159 
(1) in the case of a contract for services (except construction), at 
least 50 percent of the cost of contract performance incurred for per-
sonnel shall be expended for employees of the program participant; and 
(2) in the case of a contract for procurement of supplies (other than 
procurement from a regular dealer in such supplies), the program par-
ticipant will perform work for at least 50 percent of the cost of manu-
facturing the supplies (not including the cost of materials). 
(b) CHANGE IN PERCENTAGE.— 
(1) IN GENERAL.—The Administrator may change the percentage 
under paragraph (1) or (2) of subsection (a) if the Administrator de-
termines that a change is necessary to reflect conventional industry 
practices among business concerns that are below the numerical size 
standard for businesses in that industry category. 
(2) LIMITATION.—A percentage established under paragraph (1) 
may not differ from a percentage established under section 25113 of 
this title. 
(c) OTHER CATEGORIES OF CONTRACT.— 
(1) IN GENERAL.—The Administrator shall by regulation establish 
requirements similar to those specified in subsection (a) to be applica-
ble to— 
(A) contracts for general and specialty construction; and 
(B) contracts for any other industry category not otherwise sub-
ject to subsection (a). 
(2) APPLICABLE PERCENTAGE.—The percentage applicable to a re-
quirement under paragraph (1) shall be determined in accordance with 
subsection (b), except that such a percentage may not differ from a 
percentage established under section 25113 of this title for the same 
industry category. 
§ 23314. Wholesalers and retailers 
(a) IN GENERAL.—An otherwise responsible program participant that is 
described in subsection (b) shall not be denied the opportunity to submit 
and have considered its offer for a procurement contract for the supply of 
a product to be let under the program or section 25101 of this title solely 
because the program participant is other than the manufacturer or proc-
essor of the product to be supplied under the contract. 
(b) REQUIREMENTS.—A program participant referred to in subsection (a) 
is a program participant 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; 
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(3) is a regular dealer (as defined under section 11 of the Act of 
June 30, 1936 (41 U.S.C. 43b) (commonly known as the Walsh-Healey 
Act)) in the product to be offered the Government; and 
(4) represents that the program participant will supply the product 
of a domestic small business manufacturer or processor, unless a waiv-
er 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. 
§ 23315. 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. 
(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 the Administration any report 
that raises a suspicion 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 23321(b) of this title. 
§ 23316. Transfer of ownership or control 
(a) IN GENERAL.— 
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(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 
(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; 
(D)(i) due to incapacity or death, none of one or more individ-
uals on whom eligibility was based is able to continue to exercise 
control 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; 
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(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 
period of continued participation in the program for the remainder of the 
program participation period of the transferor. 
§ 23317. 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 23318 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 
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(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. 
(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. 
§ 23318. Business plans 
(a) SUBMISSION.—Promptly after certification under section 23325 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 
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determined eligibility under paragraph (8) or (16) of section 23101 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); 
(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 first 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 23328 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. 
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(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 23328 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 23328 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; 
(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. 
§ 23319. 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. 
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(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. 
§ 23320. 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 23310(a) 
of this title, the Administrator determines that the program participant 
and its disadvantaged owners are no longer economically disadvan-
taged. 
§ 23321. 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— 
(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-
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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. 
§ 23322. 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. 
(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 23321 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). 
§ 23323. Limitation of eligibility to one 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 23101(15) of this title shall be permitted to assert such eligibility for 
only one small business concern. 
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(c) EXCEPTION.—An economically disadvantaged Indian tribe may own 
more than one 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. 
§ 23324. 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. 
§ 23325. 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. 
§ 23326. 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. 
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(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-
tial but in which the participation rate of small business concerns 
owned and controlled by socially and economically disadvantaged indi-
viduals has been limited. 
§ 23327. 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. 
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(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 20511 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 Investment Act of 1998 (29 U.S.C. 2801 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 10331(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 
(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 are recipients of 
skills training or upgrading under subparagraph (B) at any one 
time. 
(F) AMOUNT.—Not more than $2,500 shall be made available 
for any one employee or potential employee for skills training or 
upgrading under subparagraph (B). 
(G) LENGTH
OF
TRAINING
OR
UPGRADING.—The length of 
training or upgrading financed under subparagraph (B) shall be 
not less than one nor more than 6 months. 
(H) LENGTH OF EMPLOYMENT.— 
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(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 
(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.— 
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(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 one year after the program 
participant’s term of participation. 
(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-
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-
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ceive transitional management business planning training and technical 
assistance. 
§ 23328. 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 fifth 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-
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-
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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 23311 of this 
title. 
§ 23329. Program participation period 
A program participant may receive assistance under the program for a 
total period of not longer than 9 years, measured from the date of its cer-
tification under section 23325 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. 
§ 23330. 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. 
§ 23331. 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. 
§ 23332. 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. 
§ 23333. Participation in federally funded programs and 
projects 
(a) IN GENERAL.—A small business concern that is certified, or otherwise 
meets the criteria for participation in any program under the program, shall 
not be required by any State or political subdivision of a State to meet addi-
tional criteria or certification, unrelated to the capability to provide the re-
quested product or service, to participate as a small business concern owned 
and controlled by socially and economically disadvantaged individuals in any 
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program or project that is funded, in whole or in part, by the Federal Gov-
ernment. 
(b) NOTICE
OF PARTICIPATION
BY
THE SECRETARY
OF TRANSPOR-
TATION.—The Secretary of Transportation shall notify each State or polit-
ical subdivision of a State to which the Secretary of Transportation awards 
a grant or other Federal funds of the criteria for participation by a small 
business concern owned and controlled by socially and economically dis-
advantaged individuals in any program or project that is funded, in whole 
or in part, by the Federal Government. 
CHAPTER 235—TECHNICAL AND MANAGEMENT 
ASSISTANCE 
Sec. 
23501.
Financial assistance for projects providing technical or management assistance. 
23502.
Eligible projects. 
23503.
Location of service. 
§ 23501. Financial assistance for projects providing tech-
nical or management assistance 
(a) IN GENERAL.—The Administrator shall provide financial assistance to 
public or private organizations to pay all or part of the cost of projects de-
signed to provide technical or management assistance to program partici-
pants, with special attention to small business concerns located in areas 
with high proportions of unemployed or low-income individuals. 
(b) FORM
OF ASSISTANCE.—The financial assistance authorized for 
projects under this chapter includes assistance advanced by grant, agree-
ment, or contract. 
(c) PAYMENT.—The Administrator may make payments under a grant or 
contract under this chapter in lump sum or installments, and in advance 
or by way of reimbursement, and in the case of grants, with necessary ad-
justments on account of overpayments or underpayments. 
§ 23502. Eligible projects 
(a) IN GENERAL.—Financial assistance under this chapter may be pro-
vided for projects, including projects for— 
(1) planning and research, including feasibility studies and market 
research; 
(2) the identification and development of new business opportunities; 
(3) the furnishing of centralized services with regard to public serv-
ices and Federal Government programs including the programs author-
ized under this division and section 20511 of this title; 
(4) the establishment and strengthening of business service agencies, 
including trade associations and cooperatives; and 
(5) the furnishing of business counseling, management training, and 
legal and other related services, with special emphasis on the develop-
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ment of management training programs using the resources of the 
business community (including the development of management train-
ing opportunities in existing business) and with emphasis in all cases 
on providing management training of sufficient scope and duration to 
develop entrepreneurial and managerial self-sufficiency on the part of 
the individuals served. 
(b) PREFERENCE.—The Administrator shall give preference to projects 
that promote the ownership, participation in ownership, or management of 
small business concerns owned by program participants. 
§ 23503. Location of service 
To the extent feasible, service under this chapter shall be provided in a 
location that is easily accessible to the program participants served. 
DIVISION F—PROCUREMENT ASSISTANCE 
CHAPTER 241—GENERAL PROVISIONS 
Sec. 
24101.
Definition of executive agency. 
24102.
Authority. 
24103.
Technical, managerial, and informational aids. 
24104.
Inventory of productive facilities. 
24105.
Utilization of productive capacity. 
24106.
Subcontracting to small business concerns. 
24107.
Size certification. 
24108.
Responsibility certification. 
24109.
Information pertaining to Federal procurement or production. 
24110.
Information pertaining to disposal of Federal property. 
24111.
Information pertaining to supplies of materials. 
24112.
Fair proportions of business for small business concerns. 
24113.
Fair and reasonable treatment of small business concerns. 
24114.
Information and assistance pertaining to federally aided urban renewal projects. 
24115.
Dissemination of information by the Administrator. 
24116.
Availability of information from Federal agencies. 
24117.
Adjustment of regulations and programs to the needs of small business concerns. 
24118.
Outreach programs for disabled veterans, veterans, and reservists. 
§ 24101. Definition of executive agency 
In this division, the term ’’executive agency’’ has the meaning given the 
term in section 4 of the Office of Federal Procurement Policy Act (41 
U.S.C. 403). 
§ 24102. Authority 
The Administrator shall take an action under this chapter when the Ad-
ministrator determines that the action is necessary. 
§ 24103. Technical, managerial, and informational aids 
(a) IN GENERAL.— 
(1) ACTIVITIES.—The Administrator shall provide technical, manage-
rial, and informational aids to small business concerns— 
(A) by advising and counseling on matters in connection with 
Government procurement and policies, principles, and practices of 
good management; 
(B) by cooperating and advising with— 
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(i) voluntary business, professional, educational, and other 
nonprofit organizations, associations, and institutions; and 
(ii) other Federal and State agencies; 
(C) by maintaining a clearinghouse for information on man-
aging, financing, and operating small business concerns; and 
(D) by disseminating such information, including through rec-
ognition events, and by other activities that the Administration de-
termines to be appropriate. 
(2) NO
ENDORSEMENT; APPROPRIATE
RECOGNITION.—In cooper-
ating and advising with an entity under paragraph (1)(B)(i), the Ad-
ministrator shall take such actions as the Administrator determines to 
be necessary to ensure that— 
(A) the cooperation does not constitute or imply an endorsement 
by the Administrator of the entity or its products or services; and 
(B) the Administration receives appropriate recognition in all 
printed material. 
(3) FOR-PROFIT CONCERNS.—The Administrator may provide tech-
nical, managerial, and informational aids to small business concerns 
through cooperation with a for-profit concern (referred to in this para-
graph as a ‘‘cosponsor’’) if the Administrator— 
(A) takes such action as the Administrator determines to be ap-
propriate to ensure that— 
(i) the Administration receives appropriate recognition and 
publicity; 
(ii) the cooperation does not constitute or imply an en-
dorsement by the Administrator of any product or service of 
the cosponsor; 
(iii) unnecessary promotion of the products or services of 
the cosponsor is avoided; and 
(iv) the use of any one cosponsor in a marketing area is 
minimized; and 
(B) develops an agreement, executed on behalf of the Adminis-
trator by an employee of the Administration in Washington, the 
District of Columbia, that, at a minimum— 
(i) specifies the terms and conditions of the cooperation; 
and 
(ii) provides that— 
(I) any printed material to announce the cosponsor-
ship or to be distributed at the cosponsored activity shall 
be approved in advance by the Administrator; 
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(II) only minimal charges may be imposed on any 
small business concern to cover the direct costs of pro-
viding the assistance; 
(III) the Administrator may provide to the cosponsor 
mailing labels but not lists of names and addresses of 
small business concerns compiled by the Administrator; 
(IV) all printed materials containing the names of 
both the Administration and the cosponsor shall include 
a prominent disclaimer that the cooperation does not 
constitute or imply an endorsement by the Administrator 
of any product or service of the cosponsor; and 
(V) the Administration shall receive appropriate rec-
ognition in all cosponsorship printed materials. 
(b) VOLUNTEER PROGRAMS.— 
(1) IN GENERAL.—In carrying out this section, the Administrator 
shall establish, conduct, and publicize, and recruit, select, and train vol-
unteers for, and enter into contracts, grants, or cooperative agreements 
for, volunteer programs, including SCORE and an Active Corps of Ex-
ecutives for the purposes of subsection (a). 
(2) STAFF.—To facilitate the implementation of the volunteer pro-
grams, the Administrator shall, to the extent and in such amounts as 
are provided in advance in appropriation Acts, maintain at Administra-
tion headquarters, and pay the salaries, benefits, and expenses of, a 
volunteer and professional staff to manage and oversee the volunteer 
programs. 
(3) CONTRIBUTIONS.—Notwithstanding any other provision of law, 
SCORE may— 
(A) solicit cash and in-kind contributions from the private sec-
tor to be used to carry out its functions under this subtitle; and 
(B) use payments made by the Administrator under this sub-
section for such solicitation and management of the contributions 
received. 
(c) USE
OF ADMINISTRATION FACILITIES.—The Administrator shall 
allow any individual or group of persons participating with the Adminis-
trator in furtherance of this section to use such of the Administration’s of-
fice facilities and related material and services (including clerical and steno-
graphic services) as the Administrator considers appropriate. 
(d) VOLUNTEERS DEEMED TO BE FEDERAL EMPLOYEES FOR FEDERAL 
TORT CLAIMS PURPOSES.—A volunteer, while carrying out an activity 
under this section, shall be deemed to be a Federal employee for purposes 
of chapter 171 of title 28. 
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(e) VOLUNTEERS DEEMED TO BE CIVIL EMPLOYEES FOR WORK INJURY 
COMPENSATION PURPOSES.—A volunteer, while carrying out an activity 
under this section, shall, for purposes of subchapter I of chapter 81 of title 
5 (relative to compensation to Federal employees for work injuries), be 
deemed to be a civil employee of the United States within the meaning of 
the term ‘‘employee’’ as defined in section 8101 of title 5, and that sub-
chapter shall apply except that in computing compensation benefits for dis-
ability or death, the monthly pay of a volunteer shall be deemed to be that 
received under the entrance salary for a grade GS–11 employee. 
(f) REIMBURSEMENT OF VOLUNTEERS.— 
(1) IN GENERAL.—The Administrator may reimburse a volunteer 
carrying out an activity under this section for— 
(A) all necessary out-of-pocket expenses incident to the volun-
teer’s provision of services under this subtitle, or in connection 
with attendance at a meeting sponsored by the Administration; 
(B) the cost of malpractice insurance, as the Administrator 
shall determine, in accordance with regulations that the Adminis-
trator shall prescribe; and 
(C) travel expenses (including per diem in lieu of subsistence) 
as authorized by section 5703 of title 5 for individuals serving 
without pay, while the volunteer is carrying out such an activity 
away from the volunteer’s home or regular place of business. 
(2) TREATMENT OF PAYMENTS.—Notwithstanding any other provi-
sion of law, no payment for supportive services or reimbursement of 
out-of-pocket expenses made to a volunteer serving under this section 
shall be subject to any tax or charge or be treated as wages or com-
pensation for the purposes of unemployment, disability, retirement, 
public assistance, or similar benefit payments, or minimum wage laws. 
(g) LIMITATION ON PROVISION OF SERVICES TO PERSONS WITH A DE-
LINQUENT LOAN.—A volunteer carrying out an activity under this section 
shall not provide any service to a person with a loan under this subtitle that 
is delinquent except on a specific request for assistance signed by the person 
in connection with the delinquency. 
(h) GRANTS FOR BUSINESS COUNSELING AND ASSISTANCE.— 
(1) IN GENERAL.—In carrying out this section, the Administrator 
may make a grant to, or enter into a contract or cooperative agreement 
with, a public or private institution of higher education for the estab-
lishment and operation of a small business institute, which shall be 
used to provide business counseling and assistance to small business 
concerns through the activities of students enrolled at the institution. 
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(2) EDUCATIONAL CREDITS.—A student engaged in an activity fund-
ed under paragraph (1) shall be entitled to receive educational credit 
for the activity. 
(i) PAYMENT
OF EXPENSES
IN JUDICIAL
OR ADMINISTRATIVE PRO-
CEEDINGS.—Notwithstanding any other provision of law and in accordance 
with regulations that the Administrator shall prescribe, in a judicial or ad-
ministrative proceeding arising directly out of the performance of an activity 
under this section to which a volunteer is made a party, the Administrator 
may employ counsel and pay counsel fees, court costs, bail, and other ex-
penses incidental to the defense of the volunteer. 
§ 24104. Inventory of productive facilities 
(a) IN GENERAL.—The Administrator shall— 
(1) make a complete inventory of all productive facilities of small 
business concerns; or 
(2) arrange for such an inventory to be made by any other govern-
mental agency that has the facilities. 
(b) INFORMATION FROM STATE AGENCIES.—In making an inventory 
under subsection (a), the Administrator or other governmental agency may 
request an appropriate agency of a State to furnish an inventory of the pro-
ductive facilities of small business concerns in the State if such an inventory 
is available or in prospect. 
