CHAPTER 14A —AID TO SMALL BUSINESS
§631. Declaration of policy
(a) Aid, counsel, assistance, etc., to small business concerns
The essence of the American economic system of private enterprise is free competition. Only through full and free competition can free markets, free entry into business, and opportunities for the expression and growth of personal initiative and individual judgment be assured. The preservation and expansion of such competition is basic not only to the economic well-being but to the security of this Nation. Such security and well-being cannot be realized unless the actual and potential capacity of small business is encouraged and developed. It is the declared policy of the Congress that the Government should aid, counsel, assist, and protect, insofar as is possible, the interests of small-business concerns in order to preserve free competitive enterprise, to insure that a fair proportion of the total purchases and contracts or subcontracts for property and services for the Government (including but not limited to contracts or subcontracts for maintenance, repair, and construction) be placed with small-business enterprises, to insure that a fair proportion of the total sales of Government property be made to such enterprises, and to maintain and strengthen the overall economy of the Nation.
(b) Assistance to compete in international markets
(1) It is the declared policy of the Congress that the Federal Government, through the Administrator of the Small Business Administration, acting through the Associate Administrator for International Trade, and in cooperation with the Department of Commerce and other relevant State and Federal agencies, should aid and assist small businesses, as defined under this chapter, to increase their ability to compete in international markets by—
(A) enhancing their ability to export;
(B) facilitating technology transfers;
(C) enhancing their ability to compete effectively and efficiently against imports;
(D) increasing the access of small businesses to long-term capital for the purchase of new plant and equipment used in the production of goods and services involved in international trade;
(E) disseminating information concerning State, Federal, and private programs and initiatives to enhance the ability of small businesses to compete in international markets; and
(F) ensuring that the interests of small businesses are adequately represented in bilateral and multilateral trade negotiations.
(2) The Congress recognizes that the Department of Commerce is the principal Federal agency for trade development and export promotion and that the Department of Commerce and the Small Business Administration work together to advance joint interests. It is the purpose of this chapter to enhance, not alter, their respective roles.
(c) Aid for agriculturally related industries; financial assistance
It is the declared policy of the Congress that the Government, through the Small Business Administration, should aid and assist small business concerns which are engaged in the production of food and fiber, ranching, and raising of livestock, aquaculture, and all other farming and agricultural related industries; and the financial assistance programs authorized by this chapter are also to be used to assist such concerns.
(d) Use of assistance programs to establish, preserve, and strengthen small business concerns
(1) The assistance programs authorized by
(2)(A) With respect to the programs authorized by
(i) that ownership and control of productive capital is concentrated in the economy of the United States and certain groups, therefore, own and control little productive capital;
(ii) that certain groups in the United States own and control little productive capital because they have limited opportunities for small business ownership;
(iii) that the broadening of small business ownership among groups that presently own and control little productive capital is essential to provide for the well-being of this Nation by promoting their increased participation in the free enterprise system of the United States;
(iv) that such development of business ownership among groups that presently own and control little productive capital will be greatly facilitated through the creation of a small business ownership development program, which shall provide services, including, but not limited to, financial, management, and technical assistance.1
(v) that the power to let Federal contracts pursuant to
(vi) that the procurement authority under
(B) It is therefore the purpose of the programs authorized by
(i) foster business ownership and development by individuals in groups that own and control little productive capital; and
(ii) promote the competitive viability of such firms in the marketplace by creating a small business and capital ownership development program to provide such available financial, technical, and management assistance as may be necessary.
(e) Assistance to victims of floods, etc., and those displaced as result of federally aided construction programs
Further, it is the declared policy of the Congress that the Government should aid and assist victims of floods and other catastrophes, and small-business concerns which are displaced as a result of federally aided construction programs.
(f) Findings; purpose
(1) with 2 respect to the Administration's business development programs the Congress finds—
(A) that the opportunity for full participation in our free enterprise system by socially and economically disadvantaged persons is essential if we are to obtain social and economic equality for such persons and improve the functioning of our national economy;
(B) that many such persons are socially disadvantaged because of their identification as members of certain groups that have suffered the effects of discriminatory practices or similar invidious circumstances over which they have no control;
(C) that such groups include, but are not limited to, Black Americans, Hispanic Americans, Native Americans, Indian tribes, Asian Pacific Americans, Native Hawaiian Organizations, and other minorities;
(D) that it is in the national interest to expeditiously ameliorate the conditions of socially and economically disadvantaged groups;
(E) that such conditions can be improved by providing the maximum practicable opportunity for the development of small business concerns owned by members of socially and economically disadvantaged groups;
(F) that such development can be materially advanced through the procurement by the United States of articles, equipment, supplies, services, materials, and construction work from such concerns; and
(G) that such procurements also benefit the United States by encouraging the expansion of suppliers for such procurements, thereby encouraging competition among such suppliers and promoting economy in such procurements.
(2) It is therefore the purpose of
(A) promote the business development of small business concerns owned and controlled by socially and economically disadvantaged individuals so that such concerns can compete on an equal basis in the American economy;
(B) promote the competitive viability of such concerns in the marketplace by providing such available contract, financial, technical, and mangement 3 assistance as may be necessary; and
(C) clarify and expand the program for the procurement by the United States of articles, supplies, services, materials, and construction work from small business concerns owned by socially and economically disadvantaged individuals.
(g) Assistance to disaster victims under disaster loan program
In administering the disaster loan program authorized by
(h) Assistance to women owned business
(1) With respect to the programs and activities authorized by this chapter, the Congress finds that—
(A) women owned business has become a major contributor to the American economy by providing goods and services, revenues, and jobs;
(B) over the past two decades there have been substantial gains in the social and economic status of women as they have sought economic equality and independence;
(C) despite such progress, women, as a group, are subjected to discrimination in entrepreneurial endeavors due to their gender;
(D) such discrimination takes many overt and subtle forms adversely impacting the ability to raise or secure capital, to acquire managerial talents, and to capture market opportunities;
(E) it is in the national interest to expeditiously remove discriminatory barriers to the creation and development of small business concerns owned and controlled by women;
(F) the removal of such barriers is essential to provide a fair opportunity for full participation in the free enterprise system by women and to further increase the economic vitality of the Nation;
(G) increased numbers of small business concerns owned and controlled by women will directly benefit the United States Government by expanding the potential number of suppliers of goods and services to the Government; and
(H) programs and activities designed to assist small business concerns owned and controlled by women must be implemented in such a way as to remove such discriminatory barriers while not adversely affecting the rights of socially and economically disadvantaged individuals.
(2) It is, therefore, the purpose of those programs and activities conducted under the authority of this chapter that assist women entrepreneurs to—
(A) vigorously promote the legitimate interests of small business concerns owned and controlled by women;
(B) remove, insofar as possible, the discriminatory barriers that are encountered by women in accessing capital and other factors of production; and
(C) require that the Government engage in a systematic and sustained effort to identify, define and analyze those discriminatory barriers facing women and that such effort directly involve the participation of women business owners in the public/private sector partnership.
(i) Prohibition on use of funds for individuals not lawfully within United States
None of the funds made available pursuant to this chapter may be used to provide any direct benefit or assistance to any individual in the United States if the Administrator or the official to which the funds are made available receives notification that the individual is not lawfully within the United States.
(j) Contract bundling
In complying with the statement of congressional policy expressed in subsection (a), relating to fostering the participation of small business concerns in the contracting opportunities of the Government, each Federal agency, to the maximum extent practicable, shall—
(1) comply with congressional intent to foster the participation of small business concerns as prime contractors, subcontractors, and suppliers;
(2) structure its contracting requirements to facilitate competition by and among small business concerns, taking all reasonable steps to eliminate obstacles to their participation; and
(3) avoid unnecessary and unjustified bundling of contract requirements that precludes small business participation in procurements as prime contractors.
(
Editorial Notes
Codification
This chapter was originally enacted as title II of act July 30, 1953, ch. 282,
Amendments
2010—Subsec. (b)(1).
1997—Subsec. (j).
1994—Subsec. (i).
1989—Subsec. (f).
1988—Subsecs. (b), (c).
Subsec. (d).
Subsec. (d)(2)(A)(v).
Subsec. (d)(2)(B).
"(i) foster business ownership by individuals in groups that own and control little productive capital; and
"(ii) promote the competitive viability of such firms by creating a small business and capital ownership development program to provide such available financial, technical, and management assistance as may be necessary."
Subsecs. (e), (f).
Subsec. (f)(1)(C).
Subsec. (f)(2).
"(A) foster business ownership by individuals who are both socially and economically disadvantaged;
"(B) promote the competitive viability of such firms by providing such available contract, financial, technical, and management assistance as may be necessary; and
"(C) clarify and expand the program for the procurement by the United States of articles, equipment, supplies, services, materials, and construction work from small business concerns owned by socially and economically disadvantaged individuals."
Subsec. (g).
Subsec. (h).
1986—Subsec. (e)(1)(C).
1980—Subsec. (e)(1)(C).
1978—Subsec. (c).
Subsec. (e).
1976—Subsecs. (b) to (d).
1974—Subsecs. (b), (c).
1961—Subsec. (a).
Subsec. (b).
Statutory Notes and Related Subsidiaries
Effective Date of 1997 Amendment
Effective Date of 1989 Amendment
Effective Date of 1988 Amendment
"(a)
"(1) Sections 1 and 2 [enacting provisions set out as notes under this section and
"(2) Section 101 [enacting provisions set out as a note under
"(3) Sections 202, 203, 204, 206, and 207 [amending this section and
"(4) Sections 301(a) and 303(d), (e), and (f) [amending
"(5) Sections 405, 406, 408, and 410 [amending
"(6) Sections 504 and 505 [amending
"(7) Sections 601 and 603 [amending
"(8) Titles VII and VIII [amending
"(9) Sections 7(j)(13)(G) and 7(j)(13)(I) of the Small Business Act [
"(b)
"(A) Sections 201, 205, and 208 [amending
"(B) Sections 301(b), 301(c), 303(a), 303(c), 303(g), 303(h), and 304 [amending
"(C) Sections 401, 402, 403, 404, and 409 [amending
"(D) Section 602 [enacting provisions set out as a note under
"(2) Section 302 [amending
"(3) Section 407 [amending
"(4) The following sections (and the amendments made by such sections) shall take effect on October 1, 1989:
"(A) Section 209 [amending
"(B) Section 303(b) [amending
"(C) Sections 501, 502, and 503 [amending
"(D) Section 7(j)(13)(E) of the Small Business Act [
Effective Date of 1981 Amendment
Effective Date of 1980 Amendment
Short Title of 2022 Amendment
Short Title of 2021 Amendment
Short Title of 2020 Amendment
Short Title of 2019 Amendment
Short Title of 2018 Amendment
Short Title of 2016 Amendment
Short Title of 2015 Amendment
Short Title of 2011 Amendment
Short Title of 2010 Amendment
Short Title of 2008 Amendment
[
Short Title of 2007 Amendment
Short Title of 2004 Amendment
Short Title of 2001 Amendment
Short Title of 2000 Amendment
Short Title of 1999 Amendment
Short Title of 1998 Amendment
Short Title of 1997 Amendment
Short Title of 1996 Amendment
Short Title of 1995 Amendment
Short Title of 1994 Amendment
Short Title of 1993 Amendment
Short Title of 1992 Amendment
Short Title of 1991 Amendment
Short Title of 1990 Amendment
Short Title of 1989 Amendment
Short Title of 1988 Amendment
Short Title of 1984 Amendment
Short Title of 1982 Amendment
Short Title of 1981 Amendment
Short Title of 1980 Amendment
Short Title of 1978 Amendment
Short Title of 1974 Amendment
Short Title of 1967 Amendment
Short Title of 1961 Amendment
Short Title
Repeal of Inconsistent Laws
Regulations
"(a)
"(b)
Separability
Authorization of Appropriations
"(a)(1) For fiscal year 2000 and each fiscal year thereafter, there are authorized to be appropriated such sums as may be necessary and appropriate, to remain available until expended, and to be available solely—
"(A) to carry out the Small Business Development Center Program under section 21 [
"(B) to pay the expenses of the National Small Business Development Center Advisory Board, as provided in section 21(i);
"(C) to pay the expenses of the information sharing system, as provided in section 21(c)(8);
"(D) to pay the expenses of the association referred to in section 21(a)(3)(A) for conducting the accreditation program, as provided in section 21(k)(2);
"(E) to pay the expenses of the Administration, including salaries of examiners, for conducting examinations as part of the accreditation program conducted by the association referred to in section 21(a)(3)(A); and
"(F) to pay for small business development center grants as mandated or directed by Congress.
"(2) Notwithstanding any other provision of law, the Administration shall enter into commitments for direct loans and to guarantee loans, debentures, payment of rentals, or other amounts due under qualified contracts and other types of financial assistance and enter into commitments to purchase debentures and preferred securities and to guarantee sureties against loss pursuant to programs under this Act [
"(3) There are authorized to be transferred from the disaster loan revolving fund such sums as may be necessary and appropriate for administrative expenses of the Administration.
"(4) Except as may be otherwise specifically provided by law, the amount of deferred participation loans authorized in this section—
"(A) shall mean the net amount of the loan principal guaranteed by the Small Business Administration (and does not include any amount which is not guaranteed); and
"(B) shall be available for a national program, except that the Administration may use not more than an amount equal to 10 percent of the amount authorized each year for any special or pilot program directed to identified sectors of the small business community or to specific geographic regions of the United States.
"(b) There are authorized to be appropriated to the Administration for fiscal year 1991 such sums as may be necessary to carry out the provisions of this Act [
"(c)
"(1) $15,000,000 for fiscal year 2005.
"(2) $15,000,000 for fiscal year 2006.
"(d)
"(1)
"(A) For the programs authorized by this Act [
"(i) $75,000,000 in technical assistance grants, as provided in section 7(m) [
"(ii) $105,000,000 in direct loans, as provided in 7(m).
"(B) For the programs authorized by this Act, the Administration is authorized to make $23,050,000,000 in deferred participation loans and other financings. Of such sum, the Administration is authorized to make—
"(i) $16,500,000,000 in general business loans, as provided in section 7(a) [
"(ii) $6,000,000,000 in certified development company financings, as provided in section 7(a)(13) and as provided in section 504 of the Small Business Investment Act of 1958 [
"(iii) $500,000,000 in loans, as provided in section 7(a)(21); and
"(iv) $50,000,000 in loans, as provided in section 7(m).
"(C) For the programs authorized by title III of the Small Business Investment Act of 1958 [
"(i) $4,250,000,000 in purchases of participating securities; and
"(ii) $3,250,000,000 in guarantees of debentures.
"(D) For the programs authorized by part B of title IV of the Small Business Investment Act of 1958 [
"(E) The Administration is authorized to make grants or enter into cooperative agreements for a total amount of $7,000,000 for the Service Corps of Retired Executives program authorized by section 8(b)(1) [
"(2)
"(A) There are authorized to be appropriated to the Administration for fiscal year 2005 such sums as may be necessary to carry out the provisions of this Act not elsewhere provided for, including administrative expenses and necessary loan capital for disaster loans pursuant to section 7(b) [
"(B) Notwithstanding any other provision of this paragraph, for fiscal year 2005—
"(i) no funds are authorized to be used as loan capital for the loan program authorized by section 7(a)(21) except by transfer from another Federal department or agency to the Administration, unless the program level authorized for general business loans under paragraph (1)(B)(i) is fully funded; and
"(ii) the Administration may not approve loans on its own behalf or on behalf of any other Federal department or agency, by contract or otherwise, under terms and conditions other than those specifically authorized under this Act or the Small Business Investment Act of 1958, except that it may approve loans under section 7(a)(21) of this Act in gross amounts of not more than $2,000,000.
"(e)
"(1)
"(A) For the programs authorized by this Act [
"(i) $80,000,000 in technical assistance grants, as provided in section 7(m) [
"(ii) $110,000,000 in direct loans, as provided in 7(m).
"(B) For the programs authorized by this Act, the Administration is authorized to make $25,050,000,000 in deferred participation loans and other financings. Of such sum, the Administration is authorized to make—
"(i) $17,000,000,000 in general business loans, as provided in section 7(a) [
"(ii) $7,500,000,000 in certified development company financings, as provided in section 7(a)(13) and as provided in section 504 of the Small Business Investment Act of 1958 [
"(iii) $500,000,000 in loans, as provided in section 7(a)(21); and
"(iv) $50,000,000 in loans, as provided in section 7(m).
"(C) For the programs authorized by title III of the Small Business Investment Act of 1958 [
"(i) $4,500,000,000 in purchases of participating securities; and
"(ii) $3,500,000,000 in guarantees of debentures.
"(D) For the programs authorized by part B of title IV of the Small Business Investment Act of 1958 [
"(E) The Administration is authorized to make grants or enter into cooperative agreements for a total amount of $7,000,000 for the Service Corps of Retired Executives program authorized by section 8(b)(1) [
"(2)
"(A) There are authorized to be appropriated to the Administration for fiscal year 2006 such sums as may be necessary to carry out the provisions of this Act not elsewhere provided for, including administrative expenses and necessary loan capital for disaster loans pursuant to section 7(b) [
"(B) Notwithstanding any other provision of this paragraph, for fiscal year 2006—
"(i) no funds are authorized to be used as loan capital for the loan program authorized by section 7(a)(21) except by transfer from another Federal department or agency to the Administration, unless the program level authorized for general business loans under paragraph (1)(B)(i) is fully funded; and
"(ii) the Administration may not approve loans on its own behalf or on behalf of any other Federal department or agency, by contract or otherwise, under terms and conditions other than those specifically authorized under this Act or the Small Business Investment Act of 1958, except that it may approve loans under section 7(a)(21) of this Act in gross amounts of not more than $2,000,000.
"(f)
"(1) $4,000,000,000 in purchases of participating securities; and
"(2) $3,000,000,000 in guarantees of debentures.
"(g)
"(1)
"(2)
"(A) the Committee on Small Business and Entrepreneurship and the Subcommittee on Financial Services and General Government of the Committee on Appropriations of the Senate; and
"(B) the Committee on Small Business and the Subcommittee on Financial Services and General Government of the Committee on Appropriations of the House of Representatives.
"(3)
"(h)
"(1) $80,000,000 in technical assistance grants, as provided in section 7(m) [
"(2) $110,000,000 in direct loans, as provided in section 7(m)."
Category Management Training
"(a)
"(1) best practices for procuring goods and services from small business concerns (as defined under section 3 of the Small Business Act (
"(2) information on avoiding conflicts with the requirements of the Small Business Act (
"(b)
"(1) shall ensure that staff for Federal agencies described in subsection (a) receive the training described in such subsection; and
"(2) may request the assistance of the relevant Director of Small and Disadvantaged Business Utilization (as described in section 15(k) of the Small Business Act (
"(c)
"(d)
Small Business Act Contracting Requirements Training
"(a)
"(b)
Agency Achievement of Small Business Goals
"(b)
"(1) promoting a climate or environment that is responsive to small business concerns;
"(2) communicating the importance of achieving the agency's small business contracting goals; and
"(3) encouraging small business awareness, outreach, and support.
"(c)
Loan Application Processing
Service Disabled Veterans
"SEC. 701. PURPOSES.
"The purposes of this title [amending
"(1) to foster enhanced entrepreneurship among eligible veterans by providing increased opportunities;
"(2) to vigorously promote the legitimate interests of small business concerns owned and controlled by eligible veterans; and
"(3) to ensure that those concerns receive fair consideration in purchases made by the Federal Government.
"SEC. 702. DEFINITIONS.
"In this title:
"(1)
"(2)
"(A) that is at least 51 percent owned by 1 or more eligible veterans, or in the case of a publicly owned business, at least 51 percent of the stock of which is owned by 1 or more eligible veterans; and
"(B) whose management and daily business operations are controlled by eligible veterans.
"SEC. 703. REPORT BY SMALL BUSINESS ADMINISTRATION.
"(a)
"(1)
"(A) the needs of small business concerns owned and controlled by eligible veterans;
"(B) the availability and utilization of Administration programs by small business concerns owned and controlled by eligible veterans;
"(C) the percentage, and dollar value, of Federal contracts awarded to small business concerns owned and controlled by eligible veterans in the preceding 5 fiscal years; and
"(D) methods to improve Administration and other agency programs to serve the needs of small business concerns owned and controlled by eligible veterans.
"(2)
"(b)
"(1) may conduct surveys of small business concerns owned and controlled by eligible veterans and service disabled veterans, including those who have sought financial assistance or other services from the Administration;
"(2) shall consult with the appropriate committees of Congress, relevant groups and organizations in the nonprofit sector, and Federal or State government agencies; and
"(3) shall have access to any information within other Federal agencies that pertains to such veterans and their small businesses, unless such access is specifically prohibited by law.
"SEC. 704. INFORMATION COLLECTION.
"After the date of issuance of the report required by section 703(a), the Secretary of Veterans Affairs shall, in consultation with the Assistant Secretary for Veterans' Employment and Training and the Administrator, engage in efforts each fiscal year to identify small business concerns owned and controlled by eligible veterans in the United States. The Secretary shall inform each small business concern identified under this section that information on Federal procurement is available from the Administrator.
"SEC. 707. ENTREPRENEURIAL TRAINING, COUNSELING, AND MANAGEMENT ASSISTANCE.
"The Administrator shall take such actions as may be necessary to ensure that small business concerns owned and controlled by eligible veterans have access to programs established under the Small Business Act [
"SEC. 709. OUTREACH FOR ELIGIBLE VETERANS.
"The Administrator, the Secretary of Veterans Affairs, and the Assistant Secretary of Labor for Veterans' Employment and Training, shall develop and implement a program of comprehensive outreach to assist eligible veterans, which program shall include business training and management assistance, employment and relocation counseling, and dissemination of information on veterans' benefits and veterans' entitlements."
Transition Reimbursement
Buy American Preference in Provision of Financial Assistance
Feasibility Study of Business Cooperation Network
Development of Women's Business Enterprise
Disadvantaged Small Businesses
Globalization of Production; Report to Congress
National Seminars on Small Business Exports
Appointment of Administrator of Small Business Administration to Trade Policy Committee; Special Trade Assistant for Small Business in Office of United States Trade Representative
"It is the sense of the Congress that the interests of the small business community have not been adequately represented in trade policy formulation and in trade negotiations. Therefore, it is the sense of the Congress that the Administrator of the Small Business Administration should be appointed as a member of the Trade Policy Committee and that the United States Trade Representative should consult with the Small Business Administration and its Office of Advocacy in trade policy formulation and in trade negotiations.
"Further, it is the sense of the Congress that the United States Trade Representative would better serve the needs of the small business community with full-time staff assistance with responsibilities for small business trade issues.
"Further, it is the sense of the Congress that the United States Trade Representative should appoint a special trade assistant for small business."
White House Conference on Small Business
Asian Pacific Americans as Disadvantaged Minority in 1978
Assistance to Automobile Dealers; Congressional Findings; Investigation by Administrator; Report to Congress
Definitions
"(1) the term 'Administration' means the Small Business Administration;
"(2) the term 'Administrator' means the Administrator of the Small Business Administration;
"(3) the term 'Committees' means the Committees on Small Business of the House of Representatives and the Senate [Committee on Small Business of Senate now Committee on Small Business and Entrepreneurship of Senate]; and
"(4) the term 'small business concern' has the meaning given the term in section 3 of the Small Business Act (
Executive Documents
Executive Order No. 11458
Ex. Ord. No. 11458, Mar. 5, 1969, 34 F.R. 4937, which related to a national program for minority business enterprise, was superseded by Ex. Ord. No. 11625, Oct. 13, 1971, 36 F.R. 19967, set out below.
Ex. Ord. No. 11625. National Program for Minority Business Enterprise
Ex. Ord. No. 11625, Oct. 13, 1971, 36 F.R. 19967, as amended by Ex. Ord. No. 12007, Aug. 22, 1977, 42 F.R. 42839, provided:
The opportunity for full participation in our free enterprise system by socially and economically disadvantaged persons is essential if we are to obtain social and economic justice for such persons and improve the functioning of our national economy.
The Office of Minority Business Enterprise, established in 1969, greatly facilitated the strengthening and expansion of our minority enterprise program. In order to take full advantage of resources and opportunities in the minority enterprise field, we now must build on this foundation. One important way of improving our efforts is by clarifying the authority of the Secretary of Commerce (a) to implement Federal policy in support of the minority business enterprise program; (b) provide additional technical and management assistance to disadvantaged business; (c) to assist in demonstration projects; and (d) to coordinate the participation of all Federal departments and agencies in an increased minority enterprise effort.
NOW, THEREFORE, by virtue of the authority vested in me as President of the United States, it is ordered as follows:
(1) Coordinate as consistent with law the plans, programs, and operations of the Federal Government which affect or may contribute to the establishment, preservation, and strengthening of minority business enterprise.
(2) Promote the mobilization of activities and resources of State and local governments, businesses and trade associations, universities, foundations, professional organizations, and volunteer and other groups towards the growth of minority business enterprises, and facilitate the coordination of the efforts of these groups with those of Federal departments and agencies.
(3) Establish a center for the development, collection, summarization, and dissemination of information that will be helpful to persons and organizations throughout the Nation in undertaking or promoting the establishment and successful operation of minority business enterprise.
(4) Within constraints of law and appropriations therefor, and according to his discretion, provide financial assistance to public and private organizations so that they may render technical and management assistance to minority business enterprises, and defray all or part of the costs of pilot or demonstration projects conducted by public or private agencies or organizations which are designed to overcome the special problems of minority business enterprises or otherwise to further the purposes of this order.
(b) The Secretary, as he deems necessary or appropriate to enable him to better fulfill the responsibilities vested in him by subsection (a), may—
(1) With the participation of other Federal departments and agencies as appropriate, develop comprehensive plans and specific program goals for the minority enterprise program; establish regular performance monitoring and reporting systems to assure that goals are being achieved; and evaluate the impact of Federal support in achieving the objectives established by this order.
(2) Require a coordinated review of all proposed Federal training and technical assistance activities in direct support of the minority enterprise program to assure consistency with program goals and to avoid duplication.
(3) Convene, for purposes of coordination, meetings of the heads of such departments and agencies, or their designees, whose programs and activities may affect or contribute to the purposes of this order.
(4) Convene business leaders, educators, and other representatives of the private sector who are engaged in assisting the development of minority business enterprise or who could contribute to its development, for the purpose of proposing, evaluating and coordinating governmental and private activities in furtherance of the objectives of this order.
(5) Confer with and advise officials of State and local governments.
(6) Provide the managerial and organizational framework through which joint or collaborative undertakings with Federal departments or agencies or private organizations can be planned and implemented.
(7) Recommend appropriate legislative or executive actions.
(b) The head of each Federal department or agency shall, when so requested by the Secretary, designate his Under Secretary or such other similar official to have primary and continuing responsibility for the participation and cooperation of that department or agency in matters concerning minority business enterprise.
(c) The officials designated under the preceding paragraph, when so requested, shall review and report to the Secretary upon the policies and programs of the minority business enterprise program, and shall keep the Secretary informed of all proposed budgets, plans and programs of his department or agency affecting minority business enterprise.
(d) The head of each Federal department or agency, or a representative designated by him, shall, to the extent provided under regulations issued by the Secretary after consultation with the official designated in paragraph (b) above, report to the Secretary on any activity that falls within the scope of the minority business enterprise program as defined herein and in those regulations.
(e) Each Federal department or agency shall, within constraints of law and appropriations therefor, continue all current efforts to foster and promote minority business enterprises and to support the program herein set forth, and shall cooperate with the Secretary of Commerce in increasing the total Federal effort.
(a) "Minority business enterprise" means a business enterprise that is owned or controlled by one or more socially or economically disadvantaged persons. Such disadvantage may arise from cultural, racial, chronic economic circumstances or background or other similar cause. Such persons include, but are not limited to, Negroes, Puerto Ricans, Spanish-speaking Americans, American Indians, Eskimos, and Aleuts.
(b) "State" means the States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the territories and possessions of the United States, and the Trust Territory of the Pacific Islands.
Advisory Council for Minority Enterprise
For provisions relating to termination of, see Ex. Ord. No. 12007, Aug. 22, 1977, 42 F.R. 42839, formerly set out as a note under
Term of the Advisory Council for Minority Enterprise extended until Dec. 31, 1978, see Ex. Ord. No. 11948, Dec. 20, 1976, 41 F.R. 55705, formerly set out as a note under
Executive Order No. 12061
Ex. Ord. No. 12061, May 18, 1978, 43 F.R. 21865, as amended by Ex. Ord. No. 12091, Nov. 1, 1978, 43 F.R. 51373, which related to the Small Business Conference Commission, was revoked by Ex. Ord. No. 12258, Dec. 31, 1980, 46 F.R. 1251, formerly set out as a note under
Executive Order No. 12269
Ex. Ord. No. 12269, Jan. 15, 1981, 46 F.R. 4673, which established a seven member President's Committee on Small Business Policy to advise the President on appropriate responses to the recommendations of the White House Conference on Small Business, designated the Administrator of the Small Business Administration to perform the functions of the President under Federal advisory committee provisions, and terminated the Committee on Dec. 31, 1982, was revoked by Ex. Ord. No. 12553, Feb. 25, 1986, 51 F.R. 7237.
Ex. Ord. No. 12432. Minority Business Enterprise Development
Ex. Ord. No. 12432, July 14, 1983, 48 F.R. 32551, provided:
By virtue of the authority vested in me as President by the Constitution and laws of the United States of America, including Section 205(a) of the Federal Property and Administrative Services Act of 1949 (
(b) These annual plans shall establish minority enterprise development objectives for the participating agencies and methods for encouraging both prime contractors and grantees to utilize minority business enterprises. The plans shall, to the extent possible, build upon the programs administered by the Minority Business Development Agency and the Small Business Administration, including the goals established pursuant to
(c) The Secretary of Commerce and the Administrator of the Small Business Administration, in consultation with the Cabinet Council on Commerce and Trade, shall establish uniform guidelines for all Federal agencies to be utilized in establishing the minority business programs set forth in Section 2 of this Order.
(d) The participating agencies shall furnish an annual report regarding the implementation of their programs in such form as the Cabinet Council on Commerce and Trade may request, and at such time as the Secretary of Commerce shall designate.
(e) The Secretary of Commerce shall provide an annual report to the President, through the Cabinet Council on Commerce and Trade, on activities under this Order and agency implementation of minority business development programs.
(b) Each Federal agency shall, to the extent permitted by law and consistent with its primary mission, establish minority business development programs, consistent with Section 211 of
(c) Each Federal agency shall encourage recipients of Federal grants and cooperative agreements to achieve a reasonable minority business participation in contracts let as a result of its grants and agreements. In cases where State and local governments are the recipients, such encouragement shall be consistent with principles of federalism.
(d) Each Federal agency shall provide the Cabinet Council on Commerce and Trade such information as it shall request from time to time concerning the agency's progress in implementing these programs.
Ronald Reagan.
Ex. Ord. No. 12523. National White House Conference on Small Business
Ex. Ord. No. 12523, June 27, 1985, 50 F.R. 26963, provided:
By the authority vested in me as President by the Constitution and laws of the United States of America, and in order to implement the White House Conference on Small Business Authorization Act (
Notwithstanding the provisions of any other Executive order, the functions of the President under the Federal Advisory Committee Act [see
Ronald Reagan.
Ex. Ord. No. 12928. Promoting Procurement With Small Businesses Owned and Controlled by Socially and Economically Disadvantaged Individuals, Historically Black Colleges and Universities, and Minority Institutions
Ex. Ord. No. 12928, Sept. 16, 1994, 59 F.R. 48377, provided:
By the authority vested in me as President by the Constitution and the laws of the United States of America, in order to enforce rigorously the letter and spirit of public laws that promote increased participation in Federal procurement by Small Businesses Owned and Controlled by Socially and Economically Disadvantaged Individuals (SDBs) as described in section 8 of the Small Business Act (
(a) the award of contracts to SDBs, HBCUs, and MIs through the Small Business Administration Section 8(a) [
(b) the establishment of particular goals for SDBs, HBCUs, or MIs on an agency-by-agency basis and the requirement that prime contractors and other recipients of Federal funds attain similar goals in their procurement; and
(c) the establishment of other mechanisms that ensure that SDBs, HBCUs, and MIs have a fair opportunity to participate in Federal procurement.
(a) Section 15(k) of the Small Business Act (
(b) Because of the importance of the OSDBU function, each department and agency shall also, to the extent not prohibited by law, comply with the Office of Federal Procurement Policy Letter No. 79–1 of March 7, 1979, which provides implementation guidance on section 15k [15(k)] and the organizational placement and functions of the OSDBU.
William J. Clinton.
Ex. Ord. No. 13169. Assistance to Small Business Exporters and Dislocated Workers
Ex. Ord. No. 13169, Oct. 6, 2000, 65 F.R. 60581, provided:
By the authority vested in me as President by the Constitution and the laws of the United States of America, including the Small Business Act,
(b) For the purposes of this order, "businesses headed by underserved populations" means businesses headed by women or minorities, and/or located in rural communities.
(1) developing a set of methods to inform employers of the services available through Labor workforce programs, which will explain the requirements of the Worker Adjustment and Retraining Notification Act,
(2) improving websites and other modes of communication to provide basic information on dislocated worker and Trade Adjustment Assistance program contacts at the State and local level;
(3) developing a National Toll-Free Help Line to provide universal, accurate, and easy access to information about public workforce services to workers and employers;
(4) providing on-site technical assistance, in partnership with other Federal agencies, when there are layoffs or closures with multi-State impact, or when there are dislocations with significant community impact (such as areas that have been affected by numerous layoffs of apparel and textile workers);
(5) informing States directly when a secondary worker impact has been affirmed by Labor; and
(6) to the extent permitted by law, and subject to the availability of appropriations, providing funding or an outreach campaign for secondary workers (i.e., individuals indirectly affected by increased imports from other countries).
(b) The Secretary of Labor, in consultation with the Secretary of Commerce and the United States Trade Representative, shall report annually on the employment effects of the establishment of permanent normal trade relations with the People's Republic of China.
William J. Clinton.
Ex. Ord. No. 13360. Providing Opportunities for Service-Disabled Veteran Businesses To Increase Their Federal Contracting and Subcontracting
Ex. Ord. No. 13360, Oct. 20, 2004, 69 F.R. 62549, provided:
By the authority vested in me as President by the Constitution and the laws of the United States of America, and in order to strengthen opportunities in Federal contracting for service-disabled veteran businesses, it is hereby ordered as follows:
(a) develop a strategy to implement the policy set forth in section 1;
(b) make the agency's strategy publicly available and report annually to the Administrator of the Small Business Administration on implementation of the agency's strategy;
(c) designate a senior-level official who shall be responsible for developing and implementing the agency's strategy;
(d) include development and implementation of the agency's strategy and achievements in furtherance of the strategy as significant elements in any performance plans of the agency's designated agency senior-level official, chief acquisition officer, and director of small and disadvantaged business utilization; and
(e) include in the agency's strategy plans for:
(i) reserving agency contracts exclusively for service-disabled veteran businesses;
(ii) encouraging and facilitating participation by service-disabled veteran businesses in competitions for award of agency contracts;
(iii) encouraging agency contractors to subcontract with service-disabled veteran businesses and actively monitoring and evaluating agency contractors' efforts to do so;
(iv) training agency personnel on applicable law and policies relating to participation of service-disabled veteran businesses in Federal contracting; and
(v) disseminating information to service-disabled veteran businesses that would assist these businesses in participating in awards of agency contracts.
(a) designate an appropriate entity within the Small Business Administration that shall, in coordination with the Veterans Affairs' Center for Veterans Enterprise (CVE), provide to service-disabled veteran businesses information and assistance concerning participation in Federal contracting;
(b) advise and assist heads of agencies in their implementation of section 2 of this order; and
(c) make available to service-disabled veteran businesses training in Federal contracting law, procedures, and practices that would assist such businesses in participating in Federal contracting.
(a) establish a Government-wide Acquisition Contract reserved for participation by service-disabled veteran businesses; and
(b) assist service-disabled veteran businesses to be included in Federal Supply Schedules.
(a) the term "agency" means an "executive agency" as that term is defined in
(b) the term "service-disabled" means, with respect to disability, that the disability was incurred or aggravated in the line of duty in the active service in the United States Armed Forces;
(c) the term "service-disabled veteran" means a veteran, as defined in
(d) the term "service-disabled veteran business" means a small business concern owned and controlled by service-disabled veterans, as defined in section 3(q) of the Small Business Act (
(e) the term "small business concern" has the meaning specified in section 3(a) of the Small Business Act (
(b) To the extent permitted by law, an agency shall disclose personally identifying information on service-disabled veterans to other agencies who require such information in order to discharge their responsibilities under this order.
(c) An agency that consists of a multi-member commission shall implement this order to the extent it determines appropriate to the accomplishment of the agency's mission.
(d) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, instrumentalities or entities, its officers, employees or agents, or any other person.
George W. Bush.
Establishing an Interagency Task Force on Federal Contracting Opportunities for Small Businesses
Memorandum of President of the United States, Apr. 26, 2010, 75 F.R. 22499, provided:
Memorandum for the Heads of Executive Departments and Agencies
The Federal Government is the world's largest purchaser of goods and services, with purchases totaling over $500 billion per year. The American Recovery and Reinvestment Act of 2009 (Recovery Act) and other national investments are providing new opportunities for small businesses to compete for Federal contracts, and it is critical that these investments tap into the talents and skills of a broad cross-section of American business and industry. Small businesses must be able to participate in the Nation's economic recovery, including businesses owned by women, minorities, socially and economically disadvantaged individuals, and service-disabled veterans of our Armed Forces. These businesses should be able to compete and participate effectively in Federal contracts.
The Congress has established a number of statutory goals designed to help small businesses compete for Federal contracts. In addition to the goal of awarding at least 23 percent of all Federal prime contracting dollars to small businesses, the Congress also established Government-wide contracting goals for participation by small businesses that are located in Historically Underutilized Business Zones (at least 3 percent) or that are owned by women (at least 5 percent), socially and economically disadvantaged individuals (at least 5 percent), and service-disabled veterans (at least 3 percent). These aspirational goals help ensure that all Americans share in the jobs and opportunities created by Federal procurement.
In recent years, the Federal Government has not consistently reached its small business contracting goals. Although we have made some progress—particularly with respect to Recovery Act contracts—more work can and should be done. I am committed to ensuring that small businesses, including firms owned by women, minorities, socially and economically disadvantaged individuals, and service-disabled veterans, have fair access to Federal Government contracting. Indeed, where small businesses have the capacity to do more, we should strive to exceed the statutory goals. While Chief Acquisition Officers and Senior Procurement Executives have many priorities, small business contracting should always be a high priority in the procurement process.
Obtaining tangible results will require an honest and accurate accounting of our progress so that we can have transparency and accountability through Federal small business procurement data. Additionally, we must expand outreach strategies to alert small firms to Federal contracting opportunities.
In order to coordinate executive departments' and agencies' efforts towards ensuring that all small businesses have a fair chance to participate in Federal contracting opportunities, it is hereby ordered as follows:
(i) the Secretary of the Treasury;
(ii) the Secretary of Defense;
(iii) the Attorney General;
(iv) the Secretary of Labor;
(v) the Secretary of Housing and Urban Development;
(vi) the Secretary of Transportation;
(vii) the Secretary of Veterans Affairs;
(viii) the Secretary of Homeland Security;
(ix) the Administrator of General Services;
(x) the Administrator of the National Aeronautics and Space Administration;
(xi) the Director of the Minority Business Development Agency;
(xii) the Director of the Office of Science and Technology Policy;
(xiii) the Director of the Domestic Policy Council;
(xiv) the Director of the National Economic Council;
(xv) the Chair of the Council of Economic Advisers; and
(xvi) the heads of such other executive departments, agencies, and offices as the President may, from time to time, designate.
A member of the Task Force may designate, to perform the Task Force functions of the member, one or more senior officials who are part of the member's department, agency, or office, and who are full-time officers or employees of the Federal Government.
(i) using innovative strategies, such as teaming, to increase opportunities for small business contractors and utilizing and expanding mentorship programs, such as the mentor-protégé program;
(ii) removing barriers to participation by small businesses in the Federal marketplace by unbundling large projects, improving training of Federal acquisition officials with respect to strategies for increasing small business contracting opportunities, and utilizing new technologies to enhance the effectiveness and efficiency of Federal program managers, acquisition officials, and the Directors of Offices of Small Business Programs and Offices of Small and Disadvantaged Business Utilization, their managers, and procurement center representatives in identifying and providing access to these opportunities;
(iii) expanding outreach strategies to match small businesses, including firms located in Historically Underutilized Business Zones and firms owned and controlled by women, minorities, socially and economically disadvantaged individuals, and service-disabled veterans of our Armed Forces, with contracting and subcontracting opportunities; and
(iv) establishing policies, including revision or clarification of existing legislation, regulations, or policies, that are necessary or appropriate to effectuate the objectives of this memorandum.
(b) This memorandum does not create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
(c) The heads of executive departments and agencies shall assist and provide information to the Task Force, consistent with applicable law, as may be necessary to carry out the functions of the Task Force. Each executive department and agency shall bear its own expenses of participating in the Task Force.
(d) The Director is hereby authorized and directed to publish this memorandum in the Federal Register.
Barack Obama.
1 So in original. The period probably should be a semicolon.
2 So in original. Probably should be capitalized.
3 So in original. Probably should be "management".
§631a. Congressional declaration of small business economic policy
(a) Foster small business
For the purpose of preserving and promoting a competitive free enterprise economic system, Congress hereby declares that it is the continuing policy and responsibility of the Federal Government to use all practical means and to take such actions as are necessary, consistent with its needs and obligations and other essential considerations of national policy, to implement and coordinate all Federal department, agency, and instrumentality policies, programs, and activities in order to: foster the economic interests of small businesses; insure a competitive economic climate conducive to the development, growth and expansion of small businesses; establish incentives to assure that adequate capital and other resources at competitive prices are available to small businesses; reduce the concentration of economic resources and expand competition; and provide an opportunity for entrepreneurship, inventiveness, and the creation and growth of small businesses.
(b) Capital availability to small business
Congress further declares that the Federal Government is committed to a policy of utilizing all reasonable means, consistent with the overall economic policy goals of the Nation and the preservation of the competitive free enterprise system of the Nation, to establish private sector incentives that will help assure that adequate capital at competitive prices is available to small businesses. To fulfill this policy, departments, agencies, and instrumentalities of the Federal Government shall use all reasonable means to coordinate, create, and sustain policies and programs which promote investment in small businesses, including those investments which expand employment opportunities and which foster the effective and efficient use of human and natural resources in the economy of the Nation.
(
Editorial Notes
Codification
Section was enacted as part of the Small Business Economic Policy Act of 1980, and not as part of the Small Business Act which comprises this chapter.
Statutory Notes and Related Subsidiaries
Effective Date
Section effective Oct. 1, 1980, see section 507 of
Short Title
For short title of title III of
§631b. Reports to Congress; state of small business
(a) Report on Small Business and Competition
The President shall transmit to the Congress not later than January 20 of each year a Report on Small Business and Competition which shall—
(1) examine the current role of small business in the economy on an industry-by-industry basis;
(2) present current and historical data on production, employment, investment, population, job creation and retention, annual business failures, annual business startups, and other economic variables for small business in the economy as a whole and for small business in each sector of the economy, with, to the extent practicable, specific statistics divided as to urban, suburban, and rural areas;
(3) identify economic trends which will or may affect the small business sector and the state of competition;
(4) examine the effects on small business and competition of policies, programs, and activities, including, but not limited to the Internal Revenue Code [
(5) recommend a program for carrying out the policy declared in
(b) Appendix to report
The President also shall transmit simultaneously as an appendix to such annual report, a report, by agency and department, on the total dollar value of all Federal contracts exceeding $10,000 in amount and the dollar amount (including the subcontracts thereunder in excess of $10,000) awarded to small, minority-owned, female-owned, and veteran-owned businesses.
(c) Supplementary reports
The President may transmit from time to time to the Congress reports supplementary to the Report on Small Business and Competition, each of which shall include such supplementary or revised recommendations as he may deem necessary or desirable to achieve the policy declared in
(d) Referral to Congressional committees
The Report on Small Business and Competition and all supplementary reports transmitted under subsections (b) and (c) of this section shall, when transmitted to Congress, be referred to the Senate Select Committee on Small Business and the Committee on Small Business of the House of Representatives.
(e) Small business concerns owned by disadvantaged individuals and by women 1
The information and data required to be reported pursuant to subsection (a) shall separately detail those portions of such information and data that are relevant to—
(1) small business concerns owned and controlled by socially and economically disadvantaged individuals, by gender, as defined pursuant to
(2) small business concerns owned and controlled by women; and
(3) 2 qualified HUBZone small business concern (as defined in section 632(p) 3 of this title).
(3) 2 small business concerns owned and controlled by veterans, as defined in
(
Editorial Notes
References in Text
The Internal Revenue Code, referred to in subsec. (a)(4), is classified to Title 26, Internal Revenue Code.
The Employee Retirement Income Security Act, referred to in subsec. (a)(4), is
The Securities Act of 1933, referred to in subsec. (a)(4), is act May 27, 1933, ch. 38, title I,
The Securities Exchange Act of 1934, referred to in subsec. (a)(4), is act June 6, 1934, ch. 404,
Codification
Section was enacted as part of the Small Business Economic Policy Act of 1980, and not as part of the Small Business Act which comprises this chapter.
Amendments
1999—Subsec. (e)(1).
Subsec. (e)(2).
Subsec. (e)(3).
1997—Subsec. (b).
Subsec. (e)(3).
1990—Subsec. (a)(2).
1988—Subsec. (e).
Statutory Notes and Related Subsidiaries
Change of Name
Committee on Small Business of Senate changed to Committee on Small Business and Entrepreneurship of Senate. See Senate Resolution No. 123, One Hundred Seventh Congress, June 29, 2001. Previously, Select Committee on Small Business of Senate became Committee on Small Business of Senate. See Senate Resolution No. 101, Ninety-Seventh Congress, Mar. 25, 1981.
Effective Date of 1997 Amendment
Amendment by
Effective Date
Section effective Oct. 1, 1980, see section 507 of
Termination of Reporting Requirements
For termination, effective May 15, 2000, of reporting provisions in subsecs. (a) and (b) of this section, see section 3003 of
1 See 1988 Amendment note below.
2 So in original. Two pars. (3) have been enacted.
3 See References in Text note below.
§631c. Small Business Manufacturing Task Force
(a) Establishment
The Administrator of the Small Business Administration (referred to in this subtitle 1 as the "Administrator") shall establish a Small Business Manufacturing Task Force (referred to in this section as the "Task Force") to address the concerns of small manufacturers.
(b) Chair
The Administrator shall assign a member of the Task Force to serve as chair of the Task Force.
(c) Duties
The Task Force shall—
(1) evaluate and identify whether programs and services are sufficient to serve the needs of small manufacturers;
(2) actively promote the programs and services of the Small Business Administration that serve small manufacturers; and
(3) identify and study the unique conditions facing small manufacturers and develop and propose policy initiatives to support and assist small manufacturers.
(d) Meetings
(1) Frequency
The Task Force shall meet not less than 4 times per year, and more frequently if necessary to perform its duties.
(2) Quorum
A majority of the members of the Task Force shall constitute a quorum to approve recommendations or reports.
(e) Personnel matters
(1) Compensation of members
Each member of the Task Force shall serve without compensation in addition to that received for services rendered as an officer or employee of the United States.
(2) Detail of SBA employees
Any employee of the Small Business Administration may be detailed to the Task Force without reimbursement, and such detail shall be without interruption or loss of civil service status or privilege.
(f) Report
Not later than 1 year after December 8, 2004, and annually thereafter, the Task Force shall submit a report containing the findings and recommendations of the task force to—
(1) the President;
(2) the Committee on Small Business and Entrepreneurship of the Senate; and
(3) the Committee on Small Business of the House of Representatives.
(
Editorial Notes
References in Text
This subtitle, referred to in subsec. (a), is subtitle D (§§141–147) of title I of div. K of
Codification
Section was enacted as part of the Small Business Reauthorization and Manufacturing Assistance Act of 2004, and also as part of the Consolidated Appropriations Act, 2005, and not as part of the Small Business Act which comprises this chapter.
1 See References in Text note below.
§632. Definitions
(a) Small business concerns
(1) In general
For the purposes of this chapter, a small-business concern, including but not limited to enterprises that are engaged in the business of production of food and fiber, ranching and raising of livestock, aquaculture, and all other farming and agricultural related industries, shall be deemed to be one which is independently owned and operated and which is not dominant in its field of operation.
(2) Establishment of size standards
(A) In general
In addition to the criteria specified in paragraph (1) and subject to the requirements specified under subparagraph (C), the Administrator may specify detailed definitions or standards by which a business concern may be determined to be a small business concern for the purposes of this chapter or any other Act.
(B) Additional criteria
The standards described in paragraph (1) may utilize number of employees, dollar volume of business, net worth, net income, a combination thereof, or other appropriate factors.
(C) Requirements
Unless specifically authorized by statute, no Federal department (including the Administration when acting pursuant to subparagraph (A)) or agency may prescribe a size standard for categorizing a business concern as a small business concern, unless such proposed size standard—
(i) is proposed after an opportunity for public notice and comment;
(ii) provides for determining—
(I) the size of a manufacturing concern as measured by the manufacturing concern's average employment based upon employment during each of the manufacturing concern's pay periods for the preceding 24 months;
(II) the size of a business concern providing services on the basis of the annual average gross receipts of the business concern over a period of not less than 5 years;
(III) the size of other business concerns on the basis of data over a period of not less than 3 years; or
(IV) other appropriate factors; and
(iii) is approved by the Administrator.
(3) Variation by industry and consideration of other factors
When establishing or approving any size standard pursuant to paragraph (2), the Administrator shall ensure that the size standard varies from industry to industry to the extent necessary to reflect the differing characteristics of the various industries and consider other factors deemed to be relevant by the Administrator.
(4) Exclusion of certain security expenses from consideration for purpose of small business size standards
(A) Determination required
Not later than 30 days after January 6, 2006, the Administrator shall review the application of size standards established pursuant to paragraph (2) to small business concerns that are performing contracts in qualified areas and determine whether it would be fair and appropriate to exclude from consideration in the average annual gross receipts of such small business concerns any payments made to such small business concerns by Federal agencies to reimburse such small business concerns for the cost of subcontracts entered for the sole purpose of providing security services in a qualified area.
(B) Action required
Not later than 60 days after January 6, 2006, the Administrator shall either—
(i) initiate an adjustment to the size standards, as described in subparagraph (A), if the Administrator determines that such an adjustment would be fair and appropriate; or
(ii) provide a report to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives explaining in detail the basis for the determination by the Administrator that such an adjustment would not be fair and appropriate.
(C) Qualified areas
In this paragraph, the term "qualified area" means—
(i) Iraq,
(ii) Afghanistan, and
(iii) any foreign country which included a combat zone, as that term is defined in
(5) Alternative size standard
(A) In general
The Administrator shall establish an alternative size standard for applicants for business loans under
(B) Interim rule
Until the date on which the alternative size standard established under subparagraph (A) is in effect, an applicant for a business loan under
(i) the maximum tangible net worth of the applicant is not more than $15,000,000; and
(ii) the average net income after Federal income taxes (excluding any carry-over losses) of the applicant for the 2 full fiscal years before the date of the application is not more than $5,000,000.
(6) Proposed rulemaking
In conducting rulemaking to revise, modify or establish size standards pursuant to this section, the Administrator shall consider, and address, and make publicly available as part of the notice of proposed rulemaking and notice of final rule each of the following:
(A) a detailed description of the industry for which the new size standard is proposed;
(B) an analysis of the competitive environment for that industry;
(C) the approach the Administrator used to develop the proposed standard including the source of all data used to develop the proposed rule making; and
(D) the anticipated effect of the proposed rulemaking on the industry, including the number of concerns not currently considered small that would be considered small under the proposed rule making and the number of concerns currently considered small that would be deemed other than small under the proposed rulemaking.
(7) Common size standards
In carrying out this subsection, the Administrator may establish or approve a single size standard for a grouping of 4-digit North American Industry Classification System codes only if the Administrator makes publicly available, not later than the date on which such size standard is established or approved, a justification demonstrating that such size standard is appropriate for each individual industry classification included in the grouping.
(8) Number of size standards
The Administrator shall not limit the number of size standards established pursuant to paragraph (2), and shall assign the appropriate size standard to each North American Industry Classification System Code.
(9) Petitions for reconsideration of size standards
(A) In general
A person may file a petition for reconsideration with the Office of Hearings and Appeals (as established under
(B) Time limit
A person filing a petition for reconsideration described in subparagraph (A) shall file such petition not later than 30 days after the publication in the Federal Register of the notice of final rule to revise, modify, or establish size standards described in paragraph (6).
(C) Process for agency review
The Office of Hearings and Appeals shall use the same process it uses to decide challenges to the size of a small business concern to decide a petition for review pursuant to this paragraph.
(D) Judicial review
The publication of a final rule in the Federal Register described in subparagraph (B) shall be considered final agency action for purposes of seeking judicial review. Filing a petition for reconsideration under subparagraph (A) shall not be a condition precedent to judicial review of any such size standard.
(E) Rules or guidance
The Office of Hearings and Appeals shall begin accepting petitions for reconsideration described in subparagraph (A) after the date on which the Administration issues a rule or other guidance implementing this paragraph. Notwithstanding the provisions of subparagraph (B), petitions for reconsideration of size standards revised, modified, or established in a Federal Register final rule published between November 25, 2015, and the effective date of such rule or other guidance shall be considered timely if filed within 30 days of such effective date.
(b) "Agency" defined
For purposes of this chapter, any reference to an agency or department of the United States, and the term "Federal agency", shall have the meaning given the term "agency" by
(c) Qualified employee trust; eligibility for loan guarantee; "qualified employee trust" defined; regulations for treatment of trust as qualified employee trust
(1) For purposes of this chapter, a qualified employee trust shall be eligible for any loan guarantee under
(2) For purposes of this chapter, the term "qualified employee trust" means, with respect to a small business concern, a trust—
(A) which forms part of an employee stock ownership plan (as defined in
(i) which is maintained by such concern, and
(ii) which provides that each participant is entitled to direct the plan trustee as to the manner of how to vote the qualified employer securities (as defined in
(B) in the case of any loan guarantee under
(i) the loan guaranteed under
(ii) all funds acquired by the concern in such purchase shall be used by such concern solely for the purposes for which such loan was guaranteed,
(iii) such concern will provide such funds as may be necessary for the timely repayment of such loan, and the property of such concern shall be available as security for repayment of such loan, and
(iv) all qualifying employer securities acquired by such trust in such purchase shall be allocated to the accounts of participants in such plan who are entitled to share in such allocation, and each participant has a nonforfeitable right, not later than the date such loan is repaid, to all such qualifying employer securities which are so allocated to the participant's account.
(3) Under regulations which may be prescribed by the Administrator, a trust may be treated as a qualified employee trust with respect to a small business concern if—
(A) the trust is maintained by an employee organization which represents at least 51 percent of the employees of such concern, and
(B) such concern maintains a plan—
(i) which is an employee benefit plan which is designed to invest primarily in qualifying employer securities (as defined in
(ii) which provides that each participant in the plan is entitled to direct the plan as to the manner in which voting rights under qualifying employer securities which are allocated to the account of such participant are to be exercised with respect to a corporate matter which (by law or charter) must be decided by a majority vote of the outstanding common shares voted,
(iii) which provides that each participant who is entitled to distribution from the plan has a right, in the case of qualifying employer securities which are not readily tradeable on an established market, to require that the concern repurchase such securities under a fair valuation formula, and
(iv) which meets such other requirements (similar to requirements applicable to employee stock ownership plans as defined in
(C) in the case of a loan guarantee under
(d) "Qualified Indian tribe" defined
For purposes of
(e) "Public or private organization for the handicapped" defined
For purposes of
(1) which is organized under the laws of the United States or of any State, operated in the interest of handicapped individuals, the net income of which does not inure in whole or in part to the benefit of any shareholder or other individuals;
(2) which complies with any applicable occupational health and safety standard prescribed by the Secretary of Labor; and
(3) which, in the production of commodities and in the provision of services during any fiscal year in which it received financial assistance under this subsection, employs handicapped individuals for not less than 75 per centum of the man-hours required for the production or provision of the commodities or services.
(f) "Handicapped individual" defined
For purposes of
(1) who has a physical, mental, or emotional impairment, defect, ailment, disease, or disability of a permanent nature which in any way limits the selection of any type of employment for which the person would otherwise be qualified or qualifiable; or
(2) who is a service-disabled veteran.
(g) "Energy measures" defined
For purposes of
(1) solar thermal energy equipment which is either of the active type based upon mechanically forced energy transfer or of the passive type based on convective, conductive, or radiant energy transfer or some combination of these types;
(2) photovoltaic cells and related equipment;
(3) a product or service the primary purpose of which is conservation of energy through devices or techniques which increase the energy efficiency of existing equipment, methods of operation, or systems which use fossil fuels, and which is on the Energy Conservation Measures list of the Secretary of Energy or which the Administrator determines to be consistent with the intent of this subsection;
(4) equipment the primary purpose of which is production of energy from wood, biological waste, grain, or other biomass source of energy;
(5) equipment the primary purpose of which is industrial cogeneration of energy, district heating, or production of energy from industrial waste;
(6) hydroelectric power equipment;
(7) wind energy conversion equipment; and
(8) engineering, architectural, consulting, or other professional services which are necessary or appropriate to aid citizens in using any of the measures described in paragraph (1) through (7).
(h) "Credit elsewhere" defined
The term "credit elsewhere" means—
(1) for the purposes of this chapter (except as used in
(A) the business industry in which the loan applicant operates;
(B) whether the loan applicant is an enterprise that has been in operation for a period of not more than 2 years;
(C) the adequacy of the collateral available to secure the requested loan;
(D) the loan term necessary to reasonably assure the ability of the loan applicant to repay the debt from the actual or projected cash flow of the business; and
(E) any other factor relating to the particular credit application, as documented in detail by the lender, that cannot be overcome except through obtaining a Federal loan guarantee under prudent lending standards; and
(2) for the purposes of
(i) "Homeowners" defined
For purposes of
(j) "Small agricultural cooperative" defined
For the purposes of this chapter, the term "small agricultural cooperative" means an association (corporate or otherwise) acting pursuant to the provisions of the Agricultural Marketing Act (
(k) "Disaster" defined
(1) For the purposes of this chapter, the term "disaster" means a sudden event which causes severe damage including, but not limited to, floods, hurricanes, tornadoes, earthquakes, fires, explosions, volcanoes, windstorms, landslides or mudslides, tidal waves, commercial fishery failures or fishery resource disasters (as determined by the Secretary of Commerce under the Fishery Resource Disasters Improvement Act), ocean conditions resulting in the closure of customary fishing waters, riots, civil disorders or other catastrophes, except it does not include economic dislocations.
(2) For purposes of
(A) drought;
(B) below average water levels in the Great Lakes, or on any body of water in the United States that supports commerce by small business concerns; and
(C) ice storms and blizzards.
(l) "Computer crime" defined
For purposes of this chapter—
(1) 2 the term "computer crime" means—
(A) any crime committed against a small business concern by means of the use of a computer; and
(B) any crime involving the illegal use of, or tampering with, a computer owned or utilized by a small business concern.
(m) Definitions relating to contracting
In this chapter:
(1) Prime contract
The term "prime contract" has the meaning given such term in
(2) Prime contractor
The term "prime contractor" has the meaning given such term in
(3) Simplified acquisition threshold
The term "simplified acquisition threshold" has the meaning given such term in
(4) Micro-purchase threshold
The term "micro-purchase threshold" has the meaning given such term in
(5) Total purchases and contracts for property and services
The term "total purchases and contracts for property and services" shall mean total number and total dollar amount of contracts and orders for property and services.
(n) "Small business concern owned and controlled by women" defined
For the purposes of this chapter, a small business concern is a small business concern owned and controlled by women if—
(1) at least 51 percent of small 3 business concern is owned by one or more women or, in the case of any publicly owned business, at least 51 percent of the stock of which is owned by one or more women; and
(2) the management and daily business operations of the business are controlled by one or more women.
(o) Definitions of bundling of contract requirements and related terms
In this chapter:
(1) Bundled contract
The term "bundled contract" means a contract that is entered into to meet requirements that are consolidated in a bundling of contract requirements.
(2) Bundling of contract requirements
The term "bundling of contract requirements" means consolidating 2 or more procurement requirements for goods or services previously provided or performed under separate smaller contracts into a solicitation of offers for a single contract that is likely to be unsuitable for award to a small-business concern due to—
(A) the diversity, size, or specialized nature of the elements of the performance specified;
(B) the aggregate dollar value of the anticipated award;
(C) the geographical dispersion of the contract performance sites; or
(D) any combination of the factors described in subparagraphs (A), (B), and (C).
(3) Separate smaller contract
The term "separate smaller contract", with respect to a bundling of contract requirements, means a contract that has been performed by 1 or more small business concerns or was suitable for award to 1 or more small business concerns.
(p) Qualified HUBZone small business concern
In this chapter, the term "qualified HUBZone small business concern" has the meaning given such term in
(q) Definitions relating to veterans
In this chapter, the following definitions apply:
(1) Service-disabled veteran
The term "service-disabled veteran" means a veteran with a disability that is service-connected (as defined in
(2) Small business concern owned and controlled by service-disabled veterans
The term "small business concern owned and controlled by service-disabled veterans" means any of the following:
(A) A small business concern—
(i) not less than 51 percent of which is owned by one or more service-disabled veterans or, in the case of any publicly owned business, not less than 51 percent of the stock (not including any stock owned by an ESOP) of which is owned by one or more service-disabled veterans; and
(ii) the management and daily business operations of which are controlled by one or more service-disabled veterans or, in the case of a veteran with permanent and severe disability, the spouse or permanent caregiver of such veteran.
(B) A small business concern—
(i) not less than 51 percent of which is owned by one or more service-disabled veterans with a disability that is rated by the Secretary of Veterans Affairs as a permanent and total disability who are unable to manage the daily business operations of such concern; or
(ii) in the case of a publicly owned business, not less than 51 percent of the stock (not including any stock owned by an ESOP) of which is owned by one or more such veterans.
(C)(i) During the time period described in clause (ii), a small business concern that was a small business concern described in subparagraph (A) or (B) immediately prior to the death of a service-disabled veteran who was the owner of the concern, the death of whom causes the concern to be less than 51 percent owned by one or more service-disabled veterans, if—
(I) the surviving spouse of the deceased veteran acquires such veteran's ownership interest in such concern;
(II) such veteran had a service-connected disability (as defined in
(III) immediately prior to the death of such veteran, and during the period described in clause (ii), the small business concern is included in the database described in
(ii) The time period described in this clause is the time period beginning on the date of the veteran's death and ending on the earlier of—
(I) the date on which the surviving spouse remarries;
(II) the date on which the surviving spouse relinquishes an ownership interest in the small business concern; or
(III) the date that—
(aa) in the case of a surviving spouse of a veteran with a service-connected disability rated as 100 percent disabling or who dies as a result of a service-connected disability, is 10 years after the date of the death of the veteran; or
(bb) in the case of a surviving spouse of a veteran with a service-connected disability rated as less than 100 percent disabling who does not die as a result of a service-connected disability, is 3 years after the date of the death of the veteran.
(3) Small business concern owned and controlled by veterans
The term "small business concern owned and controlled by veterans" means a small business concern—
(A) not less than 51 percent of which is owned by one or more veterans or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more veterans; and
(B) the management and daily business operations of which are controlled by one or more veterans.
(4) Veteran
The term "veteran" has the meaning given the term in
(5) Relief from time limitations
(A) In general
Any time limitation on any qualification, certification, or period of participation imposed under this chapter on any program that is available to small business concerns shall be extended for a small business concern that—
(i) is owned and controlled by—
(I) a veteran who was called or ordered to active duty under a provision of law specified in
(II) a service-disabled veteran who became such a veteran due to an injury or illness incurred or aggravated in the active military, naval, or air service during a period of active duty pursuant to a call or order to active duty under a provision of law referred to in subclause (I) on or after September 11, 2001; and
(ii) was subject to the time limitation during such period of active duty.
(B) Duration
Upon submission of proper documentation to the Administrator, the extension of a time limitation under subparagraph (A) shall be equal to the period of time that such veteran who owned or controlled such a concern was on active duty as described in that subparagraph.
(C) Exception for programs subject to Federal Credit Reform Act of 1990
The provisions of subparagraphs (A) and (B) shall not apply to any programs subject to the Federal Credit Reform Act of 1990 (
(6) ESOP
The term "ESOP" has the meaning given the term "employee stock ownership plan" in
(7) Surviving spouse
The term "surviving spouse" has the meaning given such term in
(r) Definitions relating to small business lending companies
As used in
(1) Small business lending company
The term "small business lending company" means a business concern that is authorized by the Administrator to make loans pursuant to
(2) Non-Federally regulated lender
The term "non-Federally regulated lender" means a business concern if—
(A) such concern is authorized by the Administrator to make loans under
(B) such concern is subject to regulation by a State; and
(C) the lending activities of such concern are not regulated by any Federal banking authority.
(s) Major disaster
In this chapter, the term "major disaster" has the meaning given that term in
(t) Small business development center
In this chapter, the term "small business development center" means a small business development center described in
(u) Region of the Administration
In this chapter, the term "region of the Administration" means the geographic area served by a regional office of the Administration established under
(v) Multiple award contract
In this chapter, the term "multiple award contract" means—
(1) a multiple award task order contract or delivery order contract that is entered into under the authority of
(2) any other indefinite delivery, indefinite quantity contract that is entered into by the head of a Federal agency with 2 or more sources pursuant to the same solicitation.
(w) Presumption
(1) In general
In every contract, subcontract, cooperative agreement, cooperative research and development agreement, or grant which is set aside, reserved, or otherwise classified as intended for award to small business concerns, there shall be a presumption of loss to the United States based on the total amount expended on the contract, subcontract, cooperative agreement, cooperative research and development agreement, or grant whenever it is established that a business concern other than a small business concern willfully sought and received the award by misrepresentation.
(2) Deemed certifications
The following actions shall be deemed affirmative, willful, and intentional certifications of small business size and status:
(A) Submission of a bid or proposal for a Federal grant, contract, subcontract, cooperative agreement, or cooperative research and development agreement reserved, set aside, or otherwise classified as intended for award to small business concerns.
(B) Submission of a bid or proposal for a Federal grant, contract, subcontract, cooperative agreement, or cooperative research and development agreement which in any way encourages a Federal agency to classify the bid or proposal, if awarded, as an award to a small business concern.
(C) Registration on any Federal electronic database for the purpose of being considered for award of a Federal grant, contract, subcontract, cooperative agreement, or cooperative research agreement, as a small business concern.
(3) Certification by signature of responsible official
(A) In general
Each solicitation, bid, or application for a Federal contract, subcontract, or grant shall contain a certification concerning the small business size and status of a business concern seeking the Federal contract, subcontract, or grant.
(B) Content of certifications
A certification that a business concern qualifies as a small business concern of the exact size and status claimed by the business concern for purposes of bidding on a Federal contract or subcontract, or applying for a Federal grant, shall contain the signature of an authorized official on the same page on which the certification is contained.
(4) Regulations
The Administrator shall promulgate regulations to provide adequate protections to individuals and business concerns from liability under this subsection in cases of unintentional errors, technical malfunctions, and other similar situations.
(x) Annual certification
(1) In general
Each business certified as a small business concern under this chapter shall annually certify its small business size and, if appropriate, its small business status, by means of a confirming entry on the Online Representations and Certifications Application database of the Administration, or any successor thereto.
(2) Regulations
Not later than 1 year after September 27, 2010, the Administrator, in consultation with the Inspector General and the Chief Counsel for Advocacy of the Administration, shall promulgate regulations to ensure that—
(A) no business concern continues to be certified as a small business concern on the Online Representations and Certifications Application database of the Administration, or any successor thereto, without fulfilling the requirements for annual certification under this subsection; and
(B) the requirements of this subsection are implemented in a manner presenting the least possible regulatory burden on small business concerns.
(y) Policy on prosecutions of small business size and status fraud
Not later than 1 year after September 27, 2010, the Administrator, in consultation with the Attorney General, shall issue a Government-wide policy on prosecution of small business size and status fraud, which shall direct Federal agencies to appropriately publicize the policy.
(z) Aquaculture business disaster assistance
Subject to
(aa) Venture capital operating company
In this chapter, the term "venture capital operating company" means an entity described in clause (i), (v), or (vi) of section 121.103(b)(5) of title 13, Code of Federal Regulations (or any successor thereto).
(bb) Hedge fund
In this chapter, the term "hedge fund" has the meaning given that term in
(cc) Private equity firm
In this chapter, the term "private equity firm" has the meaning given the term "private equity fund" in
(dd) Definitions pertaining to subcontracting
In this chapter:
(1) Subcontract
The term "subcontract" means a legally binding agreement between a contractor that is already under contract to another party to perform work, and a third party, hereinafter referred to as the subcontractor, for the subcontractor to perform a part, or all, of the work that the contractor has undertaken.
(2) First tier subcontractor
The term "first tier subcontractor" means a subcontractor who has a subcontract directly with the prime contractor.
(3) At any tier
The term "at any tier" means any subcontractor other than a subcontractor who is a first tier subcontractor.
(ee) Puerto Rico business
In this chapter, the term "Puerto Rico business" means a small business concern that has its principal office located in the Commonwealth of Puerto Rico.
(ff) Covered territory business
In this chapter, the term "covered territory business" means a small business concern that has its principal office located in one of the following:
(1) The United States Virgin Islands.
(2) American Samoa.
(3) Guam.
(4) The Northern Mariana Islands.
(
Editorial Notes
References in Text
The Small Business Investment Act of 1958, referred to in subsec. (a)(5), is
The Agricultural Marketing Act (
The Fishery Resource Disasters Improvement Act, referred to in subsec. (k)(1), is title II of
The Federal Credit Reform Act of 1990, referred to in subsec. (q)(5)(C), is title V of
Codification
In subsec. (m), "
In subsec. (v)(1), "
Prior Provisions
Prior similar provisions were contained in section 203 of act July 30, 1953, ch. 282, title II,
Amendments
2022—Subsec. (k)(1).
2021—Subsec. (a)(2)(A).
Subsec. (a)(2)(C).
Subsec. (a)(2)(C)(ii)(I).
Subsec. (q)(2)(C)(i)(III).
Subsec. (ff).
2019—Subsec. (q)(2)(C)(i)(II).
Subsec. (q)(2)(C)(ii)(III).
2018—Subsec. (a)(2)(C)(ii)(II).
Subsec. (c)(2)(A)(ii).
Subsec. (h).
Subsec. (r)(2).
Subsec. (ee).
2017—Subsec. (m).
Subsec. (p).
2016—Subsec. (a)(1).
Subsec. (a)(9)(E).
Subsec. (p)(4)(A).
Subsec. (q)(2).
"(A) not less than 51 percent of which is owned by one or more service-disabled veterans or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more service-disabled veterans; and
"(B) the management and daily business operations of which are controlled by one or more service-disabled veterans or, in the case of a veteran with permanent and severe disability, the spouse or permanent caregiver of such veteran."
Subsec. (q)(6), (7).
2015—Subsec. (a)(9).
Subsec. (p)(1)(F).
Subsec. (p)(3)(D) to (F).
Subsec. (p)(4)(D).
Subsec. (p)(4)(E).
Subsec. (p)(5)(A)(i)(I)(aa).
Subsec. (p)(5)(A)(i)(I)(bb), (cc).
2013—
Subsec. (a).
Subsec. (a)(1), (3).
Subsec. (a)(5).
Subsec. (a)(6) to (8).
Subsec. (p)(5)(A)(i)(III).
"(aa) in the case of a contract for services (except construction), not less than 50 percent of the cost of contract performance incurred for personnel will be expended for its employees or for employees of other HUBZone small business concerns;
"(bb) in the case of a contract for procurement of supplies (other than procurement from a regular dealer in such supplies), not less than 50 percent of the cost of manufacturing the supplies (not including the cost of materials) will be incurred in connection with the performance of the contract in a HUBZone by 1 or more HUBZone small business concerns; and
"(cc) in the case of a contract for the procurement by the Secretary of Agriculture of agricultural commodities, none of the commodity being procured will be obtained by the prime contractor through a subcontract for the purchase of the commodity in substantially the final form in which it is to be supplied to the Government; and".
Subsec. (p)(5)(B) to (D).
"(B) Change in percentages
"The Administrator may utilize a percentage other than the percentage specified in item (aa) or (bb) of subparagraph (A)(i)(III), if the Administrator determines that such action is necessary to reflect conventional industry practices among small business concerns that are below the numerical size standard for businesses in that industry category.
"(C) Construction and other contracts
"The Administrator shall promulgate final regulations imposing requirements that are similar to those specified in items (aa) and (bb) of subparagraph (A)(i)(III) on contracts for general and specialty construction, and on contracts for any other industry category that would not otherwise be subject to those requirements. The percentage applicable to any such requirement shall be determined in accordance with subparagraph (B)."
Subsec. (dd).
2011—Subsecs. (aa) to (cc).
2010—Subsec. (a)(5).
Subsecs. (t), (u).
Subsec. (v).
Subsec. (w).
Subsec. (x).
Subsec. (y).
Subsec. (z).
2008—Subsec. (k)(2)(C).
Subsec. (q)(5).
Subsec. (s).
2006—Subsec. (a)(4).
Subsec. (k).
2005—Subsec. (p)(4)(B)(ii)(III).
2004—Subsec. (b).
Subsec. (j).
Subsec. (p)(1)(E).
Subsec. (p)(3)(A).
Subsec. (p)(3)(E).
Subsec. (p)(4)(B)(ii)(II).
Subsec. (p)(4)(C).
"(i) the date on which the Census Bureau publicly releases the first results from the 2010 decennial census; or
"(ii) 3 years after"
for "only for the 3-year period following".
Subsec. (p)(4)(D).
Subsec. (p)(5)(A)(i)(I)(aa).
Subsec. (r).
2000—Subsec. (a)(1).
Subsec. (p)(1)(D).
Subsec. (p)(3).
Subsec. (p)(3)(D).
Subsec. (p)(4)(A).
Subsec. (p)(4)(B).
"(i) that, based on the most recent data available from the Bureau of the Census of the Department of Commerce—
"(I) is not located in a metropolitan statistical area (as defined in
"(II) in which the median household income is less than 80 percent of the nonmetropolitan State median household income; or
"(ii) that, based on the most recent data available from the Secretary of Labor, has an unemployment rate that is not less than 140 percent of the statewide average unemployment rate for the State in which the county is located."
Subsec. (p)(4)(C).
Subsec. (p)(5)(A)(i)(I).
Subsec. (p)(5)(A)(i)(I)(aa).
Subsec. (p)(5)(A)(i)(II).
Subsec. (p)(5)(A)(i)(III)(cc).
Subsec. (p)(5)(C).
Subsec. (p)(5)(D)(i).
Subsec. (p)(6).
Subsec. (p)(7).
1999—Subsec. (f).
Subsec. (q).
1997—Subsec. (o).
Subsec. (p).
1996—Subsec. (k).
1994—Subsec. (a)(2).
"(A) is being proposed after an opportunity for public notice and comment;
"(B) provides for determining, over a period of not less than 3 years—
"(i) the size of a manufacturing concern on the basis of the number of its employees during that period; and
"(ii) the size of a concern providing services on basis of the average gross receipts of the concern during that period; and
"(C) is approved by the Administrator."
Subsec. (m).
Subsec. (n).
1992—Subsec. (a).
1990—Subsec. (m).
1988—Subsec. (a).
Subsecs. (j) to (l).
1987—Subsec. (a)(3).
Subsec. (a)(4)(A)(i).
Subsec. (a)(5).
1986—Subsec. (a).
Subsec. (c)(2)(A), (3)(B)(i), (iv).
1984—Subsec. (j).
1981—Subsecs. (d) to (i).
1980—Subsec. (a).
Subsec. (c).
1978—
1976—
Statutory Notes and Related Subsidiaries
Effective Date of 2021 Amendment
Effective Date of 2019 Amendment
Effective Date of 2017 Amendment
Amendment by section 1701 of
Effective Date of 2016 Amendment
Effective Date of 2015 Amendment
Effective Date of 2008 Amendment
Amendment of this section and repeal of
Effective Date of 1997 Amendment
Amendment by
Effective Date of 1996 Amendment
Effective Date of 1994 Amendment
For effective date and applicability of amendment by
Effective Date of 1987 Amendment
Effective Date of 1986 Amendment; Initial Review of Standards
Section 101(c) [title X, §921(g), (h)] of
"(g)
"(h)
"(2) The first review conducted by the Administrator under such paragraph shall review the periods beginning on October 1, 1983, and ending on September 30, 1986, and shall be completed not later than 180 days after the date of the enactment of this Act.
"(3) If the Administrator of the Small Business Administration determines, on the basis of the review referred to in paragraph (2), that contracts awarded under the set-aside programs under sections 8(a) and 15(a) of the Small Business Act [
Effective Date of 1984 Amendments
Amendment by
Effective Date of 1981 Amendment
Amendment by
Effective Date of 1980 Amendment
Amendment by
Regulations
"(a)
"(b)
"(1)
"(2)
Implementation
"(1)
"(2)
"(3)
"(4)
Small Business Compliance Guide
Prohibition on Using TARP Funds or Tax Increases
"(a)
"(b)
"(1)
"(2)
"(A) the amounts made available to the Secretary of the Treasury under title I of the Emergency Economic Stabilization Act of 2008 S.C. [sic] 5201 et seq.) [
"(B) any revenue increase attributable to any amendment to the Internal Revenue Code of 1986 [
Updated Size Standards
"(a)
"(1)
"(A) during the 18-month period beginning on the date of enactment of this Act [Sept. 27, 2010], and during every 18-month period thereafter, conduct a detailed review of not less than 1/3 of the size standards for small business concerns established under section 3(a)(2) of the Small Business Act (
"(B) after completing each review under subparagraph (A) make appropriate adjustments to the size standards established under section 3(a)(2) of the Small Business Act to reflect market conditions;
"(C) make publicly available—
"(i) information regarding the factors evaluated as part of each review conducted under subparagraph (A); and
"(ii) information regarding the criteria used for any revised size standards promulgated under subparagraph (B); and
"(D) not later than 30 days after the date on which the Administrator completes each review under subparagraph (A), submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives and make publicly available a report regarding the review, including why the Administrator—
"(i) used the factors and criteria described in subparagraph (C); and
"(ii) adjusted or did not adjust each size standard that was reviewed under the review.
"(2)
"(b)
[For definitions of "Administrator" and "small business concern" as used in section 1344 of
HUBZone Status Time Line and Commencement
"(a)
"(b)
"(1)
"(2)
Continued Effectiveness of Numerical Size Standards in Effect on September 30, 1988
The last sentence of section 732 of
Report on Effect of 1986 Amendments
Section 101(c) [title X, §921(i)] of
Definitions
"(1) the terms 'Administration' and 'Administrator' mean the Small Business Administration and the Administrator thereof, respectively; and
"(2) the term 'small business concern' has the meaning given that term under section 3 of the Small Business Act (
2 So in original. No par. (2) has been enacted.
3 So in original. Probably should be preceded by "the".
§633. Small Business Administration
(a) Creation; principal, branch, and regional offices
In order to carry out the policies of this chapter there is created an agency under the name "Small Business Administration" (herein referred to as the Administration), which Administration shall be under the general direction and supervision of the President and shall not be affiliated with or be within any other agency or department of the Federal Government. The principal office of the Administration shall be located in the District of Columbia. The Administration may establish such branch and regional offices in other places in the United States as may be determined by the Administrator of the Administration. As used in this chapter, the term "United States" includes the several States, the Territories and possessions of the United States, the Commonwealth of Puerto Rico, the Trust Territory of the Pacific Islands, and the District of Columbia.
(b) Appointment of Administrator, Deputy Administrator, and Associate Administrators; duties of Administrator: preparation of data base and publication of economic indices and annual report; risk management database; computer security and education program
(1) The management of the Administration shall be vested in an Administrator who shall be appointed from civilian life by the President, by and with the advice and consent of the Senate, and who shall be a person of outstanding qualifications known to be familiar and sympathetic with small-business needs and problems. The Administrator shall not engage in any other business, vocation, or employment than that of serving as Administrator. In carrying out the programs administered by the Small Business Administration including its lending and guaranteeing functions, the Administrator shall not discriminate on the basis of sex or marital status against any person or small business concern applying for or receiving assistance from the Small Business Administration, and the Small Business Administration shall give special consideration to veterans of the Armed Forces of the United States and their survivors or dependents. The President also may appoint a Deputy Administrator, by and with the advice and consent of the Senate. The Administrator is authorized to appoint Associate Administrators (including the Associate Administrator specified in
(2) The Administrator also shall be responsible for—
(A) establishing and maintaining an external small business economic data base for the purpose of providing the Congress and the Administration information on the economic condition and the expansion or contraction of the small business sector. To that end, the Administrator shall publish on a regular basis national small business economic indices and, to the extent feasible, regional small business economic indices, which shall include, but need not be limited to, data on—
(i) employment, layoffs, and new hires;
(ii) number of business establishments and the types of such establishments such as sole proprietorships, corporations, and partnerships;
(iii) number of business formations and failures;
(iv) sales and new orders;
(v) back orders;
(vi) investment in plant and equipment;
(vii) changes in inventory and rate of inventory turnover;
(viii) sources and amounts of capital investment, including debt, equity, and internally generated funds;
(ix) debt to equity ratios;
(x) exports;
(xi) number and dollar amount of mergers and acquisitions by size of acquiring and acquired firm; and
(xii) concentration ratios; and
(B) publishing annually a report giving a comparative analysis and interpretation of the historical trends of the small business sector as reflected by the data acquired pursuant to subparagraph (A) of this subsection.
(3)
(A)
(B)
(i) the identity of the institution making the guaranteed loan or issuing the debenture;
(ii) the identity of the borrower;
(iii) the total dollar amount of the loan or debenture;
(iv) the total dollar amount of government exposure in each loan;
(v) the district of the Administration in which the borrower has its principal office;
(vi) the principal line of business of the borrower, as identified by Standard Industrial Classification Code (or any successor to that system);
(vii) the delinquency rate for each program (including number of instances and days overdue);
(viii) the number and amount of repurchases, losses, and recoveries in each program;
(ix) the number of deferrals or forbearances in each program (including days and number of instances);
(x) comparisons on the basis of loan program, lender, district and region of the Administration, for all the data elements maintained; and
(xi) underwriting characteristics of each loan that has entered into default, including term, amount and type of collateral, loan-to-value and other actual and projected ratios, line of business, credit history, and type of loan.
(C)
(i) be operational not later than June 30, 1997; and
(ii) capture data beginning on the first day of the second quarter of fiscal year 1997 beginning after such date and thereafter.
(4)(A) The Administrator shall establish a small business computer security and education program to—
(i) provide small business concerns information regarding—
(I) utilization and management of computer technology;
(II) computer crimes committed against small business concerns; and
(III) security for computers owned or utilized by small business concerns;
(ii) provide for periodic forums for small business concerns to improve their knowledge of the matters described in clause (i); and
(iii) provide training opportunities to educate small business users on computer security techniques.
(B) The Administrator, after consultation with the Director of the Institute of Computer Sciences and Technology within the Department of Commerce, shall develop information and materials to carry out the activities described in subparagraph (A) of this paragraph.
(c) Revolving funds; disaster loan fund; business loan and investment fund; payments into funds; appropriations; reports to Congress; business-type budgets; borrowing authority: terms and conditions of notes, interest rate, public debt transactions; payments into miscellaneous receipts; authorization of appropriations for losses and interest subsidies
(1) There are established in the Treasury the following revolving funds: (A) a disaster loan fund which shall be available for financing functions performed under
(2) All repayments of loans and debentures, payments of interest and other receipts arising out of transactions heretofore or hereafter entered into by the Administration (A) pursuant to
(3) Unexpended balances of appropriations made to the fund pursuant to this subsection, as in effect immediately prior to the effective date of this paragraph, shall be allocated, together with related assets and liabilities, to the funds established by paragraph (1) in such amounts as the Administrator shall determine.
(4) The Administration shall submit to the Committees on Appropriations, Senate Select Committee on Small Business, and the Committee on Small Business of the House of Representatives, as soon as possible after the beginning of each calendar quarter, a full and complete report on the status of each of the funds established by paragraph (1). Business-type budgets for each of the funds established by paragraph (1) shall be prepared, transmitted to the Committees on Appropriations, the Senate Select Committee on Small Business, and the Committee on Small Business of the House of Representatives, and considered, and enacted in the manner prescribed by law (
(5)(A) The Administration is authorized to make and issue notes to the Secretary of the Treasury for the purpose of obtaining funds necessary for discharging obligations under the revolving funds created by paragraph (1) and for authorized expenditures out of the funds. Such notes shall be in such form and denominations and have such maturities and be subject to such terms and conditions as may be prescribed by the Administration with the approval of the Secretary of the Treasury. Such notes shall bear interest at a rate fixed by the Secretary of the Treasury, taking into consideration the current average market yield of outstanding marketable obligations of the United States having maturities comparable to the notes issued by the Administration under this paragraph. The Secretary of the Treasury is authorized and directed to purchase any notes of the Administration issued hereunder, and, for that purpose, the Secretary of the Treasury is authorized to use as a public debt transaction the proceeds from the sale of any securities issued under
(B)(i) Moneys in the funds established in paragraph (1) not needed for current operations may be paid into miscellaneous receipts of the Treasury.
(ii) Following the close of each fiscal year, the Administration shall pay into the miscellaneous receipts of the United States Treasury the actual interest that the Administration collects during that fiscal year on all financings made under this chapter.
(C) Except on those loan disbursements on which interest is paid under paragraph (5)(B)(ii), the Administration shall pay into miscellaneous receipts of the Treasury, following the close of each fiscal year, interest received by the Administration on financing functions performed under this chapter and titles III and V of the Small Business Investment Act of 1958 [
(D) There are authorized to be appropriated, in any fiscal year, such sums as may be necessary for losses and interest subsidies incurred by the funds established by paragraph (1), but not previously reimbursed.
(d) Creation and composition of Loan Policy Board; establishment of policies
There is created the Loan Policy Board of the Small Business Administration, which shall consist of the following members, all ex officio: The Administrator, as Chairman, the Secretary of the Treasury, and the Secretary of Commerce. Either of the said Secretaries may designate an officer of his Department, who has been appointed by the President by and with the advice and consent of the Senate, to act in his stead as a member of the Loan Policy Board with respect to any matter or matters. The Loan Policy Board shall establish general policies (particularly with reference to the public interest involved in the granting and denial of applications for financial assistance by the Administration and with reference to the coordination of the functions of the Administration with other activities and policies of the Government), which shall govern the granting and denial of applications for financial assistance by the Administration.
(e) Prohibition on provision of assistance
Notwithstanding any other provision of law, the Administration is prohibited from providing any financial or other assistance to any business concern or other person engaged in the production or distribution of any product or service that has been determined to be obscene by a court of competent jurisdiction.
(f) Certification of compliance with child support obligations
(1) In general
For financial assistance approved after the promulgation of final regulations to implement this section, each recipient of financial assistance under this chapter, including a recipient of a direct loan or a loan guarantee, shall certify that the recipient is not more than 60 days delinquent under the terms of any—
(A) administrative order;
(B) court order; or
(C) repayment agreement entered into between the recipient and the custodial parent or State agency providing child support enforcement services,
that requires the recipient to pay child support, as such term is defined in section 662(b) 1 of title 42.
(2) Enforcement
Not later than 6 months after October 22, 1994, the Administration shall promulgate such regulations as may be necessary to enforce compliance with the requirements of this subsection.
(g) Business Opportunity Specialists
(1) Duties
The exclusive duties of a Business Opportunity Specialist employed by the Administrator and reporting to the senior official appointed by the Administrator with responsibilities under
(A) with respect to small business concerns eligible to receive contracts and subcontracts pursuant to
(i) providing guidance, counseling, and referrals for assistance with technical, management, financial, or other matters that will improve the competitive viability of such concerns;
(ii) identifying causes of success or failure of such concerns;
(iii) providing comprehensive assessments of such concerns, including identifying the strengths and weaknesses of such concerns;
(iv) monitoring and documenting compliance with the requirements of
(v) explaining the requirements of
(vi) advising on compliance with contracting regulations (including the Federal Acquisition Regulation) after award of such a contract or subcontract;
(B) reviewing and monitoring compliance with mentor-protege agreements under
(C) representing the interests of the Administrator and small business concerns in the award, modification, and administration of contracts and subcontracts awarded pursuant to
(D) reporting fraud or abuse under
(2) Certification requirements
(A) In general
Consistent with the requirements of subparagraph (B), a Business Opportunity Specialist described under
(B) Delay of certification requirement
The certification described in subparagraph (A) is not required—
(i) for any person serving as a Business Opportunity Specialist on December 12, 2017, until the date that is one calendar year after the date such person was appointed as a Business Opportunity Specialist; or
(ii) for any person serving as a Business Opportunity Specialist on or before January 3, 2013, until January 3, 2020.
(3) Job posting requirements
The duties and certification requirements described in this subsection shall be included in any initial job posting for the position of a Business Opportunity Specialist.
(h) Commercial market representatives
(1) Duties
The principal duties of a commercial market representative employed by the Administrator and reporting to the senior official appointed by the Administrator with responsibilities under
(A) helping prime contractors to find small business concerns that are capable of performing subcontracts;
(B) for contractors awarded contracts containing the clause described in
(i) counseling on the responsibility of the contractor to maximize subcontracting opportunities for small business concerns;
(ii) instruction on methods and tools to identify potential subcontractors that are small business concerns; and
(iii) assistance to increase awards to subcontractors that are small business concerns through visits, training, and reviews of past performance;
(C) providing counseling on how a small business concern may promote the capacity of the small business concern to contractors awarded contracts containing the clause described in
(D) conducting periodic reviews of contractors awarded contracts containing the clause described in
(2) Certification requirements
(A) In general
Consistent with the requirements of subparagraph (B), a commercial market representative referred to in
(B) Delay of certification requirement
The certification described in subparagraph (A) is not required—
(i) for any person serving as a commercial market representative on December 12, 2017, until the date that is one calendar year after the date on which the person was appointed as a commercial market representative; or
(ii) for any person serving as a commercial market representative on or before November 25, 2015, until November 25, 2020.
(3) Job posting requirements
The duties and certification requirements described in this subsection shall be included in any initial job posting for the position of a commercial market representative.
(
Editorial Notes
References in Text
The effective date of this paragraph, referred to in subsec. (c)(3), is July 1, 1966, pursuant to
The Small Business Investment Act of 1958, referred to in subsecs. (b)(3)(A) and (c)(1), (2), (5)(C), is
Codification
In subsec. (c)(4), (5)(A), "(
Prior Provisions
Prior similar provisions were contained in section 204 of act July 30, 1953, ch. 282, title II,
Amendments
2017—Subsec. (g).
Subsec. (h).
2015—Subsec. (b)(1).
Subsec. (g).
Subsec. (h).
2010—Subsec. (b)(1).
Subsec. (b)(3)(B)(x).
2008—Subsec. (c)(1), (2).
2004—Subsecs. (g), (h).
1999—Subsec. (b)(1).
1996—Subsec. (b)(3).
1994—Subsec. (c)(5)(B)(ii).
Subsec. (e).
Subsec. (f).
1991—Subsec. (c)(1)(A), (2)(B).
1990—Subsec. (b)(1).
1989—Subsec. (b)(1).
1988—Subsec. (b)(1).
Subsec. (c)(1)(B), (2)(B).
1984—Subsec. (b)(3).
Subsec. (b)(4).
Subsec. (c)(1)(A).
Subsec. (c)(1)(B), (2)(B).
1981—Subsec. (c)(1)(A).
Subsec. (c)(1)(B).
Subsec. (c)(5)(B)(ii).
1980—Subsec. (b).
Subsec. (b)(1).
Subsec. (c)(5).
1978—Subsec. (b).
Subsec. (c)(1)(B), (2)(B).
1977—Subsec. (c)(1).
Subsec. (c)(2).
Subsec. (c)(3).
Subsec. (c)(4).
Subsec. (c)(5), (6).
1976—Subsec. (c)(6).
1974—Subsec. (b).
Subsec. (c)(1).
Subsec. (c)(2).
Subsec. (c)(4).
1972—Subsec. (c)(1).
Subsec. (c)(2).
Subsec. (c)(4).
1971—Subsec. (c)(4)(A).
1970—Subsec. (c)(1).
Subsec. (c)(4).
1969—Subsec. (c)(1).
1968—Subsec. (a).
1967—Subsec. (c)(4).
1966—Subsec. (b).
Subsec. (c).
1965—Subsec. (c).
1962—Subsec. (c).
1961—Subsec. (c).
1959—Subsec. (c).
1958—Subsec. (c).
Statutory Notes and Related Subsidiaries
Change of Name
Committee on Small Business of Senate changed to Committee on Small Business and Entrepreneurship of Senate. See Senate Resolution No. 123, One Hundred Seventh Congress, June 29, 2001. Previously, Select Committee on Small Business of Senate became Committee on Small Business of Senate. See Senate Resolution No. 101, Ninety-Seventh Congress, Mar. 25, 1981.
Effective Date of 2008 Amendment
Amendment of this section and repeal of
Termination Date of 2004 Amendment
Effective Date of 1996 Amendment
Effective Date of 1990 Amendments
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1988 Amendment
Amendment by
Effective and Termination Dates of 1984 Amendments
"(a) This Act [amending this section and
"(b) The amendments made to section 4(b)(3) of the Small Business Act [
[Section 401(b) of
Amendment by
Effective Date of 1981 Amendment
Amendment by sections 1908 and 1913(b) of
Effective Date of 1980 Amendment
Amendment by
Effective Date of 1977 Amendment
Effective Date of 1970 Amendments
For effective date of amendment by
Amendment by
Effective Date of 1966 Amendment
Transfer of Functions
Functions, powers, and duties of Office of Audits and Investigations in Small Business Administration transferred to Office of Inspector General in Small Business Administration, as established by
Administrator's Order
Completion of Planning for Loan Monitoring System
"(a)
"(1) fully defining the system requirement using on-line, automated capabilities to the extent feasible;
"(2) identifying all data inputs and outputs necessary for timely report generation;
"(3) benchmark loan monitoring business processes and systems against comparable industry processes and, if appropriate, simplify or redefine work processes based on these benchmarks;
"(4) determine data quality standards and control systems for ensuring information accuracy;
"(5) identify an acquisition strategy and work increments to completion;
"(6) analyze the benefits and costs of alternatives and use to demonstrate the advantage of the final project;
"(7) ensure that the proposed information system is consistent with the agency's information architecture; and
"(8) estimate the cost to system completion, identifying the essential cost element.
