15 U.S.C. § 637 — Additional powers

(a) Procurement contracts and the disadvantaged-business program. The terms "Administration^*," "Program Participant," "socially and economically disadvantaged small business concern^*," "socially disadvantaged individual," "economically disadvantaged individual," "fair market price," and "graduated" are used in this section. To the extent this section does not define a term, this section does not define it.

(1) When the Administration decides that action is necessary or appropriate, it has the duty and authority—

(A) to make contracts with the United States^* Government, its departments, agencies, and officers that have procurement authority. Under those contracts, the Administration may provide the Government with articles, equipment, supplies, services, or materials, or perform construction work. If the Administration certifies that it is capable and responsible to perform a particular Government procurement contract, the procurement officer may, in that officer’s discretion, award the contract to the Administration on terms agreed by the Administration and the officer. If they cannot agree, the Administrator^* must submit the matter to the Secretary or head of the appropriate department or agency for a decision. Within 5 days after being told of an adverse decision by the procurement officer, the Administration may notify the contracting officer that it intends to appeal. Within 15 days after that notice, the Administrator must submit a written request for reconsideration to the department Secretary or agency head. An adverse decision includes deciding not to make a particular procurement requirement available for award under this subsection, and failing to agree on the terms of a contract that would be awarded without competition under this subsection. After receiving the intent-to-appeal notice, the Secretary or agency head must stop further action on the procurement until issuing a written decision on reconsideration, unless that official makes a written finding that urgent and compelling circumstances significantly affecting United States interests make waiting impossible. If the request is denied, the Secretary or agency head must state why the selected firm was found unable to perform the requirement and state the findings supporting that conclusion. Those materials must be placed in the contract file. A contract cannot be awarded under this subsection if doing so would cost the awarding agency more than a fair market price;

(B) to arrange for these procurement contracts to be performed by negotiating or otherwise awarding subcontracts to socially and economically disadvantaged small business concerns. The subcontracts may cover construction, services, manufacturing, supplying, or assembling the articles, equipment, supplies, materials, or parts; related servicing or processing; and management services needed for the Administration to perform the prime contracts;

(C) to award a contract to a small business concern owned and controlled by socially and economically disadvantaged individuals even after the concern has completed its period of Program Participation under section 636(j)(15), if—

(i) the contract will be awarded because of an offer, including its price, submitted in response to a published solicitation for a competition conducted under subparagraph (D); and

(ii) the expected awardee was a Program Participant eligible for the award on the solicitation’s stated offer-receipt date; and

(D)(i) to award a contract opportunity through competition limited to eligible Program Participants if—

(I) there is a reasonable expectation that at least two eligible Program Participants will submit offers and that the award can be made at a fair market price; and

(II) the expected award price, including options, will be more than $7,000,000 for a manufacturing opportunity assigned a standard industrial classification code, or more than $3,000,000, including options, for any other opportunity.

(ii) The Associate Administrator for Minority Small Business and Capital Ownership Development may personally approve an agency request to use a competition limited to eligible Program Participants even when the expected price will not exceed those amounts. This approval power cannot be delegated, and approvals may be given only on a limited basis.

(2) Even though subsections (a), (b), and (e) of section 3131 of title 40 may otherwise apply, a small business concern receiving a subcontract^* under this subsection does not have to provide any bond amount if the Administrator decides that amount is inappropriate for the concern’s performance. The Administrator may use this authority only if—

(A) the Administration takes measures it considers appropriate to protect people who provide materials or labor to the small business;

(B) as far as practicable, the Administration helps the small business develop, within a reasonable time, the financial and other ability needed to obtain bonds that the Administration may later require for successful completion of a program under this subsection;

(C) the Administration finds that the small business cannot obtain the needed bond or bonds from a surety, and that no surety will issue bonds covered by the guarantee provisions of Title IV of the Small Business Investment Act of 1958 [15 U.S.C. 692 et seq.]; and

(D) the small business is a start-up concern and has not taken part in a program under this subsection for more than 1 year. The authority to waive bonds under this paragraph could not be used after September 30, 1988.

(3)(A) When practicable, a Program Participant selected by the Administration for a contract awarded without competition under this subsection must take part in negotiating the contract’s terms and conditions.

(B)(i) For paragraph (1), the agency offering the procurement requirement to the Administration must determine the "fair market price" under clauses (ii) and (iii).

(ii) For a new requirement, or one without a satisfactory procurement history, the agency must estimate the current fair market price using a price or cost analysis. The analysis may consider current market conditions, commercial prices for similar products or services, and information from another agency. It must consider cost or pricing data that the Administration submits on time.

(iii) For a requirement with a satisfactory procurement history, the estimate must be based on recent award prices adjusted so the comparison is fair. The adjustments must consider differences in quantity, performance time, plans, specifications, transportation, packaging and packing, labor and materials, overhead, and any other appropriate costs.

(C) At the Administration’s request, an agency offering a requirement under this subsection must promptly give the Administration a written explanation of how the agency estimated the current fair market price. It must identify the information, studies, analyses, and other data used. The agency’s estimate and supporting data given to the Administration must not be disclosed to a potential offeror other than the Administration.

(D) A small business selected to perform or negotiate a contract under this subsection may ask the Administration to protest the agency’s fair-market-price estimate under paragraph (1)(A).

(4)(A) For this section, "socially and economically disadvantaged small business concern" means a small business concern that meets subparagraph (B) and—

(i) is at least 51 percent unconditionally owned by one or more socially and economically disadvantaged individuals, an economically disadvantaged Indian tribe or a wholly owned business entity of that tribe, or an economically disadvantaged Native Hawaiian organization; or

(ii) if publicly owned, has at least 51 percent of its stock unconditionally owned by one or more of those individuals, an economically disadvantaged Indian tribe or its wholly owned business entity, or an economically disadvantaged Native Hawaiian organization.

(B) The concern meets this subparagraph if one or more socially and economically disadvantaged individuals, members of an economically disadvantaged Indian tribe, or Native Hawaiian organizations described in subparagraph (A) control its management and daily business operations.

(C) Each Program Participant must certify every year that it meets this paragraph’s ownership and control requirements.