§ 24105. Utilization of productive capacity 
The Administrator shall— 
(1) coordinate and ascertain the means by which the productive ca-
pacity of small business concerns can be most effectively utilized; and 
(2) consult and cooperate with officers of the Government having 
procurement or property disposal powers, in order to utilize the poten-
tial productive capacity of plants operated by small business concerns. 
§ 24106. Subcontracting to small business concerns 
The Administrator shall— 
(1) obtain information concerning methods and practices that Gov-
ernment prime contractors utilize in letting subcontracts; and 
(2) take action to encourage the letting of subcontracts by prime 
contractors to small business concerns at prices and on terms and con-
ditions that are fair and equitable. 
§ 24107. Size certification 
(a) IN GENERAL.—The Administrator shall determine within any indus-
try the concerns that qualify as a small business concern for purposes of 
this subtitle. 
(b) ISSUANCE OF CERTIFICATE.—When requested to do so, the Adminis-
trator shall issue a certificate certifying a concern as a small business con-
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cern in accordance with the criteria stated in this subtitle and section 10101 
of this title. 
(c) REVOCATION OF CERTIFICATE.—A certificate issued under subsection 
(b) shall be subject to revocation when the concern covered by the certificate 
ceases to qualify as a small business concern. 
(d) CONCLUSIVE DETERMINATION.—An officer of the Government having 
procurement or lending power, or engaging in the disposal of Federal prop-
erty or allocating materials or supplies, or promulgating regulations affect-
ing the distribution of materials or supplies, shall accept as conclusive the 
Administrator’s determination whether a concern qualifies as a small busi-
ness concern. 
§ 24108. Responsibility certification 
(a) DEFINITIONS.—In this section: 
(1) CONTRACTING
OFFICER.—The term ‘‘contracting officer’’ 
means— 
(A) a contracting officer; and 
(B) any other officer engaged in the sale and disposal of Fed-
eral property. 
(2) RESPONSIBILITY.—The term ‘‘responsibility’’ includes capability, 
competency, capacity, credit, integrity, perseverance, and tenacity. 
(b) CERTIFICATION.—The Administrator shall certify to a contracting of-
ficer with respect to all elements of the responsibility of a small business 
concern or group of small business concerns to receive and perform a spe-
cific Government contract. 
(c) NO PRECLUSION FROM AWARD OF CONTRACT WITHOUT REFERRAL 
TO THE ADMINISTRATOR.—A contracting officer may not, for any reason 
relating to an element of responsibility as determined under subsection (b), 
preclude a small business concern or group of small business concerns from 
being awarded a contract without referring the matter for a final disposition 
to the Administrator. 
(d) CONCLUSIVE DETERMINATION.—A contracting officer shall— 
(1) accept as conclusive a certification made under subsection (b) as 
to the specific Government contract with respect to which the certifi-
cation is made; and 
(2) let the contract to the small business concern or group of small 
business concerns without requiring the small business concern or 
group of small business concerns to meet any other requirement of re-
sponsibility or eligibility. 
(e) NO EXEMPTION.—The Administrator may not establish an exemption 
from referral or notification or refuse to accept a referral or notification 
from a contracting officer made under subsection (c), but nothing in this 
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section requires the processing of an application for certification if the small 
business concern to which the referral pertains declines to have the applica-
tion processed. 
§ 24109. Information pertaining to Federal procurement or 
production 
The Administrator shall obtain from any Federal agency engaged in pro-
curement or in the financing of procurement or production such reports con-
cerning the letting of contracts and subcontracts and the making of loans 
to business concerns as the Administrator considers pertinent in carrying 
out the functions of the Administrator under this subtitle and subtitle I. 
§ 24110. Information pertaining to disposal of Federal prop-
erty 
The Administrator shall obtain from any Federal agency engaged in the 
disposal of Federal property such reports concerning the solicitation of bids, 
time of sale, or otherwise as the Administrator considers pertinent in car-
rying out the functions of the Administrator under this subtitle and subtitle 
I. 
§ 24111. Information pertaining to supplies of materials 
The Administrator shall obtain from suppliers of materials information 
pertaining to the method of filling orders for materials, and the bases for 
allocating their supplies of materials, when it appears that a small business 
concern is unable to obtain material from its normal sources. 
§ 24112. Fair proportions of business for small business con-
cerns 
The Administrator shall make studies and recommendations to the appro-
priate Federal agencies to ensure that— 
(1) a fair proportion of the total purchases and contracts for prop-
erty and services for the Government is placed with small business con-
cerns; 
(2) a fair proportion of Government contracts for research and devel-
opment is placed with small business concerns; 
(3) a fair proportion of the total sales of Government property is 
made to small business concerns; and 
(4) a fair and equitable share of materials, supplies, and equipment 
is available to small business concerns. 
§ 24113. Fair and reasonable treatment of small business 
concerns 
The Administrator shall consult and cooperate with all Federal agencies 
for the purpose of ensuring that small business concerns receive fair and 
reasonable treatment from Federal agencies. 
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§ 24114. Information and assistance pertaining to federally 
aided urban renewal projects 
The Administrator shall provide at the earliest practicable time such in-
formation and assistance as are appropriate (including information con-
cerning eligibility for loans under section 21303 of this title) to local public 
agencies (as defined in section 110(h) of the Housing Act of 1949 (42 
U.S.C. 1460(h))) and to small business concerns to be displaced by federally 
aided urban renewal projects in order to assist the small business concerns 
in reestablishing operations. 
§ 24115. Dissemination of information by the Administrator 
(a) IN GENERAL.—The Administrator shall disseminate, without regard 
to section 3204 of title 39, information, in such form as the Administrator 
considers appropriate, to public agencies, private organizations, and the gen-
eral public. 
(b) INFORMATION ON FEDERAL PROCUREMENT PRACTICES.—The Ad-
ministrator shall, for each fiscal year— 
(1) collect information concerning the procurement practices and 
procedures of each Federal agency having procurement authority; 
(2) publish and disseminate the information to contracting officers 
in all Federal agencies; and 
(3) make the information available to any small business concern 
that requests the information. 
§ 24116. Availability of information from Federal agencies 
(a) REQUESTS FOR INFORMATION.—For any contract to be let by any 
Federal agency, the Federal agency shall provide to any small business con-
cern, on request by the small business concern— 
(1) a copy of bid sets and specifications with respect to the contract; 
(2) the name and telephone number of an employee of the Federal 
agency to answer questions with respect to the contract; and 
(3) adequate citations to each major Federal law (including a regula-
tion) with which the small business concern must comply in performing 
the contract. 
(b) EXEMPT CONTRACTS.—Subsection (a) does not apply to a contract 
(or subcontract) that— 
(1) will be performed entirely outside the United States; or 
(2) is for services that are personal in nature. 
§ 24117. Adjustment of regulations and programs to the 
needs of small business concerns 
The Administrator shall— 
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(1) make studies of matters materially affecting the competitive 
strength of small business concerns and of the effect on small business 
concerns of Federal laws (including regulations) and programs; and 
(2) make recommendations to Federal agencies as appropriate for 
the adjustment of regulations and programs to the needs of small busi-
ness concerns. 
§ 24118. Outreach programs for disabled veterans, veterans, 
and reservists 
(a) IN GENERAL.—The Administrator shall make grants to, and enter 
into contracts and cooperative agreements with, educational institutions, pri-
vate businesses, veterans’ nonprofit community-based organizations, and 
Federal agencies and State and local agencies for the establishment and im-
plementation of outreach programs for disabled veterans, veterans, and re-
servists. 
(b) INCREASE IN NUMBER OF VETERANS BUSINESS OUTREACH CEN-
TERS.—The Administrator shall use the authority under subsection (a) to 
ensure that the number of veterans business outreach centers throughout 
the United States increases by the number that the Administrator considers 
appropriate, based on need, for each fiscal year. 
CHAPTER 243—SUBCONTRACTING PROVISIONS 
Sec. 
24301.
Opportunity to participate in performance of contracts. 
24302.
Notice of provisions relating to contracts awarded pursuant to the negotiated method 
of procurement. 
24303.
Subcontracting plans. 
24304.
Incentives. 
24305.
Liquidated damages. 
24306.
Material breach. 
24307.
Effect of chapter. 
§ 24301. Opportunity to participate in performance of con-
tracts 
(a) IN GENERAL.—The clause stated in subsection (c) shall be included 
in all contracts let by a Federal agency except a contract described in sub-
section (b). 
(b) EXCEPTED CONTRACTS.—The clause stated in subsection (c) need not 
be included in— 
(1) a contract that does not exceed the simplified acquisition thresh-
old; 
(2) a contract (including all subcontracts under the contract) that 
will be performed entirely outside the United States; or 
(3) a contract for a service that is personal in nature. 
(c) REQUIRED CLAUSE.—The clause required by subsection (a) is as fol-
lows: 
‘‘(1) DEFINITIONS.— 
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185 
‘‘(A) IN GENERAL.—As used in this contract, each of the terms 
‘qualified HUBZone small business concern’, ‘small business con-
cern’, ‘small business concern owned and controlled by service-dis-
abled veterans’, ‘small business concern owned and controlled by 
socially and economically disadvantaged individuals’, ‘small busi-
ness concern owned and controlled by veterans’, and ‘small busi-
ness concern owned and controlled by women’ has the meaning 
given the term in section 10101 of title 53, United States Code. 
‘‘(B) PRESUMPTION.—For purposes of applying the definition 
of ‘small business concern owned and controlled by socially and 
economically disadvantaged individuals’, the contractor shall pre-
sume that socially and economically disadvantaged individuals in-
clude Black Americans, Hispanic Americans, Native Americans, 
Asian Pacific Americans, and other minorities, or any other indi-
vidual found to be disadvantaged by the United States Small Busi-
ness Administration. 
‘‘(2) POLICY.—It is the policy of the United States that 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 individuals, 
small business concerns owned and controlled by veterans, small busi-
ness concerns owned and controlled by women, and other small busi-
ness concerns shall have the maximum practicable opportunity to par-
ticipate in the performance of contracts let by any Federal agency, in-
cluding contracts and subcontracts for subsystems, assemblies, compo-
nents, and related services for major systems. It is further the policy 
of the United States that its prime contractors establish procedures to 
ensure the timely payment of amounts due pursuant to the terms of 
their subcontracts with qualified HUBZone small business concerns, 
small business concerns owned and controlled by service-disabled vet-
erans, small business concerns owned and controlled by socially and 
economically disadvantaged individuals, small business concerns owned 
and controlled by veterans, small business concerns owned and con-
trolled by women, and other small business concerns. 
‘‘(3) AGREEMENT.—The contractor agrees— 
‘‘(A) to carry out the policy stated in paragraph (2) in the 
awarding of subcontracts to the fullest extent consistent with the 
efficient performance of this contract; and 
‘‘(B) to cooperate in any studies or surveys that may be con-
ducted by the United States Small Business Administration or the 
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186 
awarding agency of the United States as necessary to determine 
the extent of the contractor’s compliance with this clause. 
‘‘(4) RELIANCE
ON
WRITTEN
REPRESENTATION.—The contractor, 
acting in good faith, may rely on a written representation by a subcon-
tractor regarding its status as a qualified HUBZone small business 
concern, small business concern owned and controlled by service-dis-
abled veterans, small business concern owned and controlled by socially 
and economically disadvantaged individuals, small business concern 
owned and controlled by veterans, small business concern owned and 
controlled by women, or other small business concern.’’ 
§ 24302. Notice of provisions relating to contracts awarded 
pursuant to the negotiated method of procurement 
(a) REQUIRED CLAUSE.—A solicitation of an offer for a contract de-
scribed in subsection (b) shall contain a clause notifying potential offering 
companies of the provisions of this chapter relating to contracts awarded 
pursuant to the negotiated method of procurement. 
(b) CONTRACTS.—A contract referred to in subsection (a) is a contract 
let by a Federal agency that— 
(1) is to be awarded pursuant to the negotiated method of procure-
ment; and 
(2) may exceed— 
(A) $1,000,000, in the case of a contract for the construction 
of a public facility; or 
(B) $500,000, in the case of any other contract. 
§ 24303. Subcontracting plans 
(a) DEFINITIONS.—In this section: 
(1) BIDDER.—The term ‘‘bidder’’ does not include a bidder that is 
a small business concern. 
(2) OFFEROR.—The term ‘‘offeror’’ does not include an offeror that 
is a small business concern. 
(b) NEGOTIATED PROCUREMENTS.— 
(1) NEGOTIATION.—Before the award of any contract described in 
paragraph (2), or any amendment or modification to such a contract, 
the apparent successful offeror shall negotiate with the procurement 
authority a subcontracting plan that incorporates the information pre-
scribed in subsection (d). 
(2) CONTRACTS.—A contract referred to in paragraph (1) is a con-
tract let by a Federal agency that— 
(A) is to be (or was) awarded pursuant to the negotiated meth-
od of procurement; 
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(B) is required to include the clause stated in section 24301 of 
this title; 
(C) may exceed— 
(i) $1,000,000, in the case of a contract for the construc-
tion of a public facility; or 
(ii) $500,000, in the case of any other contract; and 
(D) offers a subcontracting possibility. 
(3) INCLUSION IN CONTRACT.—The subcontracting plan shall be in-
cluded in and made a material part of the contract. 
(4) FAILURE TO NEGOTIATE SUBCONTRACTING PLAN.—If, within the 
time prescribed in regulations of the procuring agency, the apparent 
successful offeror fails to negotiate the subcontracting plan required by 
paragraph (2), the offeror shall be ineligible to be awarded the con-
tract. 
(5) PRIOR
COMPLIANCE
A
FACTOR
IN
DETERMINING
RESPONSI-
BILITY.—Prior compliance of the offeror with other subcontracting 
plans under this subsection shall be considered by a procuring agency 
in determining the responsibility of the offeror for the award of the 
contract. 
(6) MAXIMUM OPPORTUNITY.—No contract shall be awarded to any 
offeror unless the procuring agency determines that the subcontracting 
plan to be negotiated by the offeror under paragraph (2) provides the 
maximum practicable opportunity for qualified HUBZone small busi-
ness concerns, small business concerns owned and controlled by service- 
disabled veterans, small business concerns owned and controlled by so-
cially and economically disadvantaged individuals, small business con-
cerns owned and controlled by veterans, small business concerns owned 
and controlled by women, and other small business concerns, to partici-
pate in the performance of the contract. 
(c) ADVERTISED PROCUREMENTS.— 
(1) REQUIRED CLAUSE.—A solicitation of a bid for a contract de-
scribed in paragraph (2), or any amendment or modification to such 
a contract, shall contain a clause requiring any bidder that is selected 
to be awarded a contract to submit to the procuring agency a subcon-
tracting plan that incorporates the information prescribed in subsection 
(d). 
(2) CONTRACTS.—A contract referred to in paragraph (1) is a con-
tract let by a Federal agency that— 
(A) is to be awarded pursuant to the formal advertising method 
of procurement; 
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(B) is required to contain the clause stated in section 24301 of 
this title; 
(C) may exceed— 
(i) $1,000,000, in the case of a contract for the construc-
tion of a public facility; or 
(ii) $500,000, in the case of any other contract; and 
(D) offers a subcontracting possibility. 
(3) INCLUSION IN CONTRACT.—The subcontracting plan of the bid-
der awarded the contract shall be included in and made a material part 
of the contract. 
(4) FAILURE TO SUBMIT SUBCONTRACTING PLAN.—If, within the 
time prescribed in regulations of the procuring agency, the bidder se-
lected to be awarded the contract fails to submit the subcontracting 
plan required by paragraph (1), the bidder shall become ineligible to 
be awarded the contract. 
(5) PRIOR
COMPLIANCE
A
FACTOR
IN
DETERMINING
RESPONSI-
BILITY.—Prior compliance of the bidder with other subcontracting 
plans under this subsection shall be considered by the procuring agency 
in determining the responsibility of the bidder for the award of the con-
tract. 
