IB Union Calendar No. 390 114th CONGRESS 2d Session H. R. 1481 [Report No. 114–510] IN THE HOUSE OF REPRESENTATIVES March 19, 2015 Mr. Chabot introduced the following bill; which was referred to the Committee on Small Business April 19, 2016 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed Strike out all after the enacting clause and insert the part printed in italic For text of introduced bill, see copy of bill as introduced on March 19, 2015 A BILL To amend the Small Business Act to strengthen the small business industrial base, and for other purposes.

1. Short title; table of contents (a) Short title This Act may be cited as the Small Contractors Improve Competition Act of 2015 . (b) Table of contents The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. Sec. 2. Including subcontracting goals in agency responsibilities; reports. Sec. 3. Data quality improvement. Sec. 4. Notice and justification requirements for bundling or consolidation of contract requirements. Sec. 5. Joint venturing and teaming. Sec. 6. Limitations on reverse auctions. Sec. 7. Revision to the nonmanufacturer rule. Sec. 8. Certification requirements for procurement center representatives. Sec. 9. Certification requirements for Business Opportunity Specialists. Sec. 10. Certification requirements for commercial market representatives. 2. Including subcontracting goals in agency responsibilities; reports (a) In general Section 1633(b) of the National Defense Authorization Act for Fiscal Year 2013 ( Public Law 112–239 ; 126 Stat. 2076; 15 U.S.C. 631 note) is amended by striking assume responsibility for of the agency's success in achieving small business contracting goals and percentages and inserting assume responsibility for the agency's success in achieving each of the small business prime contracting and subcontracting goals and percentages . (b) GAO study and report on accountability for subcontracting (1) Study Not later than 180 days after the date of enactment of the Small Contractors Improve Competition Act of 2015, the Comptroller General of the United States shall begin a study, which shall be conducted for a period of 1 year, to assess whether the systems of an agency or department accurately record the data necessary to comply with any requirements related to subcontracting at any tier under the Small Business Act ( 15 U.S.C. 631 et seq. ). (2) Report Not later than 90 days after the date on which the study described in paragraph (1) is completed, the Comptroller General shall submit a report to the Committee on Small Business of the House of Representatives and the Committee on Small Business and Entrepreneurship of the Senate on the results of such study. (c) GAO study and report on size status (1) Study The Comptroller General of the United States shall conduct a study— (A) to assess whether Federal agencies are accurately identifying the size status of business concerns awarded contracts in the Federal Procurement Data System as small business concerns; and (B) to identify, to the extent practicable, the impact of incorrect size status designations on meeting the requirements related to goals in subsections (g) and (h) of section 15 of the Small Business Act ( 15 U.S.C. 644 ). (2) Contents The study described in paragraph (1) shall include— (A) a description of the procedures and processes of each Federal agency, including the roles of the individuals described in section 1633(b) of the National Defense Authorization Act for Fiscal Year 2013 ( Public Law 112–239 ; 126 10 Stat. 2076; 15 U.S.C. 631 note) and the training provided to the acquisition workforce of such agency (as described under section 1703 of title 41, United States Code); (B) a description of the extent to which such processes and procedures help ensure that business concerns are assigned the most appropriate size status; (C) a description of the interactions among the Federal Procurement Data System, the System for Award Management (as described under subpart 4.11 of title 48, Code of Federal Regulations) and comparable systems run by the Small Business Administration and recommendations for improving each system to reduce errors in reporting size status; and (D) recommendations on how to improve the accuracy of the goaling reports required under section 15(h) of the Small Business Act ( 15 U.S.C. 644(h) ). (3) Report Not later than 1 year after the date of enactment of the Small Contractors Improve Competition Act of 2015, the Comptroller General shall submit a report to the Committee on Small Business of the House of Representatives and the Committee on Small Business and Entrepreneurship of the Senate containing the results of the study conducted under paragraph (1). (4) Definitions In this subsection, the following definitions shall apply: (A) Federal agency The term Federal agency has the meaning given such term in section 3(b) of the Small Business Act ( 15 U.S.C. 632(b) ). (B) Federal Procurement Data System The term Federal Procurement Data System means the system referred to in section 1122(a)(4)(A) of title 41, United States Code, or any successor system. (C) Small business concern The term small business concern has the meaning given such term under section 3 of the Small Business Act ( 15 U.S.C. 632 ). 