Title: Federal Contracting Fairness Act of 2022
Policy area: Commerce

Summary:
Federal Contracting Fairness Act of 2022
This bill makes various revisions to the Small Business Administration 8(a) Business Development program, which assists small businesses owned by socially and economically disadvantaged individuals participate in federal contracting. For example, the bill (1) allows participants to opt in to a ramp-up period if they meet certain requirements, and (2) increases the threshold for certain sole-source loans.

[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 5044 Introduced in Senate (IS)]

<DOC>






117th CONGRESS
  2d Session
                                S. 5044

   To improve the Federal contracting programs of the Small Business 
                Administration, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 29, 2022

  Mr. Cardin (for himself and Ms. Duckworth) introduced the following 
   bill; which was read twice and referred to the Committee on Small 
                     Business and Entrepreneurship

_______________________________________________________________________

                                 A BILL


 
   To improve the Federal contracting programs of the Small Business 
                Administration, 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 ``Federal Contracting Fairness Act of 
2022''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) There remain disparities in education, employment, and 
        business history, which includes unequal contracting 
        opportunities, unequal access to credit or capital, and 
        acquisition of credit or capital under commercially unfavorable 
        circumstances, between individuals defined as socially and 
        economically disadvantaged under the Small Business Act (15 
        U.S.C. 631 et seq.) and other individuals.
            (2) The following statistics reiterate the disparities 
        described in paragraph (1):
                    (A) Of the 16,300,000 students enrolled in 4-year 
                undergraduate university in the fall of 2016, 9,100,000 
                were White, 3,200,000 were Hispanic, 2,200,000 were 
                Black, and 1,100,000 million were Asian. In 2018, 41 
                percent of all 18- to 24-year-olds were enrolled in 
                college. However, 37 percent of Black 18- to 24-year-
                olds and 26 percent of Hispanic 18- to 24-year-olds 
                were enrolled in college. Additionally, in 2019, 29 
                percent of Black adults had a bachelor's degree or 
                higher, 21 percent of Latino or Hispanic adults had a 
                bachelor's degree or higher, and 22 percent of Pacific 
                Islander adults had a bachelor's degree or higher, as 
                compared to 45 percent of White adults.
                    (B) In 2020, 24 percent of Black employees and 24 
                percent of Hispanic employees report having been 
                discriminated against at work, compared to 15 percent 
                of White employees reporting discrimination at work. In 
                the first quarter of 2022, the unemployment rate in the 
                United States among White workers was 3.6 percent 
                compared to 6.8 percent among Black workers and 4.9 
                percent among Hispanic workers.
                    (C) With regards to contracting, in 2021, 2.78 
                percent of Federal contracts were awarded to Asian-
                owned small businesses, 1.67 percent went to Black-
                owned small businesses, 1.78 percent went to Hispanic-
                owned small businesses, and 2.69 percent went to Native 
                American-owned small businesses compared to 15.64 
                percent of Federal contracts awarded to White-owned 
                small businesses. In total, 9.4 percent of contracting 
                dollars went to minority-owned businesses when 19 
                percent of United States employer businesses are 
                minority-owned.
                    (D) In terms of access to capital, in 2021, 15 
                percent of Asian-owned small businesses received all 
                the financing they sought, 16 percent of Black-owned 
                small businesses received all the non-emergency 
                financing they sought, and 19 percent of Hispanic-owned 
                small businesses received all the non-emergency 
                financing they sought, as compared to 35 percent of 
                White-owned small businesses.
            (3) Given these disparities, the program established under 
        section 8(a) of the Small Business Act (15 U.S.C. 637(a)) 
        remains a vital part in increasing access to Federal 
        contracting opportunities for business owners considered 
        socially and economically disadvantaged, as defined in such 
        Act, and is a critical business development program for 
        ensuring these individuals can start and grow their businesses 
        to compete for Federal contracts.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Administration; administrator.--The terms 
        ``Administration'' and ``Administrator'' mean the Small 
        Business Administration and the Administrator thereof, 
        respectively.
            (2) Qualified hubzone small business concern; small 
        business concern; small business concern owned and controlled 
        by service-disabled veterans; small business concern owned and 
        controlled by women.--The terms ``qualified HUBZone small 
        business concern'', ``small business concern'', ``small 
        business concern owned and controlled by service-disabled 
        veterans'', and ``small business concern owned and controlled 
        by women'' have the meanings given those terms in section 3 of 
        the Small Business Act (15 U.S.C. 632).

SEC. 4. DURATION OF PARTICIPATION; RAMP-UP PERIOD; TRANSITION PERIOD.

