iii) the Associate Administrator; 
(iv) an employee whose principal duties relate to the award 
of contracts or the provision of other assistance under the 
program; and 
(v) such other employees as the Administrator may des-
ignate. 
(4) CIVIL PENALTIES.— 
(A) IN GENERAL.—An employee or former employee of SBA 
who violates this section shall be subject to a civil penalty, as-
sessed by the Attorney General, that shall not exceed 300 percent 
of the maximum amount of gain that the employee realized or 
could have realized as a result of engaging in the activity and 
transaction prohibited by paragraph (1). 
(B) FALSE CERTIFICATION.—In addition to any other remedy 
or sanction provided for under law (including a regulation), a per-
son who makes a false certification under paragraph (3)(A) shall 
be subject to a civil penalty under section 3802 of title 31. 
(b) POLITICAL ACTIVITIES AND AFFILIATIONS.— 
(1) PROHIBITION.—An employee of SBA who has authority to take, 
direct others to take, recommend, or approve any action with respect 
to any program or activity under the program shall not, with respect 
to any such action, exercise or threaten to exercise that authority on 
the basis of the political activity or affiliation of any person. 
(2) REPORTING
OF
SOLICITATION
TO
VIOLATE.—An employee of 
SBA whose participation in a violation of paragraph (1) is directed or 
solicited shall expeditiously report the direction or solicitation to the In-
spector General of SBA. 
(3) DISCIPLINARY ACTION.—An employee of SBA who willfully and 
knowingly violates paragraph (1) or (2) shall be subject to disciplinary 
action, which may consist of separation from service, reduction in 
grade, suspension, or reprimand. 
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(4) APPLICABILITY.—Paragraphs (1) and (2) do not apply to an ac-
tion taken as a penalty or other enforcement of a violation of any law 
(including a regulation) prohibiting or restricting political activity. 
(5) OTHER
PROHIBITIONS, MEASURES, AND
LIABILITIES.—Para-
graphs (1) to (4) are in addition to, and not in lieu of, any other prohi-
bitions, measures, or liabilities that may arise under any other provi-
sion of law. 
§ 231105. Encouragement of subcontracts 
(a) IN GENERAL.—The Administrator shall encourage the placement of 
subcontracts by businesses with small business concerns located in areas of 
high concentration of unemployed or low-income individuals and with pro-
gram participants. 
(b) INCENTIVES AND ASSISTANCE.—The Administrator may provide in-
centives and assistance to a business to aid in the training and upgrading 
of— 
(1) potential small business concern subcontractors; and 
(2) program participants. 
§ 231106. Federal contracts, subcontracts, and deposits 
The Administrator shall take such steps as are necessary and appro-
priate, in coordination and cooperation with the heads of other Federal 
agencies, to ensure that contracts, subcontracts, and deposits made by the 
Federal Government or with programs aided with Federal funds are placed 
in such a way as to further the purposes of the program. 
§ 231107. Business opportunity specialists 
(a) POSITION.—In each SBA field office responsible for assisting 1 or 
more program participants there shall be a position designated as a business 
opportunity specialist. 
(b) ADEQUATE NUMBER.—To the maximum extent practicable, the Ad-
ministrator shall ensure that an adequate number of business opportunity 
specialists are assigned to each district office to carry out the responsibil-
ities of the program and to assist program participants. 
(c) TRAINING.—The Administrator shall take such actions as are appro-
priate to ensure that any person employed as a business opportunity spe-
cialist receives adequate periodic training to ensure that the employee is ca-
pable of assisting program participants in fully utilizing the program and 
meeting the requirements of this subtitle and subtitle I. 
§ 231108. Requests for investigation 
The Committee on Small Business and Entrepreneurship of the Senate 
or the Committee on Small Business of the House of Representatives may 
request that the Office of the Inspector General of SBA conduct an inves-
tigation of any activity conducted under the program. Not later than 30 
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196 
days after the receipt of such a request, the Inspector General shall inform 
the committee, in writing, of the disposition of the request. 
§ 231109. Use of procurement authority 
The procurement authority under the program shall be used only as a 
tool for developing business ownership among groups that own and control 
little productive capital. 
Chapter 233—Contracting 
Sec. 
233101.
Contracting authority. 
233102.
Contracting procedure. 
233103.
Fair market price. 
233104.
Award after completion of program participation period. 
233105.
Award through competition. 
233106.
Participation by program participants in negotiation of contracts to be awarded non-
competitively. 
233107.
Sole source award. 
233108.
Annual certification regarding ownership and control. 
233109.
Annual submission regarding economic disadvantage. 
233110.
Review of economic disadvantage and withdrawal of assets. 
233111.
Hearing on the record. 
233112.
Program participant capability. 
233113.
Limitations on subcontracting. 
233114.
Wholesalers and retailers. 
233115.
Reporting by program participants to business opportunity specialists. 
233116.
Transfer of ownership or control. 
233117.
Assistance for program participants. 
233118.
Business plans. 
233119.
Denial of further assistance. 
233120.
Graduation. 
233121.
Termination. 
233122.
Evaluation of eligibility. 
233123.
Limitation of eligibility to 1 small business concern. 
233124.
Limitation on denial of admission into program based on unavailability of specific 
contract opportunities. 
233125.
Certification decision. 
233126.
Review of new entrants into the program. 
233127.
Program stages. 
233128.
Attainment of business activity targets. 
233129.
Program participation period. 
233130.
Collection of data on program operations. 
233131.
Approval of contract options and modifications. 
233132.
Orderly and efficient management of program. 
233133.
Participation in federally funded programs and projects. 
§ 233101. Contracting authority 
(a) IN GENERAL.—When the Administrator determines that such action 
is necessary or appropriate, the Administrator shall— 
(1) enter into contracts with procuring agencies obligating the Ad-
ministrator to furnish articles, equipment, supplies, services, or mate-
rials to the Government or to perform construction work for the Gov-
ernment; and 
(2) arrange for the performance of such contracts by negotiating or 
otherwise letting a subcontract to 1 or more small business concerns 
owned and controlled by socially and economically disadvantaged indi-
viduals— 
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197 
(A) for the manufacture, supply, assembly of the articles, equip-
ment, supplies, materials, or parts thereof, for the construction 
work, for the services, or for servicing or processing in connection 
with the manufacturing, construction, or services; or 
(B) for such management services as are necessary to enable 
the Administrator to perform the contract. 
(b) CONSTRUCTION SUBCONTRACTS.—To the maximum extent prac-
ticable, construction subcontracts awarded by the Administrator under the 
program shall be awarded within the county or State in which the work is 
to be performed. 
(c) INAPPLICABILITY TO CERTAIN PROCUREMENTS.—The requirements 
of the program do not apply to— 
(1) a procurement under conditions described in— 
(A) paragraph (2), (3), (4), (5), or (7) of section 3304(a) of 
title 41; or 
(B) paragraph (2), (3), (4), (5), or (7) of section 2304(c) of 
title 10; or 
(2) a procurement by an executive agency for which the head of the 
executive agency makes a determination in writing, after consultation 
with the Administrator and the Administrator for Federal Procurement 
Policy, that it is not appropriate or reasonable to publish a notice be-
fore issuing a solicitation. 
§ 233102. Contracting procedure 
(a) IN GENERAL.—If the Administrator certifies to a contracting officer 
of a procuring agency that the Administrator is competent and responsible 
to perform a specific Federal agency procurement contract to be let by the 
contracting officer, the contracting officer may let the contract to the Ad-
ministrator on such terms and conditions as may be agreed on between the 
Administrator and the contracting officer. 
(b) FAILURE TO AGREE.— 
(1) IN GENERAL.—If the Administrator and the contracting officer 
fail to agree on a procurement contract— 
(A) not later than 5 days after the date on which the Adminis-
trator is notified of the contracting officer’s adverse decision, the 
Administrator may notify the contracting officer of the intent to 
appeal the adverse decision; and 
(B) not later than 15 days after that date, the Administrator 
shall file a written request for a reconsideration of the adverse de-
cision with the head of the procuring agency. 
(2) ADVERSE DECISION.—For the purposes of paragraph (1)(A), a 
contracting officer’s adverse decision includes— 
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198 
(A) a decision not to make available for award under the pro-
gram a particular procurement requirement; and 
(B) a failure to agree on the terms and conditions of a contract 
to be awarded noncompetitively under the program. 
(3) SUSPENSION OF ACTION.—On receipt of a notice of intent to ap-
peal under paragraph (1)(A), the agency head shall suspend further ac-
tion regarding the procurement until a written decision on the Adminis-
trator’s request for reconsideration is issued by the agency head, unless 
the contracting officer makes a written determination that urgent and 
compelling circumstances that significantly affect interests of the 
United States will not permit waiting for a reconsideration of the ad-
verse decision. 
(4) DENIAL OF REQUEST FOR RECONSIDERATION.—If the Adminis-
trator’s request for reconsideration is denied, the procuring agency 
head shall specify the reasons why the small business concern selected 
by the Administrator to perform the procurement requirement was de-
termined to be incapable of performing the procurement requirement, 
and the findings supporting the determination, which shall be made a 
part of the contract file for the requirement. 
§ 233103. Fair market price 
(a) IN GENERAL.—A contract may not be awarded under the program 
if the award of the contract would result in a cost to the procuring agency 
that exceeds a fair market price. 
(b) DETERMINATION.— 
(1) IN GENERAL.—The fair market price under subsection (a) shall 
be determined by the procuring agency in accordance with this sub-
section. 
(2) NEW PROCUREMENT.— 
(A) IN GENERAL.—The estimate of a current fair market price 
for a new procurement requirement, or a requirement that does 
not have a satisfactory procurement history, shall be derived from 
a price or cost analysis. 
(B) FACTORS.—A price or cost analysis— 
(i) may take into account prevailing market conditions, 
commercial prices for similar products or services, or data ob-
tained from any other Federal agency; and 
(ii) shall consider such cost or pricing data as may be time-
ly submitted by the Administrator. 
(3) PROCUREMENTS
WITH
SATISFACTORY
PROCUREMENT
HIS-
TORY.— 
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199 
(A) IN GENERAL.—The estimate of a current fair market price 
for a procurement requirement that has a satisfactory procure-
ment history shall be based on recent award prices adjusted to en-
sure comparability. 
