Title: ESOP Business Act of 2019
Policy area: Government Operations and Politics

Summary:
ESOP Business Act of 2019
This bill gives businesses wholly owned through an employee stock ownership plan various advantages when bidding for executive agency procurement contracts, including a pricing preference not in excess of 10%.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2022 Introduced in House (IH)]

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116th CONGRESS
  1st Session
                                H. R. 2022

To establish certain procurement procedures with respect to businesses 
         wholly-owned through an ESOP, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 2, 2019

 Mr. Bucshon introduced the following bill; which was referred to the 
Committee on Oversight and Reform, and in addition to the Committees on 
  Armed Services, and Small Business, for a period to be subsequently 
   determined by the Speaker, in each case for consideration of such 
 provisions as fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
To establish certain procurement procedures with respect to businesses 
         wholly-owned through an ESOP, 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 referred to as the ``ESOP Business Act of 2019''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) Businesses wholly-owned through an ESOP--
                    (A) offer unique benefits to the United States and 
                to customers of such businesses;
                    (B) provide better retirement security, work 
                culture, and wage growth for workers; and
                    (C) reduce wealth inequality among managers and 
                employees.
            (2) Current Federal contracting laws may inadvertently 
        exclude businesses wholly-owned through an ESOP from key 
        projects.
            (3) The growth of the number of businesses wholly-owned 
        through an ESOP benefits employees of such businesses.

SEC. 3. SENSE OF CONGRESS.

    It is the sense of Congress that--
            (1) businesses wholly-owned through an ESOP are beneficial 
        to the economy;
            (2) Congress should provide incentives for businesses to 
        become businesses wholly-owned through an ESOP; and
            (3) businesses wholly-owned through an ESOP should be 
        rewarded through the Federal contracting process for the 
        benefits that such businesses provide.

SEC. 4. DEEMING OF BUSINESSES WHOLLY-OWNED THROUGH AN ESOP AS SMALL 
              BUSINESS CONCERNS.

    Section 3(a) of the Small Business Act (15 U.S.C. 632(a)) is 
amended by adding at the end the following new paragraph:
            ``(10) Application to businesses wholly-owned through an 
        esop.--
                    ``(A) In general.--Notwithstanding the requirements 
                relating to size standards in this subsection, a 
                business wholly-owned through an ESOP shall be deemed 
                to be a small business concern for the purposes of any 
                Federal procurement programs.
                    ``(B) Definition.--The term `business wholly-owned 
                through an ESOP' means a business for which 100 percent 
                of the outstanding stock is held through an employee 
                stock ownership plan (as defined in section 4795(e)(7) 
                of the Internal Revenue Code).''.

SEC. 5. PRICING PREFERENCE FOR CONTRACTS AWARDED TO BUSINESSES WHOLLY-
              OWNED THROUGH AN ESOP.

    (a) Pricing Preference for Defense Contracts.--Section 2304 of 
title 10, United States Code, is amended by adding at the end the 
following new subsection:
    ``(m) For a contract awarded pursuant to this section, the head of 
the agency may enter into a contract with a business wholly-owned 
through an ESOP using a price evaluation preference not in excess of 10 
percent when evaluating an offer received from such a business. In this 
subsection, the term `business wholly-owned through an ESOP' means a 
business for which 100 percent of the outstanding stock is held through 
an employee stock ownership plan (as defined in section 4795(e)(7) of 
the Internal Revenue Code).''.
    (b) Pricing Preference for Civilian Contracts.--Section 3301 of 
title 41, United States Code, is amended by adding at the end the 
following new subsection:
    ``(g) Pricing Preference for Contracts.--For a contract awarded 
pursuant to this section, the head of an agency may enter into a 
contract with a business wholly-owned through an ESOP using a price 
evaluation preference not in excess of 10 percent when evaluating an 
offer received from such a business. In this subsection, the term 
`business wholly-owned through an ESOP' means a business for which 100 
percent of the outstanding stock is held through an employee stock 
ownership plan (as defined in section 4795(e)(7) of the Internal 
Revenue Code).''.

SEC. 6. FOLLOW-ON CONTRACTS FOR BUSINESSES WHOLLY-OWNED THROUGH AN 
              ESOP.

    (a) Use of Noncompetitive Procedures for Defense Contracts.--
Section 2304(d)(1) of title 10, United States Code, is amended by 
adding at the end the following new subparagraph:
            ``(C) in the case of a follow-on contract for the delivery 
        of goods or services that are the same as or substantially 
        similar to the goods or services delivered under a prior 
        contract awarded to a source that is a business wholly-owned 
        through an ESOP (as defined in subsection (m)), such goods or 
        services shall be deemed to be available only from that source 
        if the Secretary rates the performance of that source on the 
        prior contract as satisfactory or better (or the equivalent) in 
        the applicable past performance database used by the Secretary 
        for making source selection decisions''.
    (b) Use of Noncompetitive Procedures for Civilian Contracts.--
Section 3304(b) of title 41, United States Code, is amended--
            (1) in paragraph (1), by striking ``or'' after 
        ``procurement;'';
            (2) in paragraph (2)(B), by striking the period and 
        inserting ``; or''; and
            (3) by adding at the end the following:
            ``(3) a follow-on contract for the delivery of goods or 
        services determined by the head of the executive agency to be 
        substantially similar to the goods or services delivered under 
        a prior contract awarded to a source that is a business wholly-
        owned through an ESOP, such goods or services shall be deemed 
        to be available only from that source if the executive agency 
        rates the performance of that source on the prior contract as 
        satisfactory or better (or the equivalent) in the applicable 
        past performance database used by the head of the agency for 
        making source selection decisions.''.
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