    (a) Extension of Program Participation Period.--Section 7(j)(15) of 
the Small Business Act (15 U.S.C. 636(j)(15)) is amended--
            (1) in the matter preceding subparagraph (A), by striking 
        ``nine years'' and inserting ``10 years'';
            (2) in subparagraph (A), by striking ``four years'' and 
        inserting ``5 years''; and
            (3) in subparagraph (B), by striking ``five years'' and 
        inserting ``5 years''.
    (b) Ramp-Up Period.--
            (1) Definition.--In this subsection, the term ``covered 
        small business concern'' means a small business concern that, 
        as of the date of enactment of this Act--
                    (A) is in the first 3 years as a participant in the 
                program established under section 8(a) of the Small 
                Business Act (15 U.S.C. 637(a));
                    (B) is an individually owned entity; and
                    (C) has not been awarded a contract under such 
                section 8(a), excluding contracts that meet the 
                simplified acquisition threshold described in section 
                134 of title 41, United States Code.
            (2) Election.--
                    (A) In general.--Subject to subparagraph (B), a 
                covered small business concern may elect at the time of 
                certification to begin the 10-year program 
                participation period under section 7(j)(15) of the 
                Small Business Act (15 U.S.C. 636(j)(15)), as amended 
                by subsection (a), on the earlier of--
                            (i) the date on which the covered small 
                        business concern is awarded a contract under 
                        section 8(a) of the Small Business Act (15 
                        U.S.C. 637(a)); or
                            (ii) 3 years after the date on which the 
                        covered small business concern was certified to 
                        participate in the program established under 
                        such section 8(a).
                    (B) Limitation.--Notwithstanding subparagraph (A), 
                the program participation period for a covered small 
                business concern under section 7(j)(15) shall not 
                exceed 13 years.
            (3) Training.--
                    (A) In general.--Except as provided in subparagraph 
                (B), if a covered small business concern makes an 
                election under paragraph (2), the covered small 
                business concern shall--
                            (i) participate in 12 hours per year of 
                        marketing, business development training, and 
                        engagement to show intent in building capacity 
                        to participate in the Federal contracting 
                        market, which shall be satisfied through 
                        training provided by the Administration, the 
                        Minority Business Development Agency, resource 
                        partners of the Administration, Procurement 
                        Technical Assistance Centers, or national 
                        organizations with expertise in Federal 
                        contracting or that provide contracting 
                        certifications; and
                            (ii) log the progress of the covered small 
                        business concern on the training carried out 
                        under subparagraph (A) in the annual review 
                        submitted by the covered small business 
                        concern.
                    (B) Exception.--
                            (i) In general.--The requirements under 
                        subparagraph (A)(i) shall be waived for a 
                        covered small business concern if, before 
                        reaching 36 hours of training under 
                        subparagraph (A)(i), the covered small business 
                        concern is awarded a contract under section 
                        8(a) of the Small Business Act (15 U.S.C. 
                        637(a)).
                            (ii) Requirement to log.--Notwithstanding 
                        clause (i), a covered small business concern 
                        that receives a waiver under clause (i) is 
                        required to log the training in which the small 
                        business concern participates under 
                        subparagraph (A) in accordance with clause (ii) 
                        of such subparagraph.
    (c) Transition Period.--
            (1) Definitions.--In this subsection--
                    (A) the term ``covered small business concern'' 
                means a small business concern that is in the final 3 
                years of participation in the program established under 
                section 8(a) of the Small Business Act (15 U.S.C. 
                637(a)); and
                    (B) the term ``economically disadvantaged 
                individual'' means an individual described in section 
                8(a)(6)(A) of the Small Business Act (15 U.S.C. 
                637(a)(6)(A)).
            (2) Increased amounts.--The Administrator may permit the 
        owner of a covered small business concern to have an adjusted 
        gross income and personal net worth that is not more than 3 
        times higher than the amount allowed for the covered small 
        business program under the program established under section 
        8(a) of the Small Business Act (15 U.S.C. 637(a)), and continue 
        to be considered economically disadvantaged for the purposes of 
        that program, if the owner demonstrates--
                    (A) an investment in the covered small business 
                concern to continue to compete in the Federal 
                contracting market, such as investment in company 
                infrastructure;
                    (B) a plan for how the covered small business 
                concern is being prepared to compete for Federal 
                contracts after exiting the program established under 
                section 8(a) of the Small Business Act (15 U.S.C. 
                637(a)); and
                    (C) any other metrics as determined by the 
                Administrator.

SEC. 5. ADMINISTRATIVE REQUIREMENTS FOR 8(A) FIRMS.