"(b)
"(1)
"(A) the Committees; and
"(B) the Comptroller General of the United States.
"(2)
"(A) prepare a written evaluation of the report for compliance with subsection (a); and
"(B) submit the evaluation to the Committees.
"(3)
Associate Administrator for Minority Small Business and Capital Ownership Development
Availability of Funds
Finding and Purpose of 1984 Amendment
"(a) The Congress hereby finds that—
"(1) there is increased dependency on, and proliferation of, information technology (including computers, data networks, and other communication devices) in the small business community;
"(2) such technology has permitted an increase in criminal activity against small business;
"(3) small businesses in particular frequently lack the education and awareness of computer security techniques and technologies which would enable them to protect their computer systems from unauthorized access and the manipulation or destruction of their computer hardware, software, and stored data;
"(4) profitmaking organizations have substantial expertise in computer technology, communications, and management assistance that is not otherwise available; and
"(5) the use of this expertise in the Small Business Administration's training delivery system would improve substantially the quantity and quality of the agency's management assistance programs.
"(b) The purposes of this Act [amending this section and
"(1) to improve the management by small businesses of their information technology,
"(2) to educate and encourage small businesses to protect such technology from intentional or unintentional manipulation or destruction; and
"(3) to permit cooperation with profitmaking organizations in providing management assistance to small business."
Audit by General Accounting Office of Small Business Administration; Report to Congress
Nonavailability of Unobligated Funds After June 30, 1974
Additional Capital for Revolving Fund
The following acts appropriated additional capital:
1965—$76,000,000—
$84,000,000—
$150,000,000—
$100,000,000—
1964—$45,000,000—
1963—$90,000,000—
1962—$300,000,000—
$40,000,000—
1961—$160,000,000—
$20,000,000—
1960—$50,000,000—
1959—$150,000,000—
1958—$200,000,000—
$20,000,000—
1957—$100,000,000—
$45,000,000—
1956—$50,000,000—Act June 20, 1956, ch. 415, title III,
Business Loan and Investment Fund; Increase in Financing Functions; Monthly Reports to Congress
Transfer of Funds for Trade Adjustment Loans
Such transfer of funds as effective July 1, 1966, see section 3(c) of
Executive Documents
Termination of Trust Territory of the Pacific Islands
For termination of Trust Territory of the Pacific Islands, see note set out preceding
Transfer of Functions
Loan Policy Board, provided for in subsec. (d) of this section, abolished and functions, including functions of chairman and other officers, transferred to Administrator of Small Business Administration by sections 11(b) and 13(a) of Reorg. Plan No. 4 of 1965, eff. July 27, 1965, 30 F.R. 9353,
1 See References in Text note below.
§633a. Detailed justification for proposed changes in budget requests
Beginning in fiscal year 2013 and each fiscal year thereafter, the budget request for the Small Business Administration shall provide a detailed justification of any proposed changes from the enacted level by individual appropriation. The detailed justification shall include at a minimum a description of each credit and non-credit program including amount of funding and costs by appropriation account and fiscal year. For activities funded in multiple appropriations, the budget justification shall specify the amount included in each enacted appropriation, the amount proposed in the budget year and a justification for any proposed changes.
(
Editorial Notes
Codification
Section was enacted as part of the Financial Services and General Government Appropriations Act, 2012, and also as part of the Consolidated Appropriations Act, 2012, and not as part of the Small Business Act which comprises this chapter.
§634. General powers
(a) Seal; appointment and compensation of personnel; use of other services and facilities
The Administration shall have power to adopt, alter, and use a seal, which shall be judicially noticed. The Administrator is authorized, subject to the civil service and classification laws, to select, employ, appoint, and fix the compensation of such officers, employees, attorneys, and agents as shall be necessary to carry out the provisions of this chapter; to define their authority and duties; and to pay the costs of qualification of certain of them as notaries public. The Administration, with the consent of any board, commission, independent establishment, or executive department of the Government, may avail itself on a reimbursable or nonreimbursable basis of the use of information, services, facilities (including any field service thereof), officers, and employees thereof, in carrying out the provisions of this chapter.
(b) Powers of Administrator
In the performance of, and with respect to, the functions, powers, and duties vested in him by this chapter the Administrator may—
(1) sue and be sued in any court of record of a State having general jurisdiction, or in any United States district court, and jurisdiction is conferred upon such district court to determine such controversies without regard to the amount in controversy; but no attachment, injunction, garnishment, or other similar process, mesne or final, shall be issued against the Administrator or his property;
(2) under regulations prescribed by him, assign or sell at public or private sale, or otherwise dispose of for cash or credit, in his discretion and upon such terms and conditions and for such consideration as the Administrator shall determine to be reasonable, any evidence of debt, contract, claim, personal property, or security assigned to or held by him in connection with the payment of loans granted under this chapter, and to collect or compromise all obligations assigned to or held by him and all legal or equitable rights accruing to him in connection with the payment of such loans until such time as such obligations may be referred to the Attorney General for suit or collection;
(3) deal with, complete, renovate, improve, modernize, insure, or rent, or sell for cash or credit upon such terms and conditions and for such consideration as the Administrator shall determine to be reasonable, any real property conveyed to or otherwise acquired by him in connection with the payment of loans granted under this chapter;
(4) pursue to final collection, by way of compromise or otherwise, all claims against third parties assigned to the Administrator in connection with loans made by him. This shall include authority to obtain deficiency judgments or otherwise in the case of mortgages assigned to the Administrator.
(5) acquire, in any lawful manner, any property (real, personal, or mixed, tangible or intangible), whenever deemed necessary or appropriate to the conduct of the activities authorized in
(6) make such rules and regulations as he deems necessary to carry out the authority vested in him by or pursuant to this chapter;
(7) in addition to any powers, functions, privileges and immunities otherwise vested in him, take any and all actions (including the procurement of the services of attorneys by contract in any office where an attorney or attorneys are not or cannot be economically employed full time to render such services) when he determines such actions are necessary or desirable in making, servicing, compromising, modifying, liquidating, or otherwise dealing with or realizing on loans made under the provisions of this chapter: Provided, That with respect to deferred participation loans, including loans guaranteed under paragraph (15) or (35) of
(8) pay the transportation expenses and per diem in lieu of subsistence expenses, in accordance with subchapter I of
(9) accept the services and facilities of Federal, State, and local agencies and groups, both public and private, and utilize such gratuitous services and facilities as may, from time to time, be necessary, to further the objectives of
(10) upon purchase by the Administration of any deferred participation entered into under
(11) make such investigations as he deems necessary to determine whether a recipient of or participant in any assistance under this chapter or any other person has engaged or is about to engage in any acts or practices which constitute or will constitute a violation of any provision of this chapter, or of any rule or regulation under this chapter, or of any order issued under this chapter. The Administration shall permit any person to file with it a statement in writing, under oath or otherwise as the Administration shall determine, as to all the facts and circumstances concerning the matter to be investigated. For the purpose of any investigation, the Administration is empowered to administer oaths and affirmations, subpena witnesses, compel their attendance, take evidence, and require the production of any books, papers, and documents which are relevant to the inquiry. Such attendance of witnesses and the production of any such records may be required from any place in the United States. In case of contumacy by, or refusal to obey a subpena issued to, any person, including a recipient or participant, the Administration may invoke the aid of any court of the United States within the jurisdiction of which such investigation or proceeding is carried on, or where such person resides or carries on business, in requiring the attendance and testimony of witnesses and the production of books, papers, and documents; and such court may issue an order requiring such person to appear before the Administration, there to produce records, if so ordered, or to give testimony touching the matter under investigation. Any failure to obey such order of the court may be punished by such court as a contempt thereof. All process in any such case may be served in the judicial district whereof such person is an inhabitant or wherever he may be found;
(12) impose, retain, and use only those fees which are specifically authorized by law or which are in effect on September 30, 1994, and in the amounts and at the rates in effect on such date, except that the Administrator may, subject to approval in appropriations Acts, impose, retain, and utilize, additional fees—
(A) not to exceed $100 for each loan servicing action (other than a loan assumption) requested after disbursement of the loan, including any substitution of collateral, release or substitution of a guarantor, reamortization, or similar action;
(B) not to exceed $300 for loan assumptions;
(C) not to exceed 1 percent of the amount of requested financings under title III of the Small Business Investment Act of 1958 [
(D) to recover the direct, incremental cost involved in the production and dissemination of compilations of information produced by the Administration under the authority of this chapter and the Small Business Investment Act of 1958 [
(13) collect, retain and utilize, subject to approval in appropriations Acts, any amounts collected by fiscal transfer agents and not used by such agent as payment of the cost of loan pooling or debenture servicing operations, except that amounts collected under this paragraph and paragraph (12) shall be utilized solely to facilitate the administration of the program that generated the excess amounts; and
(14) require any lender authorized to make loans under
(c) Procurement of experts and consultants; compensation and expenses
To such extent as he finds necessary to carry out the provisions of this chapter, the Administrator is authorized to procure the temporary (not in excess of one year) or intermittent services of experts or consultants or organizations thereof, including stenographic reporting services, by contract or appointment, and in such cases such services shall be without regard to the civil-service and classification laws and, except in the case of stenographic reporting services by organizations, without regard to
(d) Safety deposit box rentals
Section 3324(a) and (b) of title 31 shall not apply to prepayments of rentals made by the Administration on safety deposit boxes used by the Administration for the safeguarding of instruments held as security for loans or for the safeguarding of other documents.
(e) Undertaking or suspension of payment obligation; period; extension of maturity; repayment agreement; "required payments" defined
(1) Subject to the requirements and conditions contained in this subsection, upon application by a small business concern which is the recipient of a loan made under this chapter, the Administration may undertake the small business concern's obligation to make the required payments under such loan or may suspend such obligation if the loan was a direct loan made by the Administration. While such payments are being made by the Administration pursuant to the undertaking of such obligation or while such obligation is suspended, no such payment with respect to the loan may be required from the small business concern.
(2) The Administration may undertake or suspend for a period of not to exceed 5 years any small business concern's obligation under this subsection only if—
(A) without such undertaking or suspension of the obligation, the small business concern would, in the sole discretion of the Administration, become insolvent or remain insolvent;
(B) with the undertaking or suspension of the obligation, the small business concern would, in the sole discretion of the Administration, become or remain a viable small business entity; and
(C) the small business concern executes an agreement in writing satisfactory to the Administration as provided by paragraph (4).
(3) Notwithstanding the provisions of
(4)(A) Prior to the undertaking or suspension by the Administration of any small business concern's obligation under this subsection, the Administration, consistent with the purposes sought to be achieved herein, shall require the small business concern to agree in writing to repay to it the aggregate amount of the payments which were required under the loan during the period for which such obligation was undertaken or suspended, either—
(i) by periodic payments not less in amount or less frequently falling due than those which were due under the loan during such period, or
(ii) pursuant to a repayment schedule agreed upon by the Administration and the small business concern, or
(iii) by a combination of the payments described in clause (i) and clause (ii).
(B) In addition to requiring the small business concern to execute the agreement described in subparagraph (A), the Administration shall, prior to the undertaking or suspension of the obligation, take such action, and require the small business concern to take such action as the Administration deems appropriate in the circumstances, including the provision of such security as the Administration deems necessary or appropriate to insure that the rights and interests of the lender (Small Business Administration or participant) will be safeguarded adequately during and after the period in which such obligation is so undertaken or suspended.
(5) The term "required payments" with respect to any loan means payments of principal and interest under the loan.
(f) Sale of guaranteed portion of loans by lender or subsequent holder; limitations; secondary market
(1) The guaranteed portion of any loan made pursuant to this chapter may be sold by the lender, and by any subsequent holder, consistent with regulations on such sales as the Administration shall establish, subject to the following limitations:
(A) prior to the Administration's approval of the sale, or upon any subsequent resale, of any loan guaranteed by the Administration, if the lender certifies that such loan has been properly closed and that the lender has substantially complied with the provisions of the guarantee agreement and the regulations of the Administration, the Administration shall review and approve only materials not previously approved;
(B) all fees due the Administration on a guaranteed loan shall have been paid in full prior to any sale; and
(C) each loan, except each loan made under
(2) After a loan is sold in the secondary market, the lender shall remain obligated under its guarantee agreement with the Administration, and shall continue to service the loan in a manner consistent with the terms and conditions of such agreement.
(3) The Administration shall develop such procedures as are necessary for the facilitation, administration, and promotion of secondary market operations, and for assessing the increase of small business access to capital at reasonable rates and terms as a result of secondary market operations. Beginning on March 31, 1997, the sale of the unguaranteed portion of any loan made under
(4) Nothing in this subsection or subsection (g) of this section shall be interpreted to impede or extinguish the right of the borrower or the successor in interest to such borrower to prepay (in whole or in part) any loan made pursuant to
(g) Trust certificates; guarantee of timely payments of principal and interest; full faith and credit of United States; collection of fees; subrogation; division of loan guarantees
(1) The Administration is authorized to issue trust certificates representing ownership of all or a fractional part of the guaranteed portion of one or more loans which have been guaranteed by the Administration under this chapter, or under
(2) The Administration is authorized, upon such terms and conditions as are deemed appropriate, to guarantee the timely payment of the principal of and interest on trust certificates issued by the Administration or its agent for purposes of this subsection. Such guarantee shall be limited to the extent of principal and interest on the guaranteed portions of loans which compose the trust or pool. In the event that a loan in such trust or pool is prepaid, either voluntarily or in the event of default, the guarantee of timely payment of principal and interest on the trust certificates shall be reduced in proportion to the amount of principal and interest such prepaid loan represents in the trust or pool. Interest on prepaid or defaulted loans shall accrue and be guaranteed by the Administration only through the date of payment on the guarantee. During the term of the trust certificate, it may be called for redemption due to prepayment or default of all loans constituting the pool.
(3) The full faith and credit of the United States is pledged to the payment of all amounts which may be required to be paid under any guarantee of such trust certificates issued by the Administration or its agent pursuant to this subsection.
(4)(A) The Administration may collect a fee for any loan guarantee sold into the secondary market under subsection (f) in an amount equal to not more than 50 percent of the portion of the sale price that exceeds 110 percent of the outstanding principal amount of the portion of the loan guaranteed by the Administration. Any such fee imposed by the Administration shall be collected by the Administration or by the agent which carries out on behalf of the Administration the central registration functions required by subsection (h) of this section and shall be paid to the Administration and used solely to reduce the subsidy on loans guaranteed under
(B) The Administration is authorized to impose and collect, either directly or through a fiscal and transfer agent, a reasonable penalty on late payments of the fee authorized under subparagraph (A) in an amount not to exceed 5 percent of such fee per month plus interest.
(C) The Administration may contract with an agent to carry out, on behalf of the Administration, the assessment and collection of the annual fee established under
(5)(A) In the event the Administration pays a claim under a guarantee issued under this subsection, it shall be subrogated fully to the rights satisfied by such payment.
(B) No State or local law, and no Federal law, shall preclude or limit the exercise by the Administration of its ownership rights in the portions of loans constituting the trust or pool against which the trust certificates are issued.
(6) If the amount of the guaranteed portion of any loan under
(h) Central registration of loans and trust certificates; contracts with agent; disclosures by sellers of guaranteed portions of loans; regulation of brokers and dealers; electronic registration
(1) Upon the adoption of final rules and regulations, the Administration shall—
(A) provide for a central registration of all loans and trust certificates sold pursuant to subsections (f) and (g) of this section;
(B) contract with an agent to carry out on behalf of the Administration the central registration functions of this section and the issuance of trust certificates to facilitate pooling. Such agent shall provide a fidelity bond or insurance in such amounts as the Administration determines to be necessary to fully protect the interest of the Government;
(C) prior to any sale, require the seller to disclose to a purchaser of the guaranteed portion of a loan guaranteed under this chapter and to the purchaser of a trust certificate issued pursuant to subsection (g), information on the terms, conditions, and yield of such instrument. As used in this paragraph, if the instrument being sold is a loan, the term "seller" does not include (A) an entity which made the loan or (B) any individual or entity which sells three or fewer guaranteed loans per year; and
(D) have the authority to regulate brokers and dealers in guaranteed loans and trust certificates sold pursuant to subsections (f) and (g) of this section.
(2) The agent described in paragraph (1)(B) may be compensated through any of the fees assessed under this section and any interest earned on any funds collected by the agent while such funds are in the control of the agent and before the time at which the agent is contractually required to transfer such funds to the Administration or to the holders of the trust certificates, as appropriate.
(3) Nothing in this subsection shall prohibit the utilization of a book-entry or other electronic form of registration for trust certificates. The Administration may, with the consent of the Secretary of the Treasury, use the book-entry system of the Federal Reserve System.
(i) Office of Hearings and Appeals
(1) Establishment
(A) Office
There is established in the Administration an Office of Hearings and Appeals—
(i) to impartially decide matters relating to program decisions of the Administrator—
(I) for which Congress requires a hearing on the record; or
(II) that the Administrator designates for hearing by regulation; and
(ii) which shall contain the office of the Administration that handles requests submitted pursuant to
(B) Jurisdiction
(i) In general
Except as provided in clause (ii), the Office of Hearings and Appeals shall hear appeals of agency actions under or pursuant to this chapter, the Small Business Investment Act of 1958 (
(ii) Exception
The Office of Hearings and Appeals shall not adjudicate disputes that require a hearing on the record, except disputes pertaining to the small business programs described in this chapter.
(C) Associate Administrator
The head of the Office of Hearings and Appeals shall be the Chief Hearing Officer appointed under
(2) Chief Hearing Officer duties
(A) In general
The Chief Hearing Officer shall—
(i) be a career appointee in the Senior Executive Service and an attorney licensed by a State, commonwealth, territory or possession of the United States, or the District of Columbia; and
(ii) be responsible for the operation and management of the Office of Hearings and Appeals.
(B) Alternative dispute resolution
The Chief Hearing Officer may assign a matter for mediation or other means of alternative dispute resolution.
(3) Hearing officers
(A) In general
The Office of Hearings and Appeals shall appoint Hearing Officers to carry out the duties described in paragraph (1)(A)(i).
(B) Conditions of employment
A Hearing Officer appointed under this paragraph—
(i) shall serve in the excepted service as an employee of the Administration under
(ii) shall be classified at a position to which
(iii) shall be compensated at a rate not exceeding the maximum rate payable under such section.
(C) Authority; powers
Notwithstanding
(i) a Hearing Officer may hear cases arising under section 554 of such title;
(ii) a Hearing Officer shall have the powers described in section 556(c) of such title; and
(iii) the relevant provisions of subchapter II of
(D) Treatment of current personnel
An individual serving as a Judge in the Office of Hearings and Appeals (as that position and office are designated in section 134.101 of title 13, Code of Federal Regulations) on the effective date of this subsection shall be considered as qualified to be, and redesignated as, a Hearing Officer.
(4) Determinations regarding status of concerns
(A) In general
Not later than 2 days after the date on which a final determination that a business concern does not meet the requirements of the status such concern claims to hold is made, such concern or the Administrator, as applicable, shall update the status of such concern in the System for Award Management (or any successor system).
(B) Administrator updates
If such concern fails to update the status of such concern as described in subparagraph (A), not later than 2 days after such failure the Administrator shall make such update.
(C) Notification
A concern required to make an update described under subparagraph (A) shall notify a contracting officer for each contract with respect to which such concern has an offer or bid pending of the determination made under subparagraph (A), if the concern finds, in good faith, that such determination affects the eligibility of the concern to perform such a contract.
(5) Hearing Officer defined
In this subsection, the term "Hearing Officer" means an individual appointed or redesignated under this subsection who is an attorney licensed by a State, commonwealth, territory or possession of the United States, or the District of Columbia.
(
Editorial Notes
References in Text
The Small Business Investment Act of 1958, referred to in subsecs. (b)(12)(C), (D) and (i)(1)(B)(i), is
Subsection (h)(2) of this section, referred to in subsec. (g)(4)(A), was redesignated subsec. (h)(1)(B) by
The effective date of this subsection, referred to in subsec. (i)(3)(D), probably means the date of enactment of
Codification
In subsec. (b)(4), "
In subsec. (b)(8), "subchapter I of
In subsec. (c), "
In subsec. (d), "Section 3324(a) and (b) of title 31" substituted for "Section 3648 of the Revised Statutes (
Prior Provisions
Prior similar provisions were contained in section 205 of act July 30, 1953, ch. 282, title II,
Amendments
2021—Subsec. (i)(4), (5).
2018—Subsec. (b)(7).
2016—Subsec. (i)(1)(B).
2015—Subsec. (i).
2010—Subsec. (g)(6).
2004—Subsec. (b)(14).
Subsec. (g)(4)(C).
Subsec. (h)(2), (3).
2000—Subsec. (f)(1)(C).
1996—Subsec. (b)(7).
Subsec. (f)(3).
Subsec. (h).
1995—Subsec. (g)(4)(A).
1994—Subsec. (b)(8).
Subsec. (b)(12), (13).
1993—Subsec. (g)(4).
1992—Subsec. (f)(4).
1991—Subsec. (g)(1).
1988—Subsec. (g)(1).
1984—Subsecs. (f) to (h).
1980—Subsec. (b)(7).
1978—Subsec. (c).
1977—Subsec. (e).
1976—Subsec. (e).
1974—Subsec. (b)(10), (11).
Subsec. (e).
1972—Subsec. (a).
1961—Subsec. (a).
Subsec. (d).
Statutory Notes and Related Subsidiaries
Effective Date of 1996 Amendment
Amendment by sections 103 and 205 of
Effective Date of 1995 Amendment
"(a)
"(b)
Effective Date of 1993 Amendment
Effective Date of 1980 Amendment
Amendment by
Effective Date of 1978 Amendment
Regulations
"(a) Within ninety days after the date of enactment of this Act [July 10, 1984], the Small Business Administration shall develop and promulgate final rules and regulations to implement the central registration provisions provided for in section 5(h)(1) of the Small Business Act [
"(b) Within nine months after the date of enactment of this Act [July 10, 1984], the Small Business Administration shall consult with representatives of appropriate Federal and State agencies and officials, the securities industry, financial institutions and lenders, and small business persons, and shall develop and promulgate final rules and regulations to implement this Act [amending
"(c) The Small Business Administration shall not implement any of the provisions under section 5(g) of the Small Business Act, as amended [
Authority for the Office of Hearings and Appeals To Decide Appeals Relating to Qualified HUBZone Small Business Concerns
Asset Sales
Preferred Lender Standard Review Program
Study and Report Regarding 1993 Amendments To Impose Secondary Market Fees and To Reduce Loan Guarantee Percentages
References in Other Laws to GS–16, 17, or 18 Pay Rates
References in laws to the rates of pay for GS–16, 17, or 18, or to maximum rates of pay under the General Schedule, to be considered references to rates payable under specified sections of Title 5, Government Organization and Employees, see section 529 [title I, §101(c)(1)] of
Viability of Secondary Markets
Small Business Loan Secondary Market Study
Appropriations Not Authorized
Small Business Protection
1 See References in Text note below.
§634a. Office of Advocacy within Small Business Administration; Chief Counsel for Advocacy
There is established within the Small Business Administration an Office of Advocacy. The management of the Office shall be vested in a Chief Counsel for Advocacy who shall be appointed from civilian life by the President, by and with the advice and consent of the Senate.
(
Editorial Notes
Codification
Section was not enacted as part of the Small Business Act which comprises this chapter.
§634b. Primary functions of Office of Advocacy
The primary functions of the Office of Advocacy shall be to—
(1) examine the role of small business in the American economy and the contribution which small business can make in improving competition, encouraging economic and social mobility for all citizens, restraining inflation, spurring production, expanding employment opportunities, increasing productivity, promoting exports, stimulating innovation and entrepreneurship, and providing an avenue through which new and untested products and services can be brought to the marketplace;
(2) assess the effectiveness of existing Federal subsidy and assistance programs for small business and the desirability of reducing the emphasis on such existing programs and increasing the emphasis on general assistance programs designed to benefit all small businesses;
(3) measure the direct costs and other effects of government regulation on small businesses; and make legislative and nonlegislative proposals for eliminating excessive or unnecessary regulations of small businesses;
(4) determine the impact of the tax structure on small businesses and make legislative and other proposals for altering the tax structure to enable all small businesses to realize their potential for contributing to the improvement of the Nation's economic well-being;
(5) study the ability of financial markets and institutions to meet small business credit needs and determine the impact of government demands for credit on small businesses;
(6) determine financial resource availability and to recommend methods for delivery of financial assistance to minority enterprises, including methods for securing equity capital, for generating markets for goods and services, for providing effective business education, more effective management and technical assistance, and training, and for assistance in complying with Federal, State, and local law;
(7) evaluate the efforts of Federal agencies, business and industry to assist minority enterprises;
(8) make such other recommendations as may be appropriate to assist the development and strengthening of minority and other small business enterprises;
(9) recommend specific measures for creating an environment in which all businesses will have the opportunity to complete 1 effectively and expand to their full potential, and to ascertain the common reasons, if any, for small business successes and failures;
(10) determine the desirability of developing a set of rational, objective criteria to be used to define small business, and to develop such criteria, if appropriate;
(11) advise, cooperate with, and consult with, the Chairman of the Administrative Conference of the United States with respect to
(12) evaluate the efforts of each department and agency of the United States, and of private industry, to assist small business concerns owned and controlled by veterans, as defined in
(
Editorial Notes
Codification
Section was not enacted as part of the Small Business Act which comprises this chapter.
Amendments
1999—Par. (12).
1980—Par. (11).
Statutory Notes and Related Subsidiaries
Effective Date of 1980 Amendment
Amendment by
Termination of Administrative Conference of United States
For termination of Administrative Conference of United States, see provision of title IV of
Advocacy Study of Paperwork and Tax Impact
1 So in original. Probably should be "compete".
§634c. Additional duties of Office of Advocacy
(a) In general
The Office of Advocacy shall also perform the following duties on a continuing basis:
(1) serve as a focal point for the receipt of complaints, criticisms, and suggestions concerning the policies and activities of the Administration and any other Federal agency which affects small businesses;
(2) counsel small businesses on how to resolve questions and problems concerning the relationship of the small business to the Federal Government;
(3) develop proposals for changes in the policies and activities of any agency of the Federal Government which will better fulfill the purposes of the Small Business Act and communicate such proposals to the appropriate Federal agencies;
(4) represent the views and interests of small businesses before other Federal agencies whose policies and activities may affect small business;
(5) enlist the cooperation and assistance of public and private agencies, businesses, and other organizations in disseminating information about the programs and services provided by the Federal Government which are of benefit to small businesses, and information on how small businesses can participate in or make use of such programs and services; and
(6) carry out the responsibilities of the Office of Advocacy under
(b) Outreach and input from small businesses on trade promotion authority
(1) Definitions
In this subsection—
(A) the term "agency" has the meaning given the term in
(B) the term "Chief Counsel for Advocacy" means the Chief Counsel for Advocacy of the Small Business Administration;
(C) the term "covered trade agreement" means a trade agreement being negotiated pursuant to
(D) the term "Working Group" means the Interagency Working Group convened under paragraph (2)(A).
(2) Working group
(A) In general
Not later than 30 days after the date on which the President submits the notification required under
(i) The Office of the United States Trade Representative.
(ii) The Department of Commerce.
(iii) The Department of Agriculture.
(iv) Any other agency that the Chief Counsel for Advocacy, in consultation with the United States Trade Representative, determines to be relevant with respect to the subject of the covered trade agreement.
(B) Views of small businesses
Not later than 30 days after the date on which the Chief Counsel for Advocacy convenes the Working Group under subparagraph (A), the Chief Counsel for Advocacy shall identify a diverse group of small businesses, representatives of small businesses, or a combination thereof, to provide to the Working Group the views of small businesses in the manufacturing, services, and agriculture industries on the potential economic effects of the covered trade agreement.
(3) Report
(A) In general
Not later than 180 days after the date on which the Chief Counsel for Advocacy convenes the Working Group under paragraph (2)(A), the Chief Counsel for Advocacy shall submit to the Committee on Small Business and Entrepreneurship and the Committee on Finance of the Senate and the Committee on Small Business and the Committee on Ways and Means of the House of Representatives a report on the economic impacts of the covered trade agreement on small businesses, which shall—
(i) identify the most important priorities, opportunities, and challenges to various industries from the covered trade agreement;
(ii) assess the impact for new small businesses to start exporting, or increase their exports, to markets in countries that are parties to the covered trade agreement;
(iii) analyze the competitive position of industries likely to be significantly affected by the covered trade agreement;
(iv) identify—
(I) any State-owned enterprises in each country participating in negotiations for the covered trade agreement that could pose a threat to small businesses; and
(II) any steps to take to create a level playing field for those small businesses;
(v) identify any rule of an agency that should be modified to become compliant with the covered trade agreement; and
(vi) include an overview of the methodology used to develop the report, including the number of small business participants by industry, how those small businesses were selected, and any other factors that the Chief Counsel for Advocacy may determine appropriate.
(B) Delayed submission
To ensure that negotiations for the covered trade agreement are not disrupted, the President may require that the Chief Counsel for Advocacy delay submission of the report under subparagraph (A) until after the negotiations for the covered trade agreement are concluded, provided that the delay allows the Chief Counsel for Advocacy to submit the report to Congress not later than 45 days before the Senate or the House of Representatives acts to approve or disapprove the covered trade agreement.
(C) Avoidance of duplication
The Chief Counsel for Advocacy shall, to the extent practicable, coordinate the submission of the report under this paragraph with the United States International Trade Commission, the United States Trade Representative, other agencies, and trade advisory committees to avoid unnecessary duplication of reporting requirements.
(
Editorial Notes
References in Text
The Small Business Act, referred to in subsec. (a)(3), is
Codification
Section was not enacted as part of the Small Business Act which comprises this chapter.
Amendments
2016—
2010—Par. (6).
Executive Documents
Delegation of Authority Under 15 U.S.C. 634c(b)(3)(B)
Memorandum of President of the United States, Oct. 9, 2020, 85 F.R. 65631, provided:
Memorandum for the United States Trade Representative
By the authority vested in me as President by the Constitution and the laws of the United States of America, including
You are authorized and directed to publish this memorandum in the Federal Register.
Donald J. Trump.
§634d. Staff and powers of Office of Advocacy
In carrying out the provisions of
(1) employ and fix the compensation of such additional staff personnel as is deemed necessary, without regard to the provisions of title 5, governing appointments in the competitive service, and without regard to
(2) procure temporary and intermittent services to the same extent as is authorized by
(3) consult with experts and authorities in the fields of small business investment, venture capital, investment and commercial banking and other comparable financial institutions involved in the financing of business, and with individuals with regulatory, legal, economic, or financial expertise, including members of the academic community, and individuals who generally represent the public interest;
(4) utilize the services of the National Advisory Council established pursuant to the provisions of
(5) hold hearings and sit and act at such times and places as he may deem advisable.
(
Editorial Notes
References in Text
The General Schedule, referred to in par. (1), is set out under
Codification
Section was not enacted as part of the Small Business Act which comprises this chapter.
Amendments
1994—
Par. (1).
1980—Par. (1).
Statutory Notes and Related Subsidiaries
Effective Date of 1980 Amendment
Amendment by
§634e. Assistance of Government agencies
Each department, agency, and instrumentality of the Federal Government is authorized and directed to furnish to the Chief Counsel for Advocacy such reports and other information as he deems necessary to carry out his functions under
(
Editorial Notes
Codification
Section was not enacted as part of the Small Business Act which comprises this chapter.
§634f. Reports
The Chief Counsel may from time to time prepare and publish such reports as he deems appropriate. Not later than one year after June 4, 1976, he shall transmit to the Congress, the President and the Administration, a full report containing his findings and specific recommendations with respect to each of the functions referred to in
(
Editorial Notes
Codification
Section was not enacted as part of the Small Business Act which comprises this chapter.
§634g. Budgetary line item and authorization of appropriations
(a) Appropriation requests
Each budget of the United States Government submitted by the President under
(b) Administrative operations
The Administrator of the Small Business Administration shall provide the Office of Advocacy with appropriate and adequate office space at central and field office locations, together with such equipment, operating budget, and communications facilities and services as may be necessary, and shall provide necessary maintenance services for such offices and the equipment and facilities located in such offices.
(c) Authorization of appropriations
There are authorized to be appropriated such sums as are necessary to carry out
(
Editorial Notes
Codification
Section was not enacted as part of the Small Business Act which comprises this chapter.
Prior Provisions
A prior section 634g,
§635. Deposit of moneys; depositaries, custodians, and fiscal agents; contributions to employees' compensation funds
(a) All moneys of the Administration not otherwise employed may be deposited with the Treasury of the United States subject to check by authority of the Administration. The Federal Reserve banks are authorized and directed to act as depositaries, custodians, and fiscal agents for the Administration in the general performance of its powers conferred by this chapter. Any banks insured by the Federal Deposit Insurance Corporation, when designated by the Secretary of the Treasury, shall act as custodians and financial agents for the Administration. Each Federal Reserve bank, when designated by the Administrator as fiscal agent for the Administration, shall be entitled to be reimbursed for all expenses incurred as such fiscal agent.
(b) The Administrator shall contribute to the employees' compensation fund, on the basis of annual billings as determined by the Secretary of Labor, for the benefit payments made from such fund on account of employees engaged in carrying out functions financed by the revolving fund established by
(
Editorial Notes
Prior Provisions
Prior similar provisions were contained in section 206 of act July 30, 1953, ch. 282, title II,
§636. Additional powers
(a) Loans to small business concerns; allowable purposes; qualified business; restrictions and limitations
The Administration is empowered to the extent and in such amounts as provided in advance in appropriation Acts to make loans for plant acquisition, construction, conversion, or expansion, including the acquisition of land, material, supplies, equipment, and working capital, and to make loans to any qualified small business concern, including those owned by qualified Indian tribes, for purposes of this chapter. Such financings may be made either directly or in cooperation with banks or other financial institutions through agreements to participate on an immediate or deferred (guaranteed) basis. These powers shall be subject, however, to the following restrictions, limitations, and provisions:
(1)
(A)
(i)
(ii)
(B)
(C)
(2)
(A)
(i) 75 percent of the balance of the financing outstanding at the time of disbursement of the loan, if such balance exceeds $150,000; or
(ii) 85 percent of the balance of the financing outstanding at the time of disbursement of the loan, if such balance is less than or equal to $150,000.
(B)
(i)
(ii)
(C)
(i)
(ii)
(iii)
(I) complete authority to make and close loans with a guarantee from the Administration without obtaining the prior specific approval of the Administration; and
(II) complete authority to service and liquidate such loans without obtaining the prior specific approval of the Administration for routine servicing and liquidation activities, but shall not take any actions creating an actual or apparent conflict of interest.
(D)
(E)
(F)
(3) No loan shall be made under this subsection—
(A) if the total amount outstanding and committed (by participation or otherwise) to the borrower from the business loan and investment fund established by this chapter would exceed $3,750,000 (or if the gross loan amount would exceed $5,000,000), except as provided in subparagraph (B);
(B) if the total amount outstanding and committed (on a deferred basis) solely for the purposes provided in paragraph (16) to the borrower from the business loan and investment fund established by this chapter would exceed $4,500,000 (or if the gross loan amount would exceed $5,000,000), of which not more than $4,000,000 may be used for working capital, supplies, or financings under paragraph (14) for export purposes; and
(C) if effected either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate basis if the amount would exceed $350,000.
(4)
(A)
(B)
(i)
(ii)
(iii)
(C)
(i)
(I) the loan is for a term of not less than 15 years;
(II) the prepayment is voluntary;
(III) the amount of prepayment in any calendar year is more than 25 percent of the outstanding balance of the loan; and
(IV) the prepayment is made within the first 3 years after disbursement of the loan proceeds.
(ii)
(I) 5 percent of the amount of prepayment, if the borrower prepays during the first year after disbursement;
(II) 3 percent of the amount of prepayment, if the borrower prepays during the second year after disbursement; and
(III) 1 percent of the amount of prepayment, if the borrower prepays during the third year after disbursement.
(5) No such loans including renewals and extensions thereof may be made for a period or periods exceeding twenty-five years, except that such portion of a loan made for the purpose of acquiring real property or constructing, converting, or expanding facilities may have a maturity of twenty-five years plus such additional period as is estimated may be required to complete such construction, conversion, or expansion.
(6) All loans made under this subsection shall be of such sound value or so secured as reasonably to assure repayment: Provided, however, That—
(A) for loans to assist any public or private organization or to assist any handicapped individual as provided in paragraph (10) of this subsection any reasonable doubt shall be resolved in favor of the applicant;
(B) recognizing that greater risk may be associated with loans for energy measures as provided in paragraph (12) of this subsection, factors in determining "sound value" shall include, but not be limited to, quality of the product or service; technical qualifications of the applicant or his employees; sales projections; and the financial status of the business concern: Provided further, That such status need not be as sound as that required for general loans under this subsection; and 1
(C) Repealed.
On that portion of the loan used to refinance existing indebtedness held by a bank or other lending institution, the Administration shall limit the amount of deferred participation to 80 per centum of the amount of the loan at the time of disbursement: Provided further, That any authority conferred by this subparagraph on the Administration shall be exercised solely by the Administration and shall not be delegated to other than Administration personnel.
(7)(A)
(B)
(i) to provide full payment deferment relief (including payment of principal and interest) for a period of not more than 1 year; and
(ii) to provide an additional deferment period if the borrower provides documentation justifying such additional deferment.
(C)
(i)
(ii)
(8) The Administration may make loans under this subsection to small business concerns owned and controlled by disabled veterans (as defined in
(9) The Administration may provide loans under this subsection to finance residential or commercial construction or rehabilitation for sale: Provided, however, That such loans shall not be used primarily for the acquisition of land.
(10) The Administration may provide guaranteed loans under this subsection to assist any public or private organization for the handicapped or to assist any handicapped individual, including service-disabled veterans, in establishing, acquiring, or operating a small business concern.
(11) The Administration may provide loans under this subsection to any small business concern, or to any qualified person seeking to establish such a concern when it determines that such loan will further the policies established in section 631(c) 2 of this title, with particular emphasis on the preservation or establishment of small business concerns located in urban or rural areas with high proportions of unemployed or low-income individuals or owned by low-income individuals.
(12)(A) The Administration may provide loans under this subsection to assist any small business concern, including start up, to enable such concern to design architecturally or engineer, manufacture, distribute, market, install, or service energy measures: Provided, however, That such loan proceeds shall not be used primarily for research and development.
(b) 3 The Administration may provide deferred participation loans under this subsection to finance the planning, design, or installation of pollution control facilities for the purposes set forth in section 404 of the Small Business Investment Act of 1958 [
(13) The Administration may provide financings under this subsection to State and local development companies for the purposes of, and subject to the restrictions in, title V of the Small Business Investment Act of 1958 [
(14)
(A)
(B)
(i)
(ii)
(I)
(II)
(C)
(D)
(15)(A) The Administration may guarantee loans under this subsection—
(i) to qualified employee trusts with respect to a small business concern for the purpose of purchasing, and for any transaction costs associated with purchasing, stock of the concern under a plan approved by the Administrator which, when carried out, results in the qualified employee trust owning at least 51 per centum of the stock of the concern; and
(ii) to a small business concern under a plan approved by the Administrator, if the proceeds from the loan are only used to make a loan to a qualified employee trust, and for any transaction costs associated with making that loan, that results in the qualified employee trust owning at least 51 percent of the small business concern.
(B) The plan requiring the Administrator's approval under subparagraph (A) shall be submitted to the Administration by the trustee of such trust or by the small business concern with its application for the guarantee. Such plan shall include an agreement with the Administrator which is binding on such trust and on the small business concern and which provides that—
(i) not later than the date the loan guaranteed under subparagraph (A) is repaid (or as soon thereafter as is consistent with the requirements of
(ii) there will be periodic reviews of the role in the management of such concern of employees to whose accounts stock is allocated,
(iii) there will be adequate management to assure management expertise and continuity, and
(iv) with respect to a loan made to a trust, or to a cooperative in accordance with paragraph (35)—
(I) a seller of the small business concern may remain involved as an officer, director, or key employee of the small business concern when a qualified employee trust or cooperative has acquired 100 percent of ownership of the small business concern; and
(II) any seller of the small business concern who remains as an owner of the small business concern, regardless of the percentage of ownership interest, shall be required to provide a personal guarantee by the Administration.
(C) In determining whether to guarantee any loan under this paragraph, the individual business experience or personal assets of employee-owners shall not be used as criteria, except inasmuch as certain employee-owners may assume managerial responsibilities, in which case business experience may be considered.
(D) For purposes of this paragraph, a corporation which is controlled by any other person shall be treated as a small business concern if such corporation would, after the plan described in subparagraph (B) is carried out, be treated as a small business concern.
(E) The Administration shall compile a separate list of applications for assistance under this paragraph, indicating which applications were accepted and which were denied, and shall report periodically to the Congress on the status of employee-owned firms assisted by the Administration, which shall include—
(i) the total number of loans made to employee-owned business concerns that were guaranteed by the Administrator under this subsection or section 502 of the Small Business Investment Act of 1958 (
(I) to small business concerns owned and controlled by socially and economically disadvantaged individuals; and
(II) to cooperatives;
(ii) the total number of financings made to employee-owned business concerns by companies licensed under section 301(c) of the Small Business Investment Act of 1958 (
(I) to small business concerns owned and controlled by socially and economically disadvantaged individuals; and
(II) to cooperatives; and
(iii) any outreach and educational activities conducted by the Administration with respect to employee-owned business concerns.
(F) A small business concern that makes a loan to a qualified employee trust under subparagraph (A)(ii) is not required to contain the same terms and conditions as the loan made to the small business concern that is guaranteed by the Administration under such subparagraph.
(G) With respect to a loan made to a qualified employee trust under this paragraph, or to a cooperative in accordance with paragraph (35), the Administrator may, as deemed appropriate, elect to not require any mandatory equity to be provided by the qualified employee trust or cooperative to make the loan.
(16)
(A)
(i) in the financing of the acquisition, construction, renovation, modernization, improvement, or expansion of productive facilities or equipment to be used in the United States in the production of goods and services involved in international trade;
(ii) in the refinancing of existing indebtedness that is not structured with reasonable terms and conditions, including any debt that qualifies for refinancing under any other provision of this subsection; or
(iii) by providing working capital.
(B)
(i)
(ii)
(C)
(D)
(i) is confronting increased competition with foreign firms in the relevant market; and
(ii) is injured by such competition.
(E)
(F)
(i)
(I) this paragraph;
(II) paragraph (14); or
(III) paragraph (34).
(ii)
(I) post the list published under clause (i) on the website of the Administration; and
(II) make the list published under clause (i) available, upon request, at each district office of the Administration.
(17) The Administration shall authorize lending institutions and other entities in addition to banks to make loans authorized under this subsection.
(18)
(A)
(i) A guarantee fee not to exceed 2 percent of the deferred participation share of a total loan amount that is not more than $150,000.
(ii) A guarantee fee not to exceed 3 percent of the deferred participation share of a total loan amount that is more than $150,000, but not more than $700,000.
(iii) A guarantee fee not to exceed 3.5 percent of the deferred participation share of a total loan amount that is more than $700,000.
(iv) In addition to the fee under clause (iii), a guarantee fee equal to 0.25 percent of any portion of the deferred participation share that is more than $1,000,000.
(B)
(19)(A) In addition to the Preferred Lenders Program authorized by the proviso in
(B) In order to encourage all lending institutions and other entities making loans authorized under this subsection to provide loans of $50,000 or less in guarantees to eligible small business loan applicants, the Administration shall develop and allow participating lenders to solely utilize a uniform and simplified loan form for such loans.
(C)
(i)
(ii)
(20)(A) The Administration is empowered to make loans either directly or in cooperation with banks or other financial institutions through agreements to participate on an immediate or deferred (guaranteed) basis to small business concerns eligible for assistance under subsection (j)(10) and
(i) the type and amount of such assistance requested by such concern is not otherwise available on reasonable terms from other sources;
(ii) with such assistance such concern has a reasonable prospect for operating soundly and profitably within a reasonable period of time;
(iii) the proceeds of such assistance will be used within a reasonable time for plant construction, conversion, or expansion, including the acquisition of equipment, facilities, machinery, supplies, or material or to supply such concern with working capital to be used in the manufacture of articles, equipment, supplies, or material for defense or civilian production or as may be necessary to insure a well-balanced national economy; and
(iv) such assistance is of such sound value as reasonably to assure that the terms under which it is provided will not be breached by the small business concern.
(B)(i) No loan shall be made under this paragraph if the total amount outstanding and committed (by participation or otherwise) to the borrower would exceed $750,000.
(ii) Subject to the provisions of clause (i), in agreements to participate in loans on a deferred (guaranteed) basis, participation by the Administration shall be not less than 85 per centum of the balance of the financing outstanding at the time of disbursement.
(iii) The rate of interest on financings made on a deferred (guaranteed) basis shall be legal and reasonable.
(iv) Financings made pursuant to this paragraph shall be subject to the following limitations:
(I) No immediate participation may be purchased unless it is shown that a deferred participation is not available.
(II) No direct financing may be made unless it is shown that a participation is unavailable.
(C) A direct loan or the Administration's share of an immediate participation loan made pursuant to this paragraph shall be any secured debt instrument—
(i) that is subordinated by its terms to all other borrowings of the issuer;
(ii) the rate of interest on which shall not exceed the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturities of such loan and adjusted to the nearest one-eighth of 1 per centum;
(iii) the term of which is not more than twenty-five years; and
(iv) the principal on which is amortized at such rate as may be deemed appropriate by the Administration, and the interest on which is payable not less often than annually.
(21)(A) The Administration may make loans on a guaranteed basis under the authority of this subsection—
(i) to a small business concern that has been (or can reasonably be expected to be) detrimentally affected by—
(I) the closure (or substantial reduction) of a Department of Defense installation; or
(II) the termination (or substantial reduction) of a Department of Defense program on which such small business was a prime contractor or subcontractor (or supplier) at any tier; or
(ii) to a qualified individual or a veteran seeking to establish (or acquire) and operate a small business concern.
(B) Recognizing that greater risk may be associated with a loan to a small business concern described in subparagraph (A)(i), any reasonable doubts concerning the firm's proposed business plan for transition to nondefense-related markets shall be resolved in favor of the loan applicant when making any determination regarding the sound value of the proposed loan in accordance with paragraph (6).
(C) Loans pursuant to this paragraph shall be authorized in such amounts as provided in advance in appropriation Acts for the purposes of loans under this paragraph.
(D) For purposes of this paragraph a qualified individual is—
(i) a member of the Armed Forces of the United States, honorably discharged from active duty involuntarily or pursuant to a program providing bonuses or other inducements to encourage voluntary separation or early retirement;
(ii) a civilian employee of the Department of Defense involuntarily separated from Federal service or retired pursuant to a program offering inducements to encourage early retirement; or
(iii) an employee of a prime contractor, subcontractor, or supplier at any tier of a Department of Defense program whose employment is involuntarily terminated (or voluntarily terminated pursuant to a program offering inducements to encourage voluntary separation or early retirement) due to the termination (or substantial reduction) of a Department of Defense program.
(E)
(i) have the greatest potential for—
(I) creating new jobs for individuals whose employment is involuntarily terminated due to reductions in Federal defense expenditures; or
(II) preventing the loss of jobs by employees of small business concerns described in subparagraph (A)(i); and
(ii) have substantial potential for stimulating new economic activity in communities most affected by reductions in Federal defense expenditures.
(22) The Administration is authorized to permit participating lenders to impose and collect a reasonable penalty fee on late payments of loans guaranteed under this subsection in an amount not to exceed 5 percent of the monthly loan payment per month plus interest.
(23)
(A)
(B)
(C)
(i) the Administration shall first consider reducing fees paid by small business borrowers under clauses (i) through (iii) of paragraph (18)(A), to the maximum extent possible; and
(ii) fees paid by small business borrowers shall not be increased above the levels in effect on December 8, 2004.
(24)
(25)
(A)
(B)
(C)
(26)
(27) Repealed.
(28)
(29)
(A)
(i) shall be required by the Administration in connection with any such loan, if such loan is in an amount greater than the Federal banking regulator appraisal threshold; or
(ii) may be required by the Administration or the lender in connection with any such loan, if such loan is in an amount equal to or less than the Federal banking regulator appraisal threshold, if such appraisal is necessary for appropriate evaluation of creditworthiness.
(B)
(30)
(31)
(A)
(i) The term "disaster area" means the area for which the President has declared a major disaster, during the 5-year period beginning on the date of the declaration.
(ii) The term "express lender" means any lender authorized by the Administration to participate in the Express Loan Program.
(iii) The term "express loan" means any loan made pursuant to this paragraph in which a lender utilizes to the maximum extent practicable its own loan analyses, procedures, and documentation.
(iv) The term "Express Loan Program" means the program for express loans established by the Administration under paragraph (25)(B), as in existence on April 5, 2004, with a guarantee rate of not more than 50 percent.
(B)
(C)
(D)
(E)
(F)
(i)
(I) the term "biomass"—
(aa) means any organic material that is available on a renewable or recurring basis, including—
(AA) agricultural crops;
(BB) trees grown for energy production;
(CC) wood waste and wood residues;
(DD) plants (including aquatic plants and grasses);
(EE) residues;
(FF) fibers;
(GG) animal wastes and other waste materials; and
(HH) fats, oils, and greases (including recycled fats, oils, and greases); and
(bb) does not include—
(AA) paper that is commonly recycled; or
(BB) unsegregated solid waste;
(II) the term "energy efficiency project" means the installation or upgrading of equipment that results in a significant reduction in energy usage; and
(III) the term "renewable energy system" means a system of energy derived from—
(aa) a wind, solar, biomass (including biodiesel), or geothermal source; or
(bb) hydrogen derived from biomass or water using an energy source described in item (aa).
(ii)
(I) purchasing a renewable energy system; or
(II) carrying out an energy efficiency project for a small business concern.
(G)
(i)
(ii)
(I) a veteran, as defined in
(II) an individual who is eligible to participate in the Transition Assistance Program established under
(III) a member of a reserve component of the Armed Forces named in
(IV) the spouse of an individual described in subclause (I), (II), or (III); or
(V) the surviving spouse (as defined in
(H)
(i)
(ii)
(I) the maximum loan amount is $150,000; and
(II) the guarantee rate shall be not more than 85 percent.
(iii)
(iv)
(v)
(vi)
(I)
(II)
(vii)
(I)
(II)
(viii)
(32)
(A)
(i) the term "cost" has the meaning given that term in
(ii) the term "covered energy efficiency loan" means a loan—
(I) made under this subsection; and
(II) the proceeds of which are used to purchase energy efficient designs, equipment, or fixtures, or to reduce the energy consumption of the borrower by 10 percent or more; and
(iii) the term "pilot program" means the pilot program established under subparagraph (B) 4
(B)
(C)
(D)
(E)
(i)
(ii)
(I) for the fiscal year before that fiscal year, the annual rate of default of covered energy efficiency loans exceeds that of loans made under this subsection that are not covered energy efficiency loans;
(II) the cost to the Administration of making loans under this subsection is greater than zero and such cost is directly attributable to the cost of making covered energy efficiency loans; and
(III) no additional sources of revenue authority are available to reduce the cost of making loans under this subsection to zero.
(iii)
(I) shall not assess or collect fees in an amount greater than necessary to ensure that the cost of the program under this subsection is not greater than zero; and
(II) shall reinstate the fee reductions under clause (i) when the conditions in clause (ii) no longer apply.
(iv)
(F) GAO
(i)
(ii)
(I) the number of covered energy efficiency loans for which fees were reduced under the pilot program;
(II) a description of the energy efficiency savings with the pilot program;
(III) a description of the impact of the pilot program on the program under this subsection;
(IV) an evaluation of the efficacy and potential fraud and abuse of the pilot program; and
(V) recommendations for improving the pilot program.
(33)
(A)
(i) the term "cost" has the meaning given that term in
(ii) the term "pilot program" means the pilot program established under subparagraph (B); and
(iii) the term "veteran participation loan" means a loan made under this subsection to a small business concern owned and controlled by veterans of the Armed Forces or members of the reserve components of the Armed Forces.
(B)
(C)
(D)
(E)
(i)
(ii)
(I) for the fiscal year before that fiscal year, the annual estimated rate of default of veteran participation loans exceeds that of loans made under this subsection that are not veteran participation loans;
(II) the cost to the Administration of making loans under this subsection is greater than zero and such cost is directly attributable to the cost of making veteran participation loans; and
(III) no additional sources of revenue authority are available to reduce the cost of making loans under this subsection to zero.
(iii)
(I) shall not assess or collect fees in an amount greater than necessary to ensure that the cost of the program under this subsection is not greater than zero; and
(II) shall reinstate the fee reductions under clause (i) when the conditions in clause (ii) no longer apply.
(iv)
(F) GAO
(i)
(ii)
(I) the number of veteran participation loans for which fees were reduced under the pilot program;
(II) a description of the impact of the pilot program on the program under this subsection;
(III) an evaluation of the efficacy and potential fraud and abuse of the pilot program; and
(IV) recommendations for improving the pilot program.
(34)
(A)
(i) the term "export development activity" includes—
(I) obtaining a standby letter of credit when required as a bid bond, performance bond, or advance payment guarantee;
(II) participation in a trade show that takes place outside the United States;
(III) translation of product brochures or catalogues for use in markets outside the United States;
(IV) obtaining a general line of credit for export purposes;
(V) performing a service contract from buyers located outside the United States;
(VI) obtaining transaction-specific financing associated with completing export orders;
(VII) purchasing real estate or equipment to be used in the production of goods or services for export;
(VIII) providing term loans or other financing to enable a small business concern, including an export trading company and an export management company, to develop a market outside the United States; and
(IX) acquiring, constructing, renovating, modernizing, improving, or expanding a production facility or equipment to be used in the United States in the production of goods or services for export; and
(ii) the term "express loan" means a loan in which a lender uses to the maximum extent practicable the loan analyses, procedures, and documentation of the lender to provide expedited processing of the loan application.
(B)
(C)
(i)
(ii)
(I) 90 percent of a loan that is not more than $350,000; and
(II) 75 percent of a loan that is more than $350,000 and not more than $500,000.
(35)
(A)
(B)
(36)
(A)
(i) the terms "appropriate Federal banking agency" and "insured depository institution" have the meanings given those terms in
(ii) the term "covered loan" means a loan made under this paragraph during the covered period;
(iii) the term "covered period" means the period beginning on February 15, 2020 and ending on June 30, 2021;
(iv) the term "eligible recipient" means an individual or entity that is eligible to receive a covered loan;
(v) the term "eligible self-employed individual" has the meaning given the term in section 7002(b) of the Families First Coronavirus Response Act (
(vi) the term "insured credit union" has the meaning given the term in
(vii) the term "nonprofit organization" means an organization that is described in
(viii) the term "payroll costs"—
(I) means—
(aa) the sum of payments of any compensation with respect to employees that is a—
(AA) salary, wage, commission, or similar compensation;
(BB) payment of cash tip or equivalent;
(CC) payment for vacation, parental, family, medical, or sick leave;
(DD) allowance for dismissal or separation;
(EE) payment required for the provisions of group health care or group life, disability, vision, or dental insurance benefits, including insurance premiums;
(FF) payment of any retirement benefit; or
(GG) payment of State or local tax assessed on the compensation of employees; and
(bb) the sum of payments of any compensation to or income of a sole proprietor or independent contractor that is a wage, commission, income, net earnings from self-employment, or similar compensation and that is in an amount that is not more than $100,000 on an annualized basis, as prorated for the period during which the payments are made or the obligation to make the payments is incurred; and
(II) shall not include—
(aa) the compensation of an individual employee in excess of $100,000 on an annualized basis, as prorated for the period during which the compensation is paid or the obligation to pay the compensation is incurred;
(bb) taxes imposed or withheld under chapters 21, 22, or 24 of title 26 during the applicable period;
(cc) any compensation of an employee whose principal place of residence is outside of the United States;
(dd) qualified sick leave wages for which a credit is allowed under section 7001 of the Families First Coronavirus Response Act (
(ee) qualified family leave wages for which a credit is allowed under section 7003 of the Families First Coronavirus Response Act (
(ix) the term "veterans organization" means an organization that is described in
(x) the term "community development financial institution" has the meaning given the term in
(xi) the term "community financial institutions" means—
(I) a community development financial institution;
(II) a minority depository institution, as defined in section 308 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (
(III) a development company that is certified under title V of the Small Business Investment Act of 1958 (
(IV) an intermediary, as defined in subsection (m)(11);
(xii) the term "credit union" means a State credit union or a Federal credit union, as those terms are defined, respectively, in
(xiii) the term "seasonal employer" means an eligible recipient that—
(I) does not operate for more than 7 months in any calendar year; or
(II) during the preceding calendar year, had gross receipts for any 6 months of that year that were not more than 33.33 percent of the gross receipts of the employer for the other 6 months of that year;
(xiv) the term "housing cooperative" means a cooperative housing corporation (as defined in
(xv) the term "destination marketing organization" means a nonprofit entity that is—
(I) an organization described in
(II) a State, or a political subdivision of a State (including any instrumentality of such entities)—
(aa) engaged in marketing and promoting communities and facilities to businesses and leisure travelers through a range of activities, including—
(AA) assisting with the location of meeting and convention sites;
(BB) providing travel information on area attractions, lodging accommodations, and restaurants;
(CC) providing maps; and
(DD) organizing group tours of local historical, recreational, and cultural attractions; or
(bb) that is engaged in, and derives the majority of the operating budget of the entity from revenue attributable to, providing live events;
(xvi) the terms "exchange", "issuer", and "security" have the meanings given those terms in
(xvii) the term "additional covered nonprofit entity"—
(I) means an organization described in any paragraph of
(II) does not include any entity that, if the entity were a business concern, would be described in section 120.110 of title 13, Code of Federal Regulations (or in any successor regulation or other related guidance or rule that may be issued by the Administrator) other than a business concern described in paragraph (a) or (k) of such section.
(B)
(C)
(D)
(i)
(I) 500 employees; or
(II) if applicable, the size standard in number of employees established by the Administration for the industry in which the business concern, nonprofit organization, housing cooperative, veterans organization, or Tribal business concern operates.
(ii)
(I)
(II)
(iii)
(I)
(II)
(aa)
(AA) that employs not more than 500 employees, or the size standard established by the Administrator for the North American Industry Classification System code applicable to the business concern, per physical location of such business concern; or
(BB) any nonprofit organization or any organization otherwise subject to
(bb)
(AA) the included business concern is majority owned or controlled by a business concern that is assigned a North American Industry Classification System code beginning with 511110 or 5151 or, with respect to a public broadcasting entity (as defined in section 397(11) of the Communications Act of 1934 (
(BB) the included business concern makes a good faith certification that proceeds of the loan will be used to support expenses at the component of the included business concern that produces or distributes locally focused or emergency information.
(III)
(aa) a nonprofit organization shall be eligible to receive a covered loan if the nonprofit organization employs not more than 500 employees per physical location of the organization; and
(bb) an additional covered nonprofit entity and an organization that, but for subclauses (I)(dd) and (II)(dd) of clause (vii), would be eligible for a covered loan under clause (vii) shall be eligible to receive a covered loan if the entity or organization employs not more than 300 employees per physical location of the entity or organization.
(IV)
(aa) the business concern or organization employs not more than 500 employees, or the size standard established by the Administrator for that North American Industry Classification code, per physical location of the business concern or organization; and
(bb) the business concern or organization makes a good faith certification that proceeds of the loan will be used to support expenses at the component of the business concern or organization that supports local or regional news.
(iv)
(I) any business concern with not more than 500 employees that, as of the date on which the covered loan is disbursed, is assigned a North American Industry Classification System code beginning with 72;
(II) any business concern operating as a franchise that is assigned a franchise identifier code by the Administration;
(III) any business concern that receives financial assistance from a company licensed under
(IV)(aa) any business concern (including any station which broadcasts pursuant to a license granted by the Federal Communications Commission under title III of the Communications Act of 1934 (
(bb) any nonprofit organization that is assigned a North American Industry Classification System code beginning with 5151; and
(V) any business concern or other organization that was not eligible to receive a covered loan the day before March 11, 2021, is assigned a North American Industry Classification System code of 519130, certifies in good faith as an Internet-only news publisher or Internet-only periodical publisher, and is engaged in the collection and distribution of local or regional and national news and information, if the business concern or organization—
(aa) employs not more than 500 employees, or the size standard established by the Administrator for that North American Industry Classification code, per physical location of the business concern or organization; and
(bb) is majority owned or controlled by a business concern or organization that is assigned a North American Industry Classification System code of 519130.
(v)
(vi)
(vii)
(I)
(aa) the organization does not receive more than 15 percent of its receipts from lobbying activities;
(bb) the lobbying activities of the organization do not comprise more than 15 percent of the total activities of the organization;
(cc) the cost of the lobbying activities of the organization did not exceed $1,000,000 during the most recent tax year of the organization that ended prior to February 15, 2020; and
(dd) the organization employs not more than 300 employees.
(II)
(aa) the destination marketing organization does not receive more than 15 percent of its receipts from lobbying activities;
(bb) the lobbying activities of the destination marketing organization do not comprise more than 15 percent of the total activities of the organization;
(cc) the cost of the lobbying activities of the destination marketing organization did not exceed $1,000,000 during the most recent tax year of the destination marketing organization that ended prior to February 15, 2020; and 6
(dd) the destination marketing organization employs not more than 300 employees; and
(ee) the destination marketing organization—
(AA) is described in
(BB) is a quasi-governmental entity or is a political subdivision of a State or local government, including any instrumentality of those entities.
(viii)
(I)
(II)
(ix)
(I) the additional covered nonprofit entity does not receive more than 15 percent of its receipts from lobbying activities;
(II) the lobbying activities of the additional covered nonprofit entity do not comprise more than 15 percent of the total activities of the organization;
(III) the cost of the lobbying activities of the additional covered nonprofit entity did not exceed $1,000,000 during the most recent tax year of the additional covered nonprofit entity that ended prior to February 15, 2020; and
(IV) the additional covered nonprofit entity employs not more than 300 employees.
(E)
(i)(I) the sum of—
(aa) the product obtained by multiplying—
(AA) the average total monthly payments by the applicant for payroll costs incurred during the 1-year period before the date on which the loan is made, except that an applicant that is a seasonal employer shall use the average total monthly payments for payroll for any 12-week period selected by the seasonal employer between February 15, 2019, and February 15, 2020; by
(BB) 2.5; and
(bb) the outstanding amount of a loan under subsection (b)(2) that was made during the period beginning on January 31, 2020 and ending on the date on which covered loans are made available to be refinanced under the covered loan; or
(II) if requested by an otherwise eligible recipient that was not in business during the period beginning on February 15, 2019 and ending on June 30, 2019, the sum of—
(aa) the product obtained by multiplying—
(AA) the average total monthly payments by the applicant for payroll costs incurred during the period beginning on January 1, 2020 and ending on February 29, 2020; by
(BB) 2.5; and
(bb) the outstanding amount of a loan under subsection (b)(2) that was made during the period beginning on January 31, 2020 and ending on the date on which covered loans are made available to be refinanced under the covered loan; or
(ii) $10,000,000.
(F)
(i)
(I) payroll costs;
(II) costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums;
(III) employee salaries, commissions, or similar compensations;
(IV) payments of interest on any mortgage obligation (which shall not include any prepayment of or payment of principal on a mortgage obligation);
(V) rent (including rent under a lease agreement);
(VI) utilities;
(VII) interest on any other debt obligations that were incurred before the covered period;
(VIII) covered operations expenditures, as defined in
(IX) covered property damage costs, as defined in
(X) covered supplier costs, as defined in
(XI) covered worker protection expenditures, as defined in
(ii)
(I)
(II)
(aa) was in operation on February 15, 2020; and
(bb)(AA) had employees for whom the borrower paid salaries and payroll taxes; or
(BB) paid independent contractors, as reported on a Form 1099–MISC.
(iii)
(iv)
(v)
(vi)
(I) lobbying activities, as defined in
(II) lobbying expenditures related to a State or local election; or
(III) expenditures designed to influence the enactment of legislation, appropriations, regulation, administrative action, or Executive order proposed or pending before Congress or any State government, State legislature, or local legislature or legislative body.
(G)
(i) 7
(I) that the uncertainty of current economic conditions makes necessary the loan request to support the ongoing operations of the eligible recipient;
(II) acknowledging that funds will be used to retain workers and maintain payroll or make mortgage payments, lease payments, and utility payments;
(III) that the eligible recipient does not have an application pending for a loan under this subsection for the same purpose and duplicative of amounts applied for or received under a covered loan; and
(IV) during the period beginning on February 15, 2020 and ending on December 31, 2020, that the eligible recipient has not received amounts under this subsection for the same purpose and duplicative of amounts applied for or received under a covered loan.
(H)
(i) in lieu of the fee otherwise applicable under paragraph (23)(A), the Administrator shall collect no fee; and
(ii) in lieu of the fee otherwise applicable under paragraph (18)(A), the Administrator shall collect no fee.
(I)
(J)
(i) no personal guarantee shall be required for the covered loan; and
(ii) no collateral shall be required for the covered loan.
(K)
(i) the remaining balance shall continue to be guaranteed by the Administration under this subsection; and
(ii) the covered loan shall have a minimum maturity of 5 years and a maximum maturity of 10 years from the date on which the borrower applies for loan forgiveness under that section.
(L)
(M)
(i)
(I)
(aa) is in operation on February 15, 2020; and
(bb) has an application for a covered loan that is approved or pending approval on or after March 27, 2020.
(II)
(ii)
(I) consider each eligible recipient that applies for a covered loan to be an impacted borrower; and
(II) require lenders under this subsection to provide complete payment deferment relief for impacted borrowers with covered loans, including payment of principal, interest, and fees, until the date on which the amount of forgiveness determined under
(iii)
(iv)
(v)
(N)
(O)
(i)
(ii)
(P)
(i)
(I) With respect to a covered loan made during the period beginning on March 27, 2020, and ending on the day before December 27, 2020, the Administrator shall reimburse such a lender at a rate, based on the balance of the financing outstanding at the time of disbursement of the covered loan, of—
(aa) 5 percent for loans of not more than $350,000;
(bb) 3 percent for loans of more than $350,000 and less than $2,000,000; and
(cc) 1 percent for loans of not less than $2,000,000.
(II) With respect to a covered loan made on or after December 27, 2020, the Administrator shall reimburse such a lender—
(aa) for a covered loan of not more than $50,000, in an amount equal to the lesser of—
(AA) 50 percent of the balance of the financing outstanding at the time of disbursement of the covered loan; or
(BB) $2,500; and
(bb) at a rate, based on the balance of the financing outstanding at the time of disbursement of the covered loan, of—
(AA) 5 percent for a covered loan of more than $50,000 and not more than $350,000;
(BB) 3 percent for a covered loan of more than $350,000 and less than $2,000,000; and
(CC) 1 percent for a covered loan of not less than $2,000,000.
(ii)
(iii)
(iv)
(Q)
(R)
(S)
(i)
(I) insured depository institutions with consolidated assets of not less than $10,000,000,000 and less than $50,000,000,000; and
(II) credit unions with consolidated assets of not less than $10,000,000,000 and less than $50,000,000,000.
(ii)
(I) community financial institutions;
(II) insured depository institutions with consolidated assets of less than $10,000,000,000; and
(III) credit unions with consolidated assets of less than $10,000,000,000.
(T)
(U)
(V)
(i)
(I) operates as a sole proprietorship or as an independent contractor, or is an eligible self-employed individual;
(II) reports farm income or expenses on a Schedule F (or any equivalent successor schedule); and
(III) was in business as of February 15, 2020.
(ii)
(I) the sum of—
(aa) the product obtained by multiplying—
(AA) the gross income of the covered recipient in 2019, as reported on a Schedule F (or any equivalent successor schedule), that is not more than $100,000, divided by 12; and
(BB) 2.5; and
(bb) the outstanding amount of a loan under subsection (b)(2) that was made during the period beginning on January 31, 2020 and ending on April 3, 2020 that the borrower intends to refinance under the covered loan, not including any amount of any advance under the loan that is not required to be repaid; or
(II) $2,000,000.
(iii)
(iv)
(I) recalculate the maximum loan amount applicable to that covered loan based on the formula described in clause (ii) or (iii), as applicable, if doing so would result in a larger covered loan amount; and
(II) provide the covered recipient with additional covered loan amounts based on that recalculation.
(W)
(37)
(A)
(i) the terms "additional covered nonprofit entity", "eligible self-employed individual", "housing cooperative", "nonprofit organization", "payroll costs", "seasonal employer", and "veterans organization" have the meanings given those terms in paragraph (36), except that "eligible entity" shall be substituted for "eligible recipient" each place it appears in the definitions of those terms;
(ii) the term "covered loan" means a loan made under this paragraph;
(iii) the terms "covered mortgage obligation", "covered operating expenditure", "covered property damage cost", "covered rent obligation", "covered supplier cost", "covered utility payment", and "covered worker protection expenditure" have the meanings given those terms in
(iv) the term "eligible entity"—
(I) means any business concern, nonprofit organization, housing cooperative, veterans organization, Tribal business concern, eligible self-employed individual, sole proprietor, independent contractor, or small agricultural cooperative that—
(aa) employs not more than 300 employees; and
(bb)(AA) except as provided in subitems (BB), (CC), and (DD), had gross receipts during the first, second, third, or, only with respect to an application submitted on or after January 1, 2021, fourth quarter in 2020 that demonstrate not less than a 25 percent reduction from the gross receipts of the entity during the same quarter in 2019;
(BB) if the entity was not in business during the first or second quarter of 2019, but was in business during the third and fourth quarter of 2019, had gross receipts during the first, second, third, or, only with respect to an application submitted on or after January 1, 2021, fourth quarter of 2020 that demonstrate not less than a 25 percent reduction from the gross receipts of the entity during the third or fourth quarter of 2019;
(CC) if the entity was not in business during the first, second, or third quarter of 2019, but was in business during the fourth quarter of 2019, had gross receipts during the first, second, third, or, only with respect to an application submitted on or after January 1, 2021, fourth quarter of 2020 that demonstrate not less than a 25 percent reduction from the gross receipts of the entity during the fourth quarter of 2019; or
(DD) if the entity was not in business during 2019, but was in operation on February 15, 2020, had gross receipts during the second, third, or, only with respect to an application submitted on or after January 1, 2021, fourth quarter of 2020 that demonstrate not less than a 25 percent reduction from the gross receipts of the entity during the first quarter of 2020;
(II) includes a business concern or organization made eligible for a loan under paragraph (36) under subclause (II), (III), or (IV) of clause (iii), subclause (IV) or (V) of clause (iv), clause (vii), or clause (ix) of subparagraph (D) of paragraph (36) and that meets the requirements described in items (aa) and (bb) of subclause (I); and
(III) does not include—
(aa) any entity that is a type of business concern (or would be, if such entity were a business concern) described in section 120.110 of title 13, Code of Federal Regulations (or in any successor regulation or other related guidance or rule that may be issued by the Administrator) other than a business concern described in subsection (a) or (k) of such section; or
(bb) any business concern or entity primarily engaged in political or lobbying activities, which shall include any entity that is organized for research or for engaging in advocacy in areas such as public policy or political strategy or otherwise describes itself as a think tank in any public documents;
(cc) any business concern or entity—
(AA) for which an entity created in or organized under the laws of the People's Republic of China or the Special Administrative Region of Hong Kong, or that has significant operations in the People's Republic of China or the Special Administrative Region of Hong Kong, owns or holds, directly or indirectly, not less than 20 percent of the economic interest of the business concern or entity, including as equity shares or a capital or profit interest in a limited liability company or partnership; or
(BB) that retains, as a member of the board of directors of the business concern, a person who is a resident of the People's Republic of China;
(dd) any person required to submit a registration statement under
(ee) an eligible person or entity (as defined under
(v) the term "Tribal business concern" means a Tribal business concern described in
(B)
(C)
(i)
(I) the product obtained by multiplying—
(aa) at the election of the eligible entity, the average total monthly payment for payroll costs incurred or paid by the eligible entity during—
(AA) the 1-year period before the date on which the loan is made; or
(BB) calendar year 2019; by
(bb) 2.5; or
(II) $2,000,000.
(ii)
(I) the product obtained by multiplying—
(aa) at the election of the eligible entity, the average total monthly payments for payroll costs incurred or paid by the eligible entity for any 12-week period between February 15, 2019 and February 15, 2020; by
(bb) 2.5; or
(II) $2,000,000.
(iii)
(I) the product obtained by multiplying—
(aa) the quotient obtained by dividing—
(AA) the sum of the total monthly payments by the eligible entity for payroll costs paid or incurred by the eligible entity as of the date on which the eligible entity applies for the covered loan; by
(BB) the number of months in which those payroll costs were paid or incurred; by
(bb) 2.5; or
(II) $2,000,000.
(iv)
(I) the product obtained by multiplying—
(aa) at the election of the eligible entity, the average total monthly payment for payroll costs incurred or paid by the eligible entity during—
(AA) the 1-year period before the date on which the loan is made; or
(BB) calendar year 2019; by
(bb) 3.5; or
(II) $2,000,000.
(D)
(i)
(ii)
(E)
(i)
(ii)
(F)
(G)
(H)
(i) in lieu of the fee otherwise applicable under paragraph (23)(A), the Administrator shall collect no fee; and
(ii) in lieu of the fee otherwise applicable under paragraph (18)(A), the Administrator shall collect no fee.
(I)
(i)
(I) may submit a certification attesting that the eligible entity meets the applicable revenue loss requirement under subparagraph (A)(iv)(I)(bb); and
(II) if the eligible entity submits a certification under subclause (I), shall, on or before the date on which the eligible entity submits an application for forgiveness under subparagraph (J), produce adequate documentation that the eligible entity met such revenue loss standard.
(ii)
(J)
(i)
(ii)
(iii)
(I) Payroll costs, excluding any payroll costs that are—
(aa) qualified wages, as defined in subsection (c)(3) of section 2301 of the CARES Act (
(bb) qualified wages taken into account in determining the credit allowed under subsection (a) or (d) of section 303 of the Taxpayer Certainty and Disaster Relief Act of 2020; or
(cc) premiums taken into account in determining the credit allowed under
(II) Any payment of interest on any covered mortgage obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation).
(III) Any covered operations expenditure.
(IV) Any covered property damage cost.
(V) Any payment on any covered rent obligation.
(VI) Any covered utility payment.
(VII) Any covered supplier cost.
(VIII) Any covered worker protection expenditure.
(iv)
(I) the amount described in clause (ii); and
(II) the amount equal to the quotient obtained by dividing—
(aa) the amount of the covered loan used for payroll costs during the covered period; and
(bb) 0.60.
(v)
(K)
(L)
(i) for a covered loan of not more than $50,000, in an amount equal to the lesser of—
(I) 50 percent of the balance of the financing outstanding at the time of disbursement of the covered loan; or
(II) $2,500;
(ii) at a rate, based on the balance of the financing outstanding at the time of disbursement of the covered loan, of—
(I) 5 percent for a covered loan of more than $50,000 and not more than $350,000; and
(II) 3 percent for a covered loan of more than $350,000.
(M)
(N)
(O)
(i) has received a loan under paragraph (36); and
(ii) on or before the expected date on which the covered loan under this paragraph is disbursed to the eligible entity, has used, or will use, the full amount of the loan received under paragraph (36).
(P)
(b) Disaster loans; authorization, scope, terms and conditions, etc.
Except as to agricultural enterprises as defined in
(1)(A) to make such loans (either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate or deferred (guaranteed) basis) as the Administration may determine to be necessary or appropriate to repair, rehabilitate or replace property, real or personal, damaged or destroyed by or as a result of natural or other disasters: Provided, That such damage or destruction is not compensated for by insurance or otherwise: And provided further, That the Administration may increase the amount of the loan by up to an additional 20 per centum of the aggregate costs of such damage or destruction (whether or not compensated for by insurance or otherwise) if it determines such increase to be necessary or appropriate in order to protect the damaged or destroyed property from possible future disasters by taking mitigating measures, including—
(i) construction of retaining walls and sea walls;
(ii) grading and contouring land; and
(iii) relocating utilities and modifying structures, including construction of a safe room or similar storm shelter designed to protect property and occupants from tornadoes or other natural disasters, if such safe room or similar storm shelter is constructed in accordance with applicable standards issued by the Federal Emergency Management Agency;
(B) to refinance any mortgage or other lien against a totally destroyed or substantially damaged home or business concern: Provided, That no loan or guarantee shall be extended unless the Administration finds that (i) the applicant is not able to obtain credit elsewhere; (ii) such property is to be repaired, rehabilitated, or replaced; (iii) the amount refinanced shall not exceed the amount of physical loss sustained; and (iv) such amounts shall be reduced to the extent such mortgage or lien is satisfied by insurance or otherwise; and
(C) during fiscal years 2000 through 2004, to establish a predisaster mitigation program to make such loans (either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate or deferred (guaranteed) basis), as the Administrator may determine to be necessary or appropriate, to enable small businesses to use mitigation techniques in support of a formal mitigation program established by the Federal Emergency Management Agency, except that no loan or guarantee may be extended to a small business under this subparagraph unless the Administration finds that the small business is otherwise unable to obtain credit for the purposes described in this subparagraph;
(2) to make such loans (either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate or deferred (guaranteed) basis) as the Administration may determine to be necessary or appropriate to any small business concern, private nonprofit organization, or small agricultural cooperative located in an area affected by a disaster,9 (including drought), with respect to both farm-related and nonfarm-related small business concerns, if the Administration determines that the concern, the organization, or the cooperative has suffered a substantial economic injury as a result of such disaster and if such disaster constitutes—
(A) a major disaster, as determined by the President under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (
(B) a natural disaster, as determined by the Secretary of Agriculture pursuant to
(C) a disaster, as determined by the Administrator of the Small Business Administration;
(D) an emergency involving Federal primary responsibility determined to exist by the President under the
(E) if no disaster or emergency declaration has been issued pursuant to subparagraph (A), (B), (C), or (D), the Governor of a State in which a disaster or emergency has occurred may certify to the Small Business Administration that small business concerns, private nonprofit organizations, or small agricultural cooperatives (1) have suffered economic injury as a result of such disaster or emergency, and (2) are in need of financial assistance which is not available on reasonable terms in the disaster- or emergency-stricken area. Not later than 30 days after the date of receipt of such certification by a Governor of a State, the Administration shall respond in writing to that Governor on its determination and the reasons therefore,10 and may then make such loans as would have been available under this paragraph if a disaster or emergency declaration had been issued.
Provided, That no loan or guarantee shall be extended pursuant to this paragraph (2) unless the Administration finds that the applicant is not able to obtain credit elsewhere: Provided further, That for purposes of subparagraph (D), the Administrator shall deem that such an emergency affects each State or subdivision thereof (including counties), and that each State or subdivision has sufficient economic damage to small business concerns to qualify for assistance under this paragraph and the Administrator shall accept applications for such assistance immediately.
(3)(A) In this paragraph—
(i) the term "active service" has the meaning given that term in
(ii) the term "essential employee" means an individual who is employed by a small business concern and whose managerial or technical expertise is critical to the successful day-to-day operations of that small business concern; and
(iii) the term "substantial economic injury" means an economic harm to a business concern that results in the inability of the business concern—
(I) to meet its obligations as they mature;
(II) to pay its ordinary and necessary operating expenses; or
(III) to market, produce, or provide a product or service ordinarily marketed, produced, or provided by the business concern.
(B) The Administration may make such disaster loans (either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate or deferred basis) to assist a small business concern that has suffered or that is likely to suffer substantial economic injury as the result of an essential employee of such small business concern being ordered to perform active service for a period of more than 30 consecutive days.
(C) A small business concern described in subparagraph (B) shall be eligible to apply for assistance under this paragraph during the period beginning on the date on which the essential employee is ordered to active service and ending on the date that is 1 year after the date on which such essential employee is discharged or released from active service. The Administrator may, when appropriate (as determined by the Administrator), extend the ending date specified in the preceding sentence by not more than 1 year.
(D) Any loan or guarantee extended pursuant to this paragraph shall be made at the same interest rate as economic injury loans under paragraph (2).
(E) No loan may be made under this paragraph, either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate or deferred basis, if the total amount outstanding and committed to the borrower under this subsection would exceed $1,500,000, unless such applicant constitutes, or have 11 become due to changed economic circumstances, a major source of employment in its surrounding area, as determined by the Administration, in which case the Administration, in its discretion, may waive the $1,500,000 limitation.
(F) For purposes of assistance under this paragraph, no declaration of a disaster area shall be required.
(G)(i) Notwithstanding any other provision of law, the Administrator may make a loan under this paragraph of not more than $50,000 without collateral.
(ii) The Administrator may defer payment of principal and interest on a loan described in clause (i) during the longer of—
(I) the 1-year period beginning on the date of the initial disbursement of the loan; and
(II) the period during which the relevant essential employee is on active service.
(H) The Administrator shall give priority to any application for a loan under this paragraph and shall process and make a determination regarding such applications prior to processing or making a determination on other loan applications under this subsection, on a rolling basis.
(4)
(A)
(B)
(i) the deadline for submitting applications for assistance under this chapter relating to that major disaster;
(ii) information regarding the number of loan applications and disbursements processed by the Administrator relating to that major disaster for each day during the period beginning on the date on which that major disaster was declared and ending on the date of that report; and
(iii) an estimate of the number of potential applicants that have not submitted an application relating to that major disaster.
(5)
(A) the date of such declaration;
(B) cities and towns within the area of such declaration;
(C) loan application deadlines related to such disaster;
(D) all relevant contact information for victim services available through the Administration (including links to small business development center websites);
(E) links to relevant Federal and State disaster assistance websites, including links to websites providing information regarding assistance available from the Federal Emergency Management Agency;
(F) information on eligibility criteria for Administration loan programs, including where such applications can be found; and
(G) application materials that clearly state the function of the Administration as the Federal source of disaster loans for homeowners and renters.
(6)
(A)
(B)
(7)
(A)
(i) in the Office of the Disaster Assistance is not fewer than 800; and
(ii) in the Disaster Cadre of the Administration is not fewer than 1,000.
(B)
(i) detailing staffing levels on that date;
(ii) requesting, if practicable and determined appropriate by the Administrator, additional funds for additional employees; and
(iii) containing such additional information, as determined appropriate by the Administrator.
(8)
(A)
(B)
(9)
(A)
(B)
(i) have resulted in extraordinary levels of casualties or damage or disruption severely affecting the population (including mass evacuations), infrastructure, environment, economy, national morale, or government functions in an area;
(ii) be comparable to the description of a catastrophic incident in the National Response Plan of the Administration, or any successor thereto, unless there is no successor to such plan, in which case this clause shall have no force or effect; and
(iii) be of such size and scope that—
(I) the disaster assistance programs under the other paragraphs under this subsection are incapable of providing adequate and timely assistance to individuals or business concerns located within the disaster area; or
(II) a significant number of business concerns outside the disaster area have suffered disaster-related substantial economic injury as a result of the incident.
(C)
(i)
(ii)
(I)
(II)
(iii)
(D)
(i) the term "disaster area" means the area for which the applicable major disaster was declared;
(ii) the term "disaster-related substantial economic injury" means economic harm to a business concern that results in the inability of the business concern to—
(I) meet its obligations as it matures;
(II) meet its ordinary and necessary operating expenses; or
(III) market, produce, or provide a product or service ordinarily marketed, produced, or provided by the business concern because the business concern relies on materials from the disaster area or sells or markets in the disaster area; and
(iii) the term "eligible small business concern" means a small business concern—
(I) that has suffered disaster-related substantial economic injury as a result of the applicable major disaster; and
(II)(aa) for which not less than 25 percent of the market share of that small business concern is from business transacted in the disaster area;
(bb) for which not less than 25 percent of an input into a production process of that small business concern is from the disaster area; or
(cc) that relies on a provider located in the disaster area for a service that is not readily available elsewhere.
(10)
(11)
(12)
(A)
(B)
(C)
(D)
(E)
(i)
(ii)
(F)
(i)
(ii)
(G)
(H)
(13)
(A)
(B)
(14)
(A)
(B)
(i) identify a location described in subparagraph (A) in each county, parish, or similar unit of general local government in the area served by the district office; and
(ii) ensure that the locations identified under subparagraph (A) may be used as a recovery center without cost to the Government, to the extent practicable.
(15)
(A) scheduled site visits to ensure borrower eligibility and compliance with requirements established by the Administrator; and
(B) reviews of the use of the loan proceeds by an entity described in paragraph (2) to ensure compliance with requirements established by the Administrator.
(16) 12
(A)
(i) the term "rural area" means any county or other political subdivision of a State, the District of Columbia, or a territory or possession of the United States that is designated as a rural area by the Bureau of the Census; and
(ii) the term "significant damage" means, with respect to property, uninsured losses of not less than 40 percent of the estimated fair replacement value or pre-disaster fair market value of the damaged property, whichever is lower.
(B)
(i) the Governor of the State or the Chief Executive of the Indian tribal government in which the rural area is located requests such a declaration; and
(ii) any home, small business concern, private nonprofit organization, or small agricultural cooperative has incurred significant damage in the rural area.
(C)
(i) any economic injury that resulted from a major disaster declared by the President under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (
(ii) each request for assistance made by the Governor of a State or the Chief Executive of an Indian tribal government under subparagraph (B)(i) and the response of the Administrator, including the timeline for each response; and
(iii) any regulatory changes that will impact the ability of communities in rural areas to obtain disaster assistance under this subsection.
(16) 12
No loan under this subsection, including renewals and extensions thereof, may be made for a period or periods exceeding thirty years: Provided, That the Administrator may consent to a suspension in the payment of principal and interest charges on, and to an extension in the maturity of, the Federal share of any loan under this subsection for a period not to exceed five years, if (A) the borrower under such loan is a homeowner or a small business concern, (B) the loan was made to enable (i) such homeowner to repair or replace his home, or (ii) such concern to repair or replace plant or equipment which was damaged or destroyed as the result of a disaster meeting the requirements of clause (A) or (B) of paragraph (2) of this subsection, and (C) the Administrator determines such action is necessary to avoid severe financial hardship: Provided further, That the provisions of paragraph (1) of subsection (d) of this section shall not be applicable to any such loan having a maturity in excess of twenty years. Notwithstanding any other provision of law, and except as provided in subsection (d), the interest rate on the Administration's share of any loan made under subsection (b) shall not exceed the average annual interest rate on all interest-bearing obligations of the United States then forming a part of the public debt as computed at the end of the fiscal year next preceding the date of the loan and adjusted to the nearest one-eighth of 1 per centum plus one-quarter of 1 per centum: Provided, however, That the interest rate for loans made under paragraphs (1) and (2) hereof shall not exceed the rate of interest which is in effect at the time of the occurrence of the disaster. In agreements to participate in loans on a deferred basis under this subsection, such participation by the Administration shall not be in excess of 90 per centum of the balance of the loan outstanding at the time of disbursement. Notwithstanding any other provision of law, the interest rate on the Administration's share of any loan made pursuant to paragraph (1) of this subsection to repair or replace a primary residence and/or replace or repair damaged or destroyed personal property, less the amount of compensation by insurance or otherwise, with respect to a disaster occurring on or after July 1, 1976, and prior to October 1, 1978, shall be: 1 per centum on the amount of such loan not exceeding $10,000, and 3 per centum on the amount of such loan over $10,000 but not exceeding $40,000. The interest rate on the Administration's share of the first $250,000 of all other loans made pursuant to paragraph (1) of this subsection, with respect to a disaster occurring on or after July 1, 1976, and prior to October 1, 1978, shall be 3 per centum. All repayments of principal on the Administration's share of any loan made under the above provisions shall first be applied to reduce the principal sum of such loan which bears interest at the lower rates provided in this paragraph. The principal amount of any loan made pursuant to paragraph (1) in connection with a disaster which occurs on or after April 1, 1977, but prior to January 1, 1978, may be increased by such amount, but not more than $2,000, as the Administration determines to be reasonable in light of the amount and nature of loss, damage, or injury sustained in order to finance the installation of insulation in the property which was lost, damaged, or injured, if the uninsured, damaged portion of the property is 10 per centum or more of the market value of the property at the time of the disaster. Not later than June 1, 1978, the Administration shall prepare and transmit to the Select Committee on Small Business of the Senate, the Committee on Small Business of the House of Representatives, and the Committees of the Senate and House of Representatives having jurisdiction over measures relating to energy conservation, a report on its activities under this paragraph, including therein an evaluation of the effect of such activities on encouraging the installation of insulation in property which is repaired or replaced after a disaster which is subject to this paragraph, and its recommendations with respect to the continuation, modification, or termination of such activities.
In the administration of the disaster loan program under paragraphs (1) and (2) of this subsection, in the case of property loss or damage or injury resulting from a major disaster as determined by the President or a disaster as determined by the Administrator which occurs on or after January 1, 1971, and prior to July 1, 1973, the Small Business Administration, to the extent such loss or damage or injury is not compensated for by insurance or otherwise—
(A) may make any loan for repair, rehabilitation, or replacement of property damaged or destroyed without regard to whether the required financial assistance is otherwise available from private sources;
(B) may, in the case of the total destruction or substantial property damage of a home or business concern, refinance any mortgage or other liens outstanding against the destroyed or damaged property if such property is to be repaired, rehabilitated, or replaced, except that (1) in the case of a business concern, the amount refinanced shall not exceed the amount of the physical loss sustained, and (2) in the case of a home, the amount of each monthly payment of principal and interest on the loan after refinancing under this clause shall not be less than the amount of each such payment made prior to such refinancing;
(C) may, in the case of a loan made under clause (A) or a mortgage or other lien refinanced under clause (B) in connection with the destruction of, or substantial damage to, property owned and used as a residence by an individual who by reason of retirement, disability, or other similar circumstances relies for support on survivor, disability, or retirement benefits under a pension, insurance, or other programs, consent to the suspension of the payments of the principal of that loan, mortgage, or lien during the lifetime of that individual and his spouse for so long as the Administration determines that making such payments would constitute a substantial hardship;
(D) shall notwithstanding the provisions of any other law and upon presentation by the applicant of proof of loss or damage or injury and a bona fide estimate of cost of repair, rehabilitation, or replacement, cancel the principal of any loan made to cover a loss or damage or injury resulting from such disaster, except that—
(i) with respect to a loan made in connection with a disaster occurring on or after January 1, 1971 but prior to January 1, 1972, the total amount so canceled shall not exceed $2,500, and the interest on the balance of the loan shall be at a rate of 3 per centum per annum; and
(ii) with respect to a loan made in connection with a disaster occurring on or after January 1, 1972 but prior to July 1, 1973, the total amount so canceled shall not exceed $5,000 and the interest on the balance of the loan shall be at a rate of 1 percentum per annum.
(E) 13 A State grant made on or prior to July 1, 1979, shall not be considered compensation for the purpose of applying the provisions of section 312(a) of the Disaster Relief and Emergency Assistance Act [
With respect to any loan referred to in clause (D) which is outstanding on August 16, 1972, the Administrator shall—
(i) make such change in the interest rate on the balance of such loan as is required under that clause effective as of August 16, 1972; and
(ii) in applying the limitation set forth in that clause with respect to the total amount of such loan which may be canceled, consider as part of the amount so canceled any part of such loan which was previously canceled pursuant to section 231 of the Disaster Relief Act of 1970 [
Whoever wrongfully misapplies the proceeds of a loan obtained under this subsection shall be civilly liable to the Administrator in an amount equal to one-and-one half times the original principal amount of the loan.
(c) Private disaster loans
(1) Definitions
In this subsection—
(A) the term "disaster area" means any area for which the President declared a major disaster relating to which the Administrator declares eligibility for additional disaster assistance under subsection (b)(9), during the period of that major disaster declaration;
(B) the term "eligible individual" means an individual who is eligible for disaster assistance under subsection (b)(1) relating to a major disaster relating to which the Administrator declares eligibility for additional disaster assistance under subsection (b)(9);
(C) the term "eligible small business concern" means a business concern that is—
(i) a small business concern, as defined under this chapter; or
(ii) a small business concern, as defined in section 103 of the Small Business Investment Act of 1958 [
(D) the term "preferred lender" means a lender participating in the Preferred Lender Program;
(E) the term "Preferred Lender Program" has the meaning given that term in subsection (a)(2)(C)(ii); and
(F) the term "qualified private lender" means any privately-owned bank or other lending institution that—
(i) is not a preferred lender; and
(ii) the Administrator determines meets the criteria established under paragraph (10).
(2) Program required
The Administrator shall carry out a program, to be known as the Private Disaster Assistance program, under which the Administration may guarantee timely payment of principal and interest, as scheduled, on any loan made to an eligible small business concern located in a disaster area and to an eligible individual.
(3) Use of loans
A loan guaranteed by the Administrator under this subsection may be used for any purpose authorized under subsection (b).
(4) Online applications
(A) Establishment
The Administrator may establish, directly or through an agreement with another entity, an online application process for loans guaranteed under this subsection.
(B) Other Federal assistance
The Administrator may coordinate with the head of any other appropriate Federal agency so that any application submitted through an online application process established under this paragraph may be considered for any other Federal assistance program for disaster relief.
(C) Consultation
In establishing an online application process under this paragraph, the Administrator shall consult with appropriate persons from the public and private sectors, including private lenders.
(5) Maximum amounts
(A) Guarantee percentage
The Administrator may guarantee not more than 85 percent of a loan under this subsection.
(B) Loan amount
The maximum amount of a loan guaranteed under this subsection shall be $2,000,000.
(6) Terms and conditions
A loan guaranteed under this subsection shall be made under the same terms and conditions as a loan under subsection (b).
(7) Lenders
(A) In general
A loan guaranteed under this subsection made to—
(i) a qualified individual may be made by a preferred lender; and
(ii) a qualified small business concern may be made by a qualified private lender or by a preferred lender that also makes loans to qualified individuals.
(B) Compliance
If the Administrator determines that a preferred lender knowingly failed to comply with the underwriting standards for loans guaranteed under this subsection or violated the terms of the standard operating procedure agreement between that preferred lender and the Administration, the Administrator shall do 1 or more of the following:
(i) Exclude the preferred lender from participating in the program under this subsection.
