II 117th CONGRESS 2d Session S. 5044 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.

1. Short title This Act may be cited as the Federal Contracting Fairness Act of 2022 . 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. 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 ). 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. 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). 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) . 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), . 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 . 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 ). 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). 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). 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. 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.