(5) "Socially disadvantaged individuals" are people who have experienced racial or ethnic prejudice or cultural bias because they belong to a group, regardless of their individual qualities.

(6)(A) "Economically disadvantaged individuals" are socially disadvantaged individuals whose ability to compete in the free-enterprise system has been impaired because they have less access to capital and credit than other people in the same business area who are not socially disadvantaged. In deciding how much their opportunities have been reduced, the Administration must consider, among other things, the person’s assets and net worth. In deciding whether an Indian tribe is economically disadvantaged, the Administration must consider, when available, such information as the tribe members’ per-capita income, excluding judgment awards; the percentage of the local Indian population below the poverty level; and the tribe’s access to capital markets.

(B) Each Program Participant must submit to the Administration every year—

(i) a personal financial statement for each disadvantaged owner;

(ii) a record of every payment the Program Participant made to each disadvantaged owner or to a person or entity affiliated with such an owner; and

(iii) any other information the Administration considers necessary for the decisions required by this paragraph.

(C)(i) If information from a Program Participant or another source gives the Administration reason to believe that the economic-disadvantage standards in subparagraph (A) have not been met, the Administration must review whether the Program Participant and its disadvantaged owners still have reduced capital and credit opportunities, compared with other concerns in the same business area that are not socially disadvantaged.

(ii) If the Administration decides after the review that they are no longer economically disadvantaged for assistance under this subsection, the Program Participant must be graduated under section 636(j)(10)(G), subject to the hearing right in paragraph (9).

(D)(i) If information gives the Administration reason to believe that a Program Participant withdrew an excessively large amount of money or other assets for the personal benefit of its disadvantaged owners or their affiliated people or entities, the Administration must review whether the withdrawals harmed the targets, objectives, and goals in the Program Participant’s business plan.

(ii) If the Administration finds that withdrawals harmed the business, it must either—

(I) start a proceeding to terminate the Program Participant under section 636(j)(10)(F), subject to the hearing right in paragraph (9); or

(II) require an appropriate reinvestment of money or assets and any other steps it considers necessary to protect the concern.

(E) When the Administration calculates personal net worth for any purpose under this paragraph, it must leave out—

(i) the value of disadvantaged owners’ investments in their concerns. However, that value must be considered when comparing those concerns with concerns in the same business area owned by people who are not socially disadvantaged; and

(ii) the owners’ equity in their primary personal homes. However, equity caused by excessively large withdrawals from a Program Participant or an applicant must be considered.

(7)(A) The Administration may not treat a small business concern as eligible for assistance under this subsection unless it decides that, with contract, financial, technical, and management support, the concern can perform contracts that may be awarded under paragraph (1)(C) and has reasonable prospects of succeeding while competing in the private sector.

(B) The Administration may limit contracts under its rules and procedures to a limited number of standard industrial classification codes in an approved business plan. It may not apply that limit in a way that prevents a participating concern from logically expanding into industrial areas where it could succeed.

(8) The Administrator, after consulting the Associate Administrator for Minority Small Business and Capital Ownership Development, must make all paragraph (5) decisions about whether a group has experienced prejudice or bias. The Associate Administrator, under the Administrator’s supervision and responsibility, must make all other decisions under paragraphs (4), (5), (6), and (7).

(9)(A) Subject to subparagraph (E), before taking an action in subparagraph (B), the Administration must give the affected small business concern an opportunity for a hearing on the record under chapter 5 of title 5.

(B) The actions are—

(i) denying admission to the program because of a negative decision under paragraph (4), (5), or (6);

(ii) terminating participation under section 636(j)(10)(F);

(iii) graduating the concern under section 636(j)(10)(G); and

(iv) denying a request for a waiver under paragraph (21)(B).

(C) In a proceeding under this paragraph, the Administration’s proposed action must stand unless it is arbitrary, capricious, or contrary to law.

(D) The decision under this paragraph is the Administration’s final decision and binds the Administration and its employees.

(E) The adjudicator must refuse jurisdiction over a matter that—

(i) does not on its face allege facts that, if proved, would justify reversing or changing the Administration’s position;

(ii) was filed too late;

(iii) was not filed under the applicable procedural rules; or

(iv) has already been decided by, or is being adjudicated before, a court with jurisdiction over the matter.

(F) As far as practicable, the proceeding must be completed and a decision issued within 90 days after the hearing petition is filed with the adjudicating office.

(10) The Administration must create and operate an outreach program to inform small business concerns about, and recruit them to apply for, eligibility for assistance under this subsection. It must make a sustained and substantial effort to seek certification applications from concerns in areas with concentrated unemployment or underemployment, labor surplus areas, States with relatively few Program Participants, and industries where small disadvantaged businesses have not substantially received contracts under this subsection.

(11) As far as practicable, the Administration must award construction subcontracts under this subsection in the county or State where the work will be performed.

(12)(A) The Administration must require each concern eligible for subcontracts under this subsection to prepare and submit a capability statement every year. The statement must briefly describe the concern’s different contract-performance abilities and give the name and telephone number of its assigned Business Opportunity Specialist. The Administration must separate statements from concerns mainly needing local contract support from those mainly needing national marketing. It must distribute local-support statements to appropriate buying activities in the concern’s marketing area. It must distribute the remaining statements to the appropriate agencies’ Directors of Small and Disadvantaged Business Utilization, who must further distribute them to agency buying activities that may buy the listed types of items or services.

(B) Within 60 days after receiving a capability statement, a contracting activity must contact the relevant Business Opportunity Specialist and state the number, type, and approximate dollar value of contract opportunities it may award during the next 12 months that may be suitable for the concerns whose statements it received.

(C) Each executive agency that reported contract actions with an aggregate value over $50,000,000 to the Federal Procurement Data System in fiscal year 1988 or any later fiscal year must prepare and periodically revise during the year a forecast of expected contract opportunities, or classes of opportunities, for the next and later fiscal years that small businesses, including disadvantaged small businesses, can perform. When available, the forecast must state: (i) the approximate number of individual opportunities and opportunities in each class; (ii) the approximate dollar value or range for each opportunity or class; (iii) the expected fiscal-year quarter for issuing the procurement request; and (iv) the activity responsible for awarding and administering the contract.