(ii) Exclude the preferred lender from participating in the Preferred Lender Program for a period of not more than 5 years.
(8) Fees
(A) In general
The Administrator may not collect a guarantee fee under this subsection.
(B) Origination fee
The Administrator may pay a qualified private lender or preferred lender an origination fee for a loan guaranteed under this subsection in an amount agreed upon in advance between the qualified private lender or preferred lender and the Administrator.
(9) Documentation
A qualified private lender or preferred lender may use its own loan documentation for a loan guaranteed by the Administrator under this subsection, to the extent authorized by the Administrator. The ability of a lender to use its own loan documentation for a loan guaranteed under this subsection shall not be considered part of the criteria for becoming a qualified private lender under the regulations promulgated under paragraph (10).
(10) Implementation regulations
(A) In general
Not later than 1 year after the date of enactment of the Small Business Disaster Response and Loan Improvements Act of 2008, the Administrator shall issue final regulations establishing permanent criteria for qualified private lenders.
(B) Report to Congress
Not later than 6 months after the date of enactment of the Small Business Disaster Response and Loan Improvements Act of 2008, the Administrator shall submit a report on the progress of the regulations required by subparagraph (A) to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives.
(11) Authorization of appropriations
(A) In general
Amounts necessary to carry out this subsection shall be made available from amounts appropriated to the Administration to carry out subsection (b).
(B) Authority to reduce interest rates and other terms and conditions
Funds appropriated to the Administration to carry out this subsection,9 may be used by the Administrator to meet the loan terms and conditions specified in paragraph (6).
(12) Purchase of loans
The Administrator may enter into an agreement with a qualified private lender or preferred lender to purchase any loan guaranteed under this subsection.
(d) Extension or renewal of loans; purchase of participations; assumption of obligations; disaster loans; interest rates; loan amounts
(1) The Administration may further extend the maturity of or renew any loan made pursuant to this section, or any loan transferred to the Administration pursuant to Reorganization Plan Numbered 2 of 1954, or Reorganization Plan Numbered 1 of 1957, for additional periods not to exceed ten years beyond the period stated therein, if such extension or renewal will aid in the orderly liquidation of such loan.
(2) During any period in which principal and interest charges are suspended on the Federal share of any loan, as provided in subsection (b), the Administrator shall, upon the request of any person, firm, or corporation having a participation in such loan, purchase such participation, or assume the obligation of the borrower, for the balance of such period, to make principal and interest payments on the non-Federal share of such loan: Provided, That no such payments shall be made by the Administrator in behalf of any borrower unless (i) the Administrator determines that such action is necessary in order to avoid a default, and (ii) the borrower agrees to make payments to the Administration in an aggregate amount equal to the amount paid in its behalf by the Administrator, in such manner and at such times (during or after the term of the loan) as the Administrator shall determine having due regard to the purposes sought to be achieved by this paragraph.
(3) With respect to a disaster occurring on or after October 1, 1978, and prior 15 August 13, 1981, on the Administration's share of loans made pursuant to paragraph (1) of subsection (b)—
(A) if the loan proceeds are to repair or replace a primary residence and/or repair or replace damaged or destroyed personal property, the interest rate shall be 3 percent on the first $55,000 of such loan;
(B) if the loan proceeds are to repair or replace property damaged or destroyed and if the applicant is a business concern which is unable to obtain sufficient credit elsewhere, the interest rate shall be as determined by the Administration, but not in excess of 5 percent per annum; and
(C) if the loan proceeds are to repair or replace property damaged or destroyed and if the applicant is a business concern which is able to obtain sufficient credit elsewhere, the interest rate shall not exceed the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturities of such loans and adjusted to the nearest one-eighth of 1 percent, and an additional amount as determined by the Administration, but not to exceed 1 percent: Provided, That three years after such loan is fully disbursed and every two years thereafter for the term of the loan, if the Administration determines that the borrower is able to obtain a loan from non-Federal sources at reasonable rates and terms for loans of similar purposes and periods of time, the borrower shall, upon request by the Administration, apply for and accept such a loan in sufficient amount to repay the Administration: Provided further, That no loan under subsection (b)(1) shall be made, either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate or deferred basis, if the total amount outstanding and committed to the borrower under such subsection would exceed $500,000 for each disaster, unless an applicant constitutes a major source of employment in an area suffering a disaster, in which case the Administration, in its discretion, may waive the $500,000 limitation.
(4) Notwithstanding the provisions of any other law, the interest rate on the Federal share of any loan made under subsection (b) shall be—
(A) in the case of a homeowner unable to secure credit elsewhere, the rate prescribed by the Administration but not more than one-half the rate determined by the Secretary of the Treasury taking into consideration the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturities of such loans plus an additional charge of not to exceed 1 per centum per annum as determined by the Administrator, and adjusted to the nearest one-eighth of 1 per centum but not to exceed 8 per centum per annum;
(B) in the case of a homeowner able to secure credit elsewhere, the rate prescribed by the Administration but not more than the rate determined by the Secretary of the Treasury taking into consideration the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturities of such loans plus an additional charge of not to exceed 1 per centum per annum as determined by the Administrator, and adjusted to the nearest one-eighth of 1 per centum;
(C) in the case of a business concern unable to obtain credit elsewhere, not to exceed 8 per centum per annum;
(D) in the case of a business concern able to obtain credit elsewhere, the rate prescribed by the Administration but not in excess of the rate prevailing in private market for similar loans and not more than the rate prescribed by the Administration as the maximum interest rate for deferred participation (guaranteed) loans under subsection (a). Loans under this subparagraph shall be limited to a maximum term of three years.
(5) Notwithstanding the provisions of any other law, the interest rate on the Federal share of any loan made under subsection (b)(1) and (b)(2) on account of a disaster commencing on or after October 1, 1982, shall be—
(A) in the case of a homeowner unable to secure credit elsewhere, the rate prescribed by the Administration but not more than one-half the rate determined by the Secretary of the Treasury taking into consideration the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturities of such loan plus an additional charge of not to exceed 1 per centum per annum as determined by the Administrator, and adjusted to the nearest one-eighth of 1 per centum, but not to exceed 4 per centum per annum;
(B) in the case of a homeowner able to secure credit elsewhere, the rate prescribed by the Administration but not more than the rate determined by the Secretary of the Treasury taking into consideration the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturities of such loans plus an additional charge of not to exceed 1 per centum per annum as determined by the Administrator, and adjusted to the nearest one-eighth of 1 per centum, but not to exceed 8 per centum per annum;
(C) in the case of a business, private nonprofit organization, or other concern, including agricultural cooperatives, unable to obtain credit elsewhere, not to exceed 4 per centum per annum;
(D) in the case of a business concern able to obtain credit elsewhere, the rate prescribed by the Administration but not in excess of the lowest of (i) the rate prevailing in the private market for similar loans, (ii) the rate prescribed by the Administration as the maximum interest rate for deferred participation (guaranteed) loans under subsection (a), or (iii) 8 per centum per annum. Loans under this subparagraph shall be limited to a maximum term of 7 years.
(6) Notwithstanding the provisions of any other law, such loans, subject to the reductions required by subparagraphs (A) and (B) of subsection (b)(1), shall be in amounts equal to 100 per centum of loss. The interest rates for loans made under subsection (b)(1) and (2), as determined pursuant to paragraph (5), shall be the rate of interest which is in effect on the date of the disaster commenced: Provided, That no loan under subsection (b)(1) and (2) shall be made, either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate or deferred (guaranteed) basis, if the total amount outstanding and committed to the borrower under subsection (b) would exceed $500,000 for each disaster unless an applicant constitutes a major source of employment in an area suffering a disaster, in which case the Administration, in its discretion, may waive the $500,000 limitation: Provided further, That the Administration, subject to the reductions required by subparagraphs (A) and (B) of subsection (b)(1), shall not reduce the amount of eligibility for any homeowner on account of loss of real estate to less than $100,000 for each disaster nor for any homeowner or lessee on account of loss of personal property to less than $20,000 for each disaster, such sums being in addition to any eligible refinancing: Provided further, That the Administration shall not require collateral for loans of $14,000 or less (or such higher amount as the Administrator determines appropriate in the event of a major disaster) which are made under paragraph (1) of subsection (b): Provided further, That the Administrator, in obtaining the best available collateral for a loan of not more than $200,000 under paragraph (1) or (2) of subsection (b) relating to damage to or destruction of the property of, or economic injury to, a small business concern, shall not require the owner of the small business concern to use the primary residence of the owner as collateral if the Administrator determines that the owner has other assets of equal quality and with a value equal to or greater than the amount of the loan that could be used as collateral for the loan: Provided further, That nothing in the preceding proviso may be construed to reduce the amount of collateral required by the Administrator in connection with a loan described in the preceding proviso or to modify the standards used to evaluate the quality (rather than the type) of such collateral. Employees of concerns sharing a common business premises shall be aggregated in determining "major source of employment" status for nonprofit applicants owning such premises.
With respect to any loan which is outstanding on April 18, 1984, and which was made on account of a disaster commencing on or after October 1, 1982, the Administrator shall make such change in the interest rate on the balance of such loan as is required herein effective as of April 18, 1984.
(7) The Administration shall not withhold disaster assistance pursuant to this paragraph to nurseries who are victims of drought disasters. As used in subsection (b)(2) the term "an area affected by a disaster" includes any county, or county contiguous thereto, determined to be a disaster by the President, the Secretary of Agriculture or the Administrator of the Small Business Administration.
(8)
(A)
(i) for a loan to repair, rehabilitate, or replace property damaged or destroyed by reason of Superstorm Sandy; or
(ii) if such a small business concern has suffered substantial economic injury by reason of Superstorm Sandy, for a loan to assist such a small business concern.
(B)
(C)
(e) Funds for small business development centers under section 648 of this title
The Administration shall not fund any Small Business Development Center or any variation thereof, except as authorized in
(f) Additional requirements for subsection (b) loans
(1) 16 Increased deferment authorized
(A) In general
In making loans under subsection (b), the Administrator may provide, to the person receiving the loan, an option to defer repayment on the loan.
(B) Period
The period of a deferment under subparagraph (A) may not exceed 4 years.
(g) Net earnings clauses prohibited for subsection (b) loans
In making loans under subsection (b), the Administrator shall not require the borrower to pay any non-amortized amount for the first five years after repayment begins.
(h) Loans to handicapped persons and organizations for handicapped
(1) The Administration also is empowered, where other financial assistance is not available on reasonable terms, to make such loans (either directly or in cooperation with Banks or other lending institutions through agreements to participate on an immediate or deferred basis) as the Administration may determine to be necessary or appropriate—
(A) to assist any public or private organization—
(i) which is organized under the laws of the United States or of any State, operated in the interest of handicapped individuals, the net income of which does not inure in whole or in part to the benefit of any shareholder or other individual;
(ii) which complies with any applicable occupational health and safety standard prescribed by the Secretary of Labor; and
(iii) which, in the production of commodities and in the provision of services during any fiscal year in which it receives financial assistance under this subsection, employs handicapped individuals for not less than 75 per centum of the man-hours required for the production or provision of the commodities or services; or
(B) to assist any handicapped individual in establishing, acquiring, or operating a small business concern.
(2) The Administration's share of any loan made under this subsection shall not exceed $350,000, nor may any such loan be made if the total amount outstanding and committed (by participation or otherwise) to the borrower from the business loan and investment fund established by
(3) For purposes of this subsection, the term "handicapped individual" means a person who has a physical, mental, or emotional impairment, defect, ailment, disease, or disability of a permanent nature which in any way limits the selection of any type of employment for which the person would otherwise be qualified or qualifiable.
(i) Loans to small business concerns located in urban or rural areas with high proportions of unemployed or low-income individuals, or owned by low-income individuals
(1) The Administration also is empowered to make, participate (on an immediate basis) in, or guarantee loans, repayable in not more than fifteen years, to any small business concern, or to any qualified person seeking to establish such a concern, when it determines that such loans will further the policies established in section 631(b) 2 of this title, with particular emphasis on the preservation or establishment of small business concerns located in urban or rural areas with high proportions of unemployed or low-income individuals, or owned by low-income individuals: Provided, however, That no such loans shall be made, participated in, or guaranteed if the total of such Federal assistance to a single borrower outstanding at any one time would exceed $100,000. The Administration may defer payments on the principal of such loans for a grace period and use such other methods as it deems necessary and appropriate to assure the successful establishment and operation of such concern. The Administration may, in its discretion, as a condition of such financial assistance, require that the borrower take steps to improve his management skills by participating in a management training program approved by the Administration: Provided, however, That any management training program so approved must be of sufficient scope and duration to provide reasonable opportunity for the individuals served to develop entrepreneurial and managerial self-sufficiency.
(2) The Administration shall encourage, as far as possible, the participation of the private business community in the program of assistance to such concerns, and shall seek to stimulate new private lending activities to such concerns through the use of the loan guarantees, participations in loans, and pooling arrangements authorized by this subsection.
(3) To insure an equitable distribution between urban and rural areas for loans between $3,500 and $100,000 made under this subsection, the Administration is authorized to use the agencies and agreements and delegations developed under title III of the Economic Opportunity Act of 1964, as amended [
(4) The Administration shall provide for the continuing evaluation of programs under this subsection, including full information on the location, income characteristics, and types of businesses and individuals assisted, and on new private lending activity stimulated, and the results of such evaluation together with recommendations shall be included in the report required by
(5) Loans made pursuant to this subsection (including immediate participation in and guarantees of such loans) shall have such terms and conditions as the Administration shall determine, subject to the following limitations—
(A) there is reasonable assurance of repayment of the loan;
(B) the financial assistance is not otherwise available on reasonable terms from private sources or other Federal, State, or local programs;
(C) the amount of the loan, together with other funds available, is adequate to assure completion of the project or achievement of the purposes for which the loan is made;
(D) the loan bears interest at a rate not less than (i) a rate determined by the Secretary of the Treasury, taking into consideration the average market yield on outstanding Treasury obligations of comparable maturity, plus (ii) such additional charge, if any, toward covering other costs of the program as the Administration may determine to be consistent with its purposes: Provided, however, That the rate of interest charged on loans made in redevelopment areas designated under the Public Works and Economic Development Act of 1965 [
(E) fees not in excess of amounts necessary to cover administrative expenses and probable losses may be required on loan guarantees.
(6) The Administration shall take such steps as may be necessary to insure that, in any fiscal year, at least 50 per centum of the amounts loaned or guaranteed pursuant to this subsection are allotted to small business concerns located in urban areas identified by the Administration as having high concentrations of unemployed or low-income individuals or to small business concerns owned by low-income individuals. The Administration shall define the meaning of low income as it applies to owners of small business concerns eligible to be assisted under this subsection.
(7) No financial assistance shall be extended pursuant to this subsection where the Administration determines that the assistance will be used in relocating establishments from one area to another if such relocation would result in an increase in unemployment in the area of original location.
(j) Financial assistance for projects providing technical or management assistance; areas of high concentration of unemployment or low-income; preferences; manner and method of payment; accessible services; program evaluations; establishment of development program; coordination of policies
(1) The Administration shall provide financial assistance to public or private organizations to pay all or part of the cost of projects designed to provide technical or management assistance to individuals or enterprises eligible for assistance under subsection (i), paragraph (10) of this subsection; and
(2) Financial assistance under this subsection may be provided for projects, including, but not limited to—
(A) planning and research, including feasibility studies and market research;
(B) the identification and development of new business opportunities;
(C) the furnishing of centralized services with regard to public services and Federal Government programs including programs authorized under subsection (i); paragraph (10) of this subsection, and
(D) the establishment and strengthening of business service agencies, including trade associations and cooperatives; and
(E) the furnishing of business counseling, management training, and legal and other related services, with special emphasis on the development of management training programs using the resources of the business community, including the development of management training opportunities in existing business, and with emphasis in all cases upon providing management training of sufficient scope and duration to develop entrepreneurial and managerial self-sufficiency on the part of the individuals served.
(3) The Administration shall encourage the placement of subcontracts by businesses with small business concerns located in areas of high concentration of unemployed or low-income individuals, with small businesses owned by low-income individuals, and with small businesses eligible to receive contracts pursuant to
(4) The Administration shall give preference to projects which promote the ownership, participation in ownership, or management of small businesses owned by low-income individuals and small businesses eligible to receive contracts pursuant to
(5) The financial assistance authorized for projects under this subsection includes assistance advanced by grant, agreement, or contract.
(6) The Administration is authorized to make payments under grants and contracts entered into under this subsection in lump sum or installments, and in advance or by way of reimbursement, and in the case of grants, with necessary adjustments on account of overpayments or underpayments.
(7) To the extent feasible, services under this subsection shall be provided in a location which is easily accessible to the individuals and small business concerns served.
(8) Repealed.
(9) The Administration shall take such steps as may be necessary and appropriate, in coordination and cooperation with the heads of other Federal departments and agencies, to insure that contracts, subcontracts, and deposits made by the Federal Government or with programs aided with Federal funds are placed in such way as to further the purposes of subsections (i) and (j) and
(10) There is established within the Administration a small business and capital ownership development program (hereinafter referred to as the "Program") which shall provide assistance exclusively for small business concerns eligible to receive contracts pursuant to
(A) The Program shall—
(i) assist small business concerns participating in the Program (either through public or private organizations) to develop and maintain comprehensive business plans which set forth the Program Participant's specific business targets, objectives, and goals developed and maintained in conformity with subparagraph (D).17
(ii) provide for such other nonfinancial services as deemed necessary for the establishment, preservation, and growth of small business concerns participating in the Program, including but not limited to (I) loan packaging, (II) financial counseling, (III) accounting and bookkeeping assistance, (IV) marketing assistance, and (V) management assistance;
(iii) assist small business concerns participating in the Program to obtain equity and debt financing;
(iv) establish regular performance monitoring and reporting systems for small business concerns participating in the Program to assure compliance with their business plans;
(v) analyze and report the causes of success and failure of small business concerns participating in the Program; and
(vi) provide assistance necessary to help small business concerns participating in the Program to procure surety bonds, with such assistance including, but not limited to, (I) the preparation of application forms required to receive a surety bond, (II) special management and technical assistance designed to meet the specific needs of small business concerns participating in the Program and which have received or are applying to receive a surety bond, and (III) preparation of all forms necessary to receive a surety bond guarantee from the Administration pursuant to title IV, part B of the Small Business Investment Act of 1958 [
(B) Small business concerns eligible to receive contracts pursuant to
(C)(i) A small business concern participating in any program or activity conducted under the authority of this paragraph or eligible for the award of contracts pursuant to
(I) 9 years less the number of years since the award of its first contract pursuant to
(II) its original fixed program participation term (plus any extension thereof) assigned prior to November 15, 1988, plus eighteen months.
(ii) Nothing contained in this subparagraph shall be deemed to prevent the Administration from instituting a termination or graduation pursuant to subparagraph (F) or (H) for issues unrelated to the expiration of any time period limitation.
(D)(i) Promptly after certification under paragraph (11) a Program Participant shall submit a business plan (hereinafter referred to as the "plan") as described in clause (ii) of this subparagraph for review by the Business Opportunity Specialist assigned to assist such Program Participant. The plan may be a revision of a preliminary business plan submitted by the Program Participant or required by the Administration as a part of the application for certification under this section and shall be designed to result in the Program Participant eliminating the conditions or circumstances upon which the Administration determined eligibility pursuant to
(ii) The plans submitted under this subparagraph shall include the following:
(I) An analysis of market potential, competitive environment, and other business analyses estimating the Program Participant's prospects for profitable operations during the term of program participation and after graduation.
(II) An analysis of the Program Participant's strengths and weaknesses with particular attention to correcting any financial, managerial, technical, or personnel conditions which are likely to impede the small business concern from receiving contracts other than those awarded under
(III) Specific targets, objectives, and goals, for the business development of the Program Participant during the next and succeeding years utilizing the results of the analyses conducted pursuant to subclauses (I) and (II).
(IV) A transition management plan outlining specific steps to assure profitable business operations after graduation (to be incorporated into the Program Participant's plan during the first year of the transitional stage of Program participation).
(V) Estimates of contract awards pursuant to
(iii) Each Program Participant shall annually review its currently approved plan with its Business Opportunity Specialist and modify such plan as may be appropriate. Any modified plan shall be submitted to the Administration for approval. The currently approved plan shall be considered valid until such time as a modified plan is approved by the Business Opportunity Specialist. Annual reviews pertaining to years in the transitional stage of program participation shall require, as appropriate, a written verification that such Program Participant has complied with the requirements of subparagraph (I) relating to attaining business activity from sources other than contracts awarded pursuant to
(iv) Each Program Participant shall annually forecast its needs for contract awards under
(I) the aggregate dollar value of contract support to be sought on a noncompetitive basis under
(II) the types of contract opportunities being sought, identified by Standard Industrial Classification (SIC) Code or otherwise,
(III) an estimate of the dollar value of contract support to be sought on a competitive basis, and
(IV) such other information as may be requested by the Business Opportunity Specialist to provide effective business development assistance to the Program Participant.
(E) A small business concern participating in the program conducted under the authority of this paragraph and eligible for the award of contracts pursuant to
(i) voluntarily elects not to continue participation;
(ii) completes the period of Program participation as prescribed by paragraph (15);
(iii) is terminated pursuant to a termination proceeding conducted in accordance with
(iv) is graduated pursuant to a graduation proceeding conducted in accordance with
(F) For purposes of this section and
(i) the failure by such concern to maintain its eligibility for Program participation;
(ii) the failure of the concern to engage in business practices that will promote its competitiveness within a reasonable period of time as evidenced by, among other indicators, a pattern of unjustified delinquent performance or terminations for default with respect to contracts awarded under the authority of
(iii) a demonstrated pattern of failing to make required submissions or responses to the Administration in a timely manner;
(iv) the willful violation of any rule or regulation of the Administration pertaining to material issues;
(v) the debarment of the concern or its disadvantaged owners by any agency pursuant to subpart 9.4 of title 48, Code of Federal Regulations (or any successor regulation); or
(vi) the conviction of the disadvantaged owner or an officer of the concern for any offense indicating a lack of business integrity including any conviction for embezzlement, theft, forgery, bribery, falsification or violation of
(G) The Director of the Division may initiate a termination proceeding by recommending such action to the Associate Administrator for Minority Small Business and Capital Ownership Development. Whenever the Associate Administrator, or a designee of such officer, determines such termination is appropriate, within 15 days after making such a determination the Program Participant shall be provided a written notice of intent to terminate, specifying the reasons for such action. No Program Participant shall be terminated from the Program pursuant to subparagraph (F) without first being afforded an opportunity for a hearing in accordance with
(H) For the purposes of this subsection and
(I)(i) During the developmental stage of its participation in the Program, a Program Participant shall take all reasonable efforts within its control to attain the targets contained in its business plan for contracts awarded other than pursuant to
(ii) During the transitional stage of the Program a Program Participant shall be subject to regulations regarding business activity targets that are promulgated by the Administration pursuant to clause (iii);
(iii) The regulations referred to in clause (ii) shall:
(I) establish business activity targets applicable to Program Participants during the fifth year and each succeeding year of Program Participation; such targets, for such period of time, shall reflect a reasonably consistent increase in contracts awarded other than pursuant to
(II) require a Program Participant to attain its business activity targets;
(III) provide that, before the receipt of any contract to be awarded pursuant to
(IV) require the Administration to review each Program Participant's performance regarding attainment of business activity targets during periodic reviews of such Participant's business plan; and
(V) authorize the Administration to take appropriate remedial measures with respect to a Program Participant that has failed to attain a required business activity target for the purpose of reducing such Participant's dependence on contracts awarded pursuant to
(J)(i) The Administration shall conduct an evaluation of a Program Participant's eligibility for continued participation in the Program whenever it receives specific and credible information alleging that such Program Participant no longer meets the requirements for Program eligibility. Upon making a finding that a Program Participant is no longer eligible, the Administration shall initiate a termination proceeding in accordance with subparagraph (F). A Program Participant's eligibility for award of any contract under the authority of
(ii)(I) Except as authorized by subclauses (II) or (III), no award shall be made pursuant to
(II) In determining the size of a small business concern owned by a socially and economically disadvantaged Indian tribe (or a wholly owned business entity of such tribe), each firm's size shall be independently determined without regard to its affiliation with the tribe, any entity of the tribal government, or any other business enterprise owned by the tribe, unless the Administrator determines that one or more such tribally owned business concerns have obtained, or are likely to obtain, a substantial unfair competitive advantage within an industry category.
(III) Any joint venture established under the authority of section 602(b) of
(11)(A) The Associate Administrator for Minority Small Business and Capital Ownership Development shall be responsible for coordinating and formulating policies relating to Federal assistance to small business concerns eligible for assistance under subsection (i) and small business concerns eligible to receive contracts pursuant to
(B)(i) Except as provided in clause (iii), no individual who was determined pursuant to
(ii) Except as provided in clause (iii), any individual upon whom eligibility is based pursuant to
(iii) A socially and economically disadvantaged Indian tribe may own more than one small business concern eligible for assistance pursuant to paragraph (10) and
(I) the Indian tribe does not own another firm in the same industry which has been determined to be eligible to receive contracts under this program, and
(II) the individuals responsible for the management and daily operations of the concern do not manage more than two Program Participants.
(C) No concern, previously eligible for the award of contracts pursuant to
(D) A concern eligible for the award of contracts pursuant to this subsection shall remain eligible for such contracts if there is a transfer of ownership and control (as defined pursuant to
(E) There is established a Division of Program Certification and Eligibility (hereinafter referred to in this paragraph as the "Division") that shall be made part of the Office of Minority Small Business and Capital Ownership Development. The Division shall be headed by a Director who shall report directly to the Associate Administrator for Minority Small Business and Capital Ownership Development. The Division shall establish field offices within such regional offices of the Administration as may be necessary to perform efficiently its functions and responsibilities.
(F) Subject to the provisions of
(i) receive, review and evaluate applications for certification pursuant to paragraphs (4), (5), (6) and (7) of
(ii) advise each program applicant within 15 days after the receipt of an application as to whether such application is complete and suitable for evaluation and, if not, what matters must be rectified;
(iii) render recommendations on such applications to the Associate Administrator for Minority Small Business and Capital Ownership Development;
(iv) review and evaluate financial statements and other submissions from concerns participating in the program established by paragraph (10) to ascertain continued eligibility to receive subcontracts pursuant to
(v) make a request for the initiation of termination or graduation proceedings, as appropriate, to the Associate Administrator for Minority Small Business and Capital Ownership Development;
(vi) make recommendations to the Associate Administrator for Minority Small Business and Capital Ownership Development concerning protests from applicants that have been denied program admission;
(vii) decide protests regarding the status of a concern as a disadvantaged concern for purposes of any program or activity conducted under the authority of subsection (d) of
(viii) implement such policy directives as may be issued by the Associate Administrator for Minority Small Business and Capital Ownership Development pursuant to subparagraph (I) regarding, among other things, the geographic distribution of concerns to be admitted to the program and the industrial make-up of such concerns.
(G) An applicant shall not be denied admission into the program established by paragraph (10) due solely to a determination by the Division that specific contract opportunities are unavailable to assist in the development of such concern unless—
(i) the Government has not previously procured and is unlikely to procure the types of products or services offered by the concern; or
(ii) the purchases of such products or services by the Federal Government will not be in quantities sufficient to support the developmental needs of the applicant and other Program Participants providing the same or similar items or services.
(H) Not later than 90 days after receipt of a completed application for Program certification, the Associate Administrator for Minority Small Business and Capital Ownership Development shall certify a small business concern as a Program Participant or shall deny such application.
(I) Thirty days before the conclusion of each fiscal year, the Director of the Division shall review all concerns that have been admitted into the Program during the preceding 12-month period. The review shall ascertain the number of entrants, their geographic distribution and industrial classification. The Director shall also estimate the expected growth of the Program during the next fiscal year and the number of additional Business Opportunity Specialists, if any, that will be needed to meet the anticipated demand for the Program. The findings and conclusions of the Director shall be reported to the Associate Administrator for Minority Small Business and Capital Ownership Development by September 30 of each year. Based on such report and such additional data as may be relevant, the Associate Administrator shall, by October 31 of each year, issue policy and program directives applicable to such fiscal year that—
(i) establish priorities for the solicitation of program applications from underrepresented regions and industry categories;
(ii) assign staffing levels and allocate other program resources as necessary to meet program needs; and
(iii) establish priorities in the processing and admission of new Program Participants as may be necessary to achieve an equitable geographic distribution of concerns and a distribution of concerns across all industry categories in proportions needed to increase significantly contract awards to small business concerns owned and controlled by socially and economically disadvantaged individuals. When considering such increase the Administration shall give due consideration to those industrial categories where Federal purchases have been substantial but where the participation rate of such concerns has been limited.
(12)(A) The Administration shall segment the Capital Ownership Development Program into two stages: a developmental stage; and a transitional stage.
(B) The developmental stage of program participation shall be designed to assist the concern in its effort to overcome its economic disadvantage by providing such assistance as may be necessary and appropriate to access its markets and to strengthen its financial and managerial skills.
(C) The transitional stage of program participation shall be designed to overcome, insofar as practicable, the remaining elements of economic disadvantage and to prepare such concern for graduation from the program.
(13) A Program Participant, if otherwise eligible, shall be qualified to receive the following assistance during the stages of program participation specified in paragraph 12: 18
(A) Contract support pursuant to
(B) Financial assistance pursuant to subsection (a)(20).
(C) A maximum of two exemptions from the requirements of section 35(a) 2 of title 41, which exemptions shall apply only to contracts awarded pursuant to
(D) A maximum of five exemptions from the requirements of
(i) the Administration finds that such concern is unable to obtain the requisite bond or bonds from a surety and that no surety is willing to issue a bond subject to the guarantee provision of title IV of the Small Business Investment Act of 1958 (
(ii) the Administration and the agency providing the contracting opportunity have provided for the protection of persons furnishing materials or labor to the Program Participant by arranging for the direct disbursement of funds due to such persons by the procuring agency or through any bank the deposits of which are insured by the Federal Deposit Insurance Corporation; and
(iii) the contract to which it pertains does not exceed $3,000,000 in amount. This subparagraph shall cease to be effective on October 1, 1994.
(E) Financial assistance whereby the Administration may purchase in whole or in part, and on behalf of such concerns, skills training or upgrading for employees or potential employees of such concerns. Such assistance may be made without regard to
(i) such concern has documented that it has first explored the use of existing cost-free or cost-subsidized training programs offered by public and private sector agencies working with programs of employment and training and economic development;
(ii) no more than five employees or potential employees of such concern are recipients of any benefits under this subparagraph at any one time;
(iii) no more than $2,500 shall be made available for any one employee or potential employee;
(iv) the length of training or upgrading financed by this subparagraph shall be no less than one month nor more than six months;
(v) such concern has given adequate assurance it will employ the trainee or upgraded employee for at least six months after the training or upgrading financed by this subparagraph has been completed and each trainee or upgraded employee has provided a similar assurance to remain within the employ of such concern for such period; if such concern, trainee, or upgraded employee breaches this agreement, the Administration shall be entitled to and shall make diligent efforts to obtain from the violating party the repayment of all funds expended on behalf of the violating party, such repayment shall be made to the Administration together with such interest and costs of collection as may be reasonable; the violating party shall be barred from receiving any further assistance under this subparagraph;
(vi) the training to be financed may take place either at such concern's facilities or at those of the training provider; and
(vii) such concern will maintain such records as the Administration deems appropriate to ensure that the provisions of this paragraph and any other applicable law have not been violated.
(F)(i) The transfer of technology or surplus property owned by the United States to such a concern. Activities designed to effect such transfer shall be developed in cooperation with the heads of Federal agencies and shall include the transfer by grant, license, or sale of such technology or property to such a concern. Such property may be transferred to Program Participants on a priority basis. Technology or property transferred under this subparagraph shall be used by the concern during the normal conduct of its business operation and shall not be sold or transferred to any other party (other than the Government) during such concern's term of participation in the Program and for one year thereafter.
(ii)(I) In this clause—
(aa) the term "covered period" means the 2-year period beginning on the date on which the President declared the applicable major disaster; and
(bb) the term "disaster area" means the area for which the President has declared a major disaster, during the covered period.
(II) The Administrator may transfer technology or surplus property under clause (i) on a priority basis to a small business concern located in a disaster area if—
(aa) the small business concern meets the requirements for such a transfer, without regard to whether the small business concern is a Program Participant; and
(bb) for a small business concern that is a Program Participant, on and after the date on which the President declared the applicable major disaster, the small business concern has not received property under this subparagraph on the basis of the status of the small business concern as a Program Participant.
(III) For any transfer of property under this clause to a small business concern, the terms and conditions shall be the same as a transfer to a Program Participant, except that the small business concern shall agree not to sell or transfer the property to any party other than the Federal Government during the covered period.
(IV) A small business concern that receives a transfer of property under this clause may not receive a transfer of property under clause (i) during the covered period.
(V) If a small business concern sells or transfers property in violation of the agreement described in subclause (III), the Administrator may initiate proceedings to prohibit the small business concern from receiving a transfer of property under this clause or clause (i), in addition to any other remedy available to the Administrator.
(iii)(I) In this clause, the term "covered period" means—
(aa) in the case of a Puerto Rico business, the period beginning on August 13, 2018, and ending on the date on which the Oversight Board established under
(bb) in the case of a covered territory business, the period beginning on January 1, 2021, and ending on the date that is 4 years after such date.
(II) The Administrator may transfer technology or surplus property under clause (i) to a Puerto Rico business or a covered territory business if either such business meets the requirements for such a transfer, without regard to whether either such business is a Program Participant.
(G) Training assistance whereby the Administration shall conduct training sessions to assist individuals and enterprises eligible to receive contracts under
(H) Joint ventures, leader-follower arrangements, and teaming agreements between the Program Participant and other Program Participants and other business concerns with respect to contracting opportunities for the research, development, full-scale engineering or production of major systems. Such activities shall be undertaken on the basis of programs developed by the agency responsible for the procurement of the major system, with the assistance of the Administration.
(I) Transitional management business planning training and technical assistance.
(J) Program Participants in the developmental stage of Program participation shall be eligible for the assistance provided by subparagraphs (A), (B), (C), (D), (E), (F), and (G).
(14) Program Participants in the transitional stage of Program participation shall be eligible for the assistance provided by subparagraphs (A), (B), (F), (G), (H), and (I) of paragraph (13).
(15) Subject to the provisions of paragraph (10)(C), a small business concern may receive developmental assistance under the Program and contracts under
(A) no more than four years may be spent in the developmental stage of Program Participation; and
(B) no more than five years may be spent in the transitional stage of Program Participation.
(16)(A) The Administrator shall develop and implement a process for the systematic collection of data on the operations of the Program established pursuant to paragraph (10).
(B) Not later than April 30 of each year, the Administrator shall submit a report to the Congress on the Program that shall include the following:
(i) The average personal net worth of individuals who own and control concerns that were initially certified for participation in the Program during the immediately preceding fiscal year. The Administrator shall also indicate the dollar distribution of net worths, at $50,000 increments, of all such individuals found to be socially and economically disadvantaged. For the first report required pursuant to this paragraph the Administrator shall also provide the data specified in the preceding sentence for all eligible individuals in the Program as of November 15, 1988.
(ii) A description and estimate of the benefits and costs that have accrued to the economy and the Government in the immediately preceding fiscal year due to the operations of those business concerns that were performing contracts awarded pursuant to
(iii) A compilation and evaluation of those business concerns that have exited the Program during the immediately preceding three fiscal years. Such compilation and evaluation shall detail the number of concerns actively engaged in business operations, those that have ceased or substantially curtailed such operations, including the reasons for such actions, and those concerns that have been acquired by other firms or organizations owned and controlled by other than socially and economically disadvantaged individuals. For those businesses that have continued operations after they exited from the Program, the Administrator shall also separately detail the benefits and costs that have accrued to the economy during the immediately preceding fiscal year due to the operations of such concerns.
(iv) A listing of all participants in the Program during the preceding fiscal year identifying, by State and by Region, for each firm: the name of the concern, the race or ethnicity, and gender of the disadvantaged owners, the dollar value of all contracts received in the preceding year, the dollar amount of advance payments received by each concern pursuant to contracts awarded under
(v) The total dollar value of contracts and options awarded during the preceding fiscal year pursuant to
(vi) A description of such additional resources or program authorities as may be required to provide the types of services needed over the next two-year period to service the expected portfolio of firms certified pursuant to
(vii) The total dollar value of contracts and options awarded pursuant to
(C) The first report required by subparagraph (B) shall pertain to fiscal year 1990.
(k) Functions relating to loans and financial assistance for projects providing technical or management assistance to individuals or enterprises eligible for assistance as small business concerns located in urban or rural areas with high proportions of unemployed or low-income individuals, or owned by low-income individuals
In carrying out its functions under subsections (i) and (j) and
(1) to utilize, with their consent, the services and facilities of Federal agencies without reimbursement, and, with the consent of any State or political subdivision of a State, accept and utilize the services and facilities of such State or subdivision without reimbursement;
(2) to accept, in the name of the Administration, and employ or dispose of in furtherance of the purposes of this chapter, any money or property, real, personal, or mixed, tangible, or intangible, received by gift, devise, bequest, or otherwise;
(3) to accept voluntary and uncompensated services, notwithstanding the provisions of
(4) to employ experts and consultants or organizations thereof as authorized by
(l) Small business intermediary lending pilot program
(1) Definitions
In this subsection—
(A) the term "eligible intermediary"—
(i) means a private, nonprofit entity that—
(I) seeks or has been awarded a loan from the Administrator to make loans to small business concerns under this subsection; and
(II) has not less than 1 year of experience making loans to startup, newly established, or growing small business concerns; and
(ii) includes—
(I) a private, nonprofit community development corporation;
(II) a consortium of private, nonprofit organizations or nonprofit community development corporations; and
(III) an agency of or nonprofit entity established by a Native American Tribal Government; and
(B) the term "Program" means the small business intermediary lending pilot program established under paragraph (2).
(2) Establishment
There is established a 3-year small business intermediary lending pilot program, under which the Administrator may make direct loans to eligible intermediaries, for the purpose of making loans to startup, newly established, and growing small business concerns.
(3) Purposes
The purposes of the Program are—
(A) to assist small business concerns in areas suffering from a lack of credit due to poor economic conditions or changes in the financial market; and
(B) to establish a loan program under which the Administrator may provide loans to eligible intermediaries to enable the eligible intermediaries to provide loans to startup, newly established, and growing small business concerns for working capital, real estate, or the acquisition of materials, supplies, or equipment.
(4) Loans to eligible intermediaries
(A) Application
Each eligible intermediary desiring a loan under this subsection shall submit an application to the Administrator that describes—
(i) the type of small business concerns to be assisted;
(ii) the size and range of loans to be made;
(iii) the interest rate and terms of loans to be made;
(iv) the geographic area to be served and the economic, poverty, and unemployment characteristics of the area;
(v) the status of small business concerns in the area to be served and an analysis of the availability of credit; and
(vi) the qualifications of the applicant to carry out this subsection.
(B) Loan limits
No loan may be made to an eligible intermediary under this subsection if the total amount outstanding and committed to the eligible intermediary by the Administrator would, as a result of such loan, exceed $1,000,000 during the participation of the eligible intermediary in the Program.
(C) Loan duration
Loans made by the Administrator under this subsection shall be for a term of 20 years.
(D) Applicable interest rates
Loans made by the Administrator to an eligible intermediary under the Program shall bear an annual interest rate equal to 1.00 percent.
(E) Fees; collateral
The Administrator may not charge any fees or require collateral with respect to any loan made to an eligible intermediary under this subsection.
(F) Delayed payments
The Administrator shall not require the repayment of principal or interest on a loan made to an eligible intermediary under the Program during the 2-year period beginning on the date of the initial disbursement of funds under that loan.
(G) Maximum participants and amounts
During each of fiscal years 2011, 2012, and 2013, the Administrator may make loans under the Program—
(i) to not more than 20 eligible intermediaries; and
(ii) in a total amount of not more than $20,000,000.
(5) Loans to small business concerns
(A) In general
The Administrator, through an eligible intermediary, shall make loans to startup, newly established, and growing small business concerns for working capital, real estate, and the acquisition of materials, supplies, furniture, fixtures, and equipment.
(B) Maximum loan
An eligible intermediary may not make a loan under this subsection of more than $200,000 to any 1 small business concern.
(C) Applicable interest rates
A loan made by an eligible intermediary to a small business concern under this subsection, may have a fixed or a variable interest rate, and shall bear an interest rate specified by the eligible intermediary in the application of the eligible intermediary for a loan under this subsection.
(D) Review restrictions
The Administrator may not review individual loans made by an eligible intermediary to a small business concern before approval of the loan by the eligible intermediary.
(6) Termination
The authority of the Administrator to make loans under the Program shall terminate 3 years after September 27, 2010.
(m) Microloan Program
(1)(A) Purposes
The purposes of the Microloan Program are—
(i) to assist women, low-income, veteran (within the meaning of such term under
(ii) to assist small business concerns in those areas suffering from a lack of credit due to economic downturns;
(iii) to establish a microloan program to be administered by the Small Business Administration—
(I) to make loans to eligible intermediaries to enable such intermediaries to provide small-scale loans, particularly loans in amounts averaging not more than $10,000, to startup, newly established, or growing small business concerns for working capital or the acquisition of materials, supplies, or equipment;
(II) to make grants to eligible intermediaries that, together with non-Federal matching funds, will enable such intermediaries to provide intensive marketing, management, and technical assistance to microloan borrowers;
(III) to make grants to eligible nonprofit entities that, together with non-Federal matching funds, will enable such entities to provide intensive marketing, management, and technical assistance to assist low-income entrepreneurs and other low-income individuals obtain private sector financing for their businesses, with or without loan guarantees; and
(IV) to report to the Committees on Small Business of the Senate and the House of Representatives on the effectiveness of the microloan program and the advisability and feasibility of implementing such a program nationwide; and
(iv) to establish a welfare-to-work microloan initiative, which shall be administered by the Administration, in order to test the feasibility of supplementing the technical assistance grants provided under clauses (ii) and (iii) of subparagraph (B) to individuals who are receiving assistance under the State program funded under part A of title IV of the Social Security Act (
(I) establishing small businesses; and
(II) eliminating their dependence on that assistance.
(B) Establishment
There is established a microloan program, under which the Administration may—
(i) make direct loans to eligible intermediaries, as provided under paragraph (3), for the purpose of making short-term, fixed interest rate microloans to startup, newly established, and growing small business concerns under paragraph (6);
(ii) in conjunction with such loans and subject to the requirements of paragraph (4), make grants to such intermediaries for the purpose of providing intensive marketing, management, and technical assistance to small business concerns that are borrowers under this subsection; and
(iii) subject to the requirements of paragraph (5), make grants to nonprofit entities for the purpose of providing marketing, management, and technical assistance to low-income individuals seeking to start or enlarge their own businesses, if such assistance includes working with the grant recipient to secure loans in amounts not to exceed $50,000 from private sector lending institutions, with or without a loan guarantee from the nonprofit entity.
(2) Eligibility for participation
An intermediary shall be eligible to receive loans and grants under subparagraphs (B)(i) and (B)(ii) of paragraph (1) if it—
(A) meets the definition in paragraph (10); 2 and
(B) has at least 1 year of experience making microloans to startup, newly established, or growing small business concerns and providing, as an integral part of its microloan program, intensive marketing, management, and technical assistance to its borrowers.
(3) Loans to intermediaries
(A) Intermediary applications
(i) In general
As part of its application for a loan, each intermediary shall submit a description to the Administration of—
(I) the type of businesses to be assisted;
(II) the size and range of loans to be made;
(III) the geographic area to be served and its economic, poverty, and unemployment characteristics;
(IV) the status of small business concerns in the area to be served and an analysis of their credit and technical assistance needs;
(V) any marketing, management, and technical assistance to be provided in connection with a loan made under this subsection;
(VI) the local economic credit markets, including the costs associated with obtaining credit locally;
(VII) the qualifications of the applicant to carry out the purpose of this subsection; and
(VIII) any plan to involve other technical assistance providers (such as counselors from the Service Corps of Retired Executives or small business development centers) or private sector lenders in assisting selected business concerns.
(ii) Selection of intermediaries
In selecting intermediaries to participate in the program established under this subsection, the Administration shall give priority to those applicants that provide loans in amounts averaging not more than $10,000.
(B) Intermediary contribution
As a condition of any loan made to an intermediary under subparagraph (B)(i) of paragraph (1), the Administrator shall require the intermediary to contribute not less than 15 percent of the loan amount in cash from non-Federal sources.
(C) Loan limits
Notwithstanding subsection (a)(3), no loan shall be made under this subsection if the total amount outstanding and committed to one intermediary (excluding outstanding grants) from the business loan and investment fund established by this chapter would, as a result of such loan, exceed $750,000 in the first year of such intermediary's participation in the program, $7,000,000 (in the aggregate) in the remaining years of the intermediary's participation in the program, and $3,000,000 in any of those remaining years.
(D)(i) In general
The Administrator shall, by regulation, require each intermediary to establish a loan loss reserve fund, and to maintain such reserve fund until all obligations owed to the Administration under this subsection are repaid.
(ii) Level of loan loss reserve fund
(I) In general
Subject to subclause (III), the Administrator shall require the loan loss reserve fund of an intermediary to be maintained at a level equal to 15 percent of the outstanding balance of the notes receivable owed to the intermediary.
(II) Review of loan loss reserve
After the initial 5 years of an intermediary's participation in the program authorized by this subsection, the Administrator shall, at the request of the intermediary, conduct a review of the annual loss rate of the intermediary. Any intermediary in operation under this subsection prior to October 1, 1994, that requests a reduction in its loan loss reserve shall be reviewed based on the most recent 5-year period preceding the request.
(III) Reduction of loan loss reserve
Subject to the requirements of clause IV,19 the Administrator may reduce the annual loan loss reserve requirement of an intermediary to reflect the actual average loan loss rate for the intermediary during the preceding 5-year period, except that in no case shall the loan loss reserve be reduced to less than 10 percent of the outstanding balance of the notes receivable owed to the intermediary.
(IV) Requirements
The Administrator may reduce the annual loan loss reserve requirement of an intermediary only if the intermediary demonstrates to the satisfaction of the Administrator that—
(aa) the average annual loss rate for the intermediary during the preceding 5-year period is less than 15 percent; and
(bb) that 20 no other factors exist that may impair the ability of the intermediary to repay all obligations owed to the Administration under this subsection.
(E) Unavailability of comparable credit
An intermediary may make a loan under this subsection of more than $20,000 to a small business concern only if such small business concern demonstrates that it is unable to obtain credit elsewhere at comparable interest rates and that it has good prospects for success. In no case shall an intermediary make a loan under this subsection of more than $50,000, or have outstanding or committed to any 1 borrower more than $50,000.
(F) Loan duration; interest rates
(i) Loan duration
Loans made by the Administration under this subsection shall be for a term of 10 years.
(ii) Applicable interest rates
Except as provided in clause (iii), loans made by the Administration under this subsection to an intermediary shall bear an interest rate equal to 1.25 percentage points below the rate determined by the Secretary of the Treasury for obligations of the United States with a period of maturity of 5 years, adjusted to the nearest one-eighth of 1 percent.
(iii) Rates applicable to certain small loans
Loans made by the Administration to an intermediary that makes loans to small business concerns and entrepreneurs averaging not more than $7,500, shall bear an interest rate that is 2 percentage points below the rate determined by the Secretary of the Treasury for obligations of the United States with a period of maturity of 5 years, adjusted to the nearest one-eighth of 1 percent.
(iv) Rates applicable to multiple sites or offices
The interest rate prescribed in clause (ii) or (iii) shall apply to each separate loan-making site or office of 1 intermediary only if such site or office meets the requirements of that clause.
(v) Rate basis
The applicable rate of interest under this paragraph shall—
(I) be applied retroactively for the first year of an intermediary's participation in the program, based upon the actual lending practices of the intermediary as determined by the Administration prior to the end of such year; and
(II) be based in the second and subsequent years of an intermediary's participation in the program, upon the actual lending practices of the intermediary during the term of the intermediary's participation in the program.
(vii) 21 Covered intermediaries
The interest rates prescribed in this subparagraph shall apply to all loans made to intermediaries under this subsection on or after October 28, 1991.
(G) Delayed payments
The Administration shall not require repayment of interest or principal of a loan made to an intermediary under this subsection during the first year of the loan.
(H) Fees; collateral
Except as provided in subparagraphs (B) and (D), the Administration shall not charge any fees or require collateral other than an assignment of the notes receivable of the microloans with respect to any loan made to an intermediary under this subsection.
(4) Marketing, management and technical assistance grants to intermediaries
Grants made in accordance with subparagraph (B)(ii) of paragraph (1) shall be subject to the following requirements:
(A) Grant amounts
Except as otherwise provided in subparagraphs (C) and (G) and subject to subparagraph (B), each intermediary that receives a loan under subparagraph (B)(i) of paragraph (1) shall be eligible to receive a grant to provide marketing, management, and technical assistance to small business concerns that are borrowers under this subsection. Except as provided in subparagraphs (C) and (G), each intermediary meeting the requirements of subparagraph (B) may receive a grant of not more than 25 percent of the total outstanding balance of loans made to it under this subsection.
(B) Contribution
As a condition of a grant made under subparagraph (A), the Administrator shall require the intermediary to contribute an amount equal to 25 percent of the amount of the grant, obtained solely from non-Federal sources. In addition to cash or other direct funding, the contribution may include indirect costs or in-kind contributions paid for under non-Federal programs.
(C) Additional technical assistance grants for making certain loans
(i) In general
In addition to grants made under subparagraph (A) or (G), each intermediary shall be eligible to receive a grant equal to 5 percent of the total outstanding balance of loans made to the intermediary under this subsection if—
(I) the intermediary provides not less than 25 percent of its loans to small business concerns located in or owned by 1 or more residents of an economically distressed area; or
(II) the intermediary has a portfolio of loans made under this subsection—
(aa) that averages not more than $10,000 during the period of the intermediary's participation in the program; or
(bb) of which not less than 25 percent is serving rural areas during the period of the intermediary's participation in the program.
(ii) Purposes
A grant awarded under clause (i) may be used to provide marketing, management, and technical assistance to small business concerns that are borrowers under this subsection.
(iii) Contribution exception
The contribution requirements in subparagraph (B) do not apply to grants made under this subparagraph.
(D) Eligibility for multiple sites or offices
The eligibility for a grant described in subparagraph (A),9 or (C) shall be determined separately for each loan-making site or office of 1 intermediary.
(E) Assistance to certain small business concerns
(i) In general
Each intermediary may expend an amount not to exceed 50 percent of the grant funds received under paragraph (1)(B)(ii) to provide information and technical assistance to small business concerns that are prospective borrowers under this subsection.
(ii) Technical assistance
An intermediary may expend not more than 50 percent of the funds received under paragraph (1)(B)(ii) to enter into third party contracts for the provision of technical assistance.
(F) Supplemental grant
(i) In general
The Administration may accept any funds transferred to the Administration from other departments or agencies of the Federal Government to make grants in accordance with this subparagraph and section 202(b) of the Small Business Reauthorization Act of 1997 to participating intermediaries and technical assistance providers under paragraph (5), for use in accordance with clause (iii) to provide additional technical assistance and related services to recipients of assistance under a State program described in paragraph (1)(A)(iv) at the time they initially apply for assistance under this subparagraph.
(ii) Eligible recipients; grant amounts
In making grants under this subparagraph, the Administration may select, from among participating intermediaries and technical assistance providers described in clause (i), not more than 20 grantees in fiscal year 1998, not more than 25 grantees in fiscal year 1999, and not more than 30 grantees in fiscal year 2000, each of whom may receive a grant under this subparagraph in an amount not to exceed $200,000 per year.
(iii) Use of grant amounts
Grants under this subparagraph—
(I) are in addition to other grants provided under this subsection and shall not require the contribution of matching amounts as a condition of eligibility; and
(II) may be used by a grantee—
(aa) to pay or reimburse a portion of child care and transportation costs of recipients of assistance described in clause (i), to the extent such costs are not otherwise paid by State block grants under the Child Care Development Block Grant Act of 1990 (
(bb) for marketing, management, and technical assistance to recipients of assistance described in clause (i).
(iv) Memorandum of Understanding
Prior to accepting any transfer of funds under clause (i) from a department or agency of the Federal Government, the Administration shall enter into a Memorandum of Understanding with the department or agency, which shall—
(I) specify the terms and conditions of the grants under this subparagraph; and
(II) provide for appropriate monitoring of expenditures by each grantee under this subparagraph and each recipient of assistance described in clause (i) who receives assistance from a grantee under this subparagraph, in order to ensure compliance with this subparagraph by those grantees and recipients of assistance.
(G) Grant amounts based on appropriations
In any fiscal year in which the amount appropriated to make grants under subparagraph (A) is sufficient to provide to each intermediary that receives a loan under paragraph (1)(B)(i) a grant of not less than 25 percent of the total outstanding balance of loans made to the intermediary under this subsection, the Administration shall make a grant under subparagraph (A) to each intermediary of not less than 25 percent and not more than 30 percent of that total outstanding balance for the intermediary.
(5) Private sector borrowing technical assistance grants
Grants made in accordance with subparagraph (B)(iii) of paragraph (1) shall be subject to the following requirements:
(A) Grant amounts
Subject to the requirements of subparagraph (B), the Administration may make not more than 55 grants annually, each in amounts not to exceed $200,000 for the purposes specified in subparagraph (B)(iii) of paragraph (1).
(B) Contribution
As a condition of any grant made under subparagraph (A), the Administration shall require the grant recipient to contribute an amount equal to 20 percent of the amount of the grant, obtained solely from non-Federal sources. In addition to cash or other direct funding, the contribution may include indirect costs or in-kind contributions paid for under non-Federal programs.
(6) Loans to small business concerns from eligible intermediaries
(A) In general
An eligible intermediary shall make short-term, fixed rate loans to startup, newly established, and growing small business concerns from the funds made available to it under subparagraph (B)(i) of paragraph (1) for working capital and the acquisition of materials, supplies, furniture, fixtures, and equipment.
(B) Portfolio requirement
To the extent practicable, each intermediary that operates a microloan program under this subsection shall maintain a microloan portfolio with an average loan size of not more than $15,000.
(C) Interest limit
Notwithstanding any provision of the laws of any State or the constitution of any State pertaining to the rate or amount of interest that may be charged, taken, received, or reserved on a loan, the maximum rate of interest to be charged on a microloan funded under this subsection shall not exceed the rate of interest applicable to a loan made to an intermediary by the Administration—
(i) in the case of a loan of more than $7,500 made by the intermediary to a small business concern or entrepreneur by more than 7.75 percentage points; and
(ii) in the case of a loan of not more than $7,500 made by the intermediary to a small business concern or entrepreneur by more than 8.5 percentage points.
(D) Review restriction
The Administration shall not review individual microloans made by intermediaries prior to approval.
(E) Establishment of child care or transportation businesses
In addition to other eligible small businesses concerns, borrowers under any program under this subsection may include individuals who will use the loan proceeds to establish for-profit or nonprofit child care establishments or businesses providing for-profit transportation services.
(7) Program funding for microloans
(A) Number of participants
Under the program authorized by this subsection, the Administration may fund, on a competitive basis, not more than 300 intermediaries.
(B) Allocation
(i) Minimum allocation
Subject to the availability of appropriations, of the total amount of new loan funds made available for award under this subsection in each fiscal year, the Administration shall make available for award in each State (including the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, and American Samoa) an amount equal to the sum of—
(I) the lesser of—
(aa) $800,000; or
(bb) 1/55 of the total amount of new loan funds made available for award under this subsection for that fiscal year; and
(II) any additional amount, as determined by the Administration.
(ii) Redistribution
If, at the beginning of the third quarter of a fiscal year, the Administration determines that any portion of the amount made available to carry out this subsection is unlikely to be made available under clause (i) during that fiscal year, the Administration may make that portion available for award in any one or more States (including the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, and American Samoa) without regard to clause (i).
(8) Equitable distribution of intermediaries
In approving microloan program applicants and providing funding to intermediaries under this subsection, the Administration shall select and provide funding to such intermediaries as will ensure appropriate availability of loans for small businesses in all industries located throughout each State, particularly those located in urban and in rural areas.
(9) Grants for management, marketing, technical assistance, and related services
(A) In general
The Administration may procure technical assistance for intermediaries participating in the Microloan Program to ensure that such intermediaries have the knowledge, skills, and understanding of microlending practices necessary to operate successful microloan programs.
(B) Assistance amount
The Administration shall transfer 7 percent of its annual appropriation for loans and loan guarantees under this subsection to the Administration's Salaries and Expense Account for the specific purpose of providing 1 or more technical assistance grants to experienced microlending organizations and national and regional nonprofit organizations that have demonstrated experience in providing training support for microenterprise development and financing.22 to achieve the purpose set forth in subparagraph (A).
(C) Welfare-to-work microloan initiative
Of amounts made available to carry out the welfare-to-work microloan initiative under paragraph (1)(A)(iv) in any fiscal year, the Administration may use not more than 5 percent to provide technical assistance, either directly or through contractors, to welfare-to-work microloan initiative grantees, to ensure that, as grantees, they have the knowledge, skills, and understanding of microlending and welfare-to-work transition, and other related issues, to operate a successful welfare-to-work microloan initiative.
(10) Report to Congress
On November 1, 1995, the Administration shall submit to the Committees on Small Business of the Senate and the House of Representatives a report, including the Administration's evaluation of the effectiveness of the first 3½ years of the microloan program and the following:
(A) the numbers and locations of the intermediaries funded to conduct microloan programs;
(B) the amounts of each loan and each grant to intermediaries;
(C) a description of the matching contributions of each intermediary;
(D) the numbers and amounts of microloans made by the intermediaries to small business concern borrowers;
(E) the repayment history of each intermediary;
(F) a description of the loan portfolio of each intermediary including the extent to which it provides microloans to small business concerns in rural areas; and
(G) any recommendations for legislative changes that would improve program operations.
(11) Definitions
For purposes of this subsection—
(A) the term "intermediary" means—
(i) a private, nonprofit entity;
(ii) a private, nonprofit community development corporation;
(iii) a consortium of private, nonprofit organizations or nonprofit community development corporations;
(iv) a quasi-governmental economic development entity (such as a planning and development district), other than a State, county, municipal government, or any agency thereof, if—
(I) no application is received from an eligible nonprofit organization; or
(II) the Administration determines that the needs of a region or geographic area are not adequately served by an existing, eligible nonprofit organization that has submitted an application; or
(v) an agency of or nonprofit entity established by a Native American Tribal Government,
that seeks to borrow or has borrowed funds from the Administration to make microloans to small business concerns under this subsection;
(B) the term "microloan" means a short-term, fixed rate loan of not more than $50,000, made by an intermediary to a startup, newly established, or growing small business concern;
(C) the term "rural area" means any political subdivision or unincorporated area—
(i) in a nonmetropolitan county (as defined by the Secretary of Agriculture) or its equivalent thereof; or
(ii) in a metropolitan county or its equivalent that has a resident population of less than 20,000 if the Small Business Administration has determined such political subdivision or area to be rural.23
(D) the term "economically distressed area", as used in paragraph (4), means a county or equivalent division of local government of a State in which the small business concern is located, in which, according to the most recent data available from the Bureau of the Census, Department of Commerce, not less than 40 percent of residents have an annual income that is at or below the poverty level.
(12) Deferred participation loan pilot
In lieu of making direct loans to intermediaries as authorized in paragraph (1)(B), during fiscal years 1998 through 2000, the Administration may, on a pilot program basis, participate on a deferred basis of not less than 90 percent and not more than 100 percent on loans made to intermediaries by a for-profit or nonprofit entity or by alliances of such entities, subject to the following conditions:
(A) Number of loans
In carrying out this paragraph, the Administration shall not participate in providing financing on a deferred basis to more than 10 intermediaries in urban areas or more than 10 intermediaries in rural areas.
(B) Term of loans
The term of each loan shall be 10 years. During the first year of the loan, the intermediary shall not be required to repay any interest or principal. During the second through fifth years of the loan, the intermediary shall be required to pay interest only. During the sixth through tenth years of the loan, the intermediary shall be required to make interest payments and fully amortize the principal.
(C) Interest rate
The interest rate on each loan shall be the rate specified by paragraph (3)(F) for direct loans.
(13) Evaluation of welfare-to-work microloan initiative
On January 31, 1999, and annually thereafter, the Administration shall submit to the Committees on Small Business of the House of Representatives and the Senate a report on any monies distributed pursuant to paragraph (4)(F).
(n) Repayment deferred for active service reservists
(1) Definitions
In this subsection:
(A) Active service
The term "active service" has the meaning given that term in
(B) Eligible reservist
The term "eligible reservist" means a member of a reserve component of the Armed Forces ordered to perform active service for a period of more than 30 consecutive days.
(C) Essential employee
The term "essential employee" means an individual who is employed by a small business concern and whose managerial or technical expertise is critical to the successful day-to-day operations of that small business concern.
(D) Qualified borrower
The term "qualified borrower" means—
(i) an individual who is an eligible reservist and who received a direct loan under subsection (a) or (b) before being ordered to active service; or
(ii) a small business concern that received a direct loan under subsection (a) or (b) before an eligible reservist, who is an essential employee, was ordered to active service.
(2) Deferral of direct loans
(A) In general
The Administration shall, upon written request, defer repayment of principal and interest due on a direct loan made under subsection (a) or (b), if such loan was incurred by a qualified borrower.
(B) Period of deferral
The period of deferral for repayment under this paragraph shall begin on the date on which the eligible reservist is ordered to active service and shall terminate on the date that is 180 days after the date such eligible reservist is discharged or released from active service.
(C) Interest rate reduction during deferral
Notwithstanding any other provision of law, during the period of deferral described in subparagraph (B), the Administration may, in its discretion, reduce the interest rate on any loan qualifying for a deferral under this paragraph.
(3) Deferral of loan guarantees and other financings
The Administration shall—
(A) encourage intermediaries participating in the program under subsection (m) to defer repayment of a loan made with proceeds made available under that subsection, if such loan was incurred by a small business concern that is eligible to apply for assistance under subsection (b)(3); and
(B) not later than 30 days after August 17, 1999, establish guidelines to—
(i) encourage lenders and other intermediaries to defer repayment of, or provide other relief relating to, loan guarantees under subsection (a) and financings under
(ii) implement a program to provide for the deferral of repayment or other relief to any intermediary providing relief to a small business borrower under this paragraph.
(
Editorial Notes
References in Text
Subsections (b) and (c) of
The Small Business Investment Act of 1958, referred to in subsecs. (a)(13), (36)(A)(xi)(III) and (j)(10)(A)(vi), (13)(D)(i), is
The Trade Act of 1974, referred to in subsec. (a)(16)(E), is
Section 7002(b) of the Families First Coronavirus Response Act, referred to in subsec. (a)(36)(A)(v), is section 7002(b) of
Section 7001 of the Families First Coronavirus Response Act, referred to in subsec. (a)(36)(A)(viii)(II)(dd), is section 7001 of
Section 7003 of the Families First Coronavirus Response Act, referred to in subsec. (a)(36)(A)(viii)(II)(ee), is section 7003 of
Section 308 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, referred to in subsec. (a)(36)(A)(xi)(II), is section 308 of
The Communications Act of 1934, referred to in subsec. (a)(36)(D)(iii)(II)(aa), (IV)(aa), is act June 19, 1934, ch. 652,
The Federal Deposit Insurance Act, referred to in subsec. (a)(36)(O)(ii), is act Sept. 21, 1950, ch. 967, §2,
Section 2301 of the CARES Act, referred to in subsec. (a)(37)(J)(iii)(I)(aa), is section 2301 of
Section 303 of the Taxpayer Certainty and Disaster Relief Act of 2020, referred to in subsec. (a)(37)(J)(iii)(I)(bb), is section 303 of of div. EE of
The Robert T. Stafford Disaster Relief and Emergency Assistance Act, referred to in subsec. (b), is
Section 231 of the Disaster Relief Act of 1970 [
The date of enactment of the Small Business Disaster Response and Loan Improvements Act of 2008, referred to in subsec. (c)(10), is the date of enactment of subtitle B (§§12051–12091) of title XII of
Reorganization Plan Numbered 2 of 1954, referred to in subsec. (d)(1), is set out in the Appendix to Title 5, Government Organization and Employees.
Reorganization Plan Numbered 1 of 1957, referred to in subsec. (d)(1), is set out in the Appendix to Title 5.
The Economic Opportunity Act of 1964, referred to in subsec. (i)(3), is
The Public Works and Economic Development Act of 1965, referred to in subsec. (i)(5)(D), is
Section 602(b) of
The Workforce Innovation and Opportunity Act, referred to in subsec. (j)(13)(E), is
The Social Security Act, referred to in subsec. (m)(1)(A)(iv), (4)(F)(iii)(II)(aa), is act Aug. 14, 1935, ch. 531,
Paragraph (10), referred to in subsec. (m)(2)(A), was redesignated paragraph (11) by
Section 202(b) of the Small Business Reauthorization Act of 1997, referred to in subsec. (m)(4)(F)(i), is section 202(b) of
The Child Care and Development Block Grant Act of 1990, referred to in subsec. (m)(4)(F)(iii)(II)(aa), is subchapter C (§658A et seq.) of
Codification
September 30, 1996, referred to in subsec. (a)(25)(C), was in the original "the date of enactment of this subsection" which was translated as meaning the date of enactment of
In subsec. (d)(3), "August 13, 1981" substituted for "the effective date of this Act", such words having been inserted in place of "to October 1, 1983" by section 1914 of
In subsec. (j)(11)(B)(i), as enacted by the amendments made by
"
In subsec. (k)(3), "
Prior Provisions
Provisions similar to those comprising subsec. (e) of this section were contained in section 2(a) and (b) of
Prior similar provisions were contained in section 207 of act July 30, 1953, ch. 282, title II,
Amendments
2022—Subsec. (a)(36)(W).
Subsec. (a)(37)(P).
Subsec. (b)(16).
2021—Subsec. (a)(36)(A)(iii).
Subsec. (a)(36)(A)(xvii).
Subsec. (a)(36)(D)(iii)(III).
Subsec. (a)(36)(D)(iii)(IV).
Subsec. (a)(36)(D)(iv)(V).
Subsec. (a)(36)(D)(v).
Subsec. (a)(36)(D)(viii)(II).
Subsec. (a)(36)(D)(ix).
Subsec. (a)(37)(A)(i).
Subsec. (a)(37)(A)(iv)(II).
Subsec. (a)(37)(J)(iii)(I)(cc).
Subsec. (j)(13)(F)(iii)(I).
Subsec. (j)(13)(F)(iii)(II).
2020—Subsec. (a)(2)(A).
"(i) 75 percent of the balance of the financing outstanding at the time of disbursement of the loan, if such balance exceeds $150,000; or
"(ii) 85 percent of the balance of the financing outstanding at the time of disbursement of the loan, if such balance is less than or equal to $150,000."
Subsec. (a)(2)(F).
Subsec. (a)(7).
Subsec. (a)(31)(A)(iv).
"(I) for a loan in an amount less than or equal to $350,000, of not more than 75 percent; and
"(II) for a loan in an amount greater than $350,000, of not more than 50 percent."
"(I) for a loan in an amount less than or equal to $350,000, of not more than 75 percent; and
"(II) for a loan in an amount greater than $350,000, of not more than 50 percent."
for "with a guaranty rate of not more than 50 percent."
Subsec. (a)(31)(D).
Subsec. (a)(31)(G)(ii), (iii).
Subsec. (a)(36).
Subsec. (a)(36)(A)(iii).
Subsec. (a)(36)(A)(viii)(I)(aa)(EE).
Subsec. (a)(36)(A)(viii)(I)(bb).
Subsec. (a)(36)(A)(viii)(II)(aa).
Subsec. (a)(36)(A)(viii)(II)(bb).
Subsec. (a)(36)(A)(x) to (xii).
Subsec. (a)(36)(A)(xiii).
Subsec. (a)(36)(A)(xiv).
Subsec. (a)(36)(A)(xv).
Subsec. (a)(36)(A)(xvi).
Subsec. (a)(36)(D)(i).
Subsec. (a)(36)(D)(ii)(II).
Subsec. (a)(36)(D)(iii).
Subsec. (a)(36)(D)(iv)(IV).
Subsec. (a)(36)(D)(v).
Subsec. (a)(36)(D)(vi).
Subsec. (a)(36)(D)(vii).
Subsec. (a)(36)(D)(viii).
Subsec. (a)(36)(E).
Subsec. (a)(36)(E)(i)(I)(aa)(AA).
Subsec. (a)(36)(F)(i)(VIII) to (XI).
Subsec. (a)(36)(F)(v).
Subsec. (a)(36)(F)(vi).
Subsec. (a)(36)(H).
Subsec. (a)(36)(J).
Subsec. (a)(36)(K).
Subsec. (a)(36)(K)(ii).
Subsec. (a)(36)(L).
Subsec. (a)(36)(M).
Subsec. (a)(36)(M)(ii).
Subsec. (a)(36)(M)(ii)(II).
Subsec. (a)(36)(M)(iii).
Subsec. (a)(36)(M)(v).
Subsec. (a)(36)(P)(i).
"(I) 5 percent for loans of not more than $350,000;
"(II) 3 percent for loans of more than $350,000 and less than $2,000,000; and
"(III) 1 percent for loans of not less than $2,000,000."
Subsec. (a)(36)(P)(ii).
Subsec. (a)(36)(P)(iii).
Subsec. (a)(36)(Q).
Subsec. (a)(36)(S).
Subsec. (a)(36)(T).
Subsec. (a)(36)(U).
Subsec. (a)(36)(V).
Subsec. (a)(37).
Subsec. (b)(2).
Subsec. (b)(2)(D).
Subsec. (b)(2)(E).
Subsec. (m)(3)(C).
Subsec. (m)(4)(A).
Subsec. (m)(4)(C)(i).
Subsec. (m)(4)(G).
Subsec. (m)(11)(C)(ii).
Subsec. (m)(11)(D).
2019—Subsec. (b)(3)(A)(i), (ii).
Subsec. (b)(3)(B).
Subsec. (b)(3)(C).
Subsec. (b)(3)(G)(ii)(II).
Subsec. (n).
2018—Subsec. (a)(1)(A)(i).
Subsec. (a)(15)(A).
Subsec. (a)(15)(B).
Subsec. (a)(15)(B)(iv).
Subsec. (a)(15)(E).
Subsec. (a)(15)(F), (G).
Subsec. (a)(29).
Subsec. (a)(35).
Subsec. (j)(13)(F)(iii).
Subsec. (m)(3)(C).
Subsec. (m)(4)(E).
2015—Subsec. (a)(1)(A).
Subsec. (a)(1)(C).
Subsec. (a)(31)(A).
Subsec. (a)(31)(G).
Subsec. (a)(31)(H).
Subsec. (b)(1)(A).
Subsec. (b)(10).
Subsec. (b)(11).
Subsec. (b)(12).
Subsec. (b)(13).
Subsec. (b)(14).
Subsec. (b)(15).
Subsec. (d)(6).
Subsec. (d)(8).
Subsec. (j)(10)(D)(i).
Subsec. (j)(13)(F).
2014—Subsec. (j)(13)(E).
2013—Subsec. (j)(10)(D)(i).
2011—Subsec. (d)(5)(D).
2010—Subsec. (a)(2)(A).
Subsec. (a)(2)(A)(i).
Subsec. (a)(2)(A)(ii).
Subsec. (a)(2)(C)(ii), (iii).
Subsec. (a)(2)(D).
Subsec. (a)(2)(E).
Subsec. (a)(3)(A).
Subsec. (a)(3)(B).
Subsec. (a)(14).
Subsec. (a)(16)(A).
Subsec. (a)(16)(A)(i).
Subsec. (a)(16)(A)(ii).
Subsec. (a)(16)(A)(iii).
Subsec. (a)(16)(B).
Subsec. (a)(16)(F).
Subsec. (a)(31)(D).
Subsec. (a)(32), (33).
Subsec. (a)(34).
Subsec. (a)(35).
Subsec. (l).
Subsec. (m)(1)(B)(iii).
Subsec. (m)(3)(B).
Subsec. (m)(3)(C).
Subsec. (m)(3)(E).
Subsec. (m)(4)(B).
Subsec. (m)(11)(B).
2008—Subsec. (a)(32).
Subsec. (b).
Subsec. (b)(1)(A).
Subsec. (b)(2).
Subsec. (b)(2)(A).
Subsec. (b)(2)(D).
Subsec. (b)(3)(C).
Subsec. (b)(3)(E).
Subsec. (b)(3)(G), (H).
Subsec. (b)(4), (5).
Subsec. (b)(6).
Subsec. (b)(7).
Subsec. (b)(8).
Subsec. (b)(9).
Subsec. (b)(9)(C), (D).
Subsec. (c).
Subsec. (c)(5)(C).
Subsec. (c)(6).
Subsecs. (d) to (f).
Subsec. (g).
2007—Subsec. (a)(31)(F).
Subsec. (a)(32).
2006—Subsec. (b)(2).
Subsec. (b)(2)(B).
Subsec. (b)(2)(D).
2004—Subsec. (a)(3)(A).
Subsec. (a)(3)(B).
Subsec. (a)(16).
Subsec. (a)(18)(A).
"(i) A guarantee fee equal to 2 percent of the deferred participation share of a total loan amount that is not more than $150,000.
"(ii) A guarantee fee equal to 3 percent of the deferred participation share of a total loan amount that is more than $150,000, but not more than $700,000.
"(iii) A guarantee fee equal to 3.5 percent of the deferred participation share of a total loan amount that is more than $700,000."
Subsec. (a)(18)(C).
"(i) A guarantee fee equal to 1 percent of the deferred participation share of a total loan amount that is not more than $150,000.
"(ii) A guarantee fee equal to 2.5 percent of the deferred participation share of a total loan amount that is more than $150,000, but not more than $700,000.
"(iii) A guarantee fee equal to 3.5 percent of the deferred participation share of a total loan amount that is more than $700,000."
Subsec. (a)(23).
Subsec. (a)(23)(A).
Subsec. (a)(23)(B).
Subsec. (a)(23)(C).
Subsec. (a)(31).
2001—Subsec. (a)(18)(C).
Subsec. (a)(23)(A).
2000—Subsec. (a)(2)(A)(i).
Subsec. (a)(2)(A)(ii).
Subsec. (a)(3)(A).
Subsec. (a)(4).
Subsec. (a)(4)(B)(iii).
Subsec. (a)(4)(C).
Subsec. (a)(18).
Subsec. (a)(28).
Subsec. (a)(29).
Subsec. (a)(30).
Subsec. (m)(1)(A)(iii)(I).
Subsec. (m)(1)(B)(iii).
Subsec. (m)(3)(A)(ii).
Subsec. (m)(3)(E).
Subsec. (m)(4)(C)(i).
Subsec. (m)(5)(A).
Subsec. (m)(6)(B).
Subsec. (m)(7)(A).
Subsec. (m)(11)(B).
1999—Subsec. (a)(10).
Subsec. (a)(21)(A)(ii).
Subsec. (a)(27).
Subsec. (b)(1)(C).
Subsec. (b)(3).
Subsec. (m)(1)(A)(i).
Subsec. (m)(3)(D).
"(i) during the initial 5 years of the intermediary's participation in the program under this subsection, at a level equal to not more than 15 percent of the outstanding balance of the notes receivable owed to the intermediary; and
"(ii) in each year of participation thereafter, at a level equal to not more than the greater of—
"(I) 2 times an amount reflecting the total losses of the intermediary as a result of participation in the program under this subsection, as determined by the Administrator on a case-by-case basis; or
"(II) 10 percent of the outstanding balance of the notes receivable owed to the intermediary."
Subsec. (m)(7)(B).
Subsec. (m)(8).
Subsec. (n).
1998—Subsec. (j)(13)(E).
1997—Subsec. (a).
Subsec. (a)(1).
Subsec. (a)(8).
Subsec. (m).
Subsec. (m)(1)(A)(iv).
Subsec. (m)(3)(C).
Subsec. (m)(3)(D)(i), (ii).
"(i) in the first year of the intermediary's participation in the demonstration program, at a level equal to not more than 15 percent of the outstanding balance of the notes receivable owed to the intermediary; and
"(ii) in each year of participation thereafter, at a level reflecting the intermediary's total losses as a result of participation in the demonstration program, as determined by the Administration on a case-by-case basis, but in no case shall the required level exceed 15 percent of the outstanding balance of the notes receivable owed to the intermediary under the program."
Subsec. (m)(4)(E).
Subsec. (m)(4)(F).
Subsec. (m)(5)(A).
Subsec. (m)(6)(E).
Subsec. (m)(9).
Subsec. (m)(9)(C).
Subsec. (m)(12).
Subsec. (m)(13).
1996—Subsec. (a)(2)(C)(ii)(II).
Subsec. (a)(2)(D).
Subsec. (a)(4).
Subsec. (a)(19)(C).
Subsec. (a)(25).
Subsec. (a)(26).
Subsec. (d).
Subsec. (e).
Subsec. (f).
Subsec. (l).
Subsec. (m)(7)(B).
1995—Subsec. (a)(2).
Subsec. (a)(18).
Subsec. (a)(19)(B).
Subsec. (a)(19)(C).
Subsec. (a)(23).
Subsec. (a)(24).
1994—Subsec. (a)(2)(B)(iv).
Subsec. (a)(3)(B).
Subsec. (a)(14)(A).
Subsec. (a)(21)(A).
Subsec. (a)(21)(E).
Subsec. (m)(3)(C).
Subsec. (m)(4)(B).
Subsec. (m)(4)(C)(i).
"(I) the intermediary provides not less than 25 percent of its loans to small business concerns located in or owned by one or more residents of an economically distressed area; or
"(II) the intermediary has a portfolio of loans made under this subsection that averages not more than $7,500 during the period of the intermediary's participation in the program."
See Effective and Termination Dates of 1994 Amendment note below.
Subsec. (m)(4)(E).
Subsec. (m)(7).
Subsec. (m)(8).
Subsec. (m)(9)(B).
Subsec. (m)(11)(A)(v).
Subsec. (m)(11)(D).
Subsec. (m)(12).
1993—Subsec. (a)(2).
Subsec. (a)(2)(B).
Subsec. (a)(22).
Subsec. (m)(1)(B)(iii).
Subsec. (m)(5)(A).
Subsec. (m)(9)(B).
1992—Subsec. (a)(4).
Subsec. (a)(21).
Subsec. (m)(1)(A)(i).
Subsec. (m)(1)(A)(iii)(I).
Subsec. (m)(3)(A).
Subsec. (m)(3)(F).
Subsec. (m)(4)(A).
Subsec. (m)(4)(B).
Subsec. (m)(4)(C), (D).
Subsec. (m)(5)(A).
Subsec. (m)(6)(C).
Subsec. (m)(7)(A).
Subsec. (m)(7)(B).
Subsec. (m)(7)(C)(i).
Subsec. (m)(7)(C)(ii), (iii).
Subsec. (m)(9), (10).
Subsec. (m)(11).
1991—Subsec. (a)(18).
Subsec. (a)(19)(B).
Subsec. (m).
1990—Subsec. (a)(14)(A).
Subsec. (a)(16)(A).
Subsec. (a)(19)(C).
Subsec. (j)(3)(A).
Subsec. (j)(3)(B).
Subsec. (j)(8).
Subsec. (j)(10)(J)(ii).
Subsec. (j)(13)(D)(iii).
1989—Subsec. (a)(2).
"(A) not less than 90 per centum of the balance of the financing outstanding at the time of disbursement if such financing does not exceed $155,000; and
"(B) subject to the limitation in paragraph (3)—
"(i) not less than 70 per centum nor more than 85 per centum of the financing outstanding at the time of disbursement if such financing exceeds $155,000 but is less than $714,285,
"(ii) less than 70 per centum of the financing outstanding at the time of disbursement if such financing exceeds $714,285;
"(iii) not less than 85 per centum of the financing outstanding at the time of disbursement if such financing is a loan under paragraph (16) and is less than $1,176,470; and
"(iv) less than 85 per centum of the financing outstanding at the time of disbursement if such financing is a loan under paragraph (16) and exceeds $1,176,470;
Provided, That the Administration shall not use the per centum of guarantee requested as a criterion to establish priorities in approving guarantee requests nor shall the Administration reduce the per centum guaranteed to less than 85 per centum pursuant to subparagraph (B) other than by a determination made on each application: Provided, further, That the Administration may reduce its participation below the per centums stated in this paragraph if the lender requests the reduction under the preferred lenders program or any successor thereto, but any such reduction shall not exceed five points. As used in this sentence the term 'preferred lenders program' means a program under which, pursuant to a written agreement between the lender and the Administration, the lender has been delegated (1) complete authority to make and close loans with a guarantee from the Administration without obtaining the prior specific approval of the Administration, and (2) authority to service and liquidate such loans."
Subsec. (a)(19).
Subsec. (a)(20)(C)(iv).
Subsec. (j)(10)(A)(i).
Subsec. (j)(10)(D)(i).
Subsec. (j)(10)(D)(ii)(II).
Subsec. (j)(10)(D)(iii).
Subsec. (j)(10)(D)(iv).
Subsec. (j)(10)(D)(iv)(I).
Subsec. (j)(10)(E)(ii).
Subsec. (j)(10)(F).
Subsec. (j)(10)(I).
Subsec. (j)(10)(J)(i).
Subsec. (j)(11)(B).
Subsec. (j)(11)(E).
Subsec. (j)(11)(F)(v).
Subsec. (j)(11)(F)(vi).
Subsec. (j)(11)(F)(viii).
Subsec. (j)(11)(G)(ii).
Subsec. (j)(11)(H), (I).
Subsec. (j)(12)(A).
Subsec. (j)(12)(B).
Subsec. (j)(13)(E).
1988—Subsec. (a)(2).
Subsec. (a)(2)(B)(iii), (iv).
Subsec. (a)(3).
Subsec. (a)(12).
Subsec. (a)(14).
Subsec. (a)(16) to (18).
Subsec. (a)(19).
Subsec. (a)(20).
Subsec. (b)(1)(A).
Subsec. (b)(2)(A).
Subsec. (b)(E).
Subsec. (c)(5)(C).
Subsec. (c)(6).
Subsec. (c)(7).
Subsec. (f).
Subsec. (j)(3)(A).
Subsec. (j)(10)(A)(i).
Subsec. (j)(10)(C).
"(i) the business plan required pursuant to paragraph (10)(A)(i) is approved by the Administration; and
"(ii) the program is able to provide such concern with, but not limited to, such management, technical and financial services as may be necessary to achieve the targets, objectives, and goals of such business."
Subsec. (j)(10)(D).
Subsec. (j)(10)(E) to (H).
Subsec. (j)(10)[(I)].
Subsec. (j)(10)(J).
Subsec. (j)(11).
Subsec. (j)(12).
Subsec. (j)(13).
Subsec. (j)(14).
Subsec. (j)(15).
Subsec. (j)(16).
1986—Subsec. (a)(2).
Subsec. (a)(15)(B)(i).
Subsec. (a)(16).
Subsec. (b).
Subsec. (c)(4).
1984—Subsec. (b)(2).
Subsec. (b)(2)(D).
Subsec. (b)(3).
Subsec. (b)(4).
Subsec. (c).
Subsec. (c)(5).
Subsec. (c)(6).
Subsec. (d)(1).
1981—Subsec. (a).
Subsec. (a)(6)(C).
"(i) the holder of such existing indebtedness is in a position likely to sustain a loss if such refinancing is not provided, and
"(ii) if the Administration provides such refinancing through an agreement to participate on a deferred basis, it will be in a position likely to sustain part or all of any loss which would have otherwise been sustained by the holder of the original indebtedness: Provided further, That the Administration may decline to approve such refinancing if it determines that the loan will not benefit the small business concern."
Subsec. (a)(8).
"(B) An additional service fee not exceeding 1 per centum of the outstanding amount of the principal may be paid by the borrower to the lender in consideration for such lender extending the term or refinancing of such borrower's indebtedness if such extension or refinancing results in the term of such indebtedness exceeding ten years.
"(C) The authority provided in this paragraph shall not be construed to otherwise limit the authority of the Administration to set terms and conditions of the loan."
Subsec. (b)(1).
Subsec. (b)(2).
Subsec. (b)(3) to (9).
Subsec. (c)(3).
Subsec. (c)(4).
Subsec. (g).
1980—Subsec. (a).
Subsec. (a)(8).
Subsec. (b).
Subsec. (b)(4).
Subsec. (b)(8).
Subsec. (c)(3).
Subsec. (d)(1).
Subsec. (j)(10).
Subsec. (j)(10)(A)(i).
Subsec. (j)(10)(C).
1979—Subsec. (b) following par. (9).
Subsec. (c)(3).
1978—Subsec. (a).
Subsec. (d).
Subsec. (j).
Subsec. (k).
Subsec. (k)(4).
Subsec. (l).
1977—Subsec. (a).
Subsec. (a)(8).
Subsec. (b).
Subsec. (b)(2)(C) to (E).
Subsec. (b)(3).
Subsec. (b)(5).
Subsec. (b)(9).
Subsec. (g)(4).
1976—Subsec. (a)(1).
Subsec. (a)(4)(A).
Subsec. (a)(4)(C).
Subsec. (b).
Subsec. (b)(4).
Subsec. (i)(1), (3).
1974—Subsec. (a)(4)(B).
Subsec. (a)(5)(B).
Subsec. (a)(8).
Subsec. (b)(4).
Subsec. (b)(5) to (7).
Subsec. (b)(8).
Subsec. (b).
Subsecs. (g), (h).
Subsec. (h)(2).
Subsecs. (i) to (k).
1972—Subsec. (b).
Subsec. (g).
1970—Subsec. (b).
1969—Subsec. (b).
1968—Subsec. (b)(1).
Subsec. (b)(3).
1967—Subsec. (a)(4).
Subsec. (f).
1966—Subsec. (e).
1965—Subsec. (b).
Subsec. (c).
1964—Subsecs. (b)(2), (4).
Subsec. (b)(3).
1961—Subsec. (b).
Subsec. (d).
1959—Subsec. (d).
1958—Subsec. (d).
Statutory Notes and Related Subsidiaries
Change of Name
Committee on Small Business of Senate changed to Committee on Small Business and Entrepreneurship of Senate. See Senate Resolution No. 123, One Hundred Seventh Congress, June 29, 2001. Previously, Select Committee on Small Business of Senate became Committee on Small Business of Senate. See Senate Resolution No. 101, Ninety-Seventh Congress, Mar. 25, 1981.
Effective Date of 2021 Amendment
Effective Date of 2020 Amendment
"(1)
"(2)
"(1)
"(2)
"(1)
"(2)
"(a)
"(c)
Effective Date of 2019 Amendment
Effective Date of 2015 Amendment
Effective Date of 2014 Amendment
Amendment by
Effective Date of 2010 Amendment
Effective Date of 2008 Amendment
Amendment of this section and repeal of
[
[
Effective Date of 2007 Amendment
Amendment by
Effective Date of 2004 Amendment
Effective Date of 2001 Amendment
Amendment by
Effective and Termination Dates of 1999 Amendments
"(1)
"(2)
Effective Date of 1998 Amendment
Amendment by section 101(f) [title VIII, §405(d)(10)] of
Effective Date of 1997 Amendment
Amendment by
Effective Date of 1996 Amendment
Amendment by
Effective Date of 1995 Amendment
Amendment by
Effective and Termination Dates of 1994 Amendment
Effective Date of 1993 Amendment
Effective Date of 1992 Amendment
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1988 Amendments
Amendments by sections 202, 203, 206, 301(a), 408, and 505(h) of
Amendments by sections 201(a), 205, 208, 301(b), (c), and 303(a) of
Amendment by section 302 of
Subsection (j)(13)(E) of this section as added by section 301(b) of
Amendments by sections 119(a) and 120 to 122 of
Effective Date of 1984 Amendment
Amendment by
Amendment by section 311 of
Effective Date of 1981 Amendment
Amendment by section 1913 of
Effective Date of 1980 Amendment
Amendment by
Effective Date of 1978 Amendment
Amendment by
Effective Date of 1977 Amendment
Amendment by section 101(d), (e) of
Effective Date of 1972 Amendment
Effective Date of 1970 Amendments
For effective date of amendment by
Amendment by
Effective Date of 1968 Amendment
Amendment by
Effective Date of 1966 Amendment
Regulations
Section 114 of
"(1) within 60 days after the date of enactment of this Act [Nov. 15, 1988] conduct meetings of present and potential participants in the program established by section 7(j)(10) of the Small Business Act [
"(2) within one hundred and twenty days after the date of enactment of this Act, publish in the Federal Register proposed rules and regulations implementing this Act; and
"(3) within 270 days after the date of enactment of this Act, publish in the Federal Register final rules and regulations implementing this Act."
Termination of Reporting Requirements
For termination, effective May 15, 2000, of provisions of law requiring submittal to Congress of any annual, semiannual, or other regular periodic report listed in House Document No. 103–7 (in which reports required under subsections (a)(15)(E) and (j)(16)(B) of this section are listed on page 191), see section 3003 of
Transfer of Functions
For transfer of all functions, personnel, assets, components, authorities, grant programs, and liabilities of the Federal Emergency Management Agency, including the functions of the Under Secretary for Federal Emergency Management relating thereto, to the Federal Emergency Management Agency, see
For transfer of functions, personnel, assets, and liabilities of the Federal Emergency Management Agency, including the functions of the Director of the Federal Emergency Management Agency relating thereto, to the Secretary of Homeland Security, and for treatment of related references, see former section 313(1) and
Restriction
Subsequent Paycheck Protection Program Loans
"(1) no amount shall be included in the gross income of an eligible entity (within the meaning of subparagraph (J) of section 7(a)(37) of the Small Business Act [
"(2) no deduction shall be denied, no tax attribute shall be reduced, and no basis increase shall be denied, by reason of the exclusion from gross income provided by paragraph (1), and
"(3) in the case of an eligible entity that is a partnership or S corporation—
"(A) any amount excluded from income by reason of paragraph (1) shall be treated as tax exempt income for purposes of sections 705 and 1366 of the Internal Revenue Code of 1986 [
"(B) except as provided by the Secretary of the Treasury (or the Secretary's delegate), any increase in the adjusted basis of a partner's interest in a partnership under section 705 of the Internal Revenue Code of 1986 with respect to any amount described in subparagraph (A) shall equal the partner's distributive share of deductions resulting from costs giving rise to the forgiveness of indebtedness referred to in paragraph (1)."
Demographic Information on Loan Applications
Eligible Churches and Religious Organizations
"(1)
"(2)
Increased Ability for Paycheck Protection Program Borrowers To Request an Increase in Loan Amount Due to Updated Regulations
"(a)
"(1) the terms 'covered loan' and 'eligible recipient' have the meanings given those terms in 7(a)(36)(A) of the Small Business Act (
"(2) the term 'included covered loan' means a covered loan for which, as of the date of enactment of this Act [Dec. 27, 2020], the borrower had not received forgiveness under section 1106 of the CARES Act [
"(b)
"(1) in the case of an eligible recipient that returned all or part of an included covered loan, the eligible recipient may reapply for a covered loan for an amount equal to the difference between the amount retained and the maximum amount applicable; and
"(2) in the case of an eligible recipient that did not accept the full amount of an included covered loan, the eligible recipient may request a modification to increase the amount of the covered loan to the maximum amount applicable, subject to the requirements of section 7(a)(36) of the Small Business Act (
"(c)
"(1) the initial covered loan amount has been fully disbursed; or
"(2) the lender of the initial covered loan has submitted to the [Small Business] Administration a Form 1502 report related to the covered loan."
Farm Credit System Institutions
"(a)
"(1) means an institution of the Farm Credit System chartered under the Farm Credit Act of 1971 (
"(2) does not include the Federal Agricultural Mortgage Corporation.
"(b)
"(1)
"(2)
"(3)
"(A)
"(i) shall receive a risk weight of zero percent; and
"(ii) shall not be included in the calculation of any applicable leverage ratio or other applicable capital ratio or calculation.
"(B)
"(i) a loan made by a Farm Credit Bank described in section 1.2(a) of the Farm Credit Act of 1971 (
"(ii) a loan made by a Federal Land Bank Association, a Production Credit Association, an agricultural credit association, or the bank for cooperatives described in section 1.2(a) of the Farm Credit Act of 1971 (
"(c)
Conflicts of Interest
"(a)
"(1)
"(2)
"(A)
"(B)
"(3)
"(A) the President, the Vice President, the head of an Executive department, or a Member of Congress; and
"(B) the spouse, as determined under applicable common law, of an individual described in subparagraph (A).
"(4)
"(5)
"(6)
"(A) a share in an entity, without regard to whether the share is—
"(i) transferable; or
"(ii) classified as stock or anything similar;
"(B) a capital or profit interest in a limited liability company or partnership; or
"(C) a warrant or right, other than a right to convert, to purchase, sell, or subscribe to a share or interest described in subparagraph (A) or (B), respectively.
"(b)
"(1) if, before the date of enactment of this Act, the covered entity submitted an application for forgiveness under section 1106 of the CARES Act (
"(2) if, on or after the date of enactment of this Act, the covered entity submits an application for forgiveness under section 7A of the Small Business Act [
"(c)
Temporary Administrative Fee Waiver
"(1)
"(A) in lieu of the fee otherwise applicable under section 7(a)(23)(A) of the Small Business Act (
"(B) in lieu of the fee otherwise applicable under section 7(a)(18)(A) of the Small Business Act (
"(2)
"(A) first use any amounts provided to eliminate or reduce fees paid by small business borrowers under clauses (i) through (iii) of section 7(a)(18)(A) of the Small Business Act (
"(B) then use any amounts provided to eliminate or reduce fees under 7(a)(23)(A) of the Small Business Act (
Temporary Waiver of Technical Assistance Grants Matching Requirements and Flexibility on Pre- and Post-Loan Assistance
"(1) the requirement to contribute non-Federal funds under section 7(m)(4)(B) of the Small Business Act (
"(2) the limitation on amounts allowed to be expended to provide information and technical assistance under clause (i) of section 7(m)(4)(E) of the Small Business Act (
Temporary Duration of Loans to Borrowers
"(1)
"(A) to an existing borrower may be extended to not more than 8 years; and
"(B) to a new borrower may be not more than 8 years.