(d) CONTENTS OF SUBCONTRACTING PLAN.—A subcontracting plan shall 
include— 
(1) percentage goals for the utilization as subcontractors of 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 individuals, 
small business concerns owned and controlled by veterans, small busi-
ness concerns owned and controlled by women, and other small busi-
ness concerns; 
(2) the name of an individual within the employ of the offeror or 
bidder who will administer the subcontracting program of the offeror 
or bidder and a description of the duties of that individual; 
(3) a description of the efforts that the offeror or bidder will take 
to ensure that 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 con-
trolled by veterans, small business concerns owned and controlled by 
women, and other small business concerns will have an equitable oppor-
tunity to compete for subcontracts; 
(4) assurances that the offeror or bidder will— 
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(A) include the clause required by section 24301 of this title in 
all subcontracts that offer further subcontracting opportunities; 
and 
(B) require all subcontractors (except small business concerns) 
that receive subcontracts in excess of $1,000,000 in the case of 
a contract for the construction of a public facility, or in excess of 
$500,000 in the case of any other contract, to adopt a subcon-
tracting plan similar to the subcontracting plan required under 
subsection (b) or (c); 
(5) assurances that the offeror or bidder will submit such periodic 
reports and cooperate in any studies or surveys as may be required by 
the procuring agency or the Administrator to determine the extent of 
compliance by the offeror or bidder with the subcontracting plan; and 
(6) a recitation of— 
(A) the types of records that the successful offeror or bidder will 
maintain to demonstrate procedures that are adopted to comply 
with the requirements and goals set forth in the subcontracting 
plan, including the establishment of source lists of 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 
veterans, small business concerns owned and controlled by women, 
and other small business concerns; and 
(B) efforts to identify and award subcontracts to small business 
concerns. 
(e) ATTAINMENT OF GOALS.— 
(1) ATTAINABILITY OF GOALS.—A Federal agency shall ensure that 
the goals offered by an apparent successful bidder or offeror are attain-
able in relation to— 
(A) the subcontracting opportunities available to the contractor, 
commensurate with the efficient and economical performance of 
the contract; 
(B) the pool of eligible subcontractors available to fulfill the 
subcontracting opportunities; and 
(C) the actual performance of the contractor in fulfilling the 
subcontracting goals specified in prior subcontracting plans. 
(2) CREDIT FOR DEVELOPMENT ASSISTANCE.—For purposes of de-
termining the attainment of a subcontract utilization goal under a sub-
contracting plan entered into with an executive agency under sub-
section (b) or (c), a mentor firm that provides development assistance 
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to a prote´ge´ firm under the pilot Mentor-Prote´ge´ Program established 
pursuant to section 831 of the National Defense Authorization Act for 
Fiscal Year 1991 (Public Law 101–510; 10 U.S.C. 2302 note) shall 
be granted credit for the assistance in accordance with subsection (g) 
of that section. 
(f) BUNDLED CONTRACTS.—The following factors shall be designated by 
a Federal agency as significant factors for purposes of evaluating offers for 
a bundled contract if the head of the Federal agency determines that the 
contract offers a significant opportunity for subcontracting: 
(1) A factor that is based on the rate provided under the subcon-
tracting plan for small business participation in the performance of the 
contract. 
(2) For the evaluation of past performance of an offeror, a factor 
that is based on the extent to which the offeror attained applicable 
goals for small business participation in the performance of contracts. 
(g) COMPLIANCE ASSISTANCE.—The Administrator may— 
(1) assist Federal agencies and businesses in complying with their 
responsibilities under this section, including the formulation of subcon-
tracting plans; 
(2)(A) review any solicitation for any contract to be let under sub-
section (b) or (c) to determine the maximum practicable opportunity 
for 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 disadvan-
taged individuals, small business concerns, small business concerns 
owned and controlled by veterans, small business concerns owned and 
controlled by women, and other small business concerns to participate 
as subcontractors in the performance of any contract resulting from 
any solicitation; and 
(B) submit findings, which shall be advisory in nature, to the pro-
curing agency; and 
(3) evaluate compliance with subcontracting plans— 
(A) on a contract-by-contract basis; or 
(B) in the case of a contractor having multiple contracts, on an 
aggregate basis. 
§ 24304. Incentives 
Notwithstanding any other provision of law, a Federal agency, to encour-
age subcontracting opportunities for qualified HUBZone small business con-
cerns, small business concerns owned and controlled by service-disabled vet-
erans, small business concerns owned and controlled by socially and eco-
nomically disadvantaged individuals, small business concerns owned and 
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191 
controlled by veterans, small business concerns owned and controlled by 
women, and other small business concerns, may provide such incentives as 
the Federal agency considers appropriate to encourage such subcontracting 
opportunities as are commensurate with the efficient and economical per-
formance of a contract that is let pursuant to the negotiated method of pro-
curement. 
§ 24305. Liquidated damages 
(a) REQUIRED CLAUSE.— 
(1) IN GENERAL.—A contract subject to subsection (b) or (c) of sec-
tion 24303 of this title shall contain a clause for the payment of liq-
uidated damages on a finding that a prime contractor has failed to 
make a good faith effort to comply with the requirements imposed on 
the contractor by this chapter. 
(2) INCLUSION IN FEDERAL ACQUISITION REGULATION.—The clause 
required by paragraph (1) shall be made part of the Federal Acquisi-
tion Regulation and promulgated pursuant to section 22 of the Office 
of Federal Procurement Policy Act (41 U.S.C. 418b). 
(b) DEMONSTRATION OF GOOD FAITH EFFORT.—A contractor shall be 
afforded an opportunity to demonstrate a good faith effort regarding com-
pliance prior to the contracting officer’s final decision regarding the imposi-
tion of damages and the amount of damages under subsection (a). 
(c) DISPUTE RESOLUTION.—The final decision of a contracting officer re-
garding the contractor’s obligation to pay damages under subsection (a) or 
the amount of damages shall be subject to the Contract Disputes Act of 
1978 (41 U.S.C. 601 et seq.). 
§ 24306. Material breach 
The failure of a contractor or subcontractor to comply in good faith 
with— 
(1) the clause required under section 24301 of this title; or 
(2) a subcontracting plan required of the contractor pursuant under 
section 24303 of this title to be included in its contract or subcontract; 
shall be a material breach of the contract or subcontract. 
§ 24307. Effect of chapter 
Nothing in this chapter supersedes the requirements of part 331 of title 
44, Code of Federal Regulations (or any successor regulation). 
CHAPTER 245—NOTICE PROVISIONS 
Sec. 
24501.
Notice provisions. 
24502.
Availability of complete solicitation package. 
24503.
Limited applicability to Tennessee Valley Authority. 
§ 24501. Notice provisions 
(a) IN GENERAL.—Except as provided in subsection (e)— 
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(1) an executive agency intending to— 
(A) solicit bids or proposals for a contract for property or serv-
ices for a price expected to exceed $25,000; or 
(B) place an order, expected to exceed $25,000, under a basic 
agreement, basic ordering agreement, or similar arrangement; 
shall publish a notice described in subsection (d); 
(2) an executive agency intending to solicit bids or proposals for a 
contract for property or services shall post, for a period of not less than 
10 days, in a public place at the contracting office issuing the solicita-
tion, a notice of solicitation described in subsection (d)— 
(A) in the case of an executive agency other than the Depart-
ment of Defense, if the contract is for a price expected to exceed 
$10,000, but not to exceed $25,000; and 
(B) in the case of the Department of Defense, if the contract 
is for a price expected to exceed $5,000, but not to exceed 
$25,000; and 
(3) an executive agency awarding a contract for property or services 
for a price exceeding $100,000, or placing an order described in para-
graph (1)(B) exceeding $100,000, shall furnish for publication by the 
Secretary of Commerce a notice announcing the award or order if there 
is likely to be a subcontract under the contract or order. 
(b) MEANS OF PUBLICATION.— 
(1) NOTICES OF SOLICITATION.—A notice of solicitation required to 
be published under subsection (a) may be published by electronic 
means that meet the accessibility requirements under section 18(a)(7) 
of the Office of Federal Procurement Policy Act (41 U.S.C. 416(a)(7)). 
(2) NOTICES OF SUBCONTRACTING OPPORTUNITY.— 
(A) IN GENERAL.—A notice of subcontracting opportunity may 
be submitted for publication by— 
(i) a business concern awarded a contract by an executive 
agency subject to subsection (a)(3); and 
(ii) a business concern that is a subcontractor or supplier 
(at any tier) to such a business concern having a subcon-
tracting opportunity in excess of $10,000. 
(B) CONTENTS.—A notice of a subcontracting opportunity shall 
include— 
(i) a description of the business opportunity that is com-
parable to the description specified in subparagraphs (A), 
(B), (C), and (D) of subsection (d)(1); and 
(ii) the due date for receipt of offers. 
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(C) UNIFORM
IMPLEMENTATION.—The Federal Acquisition 
Regulation shall provide for uniform implementation of this para-
graph. 
(c) LIMITATIONS.—When an executive agency is required by subsection 
(a)(1) to publish a notice of solicitation, the executive agency shall not— 
(1) issue the solicitation earlier than 15 days after the date on which 
the notice is published; or 
(2) in the case of a contract or order estimated to be greater than 
the simplified acquisition threshold, establish a deadline for the submis-
sion of all bids or proposals in response to the notice required by sub-
section (a)(1) that— 
(A) in the case of an order under a basic agreement, basic or-
dering agreement, or similar arrangement, is earlier than the date 
that is 30 days after the date on which the notice required by sub-
section (a)(1)(B) is published; 
(B) in the case of a solicitation for research and development, 
is earlier than the date that is 45 days after the date on which 
the notice required by subsection (a)(1)(A) is published; or 
(C) in any other case, is earlier than the date that is 30 days 
after the date on which the solicitation is issued. 
(d) CONTENTS OF NOTICE.— 
(1) IN GENERAL.—A notice of solicitation required by paragraph (1) 
or (2) of subsection (a) shall include— 
(A) an accurate description of the property or services to be 
contracted for; 
(B) provisions that— 
(i)(I) state whether the technical data required to respond 
to the solicitation will not be furnished as part of the solicita-
tion; and 
(II) identify the source in the Government, if any, from 
which the technical data may be obtained; and 
(ii)(I) state whether an offeror, its product, or service must 
meet a qualification requirement in order to be eligible for 
award; and 
(II) if so, identify the office from which a qualification re-
quirement may be obtained; 
(C) the name, business address, and telephone number of the 
contracting officer; 
(D) a statement that all responsible sources may submit a bid, 
proposal, or quotation (as appropriate) that shall be considered by 
the agency; 
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(E) in the case of a procurement using procedures other than 
competitive procedures, a statement of the reason justifying the 
use of such procedures and the identity of the intended source; 
and 
(F) in the case of a contract in an amount estimated to be 
greater than $25,000 but not greater than the simplified acquisi-
tion threshold— 
(i) a description of the procedures to be used in awarding 
the contract; and 
(ii) a statement specifying the periods for prospective 
offerors and the contracting officer to take the necessary 
preaward and award actions. 
(2) PROPERTY OR SERVICE DESCRIPTION.—A property or service de-
scription under paragraph (1)(A)— 
(A) shall not be unnecessarily restrictive of competition; and 
(B) shall include, as appropriate, the agency nomenclature, Na-
tional Stock Number or other part number, and a brief description 
of the item’s form, fit, or function, physical dimensions, predomi-
nant material of manufacture, or similar information that will as-
sist a prospective contractor in making an informed business judg-
ment concerning whether the prospective contractor should request 
a copy of the solicitation. 
(e) EXEMPTED ACTIVITIES.—A notice is not required under subsection 
(a)(1) if— 
(1) the proposed procurement— 
(A) is for an amount not greater than the simplified acquisition 
threshold; and 
(B) is to be conducted by— 
(i) using widespread electronic public notice of the solicita-
tion in a form that allows convenient and universal user ac-
cess through a single, Governmentwide point of entry; and 
(ii) permitting the public to respond to the solicitation elec-
tronically; 
(2)(A) the notice would disclose the executive agency’s needs; and 
(B) the disclosure of those needs would compromise the national se-
curity; 
(3)(A) the proposed procurement would result from acceptance of an 
unsolicited proposal that demonstrates a unique and innovative re-
search concept; and 
(B) the publication of a notice of the unsolicited research proposal 
would disclose the originality of thought or innovativeness of the pro-
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posal or would disclose proprietary information associated with the pro-
posal; 
(4) the proposed procurement would result from acceptance of a pro-
posal submitted under chapter 263; 
(5) the procurement is made against an order placed under a re-
quirements contract; 
(6) the procurement is made for perishable subsistence supplies; 
(7)(A) the procurement is for a utility service other than a tele-
communication service; and 
(B) only one source is available; or 
(8) the procurement is for the service of an expert for use in any 
litigation or dispute (including preparation for any foreseeable litigation 
or dispute) that involves or could involve the Federal Government in 
any trial, hearing, or proceeding before any court, administrative tri-
bunal, or agency, or in any part of an alternative dispute resolution 
process, whether or not the expert is expected to testify. 
§ 24502. Availability of complete solicitation package 
(a) IN GENERAL.—An executive agency shall make available to any busi-
ness concern, or the authorized representative of a business concern, the 
complete solicitation package for any ongoing procurement announced in a 
notice under section 24501 of this title. 
(b) FEE.—An executive agency may require the payment of a fee, not ex-
ceeding the actual cost of duplication, for a copy of a solicitation package 
under subsection (a). 
§ 24503. Limited applicability to Tennessee Valley Authority 
This chapter applies to the Tennessee Valley Authority only with respect 
to procurements to be paid from appropriated funds. 
CHAPTER 247—NONCOMPETITIVE PROCEDURES 
Sec. 
24701.
Limitation on use of noncompetitive procedures. 
24702.
Limited applicability to Tennessee Valley Authority. 
§ 24701. Limitation on use of noncompetitive procedures 
(a) IN GENERAL.—An executive agency may not award a contract using 
procedures other than competitive procedures unless— 
(1) except as provided in subsection (c), a written justification for 
the use of noncompetitive procedures has been approved— 
(A) in the case of a contract for an amount exceeding $100,000 
(but equal to or less than $1,000,000), by the advocate for com-
petition for the procurement activity; 
(B) in the case of a contract for an amount exceeding 
$1,000,000 (but equal to or less than $10,000,000), by the head 
of the procurement activity or a delegate who— 
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(i) if a member of the Armed Forces, is a general or flag 
officer; or 
(ii) if a civilian, is serving in a position classified above 
GS–15 pursuant to section 5108 of title 5; or 
(C) in the case of a contract for an amount exceeding 
$10,000,000, by the senior procurement executive of the agency 
designated pursuant to section 16(c) of the Office of Federal Pro-
curement Policy Act (41 U.S.C. 414(c)); and 
(2) all other requirements applicable to the use of noncompetitive 
procedures under title III of the Federal Property and Administrative 
Services Act of 1949 (41 U.S.C. 251 et seq.) or chapter 137 of title 
10, as appropriate, have been satisfied. 
(b) NONDELEGABILITY.—The authority of an advocate for competition to 
approve the use of noncompetitive procedures under subsection (a)(1)(A) 
and the authority of a senior procurement executive to approve the use of 
noncompetitive procedures under subsection (a)(1)(C) may not be delegated. 
(c) EXCEPTIONS.—The same exceptions as are provided in section 
303(f)(2) of the Federal Property and Administrative Services Act of 1949 
(41 U.S.C. 253(f)(2)) or section 2304(f)(2) of title 10 shall apply with re-
spect to the requirements of subsection (a)(1) of this section in the same 
manner as those exceptions apply to the requirements of section 303(f)(1) 
of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 
253(f)(1)) or section 2304(f)(1) of title 10, as appropriate. 
§ 24702. Limited applicability to Tennessee Valley Authority 
This chapter applies to the Tennessee Valley Authority only with respect 
to procurements to be paid from appropriated funds. 
CHAPTER 249—SMALL BUSINESS COMPETITIVENESS 
DEMONSTRATION PROGRAM 
Sec. 
24901.
Definitions. 
24902.
Establishment of program. 
24903.
Enhanced small business participation goals. 
24904.
Procurement procedures. 
24905.
Reporting and collection of data. 
24906.
Test plan and policy direction. 
§ 24901. Definitions 
In this chapter: 
(1) DESIGNATED INDUSTRY GROUP.— 
(A) IN
GENERAL.—The term ‘‘designated industry group’’ 
means— 
(i) construction (excluding dredging); 
(ii) refuse systems and related services; 
(iii) architectural and engineering services (including sur-
veying and mapping); 
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(iv) non-nuclear ship repair; and 
(v) landscaping and pest control services. 
(B) CONSTRUCTION.—In subparagraph (A)(i), the term ‘‘con-
struction’’ includes a contract award that is assigned a North 
American Industry Classification System code in— 
(i) Subsector 236 (Construction of Buildings); 
(ii) Subsector 237 (Heavy and Civil Engineering Construc-
tion) (excluding dredging); or 
(iii) Subsector 238 (Specialty Trade Contractors). 
