H.R. 4313 (104th): Small Business Opportunity Preservation Act of 1996

104th Congress, 1995–1996. Text as of Sep 28, 1996 (Introduced).

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HR 4313 IH

104th CONGRESS

2d Session

H. R. 4313

To amend the Small Business Act to strengthen existing protections for small business participation in Federal contracting opportunities, to provide for assessments of the impacts on small businesses of the steadily increasing use of contract bundling by the procurement activities of the various Federal agencies, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

September 28, 1996

Mrs. MEYERS of Kansas introduced the following bill; which was referred to the Committee on Small Business, and in addition to the Committee on Government Reform and Oversight, 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 strengthen existing protections for small business participation in Federal contracting opportunities, to provide for assessments of the impacts on small businesses of the steadily increasing use of contract bundling by the procurement activities of the various Federal agencies, 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 AND TABLE OF CONTENTS.

    (a) SHORT TITLE- This Act may be cited as the ‘Small Business Opportunity Preservation Act of 1996’.

    (b) TABLE OF CONTENTS-

      Sec. 1. Short title and table of contents.

      Sec. 2. Statement of policy.

      Sec. 3. Definition of contract bundling.

      Sec. 4. Assessing proposed contract bundling.

      Sec. 5. Fostering contractor teaming.

      Sec. 6. Reporting of bundled contract opportunities.

      Sec. 7. Evaluating subcontract participation in awarding contracts.

      Sec. 8. Improved notice of subcontracting opportunities.

      Sec. 9. Deadlines for issuance of regulations.

SEC. 2. STATEMENT OF POLICY.

    (a) SUSTAINING SMALL BUSINESS PARTICIPATION IN GOVERNMENT CONTRACTING DESPITE CONTRACT BUNDLING- Section 2 of the Small Business Act (15 U.S.C. 631) is amended by adding at the end the following new subsection:

    ‘(j) In complying with the statement of congressional policy expressed in subsection (a)(2)(B), relating to fostering the participation of small business concerns in the contracting opportunities of the Government, each Federal agency, to the maximum practicable extent, shall--

      ‘(1) comply with the provisions of this Act expressing congressional intent to foster the participation of small business concerns as prime contractors, especially section 15;

      ‘(2) structure its contracting requirements to facilitate competition by and among small business concerns, taking all reasonable steps to eliminate obstacles to their participation;

      ‘(3) avoid the bundling of contract requirements that preclude small business participation as prime contractors; and

      ‘(4) comply with the provisions of this Act expressing congressional intent to foster the participation of small business concerns as subcontractors (including suppliers), especially section 8(d).’.

    (b) CONFORMING AMENDMENT- Section 2(a) of the Small Business Act (15 U.S.C. 631(a)) is amended--

      (1) in the first sentence, by striking ‘The essence’ and inserting ‘(1) The essence’; and

      (2) by striking the fifth sentence and inserting the following:

    ‘(2) It is the declared policy of the Congress that the government should aid, counsel, assist, and protect, in so far as is possible, the interests of small business concerns in order to--

      ‘(A) preserve free competitive enterprise;

      ‘(B) insure that a fair proportion of the total purchases for property or services (including construction) be placed with small business concerns as prime contractors or subcontractors (including suppliers);

      ‘(C) insure that a fair proportion of the total sales of Government property be made to small business concerns; and

      ‘(D) maintain and strengthen the overall economy of the Nation.’.

SEC. 3. DEFINITION OF CONTRACT BUNDLING.

    Section 3 of the Small Business Act (15 U.S.C. 632) is amended by adding at the end the following new subsection:

    ‘(o) For the purposes of this Act, the terms ‘contract bundling’, ‘bundled contract’, and ‘bundling of contract requirements’ mean the practice of consolidating two or more procurement requirements of a type that were previously solicited and awarded as separate smaller contracts into a single contract solicitation likely to be unsuitable for award to a small business concern because of--

      ‘(1) the diversity and size of the elements of performance specified;

      ‘(2) the aggregate dollar value of the anticipated award;

      ‘(3) the geographical dispersion of the contract performance sites; or

      ‘(4) any combination of the factors described in paragraphs (1), (2), and (3).’.

SEC. 4. ASSESSING PROPOSED CONTRACT BUNDLING.

    (a) IN GENERAL- Section 15(b) of the Small Business Act (15 U.S.C. 644(b)) is amended to read as follows:

    ‘(b)(1)(A) To the maximum extent practicable, procurement strategies used by the various agencies having contracting authority shall facilitate the maximum participation of small business concerns as prime contractors.

    ‘(B) Whenever a proposed procurement strategy reflects a bundling of contract requirements, such proposed procurement strategy shall--

      ‘(i) identify specifically the benefits anticipated from bundling the contract requirements;

      ‘(ii) assess the specific impediments to participation by small business concerns as prime contractors and specify actions designed to maximize small business participation as subcontractors (including suppliers) at various tiers; and

      ‘(iii) include a specific determination that the anticipated benefits of the proposed bundled contract justify its use.

    ‘(2)(A) The Administration, acting through one of its Procurement Center Representatives (or such other employee of the Administration as may be designated), is empowered to review for a period of 30 days a proposed solicitation for compliance with the requirements of this subsection and subsection (a). The 30-day review shall

occur concurrently with other reviews required prior to the issuance of the solicitation.

    ‘(B) Within 15 days after receipt from a procurement activity of a Federal agency of any proposed contract solicitation that in the opinion of the representative would constitute a bundling of contract requirements, the representative (or other designee of the Administration) shall--

      ‘(i) request the head of the procurement activity to furnish recommendations to modify the procurement strategy and the proposed solicitation for the purpose of increasing the probability of participation by small businesses as prime contractors; or

      ‘(ii) recommend to the procurement activity an alternative procurement strategy that would increase the probability of participation by small businesses as prime contractors.

    ‘(C) Whenever the Procurement Center Representative and the head of the procurement activity fail to agree to a revision of the procurement strategy (or the proposed solicitation) under subparagraph (B), the matter may be submitted by the Administrator to the head of the agency in which the procurement activity is located for determination.

    ‘(D) Any determination by an agency head to issue a contract solicitation with no revision of the procurement strategy (or the proposed solicitation) shall be supported by findings and an assessment addressing the matters described in subparagraph (E). Such determination and findings shall be submitted to the Administrator.

    ‘(E) The findings accompanying a determination made pursuant to subparagraph (D) shall include--

      ‘(i) the estimated benefits of the proposed bundling of contract requirements, including improved performance of programmatic objectives to be met by the contract, savings in terms of acquisition costs and contract administration costs, and how such estimated benefits were calculated;

      ‘(ii) specific adverse impacts on the participation of small business concerns as prime contractors, especially small business concerns that are performing (or have previously performed) contracts of the type that are proposed for inclusion in the solicitation for the bundled contract;

      ‘(iii) specific actions to foster the participation of small businesses in the performance of the bundled contract as subcontractors (including suppliers) at various tiers; and

      ‘(iv) such other matters as the agency head considers appropriate.

    ‘(F) Unless otherwise authorized by the head of the agency for urgent and compelling reasons, the solicitation shall not be issued until the determination under subparagraph (D) has been made by such agency head and submitted to the Administrator.’.

    (b) CONFORMING AMENDMENT- Section 15(a) of the Small Business Act (15 U.S.C. 644(a)) is amended by striking the third, fourth, fifth, and sixth sentences.

    (c) RESPONSIBILITIES OF AGENCY SMALL BUSINESS ADVOCATES- Section 15(k) of the Small Business Act (15 U.S.C. 644(k)) is amended--

      (1) by redesignating paragraphs (5), (6), (7), (8), and (9) as paragraphs (6), (7), (8), (9), and (10), respectively; and

      (2) by adding after paragraph (4) the following new paragraph (5):

      ‘(5) identify and report on proposed solicitations that represent bundling of contract requirements, and work with the agency acquisition officials and the Administration to revise the procurement strategies for such proposed solicitations to increase the probability of participation by small businesses as prime contractors, or to facilitate small business participation as subcontractors and suppliers, if a solicitation for a bundled contract is to be issued,’.

SEC. 5. FOSTERING CONTRACTOR TEAMING.

    Section 15(b) of the Small Business Act (15 U.S.C. 644(b)), as amended by section 2, is further amended by adding at the end the following new paragraph:

      ‘(3)(A) A small business concern intending to submit an offer for an anticipated bundled contract may propose to the Administration for approval a team of subcontractors meeting the requirements of subparagraph (B) without regard to the requirements of subsection (o) or the regulations of the Administration regarding findings of affiliation or control, either direct or indirect.

      ‘(B) A subcontracting team proposed under subparagraph (A) may include--

        ‘(i) other small business concerns; and

        ‘(ii) business concerns other than small business concerns, whose aggregate participation may not represent more than 25 percent of the anticipated total value of the contract.

      ‘(C) Any subcontracting team proposed under subparagraph (A) and approved by the Administrator shall be subject to such alternative requirements regarding subcontracting and affiliation or control as may be specified by the Administrator.’.

SEC. 6. REPORTING OF BUNDLED CONTRACT OPPORTUNITIES.

    (a) DATA COLLECTION REQUIRED- The Federal Procurement Data System described in section 6(d)(4)(A) of the Office of Federal Procurement Policy Act (41 U.S.C. 405(d)(4)(A)) shall be modified to collect data regarding contract bundling. The data shall reflect the determination made by the employee of the Small Business Administration exercising the responsibilities of section 15(b) of the Small Business Act (15 U.S.C. 644(b)) (as amended by section 3) regarding whether a particular solicitation constitutes contract bundling.

    (b) DEFINITIONS- For purposes of this section, the term ‘contract bundling’ has the meaning given such term in section 3(o) of the Small Business Act (15 U.S.C. 632(o)) (as added by section 2).

SEC. 7. EVALUATING SUBCONTRACT PARTICIPATION IN AWARDING CONTRACTS.

    (a) IN GENERAL- Section 8(d)(4) of the Small Business Act (15 U.S.C. 637(d)(4)) is amended by striking ‘(4)(A)’ and all that follows through the end of subparagraph (D) and inserting the following:

    ‘(4)(A) Each solicitation for the award of a contract (or subcontract) with an anticipated value of $1,000,000, in the case of a contract for construction (including repair, alteration, or demolition of existing construction) or $500,000, in the case of a contract for all other types of services or supplies, that can reasonably be expected to offer opportunities for subcontracting in the business judgment of the contracting officer, shall--

      ‘(i) in the case of a contract to be awarded using competitive procedures, include solicitation provisions described in subparagraph (B);

      ‘(ii) in the case of a contract to be awarded using procedures other than competitive procedures, require submission and acceptance of a subcontracting plan pursuant to subparagraph (C); and

      ‘(iii) in the case of a subcontract award, require submission and acceptance of a subcontracting plan pursuant to subparagraph (D).

    ‘(B) With respect to subcontract participation by the various types of small business concerns listed in paragraph (1), the solicitation shall--

      ‘(i) specify, whenever practicable, minimum percentages for subcontract participation by the various types of small business concerns listed in paragraph (1), determined in the exercise of business judgment by the contracting officer considering the matters described in subparagraph (F)(iii), that must be met for an offer to be considered responsive;

      ‘(ii) assign a weight of not less than the numerical equivalent of 5 percent of the total of all evaluation factors to a contract award evaluation factor that recognizes incrementally higher subcontract participation rates in excess of the minimum percentages, if any;

      ‘(iii) require the successful offeror to submit a subcontracting plan that incorporates the information prescribed in paragraph (6); and

      ‘(iv) assign a significant weight in the evaluation of past performance by offerors in attaining subcontract participation goals.

    ‘(C)(i) The apparent successful offeror for a contract to be awarded using procedures other than competitive procedures shall negotiate with the contracting officer--

      ‘(I) separate goals for subcontract participation by the various types of small business concerns listed in paragraph (1); and

      ‘(II) a plan for the attainment of the goals that incorporates the information prescribed in paragraph (6).

    ‘(ii) The goals and plan shall reflect the maximum practicable opportunity for participation of small business concerns in the performance of the contract, considering the matters described in subparagraph (F)(iii). If, within the time limits prescribed in the Federal Acquisition Regulation, the apparent successful offeror fails to negotiate such goals and subcontracting plan, such offeror shall be ineligible for award of the contract.

    ‘(D) An apparent subcontract awardee shall negotiate with the prime contractor (or higher-tier subcontractor) a goal for the participation of the various types of small business concerns listed in paragraph (1), and a plan for the attainment of those goals which incorporates the information prescribed in paragraph (6). Such goals and plan shall reflect the maximum practicable opportunity for the participation of such small business concerns in the performance of the contract, considering the matters described in subparagraph (F)(iii).’.

    (b) CONFORMING AMENDMENTS- Section 8(d) of the Small Business Act (15 U.S.C. 637(d)) is amended as follows:

      (1) Paragraph (5) is amended to read as follows:

    ‘(5) [Struck out->][ Reserved. ][<-Struck out] ’.

      (2) Paragraph (6) is amended--

        (A) in the matter preceding subparagraph (A), by striking ‘or (5)’; and

        (B) in subparagraph (D), by striking ‘or (5)’.

      (3) Paragraph (7) is amended by striking ‘(4), (5),’ and inserting ‘(4)’.

      (4) Paragraph (10) is amended--

        (A) in the matter preceding subparagraph (A), by striking ‘(4), (5),’ and inserting ‘(4)’; and

        (B) in subparagraph (B), by striking ‘paragraphs (4) and (5)’ and inserting ‘paragraph (4)’.

SEC. 8. IMPROVED NOTICE OF SUBCONTRACTING OPPORTUNITIES.

    (a) USE OF THE COMMERCE BUSINESS DAILY AUTHORIZED- Section 8 of the Small Business Act (15 U.S.C. 637) is amended by adding at the end the following new subsection:

    ‘(k) NOTICES OF SUBCONTRACTING OPPORTUNITIES-

      ‘(1) IN GENERAL- Notices of subcontracting opportunities may be submitted for publication in the Commerce Business Daily by--

        ‘(A) a business concern awarded a contract by an executive agency subject to subsection (e)(1)(C); and

        ‘(B) a business concern which is a subcontractor or supplier (at any tier) to such contractor having a subcontracting opportunity in excess of $10,000.

      ‘(2) CONTENTS OF NOTICE- The notice of a subcontracting opportunity shall include--

        ‘(A) a description of the business opportunity that is comparable to the description specified in paragraphs (1), (2), (3), and (4) of subsection (f); and

        ‘(B) the due date for receipt of offers.’.

    (b) REGULATIONS REQUIRED- The Federal Acquisition Regulation shall be amended to provide uniform implementation of the amendments made by this section.

    (c) CONFORMING AMENDMENT- Section 8(e)(1)(C) of the Small Business Act (15 U.S.C. 637(e)(1)(C)) is amended by striking ‘$25,000’ each place it appears and inserting ‘$100,000’.

SEC. 9. DEADLINES FOR ISSUANCE OF REGULATIONS.

    (a) PROPOSED REGULATIONS- Proposed amendments to the Federal Acquisition Regulation or proposed Small Business Administration regulations shall be published not later than 120 days after the date of enactment of this Act for the purpose of obtaining public comment pursuant to section 22 of the Office of Federal Procurement Policy Act (41 U.S.C. 418b) or chapter 5 of title 5, United States Code, as appropriate. The public shall be afforded not less than 60 days to submit comments.

    (b) FINAL REGULATIONS- Final regulations shall be published not later than 270 days after the date of enactment of this Act. The effective date for such regulations shall be at least 30 days after the date of publication.