Title: Incentivizing Fairness in Subcontracting Act
Policy area: Commerce

Summary:
Incentivizing Fairness in Subcontracting Act
This bill amends the Small Business Act to modify provisions regarding what credit is given to small business prime contractors for the use of certain lower-tier subcontractors in order to attain the percentage goals specified in their subcontracting plans. Such credit may (currently, shall) be given if the goals pertain only to single contracts with federal (currently, executive) agencies. The bill eliminates provisions that allow credit to be given if the goals pertain to more than one contract with one or more federal agencies or to one contract with more than one federal agency. Credit is prohibited for subcontracts at any tier required to be reported under a commercial plan or a Department of Defense comprehensive subcontracting plan.
In addition, the bill (1) requires each contracting agency to collect and review data on subcontracting plans, and (2) establishes a dispute process for non-payment to subcontractors.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6367 Introduced in House (IH)]

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115th CONGRESS
  2d Session
                                H. R. 6367

  To amend the Small Business Act to specify what credit is given for 
certain subcontractors and to provide a dispute process for non-payment 
               to subcontractors, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 13, 2018

Mr. Lawson of Florida introduced the following bill; which was referred 
                   to the Committee on Small Business

_______________________________________________________________________

                                 A BILL


 
  To amend the Small Business Act to specify what credit is given for 
certain subcontractors and to provide a dispute process for non-payment 
               to subcontractors, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Incentivizing Fairness in 
Subcontracting Act''.

SEC. 2. SMALL BUSINESS LOWER-TIER SUBCONTRACTING.

    Section 8(d) of the Small Business Act (15 U.S.C. 637(d)) is 
amended--
            (1) by amending paragraph (16) to read as follows:
            ``(16) Credit for certain small business concern 
        subcontractors.--
                    ``(A) In general.--For purposes of determining 
                whether or not a prime contractor has attained the 
                percentage goals specified in paragraph (6)--
                            ``(i) if the subcontracting goals pertain 
                        only to a single contract with the Federal 
                        agency, the prime contractor may elect to 
                        receive credit for small business concerns 
                        performing as first tier subcontractors or 
                        subcontractors at any tier pursuant to the 
                        subcontracting plans required under paragraph 
                        (6)(D) in an amount equal to the dollar value 
                        of work awarded to such small business 
                        concerns; and
                            ``(ii) credit is not permitted for 
                        subcontracts at any tier that are to be 
                        reported under a commercial plan or a 
                        Department of Defense comprehensive 
                        subcontracting plan.
                    ``(B) Collection and review of data on 
                subcontracting plans.--The head of each contracting 
                agency shall ensure that--
                            ``(i) the agency collects and reports data 
                        on the extent to which contractors of the 
                        agency meet the goals and objectives set forth 
                        in subcontracting plans submitted pursuant to 
                        this subsection; and
                            ``(ii) the agency periodically reviews data 
                        collected and reported pursuant to subparagraph 
                        (A) for the purpose of ensuring that such 
                        contractors comply in good faith with the 
                        requirements of this subsection and 
                        subcontracting plans submitted by the 
                        contractors pursuant to this subsection.
                    ``(C) Rule of construction.--Nothing in this 
                paragraph shall permit lower-tier subcontracting 
                goaling requirements to prime contractors that are 
                eligible to receive lower-tier subcontracting credit 
                under this paragraph.
                    ``(D) Definitions.--For purposes of this paragraph:
                            ``(i) Commercial plan.--The term 
                        `commercial plan' has the meaning give that 
                        term under section 19.701 of the Federal 
                        Acquisition Regulation.
                            ``(ii) Comprehensive subcontracting plan.--
                        The term `comprehensive subcontracting plan' 
                        has the meaning given that term under section 
                        252.219-7004 of the Defense Federal Acquisition 
                        Regulation Supplement.''; and
            (2) by adding at the end the following:
            ``(18) Dispute process for non-payment to subcontractors.--
                    ``(A) Notice to agency.--With respect to a contract 
                with a Federal agency, a subcontractor of a prime 
                contractor on such contract may, if the subcontractor 
                has not received payment for work performed within 90 
                days of the completion of such work, notify the Office 
                of Small and Disadvantaged Business Utilization 
                (`OSDBU') of the Federal agency of such lack of 
                payment, if such notice is provided to the agency 
                within the 15-day period following the end of such 90 
                days.
                    ``(B) Agency determination.--Upon receipt of a 
                notice described under clause (i), the OSDBU shall 
                verify whether such lack of payment has occurred and 
                determine whether such lack of payment is due to an 
                undue restriction placed on the prime contractor by an 
                action of the Federal agency.
                    ``(C) Cure period.--If the OSDBU verifies the lack 
                of payment under clause (ii) and determines that such 
                lack of payment is not due to an action of the Federal 
                agency, the OSDBU shall notify the prime contractor and 
                provide the prime contractor with a 15-day period in 
                which the primae contractor may make the payment owed 
                to the subcontractor.
                    ``(D) Result of nonpayment.--If, after notifying 
                the prime contractor under clause (iii), the OSDBU 
                determines that the prime contractor has not fully paid 
                the amount owed within the 15-day cure period described 
                under clause (iii), the OSDBU shall ensure that such 
                failure to pay is reflected in the Contractor 
                Performance Assessment Reporting system.''.
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