    Not later than 90 days after the date of enactment of this Act, the 
Administrator shall issue or revise regulations to--
            (1) make the review process for small business concerns 
        already certified under section 8(a) of the Small Business Act 
        (15 U.S.C. 637(a)) less burdensome by modifying the annual 
        review of each such small business concern, including by--
                    (A) providing that, with respect to such an annual 
                review, each such small business concern--
                            (i) shall submit to the Administrator a new 
                        business plan, including a contract forecast, a 
                        transitional management plan, and an annual 
                        performance of contracts, and a business 
                        capture strategy approach only if the plan or 
                        approach, as applicable, has changed, as 
                        compared with the previous year; and
                            (ii) may indicate to the Administrator that 
                        there has been no change to the business plan 
                        or business capture strategy approach described 
                        in clause (i) during the previous year; and
                    (B) making such other reductions in the number of 
                forms and documents submitted by each such small 
                business concern that the Administrator determines 
                necessary, while still ensuring that each such small 
                business concern maintains good standing with respect 
                to the program carried out under such section 8(a);
            (2) determine a new process for how the Administrator 
        processes the annual review of each such small business concern 
        that, at a minimum, requires the Administrator to conduct a 
        review, which shall be expedited, of the small business concern 
        when the small business concern is awarded a contract under 
        such section 8(a); and
            (3) coordinate with the General Services Administration to 
        streamline the Past Performance Questionnaire form for small 
        business concerns and Federal agencies participating in the 
        programs established under sections 8(a), 8(m), 31, and 36 of 
        the Small Business Act (15 U.S.C. 637(a), 637(m), 657a, 657f).

SEC. 6. SBA REPRESENTATION ON THE FEDERAL ACQUISITION REGULATION 
              COUNCIL.

    Section 1302(b) of title 41, United States Code, is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (C), by striking ``and'' at the 
                end;
                    (B) in subparagraph (D), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following:
                    ``(E) the Administrator of the Small Business 
                Administration.''; and
            (2) in paragraph (2)(A), by striking ``subparagraphs (B) to 
        (D)'' and inserting ``subparagraphs (B) through (E)''.

SEC. 7. OFFICE OF SMALL AND DISADVANTAGED BUSINESS UTILIZATION; 
              DIRECTOR.

    Section 15(k)(3) of the Small Business Act (15 U.S.C. 644(k)(3)) is 
amended by inserting ``be at a level that is not less senior than the 
Under Secretary of Defense for Policy or the Under Secretary of Defense 
for Acquisition and Sustainment,'' after ``appraisals),''.

SEC. 8. SOLE SOURCE THRESHOLDS.