(C) REFUSE
AND
RELATED
SERVICES.—In subparagraph 
(A)(ii), the term ‘‘refuse systems and related services’’ includes a 
contract award that is assigned— 
(i) a North American Industry Classification System code 
in Subsector 562 (Waste Management and Remediation Serv-
ices) except code 56291; 
(ii) North American Industry Classification System code 
48411 (index item ‘‘local general freight trucking without 
storage’’ only); 
(iii) North American Industry Classification System code 
48421 (index item ‘‘household goods moving without storage’’ 
only); or 
(iv) North American Industry Classification System code 
48422 (index item ‘‘local specialized freight without storage’’ 
only). 
(D) ARCHITECTURAL AND ENGINEERING SERVICES.—In sub-
paragraph (A)(iii), the term ‘‘architectural and engineering serv-
ices (including surveying and mapping)’’ includes a contract award 
that— 
(i) is assigned North American Industry Classification Sys-
tem code 54131, 54133 (except index item ‘‘traffic engineer-
ing’’), 54136 (index item ‘‘geophysical surveying services’’ 
only), or 54137; and 
(ii) is awarded under the qualification-based selection pro-
cedures required by sections 1101 to 1104 of title 40. 
(E) LANDSCAPING AND PEST CONTROL SERVICES.—In subpara-
graph (A)(v), the term ‘‘landscaping and pest control services’’ in-
cludes a contract award that is assigned North American Industry 
Classification System code 561710 (relating to extermination and 
pest control services) or 561730 (relating to landscaping services). 
(2) EMERGING SMALL BUSINESS CONCERN.—The term ‘‘emerging 
small business concern’’ means a small business concern whose size is 
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not greater than 50 percent of the numerical size standard applicable 
to the North American Industry Classification System code assigned to 
a contracting opportunity. 
(3) ENHANCED SMALL BUSINESS PARTICIPATION GOAL.—The term 
‘‘enhanced small business participation goal’’, with respect to a partici-
pating agency, means an enhanced small business participation goal es-
tablished for the participating agency under section 24903 of this title. 
(4) FULL AND OPEN COMPETITION.—The term ‘‘full and open com-
petition’’ has the meaning given the term in section 4 of the Office of 
Federal Procurement Policy Act (41 U.S.C. 403). 
(5) PARTICIPATING AGENCY.— 
(A) IN GENERAL.—The term ‘‘participating agency’’ means an 
executive agency (as defined in section (4) of the Office of Federal 
Procurement Policy Act (41 U.S.C. 403)) that the Administrator 
for Federal Procurement Policy designates to participate in the 
program. 
(B) EXECUTIVE AGENCIES REQUIRED TO BE DESIGNATED.— 
Under subparagraph (A), the Administrator for Federal Procure-
ment Policy shall designate to participate in the program— 
(i) the Department of Agriculture; 
(ii) the Department of Defense (with the Department of 
the Army, the Department of the Navy, the Department of 
the Air Force, and the defense agencies reporting separately); 
(iii) the Department of Energy; 
(iv) the Department of Health and Human Services; 
(v) the Department of the Interior; 
(vi) the Department of Transportation; 
(vii) the Environmental Protection Agency; 
(viii) the General Services Administration (with the Public 
Building Service reporting separately); 
(ix) the National Aeronautics and Space Administration; 
and 
(x) the Department of Veterans Affairs. 
(C) REPORTING.—The Administrator for Federal Procurement 
Policy may require any participating agencies to report separately 
in any manner that the Administrator for Federal Procurement 
Policy considers appropriate to enhance the attainment of the test 
activities authorized by this chapter. 
(6) PROGRAM.—The term ‘‘program’’ means the small business com-
petitiveness demonstration program. 
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(7) SMALL BUSINESS PARTICIPATION.—The term ‘‘small business 
participation’’ includes the aggregate dollar value of every procurement 
contract award made to a small business concern, without regard to 
whether an award was based on restricted or unrestricted competition 
or was made on a sole source basis. 
§ 24902. Establishment of program 
(a) IN GENERAL.—There is established a small business competitiveness 
demonstration program under section 15 of the Office of Federal Procure-
ment Policy Act (41 U.S.C. 413) to provide for the testing of innovative 
procurement methods and procedures. 
(b) EXECUTIVE AGENT.—The Administrator of Federal Procurement Pol-
icy shall designate the Administrator as the executive agent responsible for 
conducting the testing. 
(c) PURPOSE.—The purpose of the program is to demonstrate whether— 
(1) the competitive capabilities of small business concerns in certain 
industry groups will enable the small business concerns to compete suc-
cessfully on an unrestricted basis for Federal contracting opportunities; 
(2) the use of targeted goaling and management techniques by pro-
curing agencies, in conjunction with the Administrator, can expand 
small business participation in Federal contracting opportunities that 
have been historically low, despite adequate numbers of qualified small 
business contractors in the economy; and 
(3) expanded use of full and open competition adversely affects small 
business participation in certain industry groups, taking into consider-
ation the numerical dominance of small firms, the size and scope of 
most contracting opportunities, and the competitive capabilities of 
small business concerns. 
(d) APPLICABILITY.—The program shall apply to contract solicitations for 
the procurement of services in the designated industry groups. 
§ 24903. Enhanced small business participation goals 
(a) ENHANCED GOALS FOR DESIGNATED INDUSTRY GROUPS.— 
(1) ESTABLISHMENT OF GOALS.—A participating agency shall estab-
lish an annual small business participation goal that is 40 percent of 
the dollar value of the contract awards for each of the designated in-
dustry groups. 
(2) GOOD FAITH EFFORT.—In attaining its small business participa-
tion goal for contract awards for each of the designated industry 
groups, a participating agency shall make a good faith effort to ensure 
that emerging small business concerns are awarded not less than 15 
percent of the dollar value of the contract awards for each of the des-
ignated industry groups. 
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(b) SPECIAL
ASSISTANCE
FOR
EMERGING
SMALL
BUSINESS
CON-
CERNS.— 
(1) SMALL BUSINESS RESERVE.—All contract opportunities in the 
designated industry groups shall be reserved for exclusive competition 
among emerging small business concerns in accordance with the com-
petition standard specified in section 25108 of this title if the esti-
mated award value of the contract is equal to or less than the greater 
of— 
(A) $25,000; or 
(B) such larger dollar amount as may be established under 
paragraph (2). 
(2) ADJUSTMENTS TO THE SMALL BUSINESS RESERVE.—If the goal 
of awarding emerging small business concerns 15 percent of the total 
dollar value of contracts in a designated industry group is determined 
not to have been attained, on the review of award data conducted in 
accordance with subsection (d)(1), the Administrator for Federal Pro-
curement Policy, to ensure attainment of the goal, shall prescribe, on 
a semiannual basis, appropriate adjustments to the dollar threshold for 
contract opportunities in that designated industry group below which 
competition shall be conducted exclusively among emerging small busi-
ness concerns. 
(3) SMALL
BUSINESS
SMALL
PURCHASE
RESERVE.—The require-
ments of this subsection dealing with the reserve amount shall apply 
notwithstanding the amount specified in section 25108 of this title. 
(4) EXCLUSION OF MODIFICATIONS TO EXISTING CONTRACTS ABOVE 
THE SMALL PURCHASE THRESHOLD.—Any modification or follow-on 
award to a contract having an initial award value in excess of $25,000 
shall not be subject to the limitations on competition required by this 
subsection. 
(c) TARGETING OF INDUSTRY GROUPS WITH LIMITED SMALL BUSINESS 
PARTICIPATION.— 
(1) IN GENERAL.—The head of a participating agency shall imple-
ment a program to expand small business participation in the partici-
pating agency’s acquisition of selected products and services in 10 in-
dustry groups (other than the designated industry groups) that have 
historically demonstrated low rates of small business participation. 
(2) DEVELOPMENT.—The products and services to be targeted for 
the small business participation expansion program and the special 
goals for the program— 
(A) shall be developed in conjunction with the Administrator; 
and 
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(B) shall be subject to the requirements of section 25106 of this 
title. 
(3) PRODUCTS AND SERVICES.—The products and services selected 
for the small business participation expansion program shall be drawn 
from industry groups that— 
(A) are the recipients of substantial purchases by the Federal 
Government; 
(B) have less than 10 percent of such annual purchases made 
from small business concerns; and 
(C) have significant amounts of small business productive ca-
pacity that have not been utilized by the Government. 
(4) REQUIREMENTS.—In developing its small business participation 
expansion program, a participating agency shall— 
(A) provide the Administrator a detailed, time-phased strategy 
that includes incremental numerical goals; and 
(B) encourage and promote joint ventures, teaming agreements, 
and other similar arrangements that permit small business con-
cerns to compete effectively for contract solicitations for which an 
individual small business concern would lack the requisite capacity 
or capability needed to establish responsibility for the award of a 
contract. 
(d) MONITORING OF PARTICIPATING AGENCY PERFORMANCE.— 
(1) IN GENERAL.—A participating agency shall monitor the attain-
ment of its small business participation goals on an annual basis. An 
annual review by each participating agency shall be completed not later 
than January 31 of each year, based on the data for the preceding fis-
cal year, from October 1 through September 30. 
(2) COUNTING OF AWARDS.—All awards to small business concerns 
shall be counted toward attainment of the goals specified in subsection 
(a). 
(3) MODIFICATIONS.—If an annual review discloses that the rate of 
small business participation is less than 40 percent of the contract 
awards for a fiscal year, modifications to a participating agency’s solici-
tation practices under section 24904(b) of this title shall be made at 
the beginning of the fiscal year quarter following the review. 
§ 24904. Procurement procedures 
(a) FULL AND OPEN COMPETITION.— 
(1) IN GENERAL.—Except as provided in subsections (b) and (c), a 
contract opportunity with an anticipated value of more than $25,000 
for the procurement of services from firms in a designated industry 
group (unless set aside under chapter 233 of this title or section 2323 
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of title 10) shall be solicited on an unrestricted basis if the partici-
pating agency has attained its small business participation goal under 
section 24903(a) of this title. 
(2) WAIVER OF REGULATORY REQUIREMENTS.—Any regulatory re-
quirements that are inconsistent with paragraph (1) shall be waived. 
(b) RESTRICTED COMPETITION.— 
(1) IN GENERAL.—If a participating agency fails to attain an en-
hanced small business participation goal, subsequent contracting oppor-
tunities that are in excess of the reserve thresholds specified under sec-
tion 24903(b) of this title shall be solicited through a competition re-
stricted to eligible small business concerns under section 25101 of this 
title only at the buying activities of the participating agency that failed 
to attain the enhanced small business participation goal. 
(2) RESUMATION
OF
UNRESTRICTED
COMPETITION.—On deter-
mining that its contract awards to small business concerns again meet 
an enhanced small business participation goal, a participating agency 
shall promptly resume the use of unrestricted solicitations under sub-
section (a). 
(3) TIMING.—A modification in the solicitation practices of a partici-
pating agency under this subsection shall be made as soon as prac-
ticable, but not later than the beginning of the quarter following com-
pletion of the review made under section 24903(d) of this title indi-
cating that a modification to the solicitation practices is required. 
(c) RELATIONSHIP TO OTHER LAW.— 
(1) COMPETITION IN CONTRACTING ACT OF 1984.—Subsections (a) 
and (b) do not supersede the application of the Competition in Con-
tracting Act of 1984 (98 Stat. 1175) (including the amendments made 
by that Act). 
(2) OTHER APPLICABLE LAW.—A solicitation for the award of a con-
tract for architectural or engineering service (including surveying and 
mapping) issued by a military department or a Defense agency shall 
comply with the requirements of subsections (a) and (b) of section 
2855 of title 10. 
§ 24905. Reporting and collection of data 
(a) AWARDS OF $25,000 OR LESS.—An award of $25,000 or less made 
by a participating agency for the procurement of a service in any designated 
industry group shall be reported to the Federal Procurement Data Center 
in the same manner as if the purchase were in excess of $25,000. 
(b) SIZE AND STATUS OF SMALL BUSINESS CONCERNS.—A participating 
agency shall collect data pertaining to the size of the small business concern 
and the status of the small business concern (as a small business concern 
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203 
owned and controlled by socially and economically disadvantaged individ-
uals) that receives any award for the procurement of— 
(1) a service in any designated industry group; or 
(2) a product or service from an industry group selected for partici-
pation in the program under section 24903(c) of this title. 
§ 24906. Test plan and policy direction 
(a) TEST PLAN.—The Administrator for Federal Procurement Policy may 
further specify the manner and conduct of the test activities required by this 
chapter through a test plan issued under section 15 of the Office of Federal 
Procurement Policy Act (41 U.S.C. 413). 
(b) POLICY DIRECTION.—The Administrator for Federal Procurement 
Policy, in cooperation with the Administrator, shall issue a policy directive 
(which shall be binding on all participating agencies) to ensure consistent 
Governmentwide implementation of this chapter in the Federal Acquisition 
Regulation. 
DIVISION G—CONTRACT RESERVATION 
PROGRAMS 
CHAPTER 251—GENERAL PROVISIONS 
Sec. 
25101.
Awards of contracts to small business concerns. 
25102.
Placement of contracts by procuring agency. 
25103.
Disabled individuals. 
25104.
Priority for areas of concentrated unemployment or underemployment and for labor 
surplus areas. 
25105.
Procurement strategies; contract bundling. 
25106.
Goals for participation by small business concerns in procurement contracts. 
25107.
No effect on certain small business setasides. 
25108.
Mandatory contract reservation. 
25109.
Offices of Small and Disadvantaged Business Utilization. 
25110.
Breakout procurement center representatives. 
25111.
Department of Defense, Coast Guard, and National Aeronautics and Space Adminis-
tration contract goals. 
25112.
Actions by procurement center representatives to ensure compliance. 
25113.
Percentages of contract performance. 
§ 25101. Awards of contracts to small business concerns 
(a) IN GENERAL.—Subject to subsection (b), a small business concern 
shall receive any award or contract (or any part of an award or contract), 
and be awarded any contract for the sale of Government property, as to 
which the Administrator and the contracting procurement or disposal agen-
cy determine it to be in the interest of— 
(1) maintaining or mobilizing the Nation’s full productive capacity; 
(2) war or national defense programs; 
(3) ensuring that a fair proportion of the total purchases and con-
tracts for property and services for the Government in each industry 
category are placed with small business concerns; or 
(4) ensuring that a fair proportion of the total sales of Government 
property be made to small business concerns. 
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(b) NO CHANGE IN PREFERENCES OR PRIORITIES.—Nothing in this sub-
title changes any preference or priority established by law with respect to 
the sale of electric power or other property by the Government or any Gov-
ernment agency. 
(c) DETERMINATIONS.—A determination under subsection (a) may be 
made for individual awards or contracts or for classes of awards or con-
tracts. 
(d) INDUSTRY CATEGORIES.— 
(1) IN GENERAL.—For purposes of subsection (a)(3), an industry 
category is a discrete group of similar goods and services. 
(2) DETERMINATION.—A discrete group of similar goods and serv-
ices shall be determined by the Administrator in accordance with the 
definition of a United States industry under the North American In-
dustry Classification System, as established by the Office of Manage-
ment and Budget, except that the Administrator shall limit such an in-
dustry category to a greater extent than provided under the North 
American Industry Classification System if the Administrator receives 
evidence indicating that further segmentation for purposes of sub-
section (a)(3) is warranted due to special capital equipment needs or 
special labor or geographic requirements or to recognize a new indus-
try. 
(3) LIMITATION.—A market for goods or services may not be seg-
mented under paragraph (2) due to geographic requirements unless— 
(A) the Government typically designates the area where work 
for contracts for such goods or services is to be performed; 
(B) Government purchases comprise the major portion of the 
entire domestic market for such goods or services; and 
(C) due to the fixed location of facilities, high mobilization 
costs, or similar economic factors, it is unreasonable to expect 
competition from business concerns located outside the general 
areas where the business concerns are located. 
(4) SEGMENTATION OF INDUSTRY CATEGORY OF SHIPBUILDING AND 
SHIP REPAIR.—The Administrator shall segment the industry category 
of shipbuilding and ship repair as follows: 
(A) Nuclear shipbuilding and repair. 
(B) Non-nuclear shipbuilding. 
(C) Non-nuclear ship repair, which shall be further segmented 
by, at least, east coast and west coast facilities. 
(e) AVOIDANCE OF CONTRACT BUNDLING.—To foster the participation of 
small business concerns in the contracting opportunities of the Government, 
a Federal agency, to the maximum extent practicable, shall— 
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(1) foster the participation of small business concerns as prime con-
tractors, subcontractors, and suppliers; 
(2) structure its contracting requirements to facilitate competition by 
and among small business concerns, taking all reasonable steps to 
eliminate obstacles to participation by small business concerns; and 
(3) avoid unnecessary and unjustified bundling of contract require-
ments that precludes participation by small business in procurements 
as prime contractors. 
