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HR 3893 IHRHCommentsClose CommentsPermalink

112th CONGRESSCommentsClose CommentsPermalink

2d SessionCommentsClose CommentsPermalink

H. R. 3893CommentsClose CommentsPermalink

To amend the Small Business Act with respect to subcontracting and insourcing, and for other purposes.CommentsClose CommentsPermalink

IN THE HOUSE OF REPRESENTATIVESCommentsClose CommentsPermalink

February 2, 2012CommentsClose CommentsPermalink

Mr. MULVANEY introduced the following bill; which was referred to the Committee on Small Business, and in addition to the Committee on Oversight and Government Reform, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concernedCommentsClose CommentsPermalink

A BILLCommentsClose CommentsPermalink

To amend the Small Business Act with respect to subcontracting and insourcing, and for other purposes.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title- This Act may be cited as the ‘Subcontracting Transparency and Reliability Act of 2012’. CommentsClose CommentsPermalink





(b) Table of Contents- CommentsClose CommentsPermalink





Sec. 1. Short title; table of contents. CommentsClose CommentsPermalink

TITLE I--LIMITATIONS ON SUBCONTRACTING

Sec. 101. Limitations on subcontracting. CommentsClose CommentsPermalink





Sec. 102. Penalties. CommentsClose CommentsPermalink





Sec. 103. Conforming amendments. CommentsClose CommentsPermalink





Sec. 104. Guidance. CommentsClose CommentsPermalink

TITLE II--SUBCONTRACTING PLANS

Sec. 201. Subcontracting plans. CommentsClose CommentsPermalink





Sec. 202. Notices of subcontracting opportunities. CommentsClose CommentsPermalink

TITLE III--INSOURCING

Sec. 301. Definitions relating to procurement protest system. CommentsClose CommentsPermalink





Sec. 302. Insourcing. CommentsClose CommentsPermalink

TITLE I--LIMITATIONS ON SUBCONTRACTING CommentsClose CommentsPermalink

SEC. 101. LIMITATIONS ON SUBCONTRACTING.

The Small Business Act (15 U.S.C. 631 et seq.) is amended-- CommentsClose CommentsPermalink





(1) by redesignating section 45 as section 47; and CommentsClose CommentsPermalink





(2) by inserting after section 44 the following: CommentsClose CommentsPermalink

‘SEC. 45. LIMITATIONS ON SUBCONTRACTING.

‘(a) In General- If awarded a contract under section 8(a), 8(m), 15(a), 31, or 36, a covered small business concern-- CommentsClose CommentsPermalink





‘(1) in the case of a contract for services (except construction), may not expend on subcontractors more than 50 percent of the amount paid to the concern under the contract; CommentsClose CommentsPermalink





‘(2) in the case of a contract for general construction, may not expend on subcontractors more than 85 percent of the amount, less the cost of materials, paid to the concern under the contract;

‘(3) in the case of a contract for construction by a special trade contractor, may not expend on subcontractors more than 75 percent of the amount, less the cost of materials, paid to the concern under the contract;

‘(4) in the case of a contract for supplies (other than from a regular dealer in such supplies), may not expend on subcontractors more than 50 percent of the amount, less the cost of materials, paid to the concern under the contract; CommentsClose CommentsPermalink




‘(53) in the case of a contract described in more than 1 of paragraphs (1) through (4)-- CommentsClose CommentsPermalink





‘(A) shall determine for which category of services or supplies, described in 1 of paragraphs (1) through (4), the greatest percentage of the contract amount is awarded; CommentsClose CommentsPermalink





‘(B) shall determine the amount awarded under the contract for that category of services or supplies; and CommentsClose CommentsPermalink





‘(C) may not expend on subcontractors, with respect to the amount determined under subparagraph (B), more than-- CommentsClose CommentsPermalink





‘(i) 50 percent of that amount, if the category of services or supplies applicable under subparagraph (A) is described in paragraph (1);

‘(ii) 85 percent of that amount, if the category of services or supplies applicable under subparagraph (A) is described in paragraph (2);

‘(iii) 75 percent of that amount, if the category of services or supplies applicable under subparagraph (A) is described in paragraph (3); and

‘(iv and CommentsClose CommentsPermalink




‘(ii) 50 percent of that amount, if the category of services or supplies applicable under subparagraph (A) is described in paragraph (4); and‘(62); and CommentsClose CommentsPermalink