(B) ADJUSTMENT.—An adjustment under subparagraph (A) 
shall take into account differences in quantities, performance 
times, plans, specifications, transportation costs, packaging and 
packing costs, labor and materials costs, overhead costs, and any 
other additional costs that are considered appropriate. 
(c) ESTIMATION METHOD.— 
(1) IN GENERAL.—On the request of the Administrator, the pro-
curing agency shall promptly submit to the Administrator a written 
statement detailing the method used by the procuring agency to esti-
mate the current fair market price for the contract, identifying the in-
formation, studies, analyses, and other data used by the procuring 
agency. 
(2) NONDISCLOSURE.—The procuring agency’s estimate of the cur-
rent fair market price and any supporting data furnished to the Ad-
ministrator shall not be disclosed to any potential offeror other than 
the Administrator. 
(d) PROTEST.—A small business concern selected by the Administrator 
to perform or negotiate a contract to be let under the program may request 
the Administrator to protest the procuring agency’s estimate of the fair 
market price for the contract. 
§ 233104. Award after completion of program participation 
period 
The Administrator shall make an award to a small business concern 
owned and controlled by socially and economically disadvantaged individuals 
that has completed its program participation period if— 
(1) the contract will be awarded as a result of an offer (including 
price) submitted in response to a published solicitation relating to a 
competition conducted under section 233105 of this title; and 
(2) the prospective contract awardee was a program participant eligi-
ble for award of the contract on the date specified for receipt of offers 
contained in the contract solicitation. 
§ 233105. Award through competition 
(a) IN GENERAL.—Except as provided in subsections (b) and (c), a con-
tract opportunity offered for award under the program shall be awarded on 
the basis of competition restricted to eligible program participants if— 
(1) there is a reasonable expectation that— 
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200 
(A) at least 2 eligible program participants will submit offers; 
and 
(B) an award can be made at a fair market price; and 
(2) the anticipated award price of the contract (including options) 
will exceed— 
(A) $5,000,000, in the case of a contract opportunity assigned 
a North American Industry Classification System code for manu-
facturing; or 
(B) $3,000,000, in the case of any other contract opportunity. 
(b) RESTRICTED COMPETITION FOR SMALLER CONTRACTS.— 
(1) IN GENERAL.—The Associate Administrator may approve a re-
quest from a Federal agency to award a contract opportunity under the 
program on the basis of a competition restricted to eligible program 
participants even if the anticipated award price is not expected to ex-
ceed the dollar amounts specified in subsection (a)(2). 
(2) APPROVALS.—Approvals under paragraph (1) shall be granted 
only on a limited basis. 
(3) NONDELEGABILITY.—The authority of the Associate Adminis-
trator under paragraph (1) may not be delegated. 
(c) PROGRAM PARTICIPANTS OWNED AND CONTROLLED BY AN ECONOMI-
CALLY DISADVANTAGED INDIAN TRIBE.—Subsection (a) does not preclude 
the award of a sole source contract under section 233107 of this title, with-
out regard to the anticipated award price of the contract, to a program par-
ticipant that is owned and controlled by an economically disadvantaged In-
dian tribe. 
(d) PROGRAM PARTICIPANTS OWNED AND CONTROLLED BY NATIVE HA-
WAIIAN ORGANIZATIONS.—For purposes of contracting with agencies of the 
Department of Defense, subsection (a) does not preclude the award of a sole 
source contract under section 233107 of this title, without regard to the an-
ticipated award price of the contract, to a program participant that is 
owned and controlled by a Native Hawaiian organization. 
§ 233106. Participation by program participants in negotia-
tion of contracts to be awarded noncompetitively 
A program participant selected by the Administrator to perform a con-
tract to be let noncompetitively under the program shall, when practicable, 
participate in any negotiation of the terms and conditions of the contract. 
§ 233107. Sole source award 
(a) IN GENERAL.—The Administrator shall award a sole source contract 
under the program to a program participant recommended by the Federal 
agency offering the contract opportunity if— 
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201 
(1) the program participant is determined to be a responsible con-
tractor with respect to performance of the contract; 
(2) the award of the contract would be consistent with the program 
participant’s business plan; and 
(3) the award of the contract would not result in the program par-
ticipant’s exceeding the requirements established by section 233128 of 
this title. 
(b) EQUITABLE GEOGRAPHIC DISTRIBUTION.—To the maximum extent 
practicable, the Administrator shall promote the equitable geographic dis-
tribution of sole source contracts awarded under this section. 
§ 233108. Annual certification regarding ownership and con-
trol 
A program participant shall annually certify that the program participant 
meets the requirements of section 231101(15) of this title regarding owner-
ship and control. 
§ 233109. Annual submission regarding economic disadvan-
tage 
A program participant shall annually submit to the Administrator— 
(1) a personal financial statement for each disadvantaged owner; 
(2) a record of all payments made by the program participant to 
each of its disadvantaged owners or to any person or entity affiliated 
with its disadvantaged owners; and 
(3) such other information as the Administrator considers necessary 
to make the determinations required by paragraphs (8) and (16) of 
section 231101 of this title and section 233110 of this title. 
§ 233110. Review of economic disadvantage and withdrawal 
of assets 
(a) ECONOMIC DISADVANTAGE.—If, on the basis of information provided 
by a program participant under section 233109 of this title or information 
otherwise obtained by the Administrator, the Administrator has reason to 
believe that the standards to establish economic disadvantage under section 
231101(15) of this title are not met, the Administrator shall conduct a re-
view to determine whether the program participant and its disadvantaged 
owners continue to be impaired in their ability to compete in the free enter-
prise system due to diminished capital and credit opportunities as compared 
with others in the same business area who are not socially disadvantaged. 
(b) WITHDRAWAL OF ASSETS.— 
(1) IN GENERAL.—If, on the basis of information provided by a pro-
gram participant under section 233109 of this title or information oth-
erwise obtained by the Administrator, the Administrator has reason to 
believe that the amount of funds or other assets withdrawn from a pro-
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gram participant for the personal benefit of its disadvantaged owners 
or any person or entity affiliated with its disadvantaged owners may 
have been unduly excessive, the Administrator shall conduct a review 
to determine whether the withdrawal of funds or other assets was detri-
mental to the achievement of the targets, objectives, and goals con-
tained in the program participant’s business plan. 
(2) TERMINATION OR REQUIREMENT TO REINVEST ASSETS.—If the 
Administrator determines in a review under paragraph (1) that funds 
or other assets have been withdrawn to the detriment of the program 
participant’s business, the Administrator shall— 
(A) initiate a proceeding to terminate the program participant 
under section 233121 of this title; or 
(B) require an appropriate reinvestment of funds or other assets 
and such other steps as the Administrator considers necessary to 
ensure the protection of the program participant. 
§ 233111. Hearing on the record 
(a) OPPORTUNITY FOR HEARING.—Before taking an action described in 
subsection (b) with respect to a small business concern, the Administrator 
shall provide the small business concern an opportunity for a hearing on the 
record in accordance with chapter 5 of title 5. 
(b) ACTIONS.—The actions referred to in subsection (a) are— 
(1) denial of admission to the program based on a determination 
that— 
(A) a small business concern is not a small business concern 
owned and controlled by socially and economically disadvantaged 
individuals under section 231101(15) of this title; 
(B) 1 or more of the owners of a small business concern is not 
a socially disadvantaged individual under section 231101(17) of 
this title; or 
(C) 1 or more of the owners of a small business concern is not 
a socially and economically disadvantaged individual under section 
231101(16); 
(2) graduation under section 233120 of this title; 
(3) termination under section 233121 of this title; and 
(4) denial of a request to issue a waiver under section 233116(b) of 
this title. 
(c) DECLINATION OF JURISDICTION.—The administrative law judge se-
lected to preside over a proceeding under this section shall decline to accept 
jurisdiction over any matter that— 
(1) does not, on its face, allege facts that, if proven to be true, would 
warrant reversal or modification of the Administrator’s position; 
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(2) is untimely filed; 
(3) is not filed in accordance with the rules of procedure governing 
the proceeding; or 
(4) has been decided by or is the subject of an adjudication before 
a court of competent jurisdiction over such matters. 
(d) TIMING.—A proceeding under this section shall be completed and a 
decision rendered, insofar as practicable, not later than 90 days after a peti-
tion for a hearing is filed with the Office of Hearings and Appeals. 
(e) FINAL DECISION.—A decision rendered under this section shall be the 
final decision of the Administrator and shall be binding on the Adminis-
trator and persons in the employ of the Administrator. 
§ 233112. Program participant capability 
(a) ELIGIBILITY FOR ASSISTANCE.— 
(1) IN GENERAL.—A small business concern shall not be eligible for 
assistance under the program unless the Administrator determines that 
with contract, financial, technical, and management support, the small 
business concern— 
(A) will be able to perform contracts that may be awarded to 
the small business concern under 233104 of this title; and 
(B) has reasonable prospects for success in competing in the 
private sector. 
(2) PERIOD OF OPERATION.— 
(A) IN GENERAL.—The Administrator may prescribe a min-
imum period of time during which a prospective program partici-
pant must be in operation to meet the eligibility requirements of 
paragraph (1) only if the Administrator provides a waiver of the 
minimum period as provided in subparagraph (B). 
(B) WAIVER.—The Administrator shall provide that any re-
quirement that the Administrator establishes regarding the period 
of time during which a prospective program participant must have 
been in operation may be waived, and that a prospective program 
participant that otherwise meets the requirements of paragraph 
(1) shall be considered to have demonstrated reasonable prospects 
for success, if— 
(i) the individual or individuals upon whom eligibility is to 
be based have substantial and demonstrated business man-
agement experience; 
(ii) the prospective program participant has demonstrated 
technical expertise to carry out its business plan with a sub-
stantial likelihood for success; 
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(iii) the prospective program participant has adequate cap-
ital to carry out its business plan; 
(iv) the prospective program participant has a record of 
successful performance on contracts from governmental and 
nongovernmental sources in the primary industry category in 
which the prospective program participant is seeking certifi-
cation; and 
(v) the prospective program participant has, or can dem-
onstrate its ability to timely obtain, the personnel, facilities, 
equipment, and any other requirements needed to perform 
such contracts. 