(D) Within 10 days after completing a forecast, the head of each covered executive agency must provide it to that agency’s Office of Small and Disadvantaged Business Utilization Director established under section 644(k) and to the Administrator.

(E) The reported information may be limited to classes of items and services for which there are substantial annual purchases.

(F) The forecasts must be available to small business concerns.

(13) For this subsection, “Indian tribe” means an Indian tribe, band, nation, or other organized group or community of Indians, including an Alaska Native village or regional or village corporation under the Alaska Native Claims Settlement Act [43 U.S.C. 1601 et seq.], that—

(A) is recognized as eligible for the United States’ special Indian programs and services because of Indian status; or

(B) is recognized as an Indian tribe, band, nation, group, or community by the State where it resides.

(14) A concern may not receive a contract under this subsection as a small business unless it agrees to meet section 657s requirements.

(15) For this subsection, “Native Hawaiian Organization” means a community-service organization serving Native Hawaiians in Hawaii that—

(A) is a nonprofit corporation that filed articles of incorporation with the director of Hawaii’s Department of Commerce and Consumer Affairs, or a successor agency;

(B) is controlled by Native Hawaiians; and

(C) principally conducts business activities benefiting Native Hawaiians.

(16)(A) The Administration must award a sole-source contract under this section to a small business concern recommended by the agency offering the opportunity if—

(i) the Program Participant is responsible for performing it;

(ii) the award is consistent with the participant’s business plan; and

(iii) the award would not cause the participant to exceed the requirements in section 636(j)(10)(I).

(B) As far as practicable, the Administration must promote an equitable geographic distribution of sole-source contracts awarded under this subsection.

(17)(A) A responsible business concern that complies with subparagraph (B) may not be denied the opportunity to submit an offer for, and have its offer considered for, a procurement contract whose main purpose is supplying a product under this subsection, subsection (m), section 644(a), section 657a, or section 657f, solely because it is not the actual manufacturer or processor.

(B) The concern must—

(i) mainly engage in wholesale or retail trade;

(ii) meet the small-business numerical size standard for the classification code assigned to the solicitation;

(iii) be a regular dealer, as defined in section 35(a) of title 41, commonly called the Walsh-Healey Public Contracts Act, in the product offered to the Government, or be specifically exempt from that section under section 636(j)(13)(C); and

(iv) state that it will supply a product made by a domestic small-business manufacturer or processor, unless the Administrator waives that requirement—

(I) after reviewing the contracting officer’s finding that no small-business manufacturer or processor can reasonably be expected to offer a product meeting the solicitation’s specifications, including performance time; or

(II) for a product or class of products, after finding that no small-business manufacturer or processor is available to take part in the Federal procurement market.

(C) This paragraph does not apply to a contract whose main purpose is acquiring services or construction.

(18)(A) During employment with the Administration and for 2 years afterward, a person employed by the Administration may not engage in an activity or transaction in subparagraph (B) involving a Program Participant during the person’s employment if the person personally, directly or indirectly, took part in decisions about that participant or about administering assistance generally under this subsection, section 636(j)(10), or section 636(a)(20).

(B) The prohibited activities and transactions are—

(i) buying, selling, or receiving, except by inheritance, a legal or beneficial ownership of stock or another ownership interest, or a right to acquire one;

(ii) entering into or carrying out a written or oral agreement, whether legally enforceable or not, to purchase or otherwise obtain an interest described in clause (i); or

(iii) receiving another benefit or right that may come with ownership.

(C)(i) The employees listed in clause (ii) must each year give the Administration a written certification about compliance with this paragraph.

(ii) The employees are regional administrators; district directors; the Associate Administrator for Minority Small Business and Capital Ownership Development; employees whose main duties involve awarding contracts or providing assistance under this subsection or section 636(j)(10); and any other employees the Administrator chooses.

(iii) A current or former Administration employee who violates this paragraph may face a civil penalty assessed by the Attorney General of up to 300 percent of the greatest gain the employee realized or could have realized from the prohibited activities or transactions.

(iv) In addition to other legal or regulatory remedies, a person who falsely certifies under clause (i) is subject to a civil penalty under the Program Fraud Civil Remedies Act of 1986 [31 U.S.C. 3801–3812].

(19)(A) An Administration employee who may take, direct, recommend, or approve an action concerning a program or activity under this subsection or section 636(j) may not take or threaten that action because of any party’s political activity or affiliation. Employees must promptly report to the Administration’s Inspector General any such action that an employee was asked or ordered to take.

(B) An employee who knowingly and willfully violates subparagraph (A) may be disciplined by removal from service, reduction in grade, suspension, or reprimand.

(C) Subparagraph (A) does not cover action imposing a penalty or enforcing a law, rule, or regulation that prohibits or limits political activity.

(D) These prohibitions and remedies add to, and do not replace, other prohibitions, measures, or liabilities under other law.

(20)(A) A small business concern participating in the Program under section 636(j)(10) and eligible for contracts under this section must report twice a year to its assigned Business Opportunity Specialist—

(i) every agent, representative, attorney, accountant, consultant, and other nonemployee being paid to help obtain a Federal contract for the participant; and

(ii) the amount paid during the reporting period to each listed person and what that person did for the payment.

(B) The Business Opportunity Specialist must promptly review and send the report to the Associate Administrator for Minority Small Business and Capital Ownership Development. A report suggesting improper activity must immediately be reported to the Inspector General.

(C) Failing to file the report as required by this subsection and applicable regulations is "good cause" to begin a termination proceeding under section 636(j)(10)(F).

(21)(A) Subject to subparagraph (B), the concern that first received a contract under this subsection, including options, must perform it. If the owner or owners whose status made the concern eligible give up ownership or control, or agree to give it up, the contract or option must be terminated for the Government’s convenience. The concern may not be charged repurchase costs or other damages solely because of this subparagraph.