(f) PROPOSED PROCUREMENTS THAT MAKE PARTICIPATION BY SMALL 
BUSINESS CONCERNS UNLIKELY.— 
(1) NOTIFICATION
OF
SMALL
BUSINESS
PROCUREMENT
CENTER 
REPRESENTATIVE.—If— 
(A)(i) a proposed procurement includes in its statement of work 
a good or service currently being performed by a small business 
concern; and 
(ii) the proposed procurement is in a quantity or estimated dol-
lar value the magnitude of which renders prime contract participa-
tion by small business concerns unlikely; 
(B) a proposed procurement for construction seeks to package 
or consolidate discrete construction projects; or 
(C) a solicitation involves an unnecessary or unjustified bun-
dling of contract requirements, as determined by the Adminis-
trator; 
the procurement activity shall, at least 30 days before issuance of the 
solicitation, provide to the procurement activity’s small business pro-
curement center representative a copy of the proposed procurement and 
a statement of explanation. 
(2) CONTENTS OF STATEMENT OF EXPLANATION.—A statement of 
explanation under paragraph (1) shall explain— 
(A) why the proposed acquisition cannot be divided into reason-
ably small lots (not less than economic production runs) to permit 
offers on quantities less than the total requirement; 
(B) why delivery schedules cannot be established on a realistic 
basis that will encourage participation by small business concerns 
to the extent consistent with the actual requirements of the Gov-
ernment; 
(C) why the proposed acquisition cannot be offered so as to 
make participation by small business concerns likely; 
(D) why construction cannot be procured as separate discrete 
projects; or 
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(E) why the procurement activity determined that the bundled 
contract is necessary and justified. 
(3) CONCURRENT PROCESS.—The 30-day notification process shall 
occur concurrently with other processing steps required before issuance 
of the solicitation. 
(4) ALTERNATIVE PROCUREMENT METHODS.—Within 15 days after 
receipt of the proposed procurement and statement of explanation, if 
the procurement center representative believes that the procurement as 
proposed will render prime contract participation by small business 
concerns unlikely, the procurement center representative shall rec-
ommend to the procurement activity alternative procurement methods 
that would increase prime contracting opportunities for small business 
concerns. 
(5) FAILURE TO AGREE.—If the Administrator and the contracting 
procurement agency fail to agree, the Administrator shall appeal the 
matter to the head of the appropriate Federal agency for determina-
tion. 
(g) FAIR MARKET PRICE.—A contract may not be awarded under this 
section if the award of the contract would result in a cost to the procure-
ment activity that exceeds a fair market price. 
§ 25102. Placement of contracts by procuring agency 
With respect to any work to be performed the amount of which would 
exceed the maximum amount of a contract for which a surety may be guar-
anteed against loss under section 32102 of this title, the contracting pro-
curement agency shall, to the extent practicable, place contracts so as to 
allow more than one small business concern to perform the work. 
§ 25103. Disabled individuals 
(a) DEFINITION OF COMMITTEE.—In this section, the term ‘‘Committee’’ 
means the Committee for Purchase From People Who Are Blind or Severely 
Disabled established under the first section of the Act of June 25, 1938 
(41 U.S.C. 46). 
(b) PARTICIPATION.— 
(1) IN GENERAL.—During fiscal year 1995, public or private organi-
zations for the disabled shall be eligible to participate in programs au-
thorized under this chapter in an aggregate amount not to exceed 
$40,000,000. 
(2) PROCUREMENT LIST.—None of the amounts authorized for par-
ticipation by paragraph (1) may be placed on the procurement list 
maintained by the Committee under section 2 of the Act of June 25, 
1938 (41 U.S.C. 47). 
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(c) MONITORING AND EVALUATION.—The Administrator shall monitor 
and evaluate participation under subsection (b). 
(d) APPEAL.— 
(1) FILING.—Not later than 10 days after the announcement of a 
proposed award of a contract by a Federal agency to a public or private 
organization for the disabled, a for-profit small business concern that 
has experienced or is likely to experience severe economic injury as the 
result of the proposed award may file an appeal of the proposed award 
with the Administrator. 
(2) ALLEVIATION OF INJURY.—If a small business concern files an 
appeal of a proposed award under paragraph (1) and the Adminis-
trator, after consultation with the Executive Director of the Committee, 
finds that the small business concern has experienced or is likely to ex-
perience severe economic injury as the result of the proposed award, 
not later than 30 days after the filing of the appeal, the Administrator 
shall require each Federal agency having procurement powers to take 
such action as is appropriate to alleviate economic injury sustained or 
likely to be sustained by the small business concern. 
(e) MAXIMUM AMOUNT OF AWARDS.— 
(1) REPORTING.—A Federal agency having procurement powers 
shall report to the Office of Federal Procurement Policy each time a 
contract subject to subsection (b) is entered into and shall include in 
its report the amount of the next higher bid submitted by a for-profit 
small business concern. 
(2) DATA COLLECTION.—The Office of Federal Procurement Policy 
shall collect data reported under paragraph (1) through the Federal 
procurement data system and shall report the data to the Adminis-
trator. 
(3) NOTIFICATION.—The Administrator shall notify all Federal 
agencies having procurement powers when the maximum amount of 
awards authorized under subsection (b) has been made during any fis-
cal year. 
(f) CONTRACT PERFORMANCE BY DISABLED INDIVIDUALS.—A contract 
may be awarded under this section only if at least 75 percent of the direct 
labor performed on each item being produced under the contract in a shel-
tered workshop or performed in providing each type of service under the 
contract by a sheltered workshop is performed by disabled individuals. 
(g) MULTIYEAR CONTRACTS.—A Federal agency that awards one or more 
contracts to such a public or private organization for the disabled under this 
section may use multiyear contracts, if appropriate. 
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§ 25104. Priority for areas of concentrated unemployment or 
underemployment and for labor surplus areas 
(a) IN GENERAL.—For purposes of this chapter, priority shall be given 
to the awarding of contracts and the placement of subcontracts to small 
business concerns that shall perform a substantial proportion of the produc-
tion on the contracts and subcontracts in— 
(1) an area of concentrated unemployment or underemployment; or 
(2) a labor surplus area. 
(b) SETASIDES.— 
(1) IN GENERAL.—Notwithstanding any other provision of law, total 
labor surplus area setasides under part 331 of title 44, Code of Federal 
Regulations (or any successor regulation), shall be authorized if the 
Secretary of Defense specifically determines that there is a reasonable 
expectation that offers will be obtained from a sufficient number of eli-
gible concerns so that awards will be made at reasonable prices. 
(2) DETERMINATION OF LABOR SURPLUS AREAS.— 
(A) CONSIDERATION
OF
PERSONS
AVAILABLE
FOR
EMPLOY-
MENT.—To the extent possible, in determining labor surplus areas, 
consideration shall be given to persons who would be available for 
employment were suitable employment available. 
(B) CRITERIA IN EFFECT.—For purposes of this chapter, the 
determination of a labor surplus area shall be made on the basis 
of the criteria in effect at the time of the determination, except 
that any minimum population criteria shall not exceed 25,000. 
(C) DETERMINATION BY SECRETARY OF LABOR.—A determina-
tion of a labor surplus area shall be made by the Secretary of 
Labor. 
§ 25105. Procurement strategies; contract bundling 
(a) IN GENERAL.—To the maximum extent practicable, procurement 
strategies used by a Federal agency having contracting authority shall facili-
tate the maximum participation of small business concerns as prime con-
tractors, subcontractors, and suppliers. 
(b) MARKET RESEARCH.— 
(1) IN GENERAL.—Before proceeding with an acquisition strategy 
that could lead to a contract containing consolidated procurement re-
quirements, the head of a Federal agency shall conduct market re-
search to determine whether consolidation of the requirements is nec-
essary and justified. 
(2) FACTORS.—For purposes of paragraph (1), consolidation of the 
requirements may be determined as being necessary and justified if, as 
compared with the benefits that would be derived from contracting to 
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meet those requirements if not consolidated, the Federal Government 
would derive from the consolidation measurably substantial benefits, in-
cluding any combination of benefits that, in combination, are measur-
ably substantial. 
(3) BENEFITS.—Benefits described in paragraph (2) may include— 
(A) cost savings; 
(B) quality improvements; 
(C) reduction in acquisition cycle times; 
(D) better terms and conditions; or 
(E) any other benefit. 
(4) REDUCTION OF ADMINISTRATIVE OR PERSONNEL COSTS NOT A 
SUFFICIENT
JUSTIFICATION.—A reduction of administrative or per-
sonnel costs alone shall not be a justification for bundling of contract 
requirements unless the cost savings are expected to be substantial in 
relation to the dollar value of the procurement requirements to be con-
solidated. 
(c) STRATEGY SPECIFICATIONS.—If the head of a procuring agency de-
termines that a proposed procurement strategy for a procurement involves 
a substantial bundling of contract requirements, the proposed procurement 
strategy shall— 
(1) identify specifically the benefits anticipated to be derived from 
the bundling of contract requirements; 
(2) set forth an assessment of the specific impediments to participa-
tion by small business concerns as prime contractors that result from 
the bundling of contract requirements and specify actions designed to 
maximize small business participation as subcontractors (including sup-
pliers) at various tiers under the contract or contracts that are award-
ed to meet the requirements; and 
(3) include a specific determination that the anticipated benefits of 
the proposed bundled contract justify its use. 
(d) CONTRACT TEAMING.— 
(1) IN GENERAL.—In the case of a solicitation of offers for a bun-
dled contract that is issued by the head of a Federal agency, a small 
business concern may submit an offer that provides for use of a par-
ticular team of subcontractors for the performance of the contract. 
(2) EVALUATION.—The head of the Federal agency shall evaluate 
the offer in the same manner as other offers, with due consideration 
to the capabilities of all of the proposed subcontractors. 
(3) NO
EFFECT
ON
STATUS
AS
SMALL
BUSINESS
CONCERN.— 
Teaming by a small business concern under this subsection shall not 
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affect the status of the small business concern as a small business con-
cern for any other purpose. 
(e) DATABASE
AND ANALYSIS WITH RESPECT
TO BUNDLED CON-
TRACTS.— 
(1) DATABASE.—The Administrator shall maintain a database con-
taining information regarding— 
(A) each bundled contract awarded by a Federal agency; and 
(B) each small business concern that has been displaced as a 
prime contractor as a result of the award of a bundled contract. 
(2) ANALYSIS.—For each bundled contract that is to be recompeted 
as a bundled contract, the Administrator shall determine— 
(A) the amount of savings and benefits (in accordance with sub-
section (b)) achieved under the bundling of contract requirements; 
and 
(B) whether such savings and benefits will continue to be real-
ized if the contract remains bundled, and whether such savings 
and benefits would be greater if the procurement requirements 
were divided into separate solicitations suitable for award to small 
business concerns. 
(3) ACCESS TO DATA.— 
(A) FEDERAL PROCUREMENT DATA SYSTEM.—To assist in the 
implementation of this subsection and section 10706 of this title, 
the Administrator shall have access to information collected 
through the Federal Procurement Data System. 
(B) AGENCY PROCUREMENT DATA SOURCES.—To assist in the 
implementation of this subsection and section 10706 of this title, 
the head of each procuring agency shall provide, on request of the 
Administrator, procurement information collected through existing 
agency data collection sources. 
§ 25106.
Goals for participation by small business concerns 
in procurement contracts 
(a) GOVERNMENTWIDE GOALS.— 
(1) IN GENERAL.—The President shall annually establish Govern-
mentwide goals for procurement contracts awarded 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 economi-
cally disadvantaged individuals, small business concerns owned and 
controlled by women, and other small business concerns). 
(2) OVERALL GOAL.—The overall Governmentwide goal for participa-
tion by small business concerns shall be established at not less than 
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23 percent of the total value of all prime contract awards for each fis-
cal year. 
(3) GOALS FOR SPECIFIC TYPES OF SMALL BUSINESS CONCERN.— 
(A) QUALIFIED HUBZONE SMALL BUSINESS CONCERNS.—The 
Governmentwide goal for participation by qualified HUBZone 
small business concerns shall be established at not less than 3 per-
cent of the total value of all prime contract 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.—Notwithstanding the Governmentwide goal, 
each 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 busi-
ness concerns, small business concerns owned and controlled by 
service-disabled veterans, small business concerns owned and con-
trolled by socially and economically disadvantaged individuals, 
small business concerns owned and controlled by women, and other 
small business concerns) to participate in the performance of con-
tracts let by the Federal agency. 
(B) CUMULATIVE FEDERAL AGENCY GOALS TO MEET OR EX-
CEED GOVERNMENTWIDE GOAL.—The Administrator and the Ad-
ministrator of the Office of Federal Procurement Policy shall, 
when exercising authority under subsection (b), ensure that the 
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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. 
(5) PROCUREMENT PROCEDURES.— 
(A) IN GENERAL.—To facilitate the attainment of a goal for the 
participation of small business concerns owned and controlled by 
socially and economically disadvantaged individuals that is estab-
lished for a Federal agency under this subsection, the head of the 
Federal agency may enter into contracts using— 
(i) less than full and open competition by restricting the 
competition for such awards to small business concerns owned 
and controlled by socially and economically disadvantaged in-
dividuals; and 
(ii) a price evaluation preference not in excess of 10 per-
cent when evaluating an offer received from a small business 
concern owned and controlled by socially and economically 
disadvantaged individuals as the result of an unrestricted so-
licitation. 
(B) APPLICABILITY.—Subparagraph (A) does not apply to the 
Department of Defense, the Coast Guard, or the National Aero-
nautics and Space Administration. 
(C) IMPLEMENTATION THROUGH THE FEDERAL ACQUISITION 
REGULATION.— 
(i) IN GENERAL.—The Federal Acquisition Regulation shall 
provide for uniform implementation of the authority provided 
in subparagraph (A). 
(ii) MATTERS TO BE ADDRESSED.—The provisions of the 
Federal Acquisition Regulation under clause (i) shall in-
clude— 
(I) conditions for the use of advance payments; 
(II) provisions for contract payment terms that pro-
vide for— 
(aa) accelerated payment for work performed dur-
ing the period for contract performance; and 
(bb) full payment for work performed; 
(III) guidance on how contracting officers may use, in 
solicitations for various classes of products or services, a 
price evaluation preference under subparagraph (A)(ii), 
to provide a reasonable advantage to small business con-
cerns owned and controlled by socially and economically 
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disadvantaged individuals without effectively eliminating 
any participation of other small business concerns; and 
(IV)(aa) procedures for a person to request the head 
of a Federal agency to determine whether the use of 
competitions restricted to small business concerns owned 
and controlled by socially and economically disadvan-
taged individuals at a contracting activity of the Federal 
agency has caused a particular industry category to bear 
a disproportionate share of the contracts awarded to at-
tain the goal established for that contracting activity; 
and 
(bb) guidance for limiting the use of such restricted 
competitions in the case of any contracting activity and 
class of contracts determined in accordance with such 
procedures to have caused a particular industry category 
to bear a disproportionate share of the contracts award-
ed to attain the goal established for that contracting ac-
tivity. 
(D) TERMINATION.—This paragraph shall cease to be effective 
at the end of September 30, 2003. 
(b) FEDERAL AGENCY GOALS.— 
(1) IN GENERAL.—The Administrator and the head of each Federal 
agency shall jointly establish goals for the participation by small busi-
ness concerns (including qualified HUBZone small business concerns, 
small business concerns owned and controlled by service-disabled vet-
erans, 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) in pro-
curement contracts of the Federal agency. 
(2) REQUIREMENTS.—The goals of a Federal agency established 
under paragraph (1) shall— 
(A) present, 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; and 
(B) realistically reflect the potential of qualified HUBZone 
small business concerns, small business concerns owned and con-
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trolled 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 to perform such contracts and to 
perform subcontracts under such contracts. 
(3) DISAGREEMENT.—If the Administrator and the head of a Fed-
eral agency fail to agree on established goals, the disagreement shall 
be submitted to the Administrator for Federal Procurement Policy for 
final determination. 
(4) EXPANSION OF PARTICIPATION.— 
(A) IN GENERAL.—For the purpose of establishing goals under 
this section, the head of a Federal agency shall make consistent 
efforts to annually expand participation by small business concerns 
from each industry category in procurement contracts of the agen-
cy, including participation by 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 individuals, and small 
business concerns owned and controlled by women. 
(B) CONSIDERATIONS.—The head of a Federal agency, in at-
tempting to attain such participation, shall consider— 
(i) contracts awarded as the result of unrestricted competi-
tion; and 
(ii) contracts awarded after competition restricted to eligi-
ble small business concerns under this chapter and under the 
business development program. 