    The Small Business Act (15 U.S.C. 631 et seq.) is amended--
            (1) in section 8 (15 U.S.C. 637)--
                    (A) in subsection (a)(1)(D)(i), by striking 
                subclause (II) and inserting the following:
                                    ``(II) the anticipated award price 
                                of the contract (including options and 
                                options periods) will exceed--
                                            ``(aa) $12,000,000 in the 
                                        case of a contract opportunity 
                                        assigned a North American 
                                        Industry Classification System 
                                        code for research and 
                                        development, except that such 
                                        amount shall be $14,000,000 if 
                                        the small business concern is a 
                                        participating or graduated 
                                        mentor in, or a joint venture 
                                        established under, the mentor-
                                        protege program under section 
                                        45;
                                            ``(bb) $14,000,000 (or 
                                        $16,000,000, if the small 
                                        business concern is a 
                                        participating or graduated 
                                        mentor in, or a joint venture 
                                        established under, the mentor-
                                        protege program under section 
                                        45) in the case of a contract 
                                        opportunity described in item 
                                        (aa), if the small business 
                                        concern subcontracts with an 
                                        institution of higher education 
                                        described in section 371(a) of 
                                        the Higher Education Act of 
                                        1965 (20 U.S.C. 1067q(a)), for 
                                        which the limitations on 
                                        subcontracting under section 46 
                                        shall not apply;
                                            ``(cc) $14,000,000 in the 
                                        case of a contract opportunity 
                                        assigned a North American 
                                        Industry Classification System 
                                        code for manufacturing, except 
                                        that such amount shall be 
                                        $16,000,000 if the small 
                                        business concern is a 
                                        participating or graduated 
                                        mentor in, or a joint venture 
                                        established under, the mentor-
                                        protege program under section 
                                        45; or
                                            ``(dd) $10,000,000 in the 
                                        case of any other contract 
                                        opportunity, except that such 
                                        amount shall be $12,000,000 if 
                                        the small business concern is a 
                                        participating or graduated 
                                        mentor in, or a joint venture 
                                        established under, the mentor-
                                        protege program under section 
                                        45.''; and
                    (B) in subsection (m)--
                            (i) in paragraph (7)(B), by striking 
                        clauses (i) and (ii) and inserting the 
                        following:
                            ``(i) $12,000,000 in the case of a contract 
                        opportunity assigned a North American Industry 
                        Classification System code for research and 
                        development;
                            ``(ii) $14,000,000 in the case of a 
                        contract opportunity described in item (aa), if 
                        the small business concern partners with an 
                        institution of higher education described in 
                        section 371(a) of the Higher Education Act of 
                        1965 (20 U.S.C. 1067q(a));
                            ``(iii) $14,000,000 in the case of a 
                        contract opportunity assigned a North American 
                        Industry Classification System code for 
                        manufacturing; or
                            ``(iv) $10,000,000 in the case of any other 
                        contract opportunity; and''; and
                            (ii) in paragraph (8)(B), by striking 
                        clauses (i) and (ii) and inserting the 
                        following:
                            ``(i) $12,000,000 in the case of a contract 
                        opportunity assigned a North American Industry 
                        Classification System code for research and 
                        development;
                            ``(ii) $14,000,000 in the case of a 
                        contract opportunity described in item (aa), if 
                        the small business concern partners with an 
                        institution of higher education described in 
                        section 371(a) of the Higher Education Act of 
                        1965 (20 U.S.C. 1067q(a));
                            ``(iii) $14,000,000 in the case of a 
                        contract opportunity assigned a North American 
                        Industry Classification System code for 
                        manufacturing; or
                            ``(iv) $10,000,000 in the case of any other 
                        contract opportunity; and'';
            (2) in section 31(c)(2)(A)(ii) (15 U.S.C. 
        657a(c)(2)(A)(ii)), by striking subclauses (I) and (II) and 
        inserting the following:
                                    ``(I) $12,000,000 in the case of a 
                                contract opportunity assigned a North 
                                American Industry Classification System 
                                code for research and development;
                                    ``(II) $14,000,000 in the case of a 
                                contract opportunity described in item 
                                (aa), if the qualified HUBZone small 
                                business concern partners with an 
                                institution of higher education 
                                described in section 371(a) of the 
                                Higher Education Act of 1965 (20 U.S.C. 
                                1067q(a));
                                    ``(III) $14,000,000 in the case of 
                                a contract opportunity assigned a North 
                                American Industry Classification System 
                                code for manufacturing; or
                                    ``(IV) $10,000,000 in the case of 
                                any other contract opportunity; and''; 
                                and
            (3) in section 36(c)(2) (15 U.S.C. 657f(c)(2)), by striking 
        subparagraphs (A) and (B) and inserting the following:
                    ``(A) $12,000,000 in the case of a contract 
                opportunity assigned a North American Industry 
                Classification System code for research and 
                development;
                    ``(B) $14,000,000 in the case of a contract 
                opportunity described in item (aa), if the small 
                business concern partners with an institution of higher 
                education described in section 371(a) of the Higher 
                Education Act of 1965 (20 U.S.C. 1067q(a));
                    ``(C) $14,000,000 in the case of a contract 
                opportunity assigned a North American Industry 
                Classification System code for manufacturing; or
                    ``(D) $10,000,000 in the case of any other contract 
                opportunity; and''.

SEC. 9. MENTOR-PROTEGE PROGRAM.

    (a) Removal of Restriction on Number of Mentors.--
            (1) In general.--Section 45(b)(3)(A) of the Small Business 
        Act (15 U.S.C. 657r(b)(3)(A)) is amended by striking ``, 
        including any restrictions'' and all that follows through the 
        end of the subparagraph and inserting a period.
            (2) Regulations.--The Administrator shall issue regulations 
        to provide that there is no restriction on the number of 
        mentors under section 45 of the Small Business Act (15 U.S.C. 
        657r) that a small business concern participating in the 
        program established under section 8(a) of the Small Business 
        Act (15 U.S.C. 637(a)) may have while participating in the 
        program, if the mentor-protege relationships do not conflict or 
        compete with each other.
    (b) Database.--The Administrator shall create an online centralized 
database for mentors and proteges (as defined in section 45 of the 
Small Business Act (15 U.S.C. 657r)) to foster connection and support 
business development between the 2 groups.
    (c) Streamlined Process.--The Administrator shall issue regulations 
to streamline the process for applying to the mentor-protege program 
established under section 45 of the Small Business Act (15 U.S.C. 
657r).