(B) The Administrator may personally waive subparagraph (A) only if—

(i) the owners must temporarily give up some control to obtain equity financing;

(ii) the contracting agency’s head certifies that ending the contract would severely harm the agency’s program objectives or missions;

(iii) ownership and control will pass to another small-business Program Participant that would otherwise be eligible to receive the award directly under subsection (a);

(iv) the individuals whose status created eligibility can no longer control the concern because of incapacity or death; or

(v) disadvantaged owners must give up a majority of voting stock to raise equity capital, but only if the concern has left the Capital Ownership Development Program, those owners will retain the largest single outstanding block of voting stock, including stock held by affiliated parties, and they will retain control of daily operations.

(C) For the conditions in subparagraph (B)(i), (ii), and (iii), the Administrator may grant the waiver only if asked before ownership or control is actually given up. For subparagraph (B)(iv), the request must be made as soon as possible after the incapacity or death.

(D) A concern performing a contract under this subsection must immediately notify the Administration when it enters an oral or written agreement to transfer all or part of its stock or other ownership interest to another party.

(E) For deciding ownership and control under this section, potential ownership interests held by investment companies licensed under the Small Business Investment Act of 1958 [15 U.S.C. 661 et seq.] must be treated like interests held by the individuals whose status creates eligibility.

(b) Procurement and property-disposal powers; deciding which concerns are small businesses. When it decides action is necessary, the Administration also has the duty and authority—

(1)(A) to provide technical, management, and information help to small business concerns—

(i) by advising and counseling them about Government procurement and good-management policies, principles, and practices; by cooperating and advising with voluntary business, professional, educational, and other nonprofit organizations, associations, and institutions, while taking steps to ensure that this cooperation does not endorse the organization or its products or services and ensuring that the Administration is appropriately recognized in printed materials; by cooperating and advising with Federal and State agencies; by maintaining a clearinghouse for information about managing, financing, and operating small businesses; and by distributing that information, including through recognition events and other activities it considers appropriate; and

(ii) by cooperating with a profit-making concern, called a "cosponsor" in this paragraph, to provide small businesses with training, information, and education. The Administration must take steps to ensure that it receives appropriate recognition and publicity; the cooperation does not endorse the cosponsor’s product or service; unnecessary promotion of those products or services is avoided; and use of any one cosponsor in a marketing area is minimized. It must make an agreement, signed for the Administration by an Administration employee in Washington, D.C., that at least provides that: the Administration approves in advance printed material announcing or distributed at the cosponsored activity; the cooperation’s terms are stated; only minimal charges may be imposed on a small business to cover direct assistance costs; the Administration may give the cosponsor mailing labels but not its compiled lists of small-business names and addresses; printed material naming both parties prominently disclaims any Administration endorsement of the cosponsor’s product or service; and the Administration receives appropriate recognition in all cosponsorship printed material;

(B) to establish, conduct, publicize, and recruit, select, and train volunteers for volunteer programs, including the Service Corps of Retired Executives (SCORE) and the Active Corps of Executive (ACE), for the purposes in subparagraph (A). The Administration must maintain at headquarters and pay the salaries, benefits, and expenses of volunteer and professional staff who manage and oversee these programs. Payments are effective only to the extent and in the amounts provided in advance by appropriations Acts. Despite other law, SCORE may seek cash and in-kind contributions from the private sector for its chapter functions and may use Administration payments for seeking and managing those contributions;

(C) to let individuals or groups participating with it to advance subparagraphs (A) and (B) use Administration offices and related materials and services, including clerical and stenographic services, as the Administration considers appropriate. Volunteers doing activities under this paragraph are Federal employees for Federal tort-claims purposes. For subchapter I of chapter 81 of title 5, they are civil employees of the United States and that subchapter applies, except that disability or death benefits use a volunteer’s monthly pay as if the volunteer received the entrance salary for a GS–11 employee. The Administrator may reimburse necessary out-of-pocket expenses for services under this chapter, attendance at Administration meetings, and malpractice insurance, under prescribed regulations. While volunteers work away from home or their regular business locations, the Administrator may reimburse travel expenses, including daily living allowances, as authorized by section 5703 of title 5 for people serving without pay. Volunteers may not provide services to an Administration client with an overdue loan unless the client signs a specific request for help with that matter;

(D) despite other law, to make payments for support services or reimburse out-of-pocket expenses to people serving under this paragraph without subjecting those payments to a tax or charge, or treating them as wages or compensation for unemployment, disability, retirement, public-assistance, similar benefits, or minimum-wage laws;

(E) to make grants, contracts, and cooperative agreements to public or private higher-education institutions to establish and operate a small-business institute. Students at the institution must use the institute to counsel and assist small business concerns and may receive educational credit for their activities;

(F) despite other law and under the Administrator’s regulations, to hire counsel and pay counsel fees, court costs, bail, and other defense expenses in judicial or administrative proceedings that arise directly from volunteers’ activities under this paragraph and in which volunteers are parties; and

(G) while carrying out this chapter and title IV of the Women’s Business Ownership Act of 1988 [15 U.S.C. 7101 et seq.], to accept in the Administration’s name and use or dispose of, for this chapter’s purposes, money or property received by gift, devise, bequest, or otherwise. The Administration may also accept free services and facilities.

(2) to make a complete inventory of all productive facilities of small-business concerns, or arrange for another government agency with the facilities to make it. The appropriate agencies in each State may be asked for an available or planned inventory of that State’s small-business productive facilities;

(3) to coordinate and determine how to use small-business productive capacity most effectively;

(4) to consult and cooperate with Government officers who have procurement or property-disposal powers so the Government can use the potential productive capacity of small-business plants;

(5) to learn how Government prime contractors award subcontracts and encourage them to award subcontracts to small businesses at fair and equitable prices, conditions, and terms;

(6) to decide, within each industry, which concerns, firms, people, corporations, partnerships, cooperatives, and other enterprises will be called "small-business concerns" for this chapter. When asked, the Administrator must issue an appropriate certificate stating that a particular concern is a small-business concern under this chapter’s criteria. The certificate may be revoked when the concern stops being a small-business concern. Government offices with procurement or lending powers, offices disposing of Federal property or allocating materials or supplies, and offices issuing rules affecting material or supply distribution must accept the Administration’s designation as conclusive;