(c) REPORTING BY FEDERAL AGENCIES.— 
(1) IN GENERAL.—At the end of each fiscal year, the head of a Fed-
eral agency shall submit to the Administrator a report on the extent 
of participation by 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 individuals, 
small business concerns owned and controlled by veterans, small busi-
ness concerns owned and controlled by women, and other small busi-
ness concerns) in procurement contracts of the Federal agency. 
(2) CONTENTS.—A report under paragraph (1) shall contain appro-
priate justifications for failure to meet the goals under this section. 
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§ 25107. No effect on certain small business setasides 
(a) IN GENERAL.—Nothing in this chapter or any other provision of law 
precludes exclusive small business setasides for procurements of architec-
tural and engineering services, research, development, test, and evaluation. 
(b) AUTHORITY.—A Federal agency may develop setasides described in 
subsection (a) to further the interests of small business in the areas de-
scribed in that subsection. 
§ 25108. Mandatory contract reservation 
(a) IN GENERAL.—A contract for the purchase of a good or service that 
has an anticipated value greater than $2,500 but not greater than $100,000 
shall be reserved exclusively for small business concerns unless the con-
tracting officer is unable to obtain offers from 2 or more small business con-
cerns that are— 
(1) competitive with market prices; and 
(2) competitive with regard to the quality and delivery of the good 
or service being purchased. 
(b) CONSIDERATION OF TIMELY OFFERS.—In carrying out subsection 
(a), a contracting officer shall consider a responsive offer timely received 
from an eligible small business concern offeror. 
(c) EFFECT OF SECTION.—Nothing in this section precludes an award of 
a contract with a value not greater than $100,000 under— 
(1) division B of this subtitle; 
(2) section 2323 of title 10; 
(3) section 24903 of this title; or 
(4) section 25106(a)(4) of this title. 
§ 25109. Offices of Small and Disadvantaged Business Utili-
zation 
(a) DEFINITIONS.—In this section: 
(1) DIRECTOR.—The term ‘‘Director’’ means the Director of Small 
and Disadvantaged Business Utilization of a Federal agency appointed 
under subsection (c). 
(2) OFFICE.—The term ‘‘Office’’ means the Office of Small and Dis-
advantaged Business Utilization of a Federal agency established by 
subsection (b). 
(b) ESTABLISHMENT OF OFFICES.—There is established in each Federal 
agency having procurement powers an office to be known as the Office of 
Small and Disadvantaged Business Utilization. 
(c) DIRECTOR.— 
(1) IN GENERAL.—The management of an Office shall be vested in 
an officer or employee of the Federal agency, appointed by the head 
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of the Federal agency, who shall be known as the Director of Small 
and Disadvantaged Business Utilization for the Federal agency. 
(2) LINE OF AUTHORITY.—The Director for a Federal agency shall 
be responsible only to, and report directly to, the head or deputy head 
of the Federal agency, except that the Director in the Department of 
Defense shall be responsible only to, and report directly to, the Sec-
retary of Defense or any other designee of the Secretary. 
(d) GENERAL RESPONSIBILITIES.—The Director for a Federal agency 
shall be responsible for the implementation and execution of the functions 
and duties under this chapter and divisions E and F that relate to the Fed-
eral agency. 
(e) DUTIES.—The Director for a Federal agency shall— 
(1)(A) identify proposed solicitations that involve significant bun-
dling of contract requirements; and 
(B) work with the agency acquisition officials and the Administrator 
to revise the procurement strategies for such proposed solicitations 
where appropriate to increase the probability of participation by small 
business concerns as prime contractors or to facilitate small business 
concern participation as subcontractors and suppliers, if a solicitation 
for a bundled contract is to be issued; and 
(2) assist small business concerns in obtaining payments, required 
late payment interest penalties, or information regarding payments due 
to small business concerns from an executive agency or a contractor, 
in conformity with chapter 39 of title 31 or any other protection for 
contractors or subcontractors (including suppliers) that is included in 
the Federal Acquisition Regulation or any individual agency supple-
ment to the Governmentwide regulation. 
(f) SUPERVISORY AUTHORITY.—The Director for a Federal agency shall 
have supervisory authority over personnel of the Federal agency to the ex-
tent that the functions and duties of those personnel relate to functions and 
duties under this chapter and divisions E and F. 
(g) SMALL BUSINESS TECHNICAL ADVISERS.— 
(1) ASSIGNMENT.—The Director for a Federal agency shall assign 
a small business technical adviser to each office to which the Adminis-
trator assigns a procurement center representative. 
(2) QUALIFICATIONS.—A small business technical adviser— 
(A) shall be a full-time employee of the procurement activity; 
and 
(B) shall be well qualified, technically trained, and familiar with 
the goods or services purchased at the procurement activity. 
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(3) PRINCIPAL DUTY.—The principal duty of a small business tech-
nical adviser shall be to assist the Administration procurement center 
representative in carrying out duties and functions relating to this 
chapter and divisions E and F. 
(h) COOPERATION
AND CONSULTATION.—The Director for a Federal 
agency shall cooperate, and consult on a regular basis, with the Adminis-
trator with respect to carrying out the functions and duties described in 
subsection (d). 
(i) RECOMMENDATIONS CONCERNING AWARD OF CONTRACTS.— 
(1) IN GENERAL.—The Director for a Federal agency shall make 
recommendations to contracting officers concerning whether a par-
ticular contract requirement should be awarded pursuant to section 
25101 of this title, division E of this subtitle, or section 2323 of title 
10. 
(2) CONSIDERATIONS.—A recommendation under paragraph (1) 
shall be made with due regard to the requirements of sections 25111 
and 25112 of this title. 
(3) DOCUMENTATION OF FAILURE TO ACCEPT RECOMMENDATION.— 
The failure of a contracting officer to accept a recommendation under 
paragraph (1) shall be documented and included within the appropriate 
contract file. 
(j) APPLICABILITY OF SECTION.—This section does not apply to the Ad-
ministration. 
§ 25110. Breakout procurement center representatives 
(a) DEFINITION OF MAJOR PROCUREMENT CENTER.—In this section, the 
term ‘‘major procurement center’’ means a procurement center that— 
(1) in the opinion of the Administrator, purchases substantial dollar 
amounts of other than commercial items; and 
(2) has the potential to incur significant savings as the result of the 
assignment of a breakout procurement center representative. 
(b) ASSIGNMENT OF BREAKOUT PROCUREMENT CENTER REPRESENTA-
TIVES.— 
(1) IN GENERAL.—The Administration shall assign to each major 
procurement center a breakout procurement center representative with 
such assistance as may be appropriate. 
(2) ADDITIONAL POSITION.—A breakout procurement center rep-
resentative shall be in addition to the procurement center representa-
tive referred to in section 25109(g)(1) of this title. 
(c) ADVOCACY.—A breakout procurement center representative shall be 
an advocate for— 
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(1) the breakout of items for procurement through full and open 
competition, whenever appropriate, while maintaining the integrity of 
the system in which items are used; and 
(2) the use of full and open competition, whenever appropriate, for 
the procurement of goods and services by a major procurement center. 
(d) FUNCTIONS.—In addition to carrying out the responsibilities assigned 
by the Administrator, a breakout procurement center representative may— 
(1)(A) attend any provisioning conference or similar evaluation ses-
sion during which determinations are made concerning whether require-
ments are to be procured through other than full and open competition; 
and 
(B) make recommendations with respect to those requirements to the 
members of the conference or session; 
(2)(A) review, at any time, restrictions on competition previously im-
posed on items through acquisition method coding or similar proce-
dures; and 
(B) recommend to personnel of the appropriate activity the prompt 
reevaluation of such limitations; 
(3)(A) review restrictions on competition arising out of restrictions 
on the rights of the United States in technical data; and 
(B) when appropriate, recommend that personnel of the appropriate 
activity initiate a review of the validity of such an asserted restriction; 
(4) obtain from any governmental source, and make available to per-
sonnel of the appropriate activity, technical data necessary for the 
preparation of a competitive solicitation package for any item of a good 
or service previously procured noncompetitively due to the unavail-
ability of such technical data; 
(5) have access to procurement records and other data of the major 
procurement center commensurate with the level of the breakout pro-
curement center representative’s approved security clearance classifica-
tion; 
(6)(A) receive unsolicited engineering proposals; and 
(B) when appropriate— 
(i)(I) conduct a value analysis of a proposal to determine wheth-
er the proposal, if adopted, will result in lower costs to the United 
States without substantially impeding legitimate acquisition objec-
tives; and 
(II) forward to personnel of the appropriate activity rec-
ommendations with respect to the proposal; or 
(ii) forward a proposal without analysis to personnel of the ac-
tivity responsible for reviewing such proposals, which personnel 
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shall furnish the breakout procurement center representative with 
information regarding the disposition of the proposal; and 
(7) review the systems that account for the acquisition and manage-
ment of technical data within the major procurement center to ensure 
that the systems provide the maximum availability and access to data 
that— 
(A) are needed for the preparation of offers to sell to the United 
States the goods and services to which the data pertain; and 
(B) potential offerors are entitled to receive. 
(e) APPEAL OF FAILURE TO ACT FAVORABLY ON RECOMMENDATION.— 
(1) IN
GENERAL.—A breakout procurement center representative 
may appeal the failure to act favorably on any recommendation made 
under subsection (d). 
(2) PROCEDURE.—An appeal under paragraph (1) shall be filed and 
processed in the same manner and shall be subject to the same condi-
tions and limitations as an appeal filed by the Administrator under sec-
tion 25101(f)(5) of this title. 
(f) SMALL BUSINESS TECHNICAL ADVISERS.— 
(1) IN GENERAL.—The Administrator shall assign and co-locate at 
least 2 small business technical advisers to each major procurement 
center in addition to such other advisers as may be authorized from 
time to time. 
(2) DUTIES.—The sole duties of small business technical advisers as-
signed under paragraph (1) shall be— 
(A) to assist the breakout procurement center representative for 
the center to which the small business technical advisers are as-
signed in carrying out the functions described in subsection (d); 
and 
(B) to assist the procurement center representative for each of-
fice to which the Administrator assigns a procurement center rep-
resentative. 
(g) STATUS; QUALIFICATIONS.— 
(1) IN
GENERAL.—A breakout procurement center representative 
and a small business technical adviser— 
(A) shall be full-time employees of the Administration; and 
(B) shall be fully qualified, technically trained, and familiar with 
the goods and services procured by the major procurement center 
to which the individual is assigned. 
(2) ACCREDITED ENGINEER.—In addition to the requirements of 
paragraph (1), a breakout procurement center representative and at 
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least one small business technical adviser assigned under this section 
shall be accredited engineers. 
(h) PERSONNEL POSITIONS.—The Administrator shall establish personnel 
positions for breakout procurement representatives and small business tech-
nical advisers assigned under this section that are classified at a grade level 
of the General Schedule sufficient to attract and retain highly qualified per-
sonnel. 
(i) FAMILIARIZATION SESSIONS.— 
(1) IN GENERAL.—At such times as the Administrator considers ap-
propriate, a breakout procurement center representative shall conduct 
familiarization sessions for contracting officers and other appropriate 
personnel of the major procurement center to which the breakout pro-
curement center representative is assigned. 
(2) PURPOSE.—A familiarization session shall acquaint the partici-
pants with, and instruct the participants in methods designed to fur-
ther the purposes of, this section. 
(j) BRIEFING AND REPORT.— 
(1) IN
GENERAL.—A breakout procurement center representative 
shall prepare and personally deliver an annual briefing and report to 
the head of the major procurement center to which the breakout pro-
curement center representative is assigned. 
(2) CONTENTS.—A briefing and report under paragraph (1) shall— 
(A) detail the past and planned activities of the breakout pro-
curement center representative; and 
(B) contain such recommendations for improvement in the oper-
ation of the major procurement center as may be appropriate. 
(3) RESPONSE.—The head of the major procurement center shall— 
(A) personally receive the briefing and report; and 
(B) not later than 60 calendar days after receipt, respond, in 
writing, to each recommendation made by the breakout procure-
ment center representative. 
(k) STANDARDS FOR MEASURING COST SAVINGS FROM BREAKOUT PRO-
CUREMENT
CENTER
REPRESENTATIVES.—The Administrator and the 
Comptroller General shall jointly establish standards for measuring— 
(1) cost savings achieved through the efforts of breakout procure-
ment center representatives; and 
(2) the extent to which competition has been increased as a result 
of those efforts. 
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§ 25111. Department of Defense, Coast Guard, and National 
Aeronautics and Space Administration contract 
goals 
A Federal agency subject to the requirements of section 2323 of title 10 
shall, when implementing those requirements— 
(1) establish policies and procedures that ensure that there will be 
no reduction in the number or dollar value of contracts awarded under 
this chapter or division E to achieve any goal or other program objec-
tive; and 
(2) ensure that those requirements will not alter or change the pro-
curement process used to implement this chapter or division E. 
§ 25112. Actions by procurement center representatives to 
ensure compliance 
A procurement center representative assigned under section 25109 or 
25110 of this title, in addition to such other duties as the Administrator 
may assign, shall— 
(1) monitor the performance of the procurement activities to which 
the procurement center representative is assigned to ascertain the de-
gree of compliance with the requirements of section 25111 of this title; 
(2) report to the procurement center representative’s immediate su-
pervisors all instances of noncompliance with those requirements; and 
(3) increase, insofar as possible, the number and dollar value of pro-
curements that may be used for the programs established under this 
chapter, division E of this subtitle, and section 2323 of title 10. 
§ 25113. Percentages of contract performance 
(a) IN GENERAL.—A concern may not be awarded a contract under sec-
tion 25101 of this title as a small business concern unless the concern 
agrees that— 
(1) in the case of a contract for services (except construction), at 
least 50 percent of the cost of contract performance incurred for per-
sonnel shall be expended for employees of the concern; 
(2) in the case of a contract for procurement of goods (other than 
procurement from a regular dealer in such goods), the concern will per-
form work for at least 50 percent of the cost of manufacturing the 
goods (not including the cost of materials). 
(b) CHANGE IN PERCENTAGE.—The Administrator may change the per-
centage under paragraph (1) or (2) of subsection (a) if the Administrator 
determines that a change is necessary to reflect conventional industry prac-
tices among business concerns that are below the numerical size standard 
for businesses in that industry category. 
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(c) REQUIREMENTS APPLICABLE TO OTHER CONTRACTS.—The Adminis-
trator shall establish, through public rulemaking, requirements similar to 
those specified in subsection (a) to be applicable to contracts for general and 
specialty construction and to contracts for any other industry category not 
otherwise subject to the requirements of that subsection. The percentage ap-
plicable to any such requirement shall be determined in accordance with 
subsection (b). 
CHAPTER 253—HUBZONE PROGRAM 
Sec. 
25301.
Definitions. 
25302.
Establishment of HUBZone program. 
25303.
Sole source contracts. 
25304.
Restricted competition. 
25305.
Appeal of decision not to award contract. 
25306.
Price evaluation preference in full and open competition. 
25307.
Relationship to other contracting preferences. 
25308.
Verification of eligibility. 
25309.
Regulations. 
25310.
List of qualified HUBZone small business concerns. 
25311.
Penalties. 
§ 25301. Definitions 
In this chapter: 
(1) BASE CLOSURE AREA.—The term ‘‘base closure area’’ means 
land within the external boundaries of a military installation that was 
closed through a privatization process under— 
(A) the Defense Base Closure and Realignment Act of 1990 
(part A of title XXIX of division B of Public Law 101–510; 10 
U.S.C. 2687 note); 
(B) title II of the Defense Authorization Amendments and Base 
Closure and Realignment Act (Public Law 100–526; 10 U.S.C. 
2687 note); 
(C) section 2687 of title 10; or 
(D) any other provision of law authorizing or directing the Sec-
retary of Defense or the Secretary of a military department to dis-
pose of real property at the military installation for purposes relat-
ing to base closures or redevelopment, while retaining the author-
ity to enter into a leaseback of all or a portion of the property 
for military use. 
(2) FULL AND OPEN COMPETITION.—The term ‘‘full and open com-
petition’’ has the meaning given the term in section 4 of the Office of 
Federal Procurement Policy Act (41 U.S.C. 403). 
(3) HISTORICALLY
UNDERUTILIZED
BUSINESS
ZONE.—The term 
‘‘historically underutilized business zone’’ means an area located within 
one or more— 
(A) qualified census tracts; 
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(B) qualified nonmetropolitan counties; 
(C) areas of land within the external boundaries of an Indian 
reservation; 
(D) redesignated areas; or 
(E) base closure areas (until the date that is 5 years after the 
date of final closure of a base closure area). 