3. Data quality improvement (a) In general Section 15(s) of the Small Business Act (15. U.S.C. 644(s)) is amended— (1) by redesignating paragraph (4) as paragraph (6); and (2) by inserting after paragraph (3) the following new paragraphs: (4) Implementation Not later than the first day of fiscal year 2017, the Administrator of the Small Business Administration shall implement the plan described in this subsection. (5) Certification The Administrator shall annually provide to the Committee on Small Business of the House of Representatives and the Committee on Small Business and Entrepreneurship of the Senate certification of the accuracy and completeness of data reported on bundled and consolidated contracts. . (b) GAO study (1) Study Not later than the first day of fiscal year 2018, the Comptroller General of the United States shall initiate a study on the effectiveness of the plan described in section 15(s) of the Small Business Act ( 15 U.S.C. 644(s) ) that shall assess whether contracts were accurately labeled as bundled or consolidated. (2) Contracts evaluated For the purposes of conducting the study described in paragraph (1), the Comptroller General of the United States— (A) shall evaluate, for work in each of sectors 23, 33, 54, and 56 (as defined by the North American Industry Classification System), not fewer than 100 contracts in each sector; (B) shall evaluate only those contracts— (i) awarded by an agency listed in section 901(b) of title 31, United States Code; and (ii) that have a Base and Exercised Options Value, an Action Obligation, or a Base and All Options Value (as such terms are defined in the Federal procurement data system described in section 1122(a)(4)(A) of title 41, United States Code, or any successor system); and (C) shall not evaluate contracts that have used any set aside authority. (3) Report Not later than 12 months after initiating the study required by paragraph (1), the Comptroller General of the United States shall report to the Committee on Small Business of the House of Representatives and the Committee on Small Business and Entrepreneurship of the Senate on the results from such study and, if warranted, any recommendations on how to improve the quality of data reported on bundled and consolidated contracts. 4. Notice and justification requirements for bundling or consolidation of contract requirements (a) Notice of contract consolidation for acquisition strategies Section 44(c)(2) of the Small Business Act ( 15 U.S.C. 657q(c)(2) ) is amended by adding at the end the following: (C) Notice Not later than 7 days after making a determination that an acquisition strategy involving a consolidation of contract requirements is necessary and justified under subparagraph (A), the senior procurement executive or Chief Acquisition Officer shall publish a notice on a public website that such determination has been made. Any solicitation for a procurement related to the acquisition strategy may not be published earlier than 7 days after such notice is published. Along with the publication of the solicitation, the senior procurement executive or Chief Acquisition Officer shall publish a justification for the determination, which shall include the information in subparagraphs (A) through (E) of paragraph (1). . (b) Notice of contract consolidation for procurement strategies Section 15(e)(3) of such Act ( 15 U.S.C. 644(e)(3) ) is amended to read as follows: (3) Strategy specifications If the head of a contracting agency determines that an acquisition plan for a procurement involves a substantial bundling of contract requirements, the head of a contracting agency shall publish a notice on a public website that such determination has been made not later than 7 days after making such determination. Any solicitation for a procurement related to the acquisition plan may not be published earlier than 7 days after such notice is published. Along with the publication of the solicitation, the head of a contracting agency shall publish a justification for the determination, which shall include following information: (A) The specific benefits anticipated to be derived from the bundling of contract requirements and a determination that such benefits justify the bundling. (B) An identification of any alternative contracting approaches that would involve a lesser degree of bundling of contract requirements. (C) An assessment of— (i) the specific impediments to participation by small business concerns as prime contractors that result from the bundling of contract requirements; and (ii) the specific actions designed to maximize small business participation as subcontractors (including suppliers) at various tiers under the contract or contracts that are awarded to meet the requirements. . (c) Technical amendment Section 44(c)(1) of such Act ( 15 U.S.C. 657q(c)(1) ) is amended by striking Subject to paragraph (4), the head and inserting The head . 