(7)(A) to certify to Government procurement officers and Federal-property sale or disposal officers whether a small business concern or group is responsible in every relevant way, including capability, competence, capacity, credit, integrity, perseverance, and tenacity, to receive and perform a specific Government contract. Such an officer may not exclude the concern for one of those reasons without referring the issue to the Administration for final action;

(B) if a procurement officer finds that an otherwise qualified small business may be ineligible under section 35(a) of title 41, to notify the Administration in writing. The Administration must review the finding and either dismiss it and certify the concern as eligible for the specific contract, or agree and send the matter to the Secretary of Labor for final decision. The Administration may certify the concern only if the Secretary of Labor finds no violation;

(C) when the Administration certifies under (A) or (B) that a concern or group is responsible or eligible for a specific contract, Government procurement and property-disposal officers must accept that certification as conclusive and award the contract without requiring another responsibility or eligibility showing. The Administration may not create an exemption from referral or notification, or refuse a referral or notification under (A) or (B). However, an application need not be processed if the concern declines to have it processed;

(8) to obtain from Federal departments, establishments, and agencies involved in procurement or financing procurement or production reports about contracts, subcontracts, and loans to business concerns that the Administration considers relevant;

(9) to obtain from Federal departments, establishments, and agencies disposing of Federal property reports about bid solicitations, sale timing, and other matters the Administration considers relevant;

(10) to obtain from material suppliers information about how they fill orders and allocate supplies when a small business cannot obtain materials from its normal sources;

(11) to study and recommend to Federal agencies ways to ensure that a fair share of Government purchases and property-and-service contracts goes to small businesses; a fair share of Government research-and-development contracts goes to small businesses; a fair share of Government-property sales goes to small businesses; and small businesses receive a fair and equitable share of materials, supplies, and equipment;

(12) to consult and cooperate with every Government agency so small businesses receive fair and reasonable treatment;

(13) to create advisory boards and committees needed for this chapter and the Small Business Investment Act of 1958; call them together; pay their transportation and daily living allowances under section 5703 of title 5 when they travel more than 50 miles from home at the Administration’s request to attend meetings; and temporarily rent hotel or other accommodations in or outside the District of Columbia as needed for the meetings;

(14) as soon as practicable, to give local public agencies and small businesses displaced by federally aided urban-renewal projects appropriate information and help, including information about loans under section 636(b)(3), to help the businesses reopen;

(15) without regard to section 3204 of title 39, to distribute data and information in the form it considers appropriate to public agencies, private organizations, and the public;

(16) to study matters that materially affect small business’s ability to compete and how Federal laws, programs, and rules affect small business, and recommend changes to the responsible agencies; and

(17) to make grants and enter into contracts and cooperative agreements with educational institutions, private businesses, veterans’ nonprofit community organizations, and Federal, State, and local departments and agencies to establish and operate outreach programs for disabled veterans, veterans, and members of a reserve component of the Armed Forces.

(A) The Administrator must give equal consideration to the needs of disabled veterans, veterans, and reserve-component members when deciding continuation awards or competing for a grant, contract, or cooperative agreement under this paragraph. This includes giving equal value to factors based on being in one of those groups and equally considering applicants’ ability to provide Boots to Business on military installations and Boots to Business Reboot training away from installations.

(B) A "continuation award" means, for this subparagraph, a discretionary renewal or recompete for another 5-year project period. The period consists of a 12-month base period and up to four 12-month option periods, subject to continuing authority, available money, and satisfactory recipient performance.

(C) Within 1 year after December 23, 2024, the Administrator must issue guidance to existing recipients about the criteria in (A.

(D) For each budget period beginning after that guidance is issued, the Administrator must put the criteria in the funding agreement. Existing recipients have one full budget period to comply.

(E) If an existing recipient does not meet the guidance criteria during that budget period, it has 1 year beginning after the assessed budget period to reach satisfactory performance and comply with all award terms and conditions.

(F) If the Administrator fails to give equal weight to the groups’ needs during a competition, the Administrator must, within 60 days after the grant, contract, or cooperative agreement closes, give written reasons to the Senate Committee on Small Business and Entrepreneurship and the House Committee on Small Business.

(G) The Administrator must give full and fair consideration to an entity that applied before December 23, 2024, if it applies for a future funding opportunity under this paragraph.

(c) Reserved.

(d) Small-business performance of contracts and subcontracting plans.

(1) United States policy is that small businesses, veteran^*-owned small businesses, service-disabled-veteran-owned small businesses, qualified HUBZone small businesses, socially and economically disadvantaged small businesses, and women-owned small businesses must have the greatest practicable opportunity to perform contracts awarded by Federal agencies. This includes contracts and subcontracts for subsystems, assemblies, components, and related services for major systems. Prime contractors must also establish procedures for timely payment of amounts owed under subcontracts with those kinds of small businesses.

(2) Every Federal-agency contract must include the clause required by paragraph (3), except a contract that—

(A) does not exceed the simplified acquisition threshold^*;

(B) including all subcontracts, will be performed entirely outside every State, territory, and possession of the United States, the District of Columbia, and the Commonwealth of Puerto Rico; or

(C) is for services that are personal in nature.

(3) The required contract clause says: the United States policy is to give the listed small businesses the greatest practicable opportunity to participate, including in major-system subcontracts, and prime contractors must ensure timely subcontract payments. The contractor agrees to carry out that policy as far as consistent with efficient contract performance and to cooperate with studies or surveys by the Small Business Administration or awarding agency about compliance. In the clause, "small business concern" means a small business under section 3 of the Small Business Act and its regulations. A socially and economically disadvantaged small business must be at least 51 percent owned by one or more socially and economically disadvantaged individuals, or, if publicly owned, have at least 51 percent of its stock so owned, and those individuals must control management and daily operations. The contractor must presume that socially and economically disadvantaged individuals include Black Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, other minorities, and anyone the Administration finds disadvantaged under section 8(a) of the Small Business Act. A women-owned small business must be at least 51 percent owned by one or more women, or, if publicly owned, have at least 51 percent women-owned stock, and women must control management and daily operations. A veteran-owned small business must be at least 51 percent owned by one or more eligible veterans, or, if publicly owned, have at least 51 percent veteran-owned stock, and those veterans must control management and daily operations. The contractor must treat as veterans all people who are veterans under section 3(q) of the Small Business Act. A contractor acting in good faith may rely on a subcontractor’s written statement about its status as a small business, veteran-owned, service-disabled-veteran-owned, socially and economically disadvantaged, or women-owned concern. In the clause, "qualified HUBZone small business concern^*" has the meaning given in section 31(b), and "small business concern owned and controlled by service-disabled veterans^*" has the meaning given in section 3(q). This section does not define those quoted terms.