‘(4) in the case of a contract for supplies from a regular dealer in such supplies, shall supply the product of a domestic small business manufacturer or processor, unless a waiver of such requirement is granted-- CommentsClose CommentsPermalink





‘(A) by the Administrator, after reviewing a determination by the applicable contracting officer that no small business manufacturer or processor can reasonably be expected to offer a product meeting the specifications (including period for performance) required by the contract; or CommentsClose CommentsPermalink





‘(B) by the Administrator for a product (or class of products), after determining that no small business manufacturer or processor is available to participate in the Federal procurement market. CommentsClose CommentsPermalink





‘(b) Similarly Situated Entities- Contract amounts expended by a covered small business concern on a subcontractor that is a similarly situated entity shall not be considered subcontracted for purposes of determining whether the covered small business concern has violated a requirement established under subsection (a) or (d). CommentsClose CommentsPermalink





‘(c) Modifications of Percentages- CommentsClose CommentsPermalink





‘(1) IN GENERAL- The Administrator may change, by rule (after providing notice and an opportunity for public comment), a percentage specified in paragraphs (1) through (4) of subsection (a) if the Administrator determines that such change is necessary to reflect conventional industry practices among business concerns that are below the numerical size standard for businesses in that industry category. CommentsClose CommentsPermalink





‘(2) UNIFORMITY- A change to a percentage under paragraph (1) shall apply to all covered small business concerns. CommentsClose CommentsPermalink





‘(d) Other Contracts- CommentsClose CommentsPermalink





‘(1) IN GENERAL- With respect to a category of contracts to which a requirement under subsection (a) does not apply, the Administrator is authorized to establish, by rule (after providing notice and an opportunity for public comment), a requirement that a covered small business concern may not expend on subcontractors more than a specified percentage of the amount paid to the concern under a contract in that category. CommentsClose CommentsPermalink





‘(2) UNIFORMITY- A requirement established under paragraph (1) shall apply to all covered small business concerns. CommentsClose CommentsPermalink





‘(3) CONSTRUCTION PROJECTS- The Administrator shall establish, through public rulemaking, requirements similar to those specified in paragraph (1) to be applicable to contracts for general and specialty construction and to contracts for any other industry category not otherwise subject to the requirements of such paragraph. The percentage applicable to any such requirement shall be determined in accordance with paragraph (2). CommentsClose CommentsPermalink





‘(e) Definitions- In this section, the following definitions apply: CommentsClose CommentsPermalink





‘(1) COVERED SMALL BUSINESS CONCERN- The term ‘covered small business concern’ means a business concern that-- CommentsClose CommentsPermalink





‘(A) with respect to a contract awarded under section 8(a), is a small business concern eligible to receive contracts under that section; CommentsClose CommentsPermalink





‘(B) with respect to a contract awarded under section 8(m)-- CommentsClose CommentsPermalink





‘(i) is a small business concern owned and controlled by women (as defined in that section); or CommentsClose CommentsPermalink





‘(ii) is a small business concern owned and controlled by women (as defined in that section) that is not less than 51 percent owned by 1 or more women who are economically disadvantaged (and such ownership is determined without regard to any community property law); CommentsClose CommentsPermalink





‘(C) with respect to a contract awarded under section 15(a), is a small business concern; CommentsClose CommentsPermalink





‘(D) with respect to a contract awarded under section 31, is a qualified HUBZone small business concern; or CommentsClose CommentsPermalink





‘(E) with respect to a contract awarded under section 36, is a small business concern owned and controlled by service-disabled veterans. CommentsClose CommentsPermalink





‘(2) SIMILARLY SITUATED ENTITY- The term ‘similarly situated entity’ means a subcontractor that-- CommentsClose CommentsPermalink





‘(A) if a subcontractor for a small business concern, is a small business concern; CommentsClose CommentsPermalink





‘(B) if a subcontractor for a small business concern eligible to receive contracts under section 8(a), is such a concern; CommentsClose CommentsPermalink





‘(C) if a subcontractor for a small business concern owned and controlled by women (as defined in section 8(m)), is such a concern; CommentsClose CommentsPermalink





‘(D) if a subcontractor for a small business concern owned and controlled by women (as defined in section 8(m)) that is not less than 51 percent owned by 1 or more women who are economically disadvantaged (and such ownership is determined without regard to any community property law), is such a concern; CommentsClose CommentsPermalink





‘(E) if a subcontractor for a qualified HUBZone small business concern, is such a concern; or CommentsClose CommentsPermalink





‘(F) if a subcontractor for a small business concern owned and controlled by service-disabled veterans, is such a concern.’. CommentsClose CommentsPermalink

SEC. 102. PENALTIES.

