[House Report 118-202]
[From the U.S. Government Publishing Office]
118th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 118-202
======================================================================
SERVICE-DISABLED VETERAN OPPORTUNITIES IN SMALL BUSINESS ACT
_______
September 19, 2023.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Williams of Texas, from the Committee on Small Business, submitted
the following
R E P O R T
[To accompany H.R. 3511]
[Including cost estimate of the Congressional Budget Office]
The Committee on Small Business, to whom was referred the
bill (H.R. 3511) to amend the Small Business Act to require
training on increasing contract awards to small business
concerns owned and controlled by service-disabled veterans, and
for other purposes, having considered the same, reports
favorably thereon without amendment and recommends that the
bill do pass.
CONTENTS
Page
I. Purpose and Bill Summary........................................2
II. Need for Legislation............................................2
III. Hearings........................................................2
IV. Committee Consideration.........................................2
V. Committee Votes.................................................2
VI. Section-by-Section of H.R. 3511.................................5
VII. Congressional Budget Office Cost Estimate.......................5
VIII. New Budget Authority, Entitlement Authority, and Tax Expenditure6
IX. Oversight Findings & Recommendations............................6
X. Performance Goals and Objectives................................6
XI. Statement of Duplication of Federal Programs....................6
XII. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits........................................................7
XIII. Federal Mandates Statement......................................7
XIV. Federal Advisory Committee Statement............................7
XV. Applicability to Legislative Branch.............................7
XVI. Statement of Constitutional Authority...........................7
XVII. Changes in Existing Law, Made by the Bill, As Reported..........7
Purpose and Bill Summary
The purpose of H.R. 3511, the ``Service-Disabled Veteran
Opportunities in Small Business Act'' is to require training on
increasing contract awards to small business concerns owned and
controlled by service-disabled veterans.
H.R. 3511 amends the Small Business Act to require the
Small Business Administration (SBA) to provide training to
federal agencies who fail to meet the contracting goal for
Service-Disabled Veteran Owned Small Businesses on how to
increase awards to those firms.
II. Need for Legislation
Veterans bring unique skills to federal procurement which
can benefit procurement agencies. Skills such as leadership,
teamwork, and perseverance can help agencies meet their
missions.
The Small Business Act (15 U.S.C. 644 (g)(1)(A)(ii)) sets a
goal for federal agencies to spend three percent of their
procurement with Service-Disabled Veteran Owned Small
Businesses (SDVOSBs). According to the SBA's FY21 Government-
Wide Procurement Scorecard, not every federal agency has met
this required goal. In fact, in FY21 six agencies failed at
awarding three percent of their awards to SDVOSBs and the
entire federal government failed to meet its three percent
subcontracting goal for SDVOSBs.
Agencies failing to meet the statutorily mandated goals
prevent those who protected America from thriving in the
procurement space. This legislation will educate agencies on
how to best reach SDVOSBs and ensure they have adequate
opportunities to compete for government contracts.
III. Hearings
In the 118th Congress, the Committee held one hearing
examining the issues covered in H.R. 3511 on May 11, 2023, at
2:00 p.m. The Subcommittee on Contracting and Infrastructure
held a hearing examining small business contracting and heard
from a Service-Disabled Veteran Owned Small Business.
IV. Committee Consideration
The Committee on Small Business met in open session, with a
quorum being present, on May 23, 2023, and ordered H.R. 3511
favorably reported to the House of Representatives. During the
markup no amendments were offered.
V. Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the recorded
votes on the motion to report legislation and amendments
thereto. The Committee voted to favorably report H.R. 3511 to
the House of Representatives at 2:54 p.m.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
VI. Section-by-Section of H.R. 3511
Section 1. Short title
This section designates the bill as the ``Service-Disabled
Veteran Opportunities in Small Business Act.''
Section 2. Training on increasing contract awards to small business
concerns owned and controlled by Service-Disabled Veterans
This section amends the Small Business Act to require the
SBA to provide training to agencies who fail to meet the
statutorily mandated Service-Disabled Veteran Owned Small
Business (SDVOSB) contracting goals. The Small Business Act
currently sets a government wide goal for agencies to award 3
percent of all contracts to SDVOSB firms.