(4) HUBZONE.—The term ‘‘HUBZone’’ means a historically under-
utilized business zone. 
(5) HUBZONE SMALL BUSINESS CONCERN.—The term ‘‘HUBZone 
small business concern’’ means— 
(A) a small business concern that is at least 51 percent owned 
and controlled by United States citizens; 
(B) a small business concern that is— 
(i) an Alaska Native Corporation owned and controlled by 
Natives (as determined under section 29(e)(1) of the Alaska 
Native Claims Settlement Act (43 U.S.C. 1626(e)(1))); or 
(ii) a direct or indirect subsidiary corporation, joint ven-
ture, or partnership of an Alaska Native Corporation quali-
fying under section 29(e)(1) of the Alaska Native Claims Set-
tlement Act (43 U.S.C. 1626(e)(1)), if that subsidiary, joint 
venture, or partnership is owned and controlled by Natives 
(as determined under section 29(e)(2) of the Alaska Native 
Claims Settlement Act (43 U.S.C. 1626(e)(2))); 
(C) a small business concern— 
(i) that is wholly owned by one or more Indian tribal gov-
ernments, or by a corporation that is wholly owned by one or 
more Indian tribal governments; or 
(ii) that is owned in part by one or more Indian tribal gov-
ernments, or by a corporation that is wholly owned by one or 
more Indian tribal governments, if all other owners are either 
United States citizens or small business concerns; 
(D) a small business concern that is— 
(i) wholly owned by a community development corporation 
that has received financial assistance under part 1 of sub-
chapter A of the Community Economic Development Act of 
1981 (42 U.S.C. 9805 et seq.); or 
(ii) owned in part by one or more community development 
corporations, if all other owners are either United States citi-
zens or small business concerns; or 
(E) a small business concern that is— 
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(i) a small agricultural cooperative organized or incor-
porated in the United States; 
(ii) wholly owned by one or more small agricultural co-
operatives organized or incorporated in the United States; or 
(iii) owned in part by one or more small agricultural co-
operatives organized or incorporated in the United States, if 
all owners are small business concerns or United States citi-
zens. 
(6) PROGRAM.—The term ‘‘program’’ means the HUBZone program. 
(7) QUALIFIED HUBZONE SMALL BUSINESS CONCERN.— 
(A) IN GENERAL.—The term ‘‘qualified HUBZone small busi-
ness concern’’ means a small business concern— 
(i) that certifies in writing to the Administrator (or with 
respect to which the Administrator otherwise determines, 
based on information submitted to the Administrator by the 
small business concern, or based on certification procedures 
established under section 25309 of this title) that— 
(I) it is a HUBZone small business concern— 
(aa) under subparagraph (A), (B), (C), (D), or 
(E) of paragraph (5), and its principal office is lo-
cated in a HUBZone and not fewer than 35 percent 
of its employees reside in a HUBZone; or 
(bb) under paragraph (5)(C), and not fewer than 
35 percent of its employees engaged in performing 
a contract awarded to the small business concern on 
the basis of a preference provided under the 
HUBZone program reside within any Indian res-
ervation governed by one or more of the tribal gov-
ernment owners, or reside within any HUBZone ad-
joining any such Indian reservation; 
(II) the small business concern will attempt to main-
tain the applicable employment percentage under sub-
clause (I) during the performance of any contract award-
ed to the small business concern on the basis of a pref-
erence provided this chapter; and 
(III) with respect to any subcontract entered into by 
the small business concern under a contract awarded to 
the small business concern under this chapter, the small 
business concern will ensure that— 
(aa) in the case of a contract for a service (except 
construction), not less than 50 percent of the cost 
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of contract performance incurred for personnel will 
be expended for its employees or for employees of 
other HUBZone small business concerns; 
(bb) in the case of a contract for procurement of 
a supply (other than procurement from a regular 
dealer in the supply), not less than 50 percent of 
the cost of manufacturing the supply (not including 
the cost of material) will be incurred in connection 
with the performance of the contract in a HUBZone 
by one or more HUBZone small business concerns; 
(cc) in the case of a contract for general or spe-
cialty construction or a contract for any other in-
dustry category that is not otherwise subject to the 
requirements of item (aa) or (bb), the small busi-
ness concern meets requirements established by reg-
ulation under section 25309(b) of this title; and 
(dd) in the case of a contract for the procurement 
by the Secretary of Agriculture of an agricultural 
commodity, none of the commodity being procured 
will be obtained by the prime contractor through a 
subcontract for the purchase of the commodity in 
substantially the final form in which it is to be sup-
plied to the Government; and 
(ii) with respect to which no certification made or informa-
tion provided by the small business concern under clause (i) 
has been, in accordance with the procedures established under 
section 25308 of this title— 
(I) successfully challenged by an interested party; or 
(II) otherwise determined by the Administrator to be 
materially false. 
(B) CHANGE IN PERCENTAGES.—The Administrator may utilize 
a percentage other than the percentage specified in item (aa) or 
(bb) of subparagraph (A)(i)(III) if the Administrator determines 
that such action is necessary to reflect conventional industry prac-
tices among small business concerns that are below the numerical 
size standard for businesses in that industry category. 
(8) QUALIFIED NONMETROPOLITAN COUNTY.—The term ‘‘qualified 
nonmetropolitan county’’ means a county— 
(A) that was not located in a metropolitan statistical area (as 
defined in section 143(k)(2)(B) of the Internal Revenue Code of 
1986 (26 U.S.C. 143(k)(2)(B))) at the time of the most recent 
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census taken for purposes of selecting qualified census tracts 
under section 42(d)(5)(C)(ii) of the Internal Revenue Code of 
1986 (26 U.S.C. 42(d)(5)(C)(ii)); and 
(B) in which— 
(i) the median household income is less than 80 percent of 
the nonmetropolitan State median household income, based 
on the most recent data available from the Bureau of the 
Census of the Department of Commerce; 
(ii) the unemployment rate is not less than 140 percent of 
the average unemployment rate for the United States or for 
the State in which the county is located, whichever is less, 
based on the most recent data available from the Secretary 
of Labor; or 
(iii) there is located a difficult development area, as des-
ignated by the Secretary of Housing and Urban Development 
in accordance with section 42(d)(5)(C)(iii) of the Internal 
Revenue Code of 1986 (26 U.S.C. 42(d)(5)(C)(iii)), within 
Alaska, Hawaii, or any territory or possession of the United 
States outside the 48 contiguous States. 
(9) REDESIGNATED AREA.— 
(A) IN GENERAL.—Subject to subparagraph (B), the term ‘‘re-
designated area’’ means— 
(i) a census tract that was, but ceases to be, a qualified 
census tract; and 
(ii) a nonmetropolitan county that was, but ceases to be, 
a qualified nonmetropolitan county. 
(B) LIMITATION.—A census tract or nonmetropolitan county de-
scribed in subparagraph (A) shall cease to be a redesignated area 
on the later of— 
(i) the date on which the Bureau of the Census publicly re-
leases the first results from the 2010 decennial census; or 
(ii) 3 years after the date on which the census tract or non-
metropolitan county ceases to be a qualified census tract or 
qualified nonmetropolitan county. 
§ 25302. Establishment of HUBZone program 
There is established within the Administration a program to be carried 
out by the Administrator, to be known as the HUBZone program, to pro-
vide for Federal contracting assistance to qualified HUBZone small busi-
ness concerns in accordance with this chapter. 
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§ 25303. Sole source contracts 
Notwithstanding any other provision of law, a contracting officer may 
award a sole source contract under the program to a qualified HUBZone 
small business concern if— 
(1) the contracting officer or the Administrator determines that the 
qualified HUBZone small business concern is a responsible contractor 
with respect to performance of the contract opportunity; 
(2) the contracting officer does not have a reasonable expectation 
that 2 or more qualified HUBZone small business concerns will submit 
offers for the contracting opportunity; 
(3) the anticipated award price of the contract (including options) 
will not exceed— 
(A) $5,500,000 (subject to adjustment under section 35A of the 
Office of Federal Procurement Policy Act (41 U.S.C. 431a)), in 
the case of a contract opportunity assigned a North American In-
dustry Classification System code for manufacturing; or 
(B) $3,500,000 (subject to adjustment under section 35A of the 
Office of Federal Procurement Policy Act (41 U.S.C. 431a)), in 
the case of all other contract opportunities; and 
(4) in the estimation of the contracting officer, the contract award 
can be made at a fair and reasonable price. 
§ 25304. Restricted competition 
Notwithstanding any other law, a contract opportunity shall be awarded 
under the program on the basis of competition restricted to qualified 
HUBZone small business concerns if the contracting officer has a reason-
able expectation that— 
(1) not fewer than 2 qualified HUBZone small business concerns will 
submit offers; and 
(2) the award can be made at a fair market price. 
§ 25305. Appeal of decision not to award contract 
Notwithstanding any other law, not later than 5 days after the date on 
which the Administrator is notified of a decision by a contracting officer of 
a Federal agency not to award a contract opportunity under the program 
to a qualified HUBZone small business concern, the Administrator may no-
tify the contracting officer of the intent to appeal the contracting officer’s 
decision, and within 15 days after that date the Administrator may file a 
written request for reconsideration of the contracting officer’s decision with 
the head of the Federal agency. 
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§ 25306. Price evaluation preference in full and open com-
petition 
(a) IN GENERAL.—Subject to subsection (b), in a case in which a con-
tract is to be awarded on the basis of full and open competition, the price 
offered by a qualified HUBZone small business concern shall be deemed to 
be lower than the price offered by another offeror (other than another small 
business concern) if the price offered by the qualified HUBZone small busi-
ness concern is not more than 10 percent higher than the price offered by 
the otherwise lowest, responsive, and responsible offeror. 
(b) AGRICULTURAL COMMODITIES.— 
(1) IN GENERAL.—In the case of a purchase by the Secretary of Ag-
riculture of agricultural commodities, the price evaluation preference 
shall be— 
(A) 10 percent for the portion of a contract to be awarded that 
is not greater than 25 percent of the total volume being procured 
for each agricultural commodity in a single invitation; 
(B) 5 percent for the portion of a contract to be awarded that 
is greater than 25 percent, but not greater than 40 percent, of the 
total volume being procured for each agricultural commodity in a 
single invitation; and 
(C) zero, for the portion of a contract to be awarded that is 
greater than 40 percent of the total volume being procured for 
each agricultural commodity in a single invitation. 
(2) TREATMENT OF PREFERENCE.—A contract awarded to a quali-
fied HUBZone small business concern under a preference described in 
paragraph (1) shall not be counted toward the fulfillment of any re-
quirement partially set aside for competition restricted to small busi-
ness concerns. 
(3) INTERNATIONAL
FOOD
AID
EXPORT
OPERATIONS.—The price 
evaluation preference for a purchase of an agricultural commodity by 
the Secretary of Agriculture for export operations through an inter-
national food aid program administered by the Farm Service Agency 
shall be 5 percent on the first portion of a contract to be awarded that 
is not greater than 20 percent of the total volume of each agricultural 
commodity being procured in a single invitation. 
§ 25307. Relationship to other contracting preferences 
A procurement may not be made from a source on the basis of a pref-
erence under the program if the procurement would otherwise be made from 
a different source under— 
(1) section 4124 or 4125 of title 18; or 
(2) the Javits-Wagner-O’Day Act (41 U.S.C. 46 et seq.). 
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§ 25308. Verification of eligibility 
(a) IN GENERAL.—In carrying out this chapter, the Administrator shall 
establish procedures relating to— 
(1) the filing, investigation, and disposition by the Administrator of 
any challenge to the eligibility of a small business concern to receive 
assistance under the program (including a challenge, filed by an inter-
ested party, relating to the veracity of a certification made or informa-
tion provided to the Administrator by a small business concern under 
section 25301(7) of this title); and 
(2) verification by the Administrator of the accuracy of any certifi-
cation made or information provided to the Administration by a small 
business concern under section 25301(7) of this title. 
(b) EXAMINATIONS.—The procedures established under subsection (a) 
may provide for program examinations (including random program examina-
tions) by the Administrator of any small business concern making a certifi-
cation or providing information to the Administrator under section 25301(7) 
of this title. 
(c) PROVISION OF DATA.—On the request of the Administrator, the Sec-
retary of Labor, the Secretary of Housing and Urban Development, and the 
Secretary of the Interior (or the Assistant Secretary for Indian Affairs) 
shall promptly provide to the Administrator such information as the Admin-
istrator determines to be necessary to carry out this section. 
§ 25309. Regulations 
(a) CERTIFICATION PROCEDURES.—The Administrator shall by regula-
tion establish procedures for the certification of a small business concern 
as a qualified HUBZone small business concern. 
(b) CONSTRUCTION CONTRACTS AND OTHER CONTRACTS.—The Adminis-
trator shall by regulation establish requirements that are similar to the re-
quirements specified in items (aa) and (bb) of section 25301(7)(A)(i)(III) 
of this title on contracts for general and specialty construction and contracts 
for any other industry category that would not otherwise be subject to those 
requirements. The percentage applicable to any such requirement shall be 
determined in accordance with section 25301(7)(B) of this title. 
§ 25310. List of qualified HUBZone small business concerns 
The Administrator shall establish and maintain a list of qualified 
HUBZone small business concerns, which list, to the extent practicable— 
(1) after the Administrator makes the certification required by sec-
tion 25301(7)(A)(i) of this title regarding a qualified HUBZone small 
business 
concern 
and 
determines 
that 
subparagraph 
section 
25301(7)(A)(ii) of this title does not apply to that qualified HUBZone 
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small business concern, shall include the name, address, and type of 
business with respect to each such small business concern; 
(2) shall be updated by the Administrator not less than annually; 
and 
(3) on request, shall be provided to any Federal agency or other enti-
ty. 
§ 25311. Penalties 
In addition to the penalties described in section 10504 of this title, a 
small business concern that is determined by the Administrator to have mis-
represented the status of that small business concern as a HUBZone small 
business concern for purposes of this section shall be subject to— 
(1) section 1001 of title 18; and 
(2) sections 3729 to 3733 of title 31. 
CHAPTER 255—SMALL BUSINESS CONCERNS OWNED 
AND CONTROLLED BY SERVICE-DISABLED VETERANS 
Sec. 
25501.
Sole source contracts. 
25502.
Restricted competition. 
25503.
Relationship to other contracting preferences. 
25504.
Provision of data. 
25505.
Verification of eligibility. 
25506.
Penalties. 
§ 25501. Sole source contracts 
A contracting officer may award a sole source contract to any small busi-
ness concern owned and controlled by service-disabled veterans if— 
(1) the Administrator determines that the small business concern 
owned and controlled by service-disabled veterans is a responsible con-
tractor with respect to performance of the contract opportunity; 
(2) the contracting officer does not have a reasonable expectation 
that 2 or more small business concerns owned and controlled by serv-
ice-disabled veterans will submit offers for the contracting opportunity; 
(3) the anticipated award price of the contract (including options) 
will not 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; 
and 
(4) in the estimation of the contracting officer, the contract award 
can be made at a fair and reasonable price. 
§ 25502. Restricted competition 
A contracting officer may award a contract on the basis of competition 
restricted to small business concerns owned and controlled by service-dis-
abled veterans if the contracting officer has a reasonable expectation that— 
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231 
(1) not fewer than 2 small business concerns owned and controlled 
by service-disabled veterans will submit offers; and 
(2) the award can be made at a fair market price. 
§ 25503. Relationship to other contracting preferences 
A procurement may not be made from a source on the basis of a pref-
erence provided under section 25501 or 25502 of this title if the procure-
ment would otherwise be made from a different source under— 
(1) section 4124 or 4125 of title 18; or 
(2) the Javits-Wagner-O’Day Act (41 U.S.C. 46 et seq.). 
§ 25504. Provision of data 
On the request of the Administrator, the head of any Federal agency 
shall promptly provide to the Administrator such information as the Admin-
istrator determines to be necessary to carry out this chapter. 
§ 25505. Verification of eligibility 
(a) IN GENERAL.—In carrying out this chapter, the Administrator shall 
establish procedures relating to— 
(1) the filing, investigation, and disposition by the Administrator of 
any challenge to the eligibility of a small business concern to receive 
assistance under this subsection (including a challenge, filed by an in-
terested party, relating to the veracity of a certification made or infor-
mation provided to the Administration by a small business concern); 
and 
(2) verification by the Administrator of the accuracy of any certifi-
cation made or information provided to the Administration by a small 
business concern. 
(b) EXAMINATIONS.—The procedures established under subsection (a) 
may provide for program examinations (including random program examina-
tions) by the Administrator of any small business concern making a certifi-
cation or providing information to the Administrator. 