Section 16 of the Small Business Act (15 U.S.C. 645) is amended by adding at the end the following: CommentsClose CommentsPermalink





‘(g) Subcontracting Limitations- CommentsClose CommentsPermalink





‘(1) IN GENERAL- Whoever violates a requirement established under section 45 shall be subject to the penalties prescribed in subsection (d), except that, for an entity that exceeded a limitation on subcontracting under such section, the fine described in subsection (d)(2)(A) shall be treated as the greater of-- CommentsClose CommentsPermalink





‘(A) $500,000; or CommentsClose CommentsPermalink





‘(B) the dollar amount expended, in excess of permitted levels, by the entity on subcontractors. CommentsClose CommentsPermalink





‘(2) MONITORING- Not later than 1 year after the date of enactment of this subsection, the Administrator shall take such actions as are necessary to ensure that an existing Federal subcontracting reporting system is modified to notify the Administrator, the appropriate Director of the Office of Small and Disadvantaged Business Utilization, and the appropriate contracting officer if a requirement established under section 45 is violated.’. CommentsClose CommentsPermalink

SEC. 103. CONFORMING AMENDMENTS.

(a) HUBZones- Section 3(p)(5) of the Small Business Act (15 U.S.C. 632(p)(5)) is amended-- CommentsClose CommentsPermalink





(1) in subparagraph (A)(i) by striking subclause (III) and inserting the following: CommentsClose CommentsPermalink





‘(III) with respect to any subcontract entered into by the small business concern pursuant to a contract awarded to the small business concern under section 31, the small business concern will ensure that the requirements of section 45 are satisfied; and’; CommentsClose CommentsPermalink





(2) by striking subparagraphs (B) and (C); and CommentsClose CommentsPermalink





(3) by redesignating subparagraph (D) as subparagraph (B). CommentsClose CommentsPermalink





(b) Entities Eligible for Contracts Under Section 8(a)- Section 8(a) of such Act (15 U.S.C. 637(a)) is amended by striking paragraph (14) and inserting the following: CommentsClose CommentsPermalink





‘(14) Limitations on SubcontractingIMITATIONS ON SUBCONTRACTING- A concern may not be awarded a contract under this subsection as a small business concern unless the concern agrees to satisfy the requirements of section 45.’. CommentsClose CommentsPermalink





(c) Small Business Concerns- Section 15 of such Act (15 U.S.C. 644) is amended by striking subsection (o) and inserting the following: CommentsClose CommentsPermalink





‘(o) Limitations on Subcontracting- A concern may not be awarded a contract under subsection (a) as a small business concern unless the concern agrees to satisfy the requirements of section 45.’. CommentsClose CommentsPermalink

SEC. 104. REGULATIONS.

Not later than 180 days after the date of enactment of this Act, the Administrator of the Small Business Administration shall issue guidance with respect to compliance with the changes made to the Small Business Act by the amendments in this Act, with opportunities for notice and comment. CommentsClose CommentsPermalink

TITLE II--SUBCONTRACTING PLANS CommentsClose CommentsPermalink

SEC. 201. SUBCONTRACTING PLANS.

(a) Subcontracting Reporting Requirements- CommentsClose CommentsPermalink





(1) IN GENERAL- Section 8(d)(6) of the Small Business Act (15 U.S.C. 637(d)(6)) is amended-- CommentsClose CommentsPermalink





(A) by striking ‘(6) Each subcontracting plan’ and inserting the following: CommentsClose CommentsPermalink





‘(6) Subcontracting Plan RequirementsUBCONTRACTING PLAN REQUIREMENTS- Each subcontracting plan’; CommentsClose CommentsPermalink





(B) by amending subparagraph (E) to read as follows: CommentsClose CommentsPermalink





‘(E) assurances that the offeror or bidder will-- CommentsClose CommentsPermalink





