I 113th CONGRESS 1st Session H. R. 2551 IN THE HOUSE OF REPRESENTATIVES June 27, 2013 Mr. Rush introduced the following bill; which was referred to the Committee on Small Business , and in addition to the Committees on Financial Services and Oversight and Government Reform , 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 amend the Small Business Act to ensure that certain Federal contracts are set aside for small businesses, to enhance services to small businesses that are disadvantaged, and for other purposes.

1. Short title This Act may be cited as the Expanding Opportunities for Main Street Act of 2013 . I SMALL BUSINESS ADMINISTRATION 101. Contract opportunities for small business concerns (a) Definitions In this section— (1) the term eligible contract means any contract for the acquisition of goods or services that is in an amount (including options) of more than $3,000 and less than $500,000; and (2) the term small business concern has the meaning given that term under section 3(a) of the Small Business Act ( 15 U.S.C. 632(a) ). (b) In general Notwithstanding any other provision of law, a Federal department or agency shall, to the extent practicable, award to a small business concern each eligible contract let by the department or agency. (c) Sole source contracts A Federal department or agency may award an eligible contract as a sole source contract to a small business concern if at least 1 small business concern submits an offer with respect to the eligible contract. (d) Award to small business not practicable (1) In general If a contracting officer of a Federal department or agency determines that awarding an eligible contract to a small business concern under subsection (b) is not practicable, the contracting officer shall make available to the Administrator of the Small Business Administration and the public— (A) the determination and reasoning of such officer with respect to the eligible contract; and (B) the name of each small business concern that submitted an offer with respect to the eligible contract. (2) Review The Administrator of the Small Business Administration shall— (A) review a determination under paragraph (1); and (B) if the Administrator determines it is appropriate, open the eligible contract opportunity for the submission of additional offers and award the contract. 102. Enhancement of services to small businesses that are disadvantaged (a) Net worth Section 8(a)(6)(A) of the Small Business Act (15 U.S.C. 637(a)(6)(A)) is amended by inserting after disadvantaged individual. the following: For purposes of this section, an individual having a net worth of more than $1,500,000 is not economically disadvantaged. . (b) Time limit on participation Section 7(j)(15) of the Small Business Act (15 U.S.C. 636(j)(15)) is amended— (1) by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively; (2) by inserting (A) after (15) ; and (3) by adding at the end the following: (B) No time limitation relating to the period that a small business concern may receive developmental assistance under the Program and contracts under section 8(a) shall apply to a small business concern that has not completed a contract under section 8(a). . 103. Bundled contracts (a) Definitions Section 3(o) of the Small Business Act ( 15 U.S.C. 632(o) ) is amended to read as follows: (o) Definitions of bundling of contract requirements and related terms In this Act: (1) Bundled contract (A) In general The term bundled contract means a contract or order that is entered into to meet procurement requirements that are consolidated in a bundling of contract requirements, without regard to how the procuring agency has designated the contract or order or whether a study of the effects of the solicitation on civilian or military personnel has been made. (B) Exceptions The term does not include— (i) a contract or order with an aggregate dollar value below the dollar threshold; or (ii) a contract or order that is entered into to meet an exempted requirement. (2) Bundling of contract requirements (A) In general The term bundling of contract requirements means the use of any bundling methodology to satisfy 2 or more procurement requirements for goods or services previously supplied or performed under separate smaller contracts or orders, or to satisfy 2 or more procurement requirements for construction services of a type historically performed under separate smaller contracts or orders, that is likely to be unsuitable for award to a small business concern due to— (i) the diversity, size, or specialized nature of the elements of the performance specified; (ii) the aggregate dollar value of the anticipated award; (iii) the geographical dispersion of the contract or order performance sites; or (iv) any combination of the factors described in clauses (i), (ii), and (iii). (B) Inclusion of new features or functions A combination of contract requirements that would meet the definition of a bundling of contract requirements but for the addition of a procurement requirement with at least 1 new good or service shall be considered to be a bundling of contract requirements unless the new features or functions substantially transform the goods or services and will provide measurably substantial benefits to the Federal Government in terms of quality, performance, or price. (C) Exceptions The term bundling of contract requirements does not include— (i) the use of a bundling methodology for an anticipated award with an aggregate dollar value below the dollar threshold; or (ii) the use of a bundling methodology to meet an exempted requirement. (3) Bundling methodology The term bundling methodology means— (A) a solicitation to obtain offers for a single contract or order, or a multiple award contract or order; or (B) a solicitation of offers for