Subsection (1) In General. The SBA Administrator and the
SBA Office of Veterans Business Development will provide
training to agency officials at agencies that fail to meet the
SDVOSB goal on how to increase the contracts awarded to
SDVOSBs.
Subsection (2) Guidance. No later than 180 days the SBA
shall provide agencies guidance and best practices on how to
increase awards to small business owned by SDVOSB.
Subsection (3) Report. No later than 1 year and annually
after, SBA shall provide a fiscal year report that lists
agencies that failed to meet the SDVOSB goal, number of
trainings SBA provided, and overview of training content.
VII. Congressional Budget Office Cost Estimate
Pursuant to 3(c)(3) of rule XIII of the Rules of the House
of Representatives, the Committee adopts as its as its own the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to section 402 of the Congressional
Budget Act of 1974.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
H.R. 3511 would require the Small Business Administration
(SBA) to issue guidance to federal agencies on how to increase
the number of contracts awarded to service-disabled veteran-
owned small businesses (SDVOSBs). Under current law, the SDVOSB
Procurement Program, administered by the SBA, assists federal
agencies in awarding at least 3 percent of the total value of
prime contract and subcontract dollars to such small
businesses. The bill would direct the SBA to provide training
to the agencies that have not met that statutory goal and
report annually to the Congress.
Agency contracting goals are set in coordination with the
SBA and only a small number of agencies do not meet their
individual contracting goals each year. Using information from
the SBA, CBO expects it would need one employee over the 2024-
2028 period, at a cost of $170,000 annually, to train agencies
that do not meet their goals and fulfill the reporting
requirements. On that basis, CBO estimates that implementing
H.R. 3511 would cost $1 million over the 2024-2028 period; any
spending would be subject to the availability of appropriated
funds.
The CBO staff contact for this estimate is David Hughes.
The estimate was reviewed by H. Samuel Papenfuss, Deputy
Director of Budget Analysis.
Phillip L. Swagel,
Director, Congressional Budget Office.
VIII. New Budget Authority, Entitlement Authority, and
Tax Expenditures
Pursuant to clause 3(c)(2) of rule XIII of the Rules of the
House of Representatives and section 308(a)(I) of the
Congressional Budget Act of 1974, the Committee provides the
following opinion and estimate with respect to new budget
authority, entitlement authority, and tax expenditures. The
Committee does not believe that there will be any additional
costs attributable to this legislation. H.R. 3511 does not
direct new spending, but instead reallocates funding
independently authorized and appropriated.
IX. Oversight Findings & Recommendations
In accordance with clause 3(c)(1) of rule XIII and clause
2(b)(1) of rule X of the Rules of the House of Representatives,
the oversight findings and recommendations of the Committee on
Small Business with respect to the subject matter contained in
the H.R. 3511 are incorporated into the descriptive portions of
this report.
X. Performance Goals and Objectives
With respect to the requirements of clause 3(c)(1) of rule
XIII of the Rules of the House of Representatives, the
performance goals and objectives of H.R. 3511 is to require an
annual report from SBA to Congress with a list of federal
agencies who failed to meet their SDVOSB goal, the number of
trainings SBA provided to each agency, and an overview of
training content.
XI. Statement of Duplication of Federal Programs
Pursuant to clause 3(c)(5) of rule XIII of the Rules of the
House of Representatives, no provision of H.R. 3511 is known to
be duplicative of another Federal program, including any
program that was included in a report to Congress pursuant to
section 21 of Public Law 111-139 or the most recent Catalog of
Federal Domestic Assistance.
XII. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee finds that the bill
does not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits as defined in clause 9(e),
9(f), or 9(g) of rule XXI of the Rules of the House of
Representatives.