(b) CAPABILITY.— 
(1) CAPABILITY STATEMENTS.— 
(A) ANNUAL SUBMISSION.—A program participant shall annu-
ally submit to the Administrator a capability statement. 
(B) CONTENTS.—A capability statement shall— 
(i) briefly describe the program participant’s various con-
tract performance capabilities; and 
(ii) include the name and telephone number of the business 
opportunity specialist assigned the program participant. 
(C) STATEMENT
CATEGORIES.—The Administrator shall cat-
egorize capability statements as— 
(i) statements indicating capability primarily dependent on 
local contract support; and 
(ii) statements indicating capability primarily requiring a 
national marketing effort. 
(D) DISSEMINATION OF CAPABILITY STATEMENTS.— 
(i) LOCAL.—The Administrator shall disseminate capability 
statements described in subparagraph (C)(i) to appropriate 
contracting activities in the marketing area of each program 
participant, respectively. 
(ii) NATIONAL.—The Administrator shall disseminate capa-
bility statements described in subparagraph (C)(ii) to the Di-
rectors of Small and Disadvantaged Business Utilization for 
the appropriate Federal agencies, who shall further distribute 
the capability statements to contracting activities with Fed-
eral agencies that may purchase the types of items or services 
described in the capability statements. 
(2) CONTACT BY CONTRACTING ACTIVITIES.—A contracting activity 
that receives a capability statement of a program participant under 
paragraph (1)(D) shall, within 60 days after receipt of the capability 
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statement, contact the business opportunity specialist identified in the 
capability statement to indicate the number, type, and approximate dol-
lar value of contract opportunities that the contracting activity may 
award over the succeeding 12-month period and that may be appro-
priate to consider for award to program participants for which the con-
tracting activity has received capability statements. 
(3) FORECAST OF CONTRACT OPPORTUNITIES.— 
(A) IN GENERAL.—An executive agency that reports to the Fed-
eral Procurement Data System contract actions with an aggregate 
value in excess of $50,000,000 in any fiscal year shall— 
(i) prepare a forecast of expected contract opportunities or 
classes of contract opportunities for the next and succeeding 
fiscal years that program participants are capable of per-
forming; and 
(ii) periodically revise the forecast during the following 
year. 
(B) CONTENTS.—To the extent that the information is avail-
able, a forecast under subparagraph (A) shall specify— 
(i) the approximate number of individual contract opportu-
nities (and the number of opportunities within a class); 
(ii) the approximate dollar value, or range of dollar values, 
for each contract opportunity or class of contract opportuni-
ties; 
(iii) the anticipated time (by fiscal year quarter) for the 
issuance of a procurement request; and 
(iv) the activity responsible for the award and administra-
tion of the contract. 
(C) SUBMISSION OF FORECASTS.—Not later than 10 days after 
completion of a forecast under subparagraph (A), the head of the 
executive agency that prepared the forecast shall submit the fore-
cast to— 
(i) the Director of the Office of Small and Disadvantaged 
Business Utilization of the executive agency; and 
(ii) the Administrator. 
(D) SCOPE OF INFORMATION REPORTED.—A forecast submitted 
under subparagraph (C) may be limited to classes of items and 
services for which there are substantial annual purchases. 
(E) AVAILABILITY OF FORECASTS.—A forecast submitted under 
subparagraph (C) shall be available to small business concerns. 
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§ 233113. Limitations on subcontracting 
A program participant shall not be awarded a contract under the program 
unless the program participant agrees to satisfy the requirements of section 
299107 of this title. 
§ 233114. Wholesalers and retailers 
(a) IN GENERAL.—An otherwise responsible small business concern that 
is described in subsection (b) shall not be denied the opportunity to submit 
and have considered its offer for a procurement contract that has as its 
principal purpose the supply of a product to be let under this chapter solely 
because the small business concern is other than the manufacturer or proc-
essor of the product to be supplied under the contract. 
(b) REQUIREMENTS.—A small business concern referred to in subsection 
(a) is a small business concern that— 
(1) is primarily engaged in wholesale or retail trade; 
(2) is a small business concern under the numerical size standard 
for the North American Industry Classification System code assigned 
to the contract solicitation on which the offer is being made; 
(3) is a regular dealer (as defined under section 6510 of title 41) 
in the product to be offered the Government; and 
(4) represents that the small business concern will supply the prod-
uct of a domestic small business manufacturer or processor, unless a 
waiver of this paragraph is granted— 
(A) by the Administrator, after reviewing a determination by 
the contracting officer that no small business manufacturer or 
processor can reasonably be expected to offer a product meeting 
the specifications (including period for performance) required of 
an offeror by the solicitation; or 
(B) by the Administrator for a product (or class of products), 
after determining that no small business manufacturer or proc-
essor is available to participate in the Federal procurement mar-
ket. 
(c) LIMITATION.—This section does not apply to a contract that has as 
its principal purpose the acquisition of a service or construction. 
§ 233115. Reporting by program participants to business op-
portunity specialists 
(a) IN GENERAL.—A program participant shall semiannually submit to 
its assigned business opportunity specialist a report identifying each agent, 
representative, attorney, accountant, consultant, or other person (other than 
an employee of the program participant) that received compensation during 
the reporting period to assist the program participant in obtaining a Fed-
eral contract. 
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(b) CONTENTS.—A report under subsection (a) shall— 
(1) disclose the amount of compensation received by each person 
identified in the report during the reporting period; and 
(2) describe the activities performed for the compensation. 
(c) REVIEW
AND TRANSMITTAL.—The business opportunity specialist 
shall promptly— 
(1) review the report; and 
(2) transmit the report to the Associate Administrator. 
(d) SUSPICION OF IMPROPER ACTIVITY.—The Associate Administrator 
shall transmit to the Inspector General of SBA any report that raises a sus-
picion of improper activity. 
(e) FAILURE TO SUBMIT REPORT.—A failure of a program participant 
to submit a report under subsection (a) shall constitute good cause for initi-
ation of a termination proceeding under section 233121(b) of this title. 
§ 233116. Transfer of ownership or control 
(a) IN GENERAL.— 
(1) PERFORMANCE BY CONTRACT AWARDEE.—A contract (including 
options) awarded under the program shall be performed by the pro-
gram participant that is initially awarded the contract. 
(2) RELINQUISHMENT OF OWNERSHIP OR CONTROL.— 
(A) IN GENERAL.—Notwithstanding paragraph (1), if the owner 
or owners on whom eligibility for award of the contract was based 
relinquish ownership or control of the program participant, or 
enter into any agreement to relinquish such ownership or control, 
the contract or option shall be terminated for the convenience of 
the Government. 
(B) NO DAMAGES.—No repurchase costs or other damages may 
be assessed against a program participant due solely to the oper-
ation of subparagraph (A). 
(b) WAIVER.— 
(1) IN GENERAL.—The Administrator may waive subsection (a) only 
if— 
(A)(i) it is necessary for the owner of the program participant 
to surrender partial control of the program participant on a tem-
porary basis to obtain equity financing; and 
(ii) the Administrator is requested to waive subsection (a) prior 
to the actual transfer of ownership or control; 
(B)(i) the procuring agency head certifies that termination of 
the contract would severely impair attainment of the procuring 
agency’s program objectives or missions; and 
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(ii) the Administrator is requested to waive subsection (a) prior 
to the actual transfer of ownership or control; 
(C)(i) ownership and control of the program participant will 
pass to another program participant; and 
(ii) the acquiring program participant would otherwise be eligi-
ble to receive the award directly under the program; and 
(iii) the Administrator is requested to waive subsection (a) prior 
to the actual transfer of ownership or control; 
(D)(i) due to incapacity or death, none of 1 or more individuals 
on whom eligibility was based is able to continue to exercise con-
trol of the program participant; and 
(ii) the Administrator is requested to waive subsection (a) as 
soon as possible after the incapacity or death occurs; or 
(E)(i) to raise equity capital, it is necessary for the disadvan-
taged owner of the program participant to transfer ownership of 
a majority of the voting stock of the program participant; 
(ii) the program participant has exited the program; 
(iii) the disadvantaged owner will maintain ownership of the 
largest single outstanding block of voting stock (including stock 
held by affiliated persons); and 
(iv) the disadvantaged owner will maintain control of daily busi-
ness operations of the program participant. 
(2) NONDELEGABILITY.—The authority of the Administrator under 
paragraph (1) may not be delegated. 
(c) NOTIFICATION OF AGREEMENT TO TRANSFER.—The owner of a pro-
gram participant that is performing a contract awarded under the program 
shall notify the Administrator immediately on entering into an oral or writ-
ten agreement to transfer all or part of the stock or other ownership inter-
est in the program participant to any other person. 
(d) TREATMENT OF CERTAIN POTENTIAL OWNERSHIP INTERESTS.—Not-
withstanding any other provision of law, for the purposes of determining 
ownership and control of a program participant, any potential ownership in-
terest held by an investment company licensed under subtitle III shall be 
treated in the same manner as an interest held by the individuals on whom 
eligibility is based. 
(e) CONTINUED ELIGIBILITY.—A program participant shall remain eligi-
ble for contracts under the program if there is a transfer of ownership and 
control to individuals whom the Administrator determines to be socially and 
economically disadvantaged. In the event of such a transfer, the transferee 
program participant, if not terminated or graduated, shall be eligible for a 
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period of continued participation in the program for the remainder of the 
program participation period of the transferor. 
§ 233117. Assistance for program participants 
(a) IN GENERAL.—The Administrator shall— 
(1) assist program participants in developing and maintaining com-
prehensive business plans that specify the program participant’s spe-
cific business targets, objectives, and goals developed and maintained 
in conformity with section 233118 of this title; 
(2) provide for such other nonfinancial services as the Administrator 
considers necessary for the establishment, preservation, and growth of 
program participants; 
(3) assist program participants in obtaining equity and debt financ-
ing; 
(4) establish regular performance monitoring and reporting systems 
for program participants to ensure compliance with their business 
plans; 
(5) analyze and report the causes of success and failure of program 
participants; and 
(6) provide assistance necessary to help program participants pro-
cure surety bonds. 