"(2)
Findings
"(1) In 2012, Superstorm Sandy caused substantial physical and economic damage to the United States, and New York in particular.
"(2) For businesses and homeowners, the primary means of obtaining long-term Federal financial assistance in the wake of disasters such as Superstorm Sandy is through the Small Business Administration's Disaster Loan Program.
"(3) With regard to the Small Business Administration's operation of the Disaster Loan Program after Superstorm Sandy, the Government Accountability Office found that the Administration did not meet its timeliness goals for processing business loan applications.
"(4) According to the Government Accountability Office, the Small Business Administration stated that it was challenged by an unexpectedly high volume of loan applications that it received early in its response to Superstorm Sandy.
"(5) As a result, many businesses and homeowners affected by Superstorm Sandy were unable to apply for financing from the Small Business Administration."
Availability of Funds
Marketing and Outreach
"(1) encourages a proactive approach to the disaster relief efforts of the Administration;
"(2) makes clear the services provided by the Administration, including contact information, application information, and timelines for submitting applications, the review of applications, and the disbursement of funds;
"(3) describes the different disaster loan programs of the Administration, including how they are made available and the eligibility requirements for each loan program;
"(4) provides for regional marketing, focusing on disasters occurring in each region before the date of enactment of this Act [June 18, 2008], and likely scenarios for disasters in each such region; and
"(5) ensures that the marketing plan is made available at small business development centers and on the website of the Administration."
[
["Administration" and "Administrator", referred to in
Definition of Terms Used in Pub. L. 110–186
"(1) the term 'activated' means receiving an order placing a Reservist on active duty;
"(2) the term 'active duty' has the meaning given that term in
"(3) the terms 'Administration' and 'Administrator' mean the Small Business Administration and the Administrator thereof, respectively;
"(4) the term 'Reservist' means a member of a reserve component of the Armed Forces, as described in
"(5) the term 'Service Corps of Retired Executives' means the Service Corps of Retired Executives authorized by section 8(b)(1) of the Small Business Act (
"(6) the terms 'service-disabled veteran' and 'small business concern' have the meaning as in section 3 of the Small Business Act (
"(7) the term 'small business development center' means a small business development center described in section 21 of the Small Business Act (
"(8) the term 'women's business center' means a women's business center described in section 29 of the Small Business Act (
Establishment of Pre-Consideration Process and Outreach and Technical Assistance Program
"(b)
"(1)
"(A) has not been ordered to active duty;
"(B) expects to be ordered to active duty during a period of military conflict; and
"(C) can reasonably demonstrate that the small business concern for which that Reservist is a key employee will suffer economic injury in the absence of that Reservist.
"(2)
"(A) may collect all relevant materials necessary for processing a loan to a small business concern under section 7(b)(3) of the Small Business Act (
"(B) shall distribute funds for any loan approved under subparagraph (A) if that eligible Reservist is activated.
"(c)
"(1)
"(A) market the loans available under section 7(b)(3) of the Small Business Act (
"(B) provide technical assistance to a small business concern applying for a loan under that section.
"(2)
"(A) incorporate appropriate websites maintained by the Administration, the Department of Veterans Affairs, and the Department of Defense; and
"(B) require that information on the program is made available to small business concerns directly through—
"(i) the district offices and resource partners of the Administration, including small business development centers, women's business centers, and the Service Corps of Retired Executives; and
"(ii) other Federal agencies, including the Department of Veterans Affairs and the Department of Defense.
"(3)
"(A)
"(B)
"(i) for the 6-month period ending on the date of that report—
"(I) the number of loans approved under section 7(b)(3) of the Small Business Act (
"(II) the number of loans disbursed under that section; and
"(III) the total amount disbursed under that section; and
"(ii) recommendations, if any, to make the program more effective in serving small business concerns that employ Reservists."
Reservist Loans
"(a)
"(b)
"(1) to advertise and promote the program under section 7(b)(3) of the Small Business Act [
"(2) to advertise and promote participation by lenders in such program jointly with trade associations for banks or other lending institutions."
Temporary Extension and Expansion of Loan Programs
Budgetary Treatment of Loans and Financings
Enhanced Publicity During Operation Allied Force
Evaluation of Predisaster Mitigation Pilot Program
Congressional Findings Regarding Small Business Year 2000 Readiness
"(1) the failure of many computer programs to recognize the Year 2000 may have extreme negative financial consequences in the Year 2000, and in subsequent years for both large and small businesses;
"(2) small businesses are well behind larger businesses in implementing corrective changes to their automated systems;
"(3) many small businesses do not have access to capital to fix mission critical automated systems, which could result in severe financial distress or failure for small businesses; and
"(4) the failure of a large number of small businesses due to the Year 2000 computer problem would have a highly detrimental effect on the economy in the Year 2000 and in subsequent years."
Transfer of Funds
"(1)
"(2)
"(A) $3,000,000 for fiscal year 1998;
"(B) $4,000,000 for fiscal year 1999; and
"(C) $5,000,000 for fiscal year 2000."
Defense Loan and Technical Assistance Program
"(a)
"(1)
"(2)
"(3)
"(b)
"(1)
"(2)
"(A)
"(B)
"(c)
"(1) process applications for DELTA program loan guarantees;
"(2) guarantee repayment of the resulting loans in accordance with this section; and
"(3) take such other actions as are necessary to administer the program.
"(d)
"(1)
"(2)
"(A) The selection criteria established under the memorandum of understanding referred to in subsection (a)(3).
"(B) The extent to which the loans to be guaranteed would support the retention of defense workers whose employment would otherwise be permanently or temporarily terminated as a result of reductions in expenditures by the United States for defense, the termination or cancellation of a defense contract, the failure to proceed with an approved major weapon system, the merger or consolidation of the operations of a defense contractor, or the closure or realignment of a military installation.
"(C) The extent to which the loans to be guaranteed would stimulate job creation and new economic activities in communities most adversely affected by reductions in expenditures by the United States for defense, the termination or cancellation of a defense contract, the failure to proceed with an approved major weapon system, the merger or consolidation of the operations of a defense contractor, or the closure or realignment of a military installation.
"(D) The extent to which the loans to be guaranteed would be used to acquire (or permit the use of other funds to acquire) capital equipment to modernize or expand the facilities of the borrower to enable the borrower to remain in the national technology and industrial base available to the Department of Defense.
"(3)
"(A) contracts with the Department of Defense or the defense-related activities of the Department of Energy; or
"(B) subcontracts in support of defense-related prime contracts.
"(e)
"(f)
"(g)
"(1)
"(2)
"(A) to cover the costs (as defined in section 502(5) of the Federal Credit Reform Act of 1990 (
"(B) to cover the reasonable costs of the administration of the loan guarantees."
Trade Assistance Program for Small Business Concerns Adversely Affected by NAFTA
Section 509 of
Private Sector Loan Servicing Demonstration Program
"(1)
"(A)
"(B)
"(2)
"(A)
"(B)
"(3)
"(4)
"(A)
"(B)
Increase of Amounts for Disaster Loans
Congressional Findings of Microlending Expansion Act of 1992
"(1) nationwide, there are many individuals who possess skills that, with certain short-term assistance, could enable them to become successfully self-employed;
"(2) many talented and skilled individuals who are employed in low-wage occupations could, with sufficient opportunity, start their own small business concerns, which could provide them with an improved standard of living;
"(3) most such individuals have little or no savings, a nonexistent or poor credit history, and no access to credit or capital with which to start a business venture;
"(4) women, minorities, and individuals residing in areas of high unemployment and high levels of poverty have particular difficulty obtaining access to credit or capital;
"(5) providing such individuals with small-scale, short-term financial assistance in the form of microloans, together with intensive marketing, management, and technical assistance, could enable them to start or maintain small businesses, to become self-sufficient, and to raise their standard of living;
"(6) banking institutions are reluctant to provide such assistance because of the administrative costs associated with processing and servicing the loans and because they lack experience in providing the type of marketing, management, and technical assistance needed by such borrowers;
"(7) many organizations that have had successful experiences in providing microloans and marketing, management, and technical assistance to such borrowers exist throughout the Nation; and
"(8) loans from the Federal Government to intermediaries for the purpose of relending to start-up, newly established and growing small business concerns are an important catalyst to attract private sector participation in microlending."
Disadvantaged Small Business Status Decisions
"(a)
"(1) be made available to the protestor, the protested party, the contracting officer (if not the protestor), and all other parties to the proceeding, and published in full text; and
"(2) include findings of fact and conclusions of law, with specific reasons supporting such findings or conclusions, upon each material issue of fact and law of decisional significance regarding the disposition of the protest.
"(b)
Reauthorization of Bond Waiver Test Program
Emergency Direct Loans for Small Business Concerns Located in Communities Adversely Affected by Troop Deployments During Persian Gulf Conflict
Termination of Microloan Demonstration Program
References in Other Laws to GS–16, 17, or 18 Pay Rates
References in laws to the rates of pay for GS–16, 17, or 18, or to maximum rates of pay under the General Schedule, to be considered references to rates payable under specified sections of Title 5, Government Organization and Employees, see section 529 [title I, §101(c)(1)] of
Test Program for Use of Bond Waiver Authority To Assist Certain Small Disadvantaged Business Concerns
Definition of Terms Used in Pub. L. 100–656
"(1) the term 'Administration' means the Small Business Administration;
"(2) the term 'Administrator' means the Administrator of the Small Business Administration, unless otherwise indicated;
"(3) the term 'Business Opportunity Specialist' means the Administration employee responsible for providing business development assistance to Program Participants pursuant to sections 7(j) and 8(a) of the Small Business Act (
"(4) the term 'disadvantaged owners' means those individuals upon whom eligibility is based for participation in the Program and the award of subcontracts pursuant to section 8(a) of the Small Business Act (
"(5) the term 'minority owned businesses' means business concerns that are at least 51 percent owned and controlled by one or more individuals who belong to those groups described or identified pursuant to section 2(e)(1)(C) of the Small Business Act (
"(6) the term 'Program' means the Minority Small Business and Capital Ownership Development Program established by section 7(j)(10) of the Small Business Act (
"(7) the term 'Program Participant' means a small business concern participating in the Program; and
"(8) the term 'Program Participation Term' means the fixed period of time assigned to a Program Participant pursuant to section 7(j)(10)(A)(i) of the Small Business Act (
Congressional Findings and Declaration of Purposes of Pub. L. 100–656
"(a)
"(1) the Capital Ownership Development Program administered by the Small Business Administration and the award of contracts pursuant to section 8(a) of the Small Business Act [
"(2) although some progress has resulted from the Program, it has generally failed to meet its objectives, which remain as valid now as when the Program was initiated;
"(3) too few concerns that have exited the Program have been prepared to compete successfully in the open marketplace on competitive procurements, and many concerns have developed an unhealthy dependency on sole-source contracts by the time they are required to leave the Program;
"(4) the application and certification process for admitting new participants to the Program is inordinately lengthy and burdensome;
"(5) the Administration has often not efficiently and equitably administered and managed the Program in a manner that provided clear lines of responsibility for implementing and monitoring many of the administrative duties under the Program;
"(6) the Administration and some program participants have given insufficient attention and support to the business development goals of the Program and instead have focused almost entirely on the size of contract awards or the number of firms certified to participate in the Program;
"(7) many Federal procuring agencies have failed to identify and offer the necessary amount of contract support in order to allow for diversification and growth of disadvantaged businesses participating in the Program;
"(8) contract support as well as business development expenses have been misused both by the Administration and Program participants and have not been equitably distributed pursuant to objective criteria;
"(9) the widespread perception of undue political influence in the operation and administration of the Program has significantly contributed to the Program's poor image and has deterred utilization of the Program by socially and economically disadvantaged concerns and by Federal procuring agencies; and
"(10) it is imperative that increased competition and other substantial reforms be accomplished in the Program in order to promote the Congressionally mandated business development objectives and purposes.
"(b)
"(1) affirm that the Capital Ownership Development Program and the section 8(a) [
"(2) affirm that the measure of success of the Capital Ownership Development Program, and the section 8(a) authority, shall be the number of competitive firms that exit the Program without being unreasonably reliant on section 8(a) contracts and that are able to compete on an equal basis in the mainstream of the American economy;
"(3) ensure that program benefits accrue to individuals who are both socially and economically disadvantaged;
"(4) increase the number of small businesses owned and controlled by such individuals from which the United States may purchase products and services (including construction work); and
"(5) ensure integrity, competence, and efficiency in the administration of business development services and the Federal contracting opportunities made available to eligible small businesses."
Employee Training and Evaluation
"(a)
"(2) The Administration shall take such actions as may be appropriate to ensure that any person employed as a Business Opportunity Specialist receives adequate periodic training to assure such employee is capable of assisting Program Participants to fully utilize the Program and to meet the requirements of the Small Business Act [
"(b)
"(2) A Business Opportunity Specialist employed in a Region designated pursuant to paragraph (1), in addition to other assigned duties and responsibilities, shall—
"(A) conduct contract negotiations on behalf of the Administration for contracts awarded pursuant to section 8(a) of the Small Business Act (
"(B) facilitate and otherwise assist such firms in negotiating for the receipt of contracts to be let pursuant to such section.
"(3) The Administration shall take such actions as may be appropriate to train and qualify such Specialists to perform the negotiations required pursuant to paragraph (2).
"(4) To the extent practicable, the Administrator shall ensure that the performance appraisal system applicable to a Business Opportunity Specialist employed in a region designated pursuant to paragraph (1) affords substantial recognition to how well such Specialist's assigned portfolio of concerns participating in the program established by section 7(j)(10) of the Small Business Act (
"(5) The Administration shall establish personnel positions for Business Opportunity Specialists employed in the regions designated pursuant to paragraph (1) that are classified at a grade level of the General Schedule that are sufficient, in the opinion of the Administrator, to attract and retain highly qualified personnel.
"(c)
"(2) The pilot program conducted pursuant to subsection (b) shall be terminated three years after the date on which the Committees on Small Business of the Senate and of the House of Representatives [Committee on Small Business of Senate now Committee on Small Business and Entrepreneurship of Senate] receive written notification from the Administrator that the pilot is in full operation in each of the three designated pilot regions."
General Accounting Office Report
Commission on Minority Business Development
Limitations on Spending Authority
"(1) Any new credit authority or authority to enter into contracts provided for in this Act [see Short Title of 1988 Amendment note set out under
"(2) No funds are authorized to be appropriated in subsequent appropriation Acts to the Administration for the purpose of making grants of financial assistance under the so called 'Business Development Expense' program to any firm participating in the programs authorized by section 7(j)(10) or section 8(a) of the Small Business Act (
Certified Loan Program; Expanded Participation; Reports to Congress
Similar provisions were contained in
Pipeline Loans or Previous Disasters
Determination of Natural Disaster by Secretary of Agriculture To Be Deemed Disaster Declaration by Administrator of Small Business Administration; Disasters Commencing Between January 1, 1983, and September 30, 1983
Reports to Congress; Default Rate of Loans
Business Plans; Submittal by Concerns Eligible To Receive Contracts
Small Business Employee Ownership; Congressional Findings and Purposes
"
"(1) employee ownership of firms provides a means for preserving jobs and business activity;
"(2) employee ownership of firms provides a means for keeping a small business small when it might otherwise be sold to a conglomerate or other large enterprise;
"(3) employee ownership of firms provides a means for creating a new small business from the sale of a subsidiary of a large enterprise;
"(4) unemployment insurance programs, welfare payments, and job creation programs are less desirable and more costly for both the Government and program beneficiaries than loan guarantee programs to maintain employment in firms that would otherwise be closed, liquidated, or relocated; and
"(5) by guaranteeing loans to qualified employee trusts and similar employee organizations, the Small Business Administration can provide feasible and desirable methods for the transfer of all or part of the ownership of a small business concern to its employees.
"(1) to provide that a qualified employee trust shall be eligible for loan guarantees under section 7(a) of the Small Business Act [subsec. (a) of this section] with respect to a small business concern, regardless of the percentage of stock of the concern held by the trust, and
"(2) to provide in section 505 of this Act [enacting subsec. (a)(8) of this section] authority to address the specific case in which the Small Business Administration guarantees loans under section 7(a) of the Small Business Act [subsec. (a) of this section] for purposes of providing funds to a qualified employee trust (and other employee organizations which are treated as qualified employee trusts) for the purchase, by at least 51 percent of the employees, of at least 51 percent of the stock of business which is operated for profit and which is—
"(A) a small business concern, or
"(B) a corporation which is controlled by another person if, after the plan for the purchase of such corporation is carried out, such corporation would be a small business concern.
"(b) Nothing in this title shall be construed to prohibit the Small Business Administration from making loan guarantees under section 7(a) of the Small Business Act [subsec. (a) of this section] to qualified employee trusts which own less than 51 percent of the stock of a continuing business."
Disaster Relief Authority; Study and Report on Consolidation
Disaster Loans; Special Provisions for Applications Received on or Before March 19, 1981; Assistance to Hardship Applicants
Disaster Loans; Interest Rate; Cancellation of Loans
Interest Rates on Loans To Meet Regulatory Standards
Election of Benefits
Fund for Management Counseling
"(a) Within sixty days after the enactment of this Act [Aug. 21, 1958], each Federal Reserve bank shall pay to the United States the aggregate amount which the Secretary of the Treasury has heretofore paid to such bank under the provisions of section 13b of the Federal Reserve Act [
"(b) The amounts repaid to the United States pursuant to subsection (a) of this section shall be covered into a special fund in the Treasury which shall be available for grants under section 7(d) of the Small Business Act [subsec. (d) of this section]. Any remaining balance of funds set aside in the Treasury for payments under section 13b of the Federal Reserve Act [
Loans for Modifications of Mining Facilities and Equipment
Executive Documents
Executive Order No. 12190
Ex. Ord. No. 12190, Feb. 1, 1980, 45 F.R. 7773, established the Advisory Committee on Small and Minority Business Ownership to assist in monitoring and encouraging the placement of subcontracts by the private sector with eligible small businesses, to study and propose incentives and assistance needed by the private sector to help in the training, development, and upgrading of such businesses, to make periodic reports and recommendations to the President, and to report annually to the President and to the Congress on the activities of the Committee and provided for termination of the Committee on Dec. 31, 1980.
Extension of Term of Advisory Committee on Small and Minority Business Ownership
Term of Advisory Committee on Small and Minority Business Ownership extended until Sept. 30, 1991, by Ex. Ord. No. 12692, Sept. 29, 1989, 54 F.R. 40627, formerly set out as a note under
Previous extensions of term of Advisory Committee on Small and Minority Business Ownership were contained in the following prior Executive Orders:
Ex. Ord. No. 12610, Sept. 30, 1987, 52 F.R. 36901, extended term until Sept. 30, 1989.
Ex. Ord. No. 12534, Sept. 30, 1985, 50 F.R. 40319, extended term until Sept. 30, 1987.
Ex. Ord. No. 12489, Sept. 28, 1984, 49 F.R. 38927, extended term until Sept. 30, 1985.
Ex. Ord. No. 12399, Dec. 31, 1982, 48 F.R. 379, extended term until Sept. 30, 1984.
Ex. Ord. No. 12258, Dec. 31, 1980, 46 F.R. 1251, extended term until Dec. 31, 1982.
1 So in original. The "; and" probably should be a period.
2 See References in Text note below.
3 So in original. Probably should be "(B)".
5 So in original. The closing parenthesis probably should not appear.
6 So in original. The word "and" probably should not appear.
7 So in original. No cl. (ii) has been enacted.
8 So in original. The word "a" probably should appear.
9 So in original. The comma probably should not appear.
10 So in original. Probably should be "therefor,".
11 So in original. Probably should be "has".
12 So in original. Two pars. (16) have been enacted.
13 See 1980 Amendment note below.
14 So in original. Probably should be "or (2)".
15 So in original. Probably should be "prior to".
16 So in original. No par. (2) has been enacted.
17 So in original. The period probably should be a semicolon.
18 So in original. Probably should be "paragraph (12):".
19 So in original. Probably should be "subclause (IV),".
20 So in original. The word "that" probably should not appear.
21 So in original. Probably should be "(vi)".
22 So in original. The period probably should not appear.
23 So in original. The period probably should be "; and".
§636a. Repealed. Pub. L. 97–35, title XIX, §1917, Aug. 13, 1981, 95 Stat. 781
Section,
Statutory Notes and Related Subsidiaries
Effective Date of Repeal
Repeal effective Aug. 13, 1981, but not to affect any financing made, obligated, or committed under this chapter or
§636b. Disaster loan interest rates
Any loan made under section 636a 1 of this title and section 4452 1 of title 42 shall not exceed the current cost of repairing or replacing the disaster injury, loss, or damage in conformity with current codes and specifications. Any loan made under sections 636a 1 and 636d of this title, and sections 3538 and 4452 1 of title 42 shall bear interest at a rate determined by the Secretary of the Treasury, taking into consideration the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity of ten to twelve years reduced by not to exceed 2 per centum per annum. In no event shall any loan made under this section bear interest at a rate in excess of 6 per centum per annum.
(
Editorial Notes
References in Text
Codification
Section was enacted as part of the Disaster Relief Act of 1970, and not as part of the Small Business Act which comprises this chapter. Section was formerly classified to
Statutory Notes and Related Subsidiaries
Effective Date
Section effective Dec. 31, 1970, see section 304 of
1 See References in Text note below.
§636c. Age of applicant for disaster loans
In the administration of any Federal disaster loan program under the authority of section 636a 1 of this title, section 4452 1 of title 42, or section 233 of
(
Editorial Notes
References in Text
Section 233 of
Codification
Section was enacted as part of the Disaster Relief Act of 1970, and not as part of the Small Business Act which comprises this chapter. Section was formerly classified to
Statutory Notes and Related Subsidiaries
Effective Date
Section effective Dec. 31, 1970, see section 304 of
1 See References in Text note below.
§636d. Disaster aid to major sources of employment
(a) Loans to disaster areas
The Small Business Administration in the case of a nonagricultural enterprise, and the Farmers Home Administration in the case of an agricultural enterprise, are authorized to provide any industrial, commercial, agricultural, or other enterprise, which has constituted a major source of employment in an area suffering a major disaster and which is no longer in substantial operation as a result of such disaster, a loan in such amount as may be necessary to enable such enterprise to resume operations in order to assist in restoring the economic viability of the disaster area. Loans authorized by this section shall be made without regard to limitations on the size of loans which may otherwise be imposed by any other provision of law or regulations promulgated pursuant thereto.
(b) Interest; deferred payments
Assistance under this section shall be in addition to any other Federal disaster assistance, except that such other assistance may be adjusted or modified to the extent deemed appropriate by the Director under the authority of section 4418 1 of title 42. Any loan made under this section shall be subject to the interest requirements of
(
Editorial Notes
References in Text
Codification
Section was enacted as part of the Disaster Relief Act of 1970, and not as part of the Small Business Act which comprises this chapter. Section was formerly classified to
Statutory Notes and Related Subsidiaries
Effective Date
Section effective Aug. 1, 1969, see section 304 of
1 See References in Text note below.
§636e. Definitions
In this subtitle— 1
(1) the terms "Administration" and "Administrator" mean the Small Business Administration and the Administrator thereof, respectively;
(2) the term "disaster area" means an area affected by a natural or other disaster, as determined for purposes of paragraph (1) or (2) of
(3) the term "disaster loan program of the Administration" means assistance under
(4) the term "disaster update period" means the period beginning on the date on which the President declares a major disaster (including any major disaster relating to which the Administrator declares eligibility for additional disaster assistance under paragraph (9) of
(5) the term "major disaster" has the meaning given that term in
(6) the term "small business concern" has the meaning given that term under
(7) the term "State" means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, and any territory or possession of the United States.
(
Editorial Notes
References in Text
This subtitle, referred to in text, is subtitle B (§§12051–12091) of title XII of
Paragraph (9) of
Codification
Section was enacted as part of the Food, Conservation, and Energy Act of 2008, and also as part of the Small Business Disaster Response and Loan Improvements Act of 2008, and not as part of the Small Business Act which comprises this chapter.
Statutory Notes and Related Subsidiaries
Effective Date
Enactment of this section and repeal of
1 See References in Text note below.
§636f. Coordination of efforts between the Administrator and the Internal Revenue Service to expedite loan processing
The Administrator and the Commissioner of Internal Revenue shall, to the maximum extent practicable, ensure that all relevant and allowable tax records for loan approval are shared with loan processors in an expedited manner, upon request by the Administrator.
(
Editorial Notes
Codification
Section was enacted as part of the Food, Conservation, and Energy Act of 2008, and also as part of the Small Business Disaster Response and Loan Improvements Act of 2008, and not as part of the Small Business Act which comprises this chapter.
Statutory Notes and Related Subsidiaries
Effective Date
Enactment of this section and repeal of
§636g. Development and implementation of major disaster response plan
(a) In general
Not later than 3 months after the date of enactment of this Act, the Administrator shall—
(1) by rule, amend the 2006 Atlantic hurricane season disaster response plan of the Administration (in this section referred to as the "disaster response plan") to apply to major disasters; and
(2) submit a report to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives detailing the amendments to the disaster response plan.
(b) Contents
The report required under subsection (a)(2) shall include—
(1) any updates or modifications made to the disaster response plan since the report regarding the disaster response plan submitted to Congress on July 14, 2006;
(2) a description of how the Administrator plans to use and integrate District Office personnel of the Administration in the response to a major disaster, including information on the use of personnel for loan processing and loan disbursement;
(3) a description of the disaster scalability model of the Administration and on what basis or function the plan is scaled;
(4) a description of how the agency-wide Disaster Oversight Council is structured, which offices comprise its membership, and whether the Associate Deputy Administrator for Entrepreneurial Development of the Administration is a member;
(5) a description of how the Administrator plans to coordinate the disaster efforts of the Administration with State and local government officials, including recommendations on how to better incorporate State initiatives or programs, such as State-administered bridge loan programs, into the disaster response of the Administration;
(6) recommendations, if any, on how the Administration can better coordinate its disaster response operations with the operations of other Federal, State, and local entities;
(7) any surge plan for the disaster loan program of the Administration in effect on or after August 29, 2005 (including surge plans for loss verification, loan processing, mailroom, customer service or call center operations, and a continuity of operations plan);
(8) the number of full-time equivalent employees and job descriptions for the planning and disaster response staff of the Administration;
(9) the in-service and preservice training procedures for disaster response staff of the Administration;
(10) information on the logistical support plans of the Administration (including equipment and staffing needs, and detailed information on how such plans will be scalable depending on the size and scope of the major disaster 1;
(11) a description of the findings and recommendations of the Administrator, if any, based on a review of the response of the Administration to Hurricane Katrina of 2005, Hurricane Rita of 2005, and Hurricane Wilma of 2005; and
(12) a plan for how the Administrator, in consultation with the Administrator of the Federal Emergency Management Agency, will coordinate the provision of accommodations and necessary resources for disaster assistance personnel to effectively perform their responsibilities in the aftermath of a major disaster.
(c) Biennial disaster simulation exercise
(1) Exercise required
The Administrator shall conduct a disaster simulation exercise at least once every 2 fiscal years. The exercise shall include the participation of, at a minimum, not less than 50 percent of the individuals in the disaster reserve corps and shall test, at maximum capacity, all of the information technology and telecommunications systems of the Administration that are vital to the activities of the Administration during such a disaster.
(2) Report
The Administrator shall include a report on the disaster simulation exercises conducted under paragraph (1) each time the Administration submits a report required under
(
Editorial Notes
References in Text
The date of enactment of this Act, referred to in subsec. (a), is the date of enactment of
Codification
Section was enacted as part of the Food, Conservation, and Energy Act of 2008, and also as part of the Small Business Disaster Response and Loan Improvements Act of 2008, and not as part of the Small Business Act which comprises this chapter.
Statutory Notes and Related Subsidiaries
Effective Date
Enactment of this section and repeal of
1 So in original. Probably should be followed by a closing parenthesis.
§636h. Disaster planning responsibilities
(a) Assignment of Small Business Administration disaster planning responsibilities
The disaster planning function of the Administration shall be assigned to an individual appointed by the Administrator who—
(1) is not an employee of the Office of Disaster Assistance of the Administration;
(2) has proven management ability;
(3) has substantial knowledge in the field of disaster readiness and emergency response; and
(4) has demonstrated significant experience in the area of disaster planning.
(b) Responsibilities
The individual assigned the disaster planning function of the Administration shall report directly and solely to the Administrator and shall be responsible for—
(1) creating, maintaining, and implementing the comprehensive disaster response plan of the Administration described in
(2) ensuring there are in-service and pre-service training procedures for the disaster response staff of the Administration;
(3) coordinating and directing the training exercises of the Administration relating to disasters, including disaster simulation exercises and disaster exercises coordinated with other government departments and agencies; and
(4) other responsibilities relevant to disaster planning and readiness, as determined by the Administrator.
(c) Coordination
In carrying out the responsibilities described in subsection (b), the individual assigned the disaster planning function of the Administration shall coordinate with—
(1) the Office of Disaster Assistance of the Administration;
(2) the Administrator of the Federal Emergency Management Agency; and
(3) other Federal, State, and local disaster planning offices, as necessary.
(d) Resources
The Administrator shall ensure that the individual assigned the disaster planning function of the Administration has adequate resources to carry out the duties under this section.
(e) Report
Not later than 30 days after the date of enactment of this Act, the Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report containing—
(1) a description of the actions of the Administrator to assign an individual the disaster planning function of the Administration;
(2) information detailing the background and expertise of the individual assigned; and
(3) information on the status of the implementation of the responsibilities described in subsection (b).
(
Editorial Notes
References in Text
The date of enactment of this Act, referred to in subsec. (e), is the date of enactment of
Codification
Section was enacted as part of the Food, Conservation, and Energy Act of 2008, and also as part of the Small Business Disaster Response and Loan Improvements Act of 2008, and not as part of the Small Business Act which comprises this chapter.
Statutory Notes and Related Subsidiaries
Effective Date
Enactment of this section and repeal of
§636i. Small business bonding threshold
(a) In general
Except as provided in subsection (b), and notwithstanding any other provision of law, for any procurement related to a major disaster, the Administrator may, upon such terms and conditions as the Administrator may prescribe, guarantee and enter into commitments to guarantee any surety against loss resulting from a breach of the terms of a bid bond, payment bond, performance bond, or bonds ancillary thereto, by a principal on any total work order or contract amount at the time of bond execution that does not exceed $5,000,000.
(b) Increase of amount
Upon request of the head of any Federal agency other than the Administration involved in reconstruction efforts in response to a major disaster, the Administrator may guarantee and enter into a commitment to guarantee any security against loss under subsection (a) on any total work order or contract amount at the time of bond execution that does not exceed $10,000,000.
(c) Limitation on use of other funds
The Administrator may carry out this section only with amounts appropriated in advance specifically to carry out this section.
(
Editorial Notes
Codification
Section was enacted as part of the Food, Conservation, and Energy Act of 2008, and also as part of the Small Business Disaster Response and Loan Improvements Act of 2008, and not as part of the Small Business Act which comprises this chapter.
Statutory Notes and Related Subsidiaries
Effective Date
Enactment of this section and repeal of
§636j. Repealed. Pub. L. 116–6, div. D, title V, §532, Feb. 15, 2019, 133 Stat. 180
Section,
§636k. Reports on disaster assistance
(a) Monthly accounting report to Congress
(1) Reporting requirements
Not later than the fifth business day of each month during the applicable period for a major disaster, the Administrator shall submit to the Committee on Small Business and Entrepreneurship and the Committee on Appropriations of the Senate and to the Committee on Small Business and the Committee on Appropriations of the House of Representatives a report on the operation of the disaster loan program authorized under
(2) Contents
Each report submitted under paragraph (1) shall include—
(A) the daily average lending volume, in number of loans and dollars, and the percent by which each category has increased or decreased since the previous report under paragraph (1);
(B) the weekly average lending volume, in number of loans and dollars, and the percent by which each category has increased or decreased since the previous report under paragraph (1);
(C) the amount of funding spent over the month for loans, both in appropriations and program level, and the percent by which each category has increased or decreased since the previous report under paragraph (1);
(D) the amount of funding available for loans, both in appropriations and program level, and the percent by which each category has increased or decreased since the previous report under paragraph (1), noting the source of any additional funding;
(E) an estimate of how long the available funding for such loans will last, based on the spending rate;
(F) the amount of funding spent over the month for staff, along with the number of staff, and the percent by which each category has increased or decreased since the previous report under paragraph (1);
(G) the amount of funding spent over the month for administrative costs, and the percent by which such spending has increased or decreased since the previous report under paragraph (1);
(H) the amount of funding available for salaries and expenses combined, and the percent by which such funding has increased or decreased since the previous report under paragraph (1), noting the source of any additional funding; and
(I) an estimate of how long the available funding for salaries and expenses will last, based on the spending rate.
(b) Weekly disaster updates to Congress for presidentially declared disasters
(1) In general
Each week during a disaster update period, the Administration shall submit to the Committee on Small Business and Entrepreneurship of the Senate and to the Committee on Small Business of the House of Representatives a report on the operation of the disaster loan program of the Administration for the area in which the President declared a major disaster.
(2) Contents
Each report submitted under paragraph (1) shall include—
(A) the number of Administration staff performing loan processing, field inspection, and other duties for the declared disaster, and the allocations of such staff in the disaster field offices, disaster recovery centers, workshops, and other Administration offices nationwide;
(B) the daily number of applications received from applicants in the relevant area, as well as a breakdown of such figures by State;
(C) the daily number of applications pending application entry from applicants in the relevant area, as well as a breakdown of such figures by State;
(D) the daily number of applications withdrawn by applicants in the relevant area, as well as a breakdown of such figures by State;
(E) the daily number of applications summarily declined by the Administration from applicants in the relevant area, as well as a breakdown of such figures by State;
(F) the daily number of applications declined by the Administration from applicants in the relevant area, as well as a breakdown of such figures by State;
(G) the daily number of applications in process from applicants in the relevant area, as well as a breakdown of such figures by State;
(H) the daily number of applications approved by the Administration from applicants in the relevant area, as well as a breakdown of such figures by State;
(I) the daily dollar amount of applications approved by the Administration from applicants in the relevant area, as well as a breakdown of such figures by State;
(J) the daily amount of loans dispersed, both partially and fully, by the Administration to applicants in the relevant area, as well as a breakdown of such figures by State;
(K) the daily dollar amount of loans disbursed, both partially and fully, from the relevant area, as well as a breakdown of such figures by State;
(L) the number of applications approved, including dollar amount approved, as well as applications partially and fully disbursed, including dollar amounts, since the last report under paragraph (1); and
(M) the declaration date, physical damage closing date, economic injury closing date, and number of counties included in the declaration of a major disaster.
(c) Periods when additional disaster assistance is made available
(1) In general
During any period for which the Administrator declares eligibility for additional disaster assistance under paragraph (9) of
(2) Contents
Each report submitted under paragraph (1) shall specify—
(A) the number of applications for disaster assistance distributed;
(B) the number of applications for disaster assistance received;
(C) the average time for the Administration to approve or disapprove an application for disaster assistance;
(D) the amount of disaster loans approved;
(E) the average time for initial disbursement of disaster loan proceeds; and
(F) the amount of disaster loan proceeds disbursed.
(d) Notice of the need for supplemental funds
On the same date that the Administrator notifies any committee of the Senate or the House of Representatives that supplemental funding is necessary for the disaster loan program of the Administration in any fiscal year, the Administrator shall notify in writing the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives regarding the need for supplemental funds for that loan program.
(e) Report on contracting
(1) In general
Not later than 6 months after the date on which the President declares a major disaster, and every 6 months thereafter until the date that is 18 months after the date on which the major disaster was declared, the Administrator shall submit a report to the Committee on Small Business and Entrepreneurship of the Senate and to the Committee on Small Business of the House of Representatives regarding Federal contracts awarded as a result of that major disaster.
(2) Contents
Each report submitted under paragraph (1) shall include—
(A) the total number of contracts awarded as a result of that major disaster;
(B) the total number of contracts awarded to small business concerns as a result of that major disaster;
(C) the total number of contracts awarded to women and minority-owned businesses as a result of that major disaster; and
(D) the total number of contracts awarded to local businesses as a result of that major disaster.
(f) Report on loan approval rate
(1) In general
Not later than 6 months after the date of enactment of this Act, the Administrator shall submit a report to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives detailing how the Administration can improve the processing of applications under the disaster loan program of the Administration.
(2) Contents
The report submitted under paragraph (1) shall include—
(A) recommendations, if any, regarding—
(i) staffing levels during a major disaster;
(ii) how to improve the process for processing, approving, and disbursing loans under the disaster loan program of the Administration, to ensure that the maximum assistance is provided to victims in a timely manner;
(iii) the viability of using alternative methods for assessing the ability of an applicant to repay a loan, including the credit score of the applicant on the day before the date on which the disaster for which the applicant is seeking assistance was declared;
(iv) methods, if any, for the Administration to expedite loss verification and loan processing of disaster loans during a major disaster for businesses affected by, and located in the area for which the President declared, the major disaster that are a major source of employment in the area or are vital to recovery efforts in the region (including providing debris removal services, manufactured housing, or building materials);
(v) legislative changes, if any, needed to implement findings from the Accelerated Disaster Response Initiative of the Administration; and
(vi) a description of how the Administration plans to integrate and coordinate the response to a major disaster with the technical assistance programs of the Administration; and
(B) the plans of the Administrator for implementing any recommendation made under subparagraph (A).
(
Editorial Notes
References in Text
The date of enactment of this Act, referred to in subsec. (f)(1), is the date of enactment of
Codification
Section is comprised of section 12091 of
Section was enacted as part of the Food, Conservation, and Energy Act of 2008, and also as part of the Small Business Disaster Response and Loan Improvements Act of 2008, and not as part of the Small Business Act which comprises this chapter.
Statutory Notes and Related Subsidiaries
Effective Date
Enactment of this section and repeal of
§636l. Semiannual report
Not later than 180 days after December 20, 2019, and semiannually thereafter, the President shall submit to the Committee on Small Business and Entrepreneurship and the Committee on Appropriations of the Senate and the Committee on Small Business and the Committee on Appropriations of the House of Representatives a report on the number of loans made under the Military Reservist Economic Injury Disaster Loan program and the dollar volume of those loans. The report shall contain the subsidy rate of the disaster loan program as authorized under
(
Editorial Notes
Codification
Section was enacted as part of the National Defense Authorization Act for Fiscal Year 2020, and not as part of the Small Business Act which comprises this chapter.
§636m. Loan forgiveness
(a) Definitions
In this section—
(1) the term "covered loan" means a loan guaranteed under
(2) the term "covered mortgage obligation" means any indebtedness or debt instrument incurred in the ordinary course of business that—
(A) is a liability of the borrower;
(B) is a mortgage on real or personal property; and
(C) was incurred before February 15, 2020;
(3) the term "covered operations expenditure" means a payment for any business software or cloud computing service that facilitates business operations, product or service delivery, the processing, payment, or tracking of payroll expenses, human resources, sales and billing functions, or accounting or tracking of supplies, inventory, records and expenses;
(4) the term "covered period" means the period—
(A) beginning on the date of the origination of a covered loan; and
(B) ending on a date selected by the eligible recipient of the covered loan that occurs during the period—
(i) beginning on the date that is 8 weeks after such date of origination; and
(ii) ending on the date that is 24 weeks after such date of origination;
(5) the term "covered property damage cost" means a cost related to property damage and vandalism or looting due to public disturbances that occurred during 2020 that was not covered by insurance or other compensation;
(6) the term "covered rent obligation" means rent obligated under a leasing agreement in force before February 15, 2020;
(7) the term "covered supplier cost" means an expenditure made by an entity to a supplier of goods for the supply of goods that—
(A) are essential to the operations of the entity at the time at which the expenditure is made; and
(B) is made pursuant to a contract, order, or purchase order—
(i) in effect at any time before the covered period with respect to the applicable covered loan; or
(ii) with respect to perishable goods, in effect before or at any time during the covered period with respect to the applicable covered loan;
(8) the term "covered utility payment" means payment for a service for the distribution of electricity, gas, water, transportation, telephone, or internet access for which service began before February 15, 2020;
(9) the term "covered worker protection expenditure"—
(A) means an operating or a capital expenditure to facilitate the adaptation of the business activities of an entity to comply with requirements established or guidance issued by the Department of Health and Human Services, the Centers for Disease Control, or the Occupational Safety and Health Administration, or any equivalent requirements established or guidance issued by a State or local government, during the period beginning on March 1, 2020 and ending the date on which the national emergency declared by the President under the National Emergencies Act (
(B) may include—
(i) the purchase, maintenance, or renovation of assets that create or expand—
(I) a drive-through window facility;
(II) an indoor, outdoor, or combined air or air pressure ventilation or filtration system;
(III) a physical barrier such as a sneeze guard;
(IV) an expansion of additional indoor, outdoor, or combined business space;
(V) an onsite or offsite health screening capability; or
(VI) other assets relating to the compliance with the requirements or guidance described in subparagraph (A), as determined by the Administrator in consultation with the Secretary of Health and Human Services and the Secretary of Labor; and
(ii) the purchase of—
(I) covered materials described in section 328.103(a) of title 44, Code of Federal Regulations, or any successor regulation;
(II) particulate filtering facepiece respirators approved by the National Institute for Occupational Safety and Health, including those approved only for emergency use authorization; or
(III) other kinds of personal protective equipment, as determined by the Administrator in consultation with the Secretary of Health and Human Services and the Secretary of Labor; and
(C) does not include residential real property or intangible property;
(10) the term "eligible recipient" means the recipient of a covered loan;
(11) the term "expected forgiveness amount" means the amount of principal that a lender reasonably expects a borrower to expend during the covered period on the sum of any—
(A) payroll costs;
(B) payments of interest on any covered mortgage obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation);
(C) payments on any covered rent obligation;
(D) covered utility payments;
(E) covered operations expenditures;
(F) covered property damage costs;
(G) covered supplier costs; and
(H) covered worker protection expenditures; and
(12) the terms "payroll costs" and "seasonal employer" have the meanings given those terms in
(b) Forgiveness
An eligible recipient shall be eligible for forgiveness of indebtedness on a covered loan in an amount equal to the sum of the following costs incurred and payments made during the covered period:
(1) Payroll costs.
(2) Any payment of interest on any covered mortgage obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation).
(3) Any payment on any covered rent obligation.
(4) Any covered utility payment.
(5) Any covered operations expenditure.
(6) Any covered property damage cost.
(7) Any covered supplier cost.
(8) Any covered worker protection expenditure.
(c) Treatment of amounts forgiven
(1) In general
Amounts which have been forgiven under this section shall be considered canceled indebtedness by a lender authorized under
(2) Purchase of guarantees
For purposes of the purchase of the guarantee for a covered loan by the Administrator, amounts which are forgiven under this section shall be treated in accordance with the procedures that are otherwise applicable to a loan guaranteed under
(3) Remittance
Not later than 90 days after the date on which the amount of forgiveness under this section is determined, the Administrator shall remit to the lender an amount equal to the amount of forgiveness, plus any interest accrued through the date of payment.
(4) Advance purchase of covered loan
(A) Report
A lender authorized under
(B) Purchase
The Administrator shall purchase the expected forgiveness amount described in subparagraph (A) as if the amount were the principal amount of a loan guaranteed under
(C) Timing
Not later than 15 days after the date on which the Administrator receives a report under subparagraph (A), the Administrator shall purchase the expected forgiveness amount under subparagraph (B) with respect to each covered loan to which the report relates.
(d) Limits on amount of forgiveness
(1) Amount may not exceed principal
The amount of loan forgiveness under this section shall not exceed the principal amount of the financing made available under the applicable covered loan.
(2) Reduction based on reduction in number of employees
(A) In general
The amount of loan forgiveness under this section shall be reduced, but not increased, by multiplying the amount described in subsection (b) by the quotient obtained by dividing—
(i) the average number of full-time equivalent employees per month employed by the eligible recipient during the covered period; by
(ii)(I) at the election of the borrower—
(aa) the average number of full-time equivalent employees per month employed by the eligible recipient during the period beginning on February 15, 2019 and ending on June 30, 2019; or
(bb) the average number of full-time equivalent employees per month employed by the eligible recipient during the period beginning on January 1, 2020 and ending on February 29, 2020; or
(II) in the case of an eligible recipient that is seasonal employer, as determined by the Administrator, the average number of full-time equivalent employees per month employed by the eligible recipient during the period beginning on February 15, 2019 and ending on June 30, 2019.
(B) Calculation of average number of employees
For purposes of subparagraph (A), the average number of full-time equivalent employees shall be determined by calculating the average number of full-time equivalent employees for each pay period falling within a month.
(3) Reduction relating to salary and wages
(A) In general
The amount of loan forgiveness under this section shall be reduced by the amount of any reduction in total salary or wages of any employee described in subparagraph (B) during the covered period that is in excess of 25 percent of the total salary or wages of the employee during the most recent full quarter during which the employee was employed before the covered period.
(B) Employees described
An employee described in this subparagraph is any employee who did not receive, during any single pay period during 2019, wages or salary at an annualized rate of pay in an amount more than $100,000.
(4) Tipped workers
An eligible recipient with tipped employees described in
(5) Exemption for re-hires
(A) In general
In a circumstance described in subparagraph (B), the amount of loan forgiveness under this section shall be determined without regard to a reduction in the number of full-time equivalent employees of an eligible recipient or a reduction in the salary of 1 or more employees of the eligible recipient, as applicable, during the period beginning on February 15, 2020 and ending on the date that is 30 days after March 27, 2020.
(B) Circumstances
A circumstance described in this subparagraph is a circumstance—
(i) in which—
(I) during the period beginning on February 15, 2020 and ending on the date that is 30 days after March 27, 2020, there is a reduction, as compared to February 15, 2020, in the number of full-time equivalent employees of an eligible recipient; and
(II) not later than December 31, 2020 (or, with respect to a covered loan made on or after December 27, 2020, not later than the last day of the covered period with respect to such covered loan), the eligible employer has eliminated the reduction in the number of full-time equivalent employees;
(ii) in which—
(I) during the period beginning on February 15, 2020 and ending on the date that is 30 days after March 27, 2020, there is a reduction, as compared to February 15, 2020, in the salary or wages of 1 or more employees of the eligible recipient; and
(II) not later than December 31, 2020 (or, with respect to a covered loan made on or after December 27, 2020, not later than the last day of the covered period with respect to such covered loan), the eligible employer has eliminated the reduction in the salary or wages of such employees; or
(iii) in which the events described in clause (i) and (ii) occur.
(6) Exemptions
The Administrator and the Secretary of the Treasury may prescribe regulations granting de minimis exemptions from the requirements under this subsection.
(7) Exemption based on employee availability
During the period beginning on February 15, 2020, and ending on December 31, 2020 (or, with respect to a covered loan made on or after December 27, 2020, ending on the last day of the covered period with respect to such covered loan), the amount of loan forgiveness under this section shall be determined without regard to a proportional reduction in the number of full-time equivalent employees if an eligible recipient, in good faith—
(A) is able to document—
(i) an inability to rehire individuals who were employees of the eligible recipient on February 15, 2020; and
(ii) an inability to hire similarly qualified employees for unfilled positions on or before December 31, 2020 (or, with respect to a covered loan made on or after December 27, 2020, on or before the last day of the covered period with respect to such covered loan); or
(B) is able to document an inability to return to the same level of business activity as such business was operating at before February 15, 2020, due to compliance with requirements established or guidance issued by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration during the period beginning on March 1, 2020, and ending December 31, 2020 (or, with respect to a covered loan made on or after December 27, 2020, ending on the last day of the covered period with respect to such covered loan), related to the maintenance of standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID–19.
(8) Limitation on forgiveness
To receive loan forgiveness under this section, an eligible recipient shall use at least 60 percent of the covered loan amount for payroll costs, and may use up to 40 percent of such amount for any payment of interest on any covered mortgage obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation), any payment on any covered rent obligation, any payment on any covered operations expenditure, any payment on any covered property damage cost, any payment on any covered supplier cost, any payment on any covered worker protection expenditure, or any covered utility payment.
(e) Application
Except as provided in subsection (l), an eligible recipient seeking loan forgiveness under this section shall submit to the lender that is servicing the covered loan an application, which shall include—
(1) documentation verifying the number of full-time equivalent employees on payroll and pay rates for the periods described in subsection (d), including—
(A) payroll tax filings reported to the Internal Revenue Service; and
(B) State income, payroll, and unemployment insurance filings;
(2) documentation, including cancelled checks, payment receipts, transcripts of accounts, purchase orders, orders, invoices, or other documents verifying payments on covered mortgage obligations, payments on covered rent obligations, payments on covered operations expenditures, payments on covered property damage costs, payments on covered supplier costs, payments on covered worker protection expenditures, and covered utility payments;
(3) a certification from a representative of the eligible recipient authorized to make such certifications that—
(A) the documentation presented is true and correct; and
(B) the amount for which forgiveness is requested was used to retain employees, make interest payments on a covered mortgage obligation, make payments on a covered rent obligation, make payments on covered operations expenditures, make payments on covered property damage costs, make payments on covered supplier costs, make payments on covered worker protection expenditures, or make covered utility payments; and
(4) any other documentation the Administrator determines necessary.
(f) Prohibition on forgiveness without documentation
No eligible recipient shall receive forgiveness under this section without submitting to the lender that is servicing the covered loan the documentation required under subsection (e) or the certification required under subsection (l), as applicable.
(g) Decision
Not later than 60 days after the date on which a lender receives an application for loan forgiveness under this section from an eligible recipient, the lender shall issue a decision on the an 1 application.
(h) Hold harmless
(1) Definition
In this subsection, the term "initial or second draw PPP loan" means a covered loan or a loan under paragraph (37) of
(2) Reliance
A lender may rely on any certification or documentation submitted by an applicant for an initial or second draw PPP loan or an eligible recipient or eligible entity receiving initial or second draw PPP loan that—
(A) is submitted pursuant to all applicable statutory requirements, regulations, and guidance related to initial or second draw PPP loan, including under paragraph (36) or (37) of
(B) attests that the applicant, eligible recipient, or eligible entity, as applicable, has accurately provided the certification or documentation to the lender in accordance with the statutory requirements, regulations, and guidance described in subparagraph (A).
(3) No enforcement action
With respect to a lender that relies on a certification or documentation described in paragraph (2) related to an initial or second draw PPP loan, an enforcement action may not be taken against the lender, and the lender shall not be subject to any penalties relating to loan origination or forgiveness of the initial or second draw PPP loan, if—
(A) the lender acts in good faith relating to loan origination or forgiveness of the initial or second draw PPP loan based on that reliance; and
(B) all other relevant Federal, State, local, and other statutory and regulatory requirements applicable to the lender are satisfied with respect to the initial or second draw PPP loan.
(i) Tax treatment
For purposes of title 26—
(1) no amount shall be included in the gross income of the eligible recipient by reason of forgiveness of indebtedness described in subsection (b),
(2) no deduction shall be denied, no tax attribute shall be reduced, and no basis increase shall be denied, by reason of the exclusion from gross income provided by paragraph (1), and
(3) in the case of an eligible recipient that is a partnership or S corporation—
(A) any amount excluded from income by reason of paragraph (1) shall be treated as tax exempt income for purposes of
(B) except as provided by the Secretary of the Treasury (or the Secretary's delegate), any increase in the adjusted basis of a partner's interest in a partnership under
(j) Rule of construction
The cancellation of indebtedness on a covered loan under this section shall not otherwise modify the terms and conditions of the covered loan.
(k) Regulations
Not later than 30 days after March 27, 2020, the Administrator shall issue guidance and regulations implementing this section.
(l) Simplified application
(1) Covered loans up to $150,000
(A) In general
With respect to a covered loan made to an eligible recipient that is not more than $150,000, the covered loan amount shall be forgiven under this section if the eligible recipient—
(i) signs and submits to the lender a certification, to be established by the Administrator not later than 24 days after December 27, 2020, which—
(I) shall be not more than 1 page in length; and
(II) shall only require the eligible recipient to provide—
(aa) a description of the number of employees the eligible recipient was able to retain because of the covered loan;
(bb) the estimated amount of the covered loan amount spent by the eligible recipient on payroll costs; and
(cc) the total loan value;
(ii) attests that the eligible recipient has—
(I) accurately provided the required certification; and
(II) complied with the requirements under
(iii) retains records relevant to the form that prove compliance with such requirements—
(I) with respect to employment records, for the 4-year period following submission of the form; and
(II) with respect to other records, for the 3-year period following submission of the form.
(B) Limitation on requiring additional materials
An eligible recipient of a covered loan that is not more than $150,000 shall not, at the time of the application for forgiveness, be required to submit any application or documentation in addition to the certification and information required to substantiate forgiveness.
(C) Records for other requirements
Nothing in subparagraph (A) or (B) shall be construed to exempt an eligible recipient from having to provide documentation independently to a lender to satisfy relevant Federal, State, local, or other statutory or regulatory requirements, or in connection with an audit as authorized under subparagraph (E).
(D) Demographic information
The certification established by the Administrator under subparagraph (A) shall include a means by which an eligible recipient may, at the discretion of the eligible recipient, submit demographic information of the owner of the eligible recipient, including the sex, race, ethnicity, and veteran status of the owner.
(E) Audit authority
The Administrator may—
(i) review and audit covered loans described in subparagraph (A);
(ii) access any records described in subparagraph (A)(iii); and
(iii) in the case of fraud, ineligibility, or other material noncompliance with applicable loan or loan forgiveness requirements, modify—
(I) the amount of a covered loan described in subparagraph (A); or
(II) the loan forgiveness amount with respect to a covered loan described in subparagraph (A).
(2) Covered loans of more than $150,000
(A) In general
With respect to a covered loan in an amount that is more than $150,000, the eligible recipient shall submit to the lender that is servicing the covered loan the documentation described in subsection (e).
(B) Demographic information
The process for submitting the documentation described in subsection (e) shall include a means by which an eligible recipient may, at the discretion of the eligible recipient, submit demographic information of the owner of the eligible recipient, including the sex, race, ethnicity, and veteran status of the owner.
(3) Forgiveness audit plan
(A) In general
Not later than 45 days after December 27, 2020, the Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives an audit plan that details—
(i) the policies and procedures of the Administrator for conducting forgiveness reviews and audits of covered loans; and
(ii) the metrics that the Administrator shall use to determine which covered loans will be audited.
(B) Reports
Not later than 30 days after the date on which the Administrator submits the audit plan required under subparagraph (A), and each month thereafter, the Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report on the forgiveness review and audit activities of the Administrator under this subsection, which shall include—
(i) the number of active reviews and audits;
(ii) the number of reviews and audits that have been ongoing for more than 60 days; and
(iii) any substantial changes made to the audit plan submitted under subparagraph (A).
(
Editorial Notes
References in Text
The National Emergencies Act, referred to in subsec. (a)(9)(A), is
Section 1102 of this Act, referred to in subsec. (a)(12), means section 1102 of div. A of
Section 2301 of the CARES Act, referred to in subsec. (a)(12), is section 2301 of
Section 303 of the Taxpayer Certainty and Disaster Relief Act of 2020, referred to in subsec. (a)(12), is section 303 of div. EE of
Codification
Section was formerly classified to
Amendments
2021—Subsec. (a)(12).
2020—Subsec. (a)(1).
Subsec. (a)(3).
Subsec. (a)(4).
"(A) the date that is 24 weeks after such date of origination; or
"(B) December 31, 2020;".
Subsec. (a)(5) to (11).
Subsec. (a)(11)(E) to (H).
Subsec. (a)(12).
Subsec. (b)(5) to (8).
Subsec. (c).
Subsec. (d)(5)(B)(i)(II), (ii)(II).
Subsec. (d)(7).
Subsec. (d)(8).
Subsec. (e).
Subsec. (e)(2).
Subsec. (e)(3)(B).
Subsec. (f).
Subsec. (h).
"(1) an enforcement action may not be taken against the lender under
"(2) the lender shall not be subject to any penalties by the Administrator relating to loan forgiveness for the payments for payroll costs, payments on covered mortgage obligations, payments on covered lease obligations, or covered utility payments, as the case may be."
Subsec. (i).
Subsec. (l).
Statutory Notes and Related Subsidiaries
Effective Date of 2021 Amendment
Amendment by
Effective Date of 2020 Amendment
Amendment by section 304(b)(1)(A), (B), (2) of div. N of
Amendment by section 315(b) of div. N of
Except as otherwise provided, amendment by title III of div. N of
Modification of Dates
§637. Additional powers
(a) Procurement contracts; subcontracts to disadvantaged small business concerns; performance bonds; contract negotiations; definitions; eligibility; determinations; publication; recruitment; construction subcontracts; annual estimates; Indian tribes
(1) It shall be the duty of the Administration and it is hereby empowered, whenever it determines such action is necessary or appropriate—
(A) to enter into contracts with the United States Government and any department, agency, or officer thereof having procurement powers obligating the Administration to furnish articles, equipment, supplies, services, or materials to the Government or to perform construction work for the Government. In any case in which the Administration certifies to any officer of the Government having procurement powers that the Administration is competent and responsible to perform any specific Government procurement contract to be let by any such officer, such officer shall be authorized in his discretion to let such procurement contract to the Administration upon such terms and conditions as may be agreed upon between the Administration and the procurement officer. Whenever the Administration and such procurement officer fail to agree, the matter shall be submitted for determination to the Secretary or the head of the appropriate department or agency by the Administrator. Not later than 5 days from the date the Administration is notified of a procurement officer's adverse decision, the Administration may notify the contracting officer of the intent to appeal such adverse decision, and within 15 days of such date the Administrator shall file a written request for a reconsideration of the adverse decision with the Secretary of the department or agency head. For the purposes of this subparagraph, a procurement officer's adverse decision includes a decision not to make available for award pursuant to this subsection a particular procurement requirement or the failure to agree on the terms and conditions of a contract to be awarded noncompetitively under the authority of this subsection. Upon receipt of the notice of intent to appeal, the Secretary of the department or the agency head shall suspend further action regarding the procurement until a written decision on the Administrator's request for reconsideration has been issued by such Secretary or agency head, unless such officer makes a written determination that urgent and compelling circumstances which significantly affect interests of the United States will not permit waiting for a reconsideration of the adverse decision. If the Administrator's request for reconsideration is denied, the Secretary of the department or agency head shall specify the reasons why the selected firm was determined to be incapable to perform the procurement requirement, and the findings supporting such determination, which shall be made a part of the contract file for the requirement. A contract may not be awarded under this subsection if the award of the contract would result in a cost to the awarding agency which exceeds a fair market price;
(B) to arrange for the performance of such procurement contracts by negotiating or otherwise letting subcontracts to socially and economically disadvantaged small business concerns for construction work, services, or the manufacture, supply, assembly of such articles, equipment, supplies, materials, or parts thereof, or servicing or processing in connection therewith, or such management services as may be necessary to enable the Administration to perform such contracts;
(C) to make an award to a small business concern owned and controlled by socially and economically disadvantaged individuals which has completed its period of Program Participation as prescribed by
(i) the contract will be awarded as a result of an offer (including price) submitted in response to a published solicitation relating to a competition conducted pursuant to subparagraph (D); and
(ii) the prospective contract awardee was a Program Participant eligible for award of the contract on the date specified for receipt of offers contained in the contract solicitation; and
(D)(i) A contract opportunity offered for award pursuant to this subsection shall be awarded on the basis of competition restricted to eligible Program Participants if—
(I) there is a reasonable expectation that at least two eligible Program Participants will submit offers and that award can be made at a fair market price, and
(II) the anticipated award price of the contract (including options) will exceed $7,000,000 in the case of a contract opportunity assigned a standard industrial classification code for manufacturing and $3,000,000 (including options) in the case of all other contract opportunities.
(ii) The Associate Administrator for Minority Small Business and Capital Ownership Development, on a nondelegable basis, is authorized to approve a request from an agency to award a contract opportunity under this subsection on the basis of a competition restricted to eligible Program Participants even if the anticipated award price is not expected to exceed the dollar amounts specified in clause (i)(II). Such approvals shall be granted only on a limited basis.
(2) Notwithstanding subsections (a), (b), and (e) of
(A) the Administration takes such measures as it deems appropriate for the protection of persons furnishing materials and labor to a small business receiving any benefit pursuant to this paragraph;
(B) the Administration assists, insofar as practicable, a small business receiving the benefits of this paragraph to develop, within a reasonable period of time, such financial and other capability as may be needed to obtain such bonds as the Administration may subsequently require for the successful completion of any program conducted under the authority of this subsection;
(C) the Administration finds that such small business is unable to obtain the requisite bond or bonds from a surety and that no surety is willing to issue bond or bonds subject to the guarantee provisions of Title IV of the Small Business Investment Act of 1958 [
(D) the small business is determined to be a start-up concern and such concern has not been participating in any program conducted under the authority of this subsection for a period exceeding one year.
The authority to waive bonds provided in this paragraph (2) may not be exercised after September 30, 1988.
(3)(A) Any Program Participant selected by the Administration to perform a contract to be let noncompetitively pursuant to this subsection shall, when practicable, participate in any negotiation of the terms and conditions of such contract.
(B)(i) For purposes of paragraph (1) a "fair market price" shall be determined by the agency offering the procurement requirement to the Administration, in accordance with clauses (ii) and (iii).
(ii) The estimate of a current fair market price for a new procurement requirement, or a requirement that does not have a satisfactory procurement history, shall be derived from a price or cost analysis. Such analysis may take into account prevailing market conditions, commercial prices for similar products or services, or data obtained from any other agency. Such analysis shall consider such cost or pricing data as may be timely submitted by the Administration.
(iii) The estimate of a current fair market price for a procurement requirement that has a satisfactory procurement history shall be based on recent award prices adjusted to insure comparability. Such adjustments shall take into account differences in quantities, performance times, plans, specifications, transportation costs, packaging and packing costs, labor and materials costs, overhead costs, and any other additional costs which may be deemed appropriate.
(C) An agency offering a procurement requirement for potential award pursuant to this subsection shall, upon the request of the Administration, promptly submit to the Administration a written statement detailing the method used by the agency to estimate the current fair market price for such contract, identifying the information, studies, analyses, and other data used by such agency. The agency's estimate of the current fair market price (and any supporting data furnished to the Administration) shall not be disclosed to any potential offeror (other than the Administration).
(D) A small business concern selected by the Administration to perform or negotiate a contract to be let pursuant to this subsection may request the Administration to protest the agency's estimate of the fair market price for such contract pursuant to paragraph (1)(A).
(4)(A) For purposes of this section, the term "socially and economically disadvantaged small business concern" means any small business concern which meets the requirements of subparagraph (B) and—
(i) which is at least 51 per centum unconditionally owned by—
(I) one or more socially and economically disadvantaged individuals,
(II) an economically disadvantaged Indian tribe (or a wholly owned business entity of such tribe), or
(III) an economically disadvantaged Native Hawaiian organization, or
(ii) in the case of any publicly owned business, at least 51 per centum of the stock of which is unconditionally owned by—
(I) one or more socially and economically disadvantaged individuals,
(II) an economically disadvantaged Indian tribe (or a wholly owned business entity of such tribe), or
(III) an economically disadvantaged Native Hawaiian organization.
(B) A small business concern meets the requirements of this subparagraph if the management and daily business operations of such small business concern are controlled by one or more—
(i) socially and economically disadvantaged individuals described in subparagraph (A)(i)(I) or subparagraph (A)(ii)(I),
(ii) members of an economically disadvantaged Indian tribe described in subparagraph (A)(i)(II) or subparagraph (A)(ii)(II), or
(iii) Native Hawaiian organizations described in subparagraph (A)(i)(III) or subparagraph (A)(ii)(III).
(C) Each Program Participant shall certify, on an annual basis, that it meets the requirements of this paragraph regarding ownership and control.
(5) Socially disadvantaged individuals are those who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group without regard to their individual qualities.
(6)(A) Economically disadvantaged individuals are those socially disadvantaged individuals whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities as compared to others in the same business area who are not socially disadvantaged. In determining the degree of diminished credit and capital opportunities the Administration shall consider, but not be limited to, the assets and net worth of such socially disadvantaged individual. In determining the economic disadvantage of an Indian tribe, the Administration shall consider, where available, information such as the following: the per capita income of members of the tribe 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 shall annually submit to the Administration—
(i) a personal financial statement for each disadvantaged owner;
(ii) a record of all payments made by the Program Participant to each of its disadvantaged owners or to any person or entity affiliated with such owners; and
(iii) such other information as the Administration may deem necessary to make the determinations required by this paragraph.
(C)(i) Whenever, on the basis of information provided by a Program Participant pursuant to subparagraph (B) or otherwise, the Administration has reason to believe that the standards to establish economic disadvantage pursuant to subparagraph (A) have not been met, the Administration shall conduct a review to determine whether such Program Participant and its disadvantaged owners continue to be impaired in their ability to compete in the free enterprise system due to diminished capital and credit opportunities when compared to other concerns in the same business area, which are not socially disadvantaged.
(ii) If the Administration determines, pursuant to such review, that a Program Participant and its disadvantaged owners are no longer economically disadvantaged for the purpose of receiving assistance under this subsection, the Program Participant shall be graduated pursuant to
(D)(i) Whenever, on the basis of information provided by a Program Participant pursuant to subparagraph (B) or otherwise, the Administration has reason to believe that the amount of funds or other assets withdrawn from a Program Participant for the personal benefit of its disadvantaged owners or any person or entity affiliated with such owners may have been unduly excessive, the Administration shall conduct a review to determine whether such withdrawal of funds or other assets was detrimental to the achievement of the targets, objectives, and goals contained in such Program Participant's business plan.
(ii) If the Administration determines, pursuant to such review, that funds or other assets have been withdrawn to the detriment of the Program Participant's business, the Administration shall—
(I) initiate a proceeding to terminate the Program Participant pursuant to
(II) require an appropriate reinvestment of funds or other assets and such other steps as the Administration may deem necessary to ensure the protection of the concern.
(E) Whenever the Administration computes personal net worth for any purpose under this paragraph, it shall exclude from such computation—
(i) the value of investments that disadvantaged owners have in their concerns, except that such value shall be taken into account under this paragraph when comparing such concerns to other concerns in the same business area that are owned by other than socially disadvantaged persons;
(ii) the equity that disadvantaged owners have in their primary personal residences, except that any portion of such equity that is attributable to unduly excessive withdrawals from a Program Participant or a concern applying for program participation shall be taken into account.
(7)(A) No small business concern shall be deemed eligible for any assistance pursuant to this subsection unless the Administration determines that with contract, financial, technical, and management support the small business concern will be able to perform contracts which may be awarded to such concern under paragraph (1)(C) and has reasonable prospects for success in competing in the private sector.
(B) Limitations established by the Administration in its regulations and procedures restricting the award of contracts pursuant to this subsection to a limited number of standard industrial classification codes in an approved business plan shall not be applied in a manner that inhibits the logical business progression by a participating small business concern into areas of industrial endeavor where such concern has the potential for success.
(8) All determinations made pursuant to paragraph (5) with respect to whether a group has been subjected to prejudice or bias shall be made by the Administrator after consultation with the Associate Administrator for Minority Small Business and Capital Ownership Development. All other determinations made pursuant to paragraphs (4), (5), (6), and (7) shall be made by the Associate Administrator for Minority Small Business and Capital Ownership Development under the supervision of, and responsible to, the Administrator.
(9)(A) Subject to the provisions of subparagraph (E), the Administration, prior to taking any action described in subparagraph (B), shall provide the small business concern that is the subject of such action, an opportunity for a hearing on the record, in accordance with
(B) The actions referred to in subparagraph (A) are—
(i) denial of program admission based upon a negative determination pursuant to paragraph (4), (5), or (6);
(ii) a termination pursuant to
(iii) a graduation pursuant to
(iv) the denial of a request to issue a waiver pursuant to paragraph (21)(B).
(C) The Administration's proposed action, in any proceeding conducted under the authority of this paragraph, shall be sustained unless it is found to be arbitrary, capricious, or contrary to law.
(D) A decision rendered pursuant to this paragraph shall be the final decision of the Administration and shall be binding upon the Administration and those within its employ.
(E) The adjudicator selected to preside over a proceeding conducted under the authority of this paragraph shall decline to accept jurisdiction over any matter that—
(i) does not, on its face, allege facts that, if proven to be true, would warrant reversal or modification of the Administration's position;
(ii) is untimely filed;
(iii) is not filed in accordance with the rules of procedure governing such proceedings; or
(iv) has been decided by or is the subject of an adjudication before a court of competent jurisdiction over such matters.
(F) Proceedings conducted pursuant to the authority of this paragraph shall be completed and a decision rendered, insofar as practicable, within ninety days after a petition for a hearing is filed with the adjudicating office.
(10) The Administration shall develop and implement an outreach program to inform and recruit small business concerns to apply for eligibility for assistance under this subsection. Such program shall make a sustained and substantial effort to solicit applications for certification from small business concerns located in areas of concentrated unemployment or underemployment or within labor surplus areas and within States having relatively few Program Participants and from small disadvantaged business concerns in industry categories that have not substantially participated in the award of contracts let under the authority of this subsection.
(11) To the maximum extent practicable, construction subcontracts awarded by the Administration pursuant to this subsection shall be awarded within the county or State where the work is to be performed.
(12)(A) The Administration shall require each concern eligible to receive subcontracts pursuant to this subsection to annually prepare and submit to the Administration a capability statement. Such statement shall briefly describe such concern's various contract performance capabilities and shall contain the name and telephone number of the Business Opportunity Specialist assigned such concern. The Administration shall separate such statements by those primarily dependent upon local contract support and those primarily requiring a national marketing effort. Statements primarily dependent upon local contract support shall be disseminated to appropriate buying activities in the marketing area of the concern. The remaining statements shall be disseminated to the Directors of Small and Disadvantaged Business Utilization for the appropriate agencies who shall further distribute such statements to buying activities with such agencies that may purchase the types of items or services described on the capability statements.
(B) Contracting activities receiving capability statements shall, within 60 days after receipt, contact the relevant Business Opportunity Specialist to indicate the number, type, and approximate dollar value of contract opportunities that such activities may be awarding over the succeeding 12-month period and which may be appropriate to consider for award to those concerns for which it has received capability statements.
(C) Each executive agency reporting to the Federal Procurement Data System contract actions with an aggregate value in excess of $50,000,000 in fiscal year 1988, or in any succeeding fiscal year, shall prepare a forecast of expected contract opportunities or classes of contract opportunities for the next and succeeding fiscal years that small business concerns, including those owned and controlled by socially and economically disadvantaged individuals, are capable of performing. Such forecast shall be periodically revised during such year. To the extent such information is available, the agency forecasts shall specify:
(i) The approximate number of individual contract opportunities (and the number of opportunities within a class).
(ii) The approximate dollar value, or range of dollar values, for each contract opportunity or class of contract opportunities.
(iii) The anticipated time (by fiscal year quarter) for the issuance of a procurement request.
(iv) The activity responsible for the award and administration of the contract.
(D) The head of each executive agency subject to the provisions of subparagraph (C) shall within 10 days of completion furnish such forecasts to—
(i) the Director of the Office of Small and Disadvantaged Business Utilization established pursuant to
(ii) the Administrator.
(E) The information reported pursuant to subparagraph (D) may be limited to classes of items and services for which there are substantial annual purchases.
(F) Such forecasts shall be available to small business concerns.
(13) For purposes of this subsection, the term "Indian tribe" means any Indian tribe, band, nation, or other organized group or community of Indians, including any Alaska Native village or regional or village corporation (within the meaning of the Alaska Native Claims Settlement Act [
(A) is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians, or
(B) is recognized as such by the State in which such tribe, band, nation, group, or community resides.
(14)
(15) For purposes of this subsection, the term "Native Hawaiian Organization" means any community service organization serving Native Hawaiians in the State of Hawaii which—
(A) is a nonprofit corporation that has filed articles of incorporation with the director (or the designee thereof) of the Hawaii Department of Commerce and Consumer Affairs, or any successor agency,
(B) is controlled by Native Hawaiians, and
(C) whose business activities will principally benefit such Native Hawaiians.
(16)(A) The Administration shall award sole source contracts under this section to any small business concern recommended by the procuring agency offering the contract opportunity if—
(i) the Program Participant is determined to be a responsible contractor with respect to performance of such contract opportunity;
(ii) the award of such contract would be consistent with the Program Participant's business plan; and
(iii) the award of the contract would not result in the Program Participant exceeding the requirements established by
(B) To the maximum extent practicable, the Administration shall promote the equitable geographic distribution of sole source contracts awarded pursuant to this subsection.
(17)(A) An otherwise responsible business concern that is in compliance with the requirements of subparagraph (B) shall not be denied the opportunity to submit and have considered its offer for any procurement contract, which contract has as its principal purpose the supply of a product to be let pursuant to this subsection, subsection (m),
(B) To be in compliance with the requirements referred to in subparagraph (A), such a business concern shall—
(i) be primarily engaged in the wholesale or retail trade;
(ii) be a small business concern under the numerical size standard for the Standard Industrial Classification Code assigned to the contract solicitation on which the offer is being made;
(iii) be a regular dealer, as defined pursuant to section 35(a) 1 of title 41 (popularly referred to as the Walsh-Healey Public Contracts Act), in the product to be offered the Government or be specifically exempted from such section by
(iv) represent that it will supply the product of a domestic small business manufacturer or processor, unless a waiver of such requirement is granted—
(I) by the Administrator, after reviewing a determination by the 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 of an offeror by the solicitation; or
(II) 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.
(C)
(18)(A) No person within the employ of the Administration shall, during the term of such employment and for a period of two years after such employment has been terminated, engage in any activity or transaction specified in subparagraph (B) with respect to any Program Participant during such person's term of employment, if such person participated personally (either directly or indirectly) in decision-making responsibilities relating to such Program Participant or with respect to the administration of any assistance provided to Program Participants generally under this subsection,
(B) The activities and transactions prohibited by subparagraph (A) include—
(i) the buying, selling, or receiving (except by inheritance) of any legal or beneficial ownership of stock or any other ownership interest or the right to acquire any such interest;
(ii) the entering into or execution of any written or oral agreement (whether or not legally enforceable) to purchase or otherwise obtain any right or interest described in clause (i); or
(iii) the receipt of any other benefit or right that may be an incident of ownership.
(C)(i) The employees designated in clause (ii) shall annually submit a written certification to the Administration regarding compliance with the requirements of this paragraph.
(ii) The employees referred to in clause (i) are—
(I) regional administrators;
(II) district directors;
(III) the Associate Administrator for Minority Small Business and Capital Ownership Development;
(IV) employees whose principal duties relate to the award of contracts or the provision of other assistance pursuant to this subsection or
(V) such other employees as the Administrator may deem appropriate.
(iii) Any present or former employee of the Administration who violates this paragraph shall be subject to a civil penalty, assessed by the Attorney General, that shall not exceed 300 per centum of the maximum amount of gain such employee realized or could have realized as a result of engaging in those activities and transactions prescribed 2 by subparagraph (B).
(iv) In addition to any other remedy or sanction provided for under law or regulation, any person who falsely certifies pursuant to clause (i) shall be subject to a civil penalty under the Program Fraud Civil Remedies Act of 1986 (
(19)(A) Any employee of the Administration who has authority to take, direct others to take, recommend, or approve any action with respect to any program or activity conducted pursuant to this subsection or
(B) Any employee who willfully and knowingly violates subparagraph (A) shall be subject to disciplinary action which may consist of separation from service, reduction in grade, suspension, or reprimand.
(C) Subparagraph (A) shall not apply to any action taken as a penalty or other enforcement of a violation of any law, rule, or regulation prohibiting or restricting political activity.
(D) The prohibitions of subparagraph (A), and remedial measures provided for under subparagraphs (B) and (C) with regard to such prohibitions, shall be in addition to, and not in lieu of, any other prohibitions, measures or liabilities that may arise under any other provision of law.
(20)(A) Small business concerns participating in the Program under
(i) A listing of any agents, representatives, attorneys, accountants, consultants, and other parties (other than employees) receiving compensation to assist in obtaining a Federal contract for such Program Participant.
(ii) The amount of compensation received by any person listed under clause (i) during the relevant reporting period and a description of the activities performed in return for such compensation.
(B) The Business Opportunity Specialist shall promptly review and forward such report to the Associate Administrator for Minority Small Business and Capital Ownership Development. Any report that raises a suspicion of improper activity shall be reported immediately to the Inspector General of the Administration.
(C) The failure to submit a report pursuant to the requirements of this subsection and applicable regulations shall be considered "good cause" for the initiation of a termination proceeding pursuant to
(21)(A) Subject to the provisions of subparagraph (B), a contract (including options) awarded pursuant to this subsection shall be performed by the concern that initially received such contract. Notwithstanding the provisions of the preceding sentence, if the owner or owners upon whom eligibility was based relinquish ownership or control of such concern, or enter into any agreement to relinquish such ownership or control, such contract or option shall be terminated for the convenience of the Government, except that no repurchase costs or other damages may be assessed against such concerns due solely to the provisions of this subparagraph.
(B) The Administrator may, on a nondelegable basis, waive the requirements of subparagraph (A) only if one of the following conditions exist:
(i) When it is necessary for the owners of the concern to surrender partial control of such concern on a temporary basis in order to obtain equity financing.
(ii) The head of the contracting agency for which the contract is being performed certifies that termination of the contract would severely impair attainment of the agency's program objectives or missions;
(iii) Ownership and control of the concern that is performing the contract will pass to another small business concern that is a program participant, but only if the acquiring firm would otherwise be eligible to receive the award directly pursuant to subsection (a);
(iv) The individuals upon whom eligibility was based are no longer able to exercise control of the concern due to incapacity or death; or
(v) When, in order to raise equity capital, it is necessary for the disadvantaged owners of the concern to relinquish ownership of a majority of the voting stock of such concern, but only if—
(I) such concern has exited the Capital Ownership Development Program;
(II) the disadvantaged owners will maintain ownership of the largest single outstanding block of voting stock (including stock held by affiliated parties); and
(III) the disadvantaged owners will maintain control of daily business operations.
(C) The Administrator may waive the requirements of subparagraph (A) if—
(i) in the case of subparagraph (B) (i), (ii) and (iv), he is requested to do so prior to the actual relinquishment of ownership or control; and
(ii) in the case of subparagraph (B)(iii), he is requested to do so as soon as possible after the incapacity or death occurs.
(D) Concerns performing contracts awarded pursuant to this subsection shall be required to notify the Administration immediately upon entering an agreement (either oral or in writing) to transfer all or part of its stock or other ownership interest to any other party.
(E) Notwithstanding any other provision of law, for the purposes of determining ownership and control of a concern under this section, any potential ownership interests held by investment companies licensed under the Small Business Investment Act of 1958 [
(b) Procurement and property disposal powers; determination of small-business concerns
It shall also be the duty of the Administration and it is empowered, whenever it determines such action is necessary—
(1)(A) to provide—
(i) technical, managerial, and informational aids to small business concerns—
(I) by advising and counseling on matters in connection with Government procurement and policies, principles, and practices of good management;
(II) by cooperating and advising with—
(aa) voluntary business, professional, educational, and other nonprofit organizations, associations, and institutions (except that the Administration shall take such actions as it determines necessary to ensure that such cooperation does not constitute or imply an endorsement by the Administration of the organization or its products or services, and shall ensure that it receives appropriate recognition in all printed materials); and
(bb) other Federal and State agencies;
(III) by maintaining a clearinghouse for information on managing, financing, and operating small business enterprises; and
(IV) by disseminating such information, including through recognition events, and by other activities that the Administration determines to be appropriate; and
(ii) through cooperation with a profit-making concern (referred to in this paragraph as a "cosponsor"), training, information, and education to small business concerns, except that the Administration shall—
(I) take such actions as it determines to be appropriate to ensure that—
(aa) the Administration receives appropriate recognition and publicity;
(bb) the cooperation does not constitute or imply an endorsement by the Administration of any product or service of the cosponsor;
(cc) unnecessary promotion of the products or services of the cosponsor is avoided; and
(dd) utilization of any one cosponsor in a marketing area is minimized; and
(II) develop an agreement, executed on behalf of the Administration by an employee of the Administration in Washington, the District of Columbia, that provides, at a minimum, that—
(aa) any printed material to announce the cosponsorship or to be distributed at the cosponsored activity, shall be approved in advance by the Administration;
(bb) the terms and conditions of the cooperation shall be specified;
(cc) only minimal charges may be imposed on any small business concern to cover the direct costs of providing the assistance;
(dd) the Administration may provide to the cosponsorship mailing labels, but not lists of names and addresses of small business concerns compiled by the Administration;
(ee) all printed materials containing the names of both the Administration and the cosponsor shall include a prominent disclaimer that the cooperation does not constitute or imply an endorsement by the Administration of any product or service of the cosponsor; and
(ff) the Administration shall ensure that it receives appropriate recognition in all cosponsorship printed materials.
(B) To establish, conduct, and publicize, and to recruit, select, and train volunteers for (and to enter into contracts, grants, or cooperative agreements therefor), volunteer programs, including a Service Corps of Retired Executives (SCORE) and an Active Corps of Executive (ACE) for the purposes of subparagraph (A). To facilitate the implementation of such volunteer programs the Administration shall maintain at its headquarters and pay the salaries, benefits, and expenses of a volunteer and professional staff to manage and oversee the program. Any such payments made pursuant to this subparagraph shall be effective only to such extent or in such amounts as are provided in advance in appropriation Acts. Notwithstanding any other provision of law, SCORE may solicit cash and in-kind contributions from the private sector to be used to carry out its functions under this chapter, and may use payments made by the Administration pursuant to this subparagraph for such solicitation and the management of the contributions received.
(C) To allow any individual or group of persons participating with it in furtherance of the purposes of subparagraphs (A) and (B) to use the Administration's office facilities and related material and services as the Administration deems appropriate, including clerical and stenographic services:
(i) such volunteers, while carrying out activities under this paragraph shall be deemed Federal employees for the purposes of the Federal tort claims provisions in title 28; and for the purposes of subchapter I of
(ii) the Administrator is authorized to reimburse such volunteers for all necessary out-of-pocket expenses incident to their provision of services under this chapter, or in connection with attendance at meetings sponsored by the Administration, or for the cost of malpractice insurance, as the Administrator shall determine, in accordance with regulations which he or she shall prescribe, and, while they are carrying out such activities away from their homes or regular places of business, for travel expenses (including per diem in lieu of subsistence) as authorized by
(iii) such volunteers shall in no way provide services to a client of such Administration with a delinquent loan outstanding, except upon a specific request signed by such client for assistance in connection with such matter.
(D) Notwithstanding any other provision of law, no payment for supportive services or reimbursement of out-of-pocket expenses made to persons serving pursuant to this paragraph shall be subject to any tax or charge or be treated as wages or compensation for the purposes of unemployment, disability, retirement, public assistance, or similar benefit payments, or minimum wage laws.
(E) In carrying out its functions under subparagraph (A), to make grants (including contracts and cooperative agreements) to any public or private institution of higher education for the establishment and operation of a small business institute, which shall be used to provide business counseling and assistance to small business concerns through the activities of students enrolled at the institution, which students shall be entitled to receive educational credits for their activities.
(F) Notwithstanding any other provision of law and pursuant to regulations which the Administrator shall prescribe, counsel may be employed and counsel fees, court costs, bail, and other expenses incidental to the defense of volunteers may be paid in judicial or administrative proceedings arising directly out of the performance of activities pursuant to this paragraph, to which volunteers have been made parties.
(G) In carrying out its functions under this chapter and to carry out the activities authorized by title IV of the Women's Business Ownership Act of 1988 [
(2) to make a complete inventory of all productive facilities of small-business concerns or to arrange for such inventory to be made by any other governmental agency which has the facilities. In making any such inventory, the appropriate agencies in the several States may be requested to furnish an inventory of the productive facilities of small-business concerns in each respective State if such an inventory is available or in prospect;
(3) to coordinate and to ascertain the means by which the productive capacity of small-business concerns can be most effectively utilized;
(4) to consult and cooperate with officers of the Government having procurement or property disposal powers, in order to utilize the potential productive capacity of plants operated by small-business concerns;
(5) to obtain information as to methods and practices which Government prime contractors utilize in letting subcontracts and to take action to encourage the letting of subcontracts by prime contractors to small-business concerns at prices and on conditions and terms which are fair and equitable;
(6) to determine within any industry the concerns, firms, persons, corporations, partnerships, cooperatives, or other business enterprises which are to be designated "small-business concerns" for the purpose of effectuating the provisions of this chapter. To carry out this purpose the Administrator, when requested to do so, shall issue in response to each such request an appropriate certificate certifying an individual concern as a "small-business concern" in accordance with the criteria expressed in this chapter. Any such certificate shall be subject to revocation when the concern covered thereby ceases to be a "small-business concern". Offices of the Government having procurement or lending powers, or engaging in the disposal of Federal property or allocating materials or supplies, or promulgating regulations affecting the distribution of materials or supplies, shall accept as conclusive the Administration's determination as to which enterprises are to be designated "small-business concerns", as authorized and directed under this paragraph;
(7)(A) To certify to Government procurement officers, and officers engaged in the sale and disposal of Federal property, with respect to all elements of responsibility, including, but not limited to, capability, competency, capacity, credit, integrity, perseverance, and tenacity, of any small business concern or group of such concerns to receive and perform a specific Government contract. A Government procurement officer or an officer engaged in the sale and disposal of Federal property may not, for any reason specified in the preceding sentence preclude any small business concern or group of such concerns from being awarded such contract without referring the matter for a final disposition to the Administration.
(B) If a Government procurement officer finds that an otherwise qualified small business concern may be ineligible due to the provisions of section 35(a) 1 of title 41, he shall notify the Administration in writing of such finding. The Administration shall review such finding and shall either dismiss it and certify the small business concern to be an eligible Government contractor for a specific Government contract or if it concurs in the finding, forward the matter to the Secretary of Labor for final disposition, in which case the Administration may certify the small business concern only if the Secretary of Labor finds the small business concern not to be in violation.
(C) In any case in which a small business concern or group of such concerns has been certified by the Administration pursuant to (A) or (B) to be a responsible or eligible Government contractor as to a specific Government contract, the officers of the Government having procurement or property disposal powers are directed to accept such certification as conclusive, and shall let such Government contract to such concern or group of concerns without requiring it to meet any other requirement of responsibility or eligibility. Notwithstanding the first sentence of this subparagraph, the Administration may not establish an exemption from referral or notification or refuse to accept a referral or notification from a Government procurement officer made pursuant to subparagraph (A) or (B) of this paragraph, but nothing in this paragraph shall require the processing of an application for certification if the small business concern to which the referral pertains declines to have the application processed.
(8) to obtain from any Federal department, establishment, or agency engaged in procurement or in the financing of procurement or production such reports concerning the letting of contracts and subcontracts and the making of loans to business concerns as it may deem pertinent in carrying out its functions under this chapter;
(9) to obtain from any Federal department, establishment, or agency engaged in the disposal of Federal property such reports concerning the solicitation of bids, time of sale, or otherwise as it may deem pertinent in carrying out its functions under this chapter;
(10) to obtain from suppliers of materials information pertaining to the method of filling orders and the bases for allocating their supply, whenever it appears that any small business is unable to obtain materials from its normal sources;
(11) to make studies and recommendations to the appropriate Federal agencies to insure that a fair proportion of the total purchases and contracts for property and services for the Government be placed with small-business enterprises, to insure that a fair proportion of Government contracts for research and development be placed with small-business concerns, to insure that a fair proportion of the total sales of Government property be made to small-business concerns, and to insure a fair and equitable share of materials, supplies, and equipment to small-business concerns;
(12) to consult and cooperate with all Government agencies for the purpose of insuring that small-business concerns shall receive fair and reasonable treatment from such agencies;
(13) to establish such advisory boards and committees as may be necessary to achieve the purposes of this chapter and of the Small Business Investment Act of 1958 [
(14) to provide at the earliest practicable time such information and assistance as may be appropriate, including information concerning eligibility for loans under
(15) to disseminate, without regard to the provisions of
(16) to make studies of matters materially affecting the competitive strength of small business, and of the effect on small business of Federal laws, programs, and regulations, and to make recommendations to the appropriate Federal agency or agencies for the adjustment of such programs and regulations to the needs of small business; and
(17) to make grants to, and enter into contracts and cooperative agreements with, educational institutions, private businesses, veterans' nonprofit community-based organizations, and Federal, State, and local departments and agencies for the establishment and implementation of outreach programs for disabled veterans (as defined in
(c) [Reserved]
(d) Performance of contracts by small business concerns; inclusion of required contract clause; subcontracting plans; contract eligibility; incentives; breach of contract; review; report to Congress
(1) It is the policy of the United States that small business concerns, small business concerns owned and controlled by veterans, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women, shall have the maximum practicable opportunity to participate in the performance of contracts let by any Federal agency, including contracts and subcontracts for subsystems, assemblies, components, and related services for major systems. It is further the policy of the United States that its prime contractors establish procedures to ensure the timely payment of amounts due pursuant to the terms of their subcontracts with small business concerns, small business concerns owned and controlled by veterans, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women.
(2) The clause stated in paragraph (3) shall be included in all contracts let by any Federal agency except any contract which—
(A) does not exceed the simplified acquisition threshold;
(B) including all subcontracts under such contracts will be performed entirely outside of any State, territory, or possession of the United States, the District of Columbia, or the Commonwealth of Puerto Rico; or
(C) is for services which are personal in nature.
(3) The clause required by paragraph (2) shall be as follows:
"(A) It is the policy of the United States that small business concerns, small business concerns owned and controlled by veterans, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women shall have the maximum practicable opportunity to participate in the performance of contracts let by any Federal agency, including contracts and subcontracts for subsystems, assemblies, components, and related services for major systems. It is further the policy of the United States that its prime contractors establish procedures to ensure the timely payment of amounts due pursuant to the terms of their subcontracts with small business concerns, small business concerns owned and controlled by veterans, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women.
"(B) The contractor hereby agrees to carry out this policy in the awarding of subcontracts to the fullest extent consistent with the efficient performance of this contract. The contractor further agrees to cooperate in any studies or surveys as may be conducted by the United States Small Business Administration or the awarding agency of the United States as may be necessary to determine the extent of the contractor's compliance with this clause.
"(C) As used in this contract, the term 'small business concern' shall mean a small business as defined pursuant to section 3 of the Small Business Act and relevant regulations promulgated pursuant thereto. The term 'small business concern owned and controlled by socially and economically disadvantaged individuals' shall mean a small business concern—
"(i) which is at least 51 per centum owned by one or more socially and economically disadvantaged individuals; or, in the case of any publicly owned business, at least 51 per centum of the stock of which is owned by one or more socially and economically disadvantaged individuals; and
"(ii) whose management and daily business operations are controlled by one or more of such individuals.
"The contractor shall presume that socially and economically disadvantaged individuals include Black Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, and other minorities, or any other individual found to be disadvantaged by the Administration pursuant to section 8(a) of the Small Business Act.
"(D) The term 'small business concern owned and controlled by women' shall mean a small business concern—
"(i) which is at least 51 per centum owned by one or more women; or, in the case of any publicly owned business, at least 51 per centum of the stock of which is owned by one or more women; and
"(ii) whose management and daily business operations are controlled by one or more women.
"(E) The term 'small business concern owned and controlled by veterans' shall mean a small business concern—
"(i) which is at least 51 per centum owned by one or more eligible veterans; or, in the case of any publicly owned business, at least 51 per centum of the stock of which is owned by one or more veterans; and
"(ii) whose management and daily business operations are controlled by such veterans. The contractor shall treat as veterans all individuals who are veterans within the meaning of the term under section 3(q) of the Small Business Act.
"(F) Contractors acting in good faith may rely on written representations by their subcontractors regarding their status as either a small business concern, small business concern owned and controlled by veterans, small business concern owned and controlled by service-disabled veterans, a small business concern owned and controlled by socially and economically disadvantaged individuals, or a small business concern owned and controlled by women.
"(G) In this contract, the term 'qualified HUBZone small business concern' has the meaning given that term in section 31(b) 4.
"(H) In this contract, the term 'small business concern owned and controlled by service-disabled veterans' has the meaning given that term in section 3(q) 4."
(4)(A) Each solicitation of an offer for a contract to be let by a Federal agency which is to be awarded pursuant to the negotiated method of procurement and which may exceed $1,000,000, in the case of a contract for the construction of any public facility, or $500,000, in the case of all other contracts, shall contain a clause notifying potential offering companies of the provisions of this subsection relating to contracts awarded pursuant to the negotiated method of procurement.
(B) Before the award of any contract to be let, or any amendment or modification to any contract let, by any Federal agency which—
(i) is to be awarded, or was let, pursuant to the negotiated method of procurement,
(ii) is required to include the clause stated in paragraph (3),
(iii) may exceed $1,000,000 in the case of a contract for the construction of any public facility, or $500,000 in the case of all other contracts, and
(iv) which offers subcontracting possibilities,
the apparent successful offeror shall negotiate with the procurement authority a subcontracting plan which incorporates the information prescribed in paragraph (6). The subcontracting plan shall be included in and made a material part of the contract.
(C) If, within the time limit prescribed in regulations of the Federal agency concerned, the apparent successful offeror fails to negotiate the subcontracting plan required by this paragraph, such offeror shall become ineligible to be awarded the contract. Prior compliance of the offeror with other such subcontracting plans shall be considered by the Federal agency in determining the responsibility of that offeror for the award of the contract.
(D) No contract shall be awarded to any offeror unless the procurement authority determines that the plan to be negotiated by the offeror pursuant to this paragraph provides the maximum practicable opportunity for 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 to participate in the performance of the contract.
(E) Notwithstanding any other provision of law, every Federal agency, in order to encourage subcontracting opportunities for small business concerns, small business concerns owned and controlled by veterans, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, and small business concerns owned and controlled by the socially and economically disadvantaged individuals as defined in paragraph (3) of this subsection and for small business concerns owned and controlled by women, is hereby authorized to provide such incentives as such Federal agency may deem appropriate in order to encourage such subcontracting opportunities as may be commensurate with the efficient and economical performance of the contract: Provided, That, this subparagraph shall apply only to contracts let pursuant to the negotiated method of procurement.
(F)(i) Each contract subject to the requirements of this paragraph or paragraph (5) shall contain a clause for the payment of liquidated damages upon a finding that a prime contractor has failed to make a good faith effort to comply with the requirements imposed on such contractor by this subsection.