‘(i) submit-- CommentsClose CommentsPermalink





‘(I) not later than 180 days after the date on which performance under the applicable contract begins, and every 180 days thereafter until contract performance ends, a report that describes all subcontracting activities under the contract during the preceding 180-day period; CommentsClose CommentsPermalink





‘(II) not later than 1 year after the date on which performance under the applicable contract begins, and annually thereafter until contract performance ends, a report that describes all subcontracting activities under the contract that have occurred before the date on which the report is submitted (except that, with respect to the Department of Defense and the National Aeronautics and Space Administration, a report under this subclause shall be submitted not later than 180 days after the date on which contract performance begins and every 180 days thereafter until contract performance ends); and CommentsClose CommentsPermalink





‘(III) not later than 30 days after the date on which performance under the applicable contract ends, a report that describes all subcontracting activities under the contract; and CommentsClose CommentsPermalink





‘(ii) cooperate with any study or survey required by the applicable Federal agency or the Administration to determine the extent of compliance by the offeror or bidder with the subcontracting plan;’; and CommentsClose CommentsPermalink





(C) by moving subparagraph (G), including each clause therein,the margins for subparagraphs (A), (B), (C), (D), and (F) 2 ems to the leftright (so that the align with subparagraph (E), as amended by subparagraph (B) of this paragraph). CommentsClose CommentsPermalink





(2) REPORTING SYSTEM MODIFICATION- CommentsClose CommentsPermalink





(A) IN GENERAL- Not later than 1 year after the date of enactment of this Act, the Administrator of the Small Business Administration shall take such actions as are necessary to ensure that the Federal subcontracting reporting system to which covered reports are submitted is modified to notify the Administrator, the appropriate contracting officer, and the appropriate Director of Small and Disadvantaged Business Utilization if an entity fails to submit a required covered report. If the Administrator does not modify the subcontracting reporting system on or before the date that is 1 year after the date of enactment of this Act, the Administrator may not carry out or establish any pilot program until the date the Administrator modifies the reporting system. CommentsClose CommentsPermalink





(B) COVERED REPORT DEFINED- In this paragraph, the term ‘covered report’ means a report submitted in accordance with assurances provided under section 8(d)(6)(E) of the Small Business Act (15 U.S.C. 637(d)(6)(E)). CommentsClose CommentsPermalink





(b) Failure To Submit Subcontracting Reports as Breach of Contract- Section 8(d)(8) of such Act (15 U.S.C. 637(d)(8)) is amended-- CommentsClose CommentsPermalink





(1) by striking ‘(8) The failure’ and inserting the following: CommentsClose CommentsPermalink





‘(8) Material BreachATERIAL BREACH- The failure’; CommentsClose CommentsPermalink





(2) in subparagraph (A) by striking ‘subsection, or’ and inserting ‘subsection,’; CommentsClose CommentsPermalink





(3) in subparagraph (B) by striking ‘subcontract,’ and inserting ‘subcontract, or’; CommentsClose CommentsPermalink





and(4) by inserting after subparagraph (B) the following: CommentsClose CommentsPermalink





‘(C) assurances provided under paragraph (6)(E),’; and CommentsClose CommentsPermalink





(5) by moving the margins of subparagraphs (A), (B), and the matter following subparagraph (B) 2 ems to the right. CommentsClose CommentsPermalink





(c) Authority of Small Business Administration- Section 8(d)(10) of such Act (15 U.S.C. 637(d)(10)) is amended-- CommentsClose CommentsPermalink





(1) by striking ‘(10) In the case of’ and inserting the following: CommentsClose CommentsPermalink





‘(10) Authority of AdministrationUTHORITY OF ADMINISTRATION- In the case of’; CommentsClose CommentsPermalink





(2) in subparagraph (B) by striking ‘, which shall be advisory in nature,’; CommentsClose CommentsPermalink





and(3) in subparagraph (C) by striking ‘, either on a contract-by-contract basis, or in the case contractors’ and inserting ‘as a supplement to evaluations performed by the contracting agency, either on a contract-by-contract basis or, in the case of contractors’; and CommentsClose CommentsPermalink





(4) by moving the margins of subparagraphs (A) through (C) 2 ems to the right. CommentsClose CommentsPermalink