(b) NONFINANCIAL SERVICES.—Nonfinancial services provided under 
subsection (a)(2) may include— 
(1) loan packaging; 
(2) financial counseling; 
(3) accounting and bookkeeping assistance; 
(4) marketing assistance; and 
(5) management assistance. 
(c) SURETY BONDS.—Assistance provided under subsection (a)(6) may 
include— 
(1) assistance in the preparation of application forms required to re-
ceive a surety bond; 
(2) special management and technical assistance designed to meet 
the specific needs of program participants that have received or are ap-
plying for a surety bond; and 
(3) preparation of all forms necessary to receive a surety bond guar-
antee under chapter 321. 
(d) OUTREACH PROGRAM.— 
(1) IN GENERAL.—The Administrator shall develop and implement 
an outreach program to inform and recruit small business concerns to 
apply for eligibility for assistance under the program. 
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(2) ACTIVITIES.—The outreach program shall make a sustained and 
substantial effort to solicit applications for certification from— 
(A) small business concerns located in areas of concentrated un-
employment or underemployment or within labor surplus areas 
and within States having relatively few program participants; and 
(B) small disadvantaged business concerns in industry cat-
egories that have not substantially participated in the award of 
contracts under the program. 
§ 233118. Business plans 
(a) SUBMISSION.—Promptly after certification under section 233125 of 
this title, a program participant shall submit a business plan for review by 
the business opportunity specialist assigned to assist the program partici-
pant. 
(b) FORM; OBJECTIVE.—A business plan— 
(1) may be a revision of a preliminary business plan submitted by 
the program participant or required by the Administrator as a part of 
the application for certification under the program; and 
(2) shall be designed to result in the elimination by the program par-
ticipant of the conditions or circumstances on which the Administrator 
determined eligibility under paragraph (8) or (16) of section 231101 
of this title. 
(c) APPROVAL
OF
BUSINESS
PLAN
AS
CONDITION
ON
CONTRACT 
AWARD.—Prior approval of a business plan by the business opportunity spe-
cialist, and of subsequent modifications submitted under subsection (e), 
shall be a condition on the eligibility of a program participant for award 
of a contract under the program. 
(d) CONTENTS.—A business plan shall include— 
(1) an analysis of market potential, competitive environment, and 
other business analyses estimating the program participant’s prospects 
for profitable operations during the term of program participation and 
after graduation; 
(2) an analysis of the program participant’s strengths and weak-
nesses, with particular attention to correcting any financial, manage-
rial, technical, or personnel conditions that are likely to impede the pro-
gram participant in receiving contracts other than contracts awarded 
under the program; 
(3) specific targets, objectives, and goals for the business develop-
ment of the program participant during the next and succeeding years 
using the results of the analyses conducted under paragraphs (1) and 
(2); 
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(4) a transition management plan outlining specific steps to ensure 
profitable business operations after graduation (to be incorporated into 
the program participant’s plan during the 1st year of the transitional 
stage of program participation); and 
(5) estimates of contract awards under the program and from other 
sources that the program participant will require to meet the specific 
targets, objectives, and goals for the years covered by the business 
plan, which estimates shall be consistent with section 233128 of this 
title and other applicable provisions of this chapter. 
(e) ANNUAL REVIEW.— 
(1) IN GENERAL.—A program participant shall annually review its 
currently approved business plan with its business opportunity spe-
cialist and modify the business plan as appropriate. 
(2) APPROVAL.— 
(A) SUBMISSION.—A modified business plan shall be submitted 
to the Administrator for approval. 
(B) CONTINUED VALIDITY OF CURRENT PLAN.—The currently 
approved business plan shall be valid until such time as a modified 
business plan is approved by the business opportunity specialist. 
(3) TRANSITIONAL STAGE.—Annual reviews pertaining to years in 
the transitional stage of program participation shall require, as appro-
priate, a written verification that the program participant has complied 
with the requirements of section 233128 of this title relating to attain-
ing business activity from sources other than contracts awarded under 
the program. 
(f) ANNUAL NEEDS FORECAST.— 
(1) IN GENERAL.—During the review of its plan conducted under 
subsection (e), a program participant shall annually forecast its needs 
for contract awards under the program for the next program year and 
the succeeding program year. 
(2) INCLUSION IN BUSINESS PLAN.—An annual needs forecast shall 
be included in a program participant’s business plan. 
(3) CONTENTS.—An annual needs forecast shall include— 
(A) the aggregate dollar value of contract support to be sought 
on a noncompetitive basis under the program, reflecting compli-
ance with the requirements of section 233128 of this title relating 
to attaining business activity from sources other than contracts 
awarded under the program; 
(B) the types of contract opportunities being sought, identified 
by North American Industry Classification System code or other-
wise; 
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(C) an estimate of the dollar value of contract support to be 
sought on a competitive basis; and 
(D) such other information the business opportunity specialist 
may request to provide effective business development assistance 
to the program participant. 
(g) LOGICAL BUSINESS PROGRESSION.—Limitations established by the 
Administrator restricting the award of contracts under the program to a 
limited number of North American Industry Classification System codes in 
an approved business plan shall not be applied in a manner that inhibits 
the logical business progression by a program participant into areas of in-
dustrial endeavor in which the program participant has potential for suc-
cess. 
§ 233119. Denial of further assistance 
(a) IN GENERAL.—A program participant shall be denied any assistance 
under the program if the program participant— 
(1) voluntarily elects not to continue participation; 
(2) completes its program participation period; 
(3) is graduated; or 
(4) is terminated. 
(b) NO SUBSEQUENT RECERTIFICATION.—If participation in the program 
by a program participant is concluded for any of the reasons described in 
subsection (a), the former program participant shall not subsequently be re-
certified for participation in the program. 
§ 233120. Graduation 
A program participant shall be graduated from the program— 
(1) when a program participant successfully completes the program 
by substantially achieving the targets, objectives, and goals contained 
in the program participant’s business plan, thereby demonstrating the 
ability of the program participant to compete in the marketplace with-
out assistance under the program; or 
(2) if, in a review of economic disadvantage under section 233110(a) 
of this title, the Administrator determines that the program participant 
and its disadvantaged owners are no longer economically disadvan-
taged. 
§ 233121. Termination 
(a) BASIS FOR TERMINATION.— 
(1) IN GENERAL.—Termination from the program shall be based on 
good cause. 
(2) GOOD CAUSE.—For purposes of paragraph (1), good cause in-
cludes— 
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(A) the failure of a program participant to maintain eligibility 
for program participation; 
(B) the failure of a program participant to engage in business 
practices that will promote its competitiveness within a reasonable 
period of time as evidenced by, among other indicators, a pattern 
of unjustified delinquent performance or terminations for default 
with respect to contracts awarded under the program; 
(C) a demonstrated pattern of failing to make required submis-
sions or responses to the Administrator in a timely manner; 
(D) the willful violation of any regulation of the Administrator 
pertaining to a material issue; 
(E) the debarment of a program participant or its disadvan-
taged owners by any agency under subpart 9.4 of title 48, Code 
of Federal Regulations (or any successor regulation); and 
(F) the conviction of the disadvantaged owner or an officer of 
a program participant for an offense indicating a lack of business 
integrity (including a conviction for embezzlement, theft, forgery, 
bribery, falsification, or violation of chapter 105). 
(3) TERMINATION FOR CONVICTION.—For purposes of paragraph 
(2)(F), a termination action shall not be taken with respect to a dis-
advantaged owner of a program participant solely because of the con-
viction of an officer of the program participant (who is not a disadvan-
taged owner) unless the disadvantaged owner conspired with, abetted, 
or otherwise knowingly acquiesced in the activity or omission that was 
the basis of the officer’s conviction. 
(b) PROCEDURE.— 
(1) INITIATION OF PROCEEDING.—The Director may initiate a termi-
nation proceeding by recommending a termination proceeding to the 
Associate Administrator. 
(2) NOTICE OF INTENT TO TERMINATE.—If the Associate Adminis-
trator determines that termination is appropriate, the Associate Admin-
istrator shall, not later than 15 days after making the determination, 
provide the program participant written notice of intent to terminate, 
specifying the reasons for the termination. 
§ 233122. Evaluation of eligibility 
(a) IN GENERAL.—The Administrator shall conduct an evaluation of a 
program participant’s eligibility for continued participation in the program 
whenever the Administrator receives specific and credible information alleg-
ing that the program participant no longer meets the requirements for pro-
gram eligibility. 
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(b) TERMINATION PROCEEDING.—On making a finding that a program 
participant is no longer eligible, the Administrator shall initiate a termi-
nation proceeding under section 233121 of this title. 
(c) SUSPENSION.—A program participant’s eligibility for award of a con-
tract under the program may be suspended under subpart 9.4 of title 48, 
Code of Federal Regulations (or any successor regulation). 
§ 233123. Limitation of eligibility to 1 small business con-
cern 
(a) DETERMINATION OF SOCIAL AND ECONOMIC DISADVANTAGE.—Ex-
cept as provided in subsection (c), an individual who was determined to be 
socially and economically disadvantaged before August 15, 1989, shall not 
be permitted to assert such disadvantage with respect to any other concern 
making application for certification as a small business concern owned and 
controlled by socially and economically disadvantaged individuals. 
(b) ELIGIBILITY AS A SOCIALLY AND ECONOMICALLY DISADVANTAGED 
SMALL BUSINESS CONCERN.—Except as provided in subsection (c), an indi-
vidual on whom eligibility as a small business concern owned and controlled 
by socially and economically disadvantaged individuals is based under sec-
tion 231101(15) of this title shall be permitted to assert such eligibility for 
only 1 small business concern. 
(c) EXCEPTION.—An economically disadvantaged Indian tribe may own 
more than 1 small business concern eligible for assistance under the pro-
gram if— 
(1) the Indian tribe does not own another concern in the same indus-
try that has been determined to be eligible to receive contracts under 
the program; and 
(2) the individuals responsible for the management and daily oper-
ations of the concern do not manage more than 2 program partici-
pants. 