(ii) The contractor shall be afforded an opportunity to demonstrate a good faith effort regarding compliance prior to the contracting officer's final decision regarding the imposition of damages and the amount thereof. The final decision of a contracting officer regarding the contractor's obligation to pay such damages, or the amounts thereof, shall be subject to
(iii) Each agency shall ensure that the goals offered by the apparent successful bidder or offeror are attainable in relation to—
(I) the subcontracting opportunities available to the contractor, commensurate with the efficient and economical performance of the contract;
(II) the pool of eligible subcontractors available to fulfill the subcontracting opportunities; and
(III) the actual performance of such contractor in fulfilling the subcontracting goals specified in prior plans.
(G) The following factors shall be designated by the Federal agency as significant factors for purposes of evaluating offers for a bundled contract where the head of the agency determines that the contract offers a significant opportunity for subcontracting:
(i) A factor that is based on the rate provided under the subcontracting plan for small business participation in the performance of the contract.
(ii) For the evaluation of past performance of an offeror, a factor that is based on the extent to which the offeror attained applicable goals for small business participation in the performance of contracts.
(5)(A) Each solicitation of a bid for any contract to be let, or any amendment or modification to any contract let, by any Federal agency which—
(i) is to be awarded pursuant to the formal advertising method of procurement,
(ii) is required to contain the clause stated in paragraph (3) of this subsection,
(iii) may exceed $1,000,000 in the case of a contract for the construction of any public facility, or $500,000, in the case of all other contracts, and
(iv) offers subcontracting possibilities,
shall contain a clause requiring any bidder who is selected to be awarded a contract to submit to the Federal agency concerned a subcontracting plan which incorporates the information prescribed in paragraph (6).
(B) If, within the time limit prescribed in regulations of the Federal agency concerned, the bidder selected to be awarded the contract fails to submit the subcontracting plan required by this paragraph, such bidder shall become ineligible to be awarded the contract. Prior compliance of the bidder with other such subcontracting plans shall be considered by the Federal agency in determining the responsibility of such bidder for the award of the contract. The subcontracting plan of the bidder awarded the contract shall be included in and made a material part of the contract.
(6) Each subcontracting plan required under paragraph (4) or (5) shall include—
(A) percentage goals for the utilization as subcontractors of small business concerns, small business concerns owned and controlled by veterans, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women;
(B) the name of an individual within the employ of the offeror or bidder who will administer the subcontracting program of the offeror or bidder and a description of the duties of such individual;
(C) a description of the efforts the offeror or bidder will take to assure that small business concerns, small business concerns owned and controlled by veterans, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women will have an equitable opportunity to compete for subcontracts;
(D) assurances that the offeror or bidder will include the clause required by paragraph (2) of this subsection in all subcontracts which offer further subcontracting opportunities, and that the offeror or bidder will require all subcontractors (except small business concerns) who receive subcontracts in excess of $1,000,000 in the case of a contract for the construction of any public facility, or in excess of $500,000 in the case of all other contracts, to adopt a plan similar to the plan required under paragraph (4) or (5), and assurances at a minimum that the offeror or bidder, and all subcontractors required to maintain subcontracting plans pursuant to this paragraph, will—
(i) review and approve subcontracting plans submitted by their subcontractors;
(ii) monitor subcontractor compliance with their approved subcontracting plans;
(iii) ensure that subcontracting reports are submitted by their subcontractors when required;
(iv) acknowledge receipt of their subcontractors' reports;
(v) compare the performance of their subcontractors to subcontracting plans and goals; and
(vi) discuss performance with subcontractors when necessary to ensure their subcontractors make a good faith effort to comply with their subcontracting plans;
(E) assurances that the offeror or bidder will submit such periodic reports and cooperate in any studies or surveys as may be required by the Federal agency or the Administration in order to determine the extent of compliance by the offeror or bidder with the subcontracting plan;
(F) a recitation of the types of records the successful offeror or bidder will maintain to demonstrate procedures which have been adopted to comply with the requirements and goals set forth in this plan, including the establishment of source lists of small business concerns, small business concerns owned and controlled by veterans, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women; and efforts to identify and award subcontracts to such small business concerns;
(G) a recitation of the types of records the successful offeror or bidder will maintain to demonstrate that procedures have been adopted to substantiate the credit the successful offeror or bidder will elect to receive under paragraph (16)(A);
(H) a recitation of the types of records the successful offeror or bidder will maintain to demonstrate procedures which have been adopted to ensure subcontractors at all tiers comply with the requirements and goals set forth in the plan established in accordance with subparagraph (D) of this paragraph, including—
(i) the establishment of source lists of small business concerns, small business concerns owned and controlled by veterans, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women; and
(ii) efforts to identify and award subcontracts to such small business concerns; and
(I) a representation that the offeror or bidder will—
(i) make a good faith effort to acquire articles, equipment, supplies, services, or materials, or obtain the performance of construction work from the small business concerns used in preparing and submitting to the contracting agency the bid or proposal, in the same amount and quality used in preparing and submitting the bid or proposal; and
(ii) provide to the contracting officer a written explanation if the offeror or bidder fails to acquire articles, equipment, supplies, services, or materials or obtain the performance of construction work as described in clause (i).
(7) The head of the contracting agency shall ensure that—
(A) the agency collects and reports data on the extent to which contractors of the agency meet the goals and objectives set forth in subcontracting plans submitted pursuant to this subsection; and
(B) the agency periodically reviews data collected and reported pursuant to subparagraph (A) for the purpose of ensuring that such contractors comply in good faith with the requirements of this subsection and subcontracting plans submitted by the contractors pursuant to this subsection.
(8) The provisions of paragraphs (4), (5), and (6) shall not apply to offerors or bidders who are small business concerns.
(9)
(A) the clause contained in paragraph (3) of this subsection,
(B) any plan required of such contractor pursuant to the authority of this subsection to be included in its contract or subcontract, or
(C) assurances provided under paragraph (6)(E),
shall be a material breach of such contract or subcontract and may be considered in any past performance evaluation of the contractor.
(10) Nothing contained in this subsection shall be construed to supersede the requirements of Defense Manpower Policy Number 4A (32A CFR Chap. 1) or any successor policy.
(11) In the case of contracts within the provisions of paragraphs (4), (5), and (6), the Administration is authorized to—
(A) assist Federal agencies and businesses in complying with their responsibilities under the provisions of this subsection, including the formulation of subcontracting plans pursuant to paragraph (4);
(B) review any solicitation for any contract to be let pursuant to paragraphs (4) and (5) to determine the maximum practicable opportunity for small business concerns, small business concerns owned and controlled by veterans, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women to participate as subcontractors in the performance of any contract resulting from any solicitation, and to submit its findings, which shall be advisory in nature, to the appropriate Federal agency; and
(C) evaluate compliance with subcontracting plans as a supplement to evaluations performed by the contracting agency, either on a contract-by-contract basis or, in the case of contractors having multiple contracts, on an aggregate basis.
(12) For purposes of determining the attainment of a subcontract utilization goal under any subcontracting plan entered into with any executive agency pursuant to this subsection, a mentor firm providing development assistance to a protege firm under the Mentor-Protege Program established under
(13)
(A)
(B)
(i)
(ii)
(C)
(i) shall consider the unjustified failure by a prime contractor to make a full or timely payment to a subcontractor in evaluating the performance of the prime contractor; and
(ii) may enter or modify past performance information of the prime contractor in connection with the unjustified failure to make a full or timely payment to a subcontractor subject to this paragraph before or after close-out of the covered contract.
(D)
(E)
(i)
(ii)
(F)
(i) describe the circumstances under which a contractor may be determined to have a history of unjustified, untimely payments to subcontractors;
(ii) establish a process for contracting officers to record the identity of a contractor described in clause (i); and
(iii) require the identity of a contractor described in clause (i) to be incorporated in, and made publicly available through, the Federal Awardee Performance and Integrity Information System, or any successor thereto.
(14) An offeror for a covered contract that intends to identify a small business concern as a potential subcontractor in a bid or proposal for the contract, or in a plan submitted pursuant to this subsection in connection with the contract, shall notify the small business concern prior to making such identification.
(15) The Administrator shall establish a reporting mechanism that allows a subcontractor or potential subcontractor to report fraudulent activity or bad faith by a contractor with respect to a subcontracting plan submitted pursuant to this subsection.
(16)
(A)
(i) if the subcontracting goals pertain only to a single contract with a Federal agency, the prime contractor may elect to receive credit for small business concerns performing as first tier subcontractors or subcontractors at any tier pursuant to the subcontracting plans required under paragraph (6)(D) in an amount equal to the total dollar value of any subcontracts awarded to such small business concerns; and
(ii) if the subcontracting goals pertain to more than one contract with one or more Federal agencies, or to one contract with more than one Federal agency, the prime contractor may only receive credit for first tier subcontractors that are small business concerns.
(B)
(i) collects and reports data on the extent to which prime contractors of the agency meet the goals and objectives set forth in subcontracting plans submitted pursuant to this subsection; and
(ii) periodically reviews data collected and reported pursuant to clause (i) for the purpose of ensuring that such contractors comply in good faith with the requirements of this subsection.
(C)
(17)
(e) Covered executive agency activities; procurement notice; publication; time limitations
(1) Except as provided in subsection (g)—
(A) an executive agency intending to—
(i) solicit bids or proposals for a contract for property or services for a price expected to exceed $25,000; or
(ii) place an order, expected to exceed $25,000, under a basic agreement, basic ordering agreement, or similar arrangement,
shall publish a notice described in subsection (f);
(B) an executive agency intending to solicit bids or proposals for a contract for property or services shall post, for a period of not less than ten days, in a public place at the contracting office issuing the solicitation a notice of solicitation described in subsection (f)—
(i) in the case of an executive agency other than the Department of Defense, if the contract is for a price expected to exceed $10,000, but not to exceed $25,000; and
(ii) in the case of the Department of Defense, if the contract is for a price expected to exceed $5,000, but not to exceed $25,000;
(C) an executive agency awarding a contract for property or services for a price exceeding $100,000, or placing an order referred to in clause (A)(ii) exceeding $100,000, shall furnish for publication by the Secretary of Commerce a notice announcing the award or order if there is likely to be any subcontract under such contract or order.
(2)(A) A notice of solicitation required to be published under paragraph (1) may be published—
(i) by electronic means that meet the accessibility requirements under
(ii) by the Secretary of Commerce in the Commerce Business Daily.
(B) The Secretary of Commerce shall promptly publish in the Commerce Business Daily each notice or announcement received under this subsection for publication by that means.
(3) Whenever an executive agency is required by paragraph (1)(A) to publish a notice of solicitation, such executive agency may not—
(A) issue the solicitation earlier than 15 days after the date on which the notice is published; or
(B) in the case of a contract or order estimated to be greater than the simplified acquisition threshold, establish a deadline for the submission of all bids or proposals in response to the notice required by paragraph (1)(A) that—
(i) in the case of an order under a basic agreement, basic ordering agreement, or similar arrangement, is earlier than the date 30 days after the date the notice required by paragraph (1)(A)(ii) is published;
(ii) in the case of a solicitation for research and development, is earlier than the date 45 days after the date the notice required by paragraph (1)(A)(i) is published; or
(iii) in any other case, is earlier than the date 30 days after the date the solicitation is issued.
(f) Contents of notice
Each notice of solicitation required by subparagraph (A) or (B) of subsection (e)(1) shall include—
(1) an accurate description of the property or services to be contracted for, which description (A) shall not be unnecessarily restrictive of competition, and (B) shall include, as appropriate, the agency nomenclature, National Stock Number or other part number, and a brief description of the item's form, fit, or function, physical dimensions, predominant material of manufacture, or similar information that will assist a prospective contractor to make an informed business judgment as to whether a copy of the solicitation should be requested;
(2) provisions that—
(A) state whether the technical data required to respond to the solicitation will not be furnished as part of such solicitation, and identify the source in the Government, if any, from which the technical data may be obtained; and
(B) state whether an offeror, its product, or service must meet a qualification requirement in order to be eligible for award, and, if so, identify the office from which a qualification requirement may be obtained;
(3) the name, business address, and telephone number of the contracting officer;
(4) a statement that all responsible sources may submit a bid, proposal, or quotation (as appropriate) which shall be considered by the agency;
(5) in the case of a procurement using procedures other than competitive procedures, a statement of the reason justifying the use of such procedures and the identity of the intended source; and
(6) in the case of a contract in an amount estimated to be greater than $25,000 but not greater than the simplified acquisition threshold—
(A) a description of the procedures to be used in awarding the contract; and
(B) a statement specifying the periods for prospective offerors and the contracting officer to take the necessary preaward and award actions.
(g) Exempted, etc., activities of executive agency
(1) A notice is not required under subsection (e)(1) if—
(A) the proposed procurement is for an amount not greater than the simplified acquisition threshold and is to be conducted by—
(i) using widespread electronic public notice of the solicitation in a form that allows convenient and universal user access through a single, Government-wide point of entry; and
(ii) permitting the public to respond to the solicitation electronically.
(B) the notice would disclose the executive agency's needs and the disclosure of such needs would compromise the national security;
(C) the proposed procurement would result from acceptance of—
(i) any unsolicited proposal that demonstrates a unique and innovative research concept and the publication of any notice of such unsolicited research proposal would disclose the originality of thought or innovativeness of the proposal or would disclose proprietary information associated with the proposal; or
(ii) a proposal submitted under
(D) the procurement is made against an order placed under a requirements contract;
(E) the procurement is made for perishable subsistence supplies;
(F) the procurement is for utility services, other than telecommunication services, and only one source is available; or
(G) the procurement is for the services of an expert for use in any litigation or dispute (including preparation for any foreseeable litigation or dispute) that involves or could involve the Federal Government in any trial, hearing, or proceeding before any court, administrative tribunal, or agency, or in any part of an alternative dispute resolution process, whether or not the expert is expected to testify.
(2) The requirements of subsection (a)(1)(A) do not apply to any procurement under conditions described in paragraph (2), (3), (4), (5), or (7) of
(3) The requirements of subsection (a)(1)(A) shall not apply in the case of any procurement for which the head of the executive agency makes a determination in writing, after consultation with the Administrator for Federal Procurement Policy and the Administrator of the Small Business Administration, that it is not appropriate or reasonable to publish a notice before issuing a solicitation.
(h) Award of contracts; procedures other than competitive ones; exceptions
(1) An executive agency may not award a contract using procedures other than competitive procedures unless—
(A) except as provided in paragraph (2), a written justification for the use of such procedures has been approved—
(i) in the case of a contract for an amount exceeding $100,000 (but equal to or less than $1,000,000), by the advocate for competition for the procuring activity (without further delegation);
(ii) in the case of a contract for an amount exceeding $1,000,000 (but equal to or less than $10,000,000), by the head of the procuring activity or a delegate who, if a member of the Armed Forces, is a general or flag officer, or, if a civilian, is serving in a position in grade GS–16 or above under the General Schedule (or in a comparable or higher position under another schedule); or
(iii) in the case of a contract for an amount exceeding $10,000,000, by the senior procurement executive of the agency designated pursuant to
(B) all other requirements applicable to the use of such procedures under division C (except sections 3302, 3307(e), 3501(b), 3509, 3906, 4710, and 4711) of subtitle I of title 41 or
(2) The same exceptions as are provided in paragraphs (3) and (4) of
(i) Availability; complete solicitation package; fees
An executive agency shall make available to any business concern, or the authorized representative of such concern, the complete solicitation package for any on-going procurement announced pursuant to a notice under subsection (e). An executive agency may require the payment of a fee, not exceeding the actual cost of duplication, for a copy of such package.
(j) "Executive agency" defined
For purposes of this section, the term "executive agency" has the meaning provided such term in
(k) Notices of subcontracting opportunities
(1) In general
Notices of subcontracting opportunities may be submitted for publication on the appropriate Federal Web site (as determined by the Administrator) by—
(A) a business concern awarded a contract by an executive agency subject to subsection (e)(1)(C); and
(B) a business concern that is a subcontractor or supplier (at any tier) to such contractor having a subcontracting opportunity in excess of $10,000.
(2) Content of notice
The notice of a subcontracting opportunity shall include—
(A) a description of the business opportunity that is comparable to the description specified in paragraphs (1), (2), (3), and (4) of subsection (f); and
(B) the due date for receipt of offers.
(l) Management assistance for small businesses affected by military operations
(1) In general
The Administration shall utilize, as appropriate, its entrepreneurial development and management assistance programs, including programs involving State or private sector partners, to provide business counseling and training to any small business concern adversely affected by the deployment of units of the Armed Forces of the United States in support of a period of military conflict.
(2) Definition of period of military conflict
In this subsection, the term "period of military conflict" means—
(A) a period of war declared by the Congress;
(B) a period of national emergency declared by the Congress or by the President; or
(C) a period of a contingency operation, as defined in
(m) Procurement program for women-owned small business concerns
(1) Definitions
In this subsection, the following definitions apply:
(A) Contracting officer
The term "contracting officer" has the meaning given such term in
(B) Small business concern owned and controlled by women
The term "small business concern owned and controlled by women" has the meaning given such term in
(2) Authority to restrict competition
In accordance with this subsection, a contracting officer may restrict competition for any contract for the procurement of goods or services by the Federal Government to small business concerns owned and controlled by women, if—
(A) each of the concerns is not less than 51 percent owned by one or more women who are economically disadvantaged (and such ownership is determined without regard to any community property law);
(B) the contracting officer has a reasonable expectation that two or more small business concerns owned and controlled by women will submit offers for the contract;
(C) the contract is for the procurement of goods or services with respect to an industry identified by the Administrator pursuant to paragraph (3);
(D) in the estimation of the contracting officer, the contract award can be made at a fair and reasonable price; and
(E) each of the concerns is certified by a Federal agency, a State government, the Administrator, or a national certifying entity approved by the Administrator as a small business concern owned and controlled by women.
(3) Waiver
With respect to a small business concern owned and controlled by women, the Administrator may waive subparagraph (2)(A) if the Administrator determines that the concern is in an industry in which small business concerns owned and controlled by women are substantially underrepresented.
(4) Identification of industries
The Administrator shall conduct a study to identify industries in which small business concerns owned and controlled by women are underrepresented with respect to Federal procurement contracting.
(5) Enforcement; penalties
(A) Verification of eligibility
In carrying out this subsection, the Administrator shall establish procedures relating to—
(i) the filing, investigation, and disposition by the Administration of any challenge to the eligibility of a small business concern to receive assistance under this subsection (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 paragraph (2)(E)); and
(ii) verification by the Administrator of the accuracy of any certification made or information provided to the Administration by a small business concern under paragraph (2)(E).
(B) Examinations
The procedures established under subparagraph (A) may provide for program examinations (including random program examinations) by the Administrator of any small business concern making a certification or providing information to the Administrator under paragraph (2)(E).
(C) Penalties
In addition to the penalties described in
(i)
(ii)
(6) 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 this subsection.
(7) Authority for sole source contracts for economically disadvantaged small business concerns owned and controlled by women
A contracting officer may award a sole source contract under this subsection to any small business concern owned and controlled by women described in paragraph (2)(A) and certified under paragraph (2)(E) if—
(A) such concern is determined to be a responsible contractor with respect to performance of the contract opportunity and the contracting officer does not have a reasonable expectation that 2 or more businesses described in paragraph (2)(A) will submit offers;
(B) the anticipated award price of the contract (including options) will not exceed—
(i) $7,000,000, in the case of a contract opportunity assigned a standard industrial classification code for manufacturing; or
(ii) $4,000,000, in the case of any other contract opportunity; and
(C) in the estimation of the contracting officer, the contract award can be made at a fair and reasonable price.
(8) Authority for sole source contracts for small business concerns owned and controlled by women in substantially underrepresented industries
A contracting officer may award a sole source contract under this subsection to any small business concern owned and controlled by women certified under paragraph (2)(E) that is in an industry in which small business concerns owned and controlled by women are substantially underrepresented (as determined by the Administrator under paragraph (3)) if—
(A) such concern is determined to be a responsible contractor with respect to performance of the contract opportunity and the contracting officer does not have a reasonable expectation that 2 or more businesses in an industry that has received a waiver under paragraph (3) will submit offers;
(B) the anticipated award price of the contract (including options) will not exceed—
(i) $7,000,000, in the case of a contract opportunity assigned a standard industrial classification code for manufacturing; or
(ii) $4,000,000, in the case of any other contract opportunity; and
(C) in the estimation of the contracting officer, the contract award can be made at a fair and reasonable price.
(n) Business grants and cooperative agreements
(1) In general
In accordance with this subsection, the Administrator may make grants to and enter into cooperative agreements with any coalition of private entities, public entities, or any combination of private and public entities—
(A) to expand business-to-business relationships between large and small businesses; and
(B) to provide businesses, directly or indirectly, with online information and a database of companies that are interested in mentor-protege programs or community-based, statewide, or local business development programs.
(2) Matching requirement
Subject to subparagraph (B), the Administrator may make a grant to a coalition under paragraph (1) only if the coalition provides for activities described in paragraph (1)(A) or (1)(B) an amount, either in kind or in cash, equal to the grant amount.
(3) Authorization of appropriations
There is authorized to be appropriated to carry out this subsection $6,600,000, to remain available until expended, for each of fiscal years 2001 through 2006.
(
Editorial Notes
References in Text
The Small Business Investment Act of 1958, referred to in subsecs. (a)(2)(C), (21)(D), and (b)(13), is
The Alaska Native Claims Settlement Act, referred to in subsec. (a)(13), is
The Program Fraud Civil Remedies Act of 1986, referred to in subsec. (a)(18)(C)(iv), is subtitle B of title VI of
The Women's Business Ownership Act of 1988, referred to in subsec. (b)(1)(G), is
Section 110 of the Housing Act of 1949 [
Sections 3, 8, and 31 of the Small Business Act, referred to in subsec. (d)(3)(C), (E)(ii), (G), (H), are classified to sections 632, 637, and 657a, respectively, of this title.
The General Schedule, referred to in subsec. (h)(1)(A)(ii), is set out under
Codification
In subsec. (a)(2), "subsections (a), (b), and (e) of
In subsec. (d)(4)(F)(ii), "
In subsec. (d)(13)(E), "
In subsec. (e)(2)(A)(i), "
In subsec. (g)(2), "paragraph (2), (3), (4), (5), or (7) of
In subsec. (h)(1)(B), "division C (except sections 3302, 3307(e), 3501(b), 3509, 3906, 4710, and 4711) of subtitle I of title 41" substituted for "title III of the Federal Property and Administrative Services Act of 1949 (
In subsec. (h)(2), "paragraphs (3) and (4) of
In subsec. (j), "
In subsec. (m)(1)(A), "
Prior Provisions
Prior similar provisions were contained in sections 207(b)(2), (b)(4), 208, 210, 212 and 216 of act July 30, 1953, ch. 282, title II,
Amendments
2023—Subsec. (d)(13)(B)(i).
Subsec. (d)(13)(C).
Subsec. (d)(13)(D).
Subsec. (d)(13)(E), (F).
2022—Subsec. (d)(12).
2021—Subsec. (a)(1)(D)(i)(II).
Subsec. (d)(17).
Subsec. (g)(2).
Subsec. (h)(1)(B).
Subsec. (h)(2).
Subsec. (m)(7)(B)(i).
Subsec. (m)(8)(B)(i).
2019—Subsec. (d)(6)(G) to (I).
Subsec. (d)(16).
Subsec. (l).
2017—Subsec. (d)(3)(G).
Subsec. (d)(17)(A).
Subsec. (d)(17)(G)(i).
Subsec. (d)(17)(G)(ii).
Subsec. (d)(17)(H).
"(i) a commercial market representative;
"(ii) another individual designated by the senior official appointed by the Administrator with responsibilities under
"(iii) the Office of Small and Disadvantaged Business Utilization of a Federal agency, if the head of the Federal agency and the Administrator agree."
2016—Subsec. (d)(3)(H).
Subsec. (d)(9).
Subsec. (d)(17).
2015—Subsec. (a)(17)(A).
Subsec. (a)(17)(C).
2014—Subsec. (m)(2)(E).
"(i) is certified by a Federal agency, a State government, or a national certifying entity approved by the Administrator, as a small business concern owned and controlled by women; or
"(ii) certifies to the contracting officer that it is a small business concern owned and controlled by women and provides adequate documentation, in accordance with standards established by the Administration, to support such certification."
Subsec. (m)(5).
Subsec. (m)(7), (8).
2013—Subsec. (a)(14).
"(A) A concern may not be awarded a contract under this subsection as a small business concern unless the concern agrees that—
"(i) in the case of a contract for services (except construction), at least 50 percent of the cost of contract performance incurred for personnel shall be expended for employees of the concern; and
"(ii) in the case of a contract for procurement of supplies (other than procurement from a regular dealer in such supplies), the concern will perform work for at least 50 percent of the cost of manufacturing the supplies (not including the cost of materials).
"(B) The Administrator may change the percentage under clause (i) or (ii) of subparagraph (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. A percentage established under the preceding sentence may not differ from a percentage established under
"(C) The Administration shall establish, through public rulemaking, requirements similar to those specified in subparagraph (A) 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 subparagraph. The percentage applicable to any such requirement shall be determined in accordance with subparagraph (B), except that such a percentage may not differ from a percentage established under
Subsec. (d)(6)(D).
Subsec. (d)(6)(G), (H).
Subsec. (d)(7), (8).
Subsec. (d)(9).
Subsec. (d)(10).
Subsec. (d)(11).
Subsec. (d)(11)(C).
Subsec. (d)(12), (13).
Subsec. (d)(14), (15).
Subsec. (d)(16).
Subsec. (k)(1).
Subsec. (m)(2)(D) to (F).
"(i) $5,000,000, in the case of a contract assigned an industrial classification code for manufacturing; or
"(ii) $3,000,000, in the case of all other contracts;".
2010—Subsec. (d)(6)(G).
Subsec. (d)(12).
2004—Subsec. (b)(1)(A).
"(i) technical, managerial, and informational aids to small business concerns—",
redesignated subcls. (I) to (IV) of former cl. (i) as cls. (i) to (iv), respectively, substituted a period for "; and" at end of cl. (iv), and redesignated items (aa) and (bb) of former subcl. (II) as subcls. (I) and (II), respectively.
Subsec. (b)(1)(B).
Subsec. (b)(17).
2000—Subsec. (a)(15)(A).
Subsec. (b)(1)(A).
Subsec. (b)(1)(B).
Subsec. (d)(1).
Subsec. (d)(3)(A).
Subsec. (d)(3)(F).
Subsec. (d)(4)(D).
Subsec. (d)(4)(E), (6)(A), (C), (F), (10)(B).
Subsec. (e)(1)(A).
Subsec. (e)(2).
Subsec. (e)(3).
Subsec. (m).
Subsec. (n).
1999—Subsec. (d)(1).
Subsec. (d)(3)(A).
Subsec. (d)(3)(E).
Subsec. (d)(3)(F).
Subsec. (d)(3)(G).
Subsec. (d)(4)(D), (E), (6)(A), (C), (F), (10)(B).
Subsec. (l).
1997—Subsec. (b)(16).
Subsec. (b)(17).
Subsec. (d)(1).
Subsec. (d)(3)(A).
Subsec. (d)(3)(F).
Subsec. (d)(4)(E).
Subsec. (d)(4)(G).
Subsec. (d)(6).
Subsec. (d)(10)(B).
Subsec. (e)(1)(C).
Subsec. (g)(1).
"(A) the proposed procurement is for an amount not greater than the simplified acquisition threshold and is to be made through a system with interim FACNET capability certified pursuant to
"(B)(i) the proposed procurement is for an amount not greater than $250,000 and is to be made through a system with full FACNET capability certified pursuant to
"(ii) a certification has been made pursuant to section 426a(b) title 41 that Government-wide FACNET capability has been implemented;".
Subsec. (k).
1996—Subsec. (d)(1).
Subsec. (d)(6)(C).
Subsec. (f)(5).
1994—Subsec. (b)(1)(A).
Subsec. (b)(1)(G).
Subsec. (d)(1).
Subsec. (d)(2)(A).
Subsec. (d)(3)(A).
Subsec. (d)(3)(D), (E).
Subsec. (d)(4)(D).
Subsec. (d)(4)(E).
Subsec. (d)(6)(A).
Subsec. (d)(6)(C).
Subsec. (d)(6)(F), (10)(B).
Subsec. (e)(1).
Subsec. (e)(3)(B).
Subsec. (f)(6).
Subsec. (g)(1)(A) to (E).
Subsec. (g)(1)(F).
Subsec. (g)(1)(G), (H).
1992—Subsec. (a).
Subsec. (b)(1)(E) to (G).
Subsec. (c).
Subsec. (d).
Subsec. (d)(11), (12).
Subsecs. (e) to (g).
Subsec. (h).
Subsecs. (i), (j).
1991—Subsec. (c).
Subsec. (d).
Subsec. (d)(12).
Subsecs. (e) to (j).
1990—Subsec. (a)(1).
Subsec. (a)(1)(B).
Subsec. (a)(1)(C).
Subsec. (a)(4)(A)(i)(II), (ii)(II).
Subsec. (a)(17)(B)(iv).
Subsec. (d)(2)(A).
Subsec. (e)(1)(A).
Subsec. (e)(1)(B), (C).
Subsec. (g)(1).
1989—Subsec. (a)(1)(D)(i).
Subsec. (a)(4)(A)(i).
Subsec. (a)(4)(A)(ii).
Subsec. (a)(6)(C).
Subsec. (a)(9).
Subsec. (a)(15).
Subsec. (a)(17)(B)(ii) to (iv).
Subsec. (a)(18)(A).
Subsec. (a)(19)(B).
Subsec. (a)(20)(A).
Subsec. (a)(21).
Subsec. (b)(1)(A).
1988—Subsec. (a)(1)(A).
Subsec. (a)(1)(D).
Subsec. (a)(3).
Subsec. (a)(4).
Subsec. (a)(4)(C).
Subsec. (a)(6).
Subsec. (a)(7).
Subsec. (a)(9).
Subsec. (a)(10).
Subsec. (a)(12).
Subsec. (a)(15).
Subsec. (a)(16).
Subsec. (a)(17).
Subsec. (a)(18).
Subsec. (a)(19).
Subsec. (a)(20).
Subsec. (a)(21).
Subsec. (b)(1)(A).
Subsec. (b)(16).
Subsec. (c).
Subsec. (d)(4)(F).
1987—Subsec. (a)(14)(B), (C).
1986—Subsec. (a)(1).
Subsec. (a)(1)(A).
Subsec. (a)(1)(B).
Subsec. (a)(2).
Subsec. (a)(4).
Subsec. (a)(6).
Subsec. (a)(13).
Subsec. (a)(14).
Subsec. (e)(1).
Subsec. (f).
1984—Subsec. (b)(1)(A).
Subsec. (b)(7)(C).
Subsec. (d)(1).
Subsec. (d)(3)(A).
Subsecs. (e) to (j).
1983—Subsec. (a)(1).
Subsec. (a)(1)(B).
Subsec. (a)(2).
Subsec. (e).
1980—Subsec. (a)(1), (2).
Subsec. (a)(8).
Subsec. (d)(3)(C).
1978—Subsec. (a).
Subsec. (b)(1).
Subsec. (d).
1977—Subsec. (b)(7).
1970—Subsec. (b)(15).
1967—Subsec. (b)(1)(B).
Subsec. (b)(13).
Subsec. (b)(15).
1966—Subsec. (b)(1).
1964—Subsec. (b)(14).
1961—Subsec. (d).
Subsec. (e).
Statutory Notes and Related Subsidiaries
Effective Date of 2017 Amendment
Amendment by section 1701(a)(4)(C) of
Effective Date of 2016 Amendment
Amendment by section 1832(c) of
Termination Date of 2004 Amendment
Amendment by section 132(b) of
Effective Date of 2000 Amendment
Effective Date of 1997 Amendments
Amendment by
"(1) Except as provided in paragraph (2), the amendments made by this section [amending this section, former
"(2) The repeal made by subsection (c) of this section [repealing provisions set out as a note under
Effective Date of 1996 Amendment
For effective date and applicability of amendment by
Effective Date of 1994 Amendment
For effective date and applicability of amendment by
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1988 Amendment
Amendment by sections 207(a), (c) and 303(d), (e) of
Amendment by sections 201(b), 303(c), (g), (h), 304(a), 402–404, and 409 of
Amendment by section 407 of
Amendment by sections 209 and 303(b) of
Effective Date of 1987 Amendment
Amendment by section 10(b)(3) of
Effective Date of 1986 Amendment
Amendment by section 101(c) [title X, §921(b)(2), (c)(1)] of
Effective and Termination Dates of 1984 Amendments
"(1)
"(2)
[Repeal by section 401(a) of
Amendment by section 5(a)(1), (2) of
Effective Date of 1983 Amendments
"(1) Except as to the amendments made to section 8(e)(4) of the Small Business Act as added by section (a) of this Act [subsec. (e)(4) of this section], the amendments made by this Act [amending this section] shall apply to procurement actions initiated ninety days after the date of enactment of this Act [Aug. 11, 1983].
"(2) The amendments made to section 8(e)(4) of the Small Business Act as added by section (a) of this Act shall apply to procurement actions initiated on or after October 1, 1983."
Effective Date of 1980 Amendment
Amendment by
Effective Date of 1978 Amendment
Amendment by
Effective Date of 1970 Amendment
For effective date of amendment by
Regulations
Transfer of Functions
Transfer to Director of ACTION [now Corporation for National and Community Service] of functions of Small Business Administration under subsec. (b) of this section insofar as they relate to individuals or groups of persons cooperating with it in the furtherance of purposes of this section, except that such individuals or groups of persons, in providing technical and managerial aids to small concerns, remain subject to direction of Small Business Administration. See section 601 of
Extension of Participation in 8(a) Program
"(a)
"(b)
"(a)
"(b)
[For definitions of "Administrator" and "small business concern" as used in section 330 of div. N of
Good Faith Compliance With Subcontracting Requirements
Subcontracting Misrepresentations
[For definitions of "Administrator" and "small business concern" as used in section 1321 of
Small Business Contracting Parity
"(a)
"(1) the terms 'Administration' and 'Administrator' mean the Small Business Administration and the Administrator thereof, respectively; and
"(2) the terms 'HUBZone small business concern', 'small business concern', 'small business concern owned and controlled by service-disabled veterans', and 'small business concern owned and controlled by women' have the same meanings as in section 3 of the Small Business Act (
"(b)
"(1)
"(2)
"(3)
Increasing Number of Outreach Centers
"(a)
"(1) subject to subsection (b), by at least 2, for each of fiscal years 2008 and 2009; and
"(2) by the number that the Administrator considers appropriate, based on need, for each fiscal year thereafter.
"(b)
Enhanced Publicity During Operation Allied Force
Federal Acquisition Regulation
Implementation of Amendment by Pub. L. 105–85
Mobile Resource Center Pilot Program
Projects Funded Pursuant to Former Provisions
Two-Year Rule for Eligibility in Minority Small Business and Capital Ownership Development Program
"(a)
"(b)
"(A) the individual or individuals upon whom eligibility is to be based have substantial and demonstrated business management experience;
"(B) the prospective Program Participant has demonstrated technical expertise to carry out its business plan with a substantial likelihood for success;
"(C) the prospective Program Participant has adequate capital to carry out its business plan;
"(D) the prospective Program Participant has a record of successful performance on contracts from governmental and nongovernmental sources in the primary industry category in which the prospective Program Participant is seeking Program certification; and
"(E) the prospective Program Participant has, or can demonstrate its ability to timely obtain, the personnel, facilities, equipment, and any other requirements needed to perform such contracts.
"(2) The authority to make the determination that a prospective Program Participant has demonstrated its potential for success by meeting the criteria specified in paragraph (1) of this subsection shall be made by the Administrator of the Small Business Administration, or a designee of such officer."
References in Other Laws to GS–16, 17, or 18 Pay Rates
References in laws to the rates of pay for GS–16, 17, or 18, or to maximum rates of pay under the General Schedule, to be considered references to rates payable under specified sections of Title 5, Government Organization and Employees, see section 529 [title I, §101(c)(1)] of
Credit for Indian Contracting in Meeting Certain Minority Subcontracting Goals
For provisions that credit toward meeting a subcontracting goal specified in a Department of Defense contract in implementing subsec. (d) of this section may be given for work performed on Indian land or by certain Indian joint ventures, see
Test Program for Negotiation of Comprehensive Small Business Subcontracting Plans
"(a)
"(2) In developing the test program, the Secretary of Defense shall—
"(A) consult with the Administrator of the Small Business Administration; and
"(B) provide an opportunity for public comment on the test program.
"(b)
"(2) The comprehensive subcontracting plan of a contractor—
"(A) shall apply to the entire business organization of the contractor or to one or more of the contractor's divisions or operating elements, as specified in the subcontracting plan; and
"(B) shall cover each Department of Defense contract that is entered into by the contractor and each subcontract that is entered into by the contractor as the subcontractor under a Department of Defense contract.
"(3) Each comprehensive subcontracting plan of a contractor shall require that the contractor report to the Secretary of Defense on a semi-annual basis the following information:
"(A) The amount of first-tier subcontract dollars awarded during the six-month period covered by the report to covered small business concerns, with the information set forth separately—
"(i) by North American Industrial Classification System code;
"(ii) by major defense acquisition program, as defined in
"(iii) by contract, if the contract is for the maintenance, overhaul, repair, servicing, rehabilitation, salvage, modernization, or modification of supplies, systems, or equipment and the total value of the contract, including options, exceeds $100,000,000; and
"(iv) by military department.
"(B) The total number of subcontracts active under the test program during the six-month period covered by the report that would have otherwise required a subcontracting plan under paragraph (4) or (5) of section 8(d) of the Small Business Act (
"(C) Costs incurred in negotiating, complying with, and reporting on comprehensive subcontracting plans.
"(D) Costs avoided by adoption of a comprehensive subcontracting plan.
"(4) A Department of Defense contractor referred to in paragraph (1) is, with respect to a comprehensive subcontracting plan negotiated in any fiscal year, a business concern that, during the immediately preceding fiscal year, furnished the Department of Defense with supplies or services (including professional services, research and development services, and construction services) pursuant to at least three Department of Defense contracts having an aggregate value of at least $100,000,000.
"(c)
"(1) the contractor has negotiated a comprehensive subcontracting plan under the test program that includes the matters specified in section 8(d)(6) of the Small Business Act (
"(2) such matters have been determined acceptable by the Secretary of the military department or head of a Defense Agency negotiating such comprehensive subcontracting plan; and
"(3) the comprehensive subcontracting plan applies to the contract.
"(d)
"(2) Effective in fiscal year 2016 and each fiscal year thereafter in which the test program is in effect, the Secretary of Defense shall report to Congress on any negotiated comprehensive subcontracting plan that the Secretary determines did not meet the subcontracting goals negotiated in the plan for the prior fiscal year.
"(e)
"(f)
"(g)
"(1) A small business concern, as that term is defined under section 3(a) of the Small Business Act (
"(2) A small business concern owned and controlled by veterans, as that term is defined in section 3(q)(3) of such Act (
"(3) A small business concern owned and controlled by service-disabled veterans, as that term is defined in section 3(q)(2) of such Act (
"(4) A qualified HUBZone small business concern, as that term is defined under section 31(b) of such Act [
"(5) A small business concern owned and controlled by socially and economically disadvantaged individuals, as that term is defined in section 8(d)(3)(C) of such Act (
"(6) A small business concern owned and controlled by women, as that term is defined under section 3(n) of such Act (
Contract Options and Modifications
"(1) The Small Business Administration shall make substantial and sustained efforts to achieve a maximum ten-day period as the average processing time for approving options and modifications to contracts awarded pursuant to section 8(a) of the Small Business Act (
"(2) Within sixty days after the date of enactment of this Act [Nov. 15, 1988], the Small Business Administration, and the appropriate Federal agency, shall make substantial and sustained efforts to negotiate contract modifications for fair market price for any and all unpriced options contained in active contracts previously awarded pursuant to section 8(a) of the Small Business Act (
"(3) During the period of time described in paragraph (2), such agencies shall refrain from procuring such requirements from alternative sources except that, no delay may be incurred pursuant to this paragraph that would cause substantial harm to a public interest.
"(4) The Small Business Administration shall take appropriate actions, including publication in the Federal Register, to advise small business concerns and Federal agencies of the requirements of this subsection.
"(5) The Administration shall, to the maximum extent practicable, minimize delay, eliminate excess regulation, and require only such paperwork as may be necessary to effect the orderly and efficient management of the Program established by section 7(j)(10) of the Small Business Act (
Liquidated Damages Clauses
[Section 304(b) of
Native American Organizations Exemptions
Similar provisions were contained in the following prior appropriation acts:
"(a)
"(b)
"(1) a party to the joint venture is a Program Participant that is owned and controlled by an economically disadvantaged Indian tribe (as defined pursuant to paragraphs (4) and (13) of section 8(a) of the Small Business Act (
"(2) such Program Participant:
"(A) owns 51 per centum or more of such joint venture;
"(B) is located on the reservation or former reservation of such tribe as determined by the Secretary of the Interior of such tribe;
"(C) performs most of its activities on such reservation, or such former reservation; and
"(D) employs members of such tribe for at least 50 per centum of its total workforce.
"(c)
"(d)
[Section 602 of
GAO Evaluation of Service Corps of Retired Executives; Report
Authorization of Appropriations for Women-Owned Small Business Demonstration Projects
Similar provisions were contained in
Spending Authority for Contracts Authorized for Women-Owned Small Business Demonstration Projects
Rural Area Business Development Plans
Background Check Policy; Fingerprinting
Time for Designation of Agency
Report to Congress Respecting Assistance Furnished by Profitmaking Concerns to Small Business Concerns; Contents
Tennessee Valley Authority; Procurement Procedures Under 1983 and 1984 Amendments Applicable Only to Procurements Paid From Appropriated Funds
Asian Pacific Americans as Disadvantaged Minority in 1978
Business Plans; Submittal by Concerns Eligible To Receive Contracts
Concerns eligible to receive contracts pursuant to subsec. (a) of this section required to submit business plans required under
Reports to Congress; General Accounting Office Report on Business Development; Quarterly Reports by Small Business Administration to Congressional Committees
Termination of Advisory Boards and Committees
Advisory boards and committees in existence on Jan. 5, 1973, to terminate not later than the expiration of the 2-year period following Jan. 5, 1973, unless, in the case of a board or committee established by the President or an officer of the Federal Government, such board or committee is renewed by appropriate action prior to the expiration of such 2-year period, or in the case of a board or committee established by the Congress, its duration is otherwise provided by law. See
Definition
"(1) that is at least 51 per centum owned by one or more women; and
"(2) whose management and daily business operations are controlled by one or more of such women."
Similar provisions were contained in
1 See References in Text note below.
2 So in original. Probably should be "proscribed".
3 So in original. Probably should be "solicited".
4 So in original. Probably should be followed by "of the Small Business Act".
5 So in original. Probably should be "a".
§637a. Repealed. Pub. L. 89–409, §3(b), May 2, 1966, 80 Stat. 133
Section,
Statutory Notes and Related Subsidiaries
Effective Date of Repeal
Repeal effective on July 1, 1966, see section 3(c) of
§637b. Availability of information
(a) Requests for information
For any contract to be let by any Federal agency, such agency shall provide to any small business concern upon its request—
(1) a copy of bid sets and specifications with respect to such contract;
(2) the name and telephone number of an employee of such agency to answer questions with respect to such contract; and
(3) adequate citations to each major Federal law or agency rule with which such business concern must comply in performing such contract.
(b) Exempt contracts
Subsection (a) shall not apply to any contract or subcontract under such contract which—
(1) will be performed entirely outside any State, territory, or possession of the United States, the District of Columbia, or the Commonwealth of Puerto Rico; or
(2) is for services which are personal in nature.
(
Editorial Notes
Codification
Section was not enacted as part of the Small Business Act which comprises this chapter.
§637c. Definitions
For purposes of this Act—
(1) the term "Administrator" means the Administrator of the Small Business Administration;
(2) the term "Federal agency" has the meaning given the term "agency" by
(3) the term "Government procurement contract" means any contract for the procurement of any goods or services by any Federal agency.
(
Editorial Notes
References in Text
This Act, referred to in text, means
Codification
Section was not enacted as part of the Small Business Act which comprises this chapter.
Amendments
2004—Par. (2).
§637d. Subcontracting plan reports
(1) Reporting requirements
Not later than 1 year after January 2, 2013, the Administrator of the Small Business Administration shall take such actions as are necessary to ensure that the electronic subcontracting reporting system established by the Administration to carry out the requirement of
(2) Annual report
Not later than March 31 of each year, the Administrator of the Small Business Administration shall provide the Committee on Small Business of the House of Representatives and the Committee on Small Business and Entrepreneurship of the Senate a report, based on data available through existing systems, that sets forth, by agency (and to the extent practicable, by type of goal or plan), the following information:
(A) the percentage of entities required to submit reports pursuant to
(B) the percentage of entities filing such reports that met, exceeded, or failed to meet goals set forth in their subcontracting plans during the prior fiscal year; and
(C) the aggregate value by which such entities exceeded, or failed to meet, their subcontracting goals during the prior fiscal year.
(
Editorial Notes
Codification
Section was enacted as part of the National Defense Authorization Act for Fiscal Year 2013, and not as part of the Small Business Act which comprises this chapter.
§638. Research and development
(a) Declaration of policy
Research and development are major factors in the growth and progress of industry and the national economy. The expense of carrying on research and development programs is beyond the means of many small-business concerns, and such concerns are handicapped in obtaining the benefits of research and development programs conducted at Government expense. These small-business concerns are thereby placed at a competitive disadvantage. This weakens the competitive free enterprise system and prevents the orderly development of the national economy. It is the policy of the Congress that assistance be given to small-business concerns to enable them to undertake and to obtain the benefits of research and development in order to maintain and strengthen the competitive free enterprise system and the national economy.
(b) Assistance to small-business concerns
It shall be the duty of the Administration, and it is empowered—
(1) to assist small-business concerns to obtain Government contracts for research and development;
(2) to assist small-business concerns to obtain the benefits of research and development performed under Government contracts or at Government expense;
(3) to provide technical assistance to small-business concerns to accomplish the purposes of this section;
(4) to develop and maintain a source file and an information program to assure each qualified and interested small business concern the opportunity to participate in Federal agency small business innovation research programs and small business technology transfer programs;
(5) to coordinate with participating agencies a schedule for release of SBIR and STTR solicitations, and to prepare a master release schedule so as to maximize small businesses' opportunities to respond to solicitations;
(6) to independently survey and monitor the operation of SBIR and STTR programs within participating Federal agencies;
(7) to report not less than annually to the Committee on Small Business of the Senate, and to the Committee on Science and the Committee on Small Business of the House of Representatives, on the SBIR and STTR programs of the Federal agencies and the Administration's information and monitoring efforts related to the SBIR and STTR programs, including—
(A) the data on output and outcomes collected pursuant to subsections (g)(8) and (o)(9);
(B) the number of proposals received from, and the number and total amount of awards to, HUBZone small business concerns and firms with venture capital, hedge fund, or private equity firm investment (including those majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms) under each of the SBIR and STTR programs;
(C) a description of the extent to which each Federal agency is increasing outreach and awards to firms owned and controlled by women or by socially or economically disadvantaged individuals under each of the SBIR and STTR programs;
(D) general information about the implementation of, and compliance with the allocation of funds required under, subsection (dd) for firms owned in majority part by venture capital operating companies, hedge funds, or private equity firms and participating in the SBIR program;
(E) a detailed description of appeals of Phase III awards and notices of noncompliance with the SBIR Policy Directive and the STTR Policy Directive filed by the Administrator with Federal agencies;
(F) an accounting of funds, initiatives, and outcomes under the Commercialization Readiness Program;
(G) a description of the extent to which Federal agencies are providing in a timely manner information needed to maintain the database described in subsection (k);
(H) with respect to a Federal agency to which subsection (f)(1) or (n)(1) applies, whether the Federal agency has complied with the applicable subsection for the year covered by the report;
(I) the number of applications submitted to each Federal agency participating in the SBIR or STTR program in innovation open topics as compared to conventional topics, and how many small business concerns receive funding from open topics compared to conventional topics;
(J) the total number and dollar amount, and average size, of awards made by each Federal agency participating in the SBIR or STTR program, by phase, from—
(i) open topics; and
(ii) conventional topics;
(K) the minimum performance standards established under subsection (qq), including any applicable modifications under paragraph (3) of such subsection, and the number of small business concerns that did not meet those minimum performance standards, provided that the Administrator does not publish any personally identifiable information, the identity of each such small business concern, or any otherwise sensitive information; and
(L) the aggregate number and dollar amount of SBIR and STTR awards made pursuant to waivers under subsection (qq)(3)(E), provided that the Administrator does not publish any personally identifiable information, the identity of each such small business concern, or any otherwise sensitive information;
(8) to provide for and fully implement the tenets of Executive Order No. 13329 (Encouraging Innovation in Manufacturing);
(9) to coordinate the implementation of electronic databases at each of the Federal agencies participating in the SBIR program or the STTR program, including the technical ability of the participating agencies to electronically share data; and
(10) to consult, where appropriate, with personnel from the relevant Federal agency to assist small business concerns participating in a SBIR or STTR program with commercializing research developed under such a program before such small business concern is awarded a contract from such Federal agency.
(c) Consultation and cooperation with Government agencies; studies and recommendations
The Administration is authorized to consult and cooperate with all Government agencies and to make studies and recommendations to such agencies, and such agencies are authorized and directed to cooperate with the Administration in order to carry out and to accomplish the purposes of this section.
(d) Joint programs; approval of agreements; withdrawal of approval; publication in Federal Register
(1) The Administrator is authorized to consult with representatives of small-business concerns with a view to assisting and encouraging such firms to undertake joint programs for research and development carried out through such corporate or other mechanism as may be most appropriate for the purpose. Such joint programs may, among other things, include the following purposes:
(A) to construct, acquire, or establish laboratories and other facilities for the conduct of research;
(B) to undertake and utilize applied research;
(C) to collect research information related to a particular industry and disseminate it to participating members;
(D) to conduct applied research on a protected, proprietary, and contractual basis with member or nonmember firms, Government agencies, and others;
(E) to prosecute applications for patents and render patent services for participating members; and
(F) to negotiate and grant licenses under patents held under the joint program, and to establish corporations designed to exploit particular patents obtained by it.
(2) The Administrator may, after consultation with the Attorney General and the Chairman of the Federal Trade Commission, and with the prior written approval of the Attorney General, approve any agreement between small-business firms providing for a joint program of research and development, if the Administrator finds that the joint program proposed will maintain and strengthen the free enterprise system and the economy of the Nation. The Administrator or the Attorney General may at any time withdraw his approval of the agreement and the joint program of research and development covered thereby, if he finds that the agreement or the joint program carried on under it is no longer in the best interests of the competitive free enterprise system and the economy of the Nation. A copy of the statement of any such finding and approval intended to be within the coverage of this subsection, and a copy of any modification or withdrawal of approval, shall be published in the Federal Register. The authority conferred by this subsection on the Administrator shall not be delegated by him.
(3) No act or omission to act pursuant to and within the scope of any joint program for research and development, under an agreement approved by the Administrator under this subsection, shall be construed to be within the prohibitions of the antitrust laws or the Federal Trade Commission Act [
(e) Definitions
For the purpose of this section—
(1) the term "extramural budget" means the sum of the total obligations minus amounts obligated for such activities by employees of the agency in or through Government-owned, Government-operated facilities, except that for the Department of Energy it shall not include amounts obligated for atomic energy defense programs solely for weapons activities or for naval reactor programs, and except that for the Agency for International Development it shall not include amounts obligated solely for general institutional support of international research centers or for grants to foreign countries;
(2) the term "Federal agency" means an executive agency as defined in
(3) the term "funding agreement" means any contract, grant, or cooperative agreement entered into between any Federal agency and any small business for the performance of experimental, developmental, or research work funded in whole or in part by the Federal Government;
(4) the term "Small Business Innovation Research Program" or "SBIR" means a program under which a portion of a Federal agency's research or research and development effort is reserved for award to small business concerns through a uniform process having—
(A) a first phase for determining, insofar as possible, the scientific and technical merit and feasibility of ideas that appear to have commercial potential, as described in subparagraph (B), submitted pursuant to SBIR program solicitations;
(B) a second phase, which shall not include any invitation, pre-screening, or pre-selection process for eligibility for Phase II, that will further develop proposals which meet particular program needs, in which awards shall be made based on the scientific and technical merit and feasibility of the proposals, as evidenced by the first phase, considering, among other things, the proposal's commercial potential, as evidenced by—
(i) the small business concern's record of successfully commercializing SBIR or other research;
(ii) the existence of second phase funding commitments from private sector or non-SBIR funding sources;
(iii) the existence of third phase, follow-on commitments for the subject of the research; and
(iv) the presence of other indicators of the commercial potential of the idea; and
(C) where appropriate, a third phase for work that derives from, extends, or completes efforts made under prior funding agreements under the SBIR program—
(i) in which commercial applications of SBIR-funded research or research and development are funded by non-Federal sources of capital or, for products or services intended for use by the Federal Government, by follow-on non-SBIR Federal funding awards; or
(ii) for which awards from non-SBIR Federal funding sources are used for the continuation of research or research and development that has been competitively selected using peer review or merit-based selection procedures;
(5) the term "research" or "research and development" means any activity which is (A) a systematic, intensive study directed toward greater knowledge or understanding of the subject studied; (B) a systematic study directed specifically toward applying new knowledge to meet a recognized need; or (C) a systematic application of knowledge toward the production of useful materials, devices, and systems or methods, including design, development, and improvement of prototypes and new processes to meet specific requirements;
(6) the term "Small Business Technology Transfer Program" or "STTR" means a program under which a portion of a Federal agency's extramural research or research and development effort is reserved for award to small business concerns for cooperative research and development through a uniform process having—
(A) a first phase, to determine, to the extent possible, the scientific, technical, and commercial merit and feasibility of ideas submitted pursuant to STTR program solicitations;
(B) a second phase, which shall not include any invitation, pre-screening, or pre-selection process for eligibility for Phase II, that will further develop proposals that meet particular program needs, in which awards shall be made based on the scientific, technical, and commercial merit and feasibility of the idea, as evidenced by the first phase and by other relevant information; and
(C) where appropriate, a third phase for work that derives from, extends, or completes efforts made under prior funding agreements under the STTR program—
(i) in which commercial applications of STTR-funded research or research and development are funded by non-Federal sources of capital or, for products or services intended for use by the Federal Government, by follow-on non-STTR Federal funding awards; and
(ii) for which awards from non-STTR Federal funding sources are used for the continuation of research or research and development that has been competitively selected using peer review or scientific review criteria;
(7) the term "cooperative research and development" means research or research and development conducted jointly by a small business concern and a research institution in which not less than 40 percent of the work is performed by the small business concern, and not less than 30 percent of the work is performed by the research institution;
(8) the term "research institution" means a nonprofit institution, as defined in section 3703(5) 1 of this title, and includes federally funded research and development centers, as identified by the National Scientific Foundation in accordance with the governmentwide Federal Acquisition Regulation issued in accordance with
(9) the term "commercial applications" shall not be construed to exclude testing and evaluation of products, services, or technologies for use in technical or weapons systems, and further, awards for testing and evaluation of products, services, or technologies for use in technical or weapons systems may be made in either Phase II or Phase III of the Small Business Innovation Research Program and of the Small Business Technology Transfer Program, as defined in this subsection;
(10) the term "commercialization" means—
(A) the process of developing products, processes, technologies, or services; and
(B) the production and delivery (whether by the originating party or by others) of products, processes, technologies, or services for sale to or use by the Federal Government or commercial markets;
(11) the term "Phase I" means—
(A) with respect to the SBIR program, the first phase described in paragraph (4)(A); and
(B) with respect to the STTR program, the first phase described in paragraph (6)(A);
(12) the term "Phase II" means—
(A) with respect to the SBIR program, the second phase described in paragraph (4)(B); and
(B) with respect to the STTR program, the second phase described in paragraph (6)(B);
(13) the term "Phase III" means—
(A) with respect to the SBIR program, the third phase described in paragraph (4)(C); and
(B) with respect to the STTR program, the third phase described in paragraph (6)(C);
(14) the term "senior procurement executive" means an official designated under
(15) the term "covered individual" means an individual who—
(A) contributes in a substantive, meaningful way to the scientific development or execution of a research and development project proposed to be carried out with a research and development award from a Federal research agency; and
(B) is designated as a covered individual by the Federal research agency concerned;
(16) the term "foreign affiliation" means a funded or unfunded academic, professional, or institutional appointment or position with a foreign government or government-owned entity, whether full-time, part-time, or voluntary (including adjunct, visiting, or honorary);
(17) the term "foreign country of concern" means the People's Republic of China, the Democratic People's Republic of Korea, the Russian Federation, the Islamic Republic of Iran, or any other country determined to be a country of concern by the Secretary of State;
(18) the term "malign foreign talent recruitment program" has the meaning given such term in
(19) the term "federally funded award" means a Phase I, Phase II (including a Phase II award under subsection (cc)), or Phase III SBIR or STTR award made using a funding agreement.
(f) Federal agency expenditures for SBIR program
(1) Required expenditure amounts
Except as provided in paragraph (2)(B), each Federal agency which has an extramural budget for research or research and development in excess of $100,000,000 for fiscal year 1992, or any fiscal year thereafter, shall expend with small business concerns—
(A) not less than 1.5 percent of such budget in each of fiscal years 1993 and 1994;
(B) not less than 2.0 percent of such budget in each of fiscal years 1995 and 1996;
(C) not less than 2.5 percent of such budget in each of fiscal years 1997 through 2011;
(D) not less than 2.6 percent of such budget in fiscal year 2012;
(E) not less than 2.7 percent of such budget in fiscal year 2013;
(F) not less than 2.8 percent of such budget in fiscal year 2014;
(G) not less than 2.9 percent of such budget in fiscal year 2015;
(H) not less than 3.0 percent of such budget in fiscal year 2016; and
(I) not less than 3.2 percent of such budget in fiscal year 2017 and each fiscal year thereafter,
specifically in connection with SBIR programs which meet the requirements of this section, policy directives, and regulations issued under this section.
(2) Limitations
A Federal agency shall not—
(A) use any of its SBIR budget established pursuant to paragraph (1) for the purpose of funding administrative costs of the program, including costs associated with salaries and expenses; or
(B) make available for the purpose of meeting the requirements of paragraph (1) an amount of its extramural budget for basic research which exceeds the percentages specified in paragraph (1).
(3) Exclusion of certain funding agreements
Funding agreements with small business concerns for research or research and development which result from competitive or single source selections other than an SBIR program shall not be considered to meet any portion of the percentage requirements of paragraph (1).
(4) Rule of construction
Nothing in this subsection may be construed to prohibit a Federal agency from expending with small business concerns an amount of the extramural budget for research or research and development of the agency that exceeds the amount required under paragraph (1).
(g) Administration of small business innovation research programs by Federal agencies required to establish such programs
Each Federal agency required by subsection (f) to establish a small business innovation research program shall, in accordance with this chapter and regulations issued hereunder—
(1) unilaterally determine categories of projects to be in its SBIR program;
(2) issue small business innovation research solicitations in accordance with a schedule determined cooperatively with the Small Business Administration;
(3) unilaterally determine research topics within the agency's SBIR solicitations, giving special consideration to broad research topics and to topics that further 1 or more critical technologies, as identified by—
(A) the National Critical Technologies Panel (or its successor) in the 1991 report required under section 6683 1 of title 42, and in subsequent reports issued under that authority; or
(B) the Secretary of Defense, in the 1992 report issued in accordance with section 2522 1 of title 10, and in subsequent reports issued under that authority;
(4)(A) unilaterally receive and evaluate proposals resulting from SBIR proposals; and
(B) make a final decision on each proposal submitted under the SBIR program—
(i) not later than 1 year after the date on which the applicable solicitation closes, if with respect to the National Institutes of Health or the National Science Foundation, or 90 days after the date on which the applicable solicitation closes, if with respect to any other participating agency; or
(ii) if the Administrator authorizes an extension with respect to a solicitation, not later than 90 days after the date that would otherwise be applicable to the agency under clause (i);
(5) subject to subsection (l), unilaterally select awardees for its SBIR funding agreements and inform each awardee under such an agreement, to the extent possible, of the expenses of the awardee that will be allowable under the funding agreement;
(6) administer its own SBIR funding agreements (or delegate such administration to another agency);
(7) make payments to recipients of SBIR funding agreements on the basis of progress toward or completion of the funding agreement requirements and, in all cases, make payment to recipients under such agreements in full, subject to audit, on or before the last day of the 12-month period beginning on the date of completion of such requirements;
(8) collect annually, and maintain in a common format in accordance with the simplified reporting requirements under subsection (v), such information from awardees as is necessary to assess the SBIR program, including information necessary to maintain the database described in subsection (k), including—
(A) whether an awardee—
(i) has venture capital, hedge fund, or private equity firm investment or is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms and, if so—
(I) the amount of venture capital, hedge fund, or private equity firm investment that the awardee has received as of the date of the award; and
(II) the amount of additional capital that the awardee has invested in the SBIR technology;
(ii) has an investor that—
(I) is an individual who is not a citizen of the United States or a lawful permanent resident of the United States and, if so, the name of any such individual; or
(II) is a person that is not an individual and is not organized under the laws of a State or the United States and, if so, the name of any such person;
(iii) is owned by a woman or has a woman as a principal investigator; 2
(iv) is owned by a socially or economically disadvantaged individual or has a socially or economically disadvantaged individual as a principal investigator; 2
(v) is a faculty member or a student of an institution of higher education, as that term is defined in
(vi) is located in a State described in subsection (u)(3);
(B) a justification statement from the agency, if an awardee receives an award in an amount that is more than the award guidelines under this section; and
(C) data with respect to the Federal and State Technology Partnership Program (FAST Program);
(9) make an annual report on the SBIR program to the Small Business Administration and the Office of Science and Technology Policy;
(10) include, as part of its annual performance plan as required by subsections (a) and (b) of
(11) provide for and fully implement the tenets of Executive Order No. 13329 (Encouraging Innovation in Manufacturing);
(12) provide timely notice to the Administrator of any case or controversy before any Federal judicial or administrative tribunal concerning the SBIR program of the Federal agency;
(13) require each small business concern submitting a proposal or application for a federally funded award to disclose in the proposal or application—
(A) the identity of all owners and covered individuals of the small business concern who are a party to any foreign talent recruitment program of any foreign country of concern, including the People's Republic of China;
(B) the existence of any joint venture or subsidiary of the small business concern that is based in, funded by, or has a foreign affiliation with any foreign country of concern, including the People's Republic of China;
(C) any current or pending contractual or financial obligation or other agreement specific to a business arrangement, or joint venture-like arrangement with an enterprise owned by a foreign state or any foreign entity;
(D) whether the small business concern is wholly owned in the People's Republic of China or another foreign country;
(E) the percentage, if any, of venture capital or institutional investment by an entity that has a general partner or individual holding a leadership role in such entity who has a foreign affiliation with any foreign country of concern, including the People's Republic of China;
(F) any technology licensing or intellectual property sales to a foreign country of concern, including the People's Republic of China, during the 5-year period preceding submission of the proposal; and
(G) any foreign business entity, offshore entity, or entity outside the United States related to the small business concern;
(14) after reviewing the disclosures of a small business concern under paragraph (13), and if determined appropriate by the head of such Federal agency, request such small business concern to provide true copies of any contractual or financial obligation or other agreement specific to a business arrangement, or joint-venture like arrangement with an enterprise owned by a foreign state or any foreign entity in effect during the 5-year period preceding submission of the proposal with respect to which such small business concern made such disclosures;
(15) not make an award under the SBIR program of the Federal agency to a small business concern if the head of the Federal agency determines that—
(A) the small business concern submitting the proposal or application—
(i) has an owner or covered individual that is party to a malign foreign talent recruitment program;
(ii) has a business entity, parent company, or subsidiary located in the People's Republic of China or another foreign country of concern; or
(iii) has an owner or covered individual that has a foreign affiliation with a research institution located in the People's Republic of China or another foreign country of concern; and
(B) the relationships and commitments described in clauses (i) through (iii) of subparagraph (A)—
(i) interfere with the capacity for activities supported by the Federal agency to be carried out;
(ii) create duplication with activities supported by the Federal agency;
(iii) present concerns about conflicts of interest;
(iv) were not appropriately disclosed to the Federal agency;
(v) violate Federal law or terms and conditions of the Federal agency; or
(vi) pose a risk to national security;
(16) require a small business concern receiving an award under its SBIR program to repay all amounts received from the Federal agency under the award if—
(A) the small business concern makes a material misstatement that the Federal agency determines poses a risk to national security; or
(B) there is a change in ownership, change to entity structure, or other substantial change in circumstances of the small business concern that the Federal agency determines poses a risk to national security; and
(17) require a small business concern receiving an award under its SBIR program to regularly report to the Federal agency and the Administration throughout the duration of the award on—
(A) any change to a disclosure required under subparagraphs (A) through (G) of paragraph (13);
(B) any material misstatement made under paragraph (16)(A); and
(C) any change described in paragraph (16)(B).
(h) Establishment of goals for funding agreements for research or research and development to small business concerns by agencies having budgets for research and development
In addition to the requirements of subsection (f), each Federal agency which has a budget for research or research and development in excess of $20,000,000 for any fiscal year beginning with fiscal year 1983 or subsequent fiscal year shall establish goals specifically for funding agreements for research or research and development to small business concerns, and no goal established under this subsection shall be less than the percentage of the agency's research or research and development budget expended under funding agreements with small business concerns in the immediately preceding fiscal year.
(i) Annual reporting
(1) In general
Each Federal agency required by this section to have an SBIR program or to establish goals shall report annually to the Small Business Administration the number of awards (including awards under subsection (y)) pursuant to grants, contracts, or cooperative agreements over $10,000 in amount and the dollar value of all such awards, identifying SBIR awards and comparing the number and amount of such awards with awards to other than small business concerns.
(2) Calculation of extramural budget
(A) Methodology
Not later than 4 months after the date of the enactment of each appropriations Act for a Federal agency required by this section to have an SBIR program, the Federal agency shall submit to the Administrator a report, which shall include a description of the methodology used for calculating the amount of the extramural budget of that Federal agency.
(B) Administrator's analysis
The Administrator shall include an analysis of the methodology received from each Federal agency referred to in subparagraph (A) in the report required by subsection (b)(7).
(j) Small Business Administration policy directives for the general conduct of small business innovation research programs
(1) Policy directives
The Small Business Administration, after consultation with the Administrator of the Office of Federal Procurement Policy, the Director of the Office of Science and Technology Policy, and the Intergovernmental Affairs Division of the Office of Management and Budget, shall, within one hundred and twenty days of July 22, 1982, issue policy directives for the general conduct of the SBIR programs within the Federal Government, including providing for—
(A) simplified, standardized, and timely SBIR solicitations;
(B) a simplified, standardized funding process which provides for (i) the timely receipt and review of proposals; (ii) outside peer review for at least Phase II proposals, if appropriate; (iii) protection of proprietary information provided in proposals; (iv) selection of awardees; (v) retention of rights in data generated in the performance of the contract by the small business concern; (vi) transfer of title to property provided by the agency to the small business concern if such a transfer would be more cost effective than recovery of the property by the agency; (vii) cost sharing; and (viii) cost principles and payment schedules;
(C) exemptions from the regulations under paragraph (2) 4 if national security or intelligence functions clearly would be jeopardized;
(D) minimizing regulatory burden associated with participation in the SBIR program for the small business concern which will stimulate the cost-effective conduct of Federal research and development and the likelihood of commercialization of the results of research and development conducted under the SBIR program;
(E) simplified, standardized, and timely annual report on the SBIR program to the Small Business Administration and the Office of Science and Technology Policy;
(F) standardized and orderly withdrawal from program participation by an agency having a SBIR program; at the discretion of the Administration, such directives may require a phased withdrawal over a period of time sufficient in duration to minimize any adverse impact on small business concerns; and
(G) the voluntary participation in a SBIR program by a Federal agency not required to establish such a program pursuant to subsection (f).
(2) Modifications
Not later than 90 days after October 28, 1992, the Administrator shall modify the policy directives issued pursuant to this subsection to provide for—
(A) retention by a small business concern of the rights to data generated by the concern in the performance of an SBIR award for a period of not less than 4 years;
(B) continued use by a small business concern participating in Phase III of the SBIR program, as a directed bailment, of any property transferred by a Federal agency to the small business concern in Phase II of an SBIR program for a period of not less than 2 years, beginning on the initial date of the concern's participation in Phase III of such program;
(C) procedures to ensure, to the extent practicable, that an agency which intends to pursue research, development, or production of a technology developed by a small business concern under an SBIR program enters into follow-on, non-SBIR funding agreements with the small business concern for such research, development, or production;
(D) an increase to $150,000 in the amount of funds which an agency may award in Phase I of an SBIR program, and to $1,000,000 in Phase II of an SBIR program, and an adjustment of such amounts every year for inflation;
(E) a process for notifying the participating SBIR agencies and potential SBIR participants of the 1991, 1992, and the current critical technologies, as identified—
(i) by the National Critical Technologies Panel (or its successor), in accordance with section 6683 1 of title 42; or
(ii) by the Secretary of Defense, in accordance with section 2522 1 of title 10;
(F) enhanced outreach efforts to increase the participation of socially and economically disadvantaged small business concerns, as defined in
(G) technical and programmatic guidance to encourage agencies to develop gap-funding programs to address the delay between an award for Phase I of an SBIR program and the application for and extension of an award for Phase II of such program;
(H) procedures to ensure that a small business concern that submits a proposal for a funding agreement for Phase I of an SBIR program and that has received more than 15 Phase II SBIR awards during the preceding 5 fiscal years is able to demonstrate the extent to which it was able to secure Phase III funding to develop concepts resulting from previous Phase II SBIR awards; and
(I) procedures to ensure that agencies participating in the SBIR program retain the information submitted under subparagraph (H) at least until the Government Accountability Office submits the report required under section 105 of the Small Business Research and Development Enhancement Act of 1992.
(3) Additional modifications
Not later than 120 days after December 21, 2000, the Administrator shall modify the policy directives issued pursuant to this subsection—
(A) to clarify that the rights provided for under paragraph (2)(A) apply to all Federal funding awards under this section, including Phase I, Phase II, and Phase III;
(B) to provide for the requirement of a succinct commercialization plan with each application for a Phase II award that is moving toward commercialization;
(C) to require agencies to report to the Administration, not less frequently than annually, all instances in which an agency pursued research, development, or production of a technology developed by a small business concern using an award made under the SBIR program of that agency, and determined that it was not practicable to enter into a follow-on non-SBIR program funding agreement with the small business concern, which report shall include, at a minimum—
(i) the reasons why the follow-on funding agreement with the small business concern was not practicable;
(ii) the identity of the entity with which the agency contracted to perform the research, development, or production; and
(iii) a description of the type of funding agreement under which the research, development, or production was obtained; and
(D) to implement subsection (v), including establishing standardized procedures for the provision of information pursuant to subsection (k)(3).
(4) Modifications relating to procurement center representatives
Upon the enactment of this paragraph, the Administrator shall modify the policy directives issued pursuant to this subsection to require procurement center representatives (as described in
(k) Database
(1) Public database
Not later than 180 days after December 21, 2000, the Administrator shall develop, maintain, and make available to the public a searchable, up-to-date, electronic database that includes—
(A) the name, size, location, and an identifying number assigned by the Administrator, of each small business concern that has received a Phase I or Phase II SBIR or STTR award from a Federal agency;
(B) a description of each Phase I or Phase II SBIR or STTR award received by that small business concern, including—
(i) an abstract of the project funded by the award, excluding any proprietary information so identified by the small business concern;
(ii) the Federal agency making the award; and
(iii) the date and amount of the award;
(C) an identification of any business concern or subsidiary established for the commercial application of a product or service for which an SBIR or STTR award is made;
(D) information regarding mentors and Mentoring Networks, as required by
(E) with respect to assistance under the STTR program only—
(i) whether the small business concern or the research institution initiated their collaboration on each assisted STTR project;
(ii) whether the small business concern or the research institution originated any technology relating to the assisted STTR project;
(iii) the length of time it took to negotiate any licensing agreement between the small business concern and the research institution under each assisted STTR project; and
(iv) how the proceeds from commercialization, marketing, or sale of technology resulting from each assisted STTR project were allocated (by percentage) between the small business concern and the research institution; and
(F) for each small business concern that has received a Phase I or Phase II SBIR or STTR award from a Federal agency, whether the small business concern—
(i) has venture capital, hedge fund, or private equity firm investment and, if so, whether the small business concern is registered as majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms as required under subsection (dd)(3);
(ii) is owned by a woman or has a woman as a principal investigator; 2
(iii) is owned by a socially or economically disadvantaged individual or has a socially or economically disadvantaged individual as a principal investigator; 2
(iv) is owned by a faculty member or a student of an institution of higher education, as that term is defined in
(v) received assistance under the Federal and State Technology Partnership Program (FAST Program).
(2) Government database
Not later than 90 days after December 31, 2011, the Administrator, in consultation with Federal agencies required to have an SBIR program pursuant to subsection (f)(1) or an STTR program pursuant to subsection (n)(1), shall develop and maintain a database to be used exclusively for SBIR and STTR program evaluation that—
(A) contains for each small business concern that applies for, submits a proposal for, or receives an award under Phase I or Phase II of the SBIR program or the STTR program—
(i) the name, size, and location of, and the identifying number assigned by the Administration to, the small business concern;
(ii) an abstract of the applicable project;
(iii) the specific aims of the project;
(iv) the number of employees of the small business concern;
(v) the names and titles of the key individuals that will carry out the project, the position each key individual holds in the small business concern, and contact information for each key individual;
(vi) the percentage of effort each individual described in clause (v) will contribute to the project;
(vii) whether the small business concern is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms; and
(viii) the Federal agency to which the application is made and contact information for the person or office within the Federal agency that is responsible for reviewing applications and making awards under the SBIR program or the STTR program;
(B) contains for each Phase II award made by a Federal agency—
(i) information collected in accordance with paragraph (3) on revenue from the sale of new products or services resulting from the research conducted under the award;
(ii) information collected in accordance with paragraph (3) on additional investment from any source, other than Phase I or Phase II SBIR or STTR awards, to further the research and development conducted under the award; and
(iii) any other information received in connection with the award that the Administrator, in conjunction with the SBIR and STTR program managers of Federal agencies, considers relevant and appropriate;
(C) includes any narrative information that a small business concern receiving a Phase II award voluntarily submits to further describe the outputs and outcomes of its awards;
(D) includes, for each awardee—
(i) the name, size, and location of, and any identifying number assigned by the Administrator to, the awardee;
(ii) whether the awardee has venture capital, hedge fund, or private equity firm investment and, if so—
(I) the amount of venture capital, hedge fund, or private equity firm investment as of the date of the award;
(II) the percentage of ownership of the awardee held by a venture capital operating company, hedge fund, or private equity firm, including whether the awardee is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms; and
(III) the amount of additional capital that the awardee has invested in the SBIR or STTR technology, which information shall be collected on an annual basis;
(iii) the names and locations of any affiliates of the awardee;
(iv) the number of employees of the awardee;
(v) the number of employees of the affiliates of the awardee; and
(vi) the names of, and the percentage of ownership of the awardee held by—
(I) any individual who is not a citizen of the United States or a lawful permanent resident of the United States; or
(II) any person that is not an individual and is not organized under the laws of a State or the United States;
(E) includes any other data collected by or available to any Federal agency that such agency considers may be useful for SBIR or STTR program evaluation;
(F) is available for use solely for program evaluation purposes by the Federal Government or, in accordance with policy directives issued by the Administration, by other authorized persons who are subject to a use and nondisclosure agreement with the Federal Government covering the use of the database; and
(G) includes a timely and accurate list of any individual or small business concern that has participated in the SBIR program or STTR program that has been—
(i) convicted of a fraud-related crime involving funding received under the SBIR program or STTR program; or
(ii) found civilly liable for a fraud-related violation involving funding received under the SBIR program or STTR program.
(3) Updating information for database
(A) In general
A small business concern applying for a Phase II award under this section shall be required to update information in the database established under this subsection for any prior Phase II award received by that small business concern. In complying with this paragraph, a small business concern may apportion sales or additional investment information relating to more than one Phase II award among those awards, if it notes the apportionment for each award.
(B) Annual updates upon termination
A small business concern receiving a Phase II award under this section shall—
(i) update information in the database concerning that award at the termination of the award period; and
(ii) be requested to voluntarily update such information annually thereafter for a period of 5 years.
(C) Government database
Not later than 60 days after the date established by a Federal agency for submitting applications or proposals for a Phase I or Phase II award under the SBIR program or STTR program, the head of the Federal agency shall submit to the Administrator the data required under paragraph (2) with respect to each small business concern that applies or submits a proposal for the Phase I or Phase II award.
(4) Protection of information
Information provided under paragraph (2) shall be considered privileged and confidential and not subject to disclosure pursuant to
(5) Rule of construction
Inclusion of information in the database under this subsection shall not be considered to be publication for purposes of subsection (a) or (b) of
(l) Reporting of awards made from single proposal, to multiple award winners, or to critical technology topics
(1) Single proposal
If a Federal agency required to establish an SBIR program under subsection (f) makes an award with respect to an SBIR solicitation topic or subtopic for which the agency received only 1 proposal, the agency shall provide written justification for making the award in its next quarterly report to the Administration and in the agency's next annual report required under subsection (g)(8).
(2) Multiple awards
An agency referred to in paragraph (1) shall include in its next annual report required under subsection (g)(8) an accounting of the awards the agency has made for Phase I of an SBIR program during the reporting period to entities that have received more than 15 awards for Phase II of an SBIR program during the preceding 5 fiscal years.
(3) Critical technology awards
An agency referred to in paragraph (1) shall include in its next annual report required under subsection (g)(8), an accounting of the number of awards it has made to critical technology topics, as defined in subsection (g)(3), including an identification of the specific critical technologies topics, and the percentage by number and dollar amount of the agency's total SBIR awards to such critical technology topics.
(m) Termination
The authorization to carry out the Small Business Innovation Research Program established under this section shall terminate on September 30, 2025.
(n) Required expenditures for STTR by Federal agencies
(1) Required expenditure amounts
(A) In general
With respect to each fiscal year through fiscal year 2025, each Federal agency that has an extramural budget for research, or research and development, in excess of $1,000,000,000 for that fiscal year, shall expend with small business concerns not less than the percentage of that extramural budget specified in subparagraph (B), specifically in connection with STTR programs that meet the requirements of this section and any policy directives and regulations issued under this section.
(B) Expenditure amounts
The percentage of the extramural budget required to be expended by an agency in accordance with subparagraph (A) shall be—
(i) 0.15 percent for each fiscal year through fiscal year 2003;
(ii) 0.3 percent for each of fiscal years 2004 through 2011;
(iii) 0.35 percent for each of fiscal years 2012 and 2013;
(iv) 0.40 percent for each of fiscal years 2014 and 2015; and
(v) 0.45 percent for fiscal year 2016 and each fiscal year thereafter.
(2) Limitations
A Federal agency shall not—
(A) use any of its STTR budget established pursuant to paragraph (1) for the purpose of funding administrative costs of the program, including costs associated with salaries and expenses, or, in the case of a small business concern or a research institution, costs associated with salaries, expenses, and administrative overhead (other than those direct or indirect costs allowable under guidelines of the Office of Management and Budget and the governmentwide Federal Acquisition Regulation issued in accordance with
(B) make available for the purpose of meeting the requirements of paragraph (1) an amount of its extramural budget for basic research which exceeds the percentage specified in paragraph (1).
(3) Exclusion of certain funding agreements
Funding agreements with small business concerns for research or research and development which result from competitive or single source selections other than an STTR program shall not be considered to meet any portion of the percentage requirements of paragraph (1).
(o) Federal agency STTR authority
Each Federal agency required to establish an STTR program in accordance with subsection (n) and regulations issued under this chapter, shall—
(1) unilaterally determine categories of projects to be included in its STTR program;
(2) issue STTR solicitations in accordance with a schedule determined cooperatively with the Administration;
(3) unilaterally determine research topics within the agency's STTR solicitations, giving special consideration to broad research topics and to topics that further 1 or more critical technologies, as identified—
(A) by the National Critical Technologies Panel (or its successor) in reports required under section 6683 1 of title 42; or
(B) by the Secretary of Defense, in accordance with section 2522 1 of title 10;
(4)(A) unilaterally receive and evaluate proposals resulting from STTR solicitations; and
(B) make a final decision on each proposal submitted under the STTR program—
(i) not later than 1 year after the date on which the applicable solicitation closes, if with respect to the National Institutes of Health or the National Science Foundation, or 90 days after the date on which the applicable solicitation closes, if with respect to any other participating agency; or
(ii) if the Administrator authorizes an extension for a solicitation, not later than 90 days after the date that would be applicable to the agency under clause (i);
(5) unilaterally select awardees for its STTR funding agreements and inform each awardee under such an agreement, to the extent possible, of the expenses of the awardee that will be allowable under the funding agreement;
(6) administer its own STTR funding agreements (or delegate such administration to another agency);
(7) make payments to recipients of STTR funding agreements on the basis of progress toward or completion of the funding agreement requirements and, in all cases, make payment to recipients under such agreements in full, subject to audit, on or before the last day of the 12-month period beginning on the date of the completion of such requirements;
(8) include, as part of its annual performance plan as required by subsections (a) and (b) of
(9) collect annually, and maintain in a common format in accordance with the simplified reporting requirements under subsection (v), such information from applicants and awardees as is necessary to assess the STTR program outputs and outcomes, including information necessary to maintain the database described in subsection (k), including—
(A) whether an applicant or awardee—
(i) has venture capital, hedge fund, or private equity firm investment or is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms and, if so—
(I) the amount of venture capital, hedge fund, or private equity firm investment that the applicant or awardee has received as of the date of the application or award, as applicable; and
(II) the amount of additional capital that the applicant or awardee has invested in the STTR technology;
(ii) has an investor that—
(I) is an individual who is not a citizen of the United States or a lawful permanent resident of the United States and, if so, the name of any such individual; or
(II) is a person that is not an individual and is not organized under the laws of a State or the United States and, if so, the name of any such person;
(iii) is owned by a woman or has a woman as a principal investigator; 2
(iv) is owned by a socially or economically disadvantaged individual or has a socially or economically disadvantaged individual as a principal investigator; 2
(v) is a faculty member or a student of an institution of higher education, as that term is defined in
(vi) is located in a State in which the total value of contracts awarded to small business concerns under all STTR programs is less than the total value of contracts awarded to small business concerns in a majority of other States, as determined by the Administrator in biennial fiscal years, beginning with fiscal year 2008, based on the most recent statistics compiled by the Administrator;
(B) if an awardee receives an award in an amount that is more than the award guidelines under this section, a statement from the agency that justifies the award amount; and
(C) data with respect to the Federal and State Technology Partnership Program (FAST Program);
(10) submit an annual report on the STTR program to the Administration and the Office of Science and Technology Policy;
(11) adopt the agreement developed by the Administrator under subsection (w) as the agency's model agreement for allocating between small business concerns and research institutions intellectual property rights and rights, if any, to carry out follow-on research, development, or commercialization;
(12) develop, in consultation with the Office of Federal Procurement Policy and the Office of Government Ethics, procedures to ensure that federally funded research and development centers (as defined in subsection (e)(8)) that participate in STTR agreements—
(A) are free from organizational conflicts of interests relative to the STTR program;
(B) do not use privileged information gained through work performed for an STTR agency or private access to STTR agency personnel in the development of an STTR proposal; and
(C) use outside peer review, as appropriate;
(13) not later than July 31, 1993, develop procedures for assessing the commercial merit and feasibility of STTR proposals, as evidenced by—
(A) the small business concern's record of successfully commercializing STTR or other research;
(B) the existence of Phase II funding commitments from private sector or non-STTR funding sources;
(C) the existence of Phase III follow-on commitments for the subject of the research; and
(D) the presence of other indicators of the commercial potential of the idea;
(14) implement an outreach program to research institutions and small business concerns for the purpose of enhancing its STTR program, in conjunction with any such outreach done for purposes of the SBIR program;
(15) provide for and fully implement the tenets of Executive Order No. 13329 (Encouraging Innovation in Manufacturing);
(16) provide timely notice to the Administrator of any case or controversy before any Federal judicial or administrative tribunal concerning the STTR program of the Federal agency;
(17) require each small business concern submitting a proposal or application for a federally funded award to disclose in the proposal or application—
(A) the identity of all owners and covered individuals of the small business concern who are a party to any foreign talent recruitment program of any foreign country of concern, including the People's Republic of China;
(B) the existence of any joint venture or subsidiary of the small business concern that is based in, funded by, or has a foreign affiliation with any foreign country of concern, including the People's Republic of China;
(C) any current or pending contractual or financial obligation or other agreement specific to a business arrangement, or joint venture-like arrangement with an enterprise owned by a foreign state or any foreign entity;
(D) whether the small business concern is wholly owned in the People's Republic of China or another foreign country;
(E) the percentage, if any, of venture capital or institutional investment by an entity that has a general partner or individual holding a leadership role in such entity who has a foreign affiliation with any foreign country of concern, including the People's Republic of China;
(F) any technology licensing or intellectual property sales to a foreign country of concern, including the People's Republic of China, during the 5-year period preceding submission of the proposal; and
(G) any foreign business entity, offshore entity, or entity outside the United States related to the small business concern;
(18) after reviewing the disclosures of a small business concern under paragraph (17), and if determined appropriate by the head of such Federal agency, request such small business concern to provide true copies of any contractual or financial obligation or other agreement specific to a business arrangement, or joint-venture like arrangement with an enterprise owned by a foreign state or any foreign entity in effect during the 5-year period preceding submission of the proposal with respect to which such small business concern made such disclosures;
(19) not make an award under the STTR program of the Federal agency to a small business concern if the head of the Federal agency determines that—
(A) the small business concern submitting the proposal or application—
(i) has an owner or covered individual that is party to a malign foreign talent recruitment program;
(ii) has a business entity, parent company, or subsidiary located in the People's Republic of China or another foreign country of concern; or
(iii) has an owner or covered individual that has a foreign affiliation with a research institution located in the People's Republic of China or another foreign country of concern; and
(B) the relationships and commitments described in clauses (i) through (iii) of subparagraph (A)—
(i) interfere with the capacity for activities supported by the Federal agency to be carried out;
(ii) create duplication with activities supported by the Federal agency;
(iii) present concerns about conflicts of interest;
(iv) were not appropriately disclosed to the Federal agency;
(v) violate Federal law or terms and conditions of the Federal agency; or
(vi) pose a risk to national security;
(20) require a small business concern receiving an award under its STTR program to repay all amounts received from the Federal agency under the award if—
(A) the small business concern makes a material misstatement that the Federal agency determines poses a risk to national security; or
(B) there is a change in ownership, change to entity structure, or other substantial change in circumstances of the small business concern that the Federal agency determines poses a risk to national security; and
(21) require a small business concern receiving an award under its STTR program to regularly report to the Federal agency and the Administration throughout the duration of the award on—
(A) any change to a disclosure required under subparagraphs (A) through (G) of paragraph (17);
(B) any material misstatement made under paragraph (20)(A); and
(C) any change described in paragraph (20)(B).
(p) STTR policy directive
(1) Issuance
The Administrator shall issue a policy directive for the general conduct of the STTR programs within the Federal Government. Such policy directive shall be issued after consultation with—
(A) the heads of each of the Federal agencies required by subsection (n) to establish an STTR program;
(B) the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office; and
(C) the Director of the Office of Federal Procurement Policy.
(2) Contents
The policy directive required by paragraph (1) shall provide for—
(A) simplified, standardized, and timely STTR solicitations;
(B) a simplified, standardized funding process that provides for—
(i) the timely receipt and review of proposals;
(ii) outside peer review, if appropriate;
(iii) protection of proprietary information provided in proposals;
(iv) selection of awardees;
(v) retention by a small business concern of the rights to data generated by the concern in the performance of an STTR award for a period of not less than 4 years;
(vi) continued use by a small business concern, as a directed bailment, of any property transferred by a Federal agency to the small business concern in Phase II of the STTR program for a period of not less than 2 years, beginning on the initial date of the concern's participation in Phase III of such program;
(vii) cost sharing;
(viii) cost principles and payment schedules; and
(ix) 1-year awards for Phase I of an STTR program, generally not to exceed $150,000, and 2-year awards for Phase II of an STTR program, generally not to exceed $1,000,000, (each of which the Administrator shall adjust for inflation annually) greater or lesser amounts to be awarded at the discretion of the awarding agency, and shorter or longer periods of time to be approved at the discretion of the awarding agency where appropriate for a particular project;
(C) minimizing regulatory burdens associated with participation in STTR programs;
(D) guidelines for a model agreement, to be used by all agencies, for allocating between small business concerns and research institutions intellectual property rights and rights, if any, to carry out follow-on research, development, or commercialization;
(E) procedures to ensure that—
(i) a recipient of an STTR award is a small business concern, as defined in
(ii) such small business concern exercises management and control of the performance of the STTR funding agreement pursuant to a business plan providing for the commercialization of the technology that is the subject matter of the award;
(F) procedures to ensure, to the extent practicable, that an agency which intends to pursue research, development, or production of a technology developed by a small business concern under an STTR program enters into follow-on, non-STTR funding agreements with the small business concern for such research, development, or production; and
(G) procedures to ensure that procurement center representatives (as described in
(i) consult with the appropriate personnel from the relevant Federal agency, to assist small business concerns participating in the STTR program, particularly in Phase III;
(ii) provide technical assistance to such concerns to submit a bid for an award of a Federal contract; and
(iii) consult with the appropriate personnel from the relevant Federal agency in providing the assistance described in clause (i).
(3) Modifications
Not later than 120 days after October 15, 2001, the Administrator shall modify the policy directive issued pursuant to this subsection to clarify that the rights provided for under paragraph (2)(B)(v) apply to all Federal funding awards under this section, including Phase I, Phase II, and Phase III.
(q) Discretionary technical and business assistance
(1) In general
Each Federal agency required by this section to conduct an SBIR program or STTR program may enter into an agreement with 1 or more vendors selected under paragraph (2)(A) to provide small business concerns engaged in SBIR or STTR projects with technical and business assistance services, such as access to a network of scientists and engineers engaged in a wide range of technologies, assistance with product sales, intellectual property protections, market research, market validation, and development of regulatory plans and manufacturing plans, or access to technical and business literature available through on-line data bases, for the purpose of assisting such concerns in—
(A) making better technical decisions concerning such projects;
(B) solving technical problems which arise during the conduct of such projects;
(C) minimizing technical risks associated with such projects; and
(D) developing and commercializing new commercial products and processes resulting from such projects, including intellectual property protections.
(2) Vendor selection
(A) In general
Each agency may select 1 or more vendors from which small business concerns may obtain assistance in meeting the goals listed in paragraph (1) for a term not to exceed 5 years. Such selection shall be competitive and shall utilize merit-based criteria.
(B) Selection by small business concern
A small business concern may, by contract or otherwise, select 1 or more vendors to assist the small business concern in meeting the goals listed in paragraph (1).
(3) Additional technical assistance
(A) Phase I
A Federal agency described in paragraph (1) may—
(i) provide to the recipient of a Phase I SBIR or STTR award, through a vendor selected under paragraph (2)(A), the services described in paragraph (1), in an amount equal to not more than $6,500 per year; or
(ii) authorize the recipient of a Phase I SBIR or STTR award to purchase the services described in paragraph (1), in an amount equal to not more than $6,500 per year, which shall be in addition to the amount of the recipient's award.
(B) Phase II
A Federal agency described in paragraph (1) may—
(i) provide to the recipient of a Phase II SBIR or STTR award, through a vendor selected under paragraph (2)(A), the services described in paragraph (1), in an amount equal to not more than $50,000 per project; or
(ii) authorize the recipient of a Phase II SBIR or STTR award to purchase the services described in paragraph (1), in an amount equal to not more than $50,000 per project, which may, as determined appropriate by the head of the Federal agency, be included as part of the recipient's award or be in addition to the amount of the recipient's award.
(C) Flexibility
In carrying out subparagraphs (A) and (B), each Federal agency shall provide the allowable amounts to a recipient that meets the eligibility requirements under the applicable subparagraph, if the recipient requests to seek technical or business assistance from an individual or entity other than a vendor selected under paragraph (2)(A) by the Federal agency. Business-related services aimed at improving the commercialization success of a small business concern may be obtained from an entity, such as a public or private organization or an agency of or other entity established or funded by a State that facilitates or accelerates the commercialization of technologies or assists in the creation and growth of private enterprises that are commercializing technology.
(D) Limitation
A Federal agency may not—
(i) use the amounts authorized under subparagraph (A) or (B) unless 1 or more vendors selected under paragraph (2)(A) provides the technical or business assistance to the recipient; or
(ii) enter a contract with a vendor under paragraph (2)(A) under which the amount provided for technical or business assistance is based on total number of Phase I or Phase II awards.
(E) Multiple award recipients
The Administrator shall establish a limit on the amount of technical and business assistance services that may be received or purchased under subparagraph (B) by a small business concern that has received multiple Phase II SBIR or STTR awards for a fiscal year.
(4) Annual reporting
(A) In general
A small business concern that receives technical or business assistance from a vendor under this subsection during a fiscal year shall submit to the Federal agency contracting with the vendor a description of the technical or business assistance provided and the benefits and results of the technical or business assistance provided.
(B) Use of existing reporting mechanism
The information required under subparagraph (A) shall be collected by a Federal agency as part of a report required to be submitted by small business concerns engaged in SBIR or STTR projects of the Federal agency for which the requirement was in effect on August 13, 2018.
(r) Phase III agreements, competitive procedures, and justification for awards
(1) In general
In the case of a small business concern that is awarded a funding agreement for Phase II of an SBIR or STTR program, a Federal agency may enter into a Phase III agreement with that business concern for additional work to be performed during or after the Phase II period. The Phase II funding agreement with the small business concern may, at the discretion of the agency awarding the agreement, set out the procedures applicable to Phase III agreements with that agency or any other agency.
(2) Definition
In this subsection, the term "Phase III agreement" means a follow-on, non-SBIR or non-STTR funded contract as described in paragraph (4)(C) or paragraph (6)(C) of subsection (e).
(3) Intellectual property rights
Each funding agreement under an SBIR or STTR program shall include provisions setting forth the respective rights of the United States and the small business concern with respect to intellectual property rights and with respect to any right to carry out follow-on research.