(4)(A) A solicitation for a negotiated Federal-agency contract must notify potential offerors of this subsection’s negotiated-procurement rules if the contract may exceed $1,000,000 for construction of a public facility or $500,000 for any other contract.

(B) Before awarding, amending, or modifying such a contract, if it must contain the paragraph (3) clause, may exceed the applicable amount, and offers subcontracting possibilities, the apparent successful offeror must negotiate a subcontracting plan with the procurement authority. The plan must contain the information in paragraph (6), be included in the contract, and be a material part of it.

(C) If the apparent successful offeror does not negotiate the plan within the agency’s regulatory deadline, it becomes ineligible for the contract. The agency must consider the offeror’s earlier compliance with other plans when deciding responsibility.

(D) The procurement authority may not award the contract unless it finds that the plan gives the greatest practicable opportunity to the listed small businesses and qualified HUBZone businesses to perform the contract.

(E) For negotiated contracts, a Federal agency may offer incentives it considers suitable to encourage subcontracting opportunities matching efficient and economical performance.

(F)(i) Each contract covered by this paragraph or paragraph (5) must require liquidated damages if the prime contractor^* fails to make a good-faith effort to comply with this subsection.

(ii) Before the contracting officer finally decides to impose damages and their amount, the contractor must have a chance to show good-faith compliance. The final decision is subject to chapter 71 of title 41.

(iii) The agency must ensure that the goals proposed by the apparent successful bidder or offeror can be reached considering the subcontracting opportunities available, efficient and economical performance, the available pool of eligible subcontractors, and the contractor’s actual performance under earlier plans.

(G) For a bundled contract^* that the agency head finds offers a significant subcontracting opportunity, the agency must make these significant evaluation factors: a factor based on the subcontracting-plan rate for small-business participation; and, when evaluating past performance, a factor based on how well the offeror met applicable small-business participation goals in earlier contracts.

(5)(A) A solicitation for a formally advertised Federal-agency contract, or an amendment or modification, must require the selected bidder to submit a paragraph (6) subcontracting plan if the contract must contain the paragraph (3) clause, may exceed $1,000,000 for public-facility construction or $500,000 for another contract, and offers subcontracting possibilities.

(B) If the selected bidder misses the regulatory deadline for submitting the plan, the bidder becomes ineligible. Earlier compliance with other plans must be considered in deciding responsibility. The awarded bidder’s plan must be included in and be a material part of the contract.

(6) Every plan required under paragraph (4) or (5) must include—

(A) percentage goals for using small businesses, veteran-owned, service-disabled-veteran-owned, qualified HUBZone, socially and economically disadvantaged, and women-owned small businesses as subcontractors;

(B) the name of the offeror’s or bidder’s employee who will administer the subcontracting program and that employee’s duties;

(C) the efforts the offeror or bidder will make to give those small businesses an equal chance to compete for subcontracts;

(D) assurances that the paragraph (2) clause will be included in subcontracts with further subcontracting opportunities, and that non-small-business subcontractors receiving more than $1,000,000 for public-facility construction or more than $500,000 for other contracts will adopt a similar plan. The offeror or bidder and required subcontractors must review and approve lower-tier plans, monitor compliance, make sure required reports are submitted, acknowledge receiving reports, compare performance with plans and goals, and discuss performance when needed to ensure good-faith efforts;

(E) assurances that required periodic reports will be submitted and that the offeror or bidder will cooperate with agency or Administration studies and surveys about compliance;

(F) the types of records the successful offeror or bidder will keep to show the procedures used to meet the plan’s requirements and goals, including source lists and efforts to identify and award subcontracts to the listed kinds of small businesses;

(G) the types of records kept to support any credit the successful offeror or bidder elects under paragraph (16)(A);

(H) the types of records kept to show that lower-tier subcontractors comply with the plan, including source lists and efforts to identify and award subcontracts to the listed kinds of small businesses; and

(I) a statement that the offeror or bidder will make a good-faith effort to buy the articles, equipment, supplies, services, or materials, or obtain construction work, from the small businesses used in preparing the bid or proposal, in the same amount and quality used in preparing it. If it does not do so, it must give the contracting officer a written explanation.

(7) The contracting-agency head must ensure that the agency collects and reports data on how well contractors meet plan goals and objectives and periodically reviews that data to ensure good-faith compliance with this subsection and the contractors’ plans.

(8) Paragraphs (4), (5), and (6) do not apply to offerors or bidders that are small business concerns.

(9) A contractor’s or subcontractor’s failure to comply in good faith with the paragraph (3) clause, a required plan included in its contract or subcontract, or the paragraph (6)(E) assurances is a material breach and may be considered in evaluating past performance.

(10) This subsection does not replace Defense Manpower Policy Number 4A (32A CFR chapter 1) or a successor policy.

(11) For contracts covered by paragraphs (4), (5), and (6), the Administration may assist agencies and businesses with their responsibilities, including preparing plans; review solicitations to decide whether they provide the greatest practicable subcontracting opportunity for the listed small businesses and give advisory findings to the agency; and evaluate plan compliance in addition to the contracting agency, contract by contract or in the aggregate for contractors with several contracts.

(12) For measuring a subcontract-use goal under a plan with an executive agency, a mentor firm that gives development assistance to a protege under the Mentor-Protege Program in section 4902 of title 10 must receive credit for that assistance as provided in subsection (f) of that section.

(13) Payment of subcontractors.