§ 233124. Limitation on denial of admission into program 
based on unavailability of specific contract oppor-
tunities 
An applicant shall not be denied admission into the program based solely 
on a determination that specific contract opportunities are unavailable to as-
sist in the development of the applicant unless— 
(1) the Government has not previously procured and is unlikely to 
procure the types of products or services offered by the applicant; or 
(2) the purchases of such products or services by the Government 
will not be in quantities sufficient to support the developmental needs 
of the applicant and other program participants providing the same or 
similar products or services. 
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215 
§ 233125. Certification decision 
Not later than 90 days after receipt of a completed application for pro-
gram certification, the Associate Administrator shall— 
(1) certify a small business concern as a program participant; or 
(2) deny the application. 
§ 233126. Review of new entrants into the program 
(a) REVIEW.—Thirty days before the conclusion of each fiscal year, the 
Director shall review all small business concerns that have been admitted 
into the program during the preceding 12-month period. 
(b) DETERMINATION AND ESTIMATE.—In a review under subsection (a), 
the Director shall— 
(1) determine the number of entrants and their geographic distribu-
tion and industrial classification; and 
(2) estimate— 
(A) the expected growth of the program during the next fiscal 
year; and 
(B) the number of additional business opportunity specialists, if 
any, that will be needed to meet the anticipated demand for the 
program. 
(c) REPORT.—Not later than September 30 of each year, the Director 
shall report to the Associate Administrator the determination and estimates 
made under subsection (b). 
(d) DIRECTIVES.— 
(1) IN GENERAL.—Based on the report under subsection (c) and 
such additional data as are relevant, the Associate Administrator shall, 
not later than October 31 of each fiscal year, issue policy and program 
directives applicable to the fiscal year that— 
(A) establish priorities for the solicitation of program applica-
tions from underrepresented regions and industry categories; 
(B) assign staffing levels and allocate other program resources 
as necessary to meet program needs; and 
(C) establish priorities in the processing and admission of new 
program participants as necessary to achieve an equitable geo-
graphic distribution of small business concerns and a distribution 
of concerns across all industry categories in proportions needed to 
increase significantly contract awards to small business concerns 
owned and controlled by socially and economically disadvantaged 
individuals. 
(2) CONSIDERATIONS.—In considering an increase described in para-
graph (1)(C), the Associate Administrator shall give due consideration 
to industrial categories in which Federal purchases have been substan-
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tial but in which the participation rate of small business concerns 
owned and controlled by socially and economically disadvantaged indi-
viduals has been limited. 
§ 233127. Program stages 
(a) IN GENERAL.—The Administrator shall segment a program partici-
pant’s participation in the program into a developmental stage and a transi-
tional stage. 
(b) DEVELOPMENTAL STAGE.—The developmental stage of program par-
ticipation shall be designed to assist a program participant in its effort to 
overcome its economic disadvantage by providing such assistance as is nec-
essary and appropriate to access markets and strengthen its financial and 
managerial skills. 
(c) TRANSITIONAL STAGE.—The transitional stage of program participa-
tion shall be designed to overcome, insofar as practicable, the remaining ele-
ments of economic disadvantage and to prepare a program participant for 
graduation from the program. 
(d) AVAILABLE ASSISTANCE.— 
(1) IN GENERAL.—A program participant, if otherwise eligible, shall 
be qualified to receive assistance as provided in this subsection. 
(2) CONTRACT SUPPORT.—A program participant in the develop-
mental stage or transitional stage shall be qualified to receive contract 
support under the program. 
(3) FINANCIAL ASSISTANCE.—A program participant in the develop-
mental stage or transitional stage shall be qualified to receive financial 
assistance under section 205111 of this title. 
(4) EMPLOYEE SKILLS TRAINING OR UPGRADING.— 
(A) DEFINITION OF TRAINING PROVIDER.—In this paragraph, 
the term ‘‘training provider’’ means an institution of higher edu-
cation, a community or vocational college, or an institution eligible 
to provide skills training or upgrading under title I of the Work-
force Innovation and Opportunity Act (29 U.S.C. 3101 et seq.). 
(B) IN GENERAL.—A program participant in the developmental 
stage shall be qualified to receive financial assistance under which 
the Administrator may, without regard to section 103201(l) of this 
title, purchase in whole or in part, on behalf of the program par-
ticipant, skills training or upgrading for employees or potential 
employees of the program participant. 
(C) FORM OF ASSISTANCE.—Financial assistance under sub-
paragraph (B) may be made— 
(i) by direct payment to the training provider; or 
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(ii) by reimbursing the program participant or the program 
participant’s employee, if the Administrator considers reim-
bursement to be reasonable and appropriate. 
(D) LIMITATION.—Financial assistance under subparagraph (B) 
shall not be granted to a program participant unless the program 
participant first documents that the program participant has ex-
plored the use of existing cost-free or cost-subsidized training pro-
grams offered by public and private sector agencies working with 
programs of employment and training and economic development. 
(E) NUMBER OF EMPLOYEES.—Not more than 5 employees or 
potential employees of the program participant shall receive skills 
training or upgrading under subparagraph (B) at any 1 time. 
(F) AMOUNT.—Not more than $2,500 shall be made available 
for any 1 employee or potential employee for skills training or up-
grading under subparagraph (B). 
(G) LENGTH
OF
TRAINING
OR
UPGRADING.—The length of 
training or upgrading financed under subparagraph (B) shall be 
not less than 1 nor more than 6 months. 
(H) LENGTH OF EMPLOYMENT.— 
(i) ASSURANCES.—Financial assistance under subpara-
graph (B) shall not be granted to a program participant un-
less— 
(I) the program participant has given adequate assur-
ance that it will employ the trainee or upgraded em-
ployee for a period of at least 6 months after the train-
ing or upgrading financed under subparagraph (B) has 
been completed; and 
(II) each trainee or upgraded employee has given a 
similar assurance to remain within the employ of the 
program participant for that period. 
(ii) BREACH.—If a program participant, trainee, or up-
graded employee fails to fulfill the assurance under clause 
(i)— 
(I) the Administrator shall be entitled to, and shall 
make diligent efforts to obtain from the violating pro-
gram participant, trainee, or upgraded employee, the re-
payment of all funds expended on behalf of the program 
participant, trainee, or upgraded employee; 
(II) such repayment shall be made to the Adminis-
trator with such interest and costs of collection as are 
reasonable; and 
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218 
(III) the program participant, trainee, or upgraded 
employee shall be barred from receiving any further as-
sistance under subparagraph (B). 
(I) LOCATION.—Training or upgrading financed under subpara-
graph (B) may take place at a facility of the program participant 
or of the training provider. 
(J) RECORDS.—A program participant that receives assistance 
under subparagraph (B) shall maintain such records as the Ad-
ministrator considers appropriate to ensure that this subsection 
and any other applicable law have not been violated. 
(K) REGULATIONS.—The Administrator shall, in consultation 
with the Secretary of Labor, promulgate regulations to implement 
this paragraph that establish acceptable training and upgrading 
performance standards and provide for such monitoring or audit 
requirements as are necessary to ensure the integrity of the train-
ing effort. 
(5) TECHNOLOGY AND SURPLUS PROPERTY TRANSFER.— 
(A) IN GENERAL.—A program participant in the developmental 
stage or transitional stage shall be qualified to receive the transfer 
of technology or surplus property owned by the United States. 
(B) EFFECTUATION.—Activities designed to effect transfers 
under subparagraph (A)— 
(i) shall be developed in cooperation with the heads of Fed-
eral agencies; and 
(ii) shall include the transfer by grant, license, or sale of 
technology or property to program participants. 
(C) PRIORITY.—Property under subparagraph (A) may be 
transferred to program participants on a priority basis. 
(D) USE.—Technology or property transferred under subpara-
graph (A)— 
(i) shall be used by a program participant during the nor-
mal conduct of its business operation; and 
(ii) shall not be sold or transferred to any other person 
(other than the Government) until 1 year after the program 
participant’s term of participation. 
(E) FEDERAL SURPLUS PROPERTY.— 
(i) IN GENERAL.—The Administrator may transfer tech-
nology or surplus property under this paragraph on a priority 
basis to a small business concern located in a disaster area 
if— 
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(I) the small business concern meets the requirements 
for such a transfer, without regard to whether the small 
business concern is a program participant; and 
(II) for a small business concern that is a program 
participant, on and after the date on which the President 
declares a major disaster, the small business concern has 
not received property under this paragraph on the basis 
of the status of the small business concern as a program 
participant. 
(ii) TERMS AND CONDITIONS.—For any transfer of prop-
erty under this subparagraph to a small business concern, the 
terms and conditions shall be the same as a transfer to a pro-
gram participant, except that the small business concern shall 
agree not to sell or transfer the property to any entity other 
than the Federal Government during the period of the dec-
laration of the disaster area. 
(iii) NO OTHER TRANSFER.—A small business concern that 
receives a transfer of property under this subparagraph shall 
not receive any other transfer of property under this para-
graph during the period of the declaration of the disaster 
area. 
(iv) VIOLATION.—If a small business concern sells or trans-
fers property in violation of the agreement described in clause 
(ii), the Administrator may initiate proceedings to prohibit 
the small business concern from receiving a transfer of prop-
erty under this paragraph, in addition to any other remedy 
available to the Administrator. 
(6) TRAINING IN THE DEVELOPMENT OF BUSINESS PRINCIPLES AND 
STRATEGIES.—A program participant in the developmental stage or 
transitional stage shall be qualified to receive training assistance under 
which the Administrator shall conduct training sessions to assist pro-
gram participants in the development of business principles and strate-
gies to enhance their ability to compete successfully for contracts in the 
marketplace. 
(7) PARTICIPATION IN JOINT VENTURES, LEADER-FOLLOWER AR-
RANGEMENTS, AND TEAMING AGREEMENTS.— 
(A) IN GENERAL.—A program participant in the transitional 
stage shall be qualified to participate in joint ventures, leader-fol-
lower arrangements, and teaming agreements between the pro-
gram participant and other program participants and other busi-
ness concerns with respect to contracting opportunities for the re-
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search, development, full-scale engineering, or production of major 
systems. 
(B) AGENCY
PROGRAMS.—Activities under subparagraph (A) 
shall be undertaken on the basis of programs developed by the 
Federal agency responsible for the procurement of the major sys-
tem, with the assistance of the Administrator. 