XIII. Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
XIV. Federal Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
XV. Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
XVI. Statement of Constitutional Authority
Pursuant to clause 7 of rule XII of the Rules of the House,
the Committee finds that the authority for this legislation in
Art. I, Sec. 8, cl.1 of the Constitution of the United States.
XVII. Changes in Existing Law, Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (new matter is
printed in italics and existing law in which no change is
proposed is shown in roman):
SMALL BUSINESS ACT
* * * * * * *
SEC. 36. PROCUREMENT PROGRAM FOR SMALL BUSINESS CONCERNS OWNED AND
CONTROLLED BY SERVICE-DISABLED VETERANS.
(a) Contracting Officer Defined.--For purposes of this
section, the term ``contracting officer'' has the meaning given
such term in section 2101 of title 41, United States Code.
(b) Certification of Small Business Concerns Owned and
Controlled by Service-Disabled Veterans.--With respect to a
procurement program or preference established under this Act
that applies to prime contractors, the Administrator shall--
(1) certify the status of a concern as a small
business concern owned and controlled by service-
disabled veterans; and
(2) require the periodic recertification of such
status.
(c) Sole Source Contracts.--In accordance with this section,
a contracting officer may award a sole source contract to any
small business concern owned and controlled by service-disabled
veterans if--
(1) such concern is determined to be a responsible
contractor with respect to performance of such contract
opportunity and the contracting officer does not have a
reasonable expectation that 2 or more small business
concerns owned and controlled by service-disabled
veterans will submit offers for the contracting
opportunity;
(2) the anticipated award price of the contract
(including options) will not exceed--
(A) $7,000,000, in the case of a contract
opportunity assigned a standard industrial
classification code for manufacturing; or
(B) $3,000,000, in the case of any other
contract opportunity; and
(3) in the estimation of the contracting officer, the
contract award can be made at a fair and reasonable
price.
(d) Restricted Competition.--In accordance with this section,
a contracting officer may award contracts on the basis of
competition restricted to small business concerns owned and
controlled by service-disabled veterans certified under
subsection (b) if the contracting officer has a reasonable
expectation that not less than 2 small business concerns owned
and controlled by service-disabled veterans will submit offers
and that the award can be made at a fair market price.
(e) Relationship to Other Contracting Preferences.--A
procurement may not be made from a source on the basis of a
preference provided under subsection (a) or (b) if the
procurement would otherwise be made from a different source
under section 4124 or 4125 of title 18, United States Code, or
the Javits-Wagner-O'Day Act (41 U.S.C. 46 et seq.).
(f) Database of Veteran-Owned Businesses.--(1) Subject to
paragraphs (2) through (6), the Administrator shall maintain a
database of small business concerns owned and controlled by
veterans, small business concerns owned and controlled by
service-disabled veterans, and the veteran owners of such
business concerns.
(2)(A) To be eligible for inclusion in the database, such a
veteran shall submit to the Administrator such information as
the Administrator may require with respect to the small
business concern or the veteran. Application for inclusion in
the database shall constitute permission under section 552a of
title 5, United States Code, (commonly referred to as the
Privacy Act) for the Administrator to obtain from the Secretary
of Veterans Affairs such personal information maintained by the
Secretary as may be necessary to verify the information
contained in the application.
(B) For purposes of this subsection--
(i) the Secretary of Veterans Affairs shall--
(I) verify an individual's status as a
veteran or a service-disabled veteran; and
(II) establish a system to permit the
Administrator to access, but not alter, the
verification of such status; and
(ii) the Administrator shall verify--
(I) the status of a business concern as a
small business concern; and
(II) the ownership and control of such
business concern.
(C) The Administrator may not certify a concern under
subsection (b) or section 36A if the Secretary of Veterans
Affairs cannot provide the verification described under
subparagraph (B)(i)(I).
(3) Information maintained in the database shall be submitted
on a voluntary basis by a veteran described in paragraph (1).
(4) the Administrator shall make the database available to
all Federal departments and agencies and shall notify each such
department and agency of the availability of the database.
(5) If the Administrator determines that the public
dissemination of certain types of information maintained in the
database is inappropriate, the Administrator shall take such
steps as are necessary to maintain such types of information in
a secure and confidential manner.