(4) Competitive procedures and justification for awards
To the greatest extent practicable, Federal agencies and Federal prime contractors shall—
(A) consider an award under the SBIR program or the STTR program to satisfy the requirements under
(B) issue, without further justification, Phase III awards relating to technology, including sole source awards, to the SBIR and STTR award recipients that developed the technology.
(s) Competitive selection procedures for SBIR and STTR programs
All funds awarded, appropriated, or otherwise made available in accordance with subsection (f) or (n) must be awarded pursuant to competitive and merit-based selection procedures.
(t) Inclusion in strategic plans
Program information relating to the SBIR and STTR programs shall be included by each Federal agency in any update or revision required of the Federal agency under
(u) Coordination of technology development programs
(1) Definition of technology development program
In this subsection, the term "technology development program" means—
(A) the Experimental Program to Stimulate Competitive Research of the National Science Foundation, as established under
(B) the Defense Experimental Program to Stimulate Competitive Research of the Department of Defense;
(C) the Experimental Program to Stimulate Competitive Research of the Department of Energy;
(D) the Experimental Program to Stimulate Competitive Research of the Environmental Protection Agency;
(E) the Experimental Program to Stimulate Competitive Research of the National Aeronautics and Space Administration;
(F) the Institutional Development Award Program of the National Institutes of Health; and
(G) the National Research Initiative Competitive Grants Program of the Department of Agriculture.
(2) Coordination requirements
Each Federal agency that is subject to subsection (f) and that has established a technology development program may, in each fiscal year, review for funding under that technology development program—
(A) any proposal to provide outreach and assistance to one or more small business concerns interested in participating in the SBIR program, including any proposal to make a grant or loan to a company to pay a portion or all of the cost of developing an SBIR proposal, from an entity, organization, or individual located in—
(i) a State that is eligible to participate in that program; or
(ii) a State described in paragraph (3); or
(B) any proposal for Phase I of the SBIR program, if the proposal, though meritorious, is not funded through the SBIR program for that fiscal year due to funding restraints, from a small business concern located in—
(i) a State that is eligible to participate in a technology development program; or
(ii) a State described in paragraph (3).
(3) Additionally eligible State
A State referred to in subparagraph (A)(ii) or (B)(ii) of paragraph (2) is a State in which the total value of contracts awarded to small business concerns under all SBIR programs is less than the total value of contracts awarded to small business concerns in a majority of other States, as determined by the Administrator in biennial fiscal years, beginning with fiscal year 2000, based on the most recent statistics compiled by the Administrator.
(v) Reducing paperwork and compliance burden
(1) Standardization of reporting requirements
The Administrator shall work with the Federal agencies required by this section to have an SBIR or STTR program to standardize reporting requirements for the collection of data from SBIR or STTR applicants and awardees, including data for inclusion in the database under subsection (k), taking into consideration the unique needs of each agency, and to the extent possible, permitting the updating of previously reported information by electronic means. Such requirements shall be designed to minimize the burden on small businesses.
(2) Simplification of application and award process
Not later than 1 year after December 31, 2011, and after a period of public comment, the Administrator shall issue regulations or guidelines, taking into consideration the unique needs of each Federal agency, to ensure that each Federal agency required to carry out an SBIR program or STTR program simplifies and standardizes the program proposal, selection, contracting, compliance, and audit procedures for the SBIR program or STTR program of the Federal agency (including procedures relating to overhead rates for applicants and documentation requirements) to reduce the paperwork and regulatory compliance burden on small business concerns applying to and participating in the SBIR program or STTR program.
(w) STTR model agreement for intellectual property rights
(1) In general
The Administrator shall promulgate regulations establishing a single model agreement for use in the STTR program that allocates between small business concerns and research institutions intellectual property rights and rights, if any, to carry out follow-on research, development, or commercialization.
(2) Opportunity for comment
In promulgating regulations under paragraph (1), the Administrator shall provide to affected agencies, small business concerns, research institutions, and other interested parties the opportunity to submit written comments.
(x) Research and development focus
(1) Revision and update of criteria and procedures of identification
In carrying out subsection (g), the Secretary of Defense shall, not less often than once every 4 years, revise and update the criteria and procedures utilized to identify areas of the research and development efforts of the Department of Defense which are suitable for the provision of funds under the Small Business Innovation Research Program and the Small Business Technology Transfer Program.
(2) Utilization of plans
The criteria and procedures described in paragraph (1) shall be developed through the use of the most current versions of the following plans:
(A) The Joint Warfighting Science and Technology Plan required under section 270 of the National Defense Authorization Act for Fiscal Year 1997 (
(B) The Defense Technology Area Plan of the Department of Defense.
(C) The Basic Research Plan of the Department of Defense.
(3) Input in identification of areas of effort
The criteria and procedures described in paragraph (1) shall include input in the identification of areas of research and development efforts described in that paragraph from Department of Defense program managers (PMs) and program executive officers (PEOs).
(y) Commercialization Readiness Program
(1) In general
The Secretary of Defense and the Secretary of each military department is authorized to create and administer a "Commercialization Readiness Program" to accelerate the transition of technologies, products, and services developed under the Small Business Innovation Research Program or Small Business Technology Transfer Program to Phase III, including the acquisition process. The authority to create and administer a Commercialization Readiness Program under this subsection may not be construed to eliminate or replace any other SBIR program or STTR program that enhances the insertion or transition of SBIR or STTR technologies, including any such program in effect on January 6, 2006.
(2) Identification of research programs for accelerated transition to acquisition process
In carrying out the Commercialization Readiness Program, the Secretary of Defense and the Secretary of each military department shall identify research programs of the Small Business Innovation Research Program or Small Business Technology Transfer Program that have the potential for rapid transitioning to Phase III and into the acquisition process.
(3) Limitation
No research program may be identified under paragraph (2) unless the Secretary of the military department concerned certifies in writing that the successful transition of the program to Phase III and into the acquisition process is expected to meet high priority military requirements of such military department.
(4) Funding
(A) In general
The Secretary of Defense and each Secretary of a military department may use not more than an amount equal to 1 percent of the funds available to the Department of Defense or the military department pursuant to the Small Business Innovation Research Program for payment of expenses incurred to administer the Commercialization Readiness Program under this subsection.
(B) Limitations
The funds described in subparagraph (A)—
(i) shall not be subject to the limitations on the use of funds in subsection (f)(2); and
(ii) shall not be used to make Phase III awards.
(5) Insertion incentives
For any contract with a value of not less than $100,000,000, the Secretary of Defense is authorized to—
(A) establish goals for the transition of Phase III technologies in subcontracting plans; and
(B) require a prime contractor on such a contract to report the number and dollar amount of contracts entered into by that prime contractor for Phase III SBIR or STTR projects.
(6) Goal for SBIR and STTR technology insertion
The Secretary of Defense shall—
(A) set a goal to increase the number of Phase II SBIR contracts and the number of Phase II STTR contracts awarded by the Secretary that lead to technology transition into programs of record or fielded systems;
(B) use incentives in effect on December 31, 2011, or create new incentives, to encourage agency program managers and prime contractors to meet the goal under subparagraph (A); and
(C) submit to the Administrator for inclusion in the annual report under subsection (b)(7)—
(i) the number and percentage of Phase II SBIR and STTR contracts awarded by the Secretary that led to technology transition into programs of record or fielded systems;
(ii) information on the status of each project that received funding through the Commercialization Readiness Program and efforts to transition those projects into programs of record or fielded systems; and
(iii) a description of each incentive that has been used by the Secretary under subparagraph (B) and the effectiveness of that incentive with respect to meeting the goal under subparagraph (A).
(z) Encouraging innovation in energy efficiency
(1) Federal agency energy-related priority
In carrying out its duties under this section relating to SBIR and STTR solicitations by Federal departments and agencies, the Administrator shall—
(A) ensure that such departments and agencies give high priority to small business concerns that participate in or conduct energy efficiency or renewable energy system research and development projects; and
(B) include in the annual report to Congress under subsection (b)(7) a determination of whether the priority described in subparagraph (A) is being carried out.
(2) Consultation required
The Administrator shall consult with the heads of other Federal departments and agencies in determining whether priority has been given to small business concerns that participate in or conduct energy efficiency or renewable energy system research and development projects, as required by this subsection.
(3) Guidelines
The Administrator shall, as soon as is practicable after December 19, 2007, issue guidelines and directives to assist Federal agencies in meeting the requirements of this subsection.
(4) Definitions
In this subsection—
(A) the term "biomass"—
(i) means any organic material that is available on a renewable or recurring basis, including—
(I) agricultural crops;
(II) trees grown for energy production;
(III) wood waste and wood residues;
(IV) plants (including aquatic plants and grasses);
(V) residues;
(VI) fibers;
(VII) animal wastes and other waste materials; and
(VIII) fats, oils, and greases (including recycled fats, oils, and greases); and
(ii) does not include—
(I) paper that is commonly recycled; or
(II) unsegregated solid waste;
(B) the term "energy efficiency project" means the installation or upgrading of equipment that results in a significant reduction in energy usage; and
(C) the term "renewable energy system" means a system of energy derived from—
(i) a wind, solar, biomass (including biodiesel), or geothermal source; or
(ii) hydrogen derived from biomass or water using an energy source described in clause (i).
(aa) Limitation on size of awards
(1) Limitation
No Federal agency may issue an award under the SBIR program or the STTR program if the size of the award exceeds the award guidelines established under this section by more than 50 percent.
(2) Maintenance of information
Participating agencies shall maintain information on awards exceeding the guidelines established under this section, including—
(A) the amount of each award;
(B) a justification for exceeding the guidelines for each award;
(C) the identity and location of each award recipient; and
(D) whether an award recipient has received any venture capital, hedge fund, or private equity firm investment and, if so, whether the recipient is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms.
(3) Reports
The Administrator shall include the information described in paragraph (2) in the annual report of the Administrator to Congress.
(4) Waiver for specific topic
Upon the receipt of an application from a Federal agency, the Administrator may grant a waiver from the requirement under paragraph (1) with respect to a specific topic (but not for the agency as a whole) for a fiscal year if the Administrator determines, based on the information contained in the application from the agency, that—
(A) the requirement under paragraph (1) will interfere with the ability of the agency to fulfill its research mission through the SBIR program or the STTR program; and
(B) the agency will minimize, to the maximum extent possible, the number of awards that do not satisfy the requirement under paragraph (1) to preserve the nature and intent of the SBIR program and the STTR program.
(5) Rule of construction
Nothing in this subsection shall be construed to prevent a Federal agency from supplementing an award under the SBIR program or the STTR program using funds of the Federal agency that are not part of the SBIR program or the STTR program of the Federal agency.
(bb) Subsequent Phase II awards
(1) Agency flexibility
A small business concern that received a Phase I award from a Federal agency under this section shall be eligible to receive a subsequent Phase II award from another Federal agency, if the head of each relevant Federal agency or the relevant component of the Federal agency makes a written determination that the topics of the relevant awards are the same and both agencies report the awards to the Administrator for inclusion in the public database under subsection (k).
(2) SBIR and STTR program flexibility
A small business concern that received a Phase I award under this section under the SBIR program or the STTR program may receive a subsequent Phase II award in either the SBIR program or the STTR program and the participating agency or agencies shall report the awards to the Administrator for inclusion in the public database under subsection (k).
(3) Preventing duplicative awards
The head of a Federal agency shall verify that any activity to be performed with respect to a project with a Phase I or Phase II SBIR or STTR award has not been funded under the SBIR program or STTR program of another Federal agency.
(cc) Phase flexibility
During fiscal years 2012 through 2025, the National Institutes of Health, the Department of Defense, and the Department of Education may each provide to a small business concern an award under Phase II of the SBIR program with respect to a project, without regard to whether the small business concern was provided an award under Phase I of an SBIR program with respect to such project, if the head of the applicable agency determines that the small business concern has completed the determinations described in subsection (e)(4)(A) with respect to such project despite not having been provided a Phase I award.
(dd) Participation of small business concerns majority-owned by venture capital operating companies, hedge funds, or private equity firms in the SBIR program
(1) Authority
Upon providing a written determination described in paragraph (2) to the Administrator, the Committee on Small Business and Entrepreneurship of the Senate, and the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives, not later than 30 days before the date on which any such award is made—
(A) the Director of the National Institutes of Health, the Secretary of Energy, and the Director of the National Science Foundation may award not more than 25 percent of the funds allocated for the SBIR program of the applicable Federal agency to small business concerns that are owned in majority part by multiple venture capital operating companies, hedge funds, or private equity firms through competitive, merit-based procedures that are open to all eligible small business concerns; and
(B) the head of a Federal agency other than a Federal agency described in subparagraph (A) that participates in the SBIR program may award not more than 15 percent of the funds allocated for the SBIR program of the Federal agency to small business concerns that are owned in majority part by multiple venture capital operating companies, hedge funds, or private equity firms through competitive, merit-based procedures that are open to all eligible small business concerns.
(2) Determination
A written determination described in this paragraph is a written determination by the head of a Federal agency that explains how the use of the authority under paragraph (1) will—
(A) induce additional venture capital, hedge fund, or private equity firm funding of small business innovations;
(B) substantially contribute to the mission of the Federal agency;
(C) demonstrate a need for public research; and
(D) otherwise fulfill the capital needs of small business concerns for additional financing for SBIR projects.
(3) Registration
A small business concern that is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms and qualified for participation in the program authorized under paragraph (1) shall—
(A) register with the Administrator on the date that the small business concern submits an application for an award under the SBIR program; and
(B) indicate in any SBIR proposal that the small business concern is registered under subparagraph (A) as majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms.
(4) Compliance
(A) In general
The head of a Federal agency that makes an award under this subsection during a fiscal year shall collect and submit to the Administrator data relating to the number and dollar amount of Phase I awards, Phase II awards, and any other category of awards by the Federal agency under the SBIR program during that fiscal year.
(B) Annual reporting
The Administrator shall include as part of each annual report by the Administration under subsection (b)(7) any data submitted under subparagraph (A) and a discussion of the compliance of each Federal agency that makes an award under this subsection during the fiscal year with the maximum percentages under paragraph (1).
(5) Enforcement
If a Federal agency awards more than the percent of the funds allocated for the SBIR program of the Federal agency authorized under paragraph (1) for a purpose described in paragraph (1), the head of the Federal agency shall transfer an amount equal to the amount awarded in excess of the amount authorized under paragraph (1) to the funds for general SBIR programs from the non-SBIR and non-STTR research and development funds of the Federal agency not later than 180 days after the date on which the Federal agency made the award that caused the total awarded under paragraph (1) to be more than the amount authorized under paragraph (1) for a purpose described in paragraph (1).
(6) Final decisions on applications under the SBIR program
(A) Definition
In this paragraph, the term "covered small business concern" means a small business concern that—
(i) was not majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms on the date on which the small business concern submitted an application in response to a solicitation under the SBIR programs; and
(ii) on the date of the award under the SBIR program is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms.
(B) In general
If a Federal agency does not make an award under a solicitation under the SBIR program before the date that is 9 months after the date on which the period for submitting applications under the solicitation ends—
(i) a covered small business concern is eligible to receive the award, without regard to whether the covered small business concern meets the requirements for receiving an award under the SBIR program for a small business concern that is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms, if the covered small business concern meets all other requirements for such an award; and
(ii) the head of the Federal agency shall transfer an amount equal to any amount awarded to a covered small business concern under the solicitation to the funds for general SBIR programs from the non-SBIR and non-STTR research and development funds of the Federal agency, not later than 90 days after the date on which the Federal agency makes the award.
(7) Evaluation criteria
A Federal agency may not use investment of venture capital or investment from hedge funds or private equity firms as a criterion for the award of contracts under the SBIR program or STTR program.
(ee) Collaborating with Federal laboratories and research and development centers
(1) Authorization
Subject to the limitations under this section, the head of each participating Federal agency may make SBIR and STTR awards to any eligible small business concern that—
(A) intends to enter into an agreement with a Federal laboratory or federally funded research and development center for portions of the activities to be performed under that award; or
(B) has entered into a cooperative research and development agreement (as defined in
(2) Prohibition
No Federal agency shall—
(A) condition an SBIR or STTR award upon entering into agreement with any Federal laboratory or any federally funded laboratory or research and development center for any portion of the activities to be performed under that award;
(B) approve an agreement between a small business concern receiving an SBIR or STTR award and a Federal laboratory or federally funded laboratory or research and development center, if the small business concern performs a lesser portion of the activities to be performed under that award than required by this section and by the SBIR Policy Directive and the STTR Policy Directive of the Administrator; or
(C) approve an agreement that violates any provision, including any data rights protections provision, of this section or the SBIR and the STTR Policy Directives.
(3) Implementation
Not later than 180 days after December 31, 2011, the Administrator shall modify the SBIR Policy Directive and the STTR Policy Directive issued under this section to ensure that small business concerns—
(A) have the flexibility to use the resources of the Federal laboratories or federally funded research and development centers; and
(B) are not mandated to enter into agreement with any Federal laboratory or any federally funded laboratory or research and development center as a condition of an award.
(4) Advance payment
If a small business concern receiving an award under this section enters into an agreement with a Federal laboratory or federally funded research and development center for portions of the activities to be performed under that award, the Federal laboratory or federally funded research and development center may not require advance payment from the small business concern in an amount greater than the amount necessary to pay for 30 days of such activities.
(ff) Additional SBIR and STTR awards
(1) Express authority for awarding a sequential Phase II award
A small business concern that receives a Phase II SBIR award or a Phase II STTR award for a project remains eligible to receive 1 additional Phase II SBIR award or Phase II STTR award for continued work on that project.
(2) Preventing duplicative awards
The head of a Federal agency shall verify that any activity to be performed with respect to a project with a Phase I or Phase II SBIR or STTR award has not been funded under the SBIR program or STTR program of another Federal agency.
(gg) Pilot program
(1) Authorization
The head of each covered Federal agency may allocate not more than 10 percent of the funds allocated to the SBIR program and the STTR program of the covered Federal agency—
(A) for awards for technology development, testing, evaluation, and commercialization assistance for SBIR and STTR Phase II technologies; or
(B) to support the progress of research, research and development, and commercialization conducted under the SBIR or STTR programs to Phase III.
(2) Application by Federal agency
(A) In general
A covered Federal agency may not establish a pilot program unless the covered Federal agency makes a written application to the Administrator, not later than 90 days before the first day of the fiscal year in which the pilot program is to be established, that describes a compelling reason that additional investment in SBIR or STTR technologies is necessary, including unusually high regulatory, systems integration, or other costs relating to development or manufacturing of identifiable, highly promising small business technologies or a class of such technologies expected to substantially advance the mission of the agency.
(B) Determination
The Administrator shall—
(i) make a determination regarding an application submitted under subparagraph (A) not later than 30 days before the first day of the fiscal year for which the application is submitted;
(ii) publish the determination in the Federal Register; and
(iii) make a copy of the determination and any related materials available to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives.
(3) Maximum amount of award
The head of a covered Federal agency may not make an award under a pilot program in excess of 3 times the dollar amounts generally established for Phase II awards under subsection (j)(2)(D) or (p)(2)(B)(ix).
(4) Registration
Any applicant that receives an award under a pilot program shall register with the Administrator in a registry that is available to the public.
(5) Award criteria or consideration
When making an award under this section, the head of a covered Federal agency shall give consideration to whether the technology to be supported by the award is likely to be manufactured in the United States.
(6) Report
The head of each covered Federal agency shall include in the annual report of the covered Federal agency to the Administrator an analysis of the various activities considered for inclusion in the pilot program of the covered Federal agency and a statement of the reasons why each activity considered was included or not included, as the case may be.
(7) Termination
The authority to establish a pilot program under this section expires at the end of fiscal year 2025.
(8) Definitions
In this subsection—
(A) the term "covered Federal agency"—
(i) means a Federal agency participating in the SBIR program or the STTR program; and
(ii) does not include the Department of Defense; and
(B) the term "pilot program" means each program established under paragraph (1).
(hh) Timing of release of funding
(1) In general
Federal agencies participating in the SBIR program or STTR program shall, to the extent possible, shorten the amount of time between the provision of notice of an award under the SBIR program or STTR program and the subsequent release of funding with respect to the award.
(2) Pilot program to accelerate Department of Defense SBIR and STTR awards
(A) In general
Not later than 1 year after August 13, 2018, the Under Secretary of Defense for Research and Engineering, acting through the Director of Defense Procurement and Acquisition Policy of the Department of Defense, shall establish a pilot program to reduce the time for awards under the SBIR and STTR programs of the Department of Defense, under which the Department of Defense shall—
(i) develop simplified and standardized procedures and model contracts throughout the Department of Defense for Phase I, Phase II, and Phase III SBIR awards;
(ii) for Phase I SBIR and STTR awards, reduce the amount of time between solicitation closure and award;
(iii) for Phase II SBIR and STTR awards, reduce the amount of time between the end of a Phase I award and the start of the Phase II award;
(iv) for Phase II SBIR and STTR awards that skip Phase I, reduce the amount of time between solicitation closure and award;
(v) for sequential Phase II SBIR and STTR awards, reduce the amount of time between Phase II awards; and
(vi) reduce the award times described in clauses (ii), (iii), (iv), and (v) to be as close to 90 days as possible.
(B) Consultation
In carrying out the pilot program under subparagraph (A), the Director of Defense Procurement and Acquisition Policy of the Department of Defense shall consult with the Director of the Office of Small Business Programs of the Department of Defense.
(C) Termination
The pilot program under subparagraph (A) shall terminate on September 30, 2025.
(ii) Reporting on timing
(1) In general
Federal agencies participating in the SBIR program or STTR program shall provide to the Administrator, for the annual report on the SBIR and STTR program under subsection (b)(7), the average amount of time the agency takes to make a final decision on proposals submitted under such programs, the average amount of time the agency takes to release funding with respect to an award under such programs, and the goals established to reduce such amounts.
(2) Comptroller General reports
The Comptroller General of the United States shall submit to the Committee on Small Business and Entrepreneurship of the Senate, the Committee on Armed Services of the Senate, the Committee on Small Business of the House of Representatives, and the Committee on Armed Services of the House of Representatives—
(A) not later than 1 year after August 13, 2018, and every year thereafter for 3 years, a report that—
(i) provides the average and median amount of time that each component of the Department of Defense with an SBIR or STTR program takes to review and make a final decision on proposals submitted under the program; and
(ii) compares that average and median amount of time with that of other Federal agencies participating in the SBIR or STTR program; and
(B) not later than December 5, 2021, a report that—
(i) includes the information described in subparagraph (A);
(ii) assesses where each Federal agency participating in the SBIR or STTR program needs improvement with respect to the proposal review and award times under the program;
(iii) identifies best practices for shortening the proposal review and award times under the SBIR and STTR programs, including the pros and cons of using contracts compared to grants; and
(iv) analyzes the efficacy of the pilot program established under subsection (hh)(2).
(jj) Phase 0 Proof of Concept Partnership pilot program
(1) In general
The Director of the National Institutes of Health may use $5,000,000 of the funds allocated under subsection (n)(1) for a Proof of Concept Partnership pilot program to accelerate the creation of small businesses and the commercialization of research innovations from qualifying institutions. To implement this program, the Director shall award, through a competitive, merit-based process, grants to qualifying institutions. These grants shall only be used to administer Proof of Concept Partnership awards in conformity with this subsection.
(2) Definitions
In this subsection—
(A) the term "Director" means the Director of the National Institutes of Health;
(B) the term "pilot program" refers to the Proof of Concept Partnership pilot program; and
(C) the terms "qualifying institution" and "institution" mean a university or other research institution that participates in the National Institutes of Health's STTR program.
(3) Proof of Concept Partnerships
(A) In general
A Proof of Concept Partnership shall be set up by a qualifying institution to award grants to individual researchers. These grants should provide researchers with the initial investment and the resources to support the proof of concept work and commercialization mentoring needed to translate promising research projects and technologies into a viable company. This work may include technical validations, market research, clarifying intellectual property rights position and strategy, and investigating commercial or business opportunities.
(B) Award guidelines
The administrator of a Proof of Concept Partnership program shall award grants in accordance with the following guidelines:
(i) The Proof of Concept Partnership shall use a market-focused project management oversight process, including—
(I) a rigorous, diverse review board comprised of local experts in translational and proof of concept research, including industry, start-up, venture capital, technical, financial, and business experts and university technology transfer officials;
(II) technology validation milestones focused on market feasibility;
(III) simple reporting effective at redirecting projects; and
(IV) the willingness to reallocate funding from failing projects to those with more potential.
(ii) Not more than $100,000 shall be awarded towards an individual proposal.
(C) Educational resources and guidance
The administrator of a Proof of Concept Partnership program shall make educational resources and guidance available to researchers attempting to commercialize their innovations.
(4) Awards
(A) Size of award
The Director may make awards to a qualifying institution for up to $1,000,000 per year for up to 4 years.
(B) Award criteria
In determining which qualifying institutions receive pilot program grants, the Director shall consider, in addition to any other criteria the Director determines necessary, the extent to which qualifying institutions—
(i) have an established and proven technology transfer or commercialization office and have a plan for engaging that office in the program's implementation;
(ii) have demonstrated a commitment to local and regional economic development;
(iii) are located in diverse geographies and are of diverse sizes;
(iv) can assemble project management boards comprised of industry, start-up, venture capital, technical, financial, and business experts;
(v) have an intellectual property rights strategy or office; and
(vi) demonstrate a plan for sustainability beyond the duration of the funding award.
(5) Limitations
The funds for the pilot program shall not be used—
(A) for basic research, but to evaluate the commercial potential of existing discoveries, including—
(i) proof of concept research or prototype development; and
(ii) activities that contribute to determining a project's commercialization path, to include technical validations, market research, clarifying intellectual property rights, and investigating commercial and business opportunities; or
(B) to fund the acquisition of research equipment or supplies unrelated to commercialization activities.
(6) Evaluative report
The Director shall submit to the Committee on Science, Space, and Technology and the Committee on Small Business of the House of Representatives and the Committee on Small Business and Entrepreneurship of the Senate an evaluative report regarding the activities of the pilot program. The report shall include—
(A) a detailed description of the institutional and proposal selection process;
(B) an accounting of the funds used in the pilot program;
(C) a detailed description of the pilot program, including incentives and activities undertaken by review board experts;
(D) a detailed compilation of results achieved by the pilot program, including the number of small business concerns included and the number of business packages developed, and the number of projects that progressed into subsequent STTR phases; and
(E) an analysis of the program's effectiveness with supporting data.
(7) Sunset
The pilot program under this subsection shall terminate at the end of fiscal year 2025.
(kk) Phase III reporting
The annual SBIR or STTR report to Congress by the Administration under subsection (b)(7) shall include, for each Phase III award—
(1) the name of the agency or component of the agency or the non-Federal source of capital making the Phase III award;
(2) the name of the small business concern or individual receiving the Phase III award; and
(3) the dollar amount of the Phase III award.
(ll) Consent to release contact information to organizations
(1) Enabling concern to give consent
Each Federal agency required by this section to conduct an SBIR program or an STTR program shall enable a small business concern that is an SBIR applicant or an STTR applicant to indicate to the Federal agency whether the Federal agency has the consent of the concern to—
(A) identify the concern to appropriate local and State-level economic development organizations as an SBIR applicant or an STTR applicant; and
(B) release the contact information of the concern to such organizations.
(2) Rules
The Administrator shall establish rules to implement this subsection. The rules shall include a requirement that a Federal agency include in the SBIR and STTR application a provision through which the applicant can indicate consent for purposes of paragraph (1).
(mm) Assistance for administrative, oversight, and contract processing costs
(1) In general
Subject to paragraph (3) and until September 30, 2025, the Administrator shall allow each Federal agency required to conduct an SBIR program to use not more than 3 percent of the funds allocated to the SBIR program of the Federal agency for—
(A) the administration of the SBIR program or the STTR program of the Federal agency;
(B) the provision of outreach and technical assistance relating to the SBIR program or STTR program of the Federal agency, including technical assistance site visits, personnel interviews, and national conferences;
(C) the implementation of commercialization and outreach initiatives that were not in effect on December 31, 2011;
(D) carrying out the program under subsection (y);
(E) activities relating to oversight and congressional reporting, including waste, fraud, and abuse prevention activities;
(F) targeted reviews of recipients of awards under the SBIR program or STTR program of the Federal agency that the head of the Federal agency determines are at high risk for fraud, waste, or abuse to ensure compliance with requirements of the SBIR program or STTR program, respectively;
(G) the implementation of oversight and quality control measures, including verification of reports and invoices and cost reviews;
(H) carrying out subsection (dd);
(I) contract processing costs relating to the SBIR program or STTR program of the Federal agency;
(J) funding for additional personnel and assistance with application reviews; and
(K) funding for improvements that increase commonality across data systems, reduce redundancy, and improve data oversight and accuracy.
(2) Outreach and technical assistance
(A) In general
Except as provided in subparagraph (B), a Federal agency participating in the program under this subsection shall use a portion of the funds authorized for uses under paragraph (1) to carry out the policy directive required under subsection (j)(2)(F) and to increase the participation of States with respect to which a low level of SBIR awards have historically been awarded.
(B) Waiver
A Federal agency may request the Administrator to waive the requirement contained in subparagraph (A). Such request shall include an explanation of why the waiver is necessary. The Administrator may grant the waiver based on a determination that the agency has demonstrated a sufficient need for the waiver, that the outreach objectives of the agency are being met, and that there is increased participation by States with respect to which a low level of SBIR awards have historically been awarded.
(3) Performance criteria
A Federal agency may not use funds as authorized under paragraph (1) until after the effective date of performance criteria, which the Administrator shall establish, to measure any benefits of using funds as authorized under paragraph (1) and to assess continuation of the authority under paragraph (1).
(4) Rules
Not later than 180 days after December 31, 2011, the Administrator shall issue rules to carry out this subsection.
(5) Coordination with IG
Each Federal agency shall coordinate the activities funded under subparagraph (E), (F), or (G) of paragraph (1) with their respective Inspectors General, when appropriate, and each Federal agency that allocates more than $50,000,000 to the SBIR program of the Federal agency for a fiscal year may share such funding with its Inspector General when the Inspector General performs such activities.
(6) Reporting
The Administrator shall collect data and provide to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business, the Committee on Science, Space, and Technology, and the Committee on Appropriations of the House of Representatives a report on the use of funds under this subsection, including funds used to achieve the objectives of paragraph (2)(A) and any use of the waiver authority under paragraph (2)(B).
(nn) Annual report on SBIR and STTR program goals
(1) Development of metrics
The head of each Federal agency required to participate in the SBIR program or the STTR program shall develop metrics to evaluate the effectiveness and the benefit to the people of the United States of the SBIR program and the STTR program of the Federal agency that—
(A) are science-based and statistically driven;
(B) reflect the mission of the Federal agency; and
(C) include factors relating to the economic impact of the programs.
(2) Evaluation
The head of each Federal agency described in paragraph (1) shall conduct an annual evaluation using the metrics developed under paragraph (1) of—
(A) the SBIR program and the STTR program of the Federal agency; and
(B) the benefits to the people of the United States of the SBIR program and the STTR program of the Federal agency.
(3) Report
(A) In general
The head of each Federal agency described in paragraph (1) shall submit to the appropriate committees of Congress and the Administrator an annual report describing in detail the results of an evaluation conducted under paragraph (2).
(B) Public availability of report
The head of each Federal agency described in paragraph (1) shall make each report submitted under subparagraph (A) available to the public online.
(C) Definition
In this paragraph, the term "appropriate committees of Congress" means—
(i) the Committee on Small Business and Entrepreneurship of the Senate; and
(ii) the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives.
(oo) Competitive selection procedures for SBIR and STTR programs
All funds awarded, appropriated, or otherwise made available in accordance with subsection (f) or (n) must be awarded pursuant to competitive and merit-based selection procedures.
(pp) Limitation on pilot programs
(1) Existing pilot programs
The Administrator may only carry out a covered pilot program that is in operation on December 31, 2011, during the 3-year period beginning on such date.
(2) New pilot programs
The Administrator may only carry out a covered pilot program established after December 31, 2011—
(A) during the 3-year period beginning on the date on which such program is established; and
(B) if such program does not continue and is not based on, in any manner, a previously established covered pilot program.
(3) Covered pilot program defined
In this subsection, the term "covered pilot program" means any initiative, project, innovation, or other activity—
(A) established by the Administrator;
(B) relating to an SBIR or STTR program; and
(C) not specifically authorized by law.
(qq) Minimum standards for participation
(1) Progress to Phase II success
(A) Establishment of system and minimum commercialization rate
Not later than 1 year after December 31, 2011, the head of each Federal agency participating in the SBIR or STTR program shall—
(i) establish a system to measure, where appropriate, the success of small business concerns with respect to the receipt of Phase II SBIR or STTR awards for projects that have received Phase I SBIR or STTR awards;
(ii) establish a minimum performance standard for small business concerns with respect to the receipt of Phase II SBIR or STTR awards for projects that have received Phase I SBIR or STTR awards; and
(iii) begin evaluating, each fiscal year, whether each small business concern that received a Phase I SBIR or STTR award from the agency meets the minimum performance standard established under clause (ii).
(B) Consequence of failure to meet minimum commercialization rate
If the head of a Federal agency determines that a small business concern that received a Phase I SBIR or STTR award from the agency is not meeting the minimum performance standard established under subparagraph (A)(ii), such concern may not participate in Phase I (or Phase II if under the authority of subsection (cc)) of the SBIR or STTR program of that agency during the 1-year period beginning on the date on which such determination is made.
(2) Progress to Phase III success
(A) Establishment of system and minimum commercialization rate
Not later than 2 years after December 31, 2011, the head of each Federal agency participating in the SBIR or STTR program shall—
(i) establish a system to measure, where appropriate, the success of small business concerns with respect to the receipt of Phase III SBIR or STTR awards for projects that have received Phase I SBIR or STTR awards;
(ii) establish a minimum performance standard for small business concerns with respect to the receipt of Phase III SBIR or STTR awards for projects that have received Phase I SBIR or STTR awards; and
(iii) begin evaluating, each fiscal year, whether each small business concern that received a Phase I SBIR or STTR award from the agency meets the minimum performance standard established under clause (ii).
(B) Consequence of failure to meet minimum commercialization rate
If the head of a Federal agency determines that a small business concern that received a Phase I SBIR or STTR award from the agency is not meeting the minimum performance standard established under subparagraph (A)(ii), such concern may not participate in Phase I (or Phase II if under the authority of subsection (cc)) of the SBIR or STTR program of that agency during the 1-year period beginning on the date on which such determination is made.
(3) Increased minimum performance standards for experienced firms
(A) Progress to Phase II success
(i) In general
With respect to a small business concern that received or receives more than 50 Phase I awards during a covered period, each minimum performance standard established under paragraph (1)(A)(ii) shall be doubled for such covered period.
(ii) Consequence of failure to meet standard
If the head of a Federal agency determines that a small business concern that received a Phase I award from the Federal agency is not meeting an applicable increased minimum performance standard modified under clause (i), the small business concern may not receive more than 20 total Phase I awards and Phase II awards under subsection (cc) from each Federal agency during the 1-year period beginning on the date on which such determination is made.
(iii) Covered period defined
In this subparagraph, the term "covered period" means a consecutive period of 5 fiscal years preceding the most recent fiscal year.
(B) Progress to Phase III success
(i) In general
Each minimum performance standard established under paragraph (2)(A)(ii) shall—
(I) with respect to a small business concern that received or receives more than 50 Phase II awards during a covered period, require an average of $250,000 of aggregate sales and investments per Phase II award received during such covered period; and
(II) with respect to a small business concern that received or receives more than 100 Phase II awards during a covered period, require an average of $450,000 of aggregate sales and investments per Phase II award received during such covered period.
(ii) Consequence of failure to meet standard
If the head of a Federal agency determines that a small business concern that received a Phase I award from the agency is not meeting an applicable increased minimum performance standard modified under clause (i), the small business concern may not receive more than 20 total Phase I awards and Phase II awards under subsection (cc) from each agency during the 1-year period beginning on the date on which such determination is made.
(iii) Documentation
(I) In general
A small business concern that is subject to an increased minimum performance standard described in clause (i) shall submit to the Administrator supporting documentation evidencing that all covered sales of the small business concern were properly used to meet the increased minimum performance standard.
(II) Covered sale defined
In this clause, the term "covered sale" means a sale by a small business concern—
(aa) that the small business concern claims to be attributable to an SBIR or STTR award;
(bb) for which no amount of the payment was or is made using Federal funds;
(cc) which the small business concern uses to meet an applicable increased minimum performance standard under clause (i); and
(dd) that was or is received during the 5 fiscal years immediately preceding the fiscal year in which the small business concern uses the sale to meet the increased minimum performance standard.
(iv) Covered period defined
In this subparagraph, the term "covered period" means a consecutive period of 10 fiscal years preceding the most recent 2 fiscal years.
(C) Patents for increased minimum performance standards
A small business concern with respect to which an increased minimum performance standard under subparagraph (B) applies may not meet the increased minimum performance standard by obtaining patents.
(D) Effective date
Subparagraphs (A) through (C) shall take effect on April 1, 2023.
(E) Waiver
(i) In general
The Administrator may, upon the request of a senior official of a Federal agency, grant a waiver with respect to a topic for the SBIR or STTR program of the Federal agency if—
(I) the topic is critical to the mission of the Federal agency or relates to national security; and
(II) the official submits to the Administrator a request for the waiver in accordance with clause (iii).
(ii) Waiver effects
If the Administration grants a waiver with respect to a topic for the SBIR or STTR program of a Federal agency, subparagraphs (A)(ii) and (B)(ii) shall not prohibit any covered small business concern from receiving an SBIR or STTR award under such topic.
(iii) Agency request and congressional notification
Not later than 15 days before the release of a solicitation including a topic for which a senior official of a Federal agency is requesting a waiver under clause (i), the senior official shall submit to the Administrator, the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives, and the Committee on Small Business and Entrepreneurship of the Senate a request for the waiver.
(iv) Administrator determination and congressional notification
Not later than 15 days after receiving a request for a waiver under clause (i), the Administrator shall make a determination with respect to the request and notify the senior official at the Federal agency that made the request, the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives, and the Committee on Small Business and Entrepreneurship of the Senate of the determination.
(v) Definitions
In this subparagraph:
(I) Covered small business concern
The term "covered small business concern" means a small business concern that is subject to the consequences under subparagraph (A)(ii) or (B)(ii) pursuant to a determination by the head of a Federal agency that such small business concern did not meet an increased minimum performance standard that was applicable to such small business concern.
(II) Senior official
The term "senior official" means an individual appointed to a position in a Federal agency that is classified above GS–15 pursuant
(F) Reporting
(i) In general
Not later than July 1, 2023, and annually thereafter, the Administrator shall submit to Congress a list of the small business concerns that did not meet—
(I) an applicable minimum performance standard established under paragraph (1)(A)(ii) or (2)(A)(ii); or
(II) an applicable increased minimum performance standard.
(ii) Waivers
Each list submitted under clause (i) shall identify each small business concern that received an SBIR or STTR award pursuant to a waiver granted under subparagraph (E) by the Administrator during the period covered by the list.
(iii) Confidentiality
Each list submitted under clause (i) shall be confidential and exempt from disclosure under
(G) Implementation
Not later than April 1, 2023, the Administration shall implement the increased minimum performance standards under this paragraph.
(H) Rules of construction
Nothing in this paragraph shall be construed—
(i) to prohibit a small business concern from participating in a Phase I (or Phase II if under the authority of subsection (cc)) of an SBIR or STTR program under paragraph (1)(B) or (2)(B) solely on the basis of a determination by the head of a Federal agency that the small business concern is not meeting an increased minimum performance standard; or
(ii) to prevent the head of a Federal agency from implementing more restrictive limitations on the number of federally funded Phase I awards and direct to Phase II awards under subsection (cc) that may be awarded to a small business concern than the limitations described in subparagraphs (A)(ii) and (B)(ii).
(I) Termination
This paragraph shall terminate on September 30, 2025.
(4) Administration oversight
(A) Approval and publication of systems and minimum performance standards
Each system and minimum performance standard established under paragraph (1) or paragraph (2) shall be submitted by the head of the applicable Federal agency to the Administrator and shall be subject to the approval of the Administrator. In making a determination with respect to approval, the Administrator shall ensure that the minimum performance standard exceeds a de minimis level. The Administrator shall publish on the Internet Web site of the Administration the systems and minimum performance standards approved.
(B) Submission of evaluation results by agency
The head of each covered Federal agency shall submit to the Administrator the results of each evaluation conducted under paragraph (1) or paragraph (2).
(5) Requirement of notice and comment
Each system and minimum performance standard established under paragraph (1) or paragraph (2) and each approval provided by the Administrator under paragraph (4)(A), at least 60 days before becoming effective, shall be preceded by the provision of notice of and an opportunity for public comment on such system, standard, or approval.
(6) Inspector general audit
Not later than 1 year after the date on which the Administrator implements the increased minimum performance standards under paragraph (3), and periodically thereafter, the Inspector General of the Administration shall—
(A) conduct an audit on whether the small business concerns subject to increased minimum performance standards under paragraph (3)(B) verified—
(i) the sales by and investments in the small business concerns—
(I) during the 5 fiscal years immediately preceding the fiscal year in which the small business concern used such sales and investments to meet an applicable increased performance standard; and
(II) as a direct result of a Phase I award or Phase II award made under subsection (cc) during the covered period (as defined in paragraph (3)(B)(iv)), consistent with the definition of Phase III, as applicable;
(ii) any third-party revenue the small business concerns list as investments or incomes to meet the increased minimum performance standard—
(I) is a direct result of a Phase I award or Phase II award made under subsection (cc) during the covered period (as defined in paragraph (3)(B)(iv)); and
(II) consistent with the requirements of the Administrator as in effect on September 30, 2022, or any successor requirements; and
(iii) any dollar amounts such small business concerns list as investments or income to meet such increased minimum performance standard the providence of which is unclear and that is not directly attributable to a Phase I award or Phase II award made under subsection (cc) during the covered period (as defined in paragraph (3)(B)(iv)), consistent with the definition of Phase III, as applicable;
(B) assess the self-certification requirements for the minimum performance standards established under paragraph (2)(A)(ii) and the increased minimum performance standards under paragraph (3)(B); and
(C) submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives a report on the audit conducted under subparagraph (A) and the assessment conducted under subparagraph (B).
(7) Increased minimum performance standard defined
In this subsection, the term "increased minimum performance standard" means a minimum performance standard established under paragraph (1)(A)(ii) or (2)(A)(ii) as modified under subparagraph (A) or (B), respectively, of paragraph (3) with respect to a small business concern.
(rr) Publication of certain information
In order to increase the number of small businesses receiving awards under the SBIR or STTR programs of participating agencies, and to simplify the application process for such awards, the Administrator shall establish and maintain a public Internet Web site on which the Administrator shall publish such information relating to notice of and application for awards under the SBIR program and STTR program of each participating Federal agency as the Administrator determines appropriate.
(ss) Report on enhancement of manufacturing activities
Not later than October 1, 2013, and annually thereafter, the head of each Federal agency that makes more than $50,000,000 in awards under the SBIR and STTR programs of the agency combined shall submit to the Administrator, for inclusion in the annual report required under subsection (b)(7), information that includes—
(1) a description of efforts undertaken by the head of the Federal agency to enhance United States manufacturing activities;
(2) a comprehensive description of the actions undertaken each year by the head of the Federal agency in carrying out the SBIR or STTR program of the agency in support of Executive Order 13329 (69 Fed. Reg. 9181; relating to encouraging innovation in manufacturing);
(3) an assessment of the effectiveness of the actions described in paragraph (2) at enhancing the research and development of United States manufacturing technologies and processes;
(4) a description of efforts by vendors selected to provide discretionary technical assistance under subsection (q)(1) to help SBIR and STTR concerns manufacture in the United States; and
(5) recommendations that the program managers of the SBIR or STTR program of the agency consider appropriate for additional actions to increase the effectiveness of enhancing manufacturing activities.
(tt) Outstanding reports and evaluations
(1) In general
Not later than March 30, 2019, the Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate, the Committee on Small Business of the House of Representatives, and the Committee on Science, Space, and Technology of the House of Representatives—
(A) each report, evaluation, or analysis, as applicable, described in subsection (b)(7), (g)(9), (o)(10), (y)(6)(C), (gg)(6), (jj)(6), and (mm)(6); and
(B) metrics regarding, and an evaluation of, the authority provided to the National Institutes of Health, the Department of Defense, and the Department of Education under subsection (cc).
(2) Information required
Not later than December 31, 2018, the head of each agency that is responsible for carrying out a provision described in subparagraph (A) or (B) of paragraph (1) shall submit to the Administrator any information that is necessary for the Administrator to carry out the responsibilities of the Administrator under that paragraph.
(uu) Commercialization assistance pilot programs
(1) Pilot programs implemented
(A) In general
Except as provided in subparagraph (B), not later than one year after August 13, 2018, a covered agency shall implement a commercialization assistance pilot program, under which an eligible entity may receive a subsequent Phase II SBIR award.
(B) Exception
If the Administrator determines that a covered agency has a program that is sufficiently similar to the commercialization assistance pilot program established under this subsection, such covered agency shall not be required to implement a commercialization assistance pilot program under this subsection.
(2) Percent of agency funds
The head of each covered agency may allocate not more than 5 percent of the funds allocated to the SBIR program of the covered agency for the purpose of making a subsequent Phase II SBIR award under the commercialization assistance pilot program.
(3) Termination
A commercialization assistance pilot program established under this subsection shall terminate on September 30, 2025.
(4) Application
To be selected to receive a subsequent Phase II SBIR award under a commercialization assistance pilot program, an eligible entity shall submit to the covered agency implementing such pilot program an application at such time, in such manner, and containing such information as the covered agency may require, including—
(A) an updated Phase II commercialization plan; and
(B) the source and amount of the matching funding required under paragraph (5).
(5) Matching funding
(A) In general
The Administrator shall require, as a condition of any subsequent Phase II SBIR award made to an eligible entity under this subsection, that a matching amount (excluding any fees collected by the eligible entity receiving such award) equal to the amount of such award be provided from an eligible third-party investor.
(B) Ineligible sources
An eligible entity may not use funding from ineligible sources to meet the matching requirement of subparagraph (A).
(6) Award
A subsequent Phase II SBIR award made to an eligible entity under this subsection—
(A) may not exceed the limitation described under subsection (aa)(1); and
(B) shall be disbursed during Phase II.
(7) Use of funds
The funds awarded to an eligible entity under this subsection may only be used for research and development activities that build on eligible entity's Phase II program and ensure the research funded under such Phase II is rapidly progressing towards commercialization.
(8) Selection
In selecting eligible entities to participate in a commercialization assistance pilot program under this subsection, the head of a covered agency shall consider—
(A) the extent to which such award could aid the eligible entity in commercializing the research funded under the eligible entity's Phase II program;
(B) whether the updated Phase II commercialization plan submitted under paragraph (4) provides a sound approach for establishing technical feasibility that could lead to commercialization of such research;
(C) whether the proposed activities to be conducted under such updated Phase II commercialization plan further improve the likelihood that such research will provide societal benefits;
(D) whether the small business concern has progressed satisfactorily in Phase II to justify receipt of a subsequent Phase II SBIR award;
(E) the expectations of the eligible third-party investor that provides matching funding under paragraph (5); and
(F) the likelihood that the proposed activities to be conducted under such updated Phase II commercialization plan using matching funding provided by such eligible third-party investor will lead to commercial and societal benefit.
(9) Evaluation report
Not later than 6 years after August 13, 2018, the Comptroller General of the United States shall submit to the Committee on Science, Space, and Technology and the Committee on Small Business of the House of Representatives, and the Committee on Small Business and Entrepreneurship of the Senate, a report including—
(A) a summary of the activities of commercialization assistance pilot programs carried out under this subsection;
(B) a detailed compilation of results achieved by such commercialization assistance pilot programs, including the number of eligible entities that received awards under such programs;
(C) the rate at which each eligible entity that received a subsequent Phase II SBIR award under this subsection commercialized research of the recipient;
(D) the growth in employment and revenue of eligible entities that is attributable to participation in a commercialization assistance pilot program;
(E) a comparison of commercialization success of eligible entities participating in a commercialization assistance pilot program with recipients of an additional Phase II SBIR award under subsection (ff);
(F) demographic information, such as ethnicity and geographic location, of eligible entities participating in a commercialization assistance pilot program;
(G) an accounting of the funds used at each covered agency that implements a commercialization assistance pilot program under this subsection;
(H) the amount of matching funding provided by eligible third-party investors, set forth separately by source of funding;
(I) an analysis of the effectiveness of the commercialization assistance pilot program implemented by each covered agency; and
(J) recommendations for improvements to the commercialization assistance pilot program.
(10) Definitions
For purposes of this subsection:
(A) Covered agency
The term "covered agency" means a Federal agency required to have an SBIR program.
(B) Eligible entity
The term "eligible entity" means a small business concern that has received a Phase II award under an SBIR program and an additional Phase II SBIR award under subsection (ff) from the covered agency to which such small business concern is applying for a subsequent Phase II SBIR award.
(C) Eligible third-party investor
The term "eligible third-party investor" means a small business concern other than an eligible entity, a venture capital firm, an individual investor, a non-SBIR Federal, State or local government, or any combination thereof.
(D) Ineligible sources
The term "ineligible sources" means the following:
(i) The eligible entity's internal research and development funds.
(ii) Funding in forms other than cash, such as in-kind or other intangible assets.
(iii) Funding from the owners of the eligible entity, or the family members or affiliates of such owners.
(iv) Funding attained through loans or other forms of debt obligations.
(E) Subsequent Phase II SBIR award
The term "subsequent Phase II SBIR award" means an award granted to an eligible entity under this subsection to carry out further commercialization activities for research conducted pursuant to an SBIR program.
(vv) Due diligence program to assess security risks
(1) Establishment
The head of each Federal agency required to establish an SBIR or STTR program, in coordination with the Administrator, shall establish and implement a due diligence program to assess security risks presented by small business concerns seeking a federally funded award.
(2) Risks
Each program established under paragraph (1) shall—
(A) assess, using a risk-based approach as appropriate, the cybersecurity practices, patent analysis, employee analysis, and foreign ownership of a small business concern seeking an award, including the financial ties and obligations (which shall include surety, equity, and debt obligations) of the small business concern and employees of the small business concern to a foreign country, foreign person, or foreign entity; and
(B) assess awards and proposals or applications, as applicable, using a risk-based approach as appropriate, including through the use of open-source analysis and analytical tools, for the nondisclosures of information required under (g)(13).5
(3) Administrative costs
(A) In general
In addition to the amount allocated under subsection (mm)(1), each Federal agency required to establish an SBIR program may allocate not more than 2 percent of the funds allocated to the SBIR program of the Federal agency for the cost of establishing the due diligence program required under this subsection.
(B) Reporting
(i) In general
Not later than December 31 of the year in which this subparagraph is enacted, and not later than December 31 of each year thereafter, the head of a Federal agency that exercises the authority under subparagraph (A) shall submit to the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives, the Committee on Small Business and Entrepreneurship of the Senate, and the Administrator, for the covered year—
(I) the total funds allowed to be allocated for the cost of establishing the due diligence program required under this subsection;
(II) the total amount of funds obligated or expended under subparagraph (A); and
(III) the due diligence activities carried out or to be carried out using amounts allocated under subparagraph (A).
(ii) Annual report inclusion
The Administrator shall include the information submitted by head of a Federal agency under clause (i) in the next annual report submitted under subsection (b)(7) after the Administrator receives such information.
(iii) Covered year
In this subparagraph, the term "covered year" means, with respect to the information required under clause (i), the year covered by the annual report submitted under subsection (b)(7) in which the Administrator is required to include such information by clause (ii).
(C) Termination date
This paragraph shall terminate on September 30, 2025.
(ww) Program on innovation open topics
(1) Establishment
Not later than 180 days after September 30, 2022, the Secretary of Defense shall establish innovation open topic activities using the SBIR and STTR programs of the Department of Defense in order to—
(A) increase the transition of commercial technology to the Department of Defense;
(B) expand the small business nontraditional industrial base;
(C) increase commercialization derived from investments of the Department of Defense; and
(D) expand the ability for qualifying small business concerns to propose technology solutions to meet the needs of the Department of Defense.
(2) Frequency
The Secretary of Defense shall conduct not less than 1 open topic announcement at each component of the Department of Defense per fiscal year.
(3) Briefing
Not later than 180 days after September 30, 2022, the Secretary of Defense shall provide a briefing on the establishment of the program required under paragraph (1) to—
(A) the Committee on Armed Services and the Committee on Small Business and Entrepreneurship of the Senate; and
(B) the Committee on Small Business, the Committee on Armed Services, and the Committee on Science, Space, and Technology of the House of Representatives.
(xx) Additional provisions relating to solicitation topics
(1) In general
A Federal agency required to establish an SBIR or STTR program shall implement a multi-level review and approval process within the Federal agency for solicitation topics to ensure adequate competition and that no private individual or entity is shaping the requirements for eligibility for the solicitation topic after the selection of the solicitation topic, except that the Federal agency may amend the requirements to clarify the solicitation topic.
(2) Referral
A Federal agency that does not comply with paragraph (1) shall be referred to the Inspector General of the Administration for further investigation.
(
Editorial Notes
References in Text
Executive Order 13329, referred to in subsecs. (b)(8), (g)(11), (o)(15), and (ss)(2), is set out as a note under this section.
The Federal Trade Commission Act, referred to in subsec. (d)(3), is act Sept. 26, 1914, ch. 311,
Executive Order 12333, referred to in subsec. (e)(2), is set out as a note under
Section 105 of the Small Business Research and Development Enhancement Act of 1992, referred to in subsec. (j)(2)(I), is section 105 of
The enactment of this paragraph, referred to in subsec. (j)(4), means the enactment of subsec. (j)(4) by
Section 270 of the National Defense Authorization Act for Fiscal Year 1997 (
The year in which this subparagraph is enacted, referred to in subsec. (vv)(3)(B)(i), is the year of enactment of
Codification
In subsec. (e)(8), "
In subsec. (n)(2)(A), "
Section 209 of act July 30, 1953, ch. 282, title II,
Amendments
2022—
Subsec. (b)(7)(I), (J).
Subsec. (b)(7)(K), (L).
Subsec. (e)(15) to (19).
Subsec. (g)(13).
Subsec. (g)(13)(D).
Subsec. (g)(14).
Subsec. (g)(15).
Subsec. (g)(16), (17).
Subsec. (o)(17), (18).
Subsec. (o)(19).
Subsec. (o)(20), (21).
Subsec. (qq)(3), (4).
Subsec. (qq)(5).
Subsec. (qq)(6), (7).
Subsec. (vv).
Subsec. (ww).
Subsec. (xx).
2021—Subsec. (b)(7)(H).
Subsec. (g)(10).
Subsec. (o)(8).
Subsec. (r)(4)(A).
2019—Subsec. (b)(3).
Subsec. (b)(10).
Subsec. (e)(14).
Subsec. (j)(4).
Subsec. (p)(2)(G).
2018—Subsec. (q).
Subsec. (q)(1).
Subsec. (q)(1)(D).
Subsec. (q)(2).
Subsec. (q)(3).
Subsec. (q)(3)(A).
Subsec. (q)(3)(B)(i).
Subsec. (q)(3)(B)(ii).
Subsec. (q)(3)(C).
Subsec. (q)(3)(D).
Subsec. (q)(3)(D)(i).
Subsec. (q)(3)(E).
Subsec. (q)(4).
Subsec. (cc).
Subsec. (gg)(7).
Subsec. (hh).
Subsec. (ii).
Subsec. (jj)(4)(A).
Subsec. (jj)(7).
Subsec. (mm)(1).
Subsec. (mm)(1)(K).
Subsec. (tt).
Subsec. (uu).
2017—Subsec. (r).
Subsec. (r)(4).
"(A) consider an award under the SBIR program or the STTR program to satisfy the requirements under
"(B) issue, without further justification, Phase III awards"
for "shall issue Phase III awards" in text.
2016—Subsec. (m).
Subsec. (n)(1)(A).
2015—Subsec. (mm)(1).
2013—Subsec. (b)(7).
Subsec. (y)(4).
Subsec. (y)(5).
Subsec. (y)(6).
2011—Subsec. (b)(7).
Subsec. (b)(9).
Subsec. (e)(4)(B).
Subsec. (e)(4)(C).
Subsec. (e)(4)(C)(ii).
Subsec. (e)(6)(B).
Subsec. (e)(6)(C).
Subsec. (e)(9).
Subsec. (e)(10).
Subsec. (e)(11) to (13).
Subsec. (f)(1).
Subsec. (f)(2).
"(A) use any of its SBIR budget established pursuant to paragraph (1) for the purpose of funding administrative costs of the program, including costs associated with salaries and expenses; or
"(B) make available for the purpose"
for "shall not make available for the purpose".
"(A) use any of its SBIR budget established pursuant to paragraph (1) for the purpose of funding administrative costs of the program, including costs associated with salaries and expenses; or
"(B) make available for the purpose".
Subsec. (f)(4).
Subsec. (g)(4).
Subsec. (g)(8) to (10).
Subsec. (g)(12).
Subsec. (i)(1).
Subsec. (j)(1)(B).
Subsec. (j)(2)(B).
Subsec. (j)(2)(D).
Subsec. (j)(2)(F).
Subsec. (j)(2)(G).
Subsec. (j)(2)(H).
Subsec. (j)(3)(A).
Subsec. (j)(3)(B).
Subsec. (k).
Subsec. (k)(1)(F).
Subsec. (k)(2).
"(i) the name, size, and location, and an identifying number assigned by the Administration;
"(ii) an abstract of the project; and
"(iii) the Federal agency to which the application was made;".
Subsec. (k)(3)(C).
Subsec. (l)(2).
Subsec. (m).
Subsec. (m)(2).
Subsec. (n)(1)(A).
Subsec. (n)(1)(B)(ii) to (v).
Subsec. (o)(4).
Subsec. (o)(9).
Subsec. (o)(13)(B).
Subsec. (o)(13)(C).
Subsec. (o)(15), (16).
Subsec. (p)(2)(B)(vi).
Subsec. (p)(2)(B)(ix).
Subsec. (p)(3).
Subsec. (q)(1).
Subsec. (q)(2).
Subsec. (q)(3).
"(A) First phase
"Each agency referred to in paragraph (1) may provide services described in paragraph (1) to first phase SBIR award recipients in an amount equal to not more than $4,000, which shall be in addition to the amount of the recipient's award.
"(B) Second phase
"Each agency referred to in paragraph (1) may authorize any second phase SBIR award recipient to purchase, with funds available from their SBIR awards, services described in paragraph (1), in an amount equal to not more than $4,000 per year."
Subsec. (r).
Subsec. (r)(1).
Subsec. (r)(2).
Subsec. (r)(4).
Subsec. (s).
Subsec. (u)(2)(B).
Subsec. (v).
Subsec. (y).
Subsec. (y)(1).
Subsec. (y)(2).
Subsec. (y)(4).
Subsec. (y)(5).
Subsec. (y)(6).
Subsec. (aa).
Subsec. (bb).
Subsec. (cc).
Subsec. (dd).
Subsec. (ee).
Subsec. (ff).
Subsec. (gg).
Subsecs. (hh), (ii).
Subsec. (jj).
Subsec. (kk).
Subsec. (ll).
Subsec. (mm).
Subsec. (nn).
Subsec. (oo).
Subsec. (pp).
Subsec. (qq).
Subsec. (rr).
Subsec. (ss).
2009—Subsec. (m).
Subsec. (n)(1)(A).
Subsec. (y)(6).
2007—Subsec. (z).
2006—Subsec. (b)(8).
Subsec. (e)(9).
Subsec. (g)(11).
Subsec. (o)(16).
Subsecs. (x), (y).
2004—Subsec. (j)(2)(I).
2001—Subsec. (b)(4).
Subsec. (b)(7).
Subsec. (e)(6).
Subsec. (k)(1).
Subsec. (k)(2).
Subsec. (k)(2)(A)(iii).
Subsec. (k)(2)(D).
Subsec. (n)(1).
Subsec. (o)(11).
Subsec. (o)(14).
Subsec. (o)(15).
Subsec. (p)(2)(B)(ix).
Subsec. (p)(3).
Subsec. (v).
Subsec. (w).
2000—Subsec. (b)(7).
Subsec. (e)(4)(C)(i).
Subsec. (g)(9).
Subsec. (g)(10).
Subsec. (i).
Subsec. (j)(3).
Subsec. (k).
Subsec. (m).
Subsec. (s)(2).
Subsec. (u).
Subsec. (v).
1999—Subsec. (p)(1)(B).
1997—Subsec. (e)(4)(A).
Subsec. (n)(1).
"(A) not less than 0.05 percent of such budget in fiscal year 1994;
"(B) not less than 0.1 percent of such budget in fiscal year 1995; and
"(C) not less than 0.15 percent of such budget in fiscal years 1996 and 1997,
specifically in connection with STTR programs which meet the requirements of this section, policy directives, and regulations issued under this section."
Subsec. (o)(8) to (13).
Subsec. (s).
Subsec. (t).
1996—Subsec. (n)(1)(C).
1994—Subsec. (q)(2).
1992—Subsec. (b)(4).
Subsec. (b)(5) to (7).
Subsec. (e)(1).
Subsec. (e)(4)(A).
Subsec. (e)(4)(B).
Subsec. (e)(4)(C).
Subsec. (e)(6) to (8).
Subsec. (f).
Subsec. (f)(2).
Subsec. (g)(3), (4).
Subsec. (g)(5).
Subsec. (g)(6).
Subsec. (g)(7).
Subsec. (g)(8).
Subsec. (j).
Subsec. (k).
"(1) independently survey and monitor all phases of the implementation and operation of SBIR programs within agencies required to establish an SBIR program, including compliance with the expenditures of funds according to the requirements of subsection (f) of this section; and
"(2) report not less than annually, and at such other times as the Director may deem appropriate, to the Committees on Small Business of the Senate and the House of Representatives on all phases of the implementation and operation of SBIR programs within agencies required to establish an SBIR program, together with such recommendations as the Director may deem appropriate."
Subsec. (l).
Subsec. (m).
Subsecs. (n) to (p).
Subsec. (q).
Subsec. (r).
1988—Subsec. (j)(6), (7).
1986—Subsec. (e)(1).
1982—Subsec. (b)(4) to (7).
Subsecs. (e) to (k).
Statutory Notes and Related Subsidiaries
Change of Name
Committee on Small Business of Senate changed to Committee on Small Business and Entrepreneurship of Senate. See Senate Resolution No. 123, One Hundred Seventh Congress, June 29, 2001.
Committee on Science of House of Representatives changed to Committee on Science and Technology of House of Representatives by House Resolution No. 6, One Hundred Tenth Congress, Jan. 5, 2007. Committee on Science and Technology of House of Representatives changed to Committee on Science, Space, and Technology of House of Representatives by House Resolution No. 5, One Hundred Twelfth Congress, Jan. 5, 2011.
Effective Date of 2013 Amendment
Effective Date of 2011 Amendment
Effective Date of 2009 Amendment
Effective Date of 2007 Amendment
Amendment by
Effective Date of 2001 Amendment
Effective Date of 1999 Amendment
Amendment by
Effective and Termination Dates of 1997 Amendment
Amendment by
Effective Date of 1996 Amendment
Amendment by
Effective and Termination Dates of 1992 Amendment
For effective and termination dates of amendment by
Termination Date of 1982 Amendment
Rule of Construction
"(A) apply to any Federal agency with a due diligence program that applies to the SBIR or STTR programs required under subsection (vv) of section 9 of the Small Business Act (
"(B) restrict any Federal agency from taking due diligence measures in addition to those required under such subsection (vv) at the Federal agency."
[For definitions of "Federal agency", "SBIR", and "STTR" as used in section 4(b)(5) of
Due Diligence Program
"(1)
"(A) only with respect to small business concerns selected by the applicable Secretary as the presumptive recipient of an award described in such subsection (vv); and
"(B) prior to notifying the small business concern that the small business concern has been selected to receive such an award.
"(2)
Implementation of 2022 Amendment
"(A)
"(B)
"(C)
[For definitions of "Federal agency", "SBIR", and "STTR" as used in section 4(b)(2) of
Best Practices
"(A) in coordination with the Director of the Office of Science and Technology Policy and in consultation with the Committee on Foreign Investment in the United States, disseminate among Federal agencies required to establish an SBIR or STTR program best practices of those Federal agencies for due diligence programs required under subsection (vv) of section 9 of the Small Business Act (
"(B) in consultation with the Committee on Foreign Investment in the United States, provide to Federal agencies described in subparagraph (A) guidance on the business relationships required to be disclosed under paragraph (13)(G) of subsection (g) and paragraph (17)(G) of subsection (o) of section 9 of the Small Business Act (
[For definitions of terms used in section 4(b)(3) of
Cybersecurity Technical Assistance for SBIR and STTR Programs
"(a)
"(b)
Pilot Program for Domestic Investment Under the SBIR Program
"(a)
"(1) exclusively owned by multiple United States-owned venture capital operating companies, hedge funds, or private equity firms, or
"(2) majority-owned by multiple United States-owned venture capital operating companies, hedge funds, or private equity firms, if the minority foreign ownership of such concern is limited to members of the national technology and industrial base as defined under
"(b)
"(c)
"(d)
"(1) the number of applications for participation received from small business concerns;
"(2) the number of awards made to small business concerns, including an identification of such concerns;
"(3) the extent to which a small business concern participant is foreign-owned, including an identification of the foreign owners; and
"(4) an assessment of the effect of the Domestic Investment Pilot Program on—
"(A) inducing additional venture capital, hedge fund, or private equity funding of research as defined in section 9(e)(5) of the Small Business Act (
"(B) substantially contributing to the mission of the Department of Defense; and
"(C) otherwise fulfilling the capital needs of small business concerns for additional financing for SBIR projects.
"(e)
"(f)
"(g)
"(1)
"(2)
"(3)
Firms That Are Majority-Owned by Multiple Venture Capital Operating Companies, Hedge Funds, Or Private Equity Firms Entitled to Partial Participation in SBIR Program; Rules for Determining Affiliation
"(c)
"(1)
"(A) permit small business concerns that are majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms to participate in the SBIR program in accordance with section 9(dd) of the Small Business Act;
"(B) provide specific guidance for small business concerns that are majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms with regard to eligibility, participation, and affiliation rules; and
"(C) preserve and maintain the integrity of the SBIR program as a program for small business concerns in the United States by prohibiting large businesses or large entities or foreign-owned businesses or foreign-owned entities from participation in the program established under section 9 of the Small Business Act [
"(2)
"(A)
"(B)
"(3)
"(A)
"(i) in accordance with the size standards established under subparagraph (B), that the applicant is—
"(I) a large business or large entity; or
"(II) majority-owned or controlled by a large business or large entity; or
"(ii) in accordance with the criteria established under subparagraph (C), that the applicant—
"(I) is a foreign-owned business or a foreign entity or is not a citizen of the United States or alien lawfully admitted for permanent residence; or
"(II) is majority-owned or controlled by a foreign-owned business, foreign entity, or person who is not a citizen of the United States or alien lawfully admitted for permanent residence.
"(B)
"(C)
"(i) whether the applicant is at least 51 percent owned or controlled by citizens of the United States or domestic venture capital operating companies, hedge funds, or private equity firms;
"(ii) whether the applicant is domiciled in the United States; and
"(iii) whether the applicant is a direct or indirect subsidiary of a foreign-owned firm, including whether the criteria should include that an applicant is a direct or indirect subsidiary of a foreign-owned entity if—
"(I) any venture capital operating company, hedge fund, or private equity firm that owns more than 20 percent of the applicant is a direct or indirect subsidiary of a foreign-owned entity; or
"(II) in the aggregate, entities that are direct or indirect subsidiaries of foreign-owned entities own more than 49 percent of the applicant.
"(D)
"(i) if a venture capital operating company, hedge fund, or private equity firm that is determined to be affiliated with an applicant is a minority investor in the applicant, the portfolio companies of the venture capital operating company, hedge fund, or private equity firm shall not be determined to be affiliated with the applicant, unless—
"(I) the venture capital operating company, hedge fund, or private equity firm owns a majority of the portfolio company; or
"(II) the venture capital operating company, hedge fund, or private equity firm holds a majority of the seats on the board of directors of the portfolio company;
"(ii) subject to clause (i), the Administrator retains the authority to determine whether a venture capital operating company, hedge fund, or private equity firm is affiliated with an applicant, including establishing other criteria;
"(iii) the Administrator may not determine that a portfolio company of a venture capital operating company, hedge fund, or private equity firm is affiliated with an applicant based solely on 1 or more shared investors; and
"(iv) subject to clauses (i), (ii), and (iii), the Administrator retains the authority to determine whether a portfolio company of a venture capital operating company, hedge fund, or private equity firm is affiliated with an applicant based on factors independent of whether there is a shared investor, such as whether there are contractual obligations between the portfolio company and the applicant.
"(4)
"(5)
"(d)
"(1)
"(A) a clear explanation of the SBIR and STTR affiliation rules under part 121 of title 13, Code of Federal Regulations; and
"(B) contact information for officers or employees of the Administration who—
"(i) upon request, shall review an issue relating to the rules described in subparagraph (A); and
"(ii) shall respond to a request under clause (i) not later than 20 business days after the date on which the request is received.
"(2)
[For definitions used in section 5107(c), (d) of
Accuracy in Funding Base Calculations
"(a)
"(1) conduct a fiscal and management audit of the SBIR program and the STTR program for the applicable period to—
"(A) determine whether Federal agencies comply with the expenditure amount requirements under subsections (f)(1) and (n)(1) of section 9 of the Small Business Act (
"(B) assess the extent of compliance with the requirements of section 9(i)(2) of the Small Business Act (
"(C) assess whether it would be more consistent and effective to base the amount of the allocations under the SBIR program and the STTR program on a percentage of the research and development budget of a Federal agency, rather than the extramural budget of the Federal agency; and
"(D) determine the portion of the extramural research or research and development budget of a Federal agency that each Federal agency spends for administrative purposes relating to the SBIR program or STTR program, and for what specific purposes it is used, including the portion, if any, of such budget the Federal agency spends for salaries and expenses, travel to visit applicants, outreach events, marketing, and technical assistance; and
"(2) submit a report to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives regarding the audit conducted under paragraph (1), including the assessments required under subparagraph (B) and the determinations made under subparagraph (D) of paragraph (1).
"(b)
"(1) for the first report submitted under this section, the period beginning on October 1, 2005, and ending on September 30 of the last full fiscal year before the date of enactment of this Act [Dec. 31, 2011] for which information is available; and
"(2) for the second and each subsequent report submitted under this section, the period—
"(A) beginning on October 1 of the first fiscal year after the end of the most recent full fiscal year relating to which a report under this section was submitted; and
"(B) ending on September 30 of the last full fiscal year before the date of the report."
[For definitions used in section 5136 of
Transitional Rule
Conforming Amendments to the SBIR and the STTR Policy Directives
"(a)
"(b)
[For definitions used in section 5151 of
Coordination of the SBIR Program and the Experimental Program To Stimulate Competitive Research
"(a)
"(b)
"(c)
[For definitions used in section 5168 of
Continuation of SBIR Program Beyond Termination Date
Congressional Findings: Small Business Innovation Research Program Reauthorization Act of 2000
"(1) the small business innovation research program established under the Small Business Innovation Development Act of 1982 [see Short Title of 1982 Amendment note set out under
"(2) the SBIR program made the cost-effective and unique research and development capabilities possessed by the small businesses of the Nation available to Federal agencies and departments;
"(3) the innovative goods and services developed by small businesses that participated in the SBIR program have produced innovations of critical importance in a wide variety of high-technology fields, including biology, medicine, education, and defense;
"(4) the SBIR program is a catalyst in the promotion of research and development, the commercialization of innovative technology, the development of new products and services, and the continued excellence of this Nation's high-technology industries; and
"(5) the continuation of the SBIR program will provide expanded opportunities for one of the Nation's vital resources, its small businesses, will foster invention, research, and technology, will create jobs, and will increase this Nation's competitiveness in international markets."
National Research Council Reports
"(a)
"(1) conduct a comprehensive study of how the SBIR program has stimulated technological innovation and used small businesses to meet Federal research and development needs, including—
"(A) a review of the value to the Federal research agencies of the research projects being conducted under the SBIR program, and of the quality of research being conducted by small businesses participating under the program, including a comparison of the value of projects conducted under the SBIR program to those funded by other Federal research and development expenditures;
"(B) to the extent practicable, an evaluation of the economic benefits achieved by the SBIR program, including the economic rate of return, and a comparison of the economic benefits, including the economic rate of return, achieved by the SBIR program with the economic benefits, including the economic rate of return, of other Federal research and development expenditures;
"(C) an evaluation of the noneconomic benefits achieved by the SBIR program over the life of the program;
"(D) a comparison of the allocation for fiscal year 2000 of Federal research and development funds to small businesses with such allocation for fiscal year 1983, and an analysis of the factors that have contributed to such allocation; and
"(E) an analysis of whether Federal agencies, in fulfilling their procurement needs, are making sufficient effort to use small businesses that have completed a second phase award under the SBIR program; and
"(2) make recommendations with respect to—
"(A) measures of outcomes for strategic plans submitted under
"(B) whether companies who can demonstrate project feasibility, but who have not received a first phase award, should be eligible for second phase awards, and the potential impact of such awards on the competitive selection process of the program;
"(C) whether the Federal Government should be permitted to recoup some or all of its expenses if a controlling interest in a company receiving an SBIR award is sold to a foreign company or to a company that is not a small business concern;
"(D) how to increase the use by the Federal Government in its programs and procurements of technology-oriented small businesses; and
"(E) improvements to the SBIR program, if any are considered appropriate.
"(b)
"(1)
"(A) in any panel established by the National Research Council for the purpose of performing the study conducted under this section; and
"(B) among those who are asked by the National Research Council to peer review the study.
"(2)
"(c)
"(d)
"(1) not later than 3 years after the date of the enactment of this Act [Dec. 21, 2000], a report including the results of the study conducted under subsection (a)(1) and recommendations made under subsection (a)(2); and
"(2) not later than 6 years after that date of the enactment, an update of such report.
"(e)
"(1)
"(A) continue the most recent study under this section relating to the issues described in subparagraphs (A), (B), (C), and (E) of subsection (a)(1);
"(B) conduct a comprehensive study of how the STTR program has stimulated technological innovation and technology transfer, including—
"(i) a review of the collaborations created between small businesses and research institutions, including an evaluation of the effectiveness of the program in stimulating new collaborations and any obstacles that may prevent or inhibit the creation of such collaborations;
"(ii) an evaluation of the effectiveness of the program at transferring technology and capabilities developed through Federal funding;
"(iii) to the extent practicable, an evaluation of the economic benefits achieved by the STTR program, including the economic rate of return;
"(iv) an analysis of how Federal agencies are using small businesses that have completed Phase II under the STTR program to fulfill their procurement needs;
"(v) an analysis of whether additional funds could be employed effectively by the STTR program; and
"(vi) an assessment of the systems and minimum performance standards relating to commercialization success established under section 9(qq) of the Small Business Act [
"(C) make recommendations with respect to the issues described in subparagraphs (A), (D), and (E) of subsection (a)(2) and subparagraph (B) of this paragraph; and
"(D) estimate, to the extent practicable, the number of jobs created by the SBIR program or STTR program of the agency.
"(2)
"(3)
Congressional Findings and Purposes: Small Business Research and Development Enhancement Act of 1992
"(a)
"(1) the small business innovation research program established under the Small Business Innovation Development Act of 1982 [see Short Title of 1982 Amendment note set out under
"(2) the small business innovation research program has been an effective catalyst for the development of technological innovations by small business concerns;
"(3) small business innovation research program participants have provided high quality research and development in a cost-effective manner;
"(4) the innovative products and services developed by small business concerns participating in the small business innovation research program have been important to the national defense, as well as to the missions of the other participating Federal agencies;
"(5) the small business innovation research program has effectively stimulated the commercialization of technology developed through Federal research and development, benefiting both the public and private sectors of the Nation;
"(6) by encouraging the development and commercialization of technological innovations, the small business innovation research program has created jobs, expanded business opportunities for small firms, stimulated the development of new products and services, and improved the competitiveness of the Nation's high technology industries;
"(7) the small business innovation research program has also helped to increase exports from small business concerns;
"(8) despite the general success of the small business innovation research program, the proportion of Federal research and development funds received by small business concerns has not increased over the life of the program, but has remained at 3 percent; and
"(9) although the participating Federal agencies have successfully implemented most aspects of the small business innovation research program, additional outreach efforts are necessary to stimulate increased participation of socially and economically disadvantaged small business concerns.
"(b)
"(1) to expand and improve the small business innovation research program;
"(2) to emphasize the program's goal of increasing private sector commercialization of technology developed through Federal research and development;
"(3) to increase small business participation in Federal research and development; and
"(4) to improve the Federal Government's dissemination of information concerning the small business innovation research program, particularly with regard to program participation by women-owned small business concerns and by socially and economically disadvantaged small business concerns."
Recommendations of Secretary of Defense
Timing of Issuance of Policy Directive
"(1) in proposed form (with an opportunity for public comment of not less than 30 days), not later than April 30, 1993; and
"(2) in final form, not later than July 31, 1993."
Sense of Congress Concerning American-Made Equipment and Products
"(a)
"(b)
Small Business Innovation Research Program in Department of Defense
"(a)
"(b)
"(1) in phase I under the program may not exceed $100,000; and
"(2) in phase II under the program may not exceed $750,000.
"(c)
"(d)
"(e)
"(2)(A) The percentage under section 9(f)(1) of the Small Business Act (
| "For fiscal year: | The percentage is: |
|---|---|
| 1993 | 1.25 |
| 1994 | 1.5 |
| 1995 | 1.75 |
| 1996 | 2.0 |
| 1997 | 2.25 |
| 1998 and thereafter | 2.5. |
"(B) If the determination of the Secretary of Defense under subparagraph (C) is a negative determination (as set forth in that paragraph), then the percentage under section 9(f)(1) of the Small Business Act (
"(C) Not later than June 30, 1996, the Secretary of Defense during fiscal year 1996 shall determine whether there has been a demonstrable reduction in the quality of research performed under funding agreements awarded by the Department of Defense under the SBIR program since the beginning of fiscal year 1993 such that increasing the percentage under subparagraph (A) for fiscal years after fiscal year 1996 with respect to the department would adversely affect the performance of the department's research programs. If the determination of the Secretary is that there has been such a demonstrable reduction in the quality of research such that increasing the percentage under subparagraph (B) for fiscal years after fiscal year 1996 with respect to the department would adversely affect the performance of the department's research programs, the Secretary shall be considered for purposes of subparagraph (B) to have made a negative determination. The determination of the Secretary concerned under this paragraph shall be made after considering the assessment of the Comptroller General with respect to that department in the report transmitted under subparagraph (D).
"(D) Not later than March 30, 1996, the Comptroller General shall transmit to the Congress and the Secretary of Defense a report setting forth the Comptroller General's assessment, with respect to the Department of Defense of whether there has been a demonstrable reduction in the quality of research performed under funding agreements awarded by the department under the SBIR program since the beginning of fiscal year 1993 such that increasing the percentage under subparagraph (A) for fiscal years after fiscal year 1996 with respect to the department would adversely affect the performance of the department's research programs.
"(E) The results of each determination under subparagraph (C) shall be transmitted to the Congress not later than June 30, 1996.
"(f)
"(1) The term 'Small Business Innovation Research Program' means the program established under the following provisions of section 9 of the Small Business Act (
"(A) Paragraphs (4) through (7) of subsection (b).
"(B) Subsections (e) through (k).
"(2) The term 'phase I', with respect to the Small Business Innovation Research Program, means the first phase described in subsection (e)(4)(A) of section 9 of the Small Business Act.
"(3) The term 'phase II', with respect to the Small Business Innovation Research Program, means the second phase described in subsection (e)(4)(B) of such section.
"(4) The term 'phase III', with respect to the Small Business Innovation Research Program, means the third phase described in subsection (e)(4)(C) of such section.
"(g)
"(h)
"(2)(A) In the event of the enactment of H.R. 4400 or S. 2941, 102d Congress, after the date of the enactment of this Act, then, effective immediately before the enactment of H.R. 4400 or S. 2941, 102d Congress—
"(i) this section shall cease to be effective; and
"(ii) the provisions of a small business law that are amended by this section shall be effective and read as such provisions of that law were in effect immediately before the enactment of this Act, except that to the extent that any amendment is made to such a provision of a small business law by any other provision of law referred to in subparagraph (B), such provision of a small business law shall be effective and shall read as amended by that other provision of law.
"(B) For the purposes of subparagraph (A)(ii), a provision of law referred to in this subparagraph is the following:
"(i) A provision of this Act other than a provision of this section.
"(ii) A provision of any other Act if the provision takes effect during the period beginning on the date of the enactment of this Act and ending immediately before the enactment of H.R. 4400 or S. 2941, 102d Congress.
"(C) In this paragraph, the term 'small business law' means—
"(i) the Small Business Act (
"(ii) the Small Business Innovation Development Act of 1982 [
Use of Department of Agriculture Extramural Budget Funds in Small Business Innovation Research Program
Congressional Findings and Declaration of Purpose: Small Business Innovation Development Act of 1982
"(a) The Congress finds that—
"(1) technological innovation creates jobs, increases productivity, competition, and economic growth, and is a valuable counterforce to inflation and the United States balance-of-payments deficit;
"(2) while small business is the principal source of significant innovations in the Nation, the vast majority of federally funded research and development is conducted by large businesses, universities, and Government laboratories; and
"(3) small businesses are among the most cost-effective performers of research and development and are particularly capable of developing research and development results into new products.
"(b) Therefore, the purposes of the Act [amending this section] are—
"(1) to stimulate technological innovation;
"(2) to use small business to meet Federal research and development needs;
"(3) to foster and encourage participation by minority and disadvantaged persons in technological innovation; and
"(4) to increase private sector commercialization innovations derived from Federal research and development."
Reports of Comptroller General
Definitions
"(1)
"(2)
Executive Documents
Ex. Ord. No. 13329. Encouraging Innovation in Manufacturing
Ex. Ord. No. 13329, Feb. 24, 2004, 69 F.R. 9181, provided:
By the authority vested in me as President by the Constitution and the laws of the United States of America, including the Small Business Act, as amended (
(a) to the extent permitted by law and in a manner consistent with the mission of that department or agency, give high priority within such programs to manufacturing-related research and development to advance the policy set forth in section 1 of this order; and
(b) submit reports annually to the Administrator of the Small Business Administration and the Director of the Office of Science and Technology Policy concerning the efforts of such department or agency to implement subsection 2(a) of this order.
(a) shall establish, after consultation with the Director of the Office of Science and Technology Policy, formats and schedules for submission of reports by the heads of departments and agencies under subsection 2(b) of this order; and
(b) is authorized to issue to departments and agencies guidelines and directives (in addition to the formats and schedules under subsection 3(a)) as the Administrator determines from time to time are necessary to implement subsection 2(a) of this order, after such guidelines and directives are submitted to the President, through the Director of the Office of Science and Technology Policy, for approval and are approved by the President.
(a) "Small Business Innovation Research (SBIR) program" means a program to which section 9(e)(4) of the Small Business Act (
(b) "Small Business Technology Transfer (STTR) program" means a program to which section 9(e)(6) of the Small Business Act (
(c) "research and development" means an activity set forth in section 9(e)(5) of the Small Business Act (
(d) "manufacturing-related" means relating to: (i) manufacturing processes, equipment and systems; or (ii) manufacturing workforce skills and protection.
(b) Nothing in this order shall be construed to require disclosure of information the disclosure of which is prohibited by law or by Executive Order, including [former] Executive Order 12958 of April 17, 1995, as amended.
(c) This order is intended only to improve the internal management of the executive branch and is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity, against the United States, its departments, agencies, or other entities, its officers or employees, or any other person.
George W. Bush.
1 See References in Text note below.
2 So in original. Probably should be "investor;".
4 So in original. Probably should be "subparagraph (B)".
5 So in original. Probably should be preceded by "subsection".
§638a. GAO study with respect to venture capital operating company, hedge fund, and private equity firm involvement
Not later than 3 years after December 31, 2011, and every 3 years thereafter, the Comptroller General of the United States shall—
(1) conduct a study of the impact of requirements relating to venture capital operating company, hedge fund, and private equity firm involvement under
(2) submit to Congress a report regarding the study conducted under paragraph (1).
(
Editorial Notes
Codification
Section was enacted as part of the SBIR/STTR Reauthorization Act of 2011, and also as part of the National Defense Authorization Act for Fiscal Year 2012, and not as part of the Small Business Act which comprises this chapter.
§638b. Reducing vulnerability of SBIR and STTR programs to fraud, waste, and abuse
(a) Fraud, waste, and abuse prevention
(1) Amendments required for fraud, waste, and abuse prevention
Not later than 90 days after December 31, 2011, the Administrator shall amend the SBIR Policy Directive and the STTR Policy Directive to include measures to prevent fraud, waste, and abuse in the SBIR program and the STTR program.
(2) Content of amendments
The amendments required under paragraph (1) shall include—
(A) definitions or descriptions of fraud, waste, and abuse;
(B) guidelines for the monitoring and oversight of applicants to and recipients of awards under the SBIR program or the STTR program;
(C) a requirement that each Federal agency that participates in the SBIR program or STTR program include information concerning the method established by the Inspector General of the Federal agency to report fraud, waste, and abuse (including any telephone hotline or Web-based platform)—
(i) on the Web site of the Federal agency; and
(ii) in any solicitation or notice of funding opportunity issued by the Federal agency for the SBIR program or the STTR program; and
(D) a requirement that each applicant for and small business concern that receives funding under the SBIR program or the STTR program shall certify whether the applicant or small business concern is in compliance with the laws relating to the SBIR program and the STTR program and the conduct guidelines established under the SBIR Policy Directive and the STTR Policy Directive.
(3) Consultation
The Administrator shall develop, in consultation with the Council of Inspectors General on Integrity and Efficiency, the procedures and requirements for the certification set forth under paragraph (2)(D) after providing notice of and an opportunity for public comment on such procedures and requirements.
(4) Certification
The certification developed under paragraph (3) may—
(A) cover the lifecycle of an award to require certifications at the application, funding, reporting, and closeout phases of every SBIR and STTR award;
(B) require the small business concern to certify compliance with the "principal investigator 1 primary employment" requirement, the "small business concern" definition requirement, and the "performance of work" requirements as set forth in the Directive applicable to the award;
(C) require the small business concern to disclose whether it has applied for, plans to apply for, or received an SBIR or STTR award for identical or essentially equivalent work (as defined under the SBIR Policy Directive and the STTR Policy Directive), and require the concern to certify that the award that it is applying for or obtaining funding for is not identical or essentially equivalent to work it has performed, or will perform, in connection with any other SBIR or STTR award that the concern has applied for or received from any other agency except as fully disclosed to all funding agencies; and
(D) require that the small business concern certify that it will or did perform the work on the award at its facilities with its employees, unless otherwise indicated.
(5) Inspectors General
The Inspector General of each Federal agency that participates in the SBIR program or STTR program shall cooperate to prevent fraud, waste, and abuse in the SBIR program and the STTR program by—
(A) establishing fraud detection indicators;
(B) reviewing regulations and operating procedures of the Federal agency;
(C) coordinating information sharing between Federal agencies, to the extent otherwise permitted under Federal law; and
(D) improving the education and training of and outreach to—
(i) administrators of the SBIR program and the STTR program of the Federal agency;
(ii) applicants to the SBIR program or the STTR program; and
(iii) recipients of awards under the SBIR program or the STTR program.
(b) Study and report
Not later than 1 year after December 31, 2011, to establish a baseline of changes made to the program to fight fraud, waste, and abuse, and every 4 years thereafter to evaluate the effectiveness of the agency strategies, the Comptroller General of the United States shall—
(1) conduct a study that evaluates—
(A) the implementation by each Federal agency that participates in the SBIR program or the STTR program of the amendments to the SBIR Policy Directive and the STTR Policy Directive made pursuant to subsection (a);
(B) the effectiveness of the management information system of each Federal agency that participates in the SBIR program or STTR program in identifying duplicative SBIR and STTR projects;
(C) the effectiveness of the risk management strategies of each Federal agency that participates in the SBIR program or STTR program in identifying areas of the SBIR program or the STTR program that are at high risk for fraud;
(D) technological tools that may be used to detect patterns of behavior that may indicate fraud by applicants to the SBIR program or the STTR program;
(E) the success of each Federal agency that participates in the SBIR program or STTR program in reducing fraud, waste, and abuse in the SBIR program or the STTR program of the Federal agency;
(F) the extent to which the Inspector General of each Federal agency that participates in the SBIR and STTR program effectively conducts investigations, audits, inspections, and outreach relating to the SBIR and STTR programs of the Federal agency; and
(G) the effectiveness of the Government and public databases described in
(2) submit to the Committee on Small Business and Entrepreneurship of the Senate, the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives, and the head of each Federal agency that participates in the SBIR program or STTR program a report on the results of the study conducted under paragraph (1).
(c) Inspector General reports
Not later than October 1 of each year, the Inspector General of each Federal agency that participates in the SBIR program or STTR program shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives a report describing—
(1) the number of cases referred to the Inspector General in the preceding year that related to fraud, waste, or abuse with respect to the SBIR program or STTR program;
(2) the actions taken in each case described in paragraph (1) if fraud, waste, or abuse was determined to have occurred;
(3) if no action was taken in a case described in paragraph (1) and fraud, waste, or abuse was determined to have occurred, the justification for action not being taken; and
(4) an accounting of the funds used to address fraud, waste, and abuse, including a description of personnel and resources funded and funds that were recovered or saved.
(
Editorial Notes
Codification
Section was enacted as part of the SBIR/STTR Reauthorization Act of 2011, and also as part of the National Defense Authorization Act for Fiscal Year 2012, and not as part of the Small Business Act which comprises this chapter.
Statutory Notes and Related Subsidiaries
Definitions
"(1) the terms 'Administration' and 'Administrator' mean the Small Business Administration and the Administrator thereof, respectively;
"(2) the terms 'extramural budget', 'Federal agency', 'Small Business Innovation Research Program', 'SBIR', 'Small Business Technology Transfer Program', and 'STTR' have the meanings given such terms in section 9 of the Small Business Act (
"(3) the term 'small business concern' has the meaning given that term under section 3 of the Small Business Act (
1 So in original. Probably should be "investor".
§639. Reporting requirements and agency cooperation
(a) Annual reports to President and Congressional officers and committees
The Administration shall, as soon as practicable each fiscal year make a comprehensive annual report to the President, the President of the Senate, the Senate Select Committee on Small Business, and the Speaker of the House of Representatives. Such report shall include a description of the state of small business in the Nation and the several States, and a description of the operations of the Administration under this chapter, including, but not limited to, the general lending, disaster relief, Government regulation relief, procurement and property disposal, research and development, technical assistance, dissemination of data and information, and other functions under the jurisdiction of the Administration during the previous fiscal year. Such report shall contain recommendations for strengthening or improving such programs, or, when necessary or desirable to implement more effectively congressional policies and proposals, for establishing new or alternative programs. In addition, such report shall include the names of the business concerns to whom contracts are let and for whom financing is arranged by the Administration, together with the amounts involved. With respect to minority small business concerns, the report shall include the proportion of loans and other assistance under this chapter provided to such concerns, the goals of the Administration for the next fiscal year with respect to such concerns, and recommendations for improving assistance to minority small business concerns under this chapter.
(b) Cybersecurity reports
(1) Annual report
Not later than 180 days after December 21, 2022, and every year thereafter, the Administrator shall submit a report to the appropriate congressional committees that includes—
(A) a strategy to increase the cybersecurity of information technology infrastructure of the Administration;
(B) a supply chain risk management strategy and an implementation plan to address the risks of foreign manufactured information technology equipment utilized by the Administration, including specific risk mitigation activities for components originating from entities with principal places of business located in the People's Republic of China; and
(C) an account of—
(i) any incident that occurred at the Administration during the 2-year period preceding the date on which the first report is submitted, and, for subsequent reports, the 1-year period preceding the date of submission; and
(ii) any action taken by the Administrator to respond to or remediate any such incident.
(2) FISMA reports
Each report required under paragraph (1) may be submitted as part of the report required under
(3) Rule of construction
Nothing in this subsection shall be construed to affect the reporting requirements of the Administrator under
(4) Definitions
In this subsection:
(A) Appropriate congressional committees
The term "appropriate congressional committees" means—
(i) the Committee on Small Business and Entrepreneurship of the Senate;
(ii) the Committee on Homeland Security and Governmental Affairs of the Senate;
(iii) the Committee on Small Business of the House of Representatives; and
(iv) the Committee on Oversight and Reform of the House of Representatives.
(B) Incident
The term "incident" has the meaning given the term in
(C) Information technology
The term "information technology" has the meaning given the term in
(c) Repealed. Pub. L. 104–66, title I, §1091(f), Dec. 21, 1995, 109 Stat. 722
(d) Annual report of Department of Defense
For the purpose of aiding in carrying out the national policy to insure that a fair proportion of the total purchases and contracts for property and services for the Government be placed with small-business enterprises, and to maintain and strengthen the overall economy of the Nation, the Department of Defense shall make an annual report to the Committees on Small Business of the Senate and the House of Representatives, showing the amount of funds appropriated to the Department of Defense which have been expended, obligated, or contracted to be spent with small business concerns and the amount of such funds expended, obligated, or contracted to be spent with firms other than small business in the same fields of operation; and such reports shall show separately the funds expended, obligated, or contracted to be spent for basic and applied scientific research and development.
(e) Retention of records
(1) 1 The Administration and the Inspector General of the Administration shall retain all correspondence, records of inquiries, memoranda, reports, books, and records, including memoranda as to all investigations conducted by or for the Administration, for a period of at least one year from the date of each thereof, and shall at all times keep the same available for inspection and examination by the Senate Select Committee on Small Business and the Committee on Small Business of the House of Representatives, or their duly authorized representatives.