the issuance of a task or a delivery order under an existing single or multiple award contract or order. (4) Separate smaller contract The term separate smaller contract , with respect to bundling of contract requirements, means a contract or order that has been performed by 1 or more small business concerns or was suitable for award to 1 or more small business concerns. (5) Dollar threshold The term dollar threshold means— (A) $65,000,000, in the case of a contract or order that is solely for construction services; and (B) $5,000,000 for a contract or order not described in subparagraph (A). (6) Exempted requirement The term exempted requirement means a procurement requirement solely for items that are not commercial items (as the term commercial item is defined in section 103 of title 41, United States Code). (7) Procurement requirement The term procurement requirement means a determination by a Federal agency that a specified good or service is needed to satisfy the mission of the Federal agency. . (b) Proposed procurement requirements Section 15(a) of the Small Business Act ( 15 U.S.C. 644(a) ) is amended— (1) in the third sentence, by striking necessary and justified and inserting necessary and justified, and identifying information on the incumbent contract holders, a description of the industries that might be interested in bidding on the contract requirements, and the number of small businesses listed in the industry categories that could be excluded from future bidding if the contract is combined or packaged ; and (2) by striking the sixth sentence and inserting the following: Whenever the Administration and the contracting procurement agency fail to agree, the Administrator may review the proposed procurement or delay the solicitation process for not more than 10 days to make recommendations, and the matter shall be submitted to the Director of the Office of Management and Budget to mediate the disagreement. . 104. Federal contracting goals (a) Increase in certain goals Section 15(g)(1) of the Small Business Act (15 U.S.C. 644(g)(1)) is amended— (1) by striking not less than 23 percent and inserting not less than 25 percent ; and (2) by striking not less than 5 percent each place it appears and inserting not less than 10 percent . (b) Limitation on number of categories for which a business may qualify Section 15(g) of the Small Business Act ( 15 U.S.C. 644(g) ) is amended by adding at the end the following: (3) A Federal agency may not include a business concern in more than 2 specified categories for purposes of determining whether the Federal agency has met the Government-wide goals under this subsection for the award of contracts to business concerns in specified categories. In this paragraph, the term specified category means small business concerns, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women. . 105. Implementation of subcontracting plans Section 8(d) of the Small Business Act (15 U.S.C. 637(d)) is amended by adding at the end the following: (13) In the case of any contract containing a subcontracting plan included pursuant to paragraph (4) or (5)— (A) The Administrator shall collaborate with the Federal agency awarding the contract to develop and include in the contract a clause providing that, if the contractor meets the percentage goal for the utilization of small business concerns, including those owned and controlled by socially and economically disadvantaged individuals, as set forth in the subcontracting plan, the Federal agency may give additional consideration to contractor. (B) The Federal agency awarding the contract shall require the contractor to provide written justification to the agency whenever the contractor, in performing the contract, does not enter into a subcontract with, or substitutes another subcontractor for, a specific small business concern identified in the subcontracting plan. (14) The Administration shall establish a telephone line or other electronic means of communication through which a small business concern identified in a subcontracting plan by an offeror or bidder may communicate to the Administration any concerns regarding major deviations by prime contractors from the use of small business concerns as subcontractors under the prime contract as described in the subcontracting plan. . 106. Requirement to consider use of small business concerns owned and controlled by socially and economically disadvantaged individuals when considering past compliance with subcontracting plans Section 8(d) of the Small Business Act ( 15 U.S.C. 637(d) ) is amended— (1) in paragraph (4)(C), in the second sentence, by inserting , especially compliance with the goal set forth in such plans for the utilization of small business concerns owned and controlled by socially and economically disadvantaged individuals, after other such subcontracting plans ; and (2) in paragraph (5)(B), in the second sentence, by inserting , especially compliance with the goal set forth in such plans for the utilization of small business concerns owned and controlled by socially and economically disadvantaged individuals, after other such subcontracting plans . II MINORITY BUSINESS DEVELOPMENT AGENCY 201. Definitions In this title: (1) Historically disadvantaged individual The term historically disadvantaged individual means any individual who is a member of a group that is designated as eligible to receive assistance under section 1400.1 of title 15, Code of Federal Regulations, as in effect on January 1, 2009. (2) Principal The term principal means any person that the Director determines to exercise significant control over the regular operations of a business entity. (3) Program The term Program means the Minority Business Development Program established under section 202. 202. Emerging minority business development program The National Director of the Minority Business Development Agency shall establish the Minority Business Development Program to assist qualified minority businesses. The Program shall provide to such businesses the following: (1) Technical assistance under section 204. (2) Loan guarantees under section 208. (3) Contract procurement assistance under section 205. 203. Qualified minority business (a) Certification For purposes of the Program, the National Director of the Minority Business Development Agency may certify as a qualified minority business any entity that satisfies each of the following: (1) Not less than 51 percent of the entity is directly and unconditionally owned or controlled by historically disadvantaged individuals. (2) Each officer or other individual who exercises control over the regular operations of the entity is a historically disadvantaged individual. (3) The net worth of each principal of the entity is not greater than $2,000,000. (The equity of a disadvantaged owner in a primary personal residence shall not be considered in this calculation.) (4) The principal place of business of the entity is in the United States. (5) Each principal of the entity maintains good character in the determination of the National Director. (6) The entity engages in competitive and bona fide commercial business operations in not less than one sector of industry that has a North American Industry Classification System code. (7) The entity submits reports to the National Director at such time, in such form, and containing such information as the National Director may require. (8) Such other requirements as the National Director considers appropriate. (b) Term of certification A certification under this section shall be for a term of 5 years and may not be renewed. 204. Technical assistance (a) In general In carrying out the Program, the National Director of the Minority Business Development Agency may provide to qualified minority businesses technical assistance with regard to the following: (1) Writing business plans. (2) Marketing. (3) Management. (4) Securing sufficient financing for business operations. (b) Contract authority The National Director may enter into agreements with persons to provide technical assistance under this section. 205. Set-aside contracting opportunities (a) In general The National Director of the Minority Business Development Agency may enter into agreements with the United States Government and any department, agency, or officer thereof having procurement powers for purposes of providing for the fulfillment of procurement contracts and providing opportunities for qualified minority businesses with regard to such contracts. (b) Qualifications on participation The National Director shall by rule establish requirements for participation under this section by a qualified minority business in a contract. (c) Annual limit on number of contracts per qualified minority business A qualified minority business may not participate under this section in contracts in an amount that exceeds $10,000,000 for goods and services each fiscal year. (d) Limits on contract amounts (1) Goods and services Except as provided in paragraph (2), a contract for goods and services under this section may not exceed $6,000,000. (2) Manufacturing and construction A contract for manufacturing and construction services under this section may not exceed $10,000,000. 206. Termination from program The National Director of the Minority Business Development Agency may terminate a qualified minority business from the Program for any violation of a requirement of sections 203 through 206 by that qualified minority business, including the following: (1) Conduct by a principal of the qualified minority business that indicates a lack of business integrity. (2) Willful failure to comply with applicable labor standards and obligations. (3) Consistent failure to tender adequate performance with regard to contracts under the Program. (4) Failure to obtain and maintain relevant certifications. (5) Failure to pay outstanding obligations owed to the Federal Government. 207. Authorization of appropriations (a) Authorization of Appropriations There are authorized to be appropriated $200,000,000 to the National Director to carry out this section. Such sums shall remain available until expended. 208. Loan guarantees (a) In general Subject to subsection (b), the National Director of the Minority Business Development Agency may guarantee up to 90 percent of the amount of a loan made to a qualified minority business to be used for business purposes, including the following: (1) Purchasing essential equipment. (2) Payroll expenses. (3) Purchasing facilities. (4) Renovating facilities. (b) Terms and conditions (1) In general The National Director may make guarantees under this section for projects on such terms and conditions as the National Director determines appropriate, after consultation with the Secretary of the Treasury, in accordance with this section. (2) Repayment No guarantee shall be made under this section unless the National Director determines that there is reasonable prospect of repayment of the principal and interest on the obligation by the borrower. (3) Defaults (A) Payment by national director (i) In general If a borrower defaults on the obligation (as defined in regulations promulgated by the National Director and specified in the guarantee contract), the holder of the guarantee shall have the right to demand payment of the unpaid amount from the National Director. (ii) Payment required Within such period as may be specified in the guarantee or related agreements, the National Director shall pay to the holder of the guarantee the unpaid interest on, and unpaid principal of the obligation as