5. Joint venturing and teaming (a) Joint venture offers for bundled or consolidated contracts Section 15(e)(4) of the Small Business Act ( 15 U.S.C. 644(e)(4) ) is amended to read as follows: (4) Contract teaming (A) In general In the case of a solicitation of offers for a bundled or consolidated contract that is issued by the head of an agency, a small business concern may submit an offer that provides for use of a particular team of subcontractors or a joint venture of small business concerns for the performance of the contract. (B) Evaluation of offers The head of the agency shall evaluate the offer of a team or a joint venture of small business concerns in the same manner as other offers, with due consideration to the capabilities of all of the proposed subcontractors or members of the joint venture as follows: (i) Teams When evaluating an offer of a small business prime contractor whose offer includes a proposed team of small business subcontractors, the head of the agency shall consider the capabilities and past performance of each first tier subcontractor that is part of the team as the capabilities and past performance of the team. (ii) Joint ventures When evaluating an offer of a joint venture of small business concerns, if the joint venture does not have sufficient capabilities or past performance to be considered for award of a contract opportunity, the head of the agency shall consider the capabilities and past performance of each member of the joint venture as the capabilities past performance of the joint venture. (C) Status as a small business concern Participation of a small business concern in a team or a joint venture under this paragraph shall not affect the status of that concern as a small business concern with respect to the performance of a contract described in subparagraph (A). . (b) Team and joint ventures offers for multiple award contracts Section 15(q)(1) of such Act ( 15 U.S.C. 644(q)(1) ) is amended— (1) in the heading, by inserting and joint venture before requirements ; (2) by striking Each Federal agency and inserting the following: (A) In general Each Federal agency ; and (3) by adding at the end the following new subparagraphs: (B) Teams When evaluating an offer of a small business prime contractor whose offer includes a proposed team of small business subcontractors for any multiple award contract above the substantial bundling threshold of the Federal agency, the head of the agency shall consider the capabilities and past performance of each first tier subcontractor that is part of the team as the capabilities and past performance of the offeror. (C) Joint ventures When evaluating an offer of a joint venture of small business concerns for any multiple award contract above the substantial bundling threshold of the Federal agency, if the joint venture does not have sufficient capabilities or past performance to be considered for award of a contract opportunity, the head of the agency shall consider the capabilities and past performance of each member of the joint venture as the capabilities and past performance of the joint venture. (D) Use of small business teams or joint ventures (i) In general For contracts awarded under section 8(a), 8(m), 15(a), 15(j), 31, or 36 to a small business team or a joint venture of small business concerns, the contracting officer shall certify annually to the Administration, for each year the contract is in effect, that each small business concern member of such team or joint venture has the same status of a small business concern, small business concern owned and controlled by service-disabled veterans, qualified HUBZone small business concern, small business concern owned and controlled by socially and economically disadvantaged individuals, or small business concern owned and controlled by women, as applicable, that such concern had at the time the contract was awarded. (ii) Exception The requirements of clause (i) shall not apply to a contract awarded to a joint venture of small business concerns that is a protege under a mentor-protege program approved pursuant to section 45. . (c) Rulemaking Not later than 1 year after the date of enactment of this section, the Administrator of the Small Business Administration shall issue any regulations necessary to carry out the amendments made by this section. 