(d) Appeals- Section 8(d) of such Act (15 U.S.C. 637(d)) is amended by adding at the end the following: CommentsClose CommentsPermalink





‘(13) AppealsPPEALS- CommentsClose CommentsPermalink





‘(A) IN GENERAL- If a procurement center representative or commercial market representative determines that a subcontracting plan required under paragraph (4) or (5) fails to provide the maximum practicable opportunity for covered small business concerns to participate in the performance of the contract to which the plan applies, such representative may delay acceptance of the plan in accordance with subparagraph (B). CommentsClose CommentsPermalink





‘(B) PROCESS- A procurement center representative or commercial market representative who makes the determination under subparagraph (A) with respect to a subcontracting plan may delay acceptance of the plan for a 30-day period by providing written notice of such determination to appropriate personnel of the contracting agency. Such notice shall include recommendations for altering the plan to provide the maximum practicable opportunity described in that subparagraph. CommentsClose CommentsPermalink





‘(C) DISAGREEMENTS- If a procurement center representative or commercial market representative delays the acceptance of a subcontracting plan under subparagraph (B) for a 30-day period and, during such period, does not reach agreement with appropriate personnel of the contracting agency to alter the plan to provide the maximum practicable opportunity described in subparagraph (A), the disagreement shall be submitted to the head of the contracting agency by the Administrator for a final determination. CommentsClose CommentsPermalink





‘(D) COVERED SMALL BUSINESS CONCERNS DEFINED- In this paragraph, the term ‘covered small business concerns’ means small business concerns, qualified HUBZone small business concerns, small business concerns owned and controlled by veterans, small business concerns owned and controlled by service-disabled veterans, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women.’. CommentsClose CommentsPermalink

SEC. 202. NOTICES OF SUBCONTRACTING OPPORTUNITIES.

Section 8(k)(1) of the Small Business Act (15 U.S.C. 637(k)(1)) is amended by striking ‘in the Commerce Business Daily’ and inserting ‘on the appropriate Federal Web site (as determined by the Administrator)’. CommentsClose CommentsPermalink

SEC. 203. REGULATIONS.

Not later than 180 days after the date of enactment of this Act, the Administrator of the Small Business Administration shall issue guidance with respect to the changes made to the Small Business Act, with opportunity for notice and comment. CommentsClose CommentsPermalink

TITLE III--INSOURCING CommentsClose CommentsPermalink

SEC. 301. DEFINITIONS RELATING TO PROCUREMENT PROTEST SYSTEM.

(a) Protest-Section 3551(1) of title 31, United States Code, is amended by adding at the end the following: CommentsClose CommentsPermalink





‘(F) Conversion of a function that is being performed by a private sector entitysmall business concern to performance by a Federal employee.’. CommentsClose CommentsPermalink





(b) Interested Party- Section 3551(2) of such title is amended-- CommentsClose CommentsPermalink





(1) in subparagraph (A) by striking ‘and’ at the end; CommentsClose CommentsPermalink





(2) in subparagraph (B) by striking the period at the end and inserting ‘; and’; and CommentsClose CommentsPermalink





(3) by adding at the end the following: CommentsClose CommentsPermalink





‘(C) with respect to a conversion described in paragraph (1)(F), includes anymeans a small business concern (as that term is defined in section 3(a) of the Small Business Act) whose economic interest would be affected by the conversion.’. CommentsClose CommentsPermalink

SEC. 302. INSOURCING.

The Small Business Act (15 U.S.C. 631 et seq.), as amended by this Act, is further amended by inserting after section 45 the following: CommentsClose CommentsPermalink

‘SEC. 46. INSOURCING.

‘A Federal agency may only convert a function that is being performed by a small business concern to performance by a Federal employee if-- CommentsClose CommentsPermalink





‘(1) the agency has made publicly available, after providing notice and an opportunity for public comment, the procedures of the agency with respect to decisions to convert a function being performed by a small business concern to performance by a Federal employee; and CommentsClose CommentsPermalink





‘(2) the procedures described in paragraph (1) include that all decisions described in such paragraph are reviewed by any appropriate-- CommentsClose CommentsPermalink





‘(A) Office of Small and Disadvantaged Business Utilization; and CommentsClose CommentsPermalink





‘(B) procurement center representative.’. CommentsClose CommentsPermalink