(A) A "covered contract" is a contract for which a prime contractor must develop a subcontracting plan under paragraph (4) or (5). This section does not define the quoted term further.

(B)(i) For a covered contract, the prime contractor must notify the contracting officer in writing if it pays a subcontractor a reduced price after the subcontractor completes its responsibilities, or if payment for covered-contract goods or services is more than 30 days late when the Federal agency has paid the prime contractor.

(ii) The notice must explain the reduction or nonpayment.

(C) The contracting officer must consider an unjustified failure to pay fully or on time when evaluating the prime contractor’s performance and may add or change the prime contractor’s past-performance information before or after contract closeout.

(D) If the officer finds that the prime contractor has a history of unjustified late payments, the officer must record the contractor’s identity under regulations issued under subparagraph (F).

(E)(i) Once the officer finds an unjustified failure to pay fully or on time, the prime contractor must cooperate with the officer in correcting and reducing the harm. The officer must consult the Director of Small Business Programs or the Director of Small and Disadvantaged Business Utilization acting under section 644(k)(6), and other Government representatives.

(ii) The cooperation duty continues until the subcontractor is paid in full or the officer’s finding is no longer effective, regardless of whether the covered contract is still being performed or has closed out.

(F) Within 1 year after September 27, 2010, the Federal Acquisition Regulatory Council must amend the Federal Acquisition Regulation to describe when a contractor has a history of unjustified late payments, create a process for officers to record its identity, and require that identity to be included in and publicly available through the Federal Awardee Performance and Integrity Information System or a successor.

(14) Before an offeror identifies a small business as a potential subcontractor in a bid, proposal, or plan under this subsection, the offeror must notify that small business.

(15) The Administrator must create a way for a subcontractor or potential subcontractor to report contractor fraud or bad faith concerning a plan under this subsection.

(16)(A) To decide whether a prime contractor met paragraph (6) percentage goals—

(i) if the goals concern only one contract with one Federal agency, the prime may choose credit for small businesses performing as first-tier subcontractors or at any tier^* under a paragraph (6)(D) plan equal to the total dollar value of subcontracts awarded to those small businesses; and

(ii) if the goals concern more than one contract with one or more agencies, or one contract with more than one agency, the prime may receive credit only for first-tier subcontractors that are small businesses.

(B) Each contracting-agency head must ensure that the agency collects and reports data about prime contractors’ achievement of plan goals and periodically reviews the data to ensure good-faith compliance.

(C) This paragraph does not allow a Federal agency to set a goal for an unspecified or erroneous number of subcontracts with a lower-tier subcontractor for a prime that otherwise qualifies for credit.

(17) At the request of a small business that performed as a first-tier subcontractor on a covered contract, the prime contractor must give it a record of its past performance on that contract. If the small business chooses to use that record, a contracting officer must consider it when evaluating that business’s offer for a prime contract^*.

(e) Covered executive-agency activity, procurement notices, publication, and time limits. Except as subsection (g) provides—

(1)(A) An executive agency planning to seek bids or proposals for property or services expected to cost more than $25,000, or planning to place an order expected to cost more than $25,000 under a basic agreement, basic ordering agreement, or similar arrangement, must publish a notice described in subsection (f).

(B) It must also post a subsection (f) solicitation notice in a public place at the issuing contracting office for at least 10 days when the expected price is more than $10,000 but no more than $25,000 for an agency other than the Department of Defense, or more than $5,000 but no more than $25,000 for the Department of Defense.

(C) An executive agency awarding a property-or-services contract for more than $100,000, or placing such an order for more than $100,000, must give the Secretary of Commerce a notice for publication announcing the award or order if a subcontract is likely.

(2)(A) A required solicitation notice may be published electronically in a way meeting section 1708(d) of title 41, or by the Secretary of Commerce in the Commerce Business Daily.

(B) The Secretary must promptly publish each notice or award announcement received for Commerce Business Daily publication.

(3) When paragraph (1)(A) requires a notice, the agency may not issue the solicitation earlier than 15 days after publication. If the contract or order is expected to exceed the simplified acquisition threshold, the submission deadline may not be earlier than 30 days after publication for an order under a basic agreement, basic ordering agreement, or similar arrangement; 45 days after publication for research and development; or 30 days after the solicitation is issued in any other case.

(f) Notice contents. Every subsection (e)(1)(A) or (B) solicitation notice must include—

(1) an accurate description of the property or services. The description may not unnecessarily restrict competition and should include, as appropriate, the agency name or designation, National Stock Number or other part number, and brief information about form, fit, function, physical dimensions, main manufacturing material, or similar facts that let a possible contractor decide whether to request the solicitation;

(2) provisions stating whether needed technical data will not be included and identifying any Government source for it, and stating whether the offeror, product, or service must meet a qualification requirement and, if so, identifying the office where that requirement can be obtained;

(3) the contracting officer’s name, business address, and telephone number;

(4) a statement that every responsible source may submit an appropriate bid, proposal, or quotation and that the agency will consider it;

(5) if procedures other than competition will be used, the reason supporting that choice and the intended source; and

(6) for a contract expected to be more than $25,000 but no more than the simplified acquisition threshold, a description of the award procedures and the periods in which prospective offerors and the contracting officer must take required preaward and award actions.

(g) Exempt executive-agency activities.

(1) A subsection (e)(1) notice is not required if—

(A) the procurement is no more than the simplified acquisition threshold and will use broad electronic public notice through a single Government-wide entry point that is convenient and universally accessible, while allowing the public to respond electronically;

(B) the notice would reveal the agency’s needs and doing so would harm national security;

(C) the procurement would result from accepting an unsolicited proposal showing a unique and innovative research idea, when publishing notice would reveal the proposal’s originality, innovation, or proprietary information, or from a proposal submitted under section 638;

(D) the procurement is made under an order placed against a requirements contract;

(E) the procurement is for perishable subsistence supplies;

(F) the procurement is for utility services other than telecommunications and only one source is available; or

(G) the procurement is for an expert’s services for litigation or a dispute, including preparation for foreseeable litigation or dispute, involving or potentially involving the Federal Government in any trial, hearing, court or administrative proceeding, or any part of alternative dispute resolution, whether or not the expert will testify.