SEC. 10. CERTIFICATION PROCESS.

    (a) Regulations.--Not later than 1 year after the date of enactment 
of this Act, the Administrator shall issue regulations to streamline 
the certification process for small business concerns seeking to become 
certified as--
            (1) a participant in the program established under section 
        8(a) of the Small Business Act (15 U.S.C. 637(a));
            (2) a small business concern owned and controlled by women;
            (3) a qualified HUBZone small business concern; or
            (4) a small business concern owned and controlled by 
        service-disabled veterans.
    (b) Report.--Not later than 180 days after the date of enactment of 
this Act, the Administrator shall submit to the Committee on Small 
Business and Entrepreneurship of the Senate and the Committee on Small 
Business of the House of Representatives a report that outlines how the 
Administrator plans to streamline the certification process described 
in subsection (a).

SEC. 11. REPEAL OF BONAFIDE OFFICE RULE.

    Section 8(a) of the Small Business Act (15 U.S.C. 637(a)) is 
amended by repealing paragraph (11).

SEC. 12. REPORTS.

    (a) Demographic Data.--Not later than 180 days after the date of 
enactment of this Act, and annually thereafter, the Administrator 
shall--
            (1) make publicly available on the website of the 
        Administration--
                    (A) disaggregated data on the size and number of 
                contracts in total by the Federal Government and by 
                each Federal agency to small business concerns by 
                demographics, including, at a minimum, the gender, 
                race, and ethnicity categories published by the 
                Administration in the disaggregated Federal contracting 
                data in December 2021, and the size of the small 
                business concern; and
                    (B) data on the number of small business concerns 
                owned and controlled by disabled individuals that are 
                participating in the program established under section 
                8(a); and
            (2) with consultation with the Administrator of General 
        Services, include on SAM.gov the ability for small business 
        concerns to report the data described in paragraph (1)(B).
    (b) Review of Size Standards.--Not later than 180 days after the 
date of enactment of this Act, the Administrator shall conduct a review 
of and submit to Congress a report on the size standards applicable to 
participants in the program established under section 8(a) of the Small 
Business Act (15 U.S.C. 637(a)), and outline ways in which the 
Administration can modify size standards to allow program participants 
to grow and continue to exist after exiting the program.
    (c) Ability To Obtain Set-Aside and Sole Source Contracts.--Not 
later than 1 year after the date of enactment of this Act, the 
Administrator shall submit to Congress a report on--
            (1) the ability of small business concerns participating in 
        the program established under 8(a) of the Small Business Act 
        (15 U.S.C. 637(a)) that are not owned by Alaska Native 
        Corporations or Native Hawaiian Organizations to compete for 
        and successfully obtain set-aside contracts, including by 
        reporting data comparing the distribution of awarded set-aside 
        contracts among--
                    (A) small business concerns participating in that 
                program that are not owned by Alaska Native 
                Corporations or Native Hawaiian Organizations; and
                    (B) small business concerns participating in that 
                program that are owned by Alaska Native Corporations or 
                Native Hawaiian Organizations; and
            (2) the best sole source thresholds to enable small 
        business concerns participating in the program established 
        under 8(a) of the Small Business Act (15 U.S.C. 637(a)) to 
        secure available sole source contracts.
    (d) Changes to 8(a) Program.--Not later than 180 days after the 
date of enactment of this Act, the Administrator shall submit to 
Congress a report on a plan to implement the changes to the program 
established under section 8(a) of the Small Business Act (15 U.S.C. 
637(a)) required under this Act and the amendments made by this Act.

SEC. 13. AUTHORIZATION OF APPROPRIATIONS.

    There is authorized to be appropriated to the Administration--
            (1) for fiscal year 2023 and every fiscal year thereafter--
                    (A) $20,000,000 to increase the number of 
                procurement center representatives under section 15(l) 
                of the Small Business Act (15 U.S.C. 644(l)) and 
                commercial marketing representatives, of which 
                $2,000,000 of those amounts shall be used to provide 
                those individuals with increased training on the 
                process to be awarded a sole-source contract;
                    (B) $20,000,000 to increase the number of district 
                office business specialists available under the 8(a) 
                program;
                    (C) $5,000,000 for costs related to certifying 
                small business concerns as small business concerns 
                owned and controlled by women; and
                    (D) $400,000 for costs related to processing 
                applications to participate in the mentor-protege 
                program established under section 45 of the Small 
                Business Act (15 U.S.C. 657r); and
            (2) for fiscal year 2023, to remain available until 
        expended, $2,500,000 to replace the dynamic small business 
        search database of the Administration.
                                 <all>