(6)(A) If a small business concern is not included in the
database because the Administrator does not certify the status
of the concern as a small business concern owned and controlled
by veterans (under section 36A) or a small business concern
owned and controlled by service-disabled veterans (under
subsection (g) of this section), the concern may appeal the
denial of certification to the Office of Hearings and Appeals
of the Administration (as established under section 5(i)). The
decision of the Office of Hearings and Appeals shall be
considered a final agency action.
(B)(i) If an interested party challenges the inclusion in the
database of a small business concern owned and controlled by
veterans or a small business concern owned and controlled by
service-disabled veterans based on the status of the concern as
a small business concern or the ownership or control of the
concern, the challenge shall be heard by the Office of Hearings
and Appeals as described in subparagraph (A). The decision of
the Office of Hearings and Appeals shall be considered final
agency action.
(ii) In this subparagraph, the term ``interested
party'' means--
(I) the Secretary of Veterans Affairs or the
Administrator; or
(II) in the case of a small business concern
that is awarded a contract, the applicable
contracting officer or another small business
concern that submitted an offer for the
contract that was awarded to the small business
concern that is the subject of a challenge made
under clause (i).
(g) Certification Requirement.--Notwithstanding subsection
(c), a contracting officer may only award a sole source
contract to a small business concern owned and controlled by
service-disabled veterans or a contract on the basis of
competition restricted to small business concerns owned and
controlled by service-disabled veterans if such a concern is
certified by the Administrator as a small business concern
owned and controlled by service-disabled veterans.
(h) Enforcement; Penalties.--
(1) Verification of eligibility.--In carrying out
this section, the Administrator shall establish
procedures relating to--
(A) the filing, investigation, and
disposition by the Administration of any
challenge to the eligibility of a small
business concern to receive assistance under
this section (including a challenge, filed by
an interested party, relating to the veracity
of a certification made or information provided
to the Administration by a small business
concern under subsection (b)); and
(B) verification by the Administrator of the
accuracy of any certification made or
information provided to the Administration by a
small business concern under subsection (b).
(2) Examinations.--The procedures established under
paragraph (1) shall provide for a program of
examinations by the Administrator of any small business
concern making a certification or providing information
to the Administrator under subsection (b), to determine
the veracity of any statements or information provided
as part of such certification or otherwise provided
under subsection (b).
(3) Enforcement; penalties.--Rules similar to the
rules of paragraphs (5) and (6) of section 8(m) shall
apply for purposes of this section and section 36A.
(i) Provision of Data.--Upon the request of the
Administrator, the head of any Federal department or agency
shall promptly provide to the Administrator such information as
the Administrator determines to be necessary to carry out
subsection (b) or to be able to certify the status of the
concern as a small business concern owned and controlled by
veterans under section 36A.
(j) Training on Increasing Contract Awards to Small Business
Concerns Owned and Controlled by Service-Disabled Veterans.--
(1) In general.--The Administrator, in consultation
with the Office of Veterans Business Development, shall
provide to covered employees at each Federal agency
that has not met the goal established under section
15(g)(1)(A)(ii) training on how to increase the number
of contracts awarded to small business concerns owned
and controlled by service-disabled veterans.
(2) Guidance.--Not later than 180 days after the date
of the enactment of this Act, the Administrator, in
consultation with the Office of Veterans Business
Development, shall issue guidance and best practices on
increasing the number of contracts awarded to small
businesses owned and controlled by service disabled
veterans for Federal agencies to which the goal
established under section 15(g)(1)(A)(ii) applies.
(3) Report.--Not later than 1 year after the date of
enactment of this Act, and annually thereafter, the
Administration shall submit to Congress a report
detailing, for the fiscal year covered by the report--
(A) a list of each Federal agency that failed
to meet the goal established under section
15(g)(1)(A)(ii);
(B) the number of trainings provided to each
Federal agency described in paragraph (1); and
(C) an overview of the content included in
such training sessions.
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