§ 25506. Penalties 
In addition to the penalties described in section 10504 of this title, a 
small business concern that is determined by the Administrator to have mis-
represented the status of the small business concern as a small business 
concern owned and controlled by service-disabled veterans for purposes of 
this chapter shall be subject to— 
(1) section 1001 of title 18; and 
(2) sections 3729 to 3733 of title 31. 
CHAPTER 257—SMALL BUSINESS CONCERNS OWNED 
AND CONTROLLED BY WOMEN 
Sec. 
25701.
Definition of small business concern owned and controlled by women. 
25702.
Restricted competition. 
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25703.
Identification of industries. 
25704.
Provision of data. 
25705.
Verification of eligibility. 
25706.
Penalties. 
§ 25701. Definition of small business concern owned and 
controlled by women 
In this chapter, the term ‘‘small business concern owned and controlled 
by women’’ has the meaning given the term in section 10101 of this title, 
except that ownership shall be determined without regard to any community 
property law. 
§ 25702. Restricted competition 
(a) IN GENERAL.—A contracting officer may restrict competition for any 
contract for the procurement of a good or service by the Federal Govern-
ment to small business concerns owned and controlled by women if— 
(1) each of the small business concerns owned and controlled by 
women is not less than 51 percent owned by one or more women who 
are economically disadvantaged (for which purpose ownership shall be 
determined without regard to any community property law); 
(2) the contracting officer has a reasonable expectation that 2 or 
more small business concerns owned and controlled by economically dis-
advantaged women will submit offers for the contract; 
(3) the contract is for the procurement of a good or service with re-
spect to an industry identified by the Administrator under section 
25703 of this title; 
(4) the anticipated award price of the contract (including options) 
does not exceed— 
(A) $5,000,000, in the case of a contract assigned a North 
American Industry Classification System code for manufacturing; 
or 
(B) $3,000,000, in the case of any other contract; 
(5) in the estimation of the contracting officer, the contract award 
can be made at a fair and reasonable price; and 
(6) each of the small business concerns owned and controlled by 
women— 
(A) is certified by a Federal agency, a State government, or a 
national certifying entity approved by the Administrator, as a 
small business concern owned and controlled by women; or 
(B)(i) certifies to the contracting officer that it is a small busi-
ness concern owned and controlled by women; and 
(ii) provides adequate documentation, in accordance with stand-
ards established by the Administrator, to support the certification. 
(b) WAIVER.—The Administrator may waive subsection (a)(1) with re-
spect to a small business concern owned and controlled by women if the Ad-
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ministrator determines that the small business concern owned and controlled 
by women is in an industry in which small business concerns owned and 
controlled by women are substantially underrepresented. 
§ 25703. Identification of industries 
The Administrator shall conduct a study to identify industries in which 
small business concerns owned and controlled by women are underrep-
resented with respect to Federal procurement contracting. 
§ 25704. Provision of data 
On the request of the Administrator, the head of a Federal agency shall 
promptly provide to the Administrator such information as the Adminis-
trator determines to be necessary to carry out this chapter. 
§ 25705. Verification of eligibility 
(a) IN GENERAL.—In carrying out this chapter, the Administrator shall 
establish procedures relating to— 
(1) the filing, investigation, and disposition by the Administrator of 
any challenge to the eligibility of a small business concern to receive 
assistance under this chapter (including a challenge, filed by an inter-
ested party, relating to the veracity of a certification made or informa-
tion provided to the Administrator by a small business concern under 
section 25702(a)(6) of this title); and 
(2) verification by the Administrator of the accuracy of any certifi-
cation made or information provided to the Administrator by a small 
business concern under section 25702(a)(6) of this title. 
(b) EXAMINATIONS.—The procedures established under subsection (a) 
may provide for program examinations (including random program examina-
tions) by the Administrator of any small business concern making a certifi-
cation or providing information to the Administrator under section 
25702(a)(6) of this title. 
§ 25706. Penalties 
In addition to the penalties described in section 10504 of this title, a 
small business concern that is determined by the Administrator to have mis-
represented the status of the small business concern as a small business 
concern owned and controlled by women for purposes of this chapter shall 
be subject to— 
(1) section 1001 of title 18; and 
(2) sections 3729 to 3733 of title 31. 
DIVISION H—RESEARCH AND DEVELOPMENT 
CHAPTER 261—GENERAL PROVISIONS 
Sec. 
26101.
Definitions. 
26102.
Assistance to small business concerns. 
26103.
Federal agency cooperation. 
26104.
Joint research and development programs. 
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§ 26101. Definitions 
In this division: 
(1) COMMERCIAL APPLICATION.—The term ‘‘commercial application’’ 
includes testing and evaluation of products, services, or technologies for 
use in technical or weapons systems. 
(2) COOPERATIVE RESEARCH AND DEVELOPMENT.—The term ‘‘coop-
erative research and development’’ means research or research and de-
velopment conducted jointly by a small business concern and a research 
institution in which not less than 40 percent of the work is performed 
by the small business concern and not less than 30 percent of the work 
is performed by the research institution. 
(3) EXTRAMURAL BUDGET.— 
(A) IN GENERAL.—The term ‘‘extramural budget’’, in reference 
to the extramural budget of a Federal agency, means the sum of 
the total obligations minus amounts obligated for research or re-
search and development by employees of the Federal agency in or 
through Government-owned, Government-operated facilities. 
(B) APPLICABILITY TO DEPARTMENT OF ENERGY.—As applied 
with respect to the Department of Energy, the term ‘‘extramural 
budget’’ does not include amounts obligated for atomic energy de-
fense programs solely for weapons activities or for naval reactor 
programs. 
(C) APPLICABILITY TO AGENCY FOR INTERNATIONAL DEVELOP-
MENT.—As applied to the Agency for International Development, 
the term ‘‘extramural budget’’ does not include amounts obligated 
solely for general institutional support of international research 
centers or for grants to foreign countries. 
(4) FEDERAL AGENCY.— 
(A) IN GENERAL.—The term ‘‘Federal agency’’ means— 
(i) an executive agency (as defined in section 105 of title 
5); or 
(ii) a military department. 
(B) EXCLUSION.—The term ‘‘Federal agency’’ does not include 
an agency within the Intelligence Community (as defined in sec-
tion 3.4(f) of Executive Order 12333 (50 U.S.C. 401 note) (or any 
successor Executive order)). 
(5) FEDERALLY FUNDED RESEARCH AND DEVELOPMENT CENTER.— 
The term ‘‘Federally funded research and development center’’ means 
a federally funded research and development center identified by the 
National Scientific Foundation in accordance with the Governmentwide 
Federal Acquisition Regulation issued under section 25(c)(1) of the Of-
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fice of Federal Procurement Policy Act (41 U.S.C. 421(c)(1)) (or any 
successor regulation). 
(6) FIRST PHASE.—The term ‘‘first phase’’— 
(A) with respect to an SBIR, means the phase described in 
paragraph (13)(A); and 
(B) with respect to an STTR, means the phase described in 
paragraph (14)(A). 
(7) FUNDING AGREEMENT.—The term ‘‘funding agreement’’ means 
a contract, grant, or cooperative agreement entered into between a 
Federal agency and a small business concern for the performance of 
experimental, developmental, or research work funded in whole or in 
part by the Federal Government. 
(8) RESEARCH INSTITUTION.— 
(A) IN GENERAL.—The term ‘‘research institution’’ means a 
nonprofit institution (as defined in section 4 of the Stevenson- 
Wydler Technology Innovation Act of 1980 (15 U.S.C. 3703)). 
(B) INCLUSION.—The term ‘‘research institution’’ includes a 
federally funded research and development center. 
(9) RESEARCH OR RESEARCH AND DEVELOPMENT.—The term ‘‘re-
search or research and development’’ means an activity that is— 
(A) a systematic, intensive study directed toward greater knowl-
edge or understanding of the subject studied; 
(B) a systematic study directed specifically toward applying new 
knowledge to meet a recognized need; or 
(C) a systematic application of knowledge toward the production 
of useful materials, devices, and systems or methods, including de-
sign, development, and improvement of prototypes and new proc-
esses to meet specific requirements. 
(10) SBIR.—The term ‘‘SBIR’’ means a small business innovation 
research program. 
(11) SBIR AGENCY.—The term ‘‘SBIR agency’’ means a Federal 
agency that is required by section 26301 of this title to have an SBIR. 
(12) SECOND PHASE.—The term ‘‘second phase’’— 
(A) with respect to an SBIR, means the phase described in 
paragraph (13)(B); and 
(B) with respect to an STTR, means the phase described in 
paragraph (14)(B). 
(13) SMALL BUSINESS INNOVATION RESEARCH PROGRAM.—The term 
‘‘small business innovation research program’’ means a program under 
which a portion of a Federal agency’s research or research and develop-
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ment effort is reserved for award to small business concerns through 
a uniform process having— 
(A) a first phase for determining, insofar as possible, the sci-
entific and technical merit and feasibility of ideas that appear to 
have commercial potential, as described in subparagraph (B), sub-
mitted pursuant to SBIR solicitations; 
(B) a second phase, to further develop proposals that meet par-
ticular program needs, in which awards shall be made based on 
the scientific and technical merit and feasibility of the proposals, 
as evidenced by the first phase, considering, among other things, 
the proposal’s commercial potential, as evidenced by— 
(i) the small business concern’s record of successfully com-
mercializing SBIR or other research; 
(ii) the existence of second phase funding commitments 
from private sector or non-SBIR funding sources; 
(iii) the existence of third phase, follow-on commitments for 
the subject of the research; and 
(iv) the presence of other indicators of the commercial po-
tential of the idea; and 
(C) where appropriate, a third phase— 
(i) in which commercial applications of SBIR-funded re-
search or research and development are funded— 
(I) by non-Federal sources of capital; or 
(II) for products or services intended for use by the 
Federal Government, by follow-on non-SBIR Federal 
funding awards; or 
(ii) for which awards from non-SBIR Federal funding 
sources are used for the continuation of research or research 
and development that has been competitively selected using 
peer review or scientific review criteria. 
(14) SMALL
BUSINESS
TECHNOLOGY
TRANSFER
PROGRAM.—The 
term ‘‘small business technology transfer program’’ means a program 
under which a portion of a Federal agency’s extramural research or re-
search and development effort is reserved for award to small business 
concerns for cooperative research and development through a uniform 
process having— 
(A) a first phase, to determine, to the extent possible, the sci-
entific, technical, and commercial merit and feasibility of ideas 
submitted pursuant to STTR solicitations; 
(B) a second phase, to further develop proposed ideas to meet 
particular program needs, in which awards shall be made based on 
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the scientific, technical, and commercial merit and feasibility of 
the idea, as evidenced by the first phase and by other relevant in-
formation; and 
(C) where appropriate, a third phase— 
(i) in which commercial applications of STTR-funded re-
search or research and development are funded— 
(I) by non-Federal sources of capital; or 
(II) for products or services intended for use by the 
Federal Government, by follow-on non-STTR Federal 
funding awards; and 
(ii) for which awards from non-STTR Federal funding 
sources are used for the continuation of research or research 
and development that has been competitively selected using 
peer review or scientific review criteria. 
(15) STTR.—The term ‘‘STTR’’ means a small business technology 
transfer program. 
(16) STTR AGENCY.—The term ‘‘STTR agency’’ means a Federal 
agency that is required by section 26321 of this title to have an STTR. 
(17) THIRD PHASE.—The term ‘‘third phase’’— 
(A) with respect to an SBIR, means the phase described in 
paragraph (13)(C); and 
(B) with respect to an STTR, means the phase described in 
paragraph (14)(C). 
(18) THIRD PHASE AGREEMENT.—The term ‘‘third phase agree-
ment’’ means a follow-on, non-SBIR-funded contract or non-STTR- 
funded contract described in paragraph (13)(C) or (14)(C). 
§ 26102. Assistance to small business concerns 
The Administrator shall— 
(1) assist small business concerns in obtaining Government contracts 
for research and development; 
(2) assist small business concerns in obtaining the benefits of re-
search and development performed under Government contracts or at 
Government expense; 
(3) provide technical assistance to small business concerns to accom-
plish the purposes of this division; 
(4) develop and maintain a source file and an information program 
to assure each qualified and interested small business concern the op-
portunity to participate in Federal agency SBIRs and STTRs; 
(5) coordinate with participating Federal agencies a schedule for re-
lease of SBIR and STTR solicitations, and prepare a master release 
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schedule so as to maximize the opportunity of small business concerns 
to respond to solicitations; 
(6) independently survey and monitor the operation of SBIRs and 
STTRs within participating Federal agencies; and 
(7) provide for and fully implement the tenets of Executive Order 
No. 13329 (Encouraging Innovation in Manufacturing). 
§ 26103. Federal agency cooperation 
The Administrator may consult and cooperate with, and make studies and 
recommendations to, all Federal agencies and the Government Account-
ability Office, and a Federal agency or the Government Accountability Of-
fice shall cooperate with the Administrator in order to carry out and to ac-
complish the purposes of this division. 
§ 26104. Joint research and development programs 
(a) IN GENERAL.—The Administrator may consult with representatives 
of small business concerns with a view to assisting and encouraging small 
business concerns in undertaking joint programs for research and develop-
ment carried out through such corporate or other mechanism as may be 
most appropriate for the purpose. 
(b) PURPOSES.—A joint program under subsection (a) may, among other 
things, include the purposes of— 
(1) constructing, acquiring, or establishing a laboratory or other fa-
cility for the conduct of research; 
(2) undertaking and utilizing applied research; 
(3) collecting research information related to a particular industry 
and disseminating the information to participating members; 
(4) conducting applied research on a protected, proprietary, and con-
tractual basis with member or nonmember concerns, Government agen-
cies, and others; 
(5) prosecuting applications for patents and rendering patent serv-
ices for participating members; and 
(6) negotiating and granting licenses under patents held under the 
joint program and establishing corporations designed to exploit par-
ticular patents obtained by the joint venture. 
(c) APPROVAL OF AGREEMENTS.—After consultation with the Attorney 
General and the Chairman of the Federal Trade Commission, and with the 
prior written approval of the Attorney General, the Administrator may ap-
prove an agreement between small business concerns providing for a joint 
program of research and development if the Administrator determines that 
the joint program proposed will maintain and strengthen the free enterprise 
system and the economy of the Nation. 
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(d) WITHDRAWAL OF APPROVAL.—The Administrator or the Attorney 
General may at any time withdraw approval of the agreement and the joint 
program of research and development covered by the agreement if the Ad-
ministrator or Attorney General determines that the agreement or the joint 
program is no longer in the best interests of the competitive free enterprise 
system and the economy of the Nation. 
(e) PUBLICATION IN FEDERAL REGISTER.—A copy of an approval or dis-
approval and of any determination made under subsection (c) or (d) shall 
be published in the Federal Register. 
(f) NONDELEGABILITY.—The authority of the Administrator under this 
section may not be delegated. 
(g) NO VIOLATION OF ANTITRUST LAWS OR FEDERAL TRADE COMMIS-
SION ACT.— 
(1) IN GENERAL.—Subject to paragraph (2), no act or omission to 
act pursuant to and within the scope of a joint program for research 
and development under an agreement approved by the Administrator 
under this section shall be within the prohibitions of the antitrust laws 
or the Federal Trade Commission Act (15 U.S.C. 41 et seq.). 
(2) WITHDRAWAL OF APPROVAL.—On publication in the Federal 
Register of the notice of withdrawal of approval of an agreement grant-
ed under this section, by the Administrator or by the Attorney General, 
this section shall not apply to any subsequent act or omission to act 
by reason of the agreement or the approval. 
CHAPTER 263—SBIRs AND STTRs 
Subchapter I—SBIRs 
Sec. 
26301.
Federal agency SBIRs. 
26302.
Administration of SBIRs by Federal agencies. 
26303.
Funding agreement goals. 
26304.
SBIR policy directives. 
26305.
Discretionary technical assistance. 
26306.
Coordination of technology development programs. 
26307.
Purchase of American-made equipment and products. 
26308.
Use of Department of Agriculture extramural budget funds. 
26309.
Commercialization pilot program. 
26310.
Reports by Federal agencies. 
26311.
Termination. 
Subchapter II—STTRs 
26321.
Federal agency STTRs. 
26322.
Administration of STTRs by Federal agencies. 
26323.
STTR policy directive. 
26324.
STTR model agreement for intellectual property rights. 
Subchapter III—Provisions Relating to Both SBIRs and 
STTRs 
26341.
Database. 
26342.
Third phase agreements. 
26343.
Inclusion of SBIR and STTR information in strategic plans. 
26344.
Simplified reporting requirements. 
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