(8) BUSINESS PLANNING TRAINING AND TECHNICAL ASSISTANCE.— 
A program participant in the transitional stage shall be qualified to re-
ceive transitional management business planning training and technical 
assistance. 
§ 233128. Attainment of business activity targets 
(a) DEVELOPMENTAL STAGE.—During the developmental stage of partici-
pation in the program, a program participant shall take all reasonable ef-
forts within its control to attain the business activity targets contained in 
its business plan. Those efforts shall be made a part of the business plan 
and shall be sufficient in scope and duration to satisfy the Administrator 
that the program participant will engage a reasonable marketing strategy 
that will maximize its potential to attain its business activity targets. 
(b) TRANSITIONAL STAGE.— 
(1) IN GENERAL.—During the transitional stage of participation in 
the program, a program participant shall be subject to regulations re-
garding business activity targets that are promulgated by the Adminis-
trator. 
(2) ESTABLISHMENT OF BUSINESS ACTIVITY TARGETS.—The regula-
tions under paragraph (1) shall establish business activity targets ap-
plicable to program participants during the 5th year and each suc-
ceeding year of program participation. The business activity targets, 
for that period of time, shall reflect a reasonably consistent increase 
in contracts awarded other than under the program, expressed as a 
percentage of total sales. 
(3) ATTAINMENT.—The regulations under paragraph (1) shall re-
quire a program participant to attain its business activity targets. 
(4) CERTIFICATION OF COMPLIANCE.—The regulations under para-
graph (1) shall provide that, before the receipt of any contract to be 
awarded under the program, the program participant (if it is in the 
transitional stage) shall certify that it— 
(A) has complied with the regulations; or 
(B) is in compliance with such remedial measures as have been 
ordered under regulations promulgated under paragraph (6). 
(5) PERFORMANCE REVIEW.—The regulations under paragraph (1) 
shall require the Administrator to review a program participant’s per-
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formance regarding attainment of business activity targets during peri-
odic reviews of the program participant’s business plan. 
(6) REMEDIAL MEASURES.— 
(A) IN GENERAL.—The regulations under paragraph (1) shall 
authorize the Administrator to take appropriate remedial measures 
with respect to a program participant that fails to attain a re-
quired business activity target for the purpose of reducing the pro-
gram participant’s dependence on contracts awarded under the 
program. 
(B) MEASURES.—Remedial measures may include— 
(i) assisting the program participant in expanding the dol-
lar volume of its competitive business activity; and 
(ii) limiting the dollar volume of contracts awarded to the 
program participant under the program. 
(C) NONREVIEWABILITY.—Except for a remedial measure that 
would constitute a termination, a remedial measure taken under 
this paragraph shall not be reviewable under section 233111 of 
this title. 
§ 233129. Program participation period 
A program participant may receive assistance under the program for a 
total period of not more than 9 years, measured from the date of its certifi-
cation under section 233125 of this title, of which— 
(1) not more than 4 years may be spent in the developmental stage 
of program participation; and 
(2) not more than 5 years may be spent in the transitional stage of 
program participation. 
§ 233130. Collection of data on program operations 
The Administrator shall develop and implement a process for the system-
atic collection of data on the operations of the program. 
§ 233131. Approval of contract options and modifications 
The Administrator shall make substantial and sustained efforts to achieve 
a maximum 10-day period as the average processing time for approving op-
tions and modifications to contracts awarded under the program and sub-
mitted to the Administrator for approval. 
§ 233132. Orderly and efficient management of program 
The Administrator shall, to the maximum extent practicable, minimize 
delay, eliminate excess regulation, and require only such paperwork as is 
necessary to effect the orderly and efficient management of the program 
and the award of contracts under the program. 
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263 
small business concerns shall be established at not less than 3 per-
cent of the total value of all prime contract and subcontract 
awards for each fiscal year. 
(B) SMALL BUSINESS CONCERNS OWNED AND CONTROLLED BY 
SERVICE-DISABLED
VETERANS.—The Governmentwide goal for 
participation by small business concerns owned and controlled by 
service-disabled veterans shall be established at not less than 3 
percent of the total value of all prime contract and subcontract 
awards for each fiscal year. 
(C) SMALL BUSINESS CONCERNS OWNED AND CONTROLLED BY 
SOCIALLY AND ECONOMICALLY DISADVANTAGED INDIVIDUALS.— 
The Governmentwide goal for participation by small business con-
cerns owned and controlled by socially and economically disadvan-
taged individuals shall be established at not less than 5 percent 
of the total value of all prime contract and subcontract awards for 
each fiscal year. 
(D) SMALL BUSINESS CONCERNS OWNED AND CONTROLLED BY 
WOMEN.—The Governmentwide goal for participation by small 
business concerns owned and controlled by women shall be estab-
lished at not less than 5 percent of the total value of all prime 
contract and subcontract awards for each fiscal year. 
(4) FEDERAL AGENCY GOALS.— 
(A) IN GENERAL.—A Federal agency shall have an annual goal 
that presents, for that Federal agency, the maximum practicable 
opportunity for small business concerns (including qualified 
HUBZone small business concerns, small business concerns owned 
and controlled by service-disabled veterans, small business con-
cerns owned and controlled by socially and economically disadvan-
taged individuals, small business concerns owned and controlled by 
women, and other small business concerns) to participate in the 
performance of contracts let by the Federal agency. 
(B) CUMULATIVE FEDERAL AGENCY GOALS TO MEET OR EX-
CEED GOVERNMENTWIDE GOAL.—The Administrator and the Ad-
ministrator for Federal Procurement Policy shall, when exercising 
authority under subsection (b), ensure that the cumulative annual 
prime contract goals for all Federal agencies meet or exceed the 
annual Governmentwide prime contract goal established by the 
President under this subsection. 
(C) SCORECARD PROGRAM FOR EVALUATING FEDERAL AGENCY 
COMPLIANCE WITH SMALL BUSINESS CONTRACTING GOALS.— 
(i) DEFINITIONS.—In this subparagraph: 
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(I) FEDERAL AGENCY SCORECARD.—The term ‘‘Fed-
eral agency scorecard’’ means the scorecard developed by 
the Administrator under clause (ii). 
(II) SCORECARD.—The term ‘‘scorecard’’ means a 
summary using a rating system to evaluate a Federal 
agency’s efforts to meet goals established under subpara-
graph (A) that— 
(aa) includes the measures described in clause 
(iii); and 
(bb) assigns a score to each Federal agency eval-
uated. 
(ii) FEDERAL AGENCY SCORECARD.—In consultation with 
Federal agencies, the Administrator shall— 
(I) develop a methodology for calculating a score to be 
used to evaluate the compliance of each Federal agency 
with meeting the goals established under subparagraph 
(A) based on each such goal; and 
(II) develop a Federal agency scorecard based on that 
methodology. 
(iii) USE OF FEDERAL AGENCY SCORECARD.—The Admin-
istrator shall establish and carry out a program to use the 
Federal agency scorecard to evaluate whether each Federal 
agency is creating the maximum practicable opportunities for 
the award of prime contracts and subcontracts to small busi-
ness concerns (including qualified HUBZone small business 
concerns, small business concerns owned and controlled by 
service-disabled veterans, small business concerns owned and 
controlled by socially and economically disadvantaged individ-
uals, small business concerns owned and controlled by women, 
and other small business concerns) by assigning a score to 
each Federal agency for the previous fiscal year. 
(iv) CONTENTS
OF
SCORECARD.—The Federal agency 
scorecard shall include, for each Federal agency, the following 
information: 
(I) A determination whether the Federal agency met 
each of the prime contract goals established under sub-
paragraph (A) with respect to small business concerns 
(including qualified HUBZone small business concerns, 
small business concerns owned and controlled by service- 
disabled veterans, small business concerns owned and 
controlled by socially and economically disadvantaged in-
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265 
dividuals, small business concerns owned and controlled 
by women, and other small business concerns). 
(II) A determination whether the Federal agency met 
each of the subcontract goals established under this 
chapter with respect to small business concerns (includ-
ing qualified HUBZone small business concerns, small 
business concerns owned and controlled by service-dis-
abled veterans, small business concerns owned and con-
trolled by socially and economically disadvantaged indi-
viduals, small business concerns owned and controlled by 
women, and other small business concerns). 
(III) The number of small business concerns (includ-
ing qualified HUBZone small business concerns, small 
business concerns owned and controlled by service-dis-
abled veterans, small business concerns owned and con-
trolled by socially and economically disadvantaged indi-
viduals, small business concerns owned and controlled by 
women, and other small business concerns) awarded 
prime contracts in each North American Industry Classi-
fication System code during the fiscal year and a com-
parison to the number of awarded contracts during the 
prior fiscal year, if available. 
(IV) The number of small business concerns (including 
qualified HUBZone small business concerns, small busi-
ness concerns owned and controlled by service-disabled 
veterans, small business concerns owned and controlled 
by socially and economically disadvantaged individuals, 
small business concerns owned and controlled by women, 
and other small business concerns) awarded subcontracts 
in each North American Industry Classification System 
code during the fiscal year and a comparison to the num-
ber of awarded subcontracts during the prior fiscal year, 
if available. 