6. Limitations on reverse auctions (a) Sense of Congress It is the sense of Congress that, when used appropriately, reverse auctions may improve the Federal Government's procurement of commercially available commodities by increasing competition, reducing prices, and improving opportunities for small businesses. (b) Limitations on reverse auctions The Small Business Act ( 15 U.S.C. 631 et seq. ) is amended— (1) by redesignating section 47 ( 15 U.S.C. 631 note) as section 48; and (2) by inserting after section 46 the following new section: 47. Limitations on reverse auctions (a) Prohibition on using reverse auctions for covered contracts In the case of a covered contract described in subsection (c), reverse auction methods may not be used if the award of the contract is to be made under— (1) section 8(a); (2) section 8(m); (3) section 15(a); (4) section 15(j); (5) section 31; or (6) section 36. (b) Limitations on using reverse auctions In the case of the award of a contract to be made under paragraphs (1) through (6) of subsection (a) that is not a covered contract, reverse auction methods may be used pursuant to the following requirements: (1) Decisions regarding use of a reverse auction A contracting officer shall make the following decisions, which may not be delegated to any person except for another contracting officer who meets the training requirements of paragraph (2): (A) A decision to use reverse auction methods as part of the competition for award of a contract. (B) Any decision made after the decision described in subsection (A) regarding the appropriate evaluation criteria, the inclusion of vendors, the acceptability of vendor submissions (including decisions regarding timeliness), and the selection of the winner. (2) Training required Only a contracting officer who has received training on the appropriate use and supervision of reverse auction methods of contracting may supervise or use such methods in a procurement for a contract. The training shall be provided by, or similar to the training provided by, the Defense Acquisition University as described in section 824 of the Carl Levin and Howard P. Buck McKeon National Defense Authorization Act for Fiscal Year 2015 ( Public Law 113–291 ). (3) Number of offers; revisions to bids A Federal agency may not award a contract using a reverse auction method if only one offer is received or if offerors do not have the ability to submit revised bids with lower prices throughout the course of the auction. (4) Technically acceptable offers A Federal agency awarding a contract using a reverse auction method shall evaluate the technical acceptability of offers only as technically acceptable or unacceptable. (5) Use of price rankings A Federal agency may not award a contract using a reverse auction method if at any time during the award process the Federal agency misinforms an offeror about the price ranking of the offeror’s last offer submitted in relation to offers submitted by other offerors. (6) Use of third-party agents If a Federal agency uses a third party agent to assist with the award of contracts using a reverse auction method, the Federal agency shall ensure that— (A) inherently governmental functions (as such term is used in section 2303 of title 41, United States Code) are not performed by private contractors, including by the third party agent; (B) information on the past contract performance of offerors created by the third party agent and shared with the Federal agency is collected, maintained, and shared in compliance with section 1126 of title 41, United States Code; (C) information on whether an offeror is a responsible source (as defined in section 113 of title 41, United States Code) that is created by the third party agent and shared with the Federal agency is shared with the offeror and complies with section 8(b)(7) of this Act; and (D) disputes between the third party agent and an offeror may not be used to justify a determination that an offeror is not a responsible source (as defined in section 113 of title 41, United States Code) or to otherwise restrict the ability of an offeror to compete for the award of a contract or task or delivery order. (c) Definitions In this section: (1) Contracting officer The term contracting officer has the meaning given that term in section 2101(1) of title 41, United States Code. (2) Covered contract The term covered contract means a contract— (A) for design and construction services; (B) for goods purchased to protect Federal employees, members of the Armed Forces, or civilians from bodily harm; or (C) for goods or services other than those goods or services described in subparagraph (A) or (B)— (i) to be awarded based on factors other than price and technical responsibility; or (ii) if awarding the contract requires the contracting officer to conduct discussions with the offerors about their offer. (3) Design and construction services The term design and construction services means— (A) site planning and landscape design; (B) architectural and interior design; (C) engineering system design; (D) performance of construction work for facility, infrastructure, and environmental restoration projects; (E) delivery and supply of construction materials to construction sites; (F) construction, alteration, or repair, including painting and decorating, of public buildings and public works; and (G) architectural and engineering services as defined in section 1102 of title 40, United States Code. (4) Reverse auction The term reverse auction means, with respect to procurement by an agency, an auction between a group of offerors who compete against each other by submitting offers for a contract or task or delivery order with the ability to submit revised offers with lower prices throughout the course of the auction. . 