to which the borrower has defaulted, unless the National Director finds that there was no default by the borrower in the payment of interest or principal or that the default has been remedied. (iii) Forbearance Nothing in this paragraph precludes any forbearance by the holder of the obligation for the benefit of the borrower which may be agreed upon by the parties to the obligation and approved by the Director. (B) Subrogation (i) In general If the National Director makes a payment under subparagraph (A), the National Director shall be subrogated to the rights of the recipient of the payment as specified in the guarantee or related agreements including, where appropriate, the authority (notwithstanding any other provision of law) to— (I) complete, maintain, operate, lease, or otherwise dispose of any property acquired pursuant to such guarantee or related agreements; or (II) permit the borrower, pursuant to an agreement with the National Director, to continue to pursue the purposes of the project if the National Director determines this to be in the public interest. (ii) Superiority of rights The rights of the National Director, with respect to any property acquired pursuant to a guarantee or related agreements, shall be superior to the rights of any other person with respect to the property. (iii) Terms and conditions A guarantee agreement shall include such detailed terms and conditions as the National Director determines appropriate to— (I) protect the interests of the United States in the case of default; and (II) have available all the patents and technology necessary for any person selected, including the National Director, to complete and operate the project. (C) Payment of principal and interest by national director With respect to any obligation guaranteed under this section, the National Director may enter into a contract to pay, and pay, holders of the obligation, for and on behalf of the borrower, from funds appropriated for that purpose, the principal and interest payments which become due and payable on the unpaid balance of the obligation if the National Director finds that— (i) (I) the borrower is unable to meet the payments and is not in default; (II) it is in the public interest to permit the borrower to continue to pursue the purposes of the project; and (III) the probable net benefit to the Federal Government in paying the principal and interest will be greater than that which would result in the event of a default; (ii) the amount of the payment that the National Director is authorized to pay shall be no greater than the amount of principal and interest that the borrower is obligated to pay under the agreement being guaranteed; and (iii) the borrower agrees to reimburse the National Director for the payment (including interest) on terms and conditions that are satisfactory to the National Director. (D) Action by attorney general (i) Notification If the borrower defaults on an obligation, the National Director shall notify the Attorney General of the default. (ii) Recovery On notification, the Attorney General shall take such action as is appropriate to recover the unpaid principal and interest due from— (I) such assets of the defaulting borrower as are associated with the obligation; or (II) any other security pledged to secure the obligation. (4) Fees (A) In general The National Director shall charge and collect fees for guarantees in amounts the National Director determines are sufficient to cover applicable administrative expenses, not to exceed 1 percent of the amount guaranteed. (B) Availability Fees collected under this paragraph shall— (i) be deposited by the National Director into the Treasury; and (ii) remain available until expended, subject to such other conditions as are contained in annual appropriations Acts. (c) Credit requirements To receive a loan guaranteed under this section a qualified minority business shall— (1) be in good standing with regard to the credit of that business in the determination of the National Director; (2) have received technical assistance under section 204; and (3) submit reports, at such time, in such form, and containing such information as the National Director may require regarding the credit of the business. (d) Limits on guarantee amounts (1) Maximum amount of guarantee The National Director may not guarantee more than $450,000 of any loan under this section. (2) Maximum gross loan amount A loan guaranteed under this section may not be for a gross loan amount in excess of $500,000. (e) Authorization of appropriations There are authorized to be appropriated to the National Director not more than $500,000,000 to carry out this section during fiscal years 2014 through 2019. 209. Reports (a) Report of the director Not later than October 1, 2012, and annually thereafter, the National Director of the Minority Business Development Agency shall submit to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Energy and Commerce of the House of Representatives a report describing the activities of the National Director during the preceding year with respect to the Program. (b) Report of the secretary of commerce Not later than October 1, 2012, and annually thereafter, the Secretary of Commerce shall submit to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Energy and Commerce of the House of Representatives a report describing the activities the Secretary engaged in during the preceding year to build wealth among historically disadvantaged individuals. 210. Minority business development agency database Not later than 90 days after the date of the enactment of this Act, the National Director of the Minority Business Development Agency shall establish a database to assist prime contractors in identifying historically disadvantaged firms for subcontracting.