(V) Any other factors that the Administrator considers 
to be important to achieve the maximum practicable uti-
lization of small business concerns (including qualified 
HUBZone small business concerns, small business con-
cerns owned and controlled by service-disabled veterans, 
small business concerns owned and controlled by socially 
and economically disadvantaged individuals, small busi-
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(i) information collected in accordance with subsection (c) 
on revenue from the sale of new products or services resulting 
from the research conducted under the award; 
(ii) information collected in accordance with subsection (c) 
on additional investment from any source, other than phase 
I or phase II SBIR program or STTR awards, to further the 
research and development conducted under the award; and 
(iii) any other information received in connection with the 
award that the Administrator, in conjunction with the SBIR 
program and STTR program managers of Federal agencies, 
considers relevant and appropriate; 
(C) includes any narrative information that a small business 
concern receiving a phase II award voluntarily submits to further 
describe the outputs and outcomes of its awards; 
(D) includes, for each awardee— 
(i) the name, size, and location of, and any identifying 
number assigned by the Administrator to, the awardee; 
(ii) whether the awardee has venture capital, hedge fund, 
or private equity firm investment and, if so— 
(I) the amount of venture capital, hedge fund, or pri-
vate equity firm investment as of the date of the award; 
(II) the percentage of ownership of the awardee held 
by a venture capital operating company, hedge fund, or 
private equity firm, including whether the awardee is 
majority-owned by multiple venture capital operating 
companies, hedge funds, or private equity firms; and 
(III) the amount of additional capital that the awardee 
has invested in the SBIR or STTR technology, which in-
formation shall be collected on an annual basis; 
(iii) the names and locations of any affiliates of the award-
ee; 
(iv) the number of employees of the awardee; 
(v) the number of employees of the affiliates of the award-
ee; and 
(vi) the names of, and the percentage of ownership of the 
awardee held by— 
(I) any individual who is not a citizen of the United 
States or a lawful permanent resident of the United 
States; or 
(II) any person that is not an individual and is not or-
ganized under the laws of a State or the United States; 
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355 
(C) begin evaluating, each fiscal year, whether each small busi-
ness concern that received a phase I SBIR award or STTR award 
from the SBIR participating agency or STTR participating agency 
meets the minimum performance standard established under sub-
paragraph (B). 
(2) CONSEQUENCE OF FAILURE TO MEET MINIMUM COMMERCIALIZA-
TION RATE.—If the head of an SBIR participating agency or STTR 
participating agency determines that a small business concern that re-
ceived a phase I SBIR award or STTR award from the SBIR partici-
pating agency or STTR participating agency is not meeting the min-
imum performance standard established under paragraph (1)(B), the 
small business concern shall not participate in phase I (or phase II if 
under the authority of section 263108 of this title) of the SBIR pro-
gram or STTR program of the SBIR participating agency or STTR 
participating agency during the 1-year period beginning on the date on 
which the determination is made. 
(b) PROGRESS TO PHASE III SUCCESS.— 
(1) ESTABLISHMENT OF SYSTEM AND MINIMUM COMMERCIALIZATION 
RATE.—Not later than December 31, 2013, the head of an SBIR par-
ticipating agency or STTR participating agency shall— 
(A) establish a system to measure, where appropriate, the suc-
cess of small business concerns with respect to the receipt of phase 
III SBIR awards or STTR awards for projects that have received 
phase I SBIR awards or STTR awards; 
(B) establish a minimum performance standard for small busi-
ness concerns with respect to the receipt of phase III SBIR 
awards or STTR awards for projects that have received phase I 
SBIR awards or STTR awards; and 
(C) begin evaluating, each fiscal year, whether each small busi-
ness concern that received a phase I SBIR award or STTR award 
from SBIR participating agency or STTR participating agency 
meets the minimum performance standard established under sub-
paragraph (B). 
(2) CONSEQUENCE OF FAILURE TO MEET MINIMUM COMMERCIALIZA-
TION RATE.—If the head of an SBIR participating agency or STTR 
participating agency determines that a small business concern that re-
ceived a phase I SBIR award or STTR award from the SBIR partici-
pating agency or STTR participating agency is not meeting the min-
imum performance standard established under paragraph (1)(B), the 
small business concern shall not participate in phase I (or phase II if 
under the authority of section 263108 of this title) of the SBIR pro-
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356 
gram or STTR program of the SBIR participating agency or STTR 
participating agency during the 1-year period beginning on the date on 
which the determination is made. 
(c) SBA OVERSIGHT.— 
(1) APPROVAL AND PUBLICATION OF SYSTEMS AND MINIMUM PER-
FORMANCE STANDARDS.—A system and minimum performance stand-
ard established under subsection (a) or (b) shall be submitted to the 
Administrator by the head of an SBIR participating agency or STTR 
participating agency and shall be subject to the approval of the Admin-
istrator. In making a determination with respect to approval, the Ad-
ministrator shall ensure that the minimum performance standard ex-
ceeds a de minimis level. The Administrator shall publish on the SBA 
website the systems and minimum performance standards approved. 
(2) SUBMISSION OF EVALUATION RESULTS BY AGENCY.—The head 
of an SBIR participating agency or STTR participating agency shall 
submit to the Administrator the results of each evaluation conducted 
under subsection (a) or (b). 
(d) NOTICE AND COMMENT.—At least 60 days before becoming effective, 
a system and minimum performance standard established under subsection 
(a) or (b) and an approval provided by the Administrator under subsection 
(c)(1) shall be preceded by the provision of notice of and an opportunity 
for public comment on the system, standard, or approval. 
§ 263322. Publication of information relating to notice of 
and application for SBIR awards and STTR 
awards 
To increase the number of small business concerns that receive awards 
under the SBIR or STTR programs of SBIR participating agencies and 
STTR participating agencies, and to simplify the application process for 
SBIR awards and STTR awards, the Administrator shall maintain a 
website on which the Administrator shall publish such information relating 
to notice of and application for awards under the SBIR program and STTR 
program of each SBIR participating agency and STTR participating agency 
as the Administrator determines to be appropriate. 
Division J—Small Business Development 
Center Program 
Chapter 271—Small Business Development 
Center Program 
Sec. 
271101.
Definitions. 
271102.
Financial assistance agreements. 
271103.
Plans. 
271104.
Services. 
271105.
Export enhancement plans. 
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(9) coordinating and conducting research into technical and general 
small business problems for which there are no ready solutions; 
(10) providing and maintaining a comprehensive library that con-
tains current information and statistical data needed by small business 
concerns; 
(11) maintaining a working relationship and open communications 
with the financial and investment communities, legal associations, local 
and regional private consultants, and local and regional small business 
groups and associates to help address the various needs of the small 
business community; 
(12) conducting in-depth surveys for local small business groups to 
develop general information regarding the local economy and general 
small business strengths and weaknesses in the locality; 
(13) in cooperation with the Department of Commerce, the Adminis-
trator, and relevant Federal agencies, actively assisting rural small 
business concerns in exporting by— 
(A) identifying and developing potential export markets for 
rural small business concerns; 
(B) facilitating export transactions for rural small business con-
cerns; 
(C) developing linkages between rural small business concerns 
and prescreened foreign buyers; 
(D) assisting rural small business concerns in participating in 
international trade shows; and 
(E) assisting rural small business concerns in obtaining export 
financing and developing marketing and production strategies; 
(14) assisting rural small business concerns in developing marketing 
and production strategies that will enable rural small business concerns 
to better compete in the domestic market; 
(15) assisting rural small business concerns by— 
(A) providing technical assistance needed by rural small busi-
ness concerns; 
(B) making available managerial assistance to rural small busi-
ness concerns; and 
(C) providing information and assistance in obtaining financing 
for business startups and expansion; 
(16) in conjunction with the United States National Tourism Orga-
nization, assist rural small business concerns in developing the tourism 
potential of rural communities by— 
(A) identifying the cultural, historic, recreational, and scenic re-
sources of rural communities; 
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(e) EFFECT OF SECTION.—Nothing in this section requires an employer 
that attends a program offered by an eligible intermediary to contract for 
any service offered by the eligible intermediary. 
§ 299105. Course on contracting requirements 
(a) IN GENERAL.—The Defense Acquisition University and the Federal 
Acquisition Institute shall each provide a course on contracting require-
ments under this subtitle, including the requirements for— 
(1) qualified HUBZone small business concerns; 
(2) small business concerns owned and controlled by service-disabled 
veterans; 
(3) small business concerns owned and controlled by socially and eco-
nomically disadvantaged individuals; and 
(4) small business concerns owned and controlled by women. 
(b) COURSE REQUIREMENT FOR CERTIFICATION.—To have a Federal Ac-
quisition Certification in Contracting (or any successor certification) or the 
equivalent Department of Defense certification, an individual shall be re-
quired to complete the course under subsection (a). 
§ 299106. Mentor-prote´ge´ programs 
(a) DEFINITIONS.—In this section: 
(1) MENTOR.—The term ‘‘mentor’’ means a for-profit business con-
cern, of any size, that— 
(A) has the ability to assist and commits to assisting a prote´ge´ 
to compete for Federal prime contracts and subcontracts; and 
(B) satisfies any other requirements established by the Adminis-
trator. 
(2) MENTOR-PROTE´GE´ PROGRAM.—The term ‘‘mentor-prote´ge´ pro-
gram’’ means a program that pairs a mentor with a prote´ge´ for the 
purpose of assisting the prote´ge´ to compete for Federal prime contracts 
and subcontracts. 
(3) PROTE´GE´.—The term ‘‘prote´ge´’’ means a small business concern 
that— 
(A) is eligible to enter into Federal prime contracts and sub-
contracts; and 
(B) satisfies any other requirements established by the Adminis-
trator. 
(b) SBA PROGRAM.— 
(1) IN GENERAL.—The Administrator may establish a mentor- 
prote´ge´ program for all small business concerns. 
(2) MODEL
FOR
PROGRAM.—The mentor-prote´ge´ program estab-
lished under paragraph (1) shall be identical to the SBA mentor- 
prote´ge´ program for small business concerns that participate in the 
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business development program (as in effect on January 2, 2013), ex-
cept that the Administrator may modify the program to the extent nec-
essary given the categories of small business concern included as 
prote´ge´s. 
(c) PROGRAMS OF OTHER FEDERAL AGENCIES.— 
(1) APPROVAL.—Except as provided in paragraph (4), a Federal 
agency may not carry out a mentor-prote´ge´ program for small business 
concerns unless— 
(A) the head of the Federal agency submits to the Adminis-
trator a plan for the program; and 
(B) the Administrator approves the plan. 
(2) BASIS FOR APPROVAL.—The Administrator shall approve or dis-
approve a plan submitted under paragraph (1) based on whether the 
proposed program— 
(A) will assist prote´ge´s to compete for Federal prime contracts 
and subcontracts; and 
(B) complies with the regulations prescribed under paragraph 
(3). 