7. Revision to the nonmanufacturer rule (a) Procurement contracts Section 8(a)(17) of the Small Business Act ( 15 U.S.C. 637(a)(17) ) is amended— (1) in subparagraph (A), by striking any procurement contract and all that follows through section 15 and inserting any procurement contract, which contract has as its principal purpose the supply of a product to be let pursuant to this subsection or subsection (m), or section 15(a), 31, or 36, ; and (2) by adding at the end the following new subparagraph: (C) Limitation This paragraph shall not apply to a contract that has as its principal purpose the acquisition of services or construction. . (b) Subcontractor contracts Section 46(a)(4) of such Act ( 15 U.S.C. 657s(a)(4) ) is amended by striking for supplies from a regular dealer in such supplies and inserting which is principally for supplies from a regular dealer in such supplies, and which is not a contract principally for services or construction . (c) Publication of class waivers The Administrator of the Small Business Administration shall publish a list of waivers to the requirements of section 8(a)(17) of the Small Business Act ( 15 U.S.C. 637(a)(17) ) granted for a class of products as an appendix to section 121.406 of title 13, Code of Federal Regulations (or any successor regulation). (d) Rulemaking (1) In general Not later than 1 year after the date of enactment of this section, the Administrator of the Small Business Administration shall issue any rules necessary to carry out the amendments made by this section. (2) Report Not later than 1 year after the issuance of the rules required in paragraph (1), the Comptroller General shall— (A) review the compliance of the Small Business Administration with the application of the requirements of section 8(a)(17) of the Small Business Act ( 15 U.S.C. 637(a)(17) ); and (B) submit a report to the Committee on Small Business of the House of Representatives and the Committee on Small Business and Entrepreneurship of the Senate with any recommendations on how to increase compliance with such requirements. 8. Certification requirements for procurement center representatives Section 15(l)(5)(A)(iii) of the Small Business Act ( 15 U.S.C. 644(l)(5)(A)(iii) ) is amended by striking except that and all that follows through the period at the end and inserting the following: except that— (I) any person serving in such a position on or before January 3, 2013, may continue to serve in that position for a period of 5 years beginning on such date without the required certification; and (II) any person hired for such position after January 3, 2013, may have up to one calendar year from the date of employment to obtain the required certification. . 9. Certification requirements for Business Opportunity Specialists (a) In general Section 4 of the Small Business Act ( 15 U.S.C. 633 ) is amended by adding at the end the following new subsection: (g) Certification requirements for Business Opportunity Specialists A Business Opportunity Specialist described under section 7(j)(10)(D) shall have a Level I Federal Acquisition Certification in Contracting (or any successor certification) or the equivalent Department of Defense certification, except that— (1) a Business Opportunity Specialist who was serving on or before January 3, 2013, may continue to serve as a Business Opportunity Specialist for a period of 5 years beginning on such date without such a certification; and (2) any person hired as a Business Opportunity Specialist after January 3, 2013, may have up to one calendar year from the date of employment to obtain the required certification. . (b) Conforming amendment Section 7(j)(10)(D)(i) of such Act ( 15 U.S.C. 636(j)(10)(D)(i) ) is amended by striking the second sentence. 10. Certification requirements for commercial market representatives Section 4 of the Small Business Act ( 15 U.S.C. 633 ), as amended by section 9 of this Act, is further amended by adding at the end the following new subsection: (h) Certification requirements for commercial market representatives A commercial market representative referred to in section 15(q)(3) shall have a Level I Federal Acquisition Certification in Contracting (or any successor certification) or the equivalent Department of Defense certification, except that— (1) a commercial market representative who was serving on or before the date of enactment of the Small Contractors Improve Competition Act of 2015 may continue to serve as a commercial market representative for a period of 5 years beginning on such date without such a certification; and (2) any person hired as a commercial market representative after the date of enactment of the Small Contractors Improve Competition Act of 2015 may have up to one calendar year from the date of employment to obtain the required certification. .

April 19, 2016 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed