H. R. 2424
IN THE HOUSE OF REPRESENTATIVES
July 6, 2011
Mr. Rush introduced the following bill; which was referred to the Committee on Small Business, and in addition to the Committees on Financial Services, Oversight and Government Reform, and Ways and Means, 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
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.
This Act may be cited as the
Expanding Opportunities for Main
Street Act of 2011.
Small Business Administration
Contract opportunities for small business concerns
In this section—
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
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)).
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.
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.
Award to small business not practicable
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—
the determination and reasoning of such officer with respect to the eligible contract; and
the name of each small business concern that submitted an offer with respect to the eligible contract.
The Administrator of the Small Business Administration shall—
review a determination under paragraph (1); and
if the Administrator determines it is appropriate, open the eligible contract opportunity for the submission of additional offers and award the contract.
Enhancement of services to small businesses that are disadvantaged
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
Time limit on participation
Section 7(j)(15) of the Small Business Act (15 U.S.C. 636(j)(15)) is amended—
by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively;
by adding at the end the following:
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).
Surety bond guarantees
Maximum bond amount
Section 411(a)(1) of
the Small Business Investment Act of 1958 (15 U.S.C. 694b(a)(1)) is amended by
(1) and all that follows and inserting the following:
“(1)(A) The Administration may, upon such terms and conditions as it may
prescribe, guarantee and enter into commitments to guarantee any surety against
loss resulting from a breach of the terms of a bid bond, payment bond,
performance bond, or bonds ancillary thereto, by a principal on any total work
order or contract amount at the time of bond execution that does not exceed
The Administrator may guarantee a surety under subparagraph (A) for a total work order or contract amount that does not exceed $10,000,000, if a contracting officer of a Federal agency certifies that such a guarantee is necessary.
Denial of liability
Section 411 of the Small Business Investment Act of 1958 (15 U.S.C. 694b) is amended—
by striking subsection (e) and inserting the following:
Reimbursement of Surety; Conditions
Pursuant to any such guarantee or agreement, the Administration shall reimburse the surety, as provided in subsection (c) of this section, except that the Administration shall be relieved of liability (in whole or in part within the discretion of the Administration) if—
the surety obtained such guarantee or agreement, or applied for such reimbursement, by fraud or material misrepresentation;
the total contract amount at the time of execution of the bond or bonds exceeds $5,000,000;
the surety has breached a material term or condition of such guarantee agreement; or
the surety has substantially violated the regulations promulgated by the Administration pursuant to subsection (d).
by striking subsection (k); and
by adding after subsection (i) the following:
Denial of liability
For bonds made or executed with the prior approval of the Administration, the Administration shall not deny liability to a surety based upon material information that was provided as part of the guaranty application.
Section 3(o) of the Small Business Act (15 U.S.C. 632(o)) is amended to read as follows:
Definitions of Bundling of Contract Requirements and Related Terms
In this Act:
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.
The term does not include—
a contract or order with an aggregate dollar value below the dollar threshold; or
a contract or order that is entered into to meet an exempted requirement.
Bundling of contract requirements
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—
the diversity, size, or specialized nature of the elements of the performance specified;
the aggregate dollar value of the anticipated award;
the geographical dispersion of the contract or order performance sites; or
any combination of the factors described in clauses (i), (ii), and (iii).
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.
The term bundling of contract requirements does not include—
the use of a bundling methodology for an anticipated award with an aggregate dollar value below the dollar threshold; or
the use of a bundling methodology to meet an exempted requirement.
The term bundling methodology means—
a solicitation to obtain offers for a single contract or order, or a multiple award contract or order; or
a solicitation of offers for the issuance of a task or a delivery order under an existing single or multiple award contract or order.
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.
The term dollar threshold means—
$65,000,000, in the case of a contract or order that is solely for construction services; and
$5,000,000 for a contract or order not described in subparagraph (A).
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).
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.
Proposed procurement requirements
Section 15(a) of the Small Business Act (15 U.S.C. 644(a)) is amended—
in the third sentence, by striking
necessary and justified and inserting
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
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
Federal contracting goals
Increase in certain goals
Section 15(g)(1) of the Small Business Act (15 U.S.C. 644(g)(1)) is amended—
not less than 23 percent and inserting
not less than 25
not less than 5 percent each place it appears and inserting
not less than 10 percent.
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:
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.
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:
In the case of any contract containing a subcontracting plan included pursuant to paragraph (4) or (5)—
the Federal agency awarding the contract shall include in the contract a clause providing that, if the contractor does not achieve the percentage goal for the utilization of small business concerns owned and controlled by socially and economically disadvantaged individuals as set forth in the subcontracting plan, the Federal agency shall withhold not less than—
$5,000, if the contract amount is not more than $100,000;
3 percent of the contract amount, if the contract amount is more than $100,000 and not more than $5,000,000; and
5 percent of the contract amount, if the contract amount is more than $5,000,000; and
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.
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.
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—
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,
other such subcontracting plans; and
(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
other such subcontracting
Minority Business Development Agency
In this title:
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.
The term principal means any person that the Director determines to exercise significant control over the regular operations of a business entity.
The term Program means the Minority Business Development Program established under section 202.
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:
Technical assistance under section 204.
Loan guarantees under section 205.
Contract procurement assistance under section 206.
Qualified minority business
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:
Not less than 51 percent of the entity is directly and unconditionally owned or controlled by historically disadvantaged individuals.
Each officer or other individual who exercises control over the regular operations of the entity is a historically disadvantaged individual.
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.)
The principal place of business of the entity is in the United States.
Each principal of the entity maintains good character in the determination of the National Director.
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.
The entity submits reports to the National Director at such time, in such form, and containing such information as the National Director may require.
Such other requirements as the National Director considers appropriate.
Term of certification
A certification under this section shall be for a term of 5 years and may not be renewed.
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:
Writing business plans.
Securing sufficient financing for business operations.
The National Director may enter into agreements with persons to provide technical assistance under this section.
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.
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:
Purchasing essential equipment.
Terms and conditions
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.
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.
Payment by National Director
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.
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.
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.
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—
complete, maintain, operate, lease, or otherwise dispose of any property acquired pursuant to such guarantee or related agreements; or
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.
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.
Terms and conditions
A guarantee agreement shall include such detailed terms and conditions as the National Director determines appropriate to—
protect the interests of the United States in the case of default; and
have available all the patents and technology necessary for any person selected, including the National Director, to complete and operate the project.
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—
the borrower is unable to meet the payments and is not in default;
it is in the public interest to permit the borrower to continue to pursue the purposes of the project; and
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;
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
the borrower agrees to reimburse the National Director for the payment (including interest) on terms and conditions that are satisfactory to the National Director.
Action by Attorney General
If the borrower defaults on an obligation, the National Director shall notify the Attorney General of the default.
On notification, the Attorney General shall take such action as is appropriate to recover the unpaid principal and interest due from—
such assets of the defaulting borrower as are associated with the obligation; or
any other security pledged to secure the obligation.
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.
Fees collected under this paragraph shall—
be deposited by the National Director into the Treasury; and
remain available until expended, subject to such other conditions as are contained in annual appropriations Acts.
To receive a loan guaranteed under this section a qualified minority business shall—
be in good standing with regard to the credit of that business in the determination of the National Director;
have received technical assistance under section 104; and
submit reports, at such time, in such form, and containing such information as the National Director may require regarding the credit of the business.
Limits on guarantee amounts
Maximum amount of guarantee
The National Director may not guarantee more than $450,000 of any loan under this section.
Maximum gross loan amount
A loan guaranteed under this section may not be for a gross loan amount in excess of $500,000.
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 2012 through 2016.
Set-aside contracting opportunities
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.
Qualifications on participation
The National Director shall by rule establish requirements for participation under this section by a qualified minority business in a contract.
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.
Limits on contract amounts
Goods and services
Except as provided in paragraph (2), a contract for goods and services under this section may not exceed $6,000,000.
Manufacturing and construction
A contract for manufacturing and construction services under this section may not exceed $10,000,000.
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:
Conduct by a principal of the qualified minority business that indicates a lack of business integrity.
Willful failure to comply with applicable labor standards and obligations.
Consistent failure to tender adequate performance with regard to contracts under the Program.
Failure to obtain and maintain relevant certifications.
Failure to pay outstanding obligations owed to the Federal Government.
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.
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.
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.
Community economic development provisions
Targeted hiring requirement for certain construction jobs
Contracts subject to this section
The requirements of this section shall apply to all contracts for construction and rehabilitation of facilities and infrastructure funded directly by or assisted in whole or in part by or through the Federal Government in fiscal year 2012.
Employment of targeted workers
Project work hours requirement
The Secretary of Labor shall establish a minimum percentage of construction work hours to be performed by targeted workers for each contract subject to this section in each labor market area.
Utilization of apprenticeship programs
Contractor participation requirements
Each contractor and subcontractor that seeks to provide construction services on contracts subject to this section shall submit adequate assurances with its bid or proposal that it participates in a qualified apprenticeship program, with a written arrangement with a qualified pre-apprenticeship program, as defined by the Secretary of Labor, for each craft or trade classification of worker that the contractor or subcontractor intends to employ to perform work on the project.
Certification of other programs in certain localities
In the event that the Secretary of Labor certifies that a qualified apprenticeship program (as defined in subparagraph (A)) for a craft or trade classification that a prospective contractor or subcontractor intends to employ, is not operated in the locality where the contract or subcontract will be performed, an apprenticeship or other training program that is not an employee welfare benefit plan (as defined in such section) may be certified by the Secretary as a qualified apprenticeship or other training program provided it is registered with the Department of Labor, Office of Apprenticeship, or a State apprenticeship agency recognized by the Office of Apprenticeship for Federal purposes.
Each contractor and subcontractor performing work on contracts subject to this section shall employ apprentices or trainees enrolled in qualified apprenticeship programs to the maximum extent permitted in the program’s written standards, and shall submit adequate assurances that it is not party to contractual agreements that preclude its ability to meet the targeted hiring requirements set forth in paragraph (1).
For purposes of this section—
the term labor market area has the meaning given such term in section 101(18) of the Workforce Investment Act of 1998 (29 U.S.C. 2801(18));
the term qualified apprenticeship
program means an apprenticeship or other training program that qualifies
employee welfare benefit plan as defined in section 3(1)
of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1002(1));
the term targeted workers means individuals who reside in the same labor market area as the applicable project and who—
are members of families that received a total income, that during the 2-year period prior to employment on the project or admission to the pre-apprenticeship program, did not exceed 200 percent of the Federal poverty guidelines (exclusive of unemployment compensation, child support payments, payments described in 29 United States Code section 2801(25)(A), and old-age and survivors insurance benefits received under section 202 of the Social Security Act (42 U.S.C. 402)); and
reside in a census tract in which not less than 20 percent of the households have income below the Federal poverty guidelines;
are members of a targeted group, within the meaning of section 51 of the Internal Revenue Code of 1986; or
displaced homemakers as such term is defined in section 3(10) of
the Carl D. Perkins Career and Technical Education Act of 2006 (20 U.S.C.
Facilitating compliance and project efficiency
In order to achieve the purposes of this section and to promote prompt completion of construction projects undertaken pursuant to this Act, the Secretary of Labor may require that contractors and subcontractors performing construction work under a contract subject to this section enter into an agreement consistent with the standards set forth in section 4 of Executive Order 13502 and the requirements of subsection (b)(1) of this section.
No law or regulation governing the operations or activities of any agency responsible for implementing provisions of this section shall be interpreted to prohibit Federal agencies, funding recipients, contractors, or subcontractors, from advancing the purposes of this section through additional project requirements or actions. The Secretary of Labor shall be responsible for ensuring the implementation and enforcement of this section, including investigating noncompliance, and shall, not later than 180 days after the date of enactment of this Act, adopt such rules, regulations, and guidance, and issue such orders as the Secretary determines necessary and appropriate to achieve the purposes of this section.
In the event of material noncompliance with this section by a recipient, contractor, or subcontractor, the Secretary of Labor shall have the authority to assess and collect penalties from such recipient, contractor, or subcontractor of not more than 5 percent of the contract amount. The Secretary shall allow for reduction or avoidance of penalty assessments for non-compliance with the targeted hiring requirements of subsection (b)(1) only where the entity in question demonstrates that—
compliance was impossible because of a shortage of targeted workers in the local labor market; and
the employer utilized all specified measures to obtain targeted workers.
dedicated resources for training and recruitment
In order to facilitate the objectives of this section, not less than 1 percent of any funds authorized and appropriated or otherwise allocated for construction for fiscal year 2012 shall be set aside to—
provide pre-apprenticeship training and other support services through programs that have strong track records of placing targeted workers into sustained employment in the construction trades and that have written agreements with qualified apprenticeship programs;
provide support to community-based organizations that have written agreements with programs described in subsection (b)(2) to participate in such programs by recruiting targeted workers; or
provide support to contractors either—
that are community-based nonprofit organizations that both—
have a governing body in which a majority the members qualify as targeted workers; and
have less than one million dollars in annual revenue from construction work of any type, or
in which such a community-based nonprofit organization has a 100 percent controlling interest for work relating to such Act to meet the cost of participating in apprenticeship programs.
Sense of Congress regarding participation of socially and economically disadvantaged businesses
It is the sense of Congress that each agency responsible for implementing provisions relating to construction contracting and subcontracting in fiscal year 2012 should ensure that any regulation, policy, or funding disbursement made provides for the inclusive participation by socially and economically disadvantaged small business concerns, as defined under section 8(a) of the Small Business Act (15 U.S.C. 637(a)), including through bidding credits, program eligibility standards, and other means.
2-year extension of new markets tax credit national limitation
Subparagraph (G) of
section 45D(f)(1) of the Internal Revenue Code of 1986 is amended by striking
2010 and 2011 and inserting
2010, 2011, 2012, and
The amendment made by this section shall apply to investments made after December 31, 2011.
Extension of empowerment zone designation
Clause (i) of section
1391(d)(1)(A) of the Internal Revenue Code of 1986 is amended by striking
December 31, 2011 and inserting
The amendment made by this section shall apply to periods after December 31, 2011.