(3) REGULATIONS.—The Administrator shall prescribe, after pro-
viding notice and an opportunity for public comment, regulations with 
respect to mentor-prote´ge´ programs, that— 
(A) ensure that the programs improve the ability of prote´ge´s to 
compete for Federal prime contracts and subcontracts; and 
(B) address, at a minimum— 
(i) eligibility criteria for program participants, including 
any restrictions on the number of mentor-prote´ge´ relation-
ships permitted for each participant; 
(ii) the types of developmental assistance to be provided by 
mentors, including how the assistance provided shall improve 
the competitive viability of the prote´ge´s; 
(iii) whether any developmental assistance provided by a 
mentor may affect the status of a program participant as a 
small business concern due to affiliation; 
(iv) the length of mentor-prote´ge´ relationships; 
(v) the effect of mentor-prote´ge´ relationships on con-
tracting; 
(vi) benefits that may accrue to a mentor as a result of 
program participation; 
(vii) reporting requirements during program participation; 
(viii) postparticipation reporting requirements; 
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(A) entering into the contract, if the bidder receives the award 
of the contract; and 
(B) furnishing the prescribed payment bond and performance 
bond. 
(2) BOND.—Except in paragraphs (1), (7), and (8), the term ‘‘bond’’ 
means— 
(A) a bid bond; 
(B) a payment bond; 
(C) a performance bond; and 
(D) a bond that is ancillary to a bid bond, payment bond, or 
performance bond. 
(3) GUARANTEE.—The term ‘‘guarantee’’ means a guarantee of a 
bond issued under section 321102(a) of this title. 
(4) INDEMNIFICATION
AGREEMENT.—The term ‘‘indemnification 
agreement’’ means an agreement entered into between the Adminis-
trator and a participating surety under section 321102(b) of this title. 
(5) OBLIGEE.—The term ‘‘obligee’’ means— 
(A) in the case of a bid bond, the person requesting bids for 
the performance of a contract; or 
(B) in the case of a payment bond or performance bond, the 
person that has contracted with a principal for the completion of 
the contract and to which the obligation of the surety runs in the 
event of a breach by the principal of a condition of a payment 
bond or performance bond. 
(6) PARTICIPATING SURETY.— 
(A) IN GENERAL.—The term ‘‘participating surety’’ means a 
surety to which a guarantee or commitment to guarantee is issued 
under section 321102(a)(1) of this title. 
(B) INCLUSION.—The term ‘‘participating surety’’ includes a 
preferred surety. 
(7) PAYMENT BOND.—The term ‘‘payment bond’’ means a bond con-
ditioned on the payment by the principal of money to persons under 
contract with the principal. 
(8) PERFORMANCE BOND.—The term ‘‘performance bond’’ means a 
bond conditioned on the completion by the principal of a contract in 
accordance with the terms of the contract. 
(9) PREFERRED SURETY.—The term ‘‘preferred surety’’ means a 
participating surety that is a participant in the preferred surety bond 
guarantee program. 
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(10) PREFERRED SURETY BOND GUARANTEE PROGRAM.—The term 
‘‘preferred surety bond guarantee program’’ means the program under 
section 321102(a)(5) of this title. 
(11) PRIME CONTRACTOR.—The term ‘‘prime contractor’’ means the 
person with whom the obligee has contracted to perform the contract. 
(12) PRINCIPAL.— 
(A) IN GENERAL.—The term ‘‘principal’’ means— 
(i) in the case of a bid bond, a person that bids for the 
award of a contract; or 
(ii) the person— 
(I) that is primarily liable to complete a contract for 
the obligee or to make a payment to another person in 
respect of the contract; and 
(II) for whose performance of the person’s obligation 
the surety is bound under the terms of a payment bond 
or performance bond. 
(B) PRIME
CONTRACTOR
OR
SUBCONTRACTOR.—A principal 
may be a prime contractor or a subcontractor. 
(13) PROGRAM.—The term ‘‘program’’ means the preferred surety 
bond guarantee program. 
(14) SMALL BUSINESS CONCERN.—The term ‘‘small business con-
cern’’ means a business concern that meets the size standard for the 
primary industry in which the business concern and the affiliates of the 
business concern are engaged, as determined by the Administrator in 
accordance with the North American Industry Classification System. 
(15) SUBCONTRACTOR.—The term ‘‘subcontractor’’ means a person 
that contracts with a prime contractor or with another subcontractor 
to perform a contract. 
(16) SURETY.—The term ‘‘surety’’ means a person that— 
(A) under the terms of a bid bond, undertakes to pay a sum 
of money to the obligee if the principal breaches the conditions of 
the bond; 
(B) under the terms of a performance bond, undertakes to incur 
the cost of fulfilling the terms of a contract if the principal 
breaches the conditions of the contract; 
(C) under the terms of a payment bond, undertakes to make 
payment to all persons supplying labor and material in the pros-
ecution of the work provided for in the contract if the principal 
fails to make prompt payment; or 
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(b) MEETINGS.— 
(1) IN GENERAL.—The Interagency Committee shall meet not less 
than biannually at such times as the Interagency Committee deter-
mines to be necessary to perform the duties under subsection (a). 
(2) QUORUM.—A majority of the members of the Interagency Com-
mittee shall constitute a quorum for the approval of recommendations 
or reports issued under this section. 
(c) INTERACTION WITH COUNCIL.— 
(1) CONSULTATION.—In performing its duties under subsection (a), 
the Interagency Committee shall consult with the Council. 
(2) JOINT MEETINGS.—The Interagency Committee— 
(A) shall meet jointly with the Council not less frequently than 
biannually; and 
(B) may meet jointly with the Council more frequently at the 
discretion of the chairperson of the Interagency Committee and 
the chairperson of the Council. 
(3) CHAIRPERSON.—The chairperson of the Interagency Committee 
shall serve as chairperson of any joint meeting of the Interagency Com-
mittee and the Council. 
§ 403104. Membership of the Interagency Committee 
(a) IN GENERAL.— 
(1) PARTICIPANTS.—The Interagency Committee shall be composed 
of 1 representative from each of the following: 
(A) The Department of Commerce. 
(B) The Department of Defense. 
(C) The Department of Health and Human Services. 
(D) The Department of Labor. 
(E) SBA. 
(F) The Department of Transportation. 
(G) The Department of the Treasury. 
(H) The General Services Administration. 
(I) The Board of Governors of the Federal Reserve. 
(J) The Executive staff of the President engaged in policy-
making activities. 
(2) APPOINTMENTS.— 
(A) IN GENERAL.—Except as provided in subparagraph (B), the 
head of each entity listed in paragraph (1) shall designate a rep-
resentative who— 
(i) shall be a policymaking official within the entity; and 
(ii) shall report directly to the head of the entity on the 
status of the activities of the Interagency Committee. 
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553 
Schedule of Laws Repealed—Continued 
Act 
Section 
United States Code 
Former Classification 
604 ...........................................
15 U.S.C. 657b note.
Small Business Innovation Research 
Program Reauthorization Act of 2000 
(Public Law 106–554) ........................
1(a)(9) [title I, § 102], 114 
Stat. 2763A–668.
15 U.S.C. 638 note.
1(a)(9) [title I, § 108], 114 
Stat. 2763A–671.
15 U.S.C. 638 note.
Small Business Investment Company 
Amendments Act of 2001 (Public Law 
107–100) .............................................
6(d) ..........................................
15 U.S.C. 697 note.
Small Business Reauthorization and 
Manufacturing Assistance Act of 2004 
(Public Law 108–447) ........................
§ 147 ........................................
15 U.S.C. 631c.
§ 152(a)(2) ...............................
15 U.S.C. 632 note.
§ 155 ........................................
15 U.S.C. 657g.
Public Law 109–59 .................................
10201 .......................................
15 U.S.C. 657g note.
Public Law 109–289 ...............................
§ 8018 (last proviso) ................
15 U.S.C. 637 note.
Public Law 110–140 ...............................
1203 .........................................
15 U.S.C. 657h.
Military Reservist and Veteran Small 
Business Reauthorization and Oppor-
tunity Act of 2008 (Public Law 110– 
186) .....................................................
3 ...............................................
15 U.S.C. 636 note.
105 ...........................................
15 U.S.C. 637 note.
201(b), (c) ...............................
15 U.S.C. 636 note.
202 ...........................................
15 U.S.C. 636 note.
Small Business Disaster Response and 
Loan Improvements Act of 2008 
(Public Law 110–246) ........................
12052 .......................................
15 U.S.C. 636e.
12063(b) ..................................
15 U.S.C. 636 note.
12066(b) ..................................
15 U.S.C. 636f.
12072 .......................................
15 U.S.C. 636g.
12073 .......................................
15 U.S.C. 636h.
12079 .......................................
15 U.S.C. 636i.
12085 .......................................
15 U.S.C. 636j.
12091 .......................................
15 U.S.C. 636k.
Public Law 111–3 ...................................
621 ...........................................
15 U.S.C. 657p.
Public Law 111–5, div. A, title V ...........
509 ...........................................
not classified.
Small Business Jobs Act of 2010 (Public 
Law 111–240) .....................................
1131(b), (c) .............................
15 U.S.C. 636 note.
1136 .........................................
15 U.S.C. 632 note.
1202(a) ....................................
15 U.S.C. 649b note.
1205(b) ....................................
15 U.S.C. 649 note.
1207 .........................................
15 U.S.C. 649b note.
1321 .........................................
15 U.S.C. 637 note.
1344 .........................................
15 U.S.C. 632 note.
1347(a)(1), (b)(3) ...................
15 U.S.C. 637 note.
1401(c) ....................................
15 U.S.C. 636 note.
1402 .........................................
15 U.S.C. 648b note.
Public Law 112–74 .................................
532 ...........................................
15 U.S.C. 633a.
SBIR/STTR Reauthorization Act of 
2011 (Public Law 112–81) .................
5107(c), (d) .............................
15 U.S.C. 638 note.
5142 .........................................
15 U.S.C. 638a.
5143(a), (c) .............................
15 U.S.C. 638b(a), (c).
5168(a) ....................................
15 U.S.C. 638 note.
Public Law 112–239 ...............................
1622(a), (b) .............................
15 U.S.C. 631 note.
1631(c) ....................................
15 U.S.C. 644 note.
1633(b), (c) .............................
15 U.S.C. 631 note.
1653(b) ....................................
15 U.S.C. 637d.
1681(b) ....................................
15 U.S.C. 645 note.
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