(2) The requirements of subparagraph (A) of subsection (e)(1) do not apply to procurements under the conditions in paragraphs (2), (3), (4), (5), or (7) of section 3304(a) of title 41, or paragraphs (2), (3), (4), (5), or (7) of section 3204(a) of title 10.

(3) Those requirements also do not apply when the executive-agency head, after consulting the Administrator for Federal Procurement Policy and the Administrator of the Small Business Administration, makes a written finding that publishing a notice before issuing the solicitation is not appropriate or reasonable.

(h) Contract awards using noncompetitive procedures.

(1) An executive agency may not award a contract using noncompetitive procedures unless—

(A) except as paragraph (2) allows, a written justification has been approved by the proper official: for a contract over $100,000 and up to $1,000,000, by the procuring activity’s competition advocate without further delegation; for a contract over $1,000,000 and up to $10,000,000, by the procuring activity head or an authorized delegate who is a general or flag officer if in the Armed Forces, or a civilian in GS–16 or above or a comparable or higher position; and for a contract over $10,000,000, by the agency’s senior procurement executive designated under section 414(3) of title 41, without further delegation; and

(B) all other applicable requirements for using those procedures under division C, with the listed exceptions, of subtitle I of title 41 or sections 3201 through 3205 of title 10 have been met.

(2) The exceptions in paragraphs (3) and (4) of section 3304(e) of title 41 or paragraphs (3) and (4) of section 3204(e) of title 10 apply to paragraph (1)(A)’s approval requirement in the same way they apply to the approval requirement in the referenced section.

(i) Solicitation packages and fees. An executive agency must make the complete solicitation package for an ongoing procurement announced under subsection (e) available to any business concern or its authorized representative. The agency may charge a fee no higher than the actual duplication cost.

(j) Definition. For this section, "executive agency" has the meaning in section 133 of title 41. This section does not define that quoted term.

(k) Subcontracting-opportunity notices.

(1) A notice of a subcontracting opportunity may be submitted for publication on the appropriate Federal website chosen by the Administrator by a business awarded a contract by an executive agency subject to subsection (e)(1)(C), or by a subcontractor or supplier at any tier to that contractor when the opportunity exceeds $10,000.

(2) The notice must describe the opportunity in a way comparable to the description required by subsection (f)(1), (2), (3), and (4), and state the deadline for offers.

(l) Management help for businesses affected by military operations.

(1) The Administration must use, as appropriate, its entrepreneurial-development and management-assistance programs, including programs with State or private-sector partners, to provide counseling and training to a small business adversely affected by deployment of United States Armed Forces units in support of a period of military conflict.

(2) A "period of military conflict" means a war declared by Congress, a national emergency declared by Congress or the President, or a contingency operation as defined in section 101(a) of title 10. This section does not define the quoted term further.

(m) Procurement program for women-owned small businesses.

(1)(A) "Contracting officer" has the meaning in section 2101(1) of title 41.

(B) "Small business concern owned and controlled by women" has the meaning in section 632(n), except ownership is decided without regard to community-property law. This section does not define that quoted term itself.

(2) A contracting officer may limit competition for a Federal contract for goods or services to women-owned small business concerns if—

(A) each concern is at least 51 percent owned by one or more economically disadvantaged women, without regard to community-property law;

(B) the officer reasonably expects at least two such concerns to submit offers;

(C) the contract concerns an industry the Administrator identified under paragraph (3);

(D) the officer estimates that the award can be made at a fair and reasonable price; and

(E) each concern is certified by a Federal agency, State government, the Administrator, or a national certifying entity approved by the Administrator as a women-owned small business.

(3) For a women-owned small business concern, the Administrator may waive the ownership condition in paragraph (2)(A) if the Administrator finds that women-owned small businesses are substantially underrepresented in the industry.

(4) The Administrator must study and identify industries in which women-owned small businesses are underrepresented in Federal procurement contracting.

(5)(A) The Administrator must establish procedures for filing, investigating, and deciding challenges to a concern’s eligibility, including an interested party’s challenge to the truth of a certification or information under paragraph (2)(E), and for verifying the accuracy of that certification or information.

(B) The procedures may include program examinations, including random examinations, of any concern that certifies or provides information under paragraph (2)(E).

(C) In addition to section 645(d) penalties, a concern that the Administrator finds misrepresented its women-owned status for this subsection is subject to section 1001 of title 18 and sections 3729 through 3733 of title 31.

(6) At the Administrator’s request, the head of a Federal department or agency must promptly provide information the Administrator considers necessary to carry out this subsection.

(7) A contracting officer may award a sole-source contract under this subsection to a women-owned small business described in paragraph (2)(A) and certified under paragraph (2)(E) if the concern is responsible, the officer does not reasonably expect two or more such businesses to offer, the expected price including options is no more than $7,000,000 for manufacturing or $4,000,000 for any other opportunity, and the officer estimates a fair and reasonable award price.

(8) A contracting officer may award a sole-source contract to a certified women-owned small business in an industry where such businesses are substantially underrepresented, as determined under paragraph (3), if the concern is responsible, the officer does not reasonably expect two or more businesses in an industry receiving a paragraph (3) waiver to offer, the expected price including options is no more than $7,000,000 for manufacturing or $4,000,000 for another opportunity, and the officer estimates a fair and reasonable award price.

(n) Business grants and cooperative agreements.

(1) The Administrator may, under this subsection, make grants to and enter cooperative agreements with a coalition of private entities, public entities, or both—

(A) to expand business-to-business relationships between large and small businesses; and

(B) to give businesses, directly or indirectly, online information and a database of companies interested in mentor-protege programs or community-based, statewide, or local business-development programs.

(2) Subject to subparagraph (B), the Administrator may grant money to a coalition under paragraph (1) only if the coalition provides cash or in-kind support for paragraph (1)(A) or (B) activities equal to the grant amount.

(3) Congress authorizes $6,600,000 for carrying out this subsection for each fiscal year from 2001 through 2006. The money remains available until spent.