(2) The Committee on Small Business of either the Senate or the House of Representatives may request that the Office of the Inspector General of the Administration conduct an investigation of any program or activity conducted under the authority of
(f) Consultation and cooperation with Government departments and agencies
To the extent deemed necessary by the Administrator to protect and preserve small-business interests, the Administration shall consult and cooperate with other departments and agencies of the Federal Government in the formulation by the Administration of policies affecting small-business concerns. When requested by the Administrator, each department and agency of the Federal Government shall consult and cooperate with the Administration in the formulation by such department or agency of policies affecting small-business concerns, in order to insure that small-business interests will be recognized, protected, and preserved. This subsection shall not require any department or agency to consult or cooperate with the Administration in any case where the head of such department or agency determines that such consultation or cooperation would unduly delay action which must be taken by such department or agency to protect the national interest in an emergency.
(g) Annual report of employee conduct complaints received or acted upon and investigations undertaken by Administration
The Administration shall transmit, not later than December 31 of each year, to the Senate Select Committee on Small Business and Committee on Small Business of the House of Representatives a sealed report with respect to—
(1) complaints alleging illegal conduct by employees of the Administration which were received or acted upon by the Administration during the preceding fiscal year; and
(2) investigations undertaken by the Administration, including external and internal audits and security and investigation reports.
(h) Report to Congress on secondary market operations
The Administration shall transmit, not later than March 31 of each year, to the Committees on Small Business of the Senate and House of Representatives a report on the secondary market operations during the preceding calendar year. This report shall include, but not be limited to, (1) the number and the total dollar amount of loans sold into the secondary market and the distribution of such loans by size of loan, size of lender, geographic location of lender, interest rate, maturity, lender servicing fees, whether the rate is fixed or variable, and premium paid; (2) the number and dollar amount of loans resold in the secondary market with a distribution by size of loan, interest rate, and premiums; (3) the number and total dollar amount of pools formed; (4) the number and total dollar amount of loans in each pool; (5) the dollar amount, interest rate, and terms on each loan in each pool and whether the rate is fixed or variable; (6) the number, face value, interest rate, and terms of the trust certificates issued for each pool; (7) to the maximum extent possible, the use by the lender of the proceeds of sales of loans in the secondary market for additional lending to small business concerns; and (8) an analysis of the information reported in (1) through (7) to assess small businesses' access to capital at reasonable rates and terms as a result of secondary market operations.
(
Editorial Notes
Prior Provisions
Prior similar provisions were contained in sections 211 and 215 of act July 30, 1953, ch. 282, title II,
Amendments
2022—Subsec. (b).
2018—Subsec. (b).
1995—Subsec. (c).
1990—Subsec. (d).
1989—Subsec. (e)(2).
1988—Subsec. (e).
1984—Subsec. (h).
1981—Subsec. (b).
1978—Subsec. (b).
1977—Subsec. (a).
Subsec. (b).
Subsec. (c)(2).
Subsec. (d).
Subsec. (e).
Subsec. (g).
1975—Subsec. (a).
Subsec. (b).
1974—Subsec. (a).
Subsec. (g).
1965–Subsec. (a).
1961—Subsec. (a).
Subsec. (b).
Subsec. (c).
Statutory Notes and Related Subsidiaries
Change of Name
Committee on Oversight and Reform of House of Representatives changed to Committee on Oversight and Accountability of House of Representatives by House Resolution No. 5, One Hundred Eighteenth Congress, Jan. 9, 2023.
Committee on Small Business of Senate changed to Committee on Small Business and Entrepreneurship of Senate. See Senate Resolution No. 123, One Hundred Seventh Congress, June 29, 2001. Previously, Select Committee on Small Business of Senate became Committee on Small Business of Senate. See Senate Resolution No. 101, Ninety-Seventh Congress, Mar. 25, 1981.
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1981 Amendment
Amendment by
Termination of Reporting Requirements
For termination, effective May 15, 2000, of provisions in subsecs. (a), (b), and (d) of this section relating to submitting annual reports to Congress, see section 3003 of
Small Business Administration Program Data and Evaluation; Report; Implementation
Executive Documents
Ex. Ord. No. 11518. Increased Representation of Interests of Small Business Concerns Before Government Departments and Agencies
Ex. Ord. No. 11518, Mar. 20, 1970, 35 F.R. 4939, provided:
WHEREAS the policy of the Government of the United States is to insure the continuance of a strong and healthy free enterprise system; and
WHEREAS the existence of a strong and healthy free enterprise system is directly related to the well being and competitive strength of small business concerns and their opportunities for free entry into business, growth, and expansion; and
WHEREAS the departments and agencies of the United States Government exercise, through their regulatory and other programs and practices, a significant influence on the well being and competitive strength of business concerns, particularly minority-owned business concerns, and their opportunities for free entry into business, growth and expansion; and
WHEREAS members of minority groups traditionally have aspired to own their own businesses and thereby to participate in our free enterprise system; and
WHEREAS members of certain minority groups through no fault of their own have been denied the full opportunity to achieve these aspirations; and
WHEREAS the policy of the Executive Branch of the United States Government continues to be, as was described by President Dwight D. Eisenhower, "to strive to eliminate obstacles to the growth of small business"; and
WHEREAS the Small Business Act (
WHEREAS the Small Business Administration is the agency within the Executive Branch of the United States Government especially responsible for and with an established program of advocacy in matters relating to small business; and
WHEREAS section 8(b)(12) of the Small Business Act (
NOW, THEREFORE, by virtue of the authority vested in me as President of the United States and in furtherance of the purpose and policy of the Small Business Act, it is ordered as follows:
Richard Nixon.
1 Paragraph designation "(1)" supplied editorially.
§639a. Review of loan program; submission of estimated needs for additional authorization
It is the sense of the Congress that the regular business loan program of the Small Business Administration should be reviewed by the Congress at least once every two years. It is further the sense of the Congress that the Small Business Administration should submit its estimated needs for additional authorization for such program to the Congress at least one year in advance of the date on which such authorization is to be provided, in order to assure an orderly and recurring review of such program and to avoid emergency appeals for additional authorization. Compliance by the Small Business Administration with the foregoing policy will enable the Congress on and after July 25, 1962, to provide additional authorization for such program on a two-year basis.
(
Editorial Notes
Codification
Section was not enacted as part of the Small Business Act which comprises this chapter.
§639b. Oversight
(a) Compliance with oversight requirements
(1) In general
Except as provided in paragraph (2), on and after December 27, 2020, the Administrator shall comply with any data or information requests or inquiries made by the Comptroller General of the United States not later than 15 days (or such later date as the Comptroller General may specify) after receiving the request or inquiry.
(2) Exception
If the Administrator is unable to comply with a request or inquiry described in paragraph (1) before the applicable date described in that paragraph, the Administrator shall, before such applicable date, submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a notification that includes a detailed justification for the inability of the Administrator to comply with the request or inquiry.
(b) Testimony
Not later than the date that is 120 days after December 27, 2020, and not less than twice each year thereafter until the date that is 2 years after December 27, 2020, the Administrator and the Secretary of the Treasury shall testify before the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives regarding implementation of this Act and the amendments made by this Act.
(
Editorial Notes
References in Text
This Act, referred to in subsec. (b), probably means title III of div. N of
Codification
Section was enacted as part of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, and not as part of the Small Business Act which comprises this chapter.
Statutory Notes and Related Subsidiaries
Effective Date
Section effective on Dec. 27, 2020, and applicable to loans and grants made on or after Dec. 27, 2020, see section 348 of
Definition of "Administrator"
"Administrator" means the Administrator of the Small Business Administration, see section 302 of
§640. Voluntary agreements among small-business concerns
(a) Consultation with President
The President is authorized to consult with representatives of small-business concerns with a view to encouraging the making by such persons with the approval of the President of voluntary agreements and programs to further the objectives of this chapter.
(b) Exemption from certain laws; findings and requests; filing and publication
No act or omission to act pursuant to this chapter which occurs while this chapter is in effect, if requested by the President pursuant to a voluntary agreement or program approved under subsection (a) of this section and found by the President to be in the public interest as contributing to the national defense, shall be construed to be within the prohibitions of the antitrust laws or the Federal Trade Commission Act [
(c) Delegation of authority; consultation; approval of requests
The authority granted in subsection (b) of this section shall be delegated only (1) to an official who shall for the purpose of such delegation be required to be appointed by the President by and with the advice and consent of the Senate, (2) upon the condition that such official consult with the Attorney General and the Chairman of the Federal Trade Commission not less than ten days before making any request or finding thereunder, and (3) upon the condition that such official obtain the approval of the Attorney General to any request thereunder before making the request.
(d) Inapplicability of section when request or finding withdrawn
Upon withdrawal of any request or finding hereunder, or upon withdrawal by the Attorney General of his approval of the voluntary agreement or program on which the request or finding is based, the provisions of this section shall not apply to any subsequent act, or omission to act, by reason of such finding or request.
(
Editorial Notes
References in Text
The Federal Trade Commission Act, referred to in subsec. (b), is act Sept. 26, 1914, ch. 311,
Prior Provisions
Prior similar provisions were contained in section 217 of act July 30, 1953, ch. 282, title II,
Executive Documents
Ex. Ord. No. 10493. Delegation of Functions
Ex. Ord. No. 10493, Oct. 14, 1953, 18 F.R. 6583, provided:
Dwight D. Eisenhower.
§641. Transfer to Administration of other functions, powers, and duties
The President may transfer to the Administration any functions, powers, and duties of any department or agency which relate primarily to small-business problems. In connection with any such transfer, the President may provide for appropriate transfers of records, property, necessary personnel, and unexpended balances of appropriations and other funds available to the department or agency from which the transfer is made.
(
Editorial Notes
Prior Provisions
Prior similar provisions were contained in section 218 of act July 30, 1953, ch. 282, title II,
Executive Documents
Executive Order No. 10504
Ex. Ord. No. 10504, Dec. 1, 1953, 18 F.R. 7667, which provided for the transfer of functions of the Small Defense Plants Administration to the Small Business Administrator, was revoked by Ex. Ord. No. 12553, Feb. 25, 1986, 51 F.R. 7237.
Executive Order No. 11871
Ex. Ord. No. 11871, July 18, 1975, 40 F.R. 30915, which transferred the functions of ACTION Agency relating to the Service Corps of Retired Executives and Active Corps of Executives to the Small Business Administration, was revoked by Ex. Ord. No. 12553, Feb. 25, 1986, 51 F.R. 7237.
§642. Requirements for loans
No loan shall be made or equipment, facilities, or services furnished by the Administration under this chapter to any business enterprise unless the owners, partners, or officers of such business enterprise (1) certify to the Administration the names of any attorneys, agents, or other persons engaged by or on behalf of such business enterprise for the purpose of expediting applications made to the Administration for assistance of any sort, and the fees paid or to be paid to any such persons; (2) execute an agreement binding any such business enterprise for a period of two years after any assistance is rendered by the Administration to such business enterprise, to refrain from employing, tendering any office or employment to, or retaining for professional services, any person who, on the date such assistance or any part thereof was rendered, or within one year prior thereto, shall have served as an officer, attorney, agent, or employee of the Administration occupying a position or engaging in activities which the Administration shall have determined involve discretion with respect to the granting of assistance under this chapter; and (3) furnish the names of lending institutions to which such business enterprise has applied for loans together with dates, amounts, terms, and proof of refusal.
(
Editorial Notes
Prior Provisions
Prior similar provisions were contained in section 219 of act July 30, 1953, ch. 282, title II,
§643. Fair charge for use of Government-owned property
To the fullest extent the Administration deems practicable, it shall make a fair charge for the use of Government-owned property and make and let contracts on a basis that will result in a recovery of the direct costs incurred by the Administration.
(
Editorial Notes
Prior Provisions
Prior similar provisions were contained in section 220 of act July 30, 1953, ch. 282, title II,
§644. Awards or contracts
(a) Small business procurements
(1) In general
For purposes of this chapter, small business concerns shall receive any award or contract if such award or contract is, in the determination of the Administrator and the contracting agency, in the interest of—
(A) maintaining or mobilizing the full productive capacity of the United States;
(B) war or national defense programs; or
(C) assuring that a fair proportion of the total purchases and contracts for goods and services of the Government in each industry category (as defined under paragraph (2)) are awarded to small business concerns.
(2) Industry category defined
(A) In general
In this subsection, the term "industry category" means a discrete group of similar goods and services, as determined by the Administrator in accordance with the North American Industry Classification System codes used to establish small business size standards, except that the Administrator shall limit an industry category to a greater extent than provided under the North American Industry Classification System codes if the Administrator receives evidence indicating that further segmentation of the industry category is warranted—
(i) due to special capital equipment needs;
(ii) due to special labor requirements;
(iii) due to special geographic requirements, except as provided in subparagraph (B);
(iv) due to unique Federal buying patterns or requirements; or
(v) to recognize a new industry.
(B) Exception for geographic requirements
The Administrator may not further segment an industry category based on geographic requirements unless—
(i) the Government typically designates the geographic area where work for contracts for goods or services is to be performed;
(ii) Government purchases comprise the major portion of the entire domestic market for such goods or services; and
(iii) it is unreasonable to expect competition from business concerns located outside of the general geographic area due to the fixed location of facilities, high mobilization costs, or similar economic factors.
(3) Determinations with respect to awards or contracts
Determinations made pursuant to paragraph (1) may be made for individual awards or contracts, any part of an award or contract or task order, or for classes of awards or contracts or task orders.
(4) Increasing prime contracting opportunities for small business concerns
(A) Description of covered proposed procurements
The requirements of this paragraph shall apply to a proposed procurement that includes in its statement of work goods or services currently being supplied or performed by a small business concern and, as determined by the Administrator—
(i) is in a quantity or of an estimated dollar value which makes the participation of a small business concern as a prime contractor unlikely;
(ii) in the case of a proposed procurement for construction, seeks to bundle or consolidate discrete construction projects; or
(iii) is a solicitation that involves an unnecessary or unjustified bundling of contract requirements.
(B) Notice to procurement center representatives
With respect to proposed procurements described in subparagraph (A), at least 30 days before issuing a solicitation and concurrent with other processing steps required before issuing the solicitation, the contracting agency shall provide a copy of the proposed procurement to the procurement center representative of the contracting agency (as described in subsection (l)) along with a statement explaining—
(i) why the proposed procurement cannot be divided into reasonably small lots (not less than economic production runs) to permit offers on quantities less than the total requirement;
(ii) why delivery schedules cannot be established on a realistic basis that will encourage the participation of small business concerns in a manner consistent with the actual requirements of the Government;
(iii) why the proposed procurement cannot be offered to increase the likelihood of the participation of small business concerns;
(iv) in the case of a proposed procurement for construction, why the proposed procurement cannot be offered as separate discrete projects; or
(v) why the contracting agency has determined that the bundling of contract requirements is necessary and justified.
(C) Alternatives to increase prime contracting opportunities for small business concerns
If the procurement center representative believes that the proposed procurement will make the participation of small business concerns as prime contractors unlikely, the procurement center representative, within 15 days after receiving the statement described in subparagraph (B), shall recommend to the contracting agency alternative procurement methods for increasing prime contracting opportunities for small business concerns.
(D) Failure to agree on an alternative procurement method
If the procurement center representative and the contracting agency fail to agree on an alternative procurement method, the Administrator shall submit the matter to the head of the appropriate department or agency for a determination.
(5) Contracts for sale of government property
With respect to a contract for the sale of Government property, small business concerns shall receive any such contract if, in the determination of the Administrator and the disposal agency, the award of such contract is in the interest of assuring that a fair proportion of the total sales of Government property be made to small business concerns.
(6) Sale of electrical power or other property
Nothing in this subsection shall be construed to change any preferences or priorities established by law with respect to the sale of electrical power or other property by the Federal Government.
(7) Costs exceeding fair market price
A contract may not be awarded under this subsection if the cost of the contract to the awarding agency exceeds a fair market price.
(b) Placement of contracts by contracting procurement agency
With respect to any work to be performed the amount of which would exceed the maximum amount of any contract for which a surety may be guaranteed against loss under
(c) Programs for blind and handicapped individuals
(1) As used in this subsection:
(A) The term "Committee" means the Committee for Purchase From People Who Are Blind or Severely Disabled established under
(B) The term "public or private organization for the handicapped" has the same meaning given such term in
(C) The term "handicapped individual" has the same meaning given such term in
(2)(A) During fiscal year 1995, public or private organizations for the handicapped shall be eligible to participate in programs authorized under this section in an aggregate amount not to exceed $40,000,000.
(B) None of the amounts authorized for participation by subparagraph (A) may be placed on the procurement list maintained by the Committee pursuant to
(3) The Administrator shall monitor and evaluate such participation.
(4)(A) Not later than ten days after the announcement of a proposed award of a contract by an agency or department to a public or private organization for the handicapped, a for-profit small business concern that has experienced or is likely to experience severe economic injury as the result of the proposed award may file an appeal of the proposed award with the Administrator.
(B) If such a concern files an appeal of a proposed award under subparagraph (A) and the Administrator, after consultation with the Executive Director of the Committee, finds that the concern has experienced or is likely to experience severe economic injury as the result of the proposed award, not later than thirty days after the filing of the appeal, the Administration shall require each agency and department having procurement powers to take such action as may be appropriate to alleviate economic injury sustained or likely to be sustained by the concern.
(5) Each agency and department having procurement powers shall report to the Office of Federal Procurement Policy each time a contract subject to paragraph (2)(A) is entered into, and shall include in its report the amount of the next higher bid submitted by a for-profit small business concern. The Office of Federal Procurement Policy shall collect data reported under the preceding sentence through the Federal procurement data system and shall report to the Administration which shall notify all such agencies and departments when the maximum amount of awards authorized under paragraph (2)(A) has been made during any fiscal year.
(6) For the purpose of this subsection, a contract may be awarded only if at least 75 per centum of the direct labor performed on each item being produced under the contract in the sheltered workshop or performed in providing each type of service under the contract by the sheltered workshop is performed by handicapped individuals.
(7) Agencies awarding one or more contracts to such an organization pursuant to the provisions of this subsection may use multiyear contracts, if appropriate.
(d) Priority
For purposes of this section priority shall be given to the awarding of contracts and the placement of subcontracts to small business concerns which shall perform a substantial proportion of the production on those contracts and subcontracts within areas of concentrated unemployment or underemployment or within labor surplus areas. Notwithstanding any other provision of law, total labor surplus area set-asides pursuant to Defense Manpower Policy Number 4 (32A C.F.R.
(e) Procurement strategies; contract bundling
(1) In general
To the maximum extent practicable, procurement strategies used by a Federal department or agency having contracting authority shall facilitate the maximum participation of small business concerns as prime contractors, subcontractors, and suppliers, and each such Federal department or agency shall—
(A) provide opportunities for the participation of small business concerns during acquisition planning processes and in acquisition plans; and
(B) invite the participation of the appropriate Director of Small and Disadvantaged Business Utilization in acquisition planning processes and provide that Director access to acquisition plans.
(2) Market research
(A) In general
Before proceeding with an acquisition strategy that could lead to a contract containing consolidated procurement requirements, the head of an agency shall conduct market research to determine whether consolidation of the requirements is necessary and justified.
(B) Factors
For purposes of subparagraph (A), consolidation of the requirements may be determined as being necessary and justified if, as compared to the benefits that would be derived from contracting to meet those requirements if not consolidated, the Federal Government would derive from the consolidation measurably substantial benefits, including any combination of benefits that, in combination, are measurably substantial. Benefits described in the preceding sentence may include the following:
(i) Cost savings.
(ii) Quality improvements.
(iii) Reduction in acquisition cycle times.
(iv) Better terms and conditions.
(v) Any other benefits.
(C) Reduction of costs not determinative
The reduction of administrative or personnel costs alone shall not be a justification for bundling of contract requirements unless the cost savings are expected to be substantial in relation to the dollar value of the procurement requirements to be consolidated.
(3) Strategy specifications
If the head of a contracting agency determines that an acquisition plan for a procurement involves a substantial bundling of contract requirements, the head of a contracting agency shall publish a notice on a public website that such determination has been made not later than 7 days after making such determination. Any solicitation for a procurement related to the acquisition plan may not be published earlier than 7 days after such notice is published. Along with the publication of the solicitation, the head of a contracting agency shall publish a justification for the determination, which shall include the following information:
(A) The specific benefits anticipated to be derived from the bundling of contract requirements and a determination that such benefits justify the bundling.
(B) An identification of any alternative contracting approaches that would involve a lesser degree of bundling of contract requirements.
(C) An assessment of—
(i) the specific impediments to participation by small business concerns as prime contractors that result from the bundling of contract requirements; and
(ii) the specific actions designed to maximize participation of small business concerns as subcontractors (including suppliers) at various tiers under the contract or contracts that are awarded to meet the requirements.
(4) Contract teaming
(A) In general
In the case of a solicitation of offers for a bundled or consolidated contract that is issued by the head of an agency, a small business concern that provides for use of a particular team of subcontractors or a joint venture of small business concerns may submit an offer for the performance of the contract.
(B) Evaluation of offers
The head of the agency shall evaluate an offer described in subparagraph (A) in the same manner as other offers, with due consideration to the capabilities of all of the proposed subcontractors or members of the joint venture as follows:
(i) Teams
When evaluating an offer of a small business prime contractor that includes a proposed team of small business subcontractors, the head of the agency shall consider the capabilities and past performance of each first tier subcontractor that is part of the team as the capabilities and past performance of the small business prime contractor.
(ii) Joint ventures
When evaluating an offer of a joint venture of small business concerns, if the joint venture does not demonstrate sufficient capabilities or past performance to be considered for award of a contract opportunity, the head of the agency shall consider the capabilities and past performance of each member of the joint venture as the capabilities and past performance of the joint venture.
(C) Status as a small business concern
Participation of a small business concern in a team or a joint venture under this paragraph shall not affect the status of that concern as a small business concern for any other purpose.
(5) Past performance ratings of joint ventures for small business concerns
With respect to evaluating an offer for a prime contract made by a small business concern that previously participated in a joint venture with another business concern (whether or not such other business concern was a small business concern), the Administrator shall establish regulations—
(A) allowing the small business concern to elect to use the past performance of the joint venture if the small business concern has no relevant past performance of its own;
(B) requiring the small business concern, when making an election under subparagraph (A)—
(i) to identify to the contracting officer the joint venture of which the small business concern was a member; and
(ii) to inform the contracting officer what duties and responsibilities the small business concern carried out as part of the joint venture; and
(C) requiring a contracting officer, if the small business concern makes an election under subparagraph (A), to consider the past performance of the joint venture when evaluating the past performance of the small business concern, giving due consideration to the information provided under subparagraph (B)(ii).
(f) Contracting preference for small business concerns in a major disaster area
(1) Definition
In this subsection, the term "disaster area" means the area for which the President has declared a major disaster, during the period of the declaration.
(2) Contracting preference
An agency shall provide a contracting preference for a small business concern located in a disaster area if the small business concern will perform the work required under the contract in the disaster area.
(3) Credit for meeting contracting goals
If an agency awards a contract to a small business concern under the circumstances described in paragraph (2), the value of the contract shall be doubled for purposes of determining compliance with the goals for procurement contracts under subsection (g)(1)(A).
(g) Goals for participation of small business concerns in procurement contracts
(1)
(A)
(i) The Governmentwide goal for participation by small business concerns shall be established at not less than 23 percent of the total value of all prime contract awards for each fiscal year. In meeting this goal, the Government shall ensure the participation of small business concerns from a wide variety of industries and from a broad spectrum of small business concerns within each industry.
(ii) The Governmentwide goal for participation by small business concerns owned and controlled by service-disabled veterans shall be established at not less than 5 percent of the total value of all prime contract and subcontract awards for each fiscal year.
(iii) The Governmentwide goal for participation by qualified HUBZone small business concerns shall be established at not less than 3 percent of the total value of all prime contract and subcontract awards for each fiscal year.
(iv) The Governmentwide goal for participation by small business concerns owned and controlled by socially and economically disadvantaged individuals shall be established at not less than 5 percent of the total value of all prime contract and subcontract awards for each fiscal year.
(v) The Governmentwide goal for participation by small business concerns owned and controlled by women shall be established at not less than 5 percent of the total value of all prime contract and subcontract awards for each fiscal year.
(B)
(2)(A) The head of each Federal agency shall, after consultation with the Administration, establish goals for the participation by small business concerns, by small business concerns owned and controlled by service-disabled veterans, by qualified HUBZone small business concerns, by small business concerns owned and controlled by socially and economically disadvantaged individuals, and by small business concerns owned and controlled by women in procurement contracts of such agency. Such goals shall separately address prime contract awards and subcontract awards for each category of small business covered.
(B) Goals established under this subsection shall be jointly established by the Administration and the head of each Federal agency and shall realistically reflect the potential of small business concerns, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women to perform such contracts and to perform subcontracts under such contracts. Contracts excluded from review by procurement center representatives pursuant to subsection (l)(9)(B) shall not be considered when establishing these goals.
(C) Whenever the Administration and the head of any Federal agency fail to agree on established goals, the disagreement shall be submitted to the Administrator for Federal Procurement Policy for final determination.
(D) After establishing goals under this paragraph for a fiscal year, the head of each Federal agency shall develop a plan for achieving such goals at both the prime contract and the subcontract level, which shall apportion responsibilities among the agency's acquisition executives and officials. In establishing goals under this paragraph, the head of each Federal agency shall make a consistent effort to annually expand participation by small business concerns from each industry category in procurement contracts and subcontracts of such agency, including participation by small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women.
(E) The head of each Federal agency, in attempting to attain expanded participation under subparagraph (D), shall consider—
(i) contracts awarded as the result of unrestricted competition; and
(ii) contracts awarded after competition restricted to eligible small business concerns under this section and under the program established under
(F)(i) Each procurement employee or program manager described in clause (ii) shall communicate to the subordinates of the procurement employee or program manager the importance of achieving goals established under subparagraph (A).
(ii) A procurement employee or program manager described in this clause is a senior procurement executive, senior program manager, or Director of Small and Disadvantaged Business Utilization of a Federal agency having contracting authority.
(3) First tier subcontracts that are awarded by Management and Operating contractors sponsored by the Department of Energy to small business concerns, small businesses 1 concerns owned and controlled by service disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women, shall be considered toward the annually established agency and Government-wide goals for procurement contracts awarded.
(h) Reporting on goals for procurement contracts awarded to small business concerns
(1) Agency reports
At the conclusion of each fiscal year, the head of each Federal agency shall submit to the Administrator a report describing—
(A) the extent of the participation by small business concerns, small business concerns owned and controlled by veterans (including service-disabled veterans), qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women in the procurement contracts of such agency during such fiscal year;
(B) whether the agency achieved the goals established for the agency under subsection (g)(2) with respect to such fiscal year;
(C) any justifications for a failure to achieve such goals; and
(D) a remediation plan with proposed new practices to better meet such goals, including analysis of factors leading to any failure to achieve such goals.
(2) Reports by Administrator
Not later than 60 days after receiving a report from each Federal agency under paragraph (1) with respect to a fiscal year, the Administrator shall submit to the President and Congress, and to make available on a public Web site, a report that includes—
(A) a copy of each report submitted to the Administrator under paragraph (1);
(B) a determination of whether each goal established by the President under subsection (g)(1) for such fiscal year was achieved;
(C) a determination of whether each goal established by the head of a Federal agency under subsection (g)(2) for such fiscal year was achieved;
(D) the reasons for any failure to achieve a goal established under paragraph (1) or (2) of subsection (g) for such fiscal year and a description of actions planned by the applicable agency to address such failure, including the Administrator's comments and recommendations on the proposed remediation plan; and
(E) for the Federal Government and each Federal agency, an analysis of the number and dollar amount of prime contracts awarded during such fiscal year to—
(i) small business concerns—
(I) in the aggregate;
(II) through sole source contracts;
(III) through competitions restricted to small business concerns;
(IV) through unrestricted competition;
(V) that were purchased by another entity after the initial contract was awarded and as a result of the purchase, would no longer be deemed to be small business concerns for purposes of the initial contract; and
(VI) that were awarded using a procurement method that restricted competition to small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, small business concerns owned and controlled by women, or a subset of any such concerns;
(ii) small business concerns owned and controlled by service-disabled veterans—
(I) in the aggregate;
(II) through sole source contracts;
(III) through competitions restricted to small business concerns;
(IV) through competitions restricted to small business concerns owned and controlled by service-disabled veterans;
(V) through unrestricted competition;
(VI) that were purchased by another entity after the initial contract was awarded and as a result of the purchase, would no longer be deemed to be small business concerns owned and controlled by service-disabled veterans for purposes of the initial contract; and
(VII) that were awarded using a procurement method that restricted competition to qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, small business concerns owned and controlled by women, or a subset of any such concerns;
(iii) qualified HUBZone small business concerns—
(I) in the aggregate;
(II) through sole source contracts;
(III) through competitions restricted to small business concerns;
(IV) through competitions restricted to qualified HUBZone small business concerns;
(V) through unrestricted competition where a price evaluation preference was used;
(VI) through unrestricted competition where a price evaluation preference was not used;
(VII) that were purchased by another entity after the initial contract was awarded and as a result of the purchase, would no longer be deemed to be qualified HUBZone small business concerns for purposes of the initial contract; and
(VIII) that were awarded using a procurement method that restricted competition to small business concerns owned and controlled by service-disabled veterans, small business concerns owned and controlled by socially and economically disadvantaged individuals, small business concerns owned and controlled by women, or a subset of any such concerns;
(iv) small business concerns owned and controlled by socially and economically disadvantaged individuals—
(I) in the aggregate;
(II) through sole source contracts;
(III) through competitions restricted to small business concerns;
(IV) through competitions restricted to small business concerns owned and controlled by socially and economically disadvantaged individuals;
(V) through unrestricted competition;
(VI) by reason of that concern's certification as a small business owned and controlled by socially and economically disadvantaged individuals;
(VII) that were purchased by another entity after the initial contract was awarded and as a result of the purchase, would no longer be deemed to be small business concerns owned and controlled by socially and economically disadvantaged individuals for purposes of the initial contract; and
(VIII) that were awarded using a procurement method that restricted competition to small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by women, or a subset of any such concerns;
(v) small business concerns owned by an Indian tribe (as such term is defined in
(I) in the aggregate;
(II) through sole source contracts;
(III) through competitions restricted to small business concerns;
(IV) through competitions restricted to small business concerns owned and controlled by socially and economically disadvantaged individuals;
(V) through unrestricted competition; and
(VI) that were purchased by another entity after the initial contract was awarded and as a result of the purchase, would no longer be deemed to be small business concerns owned by an Indian tribe other than an Alaska Native Corporation for purposes of the initial contract;
(vi) small business concerns owned by a Native Hawaiian Organization—
(I) in the aggregate;
(II) through sole source contracts;
(III) through competitions restricted to small business concerns;
(IV) through competitions restricted to small business concerns owned and controlled by socially and economically disadvantaged individuals;
(V) through unrestricted competition; and
(VI) that were purchased by another entity after the initial contract was awarded and as a result of the purchase, would no longer be deemed to be small business concerns owned by a Native Hawaiian Organization for purposes of the initial contract;
(vii) small business concerns owned by an Alaska Native Corporation—
(I) in the aggregate;
(II) through sole source contracts;
(III) through competitions restricted to small business concerns;
(IV) through competitions restricted to small business concerns owned and controlled by socially and economically disadvantaged individuals;
(V) through unrestricted competition; and
(VI) that were purchased by another entity after the initial contract was awarded and as a result of the purchase, would no longer be deemed to be small business concerns owned by an Alaska Native Corporation for purposes of the initial contract; and
(viii) small business concerns owned and controlled by women—
(I) in the aggregate;
(II) through competitions restricted to small business concerns;
(III) through competitions restricted using the authority under
(IV) through competitions restricted using the authority under
(V) through sole source contracts awarded using the authority under subsection 2 637(m)(7) of this title;
(VI) through sole source contracts awarded using the authority under
(VII) by industry for contracts described in subclause (III), (IV), (V), or (VI);
(VIII) through unrestricted competition;
(IX) that were purchased by another entity after the initial contract was awarded and as a result of the purchase, would no longer be deemed to be small business concerns owned and controlled by women for purposes of the initial contract; and
(X) that were awarded using a procurement method that restricted competition to small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, or a subset of any such concerns; and
(F) for the Federal Government, the number, dollar amount, and distribution with respect to the North American Industry Classification System of subcontracts awarded during such fiscal year to small business concerns, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women, provided that such information is publicly available through data systems developed pursuant to the Federal Funding Accountability and Transparency Act of 2006 (
(3) Procurement data
(A) Federal Procurement Data System
(i) In general
To assist in the implementation of this section, the Administrator shall have access to information collected through the Federal Procurement Data System, Federal Subcontracting Reporting System, or any new or successor system.
(ii) GSA report
On the date that the Administrator makes available the report required under paragraph (2), the Administrator of the General Services Administration shall submit to the President and Congress, and shall make available on a public website, a report in the same form and manner, and including the same information, as the report required under paragraph (2). The report shall include all procurements made for the period covered by the report and may not exclude any contract awarded.
(B) Agency procurement data sources
To assist in the implementation of this section, the head of each contracting agency shall provide, upon request of the Administrator, procurement information collected through agency data collection sources in existence at the time of the request. Contracting agencies shall not be required to establish new data collection systems to provide such data.
(4) Best in class small business participation reporting
(A) Addendum
In addition to the requirements under paragraph (2) and for each best in class designation, the Administrator shall include in the report required by such paragraph—
(i) the total amount of spending Governmentwide in such designation; and
(ii) the number of small business concerns awarded contracts and the dollar amount of such contracts awarded within each such designation to each of the following—
(I) qualified HUBZone small business concerns;
(II) small business concerns owned and controlled by women;
(III) small business concerns owned and controlled by service-disabled veterans; and
(IV) small business concerns owned and controlled by socially and economically disadvantaged individuals.
(B) Best in class defined
The term "best in class" has the meaning given such term by the Director of the Office of Management and Budget.
(C) Effective date
The Administrator shall report on the information described by subparagraph (A) beginning on the date that such information is available in the Federal Procurement Data System, the System for Award Management, or any successor to such systems.
(i) Small business set-asides
Nothing in this chapter or any other provision of law precludes exclusive small business set-asides for procurements of architectural and engineering services, research, development, test and evaluation, and each Federal agency is authorized to develop such set-asides to further the interests of small business in those areas.
(j) Small business reservation
(1) Each contract for the purchase of goods and services that has an anticipated value greater than the micro-purchase threshold, but not greater than the simplified acquisition threshold shall be reserved exclusively for small business concerns unless the contracting officer is unable to obtain offers from two or more small business concerns that are competitive with market prices and are competitive with regard to the quality and delivery of the goods or services being purchased.
(2) In carrying out paragraph (1), a contracting officer shall consider a responsive offer timely received from an eligible small business offeror.
(3) Nothing in paragraph (1) shall be construed as precluding an award of a contract with a value not greater than $100,000 under the authority of subsection (a) of
(k) Office of Small and Disadvantaged Business Utilization; Director
There is hereby established in each Federal agency having procurement powers an office to be known as the "Office of Small and Disadvantaged Business Utilization". The management of each such office shall be vested in an officer or employee of such agency, with experience serving in any combination of the following roles: program manager, deputy program manager, or assistant program manager for Federal acquisition program; chief engineer, systems engineer, assistant engineer, or product support manager for Federal acquisition program; Federal contracting officer; small business technical advisor; contracts administrator for Federal Government contracts; attorney specializing in Federal procurement law; small business liaison officer; officer or employee who managed Federal Government contracts for a small business; or individual whose primary responsibilities were for the functions and duties of
(1) shall be known as the "Director of Small and Disadvantaged Business Utilization" for such agency;
(2) shall be appointed by the head of such agency to a position that is a Senior Executive Service position (as such term is defined under
(3) shall be responsible only to (including with respect to performance appraisals), and report directly and exclusively to, the head of such agency or to the deputy of such head, except that the Director for the Office of the Secretary of Defense shall be responsible only to (including with respect to performance appraisals), and report directly and exclusively to, such Secretary or the Secretary's designee;
(4) shall be responsible for the implementation and execution of the functions and duties under
(5) shall identify proposed solicitations that involve significant bundling of contract requirements, and work with the agency acquisition officials and the Administration to revise the procurement strategies for such proposed solicitations where appropriate to increase the probability of participation by small businesses as prime contractors, or to facilitate small business participation as subcontractors and suppliers, if a solicitation for a bundled contract is to be issued;
(6) shall assist small business concerns to obtain payments, required late payment interest penalties, or information regarding payments due to such concerns from an executive agency or a contractor, in conformity with
(7) shall have supervisory authority over personnel of such agency to the extent that the functions and duties of such personnel relate to functions and duties under
(8) shall assign a small business technical adviser to each office to which the Administration has assigned a procurement center representative—
(A) who shall be a full-time employee of the procuring activity and shall be well qualified, technically trained and familiar with the supplies or services purchased at the activity; and
(B) whose principal duty shall be to assist the Administration procurement center representative in his duties and functions relating to
(9) shall cooperate, and consult on a regular basis, with the Administration with respect to carrying out the functions and duties described in paragraph (4) of this subsection;
(10) shall make recommendations to contracting officers as to whether a particular contract requirement should be awarded pursuant to subsection (a) or
(11) shall review and advise such agency on any decision to convert an activity performed by a small business concern to an activity performed by a Federal employee;
(12) shall provide to the Chief Acquisition Officer and senior procurement executive of such agency advice and comments on acquisition strategies, market research, and justifications related to
(13) may provide training to small business concerns and contract specialists, except that such training may only be provided to the extent that the training does not interfere with the Director carrying out other responsibilities under this subsection;
(14) shall receive unsolicited proposals and, when appropriate, forward such proposals to personnel of the activity responsible for reviewing such proposals;
(15) shall carry out exclusively the duties enumerated in this chapter, and shall, while the Director, not hold any other title, position, or responsibility, except as necessary to carry out responsibilities under this subsection;
(16) shall submit, each fiscal year, to the Committee on Small Business of the House of Representatives and the Committee on Small Business and Entrepreneurship of the Senate a report describing—
(A) the training provided by the Director under paragraph (13) in the most recently completed fiscal year;
(B) the percentage of the budget of the Director used for such training in the most recently completed fiscal year;
(C) the percentage of the budget of the Director used for travel in the most recently completed fiscal year; and
(D) any failure of the agency to comply with
(17) shall, when notified by a small business concern prior to the award of a contract that the small business concern believes that a solicitation, request for proposal, or request for quotation unduly restricts the ability of the small business concern to compete for the award—
(A) submit the notice of the small business concern to the contracting officer and, if necessary, recommend ways in which the solicitation, request for proposal, or request for quotation may be altered to increase the opportunity for competition;
(B) inform the advocate for competition of such agency (as established under
(C) ensure that the small business concern is aware of other resources and processes available to address unduly restrictive provisions in a solicitation, request for proposal, or request for quotation, even if such resources and processes are provided by such agency, the Administration, the Comptroller General, or a procurement technical assistance program established under
(18) shall review summary data provided by purchase card issuers of purchases made by the agency greater than the micro-purchase threshold (as defined under
(19) shall provide assistance to a small business concern awarded a contract or subcontract under this chapter or under title 10 or title 41 in finding resources for education and training on compliance with contracting regulations (including the Federal Acquisition Regulation) after award of such a contract or subcontract;
(20) shall review all subcontracting plans required by paragraph (4) or (5) of
(21) shall consult with the appropriate personnel from the relevant Federal agency to assist small business concerns participating in a SBIR or STTR program under
This subsection shall not apply to the Administration.
(l) Procurement center representatives
(1)
(2)
(A) attend any provisioning conference or similar evaluation session during which determinations are made as to whether requirements are to be procured through other than full and open competition and make recommendations with respect to such requirements to the members of such conference or session;
(B) review, at any time, barriers to small business participation in Federal contracting previously imposed on goods and services through acquisition method coding or similar procedures, and recommend to personnel of the appropriate activity the prompt reevaluation of such barriers;
(C) review barriers to small business participation in Federal contracting arising out of restrictions on the rights of the United States in technical data, and, when appropriate, recommend that personnel of the appropriate activity initiate a review of the validity of such an asserted restriction;
(D) review any bundled or consolidated solicitation or contract in accordance with this chapter;
(E) have access to procurement records and other data of the procurement center commensurate with the level of such representative's approved security clearance classification, with such data provided upon request in electronic format, when available;
(F) receive unsolicited proposals from small business concerns and transmit such proposals to personnel of the activity responsible for reviewing such proposals, who shall furnish the procurement center representative with information regarding the disposition of any such proposal;
(G) consult with the Director the Office of Small and Disadvantaged Business Utilization of that agency and the agency personnel described in paragraph 6 (7) and (8) of subsection (k) with regard to agency insourcing decisions covered by subsection (k)(11);
(H) be an advocate for the maximum practicable utilization of small business concerns in Federal contracting, including by advocating against the consolidation or bundling of contract requirements when not justified;
(I) assist small business concerns with finding resources for education and training on compliance with contracting regulations (including the Federal Acquisition Regulation) after award of a contract or subcontract;
(J) consult with the appropriate personnel from the relevant Federal agency, to assist small business concerns participating in a SBIR or STTR program under section 9 with Phase III; 5
(K) carry out any other responsibility assigned by the Administrator.
(3)
(4) The Administration shall assign and co-locate at least two small business technical advisers to each major procurement center in addition to such other advisers as may be authorized from time to time. The sole duties of such advisers shall be to assist the procurement center representative for the center to which such advisers are assigned in carrying out the functions described in paragraph (2) and the representatives referred to in subsection (k)(6).
(5)
(A)
(i) be a full-time employee of the Administration;
(ii) be fully qualified, technically trained, and familiar with the goods and services procured by the major procurement center to which that representative is assigned; and
(iii) have the certification described in subparagraph (C).
(B)
(C)
(i)
(ii)
(I)
(II)
(aa) be included in any initial job posting for the position of a procurement center representative; and
(bb) apply to any person appointed as a procurement center representative after January 3, 2013.
(6)
(7)
(A)
(B)
(8)
(9)
(A) may not limit the scope of review by the procurement center representative for any solicitation of a contract or task order without regard to whether the contract or task order or part of the contract or task order is set aside for small business concerns, whether 1 or more contracts or task order awards are reserved for small business concerns under a multiple award contract, or whether or not the solicitation would result in a bundled or consolidated contract (as defined in subsection (s)) or a bundled or consolidated task order; and
(B) shall, unless the contracting agency requests a review, limit the scope of review by the procurement center representative for any solicitation of a contract or task order if such solicitation is awarded by or for the Department of Defense and—
(i) is conducted pursuant to
(ii) is a humanitarian operation as defined in
(iii) is for a contingency operation, as defined in
(iv) is to be awarded pursuant to an agreement with the government of a foreign country in which Armed Forces of the United States are deployed; or
(v) both the place of award and the place of performance are outside of the United States and its territories.
(m) Additional duties of procurement center representatives
All procurement center representatives (including those referred to in subsection (k)(6)), in addition to such other duties as may be assigned by the Administrator, shall increase, insofar as possible, the number and dollar value of procurements that may be used for the programs established under this section and
(n) Determination of labor surplus areas
For purposes of this section, the determination of labor surplus areas shall be made on the basis of the criteria in effect at the time of the determination, except that any minimum population criteria shall not exceed twenty-five thousand. Such determination, as modified by the preceding sentence, shall be made by the Secretary of Labor.
(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
(p) Access to data
(1) Bundled or consolidated contract defined
In this subsection, the term "bundled or consolidated contract" has the meaning given in subsection (s).
(2) Database
Not later than 180 days after December 21, 2000, the Administrator of the Small Business Administration shall develop and shall thereafter maintain a database containing data and information regarding—
(A) each bundled contract awarded by a Federal agency; and
(B) each small business concern that has been displaced as a prime contractor as a result of the award of such a contract.
(3) Analysis
For each bundled contract that is to be recompeted as a bundled contract, the Administrator shall determine—
(A) the amount of savings and benefits (in accordance with subsection (e)) achieved under the bundling of contract requirements; and
(B) whether such savings and benefits will continue to be realized if the contract remains bundled, and whether such savings and benefits would be greater if the procurement requirements were divided into separate solicitations suitable for award to small business concerns.
(4) Annual report on bundled or consolidated contracts
(A) In general
Not later than 1 year after December 21, 2000, and annually in March thereafter, the Administration shall transmit a report on bundled or consolidated contracts to the Committees on Small Business of the House of Representatives and the Senate.
(B) Contents
Each report transmitted under subparagraph (A) shall include—
(i) data on the number, arranged by industrial classification, of small business concerns displaced as prime contractors as a result of the award of bundled or consolidated contracts by Federal agencies; and
(ii) a description of the activities with respect to previously bundled or consolidated contracts of each Federal agency during the preceding year, including—
(I) data on the number and total dollar amount of all contract requirements that were included in bundled or consolidated contracts; and
(II) with respect to each bundled or consolidated contract, data or information on—
(aa) the justification for the bundling of contract requirements or the consolidation of contract requirements (as applicable);
(bb) the cost savings realized by the bundling of contract requirements or the consolidation of contract requirements (as applicable) over the life of the contract;
(cc) the extent to which maintaining contract requirements in a bundled or consolidated contract is projected to result in continued cost savings;
(dd) the extent to which the bundling of contract requirements or the consolidation of contract requirements (as applicable) complied with the contracting agency's small business subcontracting plan, including the total dollar value awarded to small business concerns as subcontractors and the total dollar value previously awarded to small business concerns as prime contractors; and
(ee) the impact of the bundling of contract requirements or the consolidation of contract requirements (as applicable) on small business concerns unable to compete as prime contractors for the contract and on the industries of such small business concerns, including a description of any changes to the proportion of any such industry that is composed of small business concerns.
(5) Access to data
(A) Federal procurement data system
To assist in the implementation of this section, the Administration shall have access to information collected through the Federal Procurement Data System.
(B) Agency procurement data sources
To assist in the implementation of this section, the head of each contracting agency shall provide to the Administrator data and information described in paragraphs (2) and (4).
(q) Reports related to procurement center representatives
(1) Teaming and joint venture requirements
(A) In general
Each Federal agency shall include in each solicitation for any multiple award contract above the substantial bundling threshold of the Federal agency a provision soliciting bids from any responsible source, including responsible small business concerns and teams or joint ventures of small business concerns.
(B) Teams
When evaluating an offer of a small business prime contractor that includes a proposed team of small business subcontractors for any multiple award contract above the substantial bundling threshold of the Federal agency, the head of the agency shall consider the capabilities and past performance of each first tier subcontractor that is part of the team as the capabilities and past performance of the small business prime contractor.
(C) Joint ventures
When evaluating an offer of a joint venture of small business concerns for any multiple award contract above the substantial bundling threshold of the Federal agency, if the joint venture does not demonstrate sufficient capabilities or past performance to be considered for award of a contract opportunity, the head of the agency shall consider the capabilities and past performance of each member of the joint venture as the capabilities and past performance of the joint venture.
(2) Policies on reduction of contract bundling
(A) In general
Not later than 1 year after September 27, 2010, the Federal Acquisition Regulatory Council established under
(i) establish a Government-wide policy regarding contract bundling, including regarding the solicitation of teaming and joint ventures under paragraph (1); and
(ii) require that the policy established under clause (i) be published on the website of each Federal agency.
(B) Rationale for contract bundling
Not later than 30 days after the date on which the head of a Federal agency submits data certifications to the Administrator for Federal Procurement Policy, the head of the Federal agency shall publish on the website of the Federal agency a list and rationale for any bundled contract for which the Federal agency solicited bids or that was awarded by the Federal agency.
(3) Reporting
Not later than 90 days after September 27, 2010, and every 3 years thereafter, the Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report regarding procurement center representatives and commercial market representatives, which shall—
(A) identify each area for which the Administration has assigned a procurement center representative or a commercial market representative;
(B) explain why the Administration selected the areas identified under subparagraph (A); and
(C) describe the activities performed by procurement center representatives and commercial market representatives.
(r) Multiple award contracts
Not later than 1 year after September 27, 2010, the Administrator for Federal Procurement Policy and the Administrator, in consultation with the Administrator of General Services, shall, by regulation, establish guidance under which Federal agencies may, at their discretion—
(1) set aside part or parts of a multiple award contract for small business concerns, including the subcategories of small business concerns identified in subsection (g)(2);
(2) notwithstanding the fair opportunity requirements under
(3) reserve 1 or more contract awards for small business concerns under full and open multiple award procurements, including the subcategories of small business concerns identified in subsection (g)(2).
(s) Data quality improvement plan
(1) In general
Not later than October 1, 2015, the Administrator of the Small Business Administration, in consultation with the Small Business Procurement Advisory Council, the Administrator for Federal Procurement Policy, and the Administrator of General Services, shall develop a plan to improve the quality of data reported on bundled or consolidated contracts in the Federal procurement data system (described in
(2) Plan requirements
The plan shall—
(A) describe the roles and responsibilities of the Administrator of the Small Business Administration, each Director of Small and Disadvantaged Business Utilization, the Administrator for Federal Procurement Policy, the Administrator of General Services, senior procurement executives, and Chief Acquisition Officers in—
(i) improving the quality of data reported on bundled or consolidated contracts in the Federal procurement data system; and
(ii) contributing to the annual report required by subsection (p)(4);
(B) recommend changes to policies and procedures, including training procedures of relevant personnel, to properly identify and mitigate the effects of bundled or consolidated contracts;
(C) recommend requirements for periodic and statistically valid data verification and validation; and
(D) recommend clear data verification responsibilities.
(3) Plan submission
The Administrator of the Small Business Administration shall submit the plan to the Committee on Small Business of the House of Representatives and the Committee on Small Business and Entrepreneurship of the Senate not later than December 1, 2016.
(4) Implementation
Not later than October 1, 2016, the Administrator of the Small Business Administration shall implement the plan described in this subsection.
(5) Certification
The Administrator shall annually provide to the Committee on Small Business of the House of Representatives and the Committee on Small Business and Entrepreneurship of the Senate a certification of the accuracy and completeness of data reported on bundled and consolidated contracts.
(6) Definitions
In this subsection, the following definitions apply:
(A) Chief Acquisition Officer; senior procurement executive
The terms "Chief Acquisition Officer" and "senior procurement executive" have the meanings given such terms in
(B) Bundled or consolidated contract
The term "bundled or consolidated contract" means a bundled contract (as defined in
(t) GAO report on Small Business Administration programs in Puerto Rico
Not later than one year after June 30, 2016, the Comptroller General of the United States shall submit to the Committee on Small Business of the House of Representatives and the Committee on Small Business and Entrepreneurship of the Senate a report on the application and utilization of contracting activities of the Administration (including contracting activities relating to HUBZone small business concerns) in Puerto Rico. The report shall also identify any provisions of Federal law that may create an obstacle to the efficient implementation of such contracting activities.
(u) Post-award compliance resources
The Administrator shall provide to small business development centers and entities participating in the Procurement Technical Assistance Cooperative Agreement Program under
(v) Regulatory changes and training materials
Not less than annually, the Administrator shall provide to the Defense Acquisition University (established under
(1) a list of all changes made in the prior year to regulations promulgated—
(A) by the Administrator that affect Federal acquisition; and
(B) by the Federal Acquisition Council that implement amendments to this chapter; and
(2) any materials the Administrator has developed that explain, train, or assist Federal agencies or departments or small business concerns with compliance with the regulations described in paragraph (1).
(w) Solicitation notice regarding administration of change orders for construction
(1) In general
With respect to any solicitation for the award of a contract for construction anticipated to be awarded to a small business concern, the agency administering such contract shall provide a notice along with the solicitation to prospective bidders and offerors that includes—
(A) information about the agency's policies or practices in complying with the requirements of the Federal Acquisition Regulation relating to the timely definitization of requests for an equitable adjustment; and
(B) information about the agency's past performance in definitizing requests for equitable adjustments in accordance with paragraph (2).
(2) Requirements for agencies
An agency shall provide the past performance information described under paragraph (1)(B) as follows:
(A) For the 3-year period preceding the issuance of the notice, to the extent such information is available.
(B) With respect to an agency that, on August 13, 2018, has not compiled the information described under paragraph (1)(B)—
(i) beginning 1 year after August 13, 2018, for the 1-year period preceding the issuance of the notice;
(ii) beginning 2 years after August 13, 2018, for the 2-year period preceding the issuance of the notice; and
(iii) beginning 3 years after August 13, 2018, and each year thereafter, for the 3-year period preceding the issuance of the notice.
(3) Format of past performance information
In the notice required under paragraph (1), the agency shall ensure that the past performance information described under paragraph (1)(B) is set forth separately for each definitization action that was completed during the following periods:
(A) Not more than 30 days after receipt of a request for an equitable adjustment.
(B) Not more than 60 days after receipt of a request for an equitable adjustment.
(C) Not more than 90 days after receipt of a request for an equitable adjustment.
(D) Not more than 180 days after receipt of a request for an equitable adjustment.
(E) Not more than 365 days after receipt of a request for an equitable adjustment.
(F) More than 365 days after receipt of a request for an equitable adjustment.
(G) After the completion of the performance of the contract through a contract modification addressing all undefinitized requests for an equitable adjustment received during the term of the contract.
(x) Small business credit for Puerto Rico businesses and covered territory businesses
(1) Credit for meeting contracting goals
If an agency awards a prime contract to Puerto Rico business or a covered territory business, or a prime contractor awards a subcontract (at any tier) to a subcontractor that is a Puerto Rico business or a covered territory business, during the period beginning on August 13, 2018, and ending on the date that is 4 years after such date, the value of the contract or subcontract shall be doubled for purposes of determining compliance with the goals for procurement contracts under subsection (g)(1)(A) during such period.
(2) Report
Along with the report required under subsection (h)(1), the head of each Federal agency shall submit to the Administrator, and make publicly available on the scorecard (as defined in subsection (y)), an analysis of the number and dollar amount of prime contracts awarded pursuant to paragraph (1) for each fiscal year of the period described in such paragraph.
(y) Scorecard program for evaluating Federal agency compliance with small business contracting goals
(1) Use of scorecard
The Administrator shall use a scorecard to annually evaluate whether each Federal agency is creating the maximum practicable opportunities for the award of prime contracts and subcontracts to small business concerns, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women, by assigning a score to each Federal agency for the previous fiscal year.
(2) Contents of scorecard
The scorecard shall include, for each Federal agency and Governmentwide, the following information:
(A) A determination of whether a Federal agency or the Federal Government, as applicable, met each of the prime contract goals established pursuant to subsection (g)(1)(B) with respect to small business concerns, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women.
(B) A determination of whether a Federal agency or the Federal Government, as applicable, met each of the subcontract goals established pursuant to such section with respect to small business concerns, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women.
(C) The number of small business concerns, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women awarded prime contracts in each North American Industry Classification System code during the fiscal year and a comparison to the number of awarded contracts during the prior fiscal year, if available.
(D) The number of small business concerns, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women awarded subcontracts in each North American Industry Classification System code during the fiscal year and a comparison to the number of awarded subcontracts during the prior fiscal year, if available.
(E) Any other factors that the Administrator deems important to achieve the maximum practicable utilization of small business concerns, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women.
(3) Weighted factors
In using the scorecard to evaluate and assign a score to a Federal agency, the Administrator shall base—
(A) fifty percent of the score on the dollar value of prime contracts described in paragraph (2)(A); and
(B) fifty percent of the score on the information provided in subparagraphs (B) through (E) of paragraph (2), weighted in a manner determined by the Administrator to encourage the maximum practicable opportunity for the award of prime contracts and subcontracts to small business concerns, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women.
(4) Additional requirements for scorecards
The scorecard shall include, for each Federal agency and Governmentwide, the following information with respect to prime contracts:
(A) The number (expressed as a percentage) and total dollar amount of awards made to small business concerns owned and controlled by women through sole source contracts and competitions restricted to small business concerns owned and controlled by women under
(B) The number (expressed as a percentage) and total dollar amount of awards made to small business concerns owned and controlled by qualified HUBZone small business concerns through sole source contracts and competitions restricted to qualified HUBZone small business concerns under
(C) The number (expressed as a percentage) and total dollar amount of awards made to small business concerns owned and controlled by service-disabled veterans through sole source contracts and competitions restricted to small business concerns owned and controlled by service-disabled veterans under
(D) The number (expressed as a percentage) and total dollar amount of awards made to socially and economically disadvantaged small business concerns under
(5) Publication
The scorecard used by the Administrator under this subsection shall be submitted to the President and Congress along with the report submitted under subsection (h)(2).
(6) Scorecard defined
In this subsection, the term "scorecard" means any summary using a rating system to evaluate the efforts of a Federal agency to meet goals established under subsection (g)(1)(B) that—
(A) includes the measures described in paragraph (2); and
(B) assigns a score to each Federal agency evaluated.
(
Editorial Notes
References in Text
The Federal Funding Accountability and Transparency Act of 2006, referred to in subsec. (h)(2)(F), is
Section 712 of the Business Opportunity Development Reform Act of 1988 (
Section 7102 of the Federal Acquisition Streamlining Act of 1994, referred to in subsec. (j)(3), is section 7102 of
Codification
In subsec. (c)(1)(A), "
In subsec. (c)(2)(B), "
In subsec. (q)(2)(A), "
In subsec. (r)(2), "
Section 868(b) of
Prior Provisions
Prior similar provisions were contained in section 214 of act July 30, 1953, ch. 282, title II,
Amendments
2023—Subsec. (g)(1)(A)(ii).
2022—Subsec. (p)(1).
Subsec. (p)(2).
Subsec. (p)(4).
Subsec. (p)(4)(A).
Subsec. (p)(4)(B)(i).
Subsec. (p)(4)(B)(ii).
Subsec. (p)(4)(B)(ii)(I).
Subsec. (p)(4)(B)(ii)(II).
Subsec. (p)(4)(B)(ii)(II)(aa).
Subsec. (p)(4)(B)(ii)(II)(bb).
Subsec. (p)(4)(B)(ii)(II)(cc).
Subsec. (p)(4)(B)(ii)(II)(dd).
Subsec. (p)(4)(B)(ii)(II)(ee).
Subsec. (p)(5)(B).
Subsec. (x)(2).
Subsec. (y).
Subsec. (y)(1).
Subsec. (y)(2).
Subsec. (y)(2)(A).
Subsec. (y)(2)(B).
Subsec. (y)(3).
Subsec. (y)(3)(A).
Subsec. (y)(3)(B).
Subsec. (y)(4).
Subsec. (y)(5).
Subsec. (y)(6).
Subsec. (y)(7).
Subsec. (y)(8).
2021—Subsec. (e)(5).
Subsec. (k)(17)(B).
Subsec. (k)(17)(C).
Subsec. (k)(18).
Subsec. (r)(2).
Subsecs. (u), (v).
Subsec. (x)(3).
2019—Subsec. (h)(4).
Subsec. (k)(21).
Subsec. (l)(2)(J), (K).
Subsec. (x).
Subsec. (x)(1).
Subsec. (x)(3).
2018—Subsec. (j)(3).
Subsec. (k)(10).
Subsec. (m).
Subsec. (w).
Subsec. (x).
2017—Subsec. (a)(1)(C).
Subsec. (h)(2)(E)(i)(V), (VI).
Subsec. (h)(2)(E)(ii)(VI), (VII).
Subsec. (h)(2)(E)(iii)(VII), (VIII).
Subsec. (h)(2)(E)(iv)(VII), (VIII).
Subsec. (h)(2)(E)(v)(VI).
Subsec. (h)(2)(E)(vi)(VI).
Subsec. (h)(2)(E)(vii)(VI).
Subsec. (h)(2)(E)(viii)(IX), (X).
Subsec. (j)(1).
2016—Subsec. (a).
Subsec. (g)(2)(B).
Subsec. (h)(3).
Subsec. (k).
Subsec. (k)(10).
Subsec. (k)(16)(D).
Subsec. (k)(18).
Subsec. (k)(19).
Subsec. (k)(20).
Subsec. (l)(2)(I), (J).
Subsec. (l)(9).
Subsec. (t).
Subsec. (u).
Subsec. (v).
2015—Subsec. (e)(3).
Subsec. (e)(4).
Subsec. (f).
Subsec. (g)(1)(A)(i).
Subsec. (k)(17).
Subsec. (l)(5)(A)(iii).
Subsec. (l)(5)(C).
Subsec. (q)(1).
Subsec. (s)(4) to (6).
2014—Subsec. (g)(3).
Subsec. (h)(2)(E)(viii)(V) to (VIII).
Subsec. (s).
2013—Subsec. (e)(1).
Subsec. (g)(1).
Subsec. (g)(2)(A).
Subsec. (g)(2)(D).
Subsec. (g)(2)(E), (F).
"(E) The head of each Federal agency, in attempting to attain the participation described in subparagraph (D), shall consider—
"(i) contracts awarded as the result of unrestricted competition; and
"(ii) contracts awarded after competition restricted to eligible small business concerns under this section and under the program established under
"(F)(i) Each procurement employee or program manager described in clause (ii) shall communicate to the subordinates of the procurement employee or program manager the importance of achieving small business goals.
"(ii) A procurement employee or program manager described in this clause is a senior procurement executive, senior program manager, or Director of Small and Disadvantaged Business Utilization of a Federal agency having contracting authority."
Subsec. (h).
Subsec. (h)(1)(D).
Subsec. (k).
Subsec. (k)(1).
Subsec. (k)(2).
Subsec. (k)(3).
Subsec. (k)(4).
Subsec. (k)(5).
Subsec. (k)(6).
Subsec. (k)(7).
Subsec. (k)(8).
Subsec. (k)(8)(A).
Subsec. (k)(9).
Subsec. (k)(10).
Subsec. (k)(11) to (16).
Subsec. (l).
Subsec. (l)(1).
Subsec. (l)(2).
Subsec. (l)(2)(B).
Subsec. (l)(2)(C).
Subsec. (l)(2)(D).
Subsec. (l)(2)(E).
Subsec. (l)(2)(F) to (I).
"(F) receive unsolicited engineering proposals and, when appropriate (i) conduct a value analysis of such proposal to determine whether such proposal, if adopted, will result in lower costs to the United States without substantially impeding legitimate acquisition objectives and forward to personnel of the appropriate activity recommendations with respect to such proposal, or (ii) forward such proposals without analysis to personnel of the activity responsible for reviewing such proposals and who shall furnish the breakout procurement center representative with information regarding the disposition of any such proposal; and
"(G) review the systems that account for the acquisition and management of technical data within the procurement center to assure that such systems provide the maximum availability and access to data needed for the preparation of offers to sell to the United States those supplies to which such data pertain which potential offerors are entitled to receive."
Subsec. (l)(3).
Subsec. (l)(4).
Subsec. (l)(5).
"(A) The breakout procurement center representatives and technical advisers assigned pursuant to this subsection shall be—
"(i) full-time employees of the Administration; and
"(ii) fully qualified, technically trained, and familiar with the supplies and services procured by the major procurement center to which they are assigned.
"(B) In addition to the requirements of subparagraph (A), each breakout procurement center representative, and at least one technical adviser assigned to such representative, shall be an accredited engineer."
Subsec. (l)(6).
Subsec. (l)(7).
Subsec. (l)(8).
Subsec. (o).
Subsec. (p).
Subsec. (q).
2010—Subsec. (g)(1).
Subsec. (g)(2).
Subsec. (h)(2).
Subsec. (q).
Subsec. (r).
2000—Subsec. (a).
Subsec. (p).
1999—Subsec. (g)(1).
Subsec. (g)(2).
Subsec. (h)(1).
Subsec. (h)(2).
Subsec. (h)(2)(A), (D), (E).
1997—Subsec. (a).
Subsec. (e).
Subsec. (g)(1).
Subsec. (g)(2).
Subsec. (h).
Subsec. (k)(5) to (10).
1996—Subsec. (g)(2).
1994—Subsec. (c)(2)(A).
Subsec. (c)(7).
Subsec. (e).
"(1) concerns which are small business concerns and which are located in labor surplus areas, on the basis of a total set-aside;
"(2) concerns which are small business concerns, on the basis of a total set-aside;
"(3) concerns which are small business concerns and which are located in a labor surplus area, on the basis of a partial set-aside;
"(4) concerns which are small business concerns, on the basis of a partial set-aside."
Subsec. (f).
"(1) are not eligible under subsection (e) of this section;
"(2) are not small business concerns; and
"(3) will perform a substantial proportion of the production on those contracts and subcontracts within areas of concentrated unemployment or underemployment or within labor surplus areas."
Subsec. (g)(1).
Subsec. (g)(2).
Subsec. (h)(1), (2)(A), (D), (E).
Subsec. (h)(2)(F).
Subsec. (j).
1992—Subsec. (c)(1)(A).
Subsec. (c)(2)(B).
Subsec. (k)(3), (5).
Subsec. (k)(9).
Subsec. (l)(6).
Subsec. (m)(1).
Subsec. (m)(2)(B).
Subsec. (m)(2)(C).
1991—Subsec. (k)(5).
1990—Subsec. (a).
Subsec. (j).
1989—Subsec. (h)(2)(A).
Subsec. (m)(1)(A).
1988—Subsec. (c).
Subsec. (g).
Subsec. (h).
Subsec. (k)(3).
Subsec. (k)(5) to (8).
Subsec. (k)(9).
Subsec. (l)(2)(D).
Subsec. (l)(2)(E).
Subsec. (l)(3).
Subsec. (l)(6).
Subsec. (l)(7).
Subsec. (m).
1987—Subsec. (a).
Subsec. (g).
Subsec. (o)(1).
Subsec. (o)(1)(A).
Subsec. (o)(3).
Subsec. (p).
"(1) Except as provided in paragraphs (2) and (3), the head of any Federal agency shall, within five days of the agency's decision to set aside a procurement for small business concerns under this section, provide the names and addresses of the small business concerns expected to respond to the procurement to any person who requests such information.
"(2) The Secretary of Defense may decline to provide information under paragraph (1) in order to protect national security interests.
"(3) The head of a Federal agency is not required to release any information under paragraph (1) that is not required to be released under
1986—Subsec. (a).
Subsec. (g).
Subsec. (j).
Subsec. (k)(3).
Subsec. (n).
Subsecs. (o), (p).
1984—Subsecs. (l), (m).
1980—Subsec. (c).
Subsec. (d).
Subsec. (e).
Subsec. (f).
1978—Subsec. (f).
Subsecs. (g) to (k).
Subsec. (l).
1977—
Statutory Notes and Related Subsidiaries
Change of Name
Committee on Small Business of Senate changed to Committee on Small Business and Entrepreneurship of Senate. See Senate Resolution No. 123, One Hundred Seventh Congress, June 29, 2001.
Effective Date of 2017 Amendment
Effective Date of 1997 Amendment
Amendment by
Effective Date of 1996 Amendment
For effective date and applicability of amendment by
Effective Date of 1994 Amendment
For effective date and applicability of amendment by sections 4004 and 7106(a) of
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1988 Amendment
Amendment by sections 502 and 503 of
Amendment by
Effective Date of 1987 Amendment
Amendment by section 10(a)(1), (b)(1) of
Effective Date of 1986 Amendment
Amendment by section 101(c) [title X, §921(a), (b)(1), (c)(2)–(e)] of
Effective Date of 1980 Amendment
Amendment by
Eliminating Self-Certification for Service-Disabled Veteran-Owned Small Businesses
"(a)
"(1)
"(2)
"(b)
"(1)
"(2)
"(c)
"(1) if the small business concern files a certification application with the Administrator before the end of the 1-year period beginning on the date of the enactment of this Act [Dec. 22, 2023], maintain such self-certification until the Administrator makes a determination with respect to such certification; and
"(2) if the small business concern does not file a certification application before the end of the 1-year period beginning on the date of enactment of this Act, lose, at the end of such 1-year period, any self-certification of the small business concern as a small business concern owned and controlled by service-disabled veterans.
"(d)
Compliance of Offices of Small Business and Disadvantaged Business Utilization
"(a)
"(b)
"(1) the date that is 120 days after the date on which a determination is made under subsection (a); and
"(2) 120 days after the date of the enactment of this Act [Jan. 1, 2021]."
Training To Be Updated
Scorecard Program for Evaluating Federal Agency Compliance With Small Business Contracting Goals
Additional Requirements for the Small Business Preference Programs for Prime and Subcontract Federal Procurement Goals and Achievements
"(1) agency subcontracting goals are established on the basis of realistically achievable improvements to levels of subcontracting rather than on the basis of an average of previous years' subcontracting performance;
"(2) agency contracting and subcontracting goals are established in a manner that does not exclude categories of contracts on the basis of—
"(A) the type of goods or services for which the agency contracts;
"(B) in the case of contracts subject to competitive procedures under
"(i) whether or not funding for the contracts is made directly available to the agency by an Appropriations Act or is made available by reimbursement from another agency or account; or
"(ii) whether or not the contract is subject to the Federal Acquisition Regulation; and
"(3) whenever an agency contracting or subcontracting goal is established at a level lower than the Governmentwide goal for small business concerns or the relevant category of small business concerns, the Administration is required to document the basis for the decision to establish such lower goal."
Electronic Procurement Center Representative
"(1)
"(2)
Small Business Teams Pilot Program
"(a)
"(1) the term 'Pilot Program' means the Small Business Teaming Pilot Program established under subsection (b); and
"(2) the term 'eligible organization' means a well-established national organization for small business concerns with the capacity to provide assistance to small business concerns (which may be provided with the assistance of the Administrator) relating to—
"(A) customer relations and outreach;
"(B) team relations and outreach; and
"(C) performance measurement and quality assurance.
"(b)
"(c)
"(d)
"(e)
"(f)
"(g)
[For definitions of "Administrator" and "small business concern" as used in section 1314 of
Manufacturing Contracts Through Manufacturing Application and Education Centers
Pilot Program for Very Small Business Concerns
Expedited Resolution of Contract Administration Matters
"(a)
"(A) to make every reasonable effort to respond in writing within 30 days to any written request made to a contracting officer with respect to a matter relating to the administration of a contract that is received from a small business concern; and
"(B) in the event that the contracting officer is unable to reply within the 30-day period, to transmit to the contractor within such period a written notification of a specific date by which the contracting officer expects to respond.
"(2) The provisions shall not apply to a request for a contracting officer's decision under the Contract Disputes Act of 1978 ([former] 41 U.S.C. 601 et seq.) [see
"(b)
"(c)
Contracting Program for Certain Small Businesses
"(a)
"(A) less than full and open competition by restricting the competition for such awards to small business concerns owned and controlled by socially and economically disadvantaged individuals described in subsection (d)(3)(C) of section 8 of the Small Business Act (
"(B) a price evaluation preference not in excess of 10 percent when evaluating an offer received from such a small business concern as the result of an unrestricted solicitation.
"(2) Paragraph (1) does not apply to the Department of Defense, the Coast Guard, and the National Aeronautics and Space Administration.
"(b)
"(1)
"(2)
"(A) conditions for the use of advance payments;
"(B) provisions for contract payment terms that provide for—
"(i) accelerated payment for work performed during the period for contract performance; and
"(ii) full payment for work performed;
"(C) guidance on how contracting officers may use, in solicitations for various classes of products or services, a price evaluation preference pursuant to subsection (a)(1)(B), to provide a reasonable advantage to small business concerns owned and controlled by socially and economically disadvantaged individuals without effectively eliminating any participation of other small business concerns; and
"(D)(i) procedures for a person to request the head of a Federal agency to determine whether the use of competitions restricted to small business concerns owned and controlled by socially and economically disadvantaged individuals at a contracting activity of such agency has caused a particular industry category to bear a disproportionate share of the contracts awarded to attain the goal established for that contracting activity; and
"(ii) guidance for limiting the use of such restricted competitions in the case of any contracting activity and class of contracts determined in accordance with such procedures to have caused a particular industry category to bear a disproportionate share of the contracts awarded to attain the goal established for that contracting activity.
"(c)
[For transfer of authorities, functions, personnel, and assets of the Coast Guard, including the authorities and functions of the Secretary of Transportation relating thereto, to the Department of Homeland Security, and for treatment of related references, see
Small Business Procurement Advisory Council
Procurement Procedures Under Small Business Competitiveness Demonstration Program Act of 1988
Modifications of Test Plan and Policy Direction Under Small Business Competitiveness Demonstration Program Act of 1988
Contract Bundling Study
Small Business Competitiveness Demonstration Program
[
["(1) shall take effect on the date of enactment of this Act [Sept. 27, 2010]; and
["(2) apply to the first full fiscal year after the date of enactment of this Act."]
Segmentation of Industry Category of Shipbuilding and Ship Repair
Programs for Blind and Handicapped Individuals; Report on Impact on Small Business Concerns
Task Force on Purchases From Blind and Severely Handicapped Individuals; Establishment; Meetings; Recommendations
Standards for Measuring Cost Savings From Breakout Procurement Center Representatives
"(1) The Administrator of the Small Business Administration and the Comptroller General of the United States shall jointly establish standards for measuring cost savings achieved through the efforts of breakout procurement center representatives and for measuring the extent to which competition has been increased as a result of such efforts. Thereafter, the Administrator shall annually prepare and submit to the Congress a report setting forth—
"(A) the cost savings achieved during the year covered by such report through the efforts of breakout procurement center representatives;
"(B) an evaluation of the extent to which competition has been increased as a result of such efforts; and
"(C) such other information as the Administrator may deem appropriate.
"(2) Within 180 days following the submission of the second annual report to Congress by the Administrator, the Comptroller General shall report to the Congress an evaluation of the Administration's adherence to the standards jointly established and the accuracy of the information the Administration has submitted to the Congress."
Executive Documents
Ex. Ord. No. 13157. Increasing Opportunities for Women-Owned Small Businesses
Ex. Ord. No. 13157, May 23, 2000, 65 F.R. 34035, provided:
By the authority vested in me as President by the Constitution and the laws of the United States of America, including the Small Business Act,
(a) working with each agency to develop and implement policies to achieve the participation goals for WOSBs for the executive branch and individual agencies;
(b) advising agencies on how to implement strategies that will increase the participation of WOSBs in Federal procurement;
(c) evaluating, on a semiannual basis, using the Federal Procurement Data System (FPDS), the achievement of prime and subcontract goals and actual prime and subcontract awards to WOSBs for each agency;
(d) preparing a report, which shall be submitted by the Administrator of the SBA to the President, through the Interagency Committee on Women's Business Enterprise and the Office of Federal Procurement Policy (OFPP), on findings based on the FPDS, regarding prime contracts and subcontracts awarded to WOSBs;
(e) making recommendations and working with Federal agencies to expand participation rates for WOSBs, with a particular emphasis on agencies in which the participation rate for these businesses is less than 5 percent;
(f) providing a program of training and development seminars and conferences to instruct women on how to participate in the SBA's 8(a) [
(g) developing and implementing a single uniform Federal Government-wide website, which provides links to other websites within the Federal system concerning acquisition, small businesses, and women-owned businesses, and which provides current procurement information for WOSBs and other small businesses;
(h) developing an interactive electronic commerce database that allows small businesses to register their businesses and capabilities as potential contractors for Federal agencies, and enables contracting officers to identify and locate potential contractors; and
(i) working with existing women-owned business organizations, State and local governments, and others in order to promote the sharing of information and the development of more uniform State and local standards for WOSBs that reduce the burden on these firms in competing for procurement opportunities.
(a) designating a senior acquisition official who will work with the SBA to identify and promote contracting opportunities for WOSBs;
(b) requiring contracting officers, to the maximum extent practicable, to include WOSBs in competitive acquisitions;
(c) prescribing procedures to ensure that acquisition planners, to the maximum extent practicable, structure acquisitions to facilitate competition by and among small businesses, HUBZone small businesses, SDBs, and WOSBs, and providing guidance on structuring acquisitions, including, but not limited to, those expected to result in multiple award contracts, in order to facilitate competition by and among these groups;
(d) implementing mentor-protege programs, which include women-owned small business firms; and
(e) offering industry-wide as well as industry-specific outreach, training, and technical assistance programs for WOSBs including, where appropriate, the use of Government acquisitions forecasts, in order to assist WOSBs in developing their products, skills, business planning practices, and marketing techniques.
William J. Clinton.
Ex. Ord. No. 13170. Increasing Opportunities and Access for Disadvantaged Businesses
Ex. Ord. No. 13170, Oct. 6, 2000, 65 F.R. 60827, provided:
By the authority vested in me as President by the Constitution and the laws of the United States of America, including the Small Business Act (
(a) Each department and agency with procurement authority shall:
(i) aggressively seek to ensure that 8(a)s, SDBs, and MBEs are aware of future prime contracting opportunities through wide dissemination of contract announcements, including sources likely to reach 8(a)s, SDBs, other small businesses, and MBEs. Each department and agency shall use all available forms of communication to implement this provision, including the Internet, speciality press, and trade press;
(ii) work with the Small Business Administration (SBA) to ensure that information regarding sole source contracts awarded through the section 8(a) program receives the widest dissemination possible to 8(a)s;
(iii) ensure that the price evaluation preference programs authorized by the Federal Acquisition Streamlining Act of 1994 [
(iv) aggressively use the firms in the section 8(a) program, particularly in the developmental stage of the program, so that these firms have an opportunity to overcome artificial barriers to Federal contracting and gain access to the Federal procurement arena;
(v) ensure that department and agency heads take all reasonable steps so that prime contractors meet or exceed Federal subcontracting goals, and enforce subcontracting commitments as required by the Small Business Act (
(vi) encourage the establishment of business-to-business mentoring and teaming relationships, including the implementation of Mentor-Protege programs, to foster the development of the technical and managerial capabilities of 8(a)s and SDBs and to facilitate long-term business relationships;
(vii) offer information, training, and technical assistance programs for 8(a)s and SDBs including, where appropriate, Government acquisition forecasts in order to assist 8(a)s and SDBs in developing their products, skills, business planning practices, and marketing techniques;
(viii) train program and procurement officials regarding the policy of including 8(a)s and SDBs in Federal procurement. This includes prescribing procedures to ensure that acquisition planners, to the maximum extent practicable, structure acquisitions to facilitate competition by SDBs and 8(a)s, including their participation in the competition of multiple award requirements;
(ix) provide the information required by the Department of Commerce when it requests data to develop the benchmarks used in the price evaluation preference programs authorized by the Federal Acquisition Streamlining Act of 1994;
(x) ensure that Directors of Offices of Small and Disadvantaged Business Utilization carry out their responsibilities to maximize the participation of 8(a)s and SDBs in Federal procurement and, in particular, ensure that the Directors report directly to the head of each department or agency as required by law; and
(xi) as required by law, establish with the Small Business Administration small business goals to ensure that the government-wide goal for participation of small business concerns is not less than 23 percent of Federal prime contracts. Where feasible and consistent with the effective and efficient performance of its mission, each agency shall establish a goal of achieving a participation rate for SDBs of not less than 5 percent of the total value of prime contract awards for each fiscal year and of not less than 5 percent of the total value of subcontract awards for each year. Each agency shall also establish a goal for awards made to 8(a) firms pursuant to section 8(a) of the Small Business Act [
(b) Each department and agency with procurement authority shall:
(i) develop a long-term comprehensive plan to implement the requirements of section 2(a) of this order and submit this plan to the Director of the Office of Management and Budget (OMB) within 90 days of the date of this order. The Director of OMB shall review each plan and report to the President on the sufficiency of each plan to carry out the terms of this order; and
(ii) annually, by April 30 each year, assess its efforts and the results of those efforts to increase utilization of 8(a)s, SDBs, and MBEs as both prime contractors and subcontractors and report on those efforts to the President through the Director of OMB, who shall review the evaluations made of the agency assessments by the Small Business Administration.
(a) evaluate on a semi-annual basis, using the Federal Procurement Data System (FPDS), the achievement of government-wide prime and subcontract goals and the actual prime and subcontract awards to 8(a)s and SDBs for each department and agency. The OMB shall review SBA's evaluation;
(b) ensure that Procurement Center Representatives receive adequate training regarding the section 8(a) and SDB programs and that they consistently and aggressively seek opportunities for maximizing the use of 8(a)s and SDBs in department and agency procurements; and
(c) ensure that each department and agency's small and disadvantaged business procurement goals as well as the amount of procurement of each department and agency with 8(a)s, SDBs, and MBEs is publicly available in an easily accessible and understandable format such as through publication on the Internet.
(a) This order shall be carried out to the extent permitted by law and consistent with the Administration's priorities and appropriations.
(b) This order is not intended and should not be construed to create any right or benefit, substantive or procedural, enforceable at law by a party against the United States, its agencies, its officers, or its employees.
William J. Clinton.
Delegation of Authority To Establish Annual Goals for Participation of Small Business Concerns in Procurement Contracts
Memorandum of the President of the United States, June 6, 1990, 55 F.R. 27453–27455, provided:
Memorandum for the Director of the Office of Management and Budget
By the authority vested in me as President by the Constitution and laws of the United States, including section 15(g) of the Small Business Act, as amended [subsec. (g) of this section], and
You are authorized and directed to publish this memorandum in the Federal Register.
George Bush.
Continued Commitment to Small, Small Disadvantaged, and Small Women-Owned Businesses in Federal Procurement
Memorandum of President of the United States, Oct. 13, 1994, 59 F.R. 52397, provided:
Memorandum for the Heads of Executive Departments and Agencies [and] the President's Management Council
It is the policy of the Federal Government that a fair proportion of its contracts be placed with small, small disadvantaged, and small women-owned businesses. Such businesses should also have the maximum practicable opportunity to participate as subcontractors in contracts awarded by the Federal Government consistent with efficient contract performance. I am committed to the continuation of this policy. Therefore, I ask that you encourage the use of various tools, including set-asides, price preferences, and section 8(a) of the Small Business Act (
The Federal Acquisition Streamlining Act of 1994 [
This memorandum shall be published in the Federal Register.
William J. Clinton.
1 So in original. Probably should be "business".
2 So in original. Probably should be "section".
3 See References in Text note below.
4 So in original. The comma probably should be a semicolon.
5 So in original. Probably should be followed by "and".
6 So in original. Probably should be "paragraphs".
7 So in original. Probably should be "the procurement center representative".
§644a. Small Business Procurement Advisory Council
(a) Establishment
There is hereby established an interagency council to be known as the "Small Business Procurement Advisory Council" (hereinafter in this section referred to as the "Council").
(b) Duties
The duties of the Council are—
(1) to develop positions on proposed procurement regulations affecting the small business community;
(2) to submit comments reflecting such positions to appropriate regulatory authorities;
(3) to conduct reviews of each Office of Small and Disadvantaged Business Utilization established under
(4) to identify best practices for maximizing small business utilization in Federal contracting that may be implemented by Federal agencies having procurement powers; and
(5) to submit, annually, to the Committee on Small Business of the House of Representatives and the Committee on Small Business and Entrepreneurship of the Senate a report describing—
(A) the comments submitted under paragraph (2) during the 1-year period ending on the date on which the report is submitted, including any outcomes related to the comments;
(B) the results of reviews conducted under paragraph (3) during such 1-year period; and
(C) best practices identified under paragraph (4) during such 1-year period.
(c) Membership
The Council shall be composed of the following members:
(1) The Administrator of the Small Business Administration (or the designee of the Administrator).
(2) The Director of the Minority Business Development Agency.
(3) The head of each Office of Small and Disadvantaged Business Utilization in each Federal agency having procurement powers.
(d) Chairman
The Council shall be chaired by the Administrator of the Small Business Administration (or the designee of the Administrator).
(e) Meetings
The Council shall meet at the call of the chairman as necessary to consider proposed procurement regulations affecting the small business community.
(f) Consideration of Council comments
The Federal Acquisition Regulatory Council and other appropriate regulatory authorities shall consider comments submitted in a timely manner pursuant to subsection (b)(2).
(
Editorial Notes
Codification
Section was formerly set out as a note under
Section was enacted as part of the Federal Acquisition Streamlining Act of 1994, and not as part of the Small Business Act which comprises this chapter.
Amendments
2013—Subsec. (b)(3) to (5).
Subsec. (c)(3).
Subsec. (d).
§645. Offenses and penalties
(a) False statements; overvaluation of securities
Whoever makes any statement knowing it to be false, or whoever willfully overvalues any security, for the purpose of obtaining for himself or for any applicant any loan, or extension thereof by renewal, deferment of action, or otherwise, or the acceptance, release, or substitution of security therefor, or for the purpose of influencing in any way the action of the Administration, or for the purpose of obtaining money, property, or anything of value, under this chapter, shall be punished by a fine of not more than $5,000 or by imprisonment for not more than two years, or both.
(b) Embezzlement, etc.
Whoever, being connected in any capacity with the Administration, (1) embezzles, abstracts, purloins, or willfully misapplies any moneys, funds, securities, or other things of value, whether belonging to it or pledged or otherwise entrusted to it, or (2) with intent to defraud the Administration or any other body politic or corporate, or any individual, or to deceive any officer, auditor, or examiner of the Administration, makes any false entry in any book, report, or statement of or to the Administration, or, without being duly authorized, draws any order or issues, puts forth, or assigns any note, debenture, bond, or other obligation, or draft, bill of exchange, mortgage, judgment, or decree thereof, or (3) with intent to defraud participates or shares in or receives directly or indirectly any money, profit, property, or benefit through any transaction, loan, commission, contract, or any other act of the Administration, or (4) gives any unauthorized information concerning any future action or plan of the Administration which might affect the value of securities, or, having such knowledge, invests or speculates, directly or indirectly, in the securities or property of any company or corporation receiving loans or other assistance from the Administration, shall be punished by a fine of not more than $10,000 or by imprisonment for not more than five years, or both.
(c) Concealment, etc.
Whoever, with intent to defraud, knowingly conceals, removes, disposes of, or converts to his own use or to that of another, any property mortgaged or pledged to, or held by, the Administration, shall be fined not more than $5,000 or imprisoned not more than five years, or both; but if the value of such property does not exceed $100, he shall be fined not more than $1,000 or imprisoned not more than one year, or both.
(d) Misrepresentation, etc.
(1) Whoever misrepresents the status of any concern or person as a "small business concern", a "qualified HUBZone small business concern", a "small business concern owned and controlled by service-disabled veterans", a "small business concern owned and controlled by veterans", a "small business concern owned and controlled by socially and economically disadvantaged individuals", or a "small business concern owned and controlled by women", in order to obtain for oneself or another any—
(A) prime contract to be awarded pursuant to
(B) subcontract to be awarded pursuant to
(C) subcontract that is to be included as part or all of a goal contained in a subcontracting plan required pursuant to
(D) prime or subcontract to be awarded as a result, or in furtherance, of any other provision of Federal law that specifically references
(2) Any person who violates paragraph (1) shall—
(A) be punished by a fine of not more than $500,000 or by imprisonment for not more than 10 years, or both;
(B) be subject to the administrative remedies prescribed by the Program Fraud Civil Remedies Act of 1986 (
(C) be subject to suspension and debarment as specified in subpart 9.4 of title 48, Code of Federal Regulations (or any successor regulation); and
(D) be ineligible for participation in any program or activity conducted under the authority of this chapter or the Small Business Investment Act of 1958 (
(3)
(e) Representations under subsection (d) to be in writing
Any representation of the status of any concern or person as a "small business concern", a "HUBZone small business concern", a "small business concern owned and controlled by service-disabled veterans", a "small business concern owned and controlled by veterans", a "small business concern owned and controlled by socially and economically disadvantaged individuals", or a "small business concern owned and controlled by women" in order to obtain any prime contract or subcontract enumerated in subsection (d) of this section shall be in writing.
(f) Misrepresentation of compliance with section 636(j)(10)(I)
Whoever falsely certifies past compliance with the requirements of
(g) Subcontracting limitations
(1) In general
Whoever violates a requirement established under
(A) $500,000; or
(B) the dollar amount expended, in excess of permitted levels, by the entity on subcontractors.
(2) Monitoring
Not later than 1 year after January 2, 2013, 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
(
Editorial Notes
References in Text
The Program Fraud Civil Remedies Act of 1986 (
The Small Business Investment Act of 1958, referred to in subsec. (d)(2)(D), is
Prior Provisions
Prior similar provisions were contained in section 209 of act July 30, 1953, ch. 282, title II,
Amendments
2021—Subsec. (d)(1).
Subsec. (d)(1)(A).
Subsec. (d)(3).
Subsec. (e).
2013—Subsec. (d)(2)(C).
Subsec. (d)(3).
Subsec. (g).
1997—Subsec. (d)(1).
Subsec. (d)(1)(A).
Subsec. (e).
1994—Subsec. (d)(1).
Subsec. (e).
1988—Subsec. (d).
Subsec. (f).
1986—Subsecs. (d), (e).
1964—Subsec. (c).
Statutory Notes and Related Subsidiaries
Effective Date of 1997 Amendment
Amendment by
Effective Date of 1994 Amendment
For effective date and applicability of amendment by
Regulations
Development and Promulgation of Guidance
Publication of Procedures Regarding Suspension and Debarment
1 So in original. Following provision probably should be set flush with par. (1).
§645a. Annual report on suspensions and debarments proposed by Small Business Administration
(a) Report requirement
The Administrator of the Small Business Administration shall submit each year to the Committee on Small Business and Entrepreneurship of the Senate, and the Committee on Small Business of the House of Representatives a report on the suspension and debarment actions taken by the Administrator during the year preceding the year of submission of the report.
(b) Matters covered
The report required by subsection (a) shall include the following information for the year covered by the report:
(1) Number
The number of contractors proposed for suspension or debarment.
(2) Source
The office within a Federal agency that originated each proposal for suspension or debarment.
(3) Reasons
The reason for each proposal for suspension or debarment.
(4) Results
The result of each proposal for suspension or debarment, and the reason for such result.
(5) Referrals
The number of suspensions or debarments referred to the Inspector General of the Small Business Administration or another agency, or to the Attorney General (for purposes of this paragraph, the Administrator may redact identifying information on names of companies or other information in order to protect the integrity of any ongoing criminal or civil investigation).
(
Editorial Notes
Codification
Section was enacted as part of the National Defense Authorization Act for Fiscal Year 2013, and not as part of the Small Business Act which comprises this chapter.
§646. Liens
Any interest held by the Administration in property, as security for a loan, shall be subordinate to any lien on such property for taxes due on the property to a State, or political subdivision thereof, in any case where such lien would, under applicable State law, be superior to such interest if such interest were held by any party other than the United States.
(
Editorial Notes
Prior Provisions
Section 217 of act July 30, 1953, ch. 282, title II,
§647. Duplication of activities of other Federal departments or agencies
(a) General prohibition; exception
The Administration shall not duplicate the work or activity of any other department or agency of the Federal Government,,1 and nothing contained in this chapter shall be construed to authorize any such duplication unless such work or activity is expressly provided for in this chapter. If loan applications are being refused or loans denied by such other department or agency responsible for such work or activity due to administrative withholding from obligation or withholding from apportionment, or due to administratively declared moratorium, then, for purposes of this section, no duplication shall be deemed to have occurred.
(b) "Agricultural enterprises" defined
As used in this chapter, the term "agricultural enterprises" means those small business concerns engaged in the production of food and fiber, ranching, and raising of livestock, aquaculture, and all other farming and agricultural-related industries.
(
Editorial Notes
Prior Provisions
Prior similar provisions were contained in section 225, of act July 30, 1953, ch. 282, as added by act Aug. 9, 1955, ch. 628, §14,
Amendments
2018—Subsec. (b).
"(1) 'agricultural enterprises' means those small business concerns engaged in the production of food and fiber, ranching, and raising of livestock, aquaculture, and all other farming and agricultural related industries; and
"(2) 'credit elsewhere' means the availability of sufficient credit from non-Federal sources at reasonable rates and terms, taking into consideration prevailing private rates and terms in the community in or near where the concern transacts business for similar purposes and periods of time."
2016—Subsec. (b)(1).
1986—Subsec. (a).
1984—Subsec. (a).
1980—Subsec. (a).
Subsec. (b).
1979—
1976—
1974—
Statutory Notes and Related Subsidiaries
Effective Date of 1984 Amendment
Amendment by
Effective Date of 1980 Amendment
Amendment by
Programs Administered by the Department of Commerce
§648. Small business development center program authorization
(a) Grants, contracts and cooperative agreements for establishment of small business development centers and for small business activities and purposes; role of Administration; non-Federal additional amount; amount of grant; eligibility
(1) The Administration is authorized to make grants (including contracts and cooperative agreements) to any State government or any agency thereof, any regional entity, any State-chartered development, credit or finance corporation, any women's business center operating pursuant to
(2)
(A)
(B)
(i) consult with State trade agencies and Export Assistance Centers to provide appropriate services to the small business concern; and
(ii) as necessary, refer the small business concern to a State trade agency or an Export Assistance Center for further counseling or assistance.
(C)
(3) The Small Business Development Center Program shall be under the general management and oversight of the Administration for the delivery of programs and services to the small business community. Such programs and services shall be jointly developed, negotiated, and agreed upon, with full participation of both parties, pursuant to an executed cooperative agreement between the Small Business Development Center applicant and the Administration.
(A) Small business development centers are authorized to form an association to pursue matters of common concern. If more than a majority of the small business development centers which are operating pursuant to agreements with the Administration are members of such an association, the Administration is authorized and directed to recognize the existence and activities of such an association and to consult with it and develop documents (i) announcing the annual scope of activities pursuant to this section, (ii) requesting proposals to deliver assistance as provided in this section and (iii) governing the general operations and administration of the Small Business Development Center Program, specifically including the development of regulations and a uniform negotiated cooperative agreement for use on an annual basis when entering into individual negotiated agreements with small business development centers.
(B) Provisions governing audits, cost principles and administrative requirements for Federal grants, contracts and cooperative agreements which are included in uniform requirements of Office of Management and Budget (OMB) Circulars shall be incorporated by reference and shall not be set forth in summary or other form in regulations.
(C) On an annual basis, the Small Business Development Center shall review and coordinate public and private partnerships and cosponsorships with the Administration for the purpose of more efficiently leveraging available resources on a National 1 and a State basis.
(4)
(A)
(B)
(C)
(i)
(I) The annual amount made available under section 20(a) 2 for the Small Business Development Center Program, less any reductions made for expenses authorized by clause (v) of this subparagraph, shall be divided on a pro rata basis, based on the percentage of the population of each State, as compared to the population of the United States.
(II) If the pro rata amount calculated under subclause (I) for any State is less than the minimum funding level under clause (iii), the Administration shall determine the aggregate amount necessary to achieve that minimum funding level for each such State.
(III) The aggregate amount calculated under subclause (II) shall be deducted from the amount calculated under subclause (I) for States eligible to receive more than the minimum funding level. The deductions shall be made on a pro rata basis, based on the population of each such State, as compared to the total population of all such States.
(IV) The aggregate amount deducted under subclause (III) shall be added to the grants of those States that are not eligible to receive more than the minimum funding level in order to achieve the minimum funding level for each such State, except that the eligible amount of a grant to any State shall not be reduced to an amount below the minimum funding level.
(ii)
(iii)
(I) If the amount made available is not less than $81,500,000 and not more than $90,000,000, the minimum funding level shall be $500,000.
(II) If the amount made available is less than $81,500,000, the minimum funding level shall be the remainder of $500,000 minus a percentage of $500,000 equal to the percentage amount by which the amount made available is less than $81,500,000.
(III) If the amount made available is more than $90,000,000, the minimum funding level shall be the sum of $500,000 plus a percentage of $500,000 equal to the percentage amount by which the amount made available exceeds $90,000,000.
(iv)
(I) If the grant to any State is less than the amount received by that State in fiscal year 2000, the Administration shall distribute such remaining funds, on a pro rata basis, based on the percentage of shortage of each such State, as compared to the total amount of such remaining funds available, to the extent necessary in order to increase the amount of the grant to the amount received by that State in fiscal year 2000, or until such funds are exhausted, whichever first occurs.
(II) If any funds remain after the application of subclause (I), the remaining amount may be distributed as supplemental grants to any State, as the Administration determines, in its discretion, to be appropriate, after consultation with the association referred to in subsection (a)(3)(A).
(v)
(I)
(aa) not more than $500,000 may be used by the Administration to pay expenses enumerated in subparagraphs (B) through (D) of section 20(a)(1); 2 and
(bb) not more than $500,000 may be used by the Administration to pay the examination expenses enumerated in section 20(a)(1)(E).2
(II)
(vi)
(vii)
(I) $130,000,000 for fiscal year 2005; and
(II) $135,000,000 for fiscal year 2006.
(viii)
(ix)
(5)
(A)
(B)
(C)
(D)
(6) Any applicant which is funded by the Administration as a Small Business Development Center may apply for an additional grant to be used solely to assist—
(A) with the development and enhancement of exports by small business concerns;
(B) in technology transfer; and
(C) with outreach, development, and enhancement of minority-owned small business startups or expansions, HUBZone small business concerns, veteran-owned small business startups or expansions, and women-owned small business startups or expansions, in communities impacted by base closings or military or corporate downsizing, or in rural or underserved communities;
as provided under subparagraphs (B) through (G) of subsection (c)(3). Applicants for such additional grants shall comply with all of the provisions of this section, including providing matching funds, except that funding under this paragraph shall be effective for any fiscal year to the extent provided in advance in appropriations Acts and shall be in addition to the dollar program limitations specified in paragraphs (4) and (5). No recipient of funds under this paragraph shall receive a grant which would exceed its pro rata share of a $15,000,000 program based upon the populations to be served by the Small Business Development Center as compared to the total population of the United States. The minimum amount of eligibility for any State shall be $100,000.
(7)
(A)
(i) the Administrator is ordered to make such a disclosure by a court in any civil or criminal enforcement action initiated by a Federal or State agency; or
(ii) the Administrator considers such a disclosure to be necessary for the purpose of conducting a financial audit of a small business development center, but a disclosure under this clause shall be limited to the information necessary for such audit.
(B)
(i) restrict Administrator access to program activity data; or
(ii) prevent the Administrator from using client information to conduct client surveys.
(C)
(i)
(I) for disclosures with respect to financial audits under subparagraph (A)(ii); and
(II) for client surveys under subparagraph (B)(ii), including standards for oversight of such surveys and for dissemination and use of client information.
(ii)
(iii)
(8)
(A)
(B)
(b) Area plan inconsistent with applicant's plan: assistance unavailable 1981 through 1983; plan of applicant: submittal to Administration, action on plan, review by Administration, assistance to out-of-State businesses
(1) Financial assistance shall not be made available to any applicant if approving such assistance would be inconsistent with a plan for the area involved which has been adopted by an agency recognized by the State government as authorized to do so and approved by the Administration in accordance with the standards and requirements established pursuant to this section.
(2) An applicant may apply to participate in the program by submitting to the Administration for approval a plan naming those authorized in subsection (a) to participate in the program, the geographic area to be served, the services that it would provide, the method for delivering services, a budget, and any other information and assurances the Administration may require to insure that the applicant will carry out the activities eligible for assistance. The Administration is authorized to approve, conditionally approve or reject a plan or combination of plans submitted. In all cases, the Administration shall review plans for conformity with the plan submitted pursuant to paragraph (1) of this subsection, and with a view toward providing small business with the most comprehensive and coordinated assistance in the State or part thereof to be served.
(3)
(A)
(B)
(i)
(ii)
(I)
(II)
(iii)
(iv)
(c) Problem-solving assistance; development center extension services; staff and access requirements; assistance services; changing services for evolving needs; qualified small business vendors; non-profit entities; cooperation with regional and local offices, etc.; information sharing system
(1) Applicants receiving grants under this section shall assist small businesses in solving problems concerning operations, manufacturing, engineering, technology exchange and development, personnel administration, marketing, sales, merchandising, finance, accounting, business strategy development, and other disciplines required for small business growth and expansion, innovation, increased productivity, and management improvement, and for decreasing industry economic concentrations. Applicants receiving grants under this section may also assist small businesses by providing, where appropriate, education on the requirements applicable to small businesses under the regulations issued under
(2) A small business development center shall provide services as close as possible to small businesses by providing extension services and utilizing satellite locations when necessary. The facilities and staff of each Small Business Development Center shall be located in such places as to provide maximum accessibility and benefits to the small businesses which the center is intended to serve. To the extent possible, it also shall make full use of other Federal and State government programs that are concerned with aiding small business. A small business development center shall have—
(A) a full-time staff, including a full-time director who shall have the authority to make expenditures under the center's budget and who shall manage the program activities;
(B) access to business analysts to counsel, assist, and inform small business clients;
(C) access to technology transfer agents to provide state of art technology to small businesses through coupling with national and regional technology data sources;
(D) access to information specialists to assist in providing information searches and referrals to small business;
(E) access to part-time professional specialists to conduct research or to provide counseling assistance whenever the need arises;
(F) access to laboratory and adaptive engineering facilities; and
(G) access to cybersecurity specialists to counsel, assist, and inform small business concern clients, in furtherance of the Small Business Development Center Cyber Strategy developed under section 1841(a) of the National Defense Authorization Act for Fiscal Year 2017.
(3) Services provided by a small business development center shall include, but shall not be limited to—
(A) furnishing one-to-one individual counseling to small businesses, including—
(i) working with individuals to increase awareness of basic credit practices and credit requirements;
(ii) working with individuals to develop business plans, financial packages, credit applications, and contract proposals;
(iii) working with the Administration to develop and provide informational tools for use in working with individuals on pre-business startup planning, existing business expansion, and export planning; and
(iv) working with individuals referred by the local offices of the Administration and Administration participating lenders;
(B) assisting in technology transfer, research and development, including applied research, and coupling from existing sources to small businesses, including—
(i) working to increase the access of small businesses to the capabilities of automated flexible manufacturing systems;
(ii) working through existing networks and developing new networks for technology transfer that encourage partnership between the small business and academic communities to help commercialize university-based research and development and introduce university-based engineers and scientists to their counterparts in small technology-based firms; and
(iii) exploring the viability of developing shared production facilities, under appropriate circumstances;
(C) in cooperation with the Department of Commerce and other relevant Federal agencies, actively assisting small businesses in exporting by identifying and developing potential export markets, facilitating export transactions, developing linkages between United States small business firms and prescreened foreign buyers, assisting small businesses to participate in international trade shows, assisting small businesses in obtaining export financing, and facilitating the development or reorientation of marketing and production strategies; where appropriate, the Small Business Development Center and the Administration may work in cooperation with the State to establish a State international trade center for these purposes;
(D) developing a program in conjunction with the Export-Import Bank and local and regional Administration offices that will enable Small Business Development Centers to serve as an information network and to assist small business applicants for Export-Import Bank financing programs, and otherwise identify and help to make available export financing programs to small businesses;
(E) working closely with the small business community, small business consultants, State agencies, universities and other appropriate groups to make translation services more readily available to small business firms doing business, or attempting to develop business, in foreign markets;
(F) in providing assistance under this subsection, applicants shall cooperate with the Department of Commerce and other relevant Federal agencies to increase access to available export market information systems, including the CIMS system;
(G) assisting small businesses to develop and implement strategic business plans to timely and effectively respond to the planned closure (or reduction) of a Department of Defense facility within the community, or actual or projected reductions in such firms' business base due to the actual or projected termination (or reduction) of a Department of Defense program or a contract in support of such program—
(i) by developing broad economic assessments of the adverse impacts of—
(I) the closure (or reduction) of the Department of Defense facility on the small business concerns providing goods or services to such facility or to the military and civilian personnel currently stationed or working at such facility; and
(II) the termination (or reduction) of a Department of Defense program (or contracts under such program) on the small business concerns participating in such program as a prime contractor, subcontractor or supplier at any tier;
(ii) by developing, in conjunction with appropriate Federal, State, and local governmental entities and other private sector organizations, the parameters of a transition adjustment program adaptable to the needs of individual small business concerns;
(iii) by conducting appropriate programs to inform the affected small business community regarding the anticipated adverse impacts identified under clause (i) and the economic adjustment assistance available to such firms; and
(iv) by assisting small business concerns to develop and implement an individualized transition business plan.3
(H) maintaining current information concerning Federal, State, and local regulations that affect small businesses and counsel 4 small businesses on methods of compliance. Counseling and technology development shall be provided when necessary to help small businesses find solutions for complying with environmental, energy, health, safety, and other Federal, State, and local regulations;
(I) coordinating and conducting research into technical and general small business problems for which there are no ready solutions;
(J) providing and maintaining a comprehensive library that contains current information and statistical data needed by small businesses;
(K) maintaining a working relationship and open communications with the financial and investment communities, legal associations, local and regional private consultants, and local and regional small business groups and associates in order to help address the various needs of the small business community;
(L) conducting in-depth surveys for local small business groups in order to develop general information regarding the local economy and general small business strengths and weaknesses in the locality;
(M) in cooperation with the Department of Commerce, the Administration and other relevant Federal agencies, actively assisting rural small businesses in exporting by identifying and developing potential export markets for rural small businesses, facilitating export transactions for rural small businesses, developing linkages between United States' rural small businesses and prescreened foreign buyers, assisting rural small businesses to participate in international trade shows, assisting rural small businesses in obtaining export financing and developing marketing and production strategies;
(N) assisting rural small businesses—
(i) in developing marketing and production strategies that will enable them to better compete in the domestic market—
(ii) by providing technical assistance needed by rural small businesses;
(iii) by making available managerial assistance to rural small business concerns; and
(iv) by providing information and assistance in obtaining financing for business startups and expansion;
(O) in conjunction with the United States Travel and Tourism Administration, assist rural small business in developing the tourism potential of rural communities by—
(i) identifying the cultural, historic, recreational, and scenic resources of such communities;
(ii) providing assistance to small businesses in developing tourism marketing and promotion plans relating to tourism in rural areas; and
(iii) assisting small business concerns to obtain capital for starting or expanding businesses primarily serving tourists;
(P) maintaining lists of local and regional private consultants to whom small businesses can be referred;
(Q) providing information to small business concerns regarding compliance with regulatory requirements;
(R) developing informational publications, establishing resource centers of reference materials, and distributing compliance guides published under section 312(a) 2 of the Small Business Regulatory Enforcement Fairness Act of 1996;
(S) providing small business owners with access to a wide variety of export-related information by establishing on-line computer linkages between small business development centers and an international trade data information network with ties to the Export Assistance Center program;
(T) providing information and assistance to small business concerns with respect to establishing drug-free workplace programs on or before October 1, 2006; and
(U) 5 encouraging and assisting the provision of succession planning to small business concerns with a focus on transitioning to cooperatives, as defined in
(i) providing training to individuals to promote the successful management, governance, or operation of a business purchased by those individuals in the formation of an employee-owned business concern;
(ii) assisting employee-owned business concerns that meet applicable size standards established under
(iii) coordinating with lenders on conducting outreach on financing through programs administered by the Administration that may be used to support the transition of ownership to employees;
(iv) supporting small business concerns in exploring or assessing the possibility of transitioning to an employee-owned business concern; and
(v) coordinating with the cooperative development centers of the Department of Agriculture, the land grant extension network, the Manufacturing Extension Partnership, community development financial institutions, employee ownership associations and service providers, and local, regional and national cooperative associations.
(U) 5 in conjunction with the United States Patent and Trademark Office, providing training—
(i) to small business concerns relating to—
(I) domestic and international intellectual property protections; and
(II) how the protections described in subclause (I) should be considered in the business plans and growth strategies of the small business concerns; and
(ii) that may be delivered—
(I) in person; or
(II) through a website.
(4) A small business development center shall continue to upgrade and modify its services, as needed, in order to meet the changing and evolving needs of the small business community.
(5) In addition to the methods prescribed in paragraph (2), a small business development center shall utilize and compensate as one of its resources qualified small business vendors, including but not limited to, private management consultants, private consulting engineers and private testing laboratories, to provide services as described in this subsection to small businesses on behalf of such small business development center.
(6) In any State (A) in which the Administration has not made a grant pursuant to paragraph (1) of subsection (a), or (B) in which no application for a grant has been made by a Small Business Development Center pursuant to paragraph (6) of such subsection within 60 days after the effective date of any grant under subsection (a)(1) to such center or the date the Administration notifies the grantee funded under subsection (a)(1) that funds are available for grant applications pursuant to subsection (a)(6), whichever date occurs last, the Administration may make grants to a non-profit entity in that State to carry out the activities specified in paragraph (6) of subsection (a). Any such applicants shall comply with the matching funds requirement of paragraph (4) of subsection (a). Such grants shall be effective for any fiscal year only to the extent provided in advance in appropriations Acts, and each State shall be limited to the pro rata share provisions of paragraph (6) of subsection (a).
(7) In performing the services identified in paragraph (3), the Small Business Development Centers shall work in close cooperation with the Administration's regional and local offices, the local small business community, and appropriate State and local agencies.
(8) The Associate Administrator for Small Business Development Centers, in consultation with the Small Business Development Centers, shall develop and implement an information sharing system. Subject to amounts approved in advance in appropriations Acts, the Administration may make grants or enter 6 cooperative agreements with one or more centers to carry out the provisions of this paragraph. Said grants or cooperative agreements shall be awarded for periods of no more than five years duration. The matching funds provisions of subsection (a) shall not be applicable to grants or cooperative agreements under this paragraph. The system shall—
(A) allow Small Business Development Centers participating in the program to exchange information about their programs; and
(B) provide information central to technology transfer.
(d) Enhancing export potential of businesses within State; State Office of International Trade
Where appropriate, the Small Business Development Centers shall work in conjunction with the relevant State agency and the Department of Commerce to develop a comprehensive plan for enhancing the export potential of small businesses located within the State. This plan may involve the cofunding and staffing of a State Office of International Trade within the State Small Business Development Center, using joint State and Federal funding, and any other appropriate measures directed at improving the export performance of small businesses within the State.
(e) Laboratory assistance; reimbursement for services
Laboratories operated and funded by the Federal Government are authorized and directed to cooperate with the Administration in developing and establishing programs to support small business development centers by making facilities and equipment available; providing experiment station capabilities in adaptive engineering; providing library and technical information processing capabilities; and providing professional staff for consulting. The Administration is authorized to reimburse the laboratories for such services.
(f) National Science Foundation; cooperation with Administration and Small Business Development Centers; center support
The National Science Foundation is authorized and directed to cooperate with the Administration and with the Small Business Development Centers in developing and establishing programs to support the centers.
(g) National Aeronautics and Space Administration and regional technology transfer centers
The National Aeronautics and Space Administration and regional technology transfer centers supported by the National Aeronautics and Space Administration are authorized and directed to cooperate with small business development centers participating in the program.
(h) Associate Administrator for Small Business Development Centers
(1) Appointment and compensation
The Administrator shall appoint an Associate Administrator for Small Business Development Centers who shall report to an official who is not more than one level below the Office of the Administrator and who shall serve without regard to the provisions of title 5 governing appointments in the competitive service, and without regard to
(2) Duties
(A) In general
The sole responsibility of the Associate Administrator for Small Business Development Centers shall be to administer the small business development center program. Duties of the position shall include recommending the annual program budget, reviewing the annual budgets submitted by each applicant, establishing appropriate funding levels therefore,7 selecting applicants to participate in this program, implementing the provisions of this section, maintaining a clearinghouse to provide for the dissemination and exchange of information between small business development centers and conducting audits of recipients of grants under this section.
(B) Consultation requirements
In carrying out the duties described in this subsection, the Associate Administrator shall confer with and seek the advice of the Board established by subsection (i) and Administration officials in areas served by the small business development centers; however, the Associate Administrator shall be responsible for the management and administration of the program and shall not be subject to the approval or concurrence of such Administration officials.
(i) National Small Business Development Center Advisory Board; establishment; membership; term; Chairman; advisory and counseling functions; meetings; compensation
(1) There is established a National Small Business Development Center Advisory Board (herein referred to as "Board") which shall consist of nine members appointed from civilian life by the Administrator and who shall be persons of outstanding qualifications known to be familiar and sympathetic with small business needs and problems. No more than three members shall be from universities or their affiliates and six shall be from small businesses or associations representing small businesses. At the time of the appointment of the Board, the Administrator shall designate one-third of the members and at least one from each category whose term shall end in two years from the date of appointment, a second third whose term shall end in three years from the date of appointment, and the final third whose term shall end in four years from the date of appointment. Succeeding Boards shall have three-year terms, with one-third of the Board changing each year.
(2) The Board shall elect a Chairman and advise, counsel, and confer with the Associate Administrator for Small Business Development Centers in carrying out the duties described in this section. The Board shall meet at least semiannually and at the call of the Chairman of the Board. Each member of the Board shall be entitled to be compensated at the rate not in excess of the per diem, equivalent of the highest rate of pay for individuals occupying the position under GS–18 of the General Schedule for each day engaged in activities of the Board and shall be entitled to be reimbursed for expenses as a member of the Board.
(j) Small business development center advisory board; establishment; chairman; conferences with director on policy
(1) Each small business development center shall establish an advisory board.
(2) Each small business development center advisory board shall elect a chairman and advise, counsel, and confer with the director of the small business development center on all policy matters pertaining to the operation of the small business development center, including who may be eligible to receive assistance from, and how local and regional private consultants may participate with the small business development center.
(k) Program examination and accreditation
(1) Examination
Not later than 180 days after October 22, 1994, the Administration shall develop and implement a biennial programmatic and financial examination of each small business development center established pursuant to this section.
(2) Accreditation
The Administration may provide financial support, by contract or otherwise, to the association authorized by subsection (a)(3)(A) for the purpose of developing a small business development center accreditation program.
(3) Extension or renewal of cooperative agreements
(A) In general
In extending or renewing a cooperative agreement of a small business development center, the Administration shall consider the results of the examination and accreditation program conducted pursuant to paragraphs (1) and (2).
(B) Accreditation requirement
After September 30, 2000, the Administration may not renew or extend any cooperative agreement with a small business development center unless the center has been approved under the accreditation program conducted pursuant to this subsection, except that the Associate Administrator for Small Business Development Centers may waive such accreditation requirement, in the discretion of the Associate Administrator, upon a showing that the center is making a good faith effort to obtain accreditation.
(l) Contract authority
The authority to enter into contracts shall be in effect for each fiscal year only to the extent and in the amounts as are provided in advance in appropriations Acts. After the administration has entered a contract, either as a grant or a cooperative agreement, with any applicant under this section, it shall not suspend, terminate, or fail to renew or extend any such contract unless the Administration provides the applicant with written notification setting forth the reasons therefore 7 and affording the applicant an opportunity for a hearing, appeal, or other administrative proceeding under the provisions of
(m) Prohibition on certain fees
A small business development center shall not impose or otherwise collect a fee or other compensation in connection with the provision of counseling services under this section.
(n) Veterans assistance and services program
(1) In general
A small business development center may apply for a grant under this subsection to carry out a veterans assistance and services program.
(2) Elements of program
Under a program carried out with a grant under this subsection, a small business development center shall—
(A) create a marketing campaign to promote awareness and education of the services of the center that are available to veterans, and to target the campaign toward veterans, service-disabled veterans, military units, Federal agencies, and veterans organizations;
(B) use technology-assisted online counseling and distance learning technology to overcome the impediments to entrepreneurship faced by veterans and members of the Armed Forces; and
(C) increase coordination among organizations that assist veterans, including by establishing virtual integration of service providers and offerings for a one-stop point of contact for veterans who are entrepreneurs or owners of small business concerns.
(3) Amount of grants
A grant under this subsection shall be for not less than $75,000 and not more than $250,000.
(4) Funding
Subject to amounts approved in advance in appropriations Acts, the Administration may make grants or enter into cooperative agreements to carry out the provisions of this subsection.
(o) Cyber strategy training for small business development centers
(1) Definitions
In this subsection—
(A) the term "cyber strategy" means resources and tactics to assist in planning for cybersecurity and defending against cyber risks and attacks; and
(B) the term "lead small business development center" means a small business development center that receives reimbursement from the Administrator under paragraph (5).
(2) Certification program
The Administrator shall establish a cyber counseling certification program, or designate 1 or more substantially similar governmental or private cybersecurity certification programs, to certify the employees of lead small business development centers in providing cyber planning assistance to small business concerns.
(3) Number of certified employees
The Administrator shall ensure that the number of employees of each lead small business development center who are certified in providing cyber planning assistance is not less than the lesser of—
(A) 5; or
(B) 10 percent of the total number of employees of the lead small business development center.
(4) Cyber strategy
In carrying out paragraph (2), the Administrator, to the extent practicable, shall consider any cyber strategy methods included in the Small Business Development Center Cyber Strategy developed under section 1841(a)(3)(B) of the National Defense Authorization Act for Fiscal Year 2017 (
(5) Reimbursement for certification
(A) In general
Subject to the availability of appropriations, the Administrator may reimburse each lead small business development center for costs relating to the certification of 1 or more employees of the lead small business center in providing cyber planning assistance under a program established or designated under paragraph (2).
(B) Limitation
The total amount reimbursed by the Administrator under subparagraph (A) may not exceed $350,000 in any fiscal year.
(
Editorial Notes
References in Text
Section 1841(a) of the National Defense Authorization Act for Fiscal Year 2017, referred to in subsecs. (a)(1), (c)(2)(G), and (o)(4), is section 1841(a) of
Section 20(a), referred to in subsec. (a)(4)(C)(i)(I), (v), means section 2[20(a)] of
Section 312(a) of the Small Business Regulatory Enforcement Fairness Act of 1996, referred to in subsec. (c)(3)(R), probably means section 212(a) of
The General Schedule, referred to in subsecs. (h)(1) and (i)(2), is set out under
Codification
October 22, 1994, referred to in subsec. (k)(1), was in the original "the date of enactment of this subsection", which was translated as meaning the date of enactment of
Prior Provisions
A prior
A prior section 2[21] of
Amendments
2022—Subsec. (a)(8)(B).
Subsec. (o).
2021—Subsec. (a)(1).
Subsec. (a)(4)(C)(ix).
2018—Subsec. (a)(8)(B).
Subsec. (c)(3)(U).
2016—Subsec. (a)(1).
Subsec. (a)(8).
Subsec. (c)(2)(G).
2015—Subsec. (b)(3).
2014—Subsec. (c)(1).
2010—Subsec. (a)(2).
2008—Subsec. (n).
2004—Subsec. (a)(4)(C)(vii) to (ix).
Subsec. (a)(7).
Subsec. (c)(3)(T).
Subsec. (k).
2001—Subsec. (a)(4)(C)(v)(II).
2000—Subsec. (a)(4)(C).
Subsec. (c)(3)(T).
1998—Subsec. (c)(3)(T).
1997—Subsec. (a)(1).
Subsec. (a)(3).
Subsec. (a)(3)(C).
Subsec. (a)(4)(C)(i).
"(I) for fiscal year 1995, the sum of such State's pro rata share of a national program based upon the population of the State as compared to the total population in the United States, and $125,000; or
"(II) in each succeeding fiscal year, the sum of such State's pro rata share of a national program based upon the population of the State as compared to the total population in the United States, and $200,000."
Subsec. (a)(4)(C)(iii).
"(iii)
"(I) $70,000,000 through September 30, 1996;
"(II) $77,500,000 from October 1, 1996 through September 30, 1997; and
"(III) $85,000,000 beginning October 1, 1997."
Subsec. (a)(6)(C).
Subsec. (c)(3).
Subsec. (c)(3)(A).
Subsec. (c)(3)(B).
Subsec. (c)(3)(C).
Subsec. (c)(3)(D) to (G), (M) to (O), (Q), (R).
Subsec. (c)(3)(S).
Subsec. (c)(4).
Subsec. (c)(5).
Subsec. (c)(6) to (8).
Subsec. (l).
Subsec. (m).
1996—Subsec. (c)(3)(Q), (R).
Subsec. (c)(7).
Subsec. (h).
"(h)(1) The Administrator shall appoint a Associate Administrator for Small Business Development Centers who shall report to an official who is not more than one level below the Office of the Administrator and who shall serve without regard to the provisions of title 5 governing appointments in the competitive service, and without regard to
"(2) The sole responsibility of the Associate Administrator for Small Business Development Centers shall be to administer the small business development center program. Duties of the position shall include, but are not limited to, recommending the annual program budget, reviewing the annual budgets submitted by each applicant, establishing appropriate funding levels therefore, selecting applicants to participate in this program, implementing the provisions of this section, maintaining a clearinghouse to provide for the dissemination and exchange of information between small business development centers and conducting audits of recipients of grants under this section. The Associate Administrator for Small Business Development Centers shall confer with and seek the advise and counsel of the Board in carrying out the responsibilities described in this subsection."
Subsec. (i)(2).
Subsec. (k)(3).
Subsec. (l).
1995—Subsec. (g).
1994—Subsec. (a)(4).
Subsec. (a)(5).
Subsec. (k).
1993—Subsec. (c)(7).
1992—Subsec. (a)(3)(A), (B).
Subsec. (c)(3)(D) to (G).
1990—Subsec. (a)(1).
Subsec. (a)(4).
Subsec. (c)(3)(M) to (P).
1988—Subsec. (a)(1).
Subsec. (a)(2) to (6).
Subsec. (c)(3)(B) to (M).
Subsec. (c)(5).
Subsec. (c)(6), (7).
Subsecs. (d) to (g).
Subsec. (h).
Subsecs. (i) to (k).
Subsec. (l)
1984—Subsec. (a)(1).
Subsec. (a)(2) to (4).
Subsec. (b)(1).
Subsec. (c)(2).
Subsec. (c)(2)(A).
Subsec. (e).
Subsec. (h)(2).
Subsec. (i)(1).
Subsec. (j).
Statutory Notes and Related Subsidiaries
Effective Date of 1997 Amendment
Amendment by
Effective Date of 1996 Amendments
Amendment by
Amendment by
Effective Date of 1990 Amendments
Effective and Termination Dates
Section effective Oct. 1, 1980, see section 507 of
Short Title
For short title of title II of
Regulations
Implementation
Opportunities for Employee-Owned Business Concerns Through Small Business Administration Loan Programs
"(a)
"(1) the terms 'Administration' and 'Administrator' means the Small Business Administration and the Administrator thereof, respectively;
"(2) the term 'cooperative' means an entity that is determined to be a cooperative by the Administrator, in accordance with applicable Federal and State laws and regulations;
"(3) the term 'employee-owned business concern' means—
"(A) a cooperative; and
"(B) a qualified employee trust;
"(4) the terms 'qualified employee trust' and 'small business concern' have the meanings given those terms in section 3 of the Small Business Act (
"(5) the term 'small business development center' means a small business development center described in section 21 of the Small Business Act (
"(c)
"(d)
"(e)
"(1) Establishment.—The Administrator shall establish a Small Business Employee Ownership and Cooperatives Promotion Program to offer technical assistance and training on the transition to employee ownership through cooperatives and qualified employee trusts.
"(2)
"(A)
"(i) provide access to information and resources on employee ownership through cooperatives or qualified employee trusts as a business succession strategy;
"(ii) conduct training and educational activities; and
"(iii) carry out the activities described in subparagraph (U) of section 21(c)(3) of the Small Business Act (
Small Business Technology Transfer Demonstration Program
References in Other Laws to GS–16, 17, or 18 Pay Rates
References in laws to the rates of pay for GS–16, 17, or 18, or to maximum rates of pay under the General Schedule, to be considered references to rates payable under specified sections of Title 5, Government Organization and Employees, see section 529 [title I, §101(c)(1)] of
1 So in original. Probably should not be capitalized.
2 See References in Text note below.
3 So in original. The period probably should be a semicolon.
4 So in original. Probably should be "counseling".
5 So in original. Two subpars. (U) have been enacted.
6 So in original. Probably should be "enter into".
7 So in original. Probably should be "therefor,".
§648a. Repealed. Pub. L. 102–140, title VI, §609(e), Oct. 28, 1991, 105 Stat. 826
Section,
Statutory Notes and Related Subsidiaries
Effective Date of Repeal; Termination of Funding
§648b. Grants for SBDCs
(a) In general
The Administrator may make grants to small business development centers under
(b) Allocation
(1) In general
Subject to paragraph (2), and notwithstanding the requirements of
(2) Minimum funding
The amount made available under this section to each State shall be not less than $325,000.
(3) Types of uses
Of the total amount of the grants awarded by the Administrator under this section—
(A) not less than 80 percent shall be used for counseling of small business concerns; and
(B) not more than 20 percent may be used for classes or seminars.
(c) No non-Federal share required
Notwithstanding
(d) Distribution
Not later than 30 days after the date on which amounts are appropriated to carry out this section, the Administrator shall disburse the total amount appropriated.
(e) Authorization of appropriations
There is authorized to be appropriated to the Administrator $50,000,000 to carry out this section.
(
Editorial Notes
Codification
Section was enacted as part of the Small Business Jobs Act of 2010, and not as part of the Small Business Act which comprises this chapter.
Statutory Notes and Related Subsidiaries
Definitions
For definition of "Administrator" and "small business concern" as used in this section, see section 1001 of
§648c. SBA and USPTO partnerships
(a) In general
Beginning not later than 180 days after October 9, 2018, the Administrator, in consultation with the Director, shall develop partnership agreements that—
(1) provide for the—
(A) development of high-quality training, including in-person or modular training sessions, for small business concerns relating to domestic and international protection of intellectual property;
(B) leveraging of training materials already developed for the education of inventors and small business concerns; and
(C) participation of a nongovernmental organization; and
(2) provide training—
(A) through electronic resources, including Internet-based webinars; and
(B) at physical locations, including—
(i) a small business development center; and
(ii) the headquarters or a regional office of the USPTO.
(
Editorial Notes
Codification
Section was enacted as part of the Small Business Innovation Protection Act of 2017, and not as part of the Small Business Act which comprises this chapter.
Statutory Notes and Related Subsidiaries
Findings
"(1) the USPTO and the SBA are positioned to—
"(A) build upon several successful intellectual property and training programs aimed at small business concerns; and
"(B) increase the availability of and the participation in the programs described in subparagraph (A) across the United States; and
"(2) any education and training program administered by the USPTO and the SBA should be scalable so that the program is able to reach more small business concerns."
Definitions
"(1) the term 'Administrator' means the Administrator of the SBA;
"(2) the term 'Director' means the Under Secretary of Commerce for Intellectual Property and Director of the USPTO;
"(3) the term 'SBA' means the Small Business Administration;
"(4) the term 'small business concern' has the meaning given the term in section 3(a) of the Small Business Act (
"(5) the term 'small business development center' means a center described in section 21 of the Small Business Act (
"(6) the term 'USPTO' means the United States Patent and Trademark Office."
§649. Office of International Trade
(a) Establishment
(1) Office
There is established within the Administration an Office of International Trade which shall implement the programs pursuant to this section for the primary purposes of increasing—
(A) the number of small business concerns that export; and
(B) the volume of exports by small business concerns.
(2) Associate Administrator
The head of the Office shall be the Associate Administrator for International Trade, who shall be responsible to the Administrator.
(b) Trade distribution network
The Associate Administrator, working in close cooperation with the Secretary of Commerce, the United States Trade Representative, the Secretary of Agriculture, the Secretary of State, the President of the Export-Import Bank of the United States, the Board of Directors of the United States International Development Finance Corporation, the Director of the United States Trade and Development Agency, and other relevant Federal agencies, small business development centers engaged in export promotion efforts, Export Assistance Centers, regional and district offices of the Administration, the small business community, and relevant State and local export promotion programs, shall—
(1) maintain a distribution network, using regional and district offices of the Administration, the small business development center network, networks of women's business centers, the Service Corps of Retired Executives authorized by
(A) trade promotion;
(B) trade finance;
(C) trade adjustment assistance;
(D) trade remedy assistance; and
(E) trade data collection;
(2) aggressively market the programs described in paragraph (1) and disseminate information, including computerized marketing data, to small business concerns on exporting trends, market-specific growth, industry trends, and international prospects for exports;
(3) promote export assistance programs through the district and regional offices of the Administration, the small business development center network, Export Assistance Centers, the network of women's business centers, chapters of the Service Corps of Retired Executives, State and local export promotion programs, and partners in the private sector; and
(4) give preference in hiring or approving the transfer of any employee into the Office or to a position described in subsection (c)(9) to otherwise qualified applicants who are fluent in a language in addition to English, to—
(A) accompany small business concerns on foreign trade missions; and
(B) translate documents, interpret conversations, and facilitate multilingual transactions, including by providing referral lists for translation services, if required.
(c) Promotion of sales opportunities
The Associate Administrator shall promote sales opportunities for small business goods and services abroad. To accomplish this objective the office shall—
(1) establish annual goals for the Office relating to—
(A) enhancing the exporting capability of small business concerns and small manufacturers;
(B) facilitating technology transfers;
(C) enhancing programs and services to assist small business concerns and small manufacturers to compete effectively and efficiently in foreign markets;
(D) increasing the ability of small business concerns to access capital; and
(E) disseminating information concerning Federal, State, and private programs and initiatives;
(2) in cooperation with the Department of Commerce, other relevant agencies, regional and local Administration offices, the Small Business Development Center network, and State programs, develop a mechanism for—
(A) identifying subsectors of the small business community with strong export potential;
(B) identifying areas of demand in foreign markets;
(C) prescreening foreign buyers for commercial and credit purposes; and
(D) assisting in increasing international marketing by disseminating relevant information regarding market leads, linking potential sellers and buyers, and catalyzing the formation of joint ventures, where appropriate;
(3) in cooperation with the Department of Commerce, actively assist small business concerns in forming and using export trading companies, export management companies and research and development pools authorized under
(4) work in conjunction with other Federal agencies, regional and district offices of the Administration, the small business development center network, and the private sector to identify and publicize translation services, including those available through colleges and universities participating in the small business development center program;
(5) work closely with the Department of Commerce and other relevant Federal agencies to—
(A) collect, analyze and periodically update relevant data regarding the small business share of United States exports and the nature of State exports (including the production of Gross State Product figures) and disseminate that data to the public and to Congress;
(B) make recommendations to the Secretary of Commerce and to Congress regarding revision of the North American Industry Classification System codes to encompass industries currently overlooked and to create North American Industry Classification System codes for export trading companies and export management companies;
(C) improve the utility and accessibility of existing export promotion programs for small business concerns; and
(D) increase the accessibility of the Export Trading Company contact facilitation service;
(6) make available to the small business community information regarding conferences on exporting and international trade sponsored by the public and private sector;
(7) provide small business concerns with access to up to date and complete export information by—
(A) making available, at the regional and district offices of the Administration through cooperation with the Department of Commerce, export information, including, but not limited to, the worldwide information and trade system and world trade data reports;
(B) maintaining a list of financial institutions that finance export operations;
(C) maintaining a directory of all Federal, regional, State and private sector programs that provide export information and assistance to small business concerns; and
(D) preparing and publishing such reports as it determines to be necessary concerning market conditions, sources of financing, export promotion programs, and other information pertaining to the needs of small business exporting firms so as to insure that the maximum information is made available to small business concerns in a readily usable form;
(8) encourage through cooperation with the Department of Commerce, greater small business participation in trade fairs, shows, missions, and other domestic and overseas export development activities of the Department of Commerce;
(9) facilitate decentralized delivery of export information and assistance to small business concerns by assigning primary responsibility for export development to one individual in each district office and providing each Administration regional office with a full-time export development specialist, who shall—
(A) assist small business concerns in obtaining export information and assistance from other Federal departments and agencies;
(B) maintain a directory of all programs which provide export information and assistance to small business concerns in the region;
(C) encourage financial institutions to develop and expand programs for export financing;
(D) provide advice to personnel of the Administration involved in making loans, loan guarantees, and extensions and revolving lines of credit, and providing other forms of assistance to small business concerns engaged in exports;
(E) within one hundred and eighty days of their appointment, participate in training programs designed by the Administrator, in conjunction with the Department of Commerce and other Federal departments and agencies, to study export programs and to examine the needs of small business concerns for export information and assistance;
(F) participate, jointly with employees of the Office, in an annual training program that focuses on current small business needs for exporting; and
(G) develop and conduct training programs for exporters and lenders, in cooperation with the Export Assistance Centers, the Department of Commerce, the Department of Agriculture, small business development centers, women's business centers, the Export-Import Bank of the United States, the United States International Development Finance Corporation, and other relevant Federal agencies;
(10) make available on the website of the Administration the name and contact information of each individual described in paragraph (9);
(11) carry out a nationwide marketing effort using technology, online resources, training, and other strategies to promote exporting as a business development opportunity for small business concerns;
(12) disseminate information to the small business community through regional and district offices of the Administration, the small business development center network, Export Assistance Centers, the network of women's business centers, chapters of the Service Corps of Retired Executives authorized by
(13) establish and carry out training programs for the staff of the regional and district offices of the Administration and resource partners of the Administration on export promotion and providing assistance relating to exports.
(d) Export financing programs
(1) In general
The Associate Administrator shall work in cooperation with the Export-Import Bank of the United States, the Department of Commerce, other relevant Federal agencies, and the States to develop a program through which export specialists in the regional offices of the Administration, regional and local loan officers, and Small Business Development Center personnel can facilitate the access of small businesses to relevant export financing programs of the Export-Import Bank of the United States and to export and pre-export financing programs available from the Administration and the private sector.
(2) Trade finance specialist
To accomplish the goal established under paragraph (1), the Associate Administrator shall—
(A) designate at least 1 individual within the Administration as a trade finance specialist to oversee international loan programs and assist Administration employees with trade finance issues; and
(B) work in cooperation with the Export-Import Bank and the small business community, including small business trade associations, to—
(i) aggressively market existing Administration export financing and pre-export financing programs;
(ii) identify financing available under various Export-Import Bank programs, and aggressively market those programs to small businesses;
(iii) assist in the development of financial intermediaries and facilitate the access of those intermediaries to existing financing programs;
(iv) promote greater participation by private financial institutions, particularly those institutions already participating in loan programs under this chapter, in export finance; and
(v) provide for the participation of appropriate Administration personnel in training programs conducted by the Export-Import Bank.
(e) Trade remedies
The Associate Administrator shall—
(1) work in cooperation with other Federal agencies and the private sector to counsel small businesses with respect to initiating and participating in any proceedings relating to the administration of the United States trade laws; and
(2) work with the Department of Commerce, the Office of the United States Trade Representative, and the International Trade Commission to increase access to trade remedy proceedings for small businesses.
(f) Reporting requirement
The Associate Administrator shall submit an annual report to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives that contains—
(1) a description of the progress of the Office in implementing the requirements of this section;
(2) a detailed account of the results of export growth activities of the Administration, including the activities of each district and regional office of the Administration, based on the performance measures described in subsection (i); 1
(3) an estimate of the total number of jobs created or retained as a result of export assistance provided by the Administration and resource partners of the Administration;
(4) for any travel by the staff of the Office, the destination of such travel and the benefits to the Administration and to small business concerns resulting from such travel; and
(5) a description of the participation by the Office in trade negotiations.
(g) Studies
The Associate Administrator, in cooperation, where appropriate, with the Division of Economic Research of the Office of Advocacy, and with other Federal agencies, shall undertake studies regarding the following issues and shall report to the Committees on Small Business of the House of Representatives and the Senate, and to other relevant Committees of the House and Senate within 6 months after August 23, 1988, with specific recommendations on—
(1) the viability and cost of establishing an annual, competitive small business export incentive program similar to the Small Business Innovation Research program and alternative methods of structuring such a program;
(2) methods of streamlining trade remedy proceedings to increase access for, and reduce expenses incurred by, smaller firms;
(3) methods of improving the current small business foreign sales corporation tax incentives and providing small businesses with greater benefits from this initiative;
(4) methods of identifying potential export markets for United States small businesses; maintaining and disseminating current foreign market data; and devising a comprehensive export marketing strategy for United States small business goods and services, and shall include data on the volume and dollar amount of goods and services, identified by type, imported by United States trading partners over the past 10 years; and
(5) the results of a survey of major United States trading partners to identify the domestic policies, programs and incentives, and the private sector initiatives, which exist to encourage the formation and growth of small business.
(h) Discharge of international trade responsibilities of Administration
The Administrator shall ensure that—
(1) the responsibilities of the Administration regarding international trade are carried out by the Associate Administrator;
(2) the Associate Administrator has sufficient resources to carry out such responsibilities; and
(3) the Associate Administrator has direct supervision and control over—
(A) the staff of the Office; and
(B) any employee of the Administration whose principal duty station is an Export Assistance Center, or any successor entity.
(i) Export and trade counseling
(1) Definition
In this subsection—
(A) the term "lead small business development center" means a small business development center that has received a grant from the Administration; and
(B) the term "lead women's business center" means a women's business center that has received a grant from the Administration.
(2) Certification program
The Administrator shall establish an export and trade counseling certification program to certify employees of lead small business development centers and lead women's business centers in providing export assistance to small business concerns.
(3) Number of certified employees
The Administrator shall ensure that the number of employees of each lead small business development center who are certified in providing export assistance is not less than the lesser of—
(A) 5; or
(B) 10 percent of the total number of employees of the lead small business development center.
(4) Reimbursement for certification
(A) In general
Subject to the availability of appropriations, the Administrator shall reimburse a lead small business development center or a lead women's business center for costs relating to the certification of an employee of the lead small business center or lead women's business center in providing export assistance under the program established under paragraph (2).
(B) Limitation
The total amount reimbursed by the Administrator under subparagraph (A) may not exceed $350,000 in any fiscal year.
(j) Performance measures
(1) In general
The Associate Administrator shall develop performance measures for the Administration to support export growth goals for the activities of the Office under this section that include—
(A) the number of small business concerns that—
(i) receive assistance from the Administration;
(ii) had not exported goods or services before receiving the assistance described in clause (i); and
(iii) export goods or services;
(B) the number of small business concerns receiving assistance from the Administration that export goods or services to a market outside the United States into which the small business concern did not export before receiving the assistance;
(C) export revenues by small business concerns assisted by programs of the Administration;
(D) the number of small business concerns referred to an Export Assistance Center or a small business development center by the staff of the Office;
(E) the number of small business concerns referred to the Administration by an Export Assistance Center or a small business development center; and
(F) the number of small business concerns referred to the Department of Commerce, the Department of Agriculture, the Department of State, the Export-Import Bank of the United States, the United States International Development Finance Corporation, or the United States Trade and Development Agency by the staff of the Office, an Export Assistance Center, or a small business development center.
(2) Joint performance measures
The Associate Administrator shall develop joint performance measures for the district offices of the Administration and the Export Assistance Centers that include the number of export loans made under—
(A)
(B) the Export Working Capital Program established under
(C) the Preferred Lenders Program, as defined in
(D) the export express program established under
(3) Consistency of tracking
The Associate Administrator, in coordination with the departments and agencies that are represented on the Trade Promotion Coordinating Committee established under
(k) Export Assistance Centers
(1) Export finance specialists
(A) Minimum number of export finance specialists
On and after the date that is 90 days after September 27, 2010, the Administrator, in coordination with the Secretary of Commerce, shall ensure that the number of export finance specialists is not less than the number of such employees so assigned on January 1, 2003.
(B) Export finance specialists assigned to each region of the Administration
On and after the date that is 2 years after September 27, 2010, the Administrator, in coordination with the Secretary of Commerce, shall ensure that there are not fewer than 3 export finance specialists in each region of the Administration.
(2) Placement of export finance specialists
(A) Priority
The Administrator shall give priority, to the maximum extent practicable, to placing employees of the Administration at any Export Assistance Center that—
(i) had an Administration employee assigned to the Export Assistance Center before January 2003; and
(ii) has not had an Administration employee assigned to the Export Assistance Center during the period beginning January 2003, and ending on September 27, 2010, either through retirement or reassignment.
(B) Needs of exporters
The Administrator shall, to the maximum extent practicable, strategically assign Administration employees to Export Assistance Centers, based on the needs of exporters.
(C) Rule of construction
Nothing in this subsection may be construed to require the Administrator to reassign or remove an export finance specialist who is assigned to an Export Assistance Center on September 27, 2010.
(3) Goals
The Associate Administrator shall work with the Department of Commerce, the Export-Import Bank of the United States, and the United States International Development Finance Corporation to establish shared annual goals for the Export Assistance Centers.
(4) Oversight
The Associate Administrator shall designate an individual within the Administration to oversee all activities conducted by Administration employees assigned to Export Assistance Centers.
(l) State Trade Expansion Program
(1) Definitions
In this subsection—
(A) the term "eligible small business concern" means a business concern that—
(i) is organized or incorporated in the United States;
(ii) is operating in the United States;
(iii) meets—
(I) the applicable industry-based small business size standard established under
(II) the alternate size standard applicable to the program under
(iv) has been in business for not less than 1 year, as of the date on which assistance using a grant under this subsection commences; and
(v) has access to sufficient resources to bear the costs associated with trade, including the costs of packing, shipping, freight forwarding, and customs brokers;
(B) the term "program" means the State Trade Expansion Program established under paragraph (2);
(C) the term "rural small business concern" means an eligible small business concern located in a rural area, as that term is defined in
(D) the term "socially and economically disadvantaged small business concern" has the meaning given that term in
(E) the term "State" means each of the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands, and American Samoa.
(2) Establishment of program
The Associate Administrator shall establish a trade expansion program, to be known as the "State Trade Expansion Program", to make grants to States to carry out programs that assist eligible small business concerns in—
(A) participation in foreign trade missions;
(B) a subscription to services provided by the Department of Commerce;
(C) the payment of website fees;
(D) the design of marketing media;
(E) a trade show exhibition;
(F) participation in training workshops;
(G) a reverse trade mission;
(H) procurement of consultancy services (after consultation with the Department of Commerce to avoid duplication); or
(I) any other initiative determined appropriate by the Associate Administrator.
(3) Grants
(A) Joint review
In carrying out the program, the Associate Administrator may make a grant to a State to increase the number of eligible small business concerns in the State exploring significant new trade opportunities.
(B) Considerations
In making grants under this subsection, the Associate Administrator may give priority to an application by a State that proposes a program that—
(i) focuses on eligible small business concerns as part of a trade expansion program;
(ii) demonstrates intent to promote trade expansion by—
(I) socially and economically disadvantaged small business concerns;
(II) small business concerns owned or controlled by women; and
(III) rural small business concerns;
(iii) promotes trade facilitation from a State that is not 1 of the 10 States with the highest percentage of eligible small business concerns that are engaged in international trade, based upon the most recent data from the Department of Commerce; and
(iv) includes—
(I) activities which have resulted in the highest return on investment based on the most recent year; and
(II) the adoption of shared best practices included in the annual report of the Administration.
(C) Limitations
(i) Single application
A State may not submit more than 1 application for a grant under the program in any 1 fiscal year.
(ii) Proportion of amounts
The total value of grants made under the program during a fiscal year to the 10 States with the highest percentage of eligible small business concerns, based upon the most recent data available from the Department of Commerce, shall be not more than 40 percent of the amounts appropriated for the program for that fiscal year.
(iii) Duration
The Associate Administrator shall award a grant under this program for a period of not more than 2 years.
(D) Application
(i) In general
A State desiring a grant under the program shall submit an application at such time, in such manner, and accompanied by such information as the Associate Administrator may establish.
(ii) Consultation to reduce duplication
A State desiring a grant under the program shall—
(I) before submitting an application under clause (i), consult with applicable trade agencies of the Federal Government on the scope and mission of the activities the State proposes to carry out using the grant, to ensure proper coordination and reduce duplication in services; and
(II) document the consultation conducted under subclause (I) in the application submitted under clause (i).
(4) Competitive basis
The Associate Administrator shall award grants under the program on a competitive basis.
(5) Federal share
The Federal share of the cost of a trade expansion program carried out using a grant under the program shall be—
(A) for a State that has a high trade volume, as determined by the Associate Administrator, not more than 65 percent; and
(B) for a State that does not have a high trade volume, as determined by the Associate Administrator, not more than 75 percent.
(6) Non-Federal share
The non-Federal share of the cost of a trade expansion program carried out using a grant under the program shall be comprised of not less than 50 percent cash and not more than 50 percent of indirect costs and in-kind contributions, except that no such costs or contributions may be derived from funds from any other Federal program.
(7) Reports
(A) Initial report
Not later than 120 days after February 24, 2016, the Associate Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report, which shall include—
(i) a description of the structure of and procedures for the program;
(ii) a management plan for the program; and
(iii) a description of the merit-based review process to be used in the program.
(B) Annual reports
(i) In general
The Associate Administrator shall publish on the website of the Administration an annual report regarding the program, which shall include—
(I) the number and amount of grants made under the program during the preceding year;
(II) a list of the States receiving a grant under the program during the preceding year, including the activities being performed with each grant;
(III) the effect of each grant on the eligible small business concerns in the State receiving the grant;
(IV) the total return on investment for each State; and
(V) a description of best practices by States that showed high returns on investment and significant progress in helping more eligible small business concerns.
(ii) Notice to Congress
On the date on which the Associate Administrator publishes a report under clause (i), the Associate Administrator shall notify the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives that the report has been published.
(8) Reviews by Inspector General
(A) In general
The Inspector General of the Administration shall conduct a review of—
(i) the extent to which recipients of grants under the program are measuring the performance of the activities being conducted and the results of the measurements; and
(ii) the overall management and effectiveness of the program.
(B) Reports
(i) Pilot program
Not later than 6 months after February 24, 2016, the Inspector General of the Administration shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report regarding the use of amounts made available under the State Trade and Export Promotion Grant Program under section 1207 of the Small Business Jobs Act of 2010 (
(ii) New step program
Not later than 18 months after the date on which the first grant is awarded under this subsection, the Inspector General of the Administration shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report regarding the review conducted under subparagraph (A).
(9) Authorization of appropriations
There is authorized to be appropriated to carry out the program $30,000,000 for each of fiscal years 2016 through 2020.
(m) Definitions
In this section—
(1) the term "Associate Administrator" means the Associate Administrator for International Trade described in subsection (a)(2);
(2) the term "Export Assistance Center" means a one-stop shop for United States exporters established by the United States and Foreign Commercial Service of the Department of Commerce pursuant to
(3) the term "export finance specialist" means a full-time equivalent employee of the Office assigned to an Export Assistance Center to carry out the duties described in subsection (e); and
(4) the term "Office" means the Office of International Trade established under subsection (a)(1).
(
Editorial Notes
References in Text
The Small Business Investment Act of 1958, referred to in subsec. (l)(1)(A)(iii)(II), is
Section 1207 of the Small Business Jobs Act of 2010, referred to in subsec. (l)(8)(B)(i), is section 1207 of
Prior Provisions
A prior section 649, act July 30, 1953, ch. 282, title II, §220,
Amendments
2018—
Subsec. (b).
2016—Subsecs. (l), (m).
2010—
Subsec. (a).
Subsec. (b).
Subsec. (c).
Subsec. (c)(1).
Subsec. (c)(2).
"(A) identifying subsectors of the small business community with strong export potential;
"(B) identifying areas of demand in foreign markets;
"(C) prescreening foreign buyers for commercial and credit purposes; and
"(D) assisting"
for "mechanism for (A) identifying sub-sectors of the small business community with strong export potential; (B) identifying areas of demand in foreign markets; (C) prescreening foreign buyers for commercial and credit purposes; and (D) assisting".
Subsec. (c)(3).
Subsec. (c)(4).
Subsec. (c)(5).
Subsec. (c)(5)(A).
Subsec. (c)(5)(B).
Subsec. (c)(5)(C).
Subsec. (c)(6).
Subsec. (c)(7).
Subsec. (c)(7)(A).
Subsec. (c)(7)(B).
Subsec. (c)(7)(C).
Subsec. (c)(7)(D).
Subsec. (c)(8).
Subsec. (c)(9).
Subsec. (c)(9)(A).
Subsec. (c)(9)(B).
Subsec. (c)(9)(D).
Subsec. (c)(9)(E).
Subsec. (c)(9)(F), (G).
Subsec. (c)(10) to (13).
Subsec. (d).
Subsec. (e).
Subsec. (f).
Subsec. (g).
Subsec. (h).
Subsecs. (i), (j).
Subsecs. (k), (l).
1988—Subsecs. (b) to (g).
Statutory Notes and Related Subsidiaries
Change of Name
Committee on Small Business of Senate changed to Committee on Small Business and Entrepreneurship of Senate. See Senate Resolution No. 123, One Hundred Seventh Congress, June 29, 2001.
Effective Date of 2018 Amendment
Amendment by
Effective Date
Short Title
For short title of part B of title I of
Implementation
Study and Report on Filling Gaps in High-and-Low-Export Volume Areas
"(1)
"(A) conduct a study of—
"(i) the volume of exports for each State;
"(ii) the availability of export finance specialists in each State;
"(iii) the number of exporters in each State that are small business concerns;
"(iv) the percentage of exporters in each State that are small business concerns;
"(v) the change, if any, in the number of exporters that are small business concerns in each State—
"(I) for the first study conducted under this subparagraph, during the 10-year period ending on the date of enactment of this Act [Sept. 27, 2010]; and
"(II) for each subsequent study, during the 10-year period ending on the date the study is commenced;
"(vi) the total value of the exports in each State by small business concerns;
"(vii) the percentage of the total volume of exports in each State that is attributable to small business concerns; and
"(viii) the change, if any, in the percentage of the total volume of exports in each State that is attributable to small business concerns—
"(I) for the first study conducted under this subparagraph, during the 10-year period ending on the date of enactment of this Act [Sept. 27, 2010]; and
"(II) for each subsequent study, during the 10-year period ending on the date the study is commenced; and
"(B) submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report containing—
"(i) the results of the study under subparagraph (A);
"(ii) to the extent practicable, a recommendation regarding how to eliminate gaps between the supply of and demand for export finance specialists in the 15 States that have the greatest volume of exports, based upon the most recent data available from the Department of Commerce;
"(iii) to the extent practicable, a recommendation regarding how to eliminate gaps between the supply of and demand for export finance specialists in the 15 States that have the lowest volume of exports, based upon the most recent data available from the Department of Commerce; and
"(iv) such additional information as the Administrator determines is appropriate.
"(2)
[For definitions of "Administrator" and "small business concern" as used in section 1205(b) of
Congressional Declaration of Policy
"(a) The Congress finds and declares that—
"(1) a strong export policy is essential to the health and well-being of the United States economy;
"(2) exports of goods and services account for one out of every six jobs in the manufacturing sector and 10 per centum of the gross national product.
"(3) every billion dollars in new exports is estimated to provide forty thousand jobs;
"(4) there is increased and fierce competition in international markets to United States goods and services;
"(5) small businesses account for no more than 10 per centum of all United States export sales;
"(6) Federal Government programs are not sufficiently responsive to the needs of small business for export education and development of overseas marketing opportunities necessary to insure that small businesses realize their potential; and
"(7) it is in the national interest to systematically and consistently promote and encourage small business participation in international markets.
"(b) It is therefore the purpose of this part [enacting this section, amending
"(1) providing educational and marketing assistance to small businesses;
"(2) insuring better access to export information and assistance for small businesses by upgrading and expanding the export development programs and services of the Department of Commerce and the Small Business Administration; and
"(3) promoting the competitive viability of such firms in export trade and encouraging increased tourism in the United States by creating a program to provide limited financial, technical, and management assistance as may be necessary."
1 So in original. Probably should be a reference to subsection (j).
§649a. Omitted
Editorial Notes
Codification
Section,
Statutory Notes and Related Subsidiaries
Effective and Termination Dates
§649b. Grants, contracts and cooperative agreements for international marketing programs
(a) Limitations and restrictions
The Secretary of Commerce (hereinafter referred to as the "Secretary") is authorized to make grants (including contracts and cooperative agreements) to a qualified applicant to encourage the development and implementation of a small business international marketing program (hereinafter referred to as "the program"). Each qualified applicant under
(b) Eligibility
(1) To be eligible for a grant under this section, an applicant proposing to carry out a small business international marketing program must submit to the Secretary an application demonstrating, at a minimum:
(A) the geographical area to be served;
(B) the number of firms to be assisted;
(C) the staff required to administer the program;
(D) the means to counsel small businesses interested in pursuing export sales, including providing information concerning available financing, credit insurance, tax treatment, potential markets and marketing assistance, export pricing, shipping, documentation, and foreign financing and business customs;
(E) the ability to provide market analysis of the export potential of small business concerns; and
(F) the capability for developing contacts with potential foreign customers and distributors for small business and their products, including arrangements and sponsorship of foreign trade missions for small business concerns to meet with identified potential customers, distributors, sales representatives, and organizations interested in licensing or joint ventures: Provided, however, That no portion of any Federal funds may be used to directly underwrite any small business participation in foreign trade missions abroad.
(2) Program services shall be provided to small business concerns through outreach services at the most local level practicable.
(3) Each small business international marketing program shall have a full-time staff director to manage program activities, and access to export specialists to counsel and to assist small business clients in international marketing.
(c) Advisory board establishment
(1) Each small business international marketing program shall establish an advisory board of nine members to be appointed by the staff director of the program, not less than five members of whom shall be small business persons or representatives of small business associations.
(2) Each advisory board shall elect a chairman and shall advise, counsel, and confer with the staff director of the program on all policy matters pertaining to the operation of the program (including who may be eligible to receive assistance, ways to promote the sale of United States products and services in foreign markets or to encourage tourism in the United States, and how to maximize local and regional private consultant participation in the program).
(d) Grant requirements
The Secretary shall require, as a condition to any grant (or amendment or modification thereof) made to an applicant under this section, that a sum equal to the amount of such grant be provided from sources other than the Federal Government: Provided, That the additional amount shall not include any amount of indirect costs or in-kind contributions paid for under any Federal program, nor shall indirect costs or in-kind contributions exceed 50 per centum of the non-Federal additional amount.
(e) Program evaluation; reports
The Secretary shall develop a plan to evaluate programs approved under this section which shall only—
(1) determine the impact of small business international marketing programs on those small businesses assisted;
(2) determine the amount of export sales generated by small businesses assisted through such programs; and
(3) make recommendations concerning continuation and/or expansion of the program and possible improvements in the program structure. Such evaluation shall be submitted to the Congress by October 1, 1982.
(f) Recipients' duty to furnish information
For the purpose of the evaluation under subsection (e), the Secretary is authorized to require any small business international marketing program, or party receiving assistance under this section, to furnish such information as is deemed appropriate to complete the required evaluation.
(g) "Applicant" defined
As used in this section, the term "applicant" means any State government or agency or instrumentality thereof, any Small Business Administration—designated small business development center, any for profit small business, any nonprofit corporation, any regional commission, or any combination of such entities, which will carry out a small business international marketing program.
(h) Contract authority
The authority to enter into contracts shall be in effect for each fiscal year only to the extent or in the amounts as are provided in advance in appropriation Acts.
(
Editorial Notes
Codification
Section was not enacted as part of the Small Business Act which comprises this chapter.
Statutory Notes and Related Subsidiaries
Termination of Advisory Boards
Advisory boards established after Jan. 5, 1973, to terminate not later than the expiration of the 2-year period beginning on the date of their establishment, unless, in the case of a board established by the President or an officer of the Federal Government, such board is renewed by appropriate action prior to the expiration of such 2-year period, or in the case of a board established by the Congress, its duration is otherwise provided for by law. See
State Trade and Export Promotion Grant Program
"(a)
"(1) the term 'eligible small business concern' means a small business concern that—
"(A) has been in business for not less than the 1-year period ending on the date on which assistance is provided using a grant under this section;
"(B) is operating profitably, based on operations in the United States;
"(C) has demonstrated understanding of the costs associated with exporting and doing business with foreign purchasers, including the costs of freight forwarding, customs brokers, packing and shipping, as determined by the Associate Administrator; and
"(D) has in effect a strategic plan for exporting;
"(2) the term 'program' means the State Trade and Export Promotion Grant Program established under subsection (b);
"(3) the term 'small business concern owned and controlled by women' has the meaning given that term in section 3 of the Small Business Act (
"(4) the term 'socially and economically disadvantaged small business concern' has the meaning given that term in section 8(a)(4)(A) of the Small Business Act (
"(5) the term 'State' means each of the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands, and American Samoa.
"(b)
"(1) participation in a foreign trade mission;
"(2) a foreign market sales trip;
"(3) a subscription to services provided by the Department of Commerce;
"(4) the payment of website translation fees;
"(5) the design of international marketing media;
"(6) a trade show exhibition;
"(7) participation in training workshops; or
"(8) any other export initiative determined appropriate by the Associate Administrator.
"(c)
"(1)
"(2)
"(A) focuses on eligible small business concerns as part of an export promotion program;
"(B) demonstrates success in promoting exports by—
"(i) socially and economically disadvantaged small business concerns;
"(ii) small business concerns owned or controlled by women; and
"(iii) rural small business concerns;
"(C) promotes exports from a State that is not 1 of the 10 States with the highest percentage of exporters that are small business concerns, based upon the latest data available from the Department of Commerce; and
"(D) promotes new-to-market export opportunities to the People's Republic of China for eligible small business concerns in the United States.
"(3)
"(A)
"(B)
"(4)
"(d)
"(e)
"(1) for a State that has a high export volume, as determined by the Associate Administrator, not more than 65 percent; and
"(2) for a State that does not have a high export volume, as determined by the Associate Administrator, not more than 75 percent.
"(f)
"(g)
"(1)
"(A) a description of the structure of and procedures for the program;
"(B) a management plan for the program; and
"(C) a description of the merit-based review process to be used in the program.
"(2)
"(A) the number and amount of grants made under the program during the preceding year;
"(B) a list of the States receiving a grant under the program during the preceding year, including the activities being performed with grant; and
"(C) the effect of each grant on exports by eligible small business concerns in the State receiving the grant.
"(h)
"(1)
"(A) the extent to which recipients of grants under the program are measuring the performance of the activities being conducted and the results of the measurements; and
"(B) the overall management and effectiveness of the program.
"(2)
"(i)
"(j)
[For definitions of "Associate Administrator" and "rural small business concern" as used in section 1207 of
[For definitions of "Administration" and "small business concern" as used in section 1207 of
Definitions
"(1) the term 'Associate Administrator' means the Associate Administrator for International Trade appointed under section 22(a)(2) of the Small Business Act [
"(2) the term 'Export Assistance Center' means a one-stop shop referred to in section 2301(b)(8) of the Omnibus Trade and Competitiveness Act of 1988 (
"(3) the term 'rural small business concern' means a small business concern located in a rural area, as that term is defined in section 1393(a)(2) of the Internal Revenue Code of 1986 [
[For definition of "small business concern" as used in section 1202(a) of
§649c. Authorization of appropriations
At least one small business international program shall be established within each region of the Department of Commerce. There are authorized to be appropriated to the Secretary $1,500,000 for each fiscal year 1981, 1982, and 1983, to carry out the program established in
(
Editorial Notes
Codification
Section was not enacted as part of the Small Business Act which comprises this chapter.
§649d. Central information clearinghouse
The Secretary through the International Trade Administration, shall, only to such extent and in such amounts as are provided in appropriation Acts on and after October 1, 1980, maintain a central clearinghouse to provide for the collection, dissemination, and exchange of information between programs established pursuant to
(
Editorial Notes
Codification
Section was not enacted as part of the Small Business Act which comprises this chapter.
§650. Supervisory and enforcement authority for small business lending companies
(a) In general
The Administrator is authorized—
(1) to supervise the safety and soundness of small business lending companies and non-Federally regulated lenders;
(2) with respect to small business lending companies to set capital standards to regulate, to examine, and to enforce laws governing such companies, in accordance with the purposes of this chapter; and
(3) with respect to non-Federally regulated lenders to regulate, to examine, and to enforce laws governing the lending activities of such lenders under
(b) Capital directive
(1) In general
If the Administrator determines that a small business lending company is being operated in an imprudent manner, the Administrator may, in addition to any other action authorized by law, issue a directive to such company to increase capital to such level as the Administrator determines will result in the safe and sound operation of such company.
(2) Delegation
The Administrator may not delegate the authority granted under paragraph (1) except to an Associate Deputy Administrator.
(3) Regulations
The Administrator shall issue regulations outlining the conditions under which the Administrator may determine the level of capital pursuant to paragraph (1).
(c) Civil action
If a small business lending company violates this chapter, the Administrator may institute a civil action in an appropriate district court to terminate the rights, privileges, and franchises of the company under this chapter.
(d) Revocation or suspension of loan authority
(1) The Administrator may revoke or suspend the authority of a small business lending company or a non-Federally regulated lender to make, service or liquidate business loans authorized by
(A) for false statements knowingly made in any written submission required under this chapter;
(B) for omission of a material fact from any written submission required under this chapter;
(C) for willful or repeated violation of this chapter;
(D) for willful or repeated violation of any condition imposed by the Administrator with respect to any application, request, or agreement under this chapter; or
(E) for violation of any cease and desist order of the Administrator under this section.
(2) The Administrator may revoke or suspend authority under paragraph (1) only after a hearing under subsection (f). The Administrator may delegate power to revoke or suspend authority under paragraph (1) only to the Deputy Administrator and only if the Administrator is unavailable to take such action.
(A) The Administrator, after finding extraordinary circumstances and in order to protect the financial or legal position of the United States, may issue a suspension order without conducting a hearing pursuant to subsection (f). If the Administrator issues a suspension under the preceding sentence, the Administrator shall within two business days follow the procedures set forth in subsection (f).
(B) Any suspension under paragraph (1) shall remain in effect until the Administrator makes a decision pursuant to subparagraph (4) to permanently revoke the authority of the small business lending company or non-Federally regulated lender, suspend the authority for a time certain, or terminate the suspension.
(3) The small business lending company or non-Federally regulated lender must notify borrowers of a revocation and that a new entity has been appointed to service their loans. The Administrator or an employee of the Administration designated by the Administrator may provide such notice to the borrower.
(4) Any revocation or suspension under paragraph (1) shall be made by the Administrator except that the Administrator shall delegate to an administrative law judge as that term is used in
(e) Cease and desist order
(1) Where a small business lending company, a non-Federally regulated lender, or other person violates this chapter or is engaging or is about to engage in any acts or practices which constitute or will constitute a violation of this chapter, the Administrator may order, after the opportunity for hearing pursuant to subsection (f), the company, lender, or other person to cease and desist from such action or failure to act. The Administrator may delegate the authority under the preceding sentence only to the Deputy Administrator and only if the Administrator is unavailable to take such action.
(2) The Administrator, after finding extraordinary circumstances and in order to protect the financial or legal position of the United States, may issue a cease and desist order without conducting a hearing pursuant to subsection (f). If the Administrator issues a cease and desist order under the preceding sentence, the Administrator shall within two business days follow the procedures set forth in subsection (f).
(3) The Administrator may further order such small business lending company or non-Federally regulated lender or other person to take such action or to refrain from such action as the Administrator deems necessary to insure compliance with this chapter.
(4) A cease and desist order under this subsection may also provide for the suspension of authority to lend in subsection (d).
(f) Procedure for revocation or suspension of loan authority and for cease and desist order
(1) Before revoking or suspending authority under subsection (d) or issuing a cease and desist order under subsection (e), the Administrator shall serve an order to show cause upon the small business lending company, non-Federally regulated lender, or other person why an order revoking or suspending the authority or a cease and desist order should not be issued. The order to show cause shall contain a statement of the matters of fact and law asserted by the Administrator and the legal authority and jurisdiction under which a hearing is to be held, and shall set forth that a hearing will be held before an administrative law judge at a time and place stated in the order. Such hearing shall be conducted pursuant to the provisions of
(2) Witnesses summoned before the Administrator shall be paid by the party at whose instance they were called the same fees and mileage that are paid witnesses in the courts of the United States.
(3) A cease and desist order, suspension or revocation issued by the Administrator, after the hearing under this subsection is final agency action for purposes of
(g) Removal or suspension of management official
(1) Definition
In this section, the term "management official" means, with respect to a small business lending company or a non-Federally regulated lender, an officer, director, general partner, manager, employee, agent, or other participant in the management of the affairs of the company's or lender's activities under
(2) Removal of management official
(A) Notice
The Administrator may serve upon any management official a written notice of its intention to remove that management official if, in the opinion of the Administrator, the management official—
(i) willfully and knowingly commits a substantial violation of—
(I) this chapter;
(II) any regulation issued under this chapter;
(III) a final cease-and-desist order under this chapter; or
(IV) any agreement by the management official, the small business lending company or non-Federally regulated lender under this chapter; or
(ii) willfully and knowingly commits a substantial breach of a fiduciary duty of that person as a management official and the violation or breach of fiduciary duty is one involving personal dishonesty on the part of such management official.
(B) Contents of notice
A notice under subparagraph (A) shall contain a statement of the facts constituting grounds therefor and shall fix a time and place at which a hearing, conducted pursuant to
(C) Hearing
(i) Timing
A hearing under subparagraph (B) shall be held not earlier than 30 days and later than 60 days after the date of service of notice of the hearing, unless an earlier or a later date is set by the Administrator at the request of—
(I) the management official, and for good cause shown; or
(II) the Attorney General.
(ii) Consent
Unless the management official appears at a hearing under this paragraph in person or by a duly authorized representative, the management official shall be deemed to have consented to the issuance of an order of removal under subparagraph (A).
(D) Order of removal
(i) In general
In the event of consent under subparagraph (C)(ii), or if upon the record made at a hearing under this subsection, the Administrator finds that any of the grounds specified in the notice of removal has been established, the Administrator may issue such orders of removal from office as the Administrator deems appropriate.
(ii) Effectiveness
An order under clause (i) shall—
(I) take effect 30 days after the date of service upon the subject small business lending company or non-Federally regulated lender and the management official concerned (except in the case of an order issued upon consent as described in subparagraph (C)(ii), which shall become effective at the time specified in such order); and
(II) remain effective and enforceable, except to such extent as it is stayed, modified, terminated, or set aside by action of the Administrator or a reviewing court in accordance with this section.
(3) Authority to suspend or prohibit participation
(A) In general
In order to protect a small business lending company, a non-Federally regulated lender or the interests of the Administration or the United States, the Administrator may suspend from office or prohibit from further participation in any manner in the management or conduct of the affairs of a small business lending company or a non-Federally regulated lender a management official by written notice to such effect served upon the management official. Such suspension or prohibition may prohibit the management official from making, servicing, reviewing, approving, or liquidating any loan under
(B) Effectiveness
A suspension or prohibition under subparagraph (A)—
(i) shall take effect upon service of notice under paragraph (2); and
(ii) unless stayed by a court in proceedings authorized by subparagraph (C), shall remain in effect—
(I) pending the completion of the administrative proceedings pursuant to a notice of intention to remove served under paragraph (2); and
(II) until such time as the Administrator dismisses the charges specified in the notice, or, if an order of removal or prohibition is issued against the management official, until the effective date of any such order.
(C) Judicial review of suspension prior to hearing
Not later than 10 days after a management official is suspended or prohibited from participation under subparagraph (A), the management official may apply to an appropriate district court for a stay of the suspension or prohibition pending the completion of the administrative proceedings pursuant to a notice of intent to remove served upon the management official under paragraph (2).
(4) Authority to suspend on criminal charges
(A) In general
If a management official is charged in any information, indictment, or complaint authorized by a United States attorney, with a felony involving dishonesty or breach of trust, the Administrator may, by written notice served upon the management official, suspend the management official from office or prohibit the management official from further participation in any manner in the management or conduct of the affairs of the small business lending company or non-Federally regulated lender.
(B) Effectiveness
A suspension or prohibition under subparagraph (A) shall remain in effect until the information, indictment, or complaint is finally disposed of, or until terminated by the Administrator or upon an order of a district court.
(C) Authority upon conviction
If a judgment of conviction with respect to an offense described in subparagraph (A) is entered against a management official, then at such time as the judgment is not subject to further judicial review (and for purposes of this subparagraph shall not include any petition for a writ of habeas corpus), the Administrator may issue and serve upon the management official an order removing the management official, effective upon service of a copy of the order upon the small business lending company or non-Federally regulated lender.
(D) Authority upon dismissal or other disposition
A finding of not guilty or other disposition of charges described in subparagraph (A) shall not preclude the Administrator from instituting proceedings under subsection (e) or (f).
(5) Notification to small business lending company or a non-Federally regulated lender
Copies of each notice required to be served on a management official under this section shall also be served upon the small business lending company or non-Federally regulated lender involved.
(6) Final agency action and judicial review
(A) Issuance of orders
After a hearing under this subsection, and not later than 30 days after the Administrator notifies the parties that the case has been submitted for final decision, the Administrator shall render a decision in the matter (which shall include findings of fact upon which its decision is predicated), and shall issue and cause to be served upon each party to the proceeding an order or orders consistent with this section. The decision of the Administrator shall constitute final agency action for purposes of
(B) Judicial review
An adversely aggrieved party shall have 20 days from the date of issuance of the order to seek judicial review in an appropriate district court.
(h) Appointment of receiver
(1) In any proceeding under subsection (f)(4) or subsection (g)(6)(C),1 the court may take exclusive jurisdiction of a small business lending company or a non-Federally regulated lender and appoint a receiver to hold and administer the assets of the company or lender.
(2) Upon request of the Administrator, the court may appoint the Administrator as a receiver under paragraph (1).
(i) Possession of assets
(1) If a small business lending company or a non-Federally regulated lender is not in compliance with capital requirements or is insolvent, the Administrator may take possession of the portfolio of loans guaranteed by the Administrator and sell such loans to a third party by means of a receiver appointed under subsection (h).
(2) If a small business lending company or a non-Federally regulated lender is not in compliance with capital requirements or is insolvent or otherwise operating in an unsafe and unsound condition, the Administrator may take possession of servicing activities of loans that are guaranteed by the Administrator and sell such servicing rights to a third party by means of a receiver appointed under subsection (h).
(j) Penalties and forfeitures
(1) Except as provided in paragraph (2), a small business lending company or a non-Federally regulated lender which violates any regulation or written directive issued by the Administrator regarding the filing of any regular or special report shall pay to the United States a civil penalty of not more than $5,000 for each day of the continuance of the failure to file such report, unless it is shown that such failure is due to reasonable cause and not due to willful neglect. The civil penalties under this subsection may be enforced in a civil action brought by the Administrator. The penalties under this subsection shall not apply to any affiliate of a small business lending company that procures at least 10 percent of its annual purchasing requirements from small manufacturers.
(2) The Administrator may by rules and regulations that shall be codified in the Code of Federal Regulations, after an opportunity for notice and comment, or upon application of an interested party, at any time previous to such failure, by order, after notice and opportunity for hearing which shall be conducted pursuant to
(
Editorial Notes
Prior Provisions
A prior section 650, acts July 30, 1953, ch. 282, title II, §221,
Amendments
2004—
1 So in original. There is no subsec. (f)(4) or (g)(6)(C) in this section.
§651. National small business tree planting program
(a) Authorization of grants and contracts with States
The Administrator is authorized to make grants to or to enter into contracts with any State for the purpose of contracting with small businesses to plant trees on land owned or controlled by such State or local government. The Administrator shall require as a condition of any grant (or amendment or modification thereof) under this section that the applicant also contribute to the project a sum equal to at least 25 per centum of a particular project cost from sources other than the Federal Government. Such non-Federal money may include inkind contributions, including the cost or value of providing care and maintenance for a period of three years after the planting of the trees, but shall not include any value attributable to the land on which the trees are to be planted, nor may any part of any grant be used to pay for land or land charges: Provided, That not less than one-half of the amounts appropriated under this section shall be allocated to each State, the District of Columbia, and the Commonwealth of Puerto Rico on the basis of the population in each area as compared to the total population in all areas as provided by the Census Bureau of the Department of Commerce in the annual population estimate or the decennial census, whichever is most current. The Administrator may give a priority in awarding the remaining one-half of appropriated amounts to applicants who agree to contribute more than the requisite 25 per centum, and shall give priority to a proposal to restore an area determined to be a major disaster by the President on a date not more than three years prior to the fiscal year for which the application is made.
(b) Establishment by Administrator
In order to accomplish the objectives of this section, the Administrator, in consultation with appropriate Federal agencies, shall be responsible for formulating a national small business tree planting program. Based on this program, a State may submit a detailed proposal for tree planting by contract.
(c) Utilization of small business concerns in implementing program
To encourage and develop the capacity of small business concerns, to utilize this important segment of our economy, and to permit rapid increases in employment opportunities in local communities, grantees are directed to utilize small business contractors or concerns in connection with the program established by this section, and shall, to the extent practicable, divide the project to allow more than one small business concern to perform the work under the project.
(d) Cooperation of Federal agencies; technical services
For purposes of this section, agencies of the Federal Government are hereby authorized to cooperate with all grantees and with State foresters or other appropriate officials by providing without charge, in furtherance of this program, technical services with respect to the planting and growing of such trees.
(e) Authorization of appropriations
There are authorized to be appropriated to carry out the objectives of this section, $15,000,000 for fiscal year 1991 and $30,000,000 for each of the fiscal years 1995 through 1997, and all of such sums may remain available until expended.
(f) Rules and regulations
Notwithstanding any other law, rule, or regulation, the administration shall publish in the Federal Register proposed rules and regulations implementing this section within sixty days after November 5, 1990, and shall publish final rules and regulations within one hundred and twenty days of November 5, 1990.
(g) Definitions
As used in this section:
(1) the term "local government" includes political subdivisions of a State such as counties, parishes, cities, towns and municipalities;
(2) the term "planting" includes watering, application of fertilizer and herbicides, pruning and shaping, and other subsequent care and maintenance for a period of three years after the trees are planted; and
(3) the term "State" includes any agency thereof.
(h) Annual report to President and Congress
The Administrator shall submit annually to the President and the Congress a report on activities within the scope of this section.
(
Editorial Notes
Prior Provisions
A prior section 651, act July 30, 1953, ch. 282, §225, as added Aug. 9, 1955, ch. 628, §14,
Amendments
1994—Subsec. (a).
Subsec. (e).
Statutory Notes and Related Subsidiaries
Termination of Reporting Requirements
For termination, effective May 15, 2000, of provisions in subsec. (h) of this section relating to submitting annual report to Congress, see section 3003 of
§652. Central European Enterprise Development Commission
(a) Establishment
There is hereby established a Central European Small Business Enterprise Development Commission (hereinafter in this section referred to as the "Commission"). The Commission shall be comprised of a representative of each of the following: the Small Business Administration, the Association of American Universities, and the Association of Small Business Development Centers.
(b) Management and technical assistance to designated Central European countries
The Commission shall develop in Czechoslovakia, Poland and Hungary (hereinafter referred to as "designated Central European countries") a self-sustaining system to provide management and technical assistance to small business owners.
(1) Not later than 90 days after November 5, 1990, the Commission, in consultation with the Agency for International Development, shall enter 1 a contract with one or more entities to—
(A) determine the needs of small businesses in the designated Central European countries for management and technical assistance;
(B) evaluate appropriate Small Business Development Center-programs which might be replicated in order to meet the needs of each of such countries; and
(C) identify and assess the capability of educational institutions in each such country to develop a Small Business Development Center type program.
(2) Not later than 18 months after November 5, 1990, the Commission shall review the recommendations submitted to it and shall formulate and contract for the establishment of a three-year management and technical assistance demonstration program.
(c) Eligibility
In order to be eligible to participate, the educational institution in each designated Central European country shall—
(1) obtain the prior approval of the government to conduct the program;
(2) agree to provide partial financial support for the program, either directly or indirectly, during the second and third years of the demonstration program; and
(3) agree to obtain private sector involvement in the delivery of assistance under the program.
(d) Initial meeting and organization
The Commission shall meet and organize not later than 30 days after November 5, 1990.
(e) Reimbursement for necessary expenses
Members of the Commission shall serve without pay, except they shall be entitled to reimbursement for travel, subsistence, and other necessary expenses incurred by them in carrying out their functions in the same manner as persons employed intermittently in the Federal Government are allowed expenses under
(f) Meetings; quorum
Two Commissioners shall constitute a quorum for the transaction of business. Meetings shall be at the call of the Chairperson who shall be elected by the Members of the Commission.
(g) Authority; personnel
The Commission shall not have any authority to appoint staff, but upon request of the Chairperson, the head of any Federal department or agency may detail, on a reimbursable basis, any of the personnel of such department or agency to the Commission to assist in carrying out the Commission's functions under this section without regard to
(h) Initial and annual reports to Congress
The Commission shall report to Congress not later than December 1, 1991, and annually thereafter, on the progress in carrying out the provisions of this section.
(i) Authorization of appropriations
There are hereby authorized to be appropriated to the Small Business Administration the sum of $3,000,000 for fiscal year 1991, $5,000,000 for fiscal year 1992, $2,000,000 for each of fiscal years 1993 and 1994, and $1,000,000 for fiscal year 1995 to carry out the provisions of this section. Such sums shall be disbursed by the Small Business Administration as requested by the Commission and may remain available until expended. Any authority to enter contracts or other spending authority provided for in this section is subject to amounts provided for in advance in appropriations Acts.
(
Editorial Notes
Amendments
1994—
1993—Subsec. (i).
1 So in original. Probably should be "enter into".
§653. Office of Rural Affairs
(a) Establishment
There is hereby established in the Small Business Administration an Office of Rural Affairs (hereafter in this section referred to as the "Office").
(b) Appointment of director
The Office shall be headed by a director who shall be appointed by the Administrator not later than 90 days after November 15, 1990.
(c) Functions
The Office shall—
(1) strive to achieve an equitable distribution of the financial assistance available from the Administration for small business concerns located in rural areas;
(2) to the extent practicable, compile annual statistics on rural areas, including statistics concerning the population, poverty, job creation and retention, unemployment, business failures, and business startups;
(3) provide information to industries, organizations, and State and local governments concerning the assistance available to rural small business concerns through the Administration and through other Federal departments and agencies;
(4) provide information to industries, organizations, educational institutions, and State and local governments concerning programs administered by private organizations, educational institutions, and Federal, State, and local governments which improve the economic opportunities of rural citizens; and
(5) work with the United States Tourism and Travel Administration to assist small businesses in rural areas with tourism promotion and development.
(
Statutory Notes and Related Subsidiaries
Catalog of Programs To Assist Rural Small Business Concerns
Rural Small Business Conferences
"(a)
"(b)
"(1) select the sites for the conferences in order to encourage the maximum participation of all interested parties including private citizens and representatives of business, government, educational and nonprofit institutions; and
"(2) distribute the catalog of programs and such other background materials prepared by the Office of Advocacy as the Chief Counsel deems appropriate.
"(c)
"(1) review the effectiveness of current Federal programs to promote rural small business and its needs, with particular reference to the catalog of such programs;
"(2) review how current Federal programs could be made more accessible to small businesses located in rural areas;
"(3) make recommendations on how current programs can be approved to better address small business needs in rural areas;
"(4) review the availability and cost of capital, transportation, and telecommunications in rural areas;
"(5) review the availability of technical assistance and training programs for small business needs in rural areas, including marketing, computer training, accounting, financing, and international trade; and
"(6) determine any additional needs of small businesses in rural areas.
"(d)
Rural Tourism Training Program
§654. Paul D. Coverdell drug-free workplace program
(a) Definitions
In this section:
(1) Drug-free workplace program
The term "drug-free workplace program" means a program that includes—
(A) a written policy, including a clear statement of expectations for workplace behavior, prohibitions against reporting to work or working under the influence of illegal drugs or alcohol, prohibitions against the use or possession of illegal drugs in the workplace, and the consequences of violating those expectations and prohibitions;
(B) drug and alcohol abuse prevention training for a total of not less than 2 hours for each employee, and additional voluntary drug and alcohol abuse prevention training for employees who are parents;
(C) employee illegal drug testing, with analysis conducted by a drug testing laboratory certified by the Substance Abuse and Mental Health Services Administration, or approved by the College of American Pathologists for forensic drug testing, and a review of each positive test result by a medical review officer;
(D) employee access to an employee assistance program, including confidential assessment, referral, and short-term problem resolution; and
(E) continuing alcohol and drug abuse prevention education.
(2) Eligible intermediary
The term "eligible intermediary" means an organization—
(A) that has not less than 2 years of experience in carrying out drug-free workplace programs;
(B) that has a drug-free workplace policy in effect;
(C) that is located in a State, the District of Columbia, or a territory of the United States; and
(D)(i) the purpose of which is—
(I) to develop comprehensive drug-free workplace programs or to supply drug-free workplace services; or
(II) to provide other forms of assistance and services to small business concerns; or
(ii) that is eligible to receive a grant under
(3) Employee
The term "employee" includes any—
(A) applicant for employment;
(B) employee;
(C) supervisor;
(D) manager;
(E) officer of a small business concern who is active in management of the concern; and
(F) owner of a small business concern who is active in management of the concern.
(4) Medical review officer
The term "medical review officer"—
(A) means a licensed physician with knowledge of substance abuse disorders; and
(B) does not include any—
(i) employee of the small business concern; or
(ii) employee or agent of, or any person having a financial interest in, the laboratory for which the illegal drug test results are being reviewed.
(b) Establishment
(1) In general
There is established a drug-free workplace demonstration program, under which the Administrator may make grants to, or enter into cooperative agreements or contracts with, eligible intermediaries for the purpose of providing financial and technical assistance to small business concerns seeking to establish a drug-free workplace program.
(2) Additional grants for technical assistance
In addition to grants under paragraph (1), the Administrator may make grants to, or enter into cooperative agreements or contracts with, any grantee for the purpose of providing, in cooperation with one or more small business development centers, technical assistance to small business concerns seeking to establish a drug-free workplace program.
(3) 2-year grants
Each grant made under this subsection shall be for a period of 2 years, subject to an annual performance review by the Administrator.
(c) Promotion of effective practices of eligible intermediaries
(1) Technical assistance and information
The Administrator, after consultation with the Director of the Center for Substance Abuse and Prevention, shall provide technical assistance and information to each eligible intermediary under subsection (b) regarding the most effective practices in establishing and carrying out drug-free workplace programs.
(2) Evaluation of program
(A) Data collection and analysis
Each eligible intermediary receiving a grant under this section shall establish a system to collect and analyze information regarding the effectiveness of drug-free workplace programs established with assistance provided under this section through the intermediary, including information regarding any increase or decrease among employees in drug use, awareness of the adverse consequences of drug use, and absenteeism, injury, and disciplinary problems related to drug use. Such system shall conform to such requirements as the Administrator, after consultation with the Director of the Center for Substance Abuse and Prevention, may prescribe. Not more than 5 percent of the amount of each grant made under subsection (b) shall be used by the eligible intermediary to carry out this paragraph.
(B) Method of evaluation
The Administrator, after consultation with the Director of the Center for Substance Abuse and Prevention, shall provide technical assistance and guidance to each eligible intermediary receiving a grant under subsection (b) regarding the collection and analysis of information to evaluate the effectiveness of drug-free workplace programs established with assistance provided under this section, including the information referred to in paragraph (1). Such assistance shall include the identification of additional information suitable for measuring the benefits of drug-free workplace programs to the small business concern and to the concern's employees and the identification of methods suitable for analyzing such information.
(d) Evaluation and coordination
Not later than 18 months after October 21, 1998, the Administrator, in coordination with the Secretary of Labor, the Secretary of Health and Human Services, and the Director of National Drug Control Policy, shall—
(1) evaluate the drug-free workplace programs established with assistance made available under this section; and
(2) submit to Congress a report describing the results of the evaluation under paragraph (1).
(e) Contract authority
In carrying out this section, the Administrator may—
(1) contract with public and private entities to provide assistance related to carrying out the program under this section; and
(2) compensate those entities for provision of that assistance.
(f) Construction
Nothing in this section may be construed to require an employer who attends a program offered by an intermediary to contract for any service offered by the intermediary.
(g) Authorization
(1) In general
There is authorized to be appropriated to carry out this section (other than subsection (b)(2)), $5,000,000 for each of fiscal years 2005 and 2006. Amounts made available under this paragraph shall remain available until expended.
(2) Small business development centers
Of the total amount made available under paragraph (1) for each of fiscal years 2005 and 2006, not more than the greater of 10 percent or $500,000 may be used to carry out
(3) Additional authorization for technical assistance grants
There are authorized to be appropriated to carry out subsection (b)(2), $1,500,000 for each of fiscal years 2005 and 2006. Amounts made available under this paragraph shall remain available until expended.
(4) Limitation on administrative costs
Not more than 5 percent of the total amount made available under this subsection for any fiscal year shall be used for administrative costs (determined without regard to the administrative costs of eligible intermediaries).
(
Editorial Notes
References in Text
The National Narcotics Leadership Act of 1988, referred to in subsec. (a)(2)(D)(ii), is subtitle A of title I of
Amendments
2004—Subsec. (a)(2)(D).
"(i) to develop comprehensive drug-free workplace programs or to supply drug-free workplace services; or
"(ii) to provide other forms of assistance and services to small business concerns."
Subsec. (b).
Subsec. (c).
"(1) include, as reasonably necessary and appropriate, practices and procedures to ensure the confidentiality of illegal drug test results and of any participation by an employee in a rehabilitation program;
"(2) prohibit the mandatory disclosure of medical information by an employee prior to a confirmed positive illegal drug test; and
"(3) require that a medical review officer reviewing illegal drug test results shall report only the final results, limited to those drugs for which the employee tests positive, in writing and in a manner designed to ensure the confidentiality of the results."
Subsec. (g)(1).
Subsec. (g)(2).
Subsec. (g)(3), (4).
2000—
Subsec. (g)(1).
1998—
Statutory Notes and Related Subsidiaries
Findings and Purposes of 1998 Amendment
"(a)
"(1) 74 percent of adults who use illegal drugs are employed;
"(2) small business concerns employ over 50 percent of the Nation's workforce;
"(3) in more than 88 percent of families with children under the age of 18, at least 1 parent is employed; and
"(4) employees who use and abuse addictive illegal drugs and alcohol increase costs for businesses and risk the health and safety of all employees because—
"(A) absenteeism is 66 percent higher among drug users than individuals who do not use drugs;
"(B) health benefit utilization is 300 percent higher among drug users than individuals who do not use drugs;
"(C) 47 percent of workplace accidents are drug-related;
"(D) disciplinary actions are 90 percent higher among drug users than among individuals who do not use drugs; and
"(E) employee turnover is significantly higher among drug users than among individuals who do not use drugs.
"(b)
"(1) educate small business concerns about the advantages of a drug-free workplace;
"(2) provide grants and technical assistance in addition to financial incentives to enable small business concerns to create a drug-free workplace;
"(3) assist working parents in keeping their children drug-free; and
"(4) encourage small business employers and employees alike to participate in drug-free workplace programs."
Sense of Congress for 1998 Amendment
"(1) businesses should adopt drug-free workplace programs;
"(2) States should consider incentives to encourage businesses to adopt drug-free workplace programs; and
"(3) such incentives may include—
"(A) financial incentives, including—
"(i) a reduction in workers' compensation premiums;
"(ii) a reduction in unemployment insurance premiums; and
"(iii) tax deductions in an amount equal to the amount of expenditures for employee assistance programs, treatment, or illegal drug testing; and
"(B) other incentives, such as the adoption of liability limitations, as recommended by the President's Commission on Model State Drug Laws."
§655. Pilot Technology Access Program
(a) Establishment
The Administration, in consultation with the National Institute of Standards and Technology and the National Technical Information Service, shall establish a Pilot Technology Access Program, for making awards under this section to Small Business Development Centers (hereinafter in this section referred to as "Centers").
(b) Criteria for selection of Centers
The Administrator of the Small Business Administration shall establish competitive, merit-based criteria for the selection of Centers to receive awards on the basis of—
(1) the ability of the applicant to carry out the purposes described in subsection (d) in a manner relevant to the needs of industries in the area served by the Center;
(2) the ability of the applicant to integrate the implementation of this program with existing Federal and State technical and business assistance resources; and
(3) the ability of the applicant to continue providing technology access after the termination of this pilot program.
(c) Matching requirement
To be eligible to receive an award under this section, an applicant shall provide a matching contribution at least equal to that received under such award, not more than 50 percent of which may be waived overhead or in-kind contributions.
(d) Purpose of awards
Awards made under this section shall be for the purpose of increasing access by small businesses to on-line data base services that provide technical and business information, and access to technical experts, in a wide range of technologies, through such activities as—
(1) defraying the cost of access by small businesses to the data base services;
(2) training small businesses in the use of the data base services; and
(3) establishing a public point of access to the data base services.
Activities described in paragraphs (1) through (3) may be carried out through contract with a private entity.
(e) Renewal of awards
Awards previously made under section 648a 1 of this title may be renewed under this section.
(f) Interim report
Two years after the date on which the first award was issued under section 648a 1 of this title, the General Accounting Office shall submit to the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives and to the Committee on Small Business and the Committee on Commerce, Science, and Transportation of the Senate, an interim report on the implementation of the program under such section and this section, including the judgments of the participating Centers as to its effect on small business productivity and innovation.
(g) Final report
Three years after such date, the General Accounting Office shall submit to the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives and to the Committee on Small Business and the Committee on Commerce, Science and Transportation of the Senate, a final report evaluating the effectiveness of the Program under section 648a 1 of this title and this section in improving small business productivity and innovation.
(h) Authorization of appropriations
There are authorized to be appropriated to the Small Business Administration $5 million for each of fiscal years 1992 through 1995 to carry out this section, and such amounts may remain available until expended.
(i) Funding from other sources; employment of Centers by Federal agencies
Centers are encouraged to seek funding from Federal and non-Federal sources other than those provided for in this section to assist small businesses in the identification of appropriate technologies to fill their needs, the transfer of technologies from Federal laboratories, public and private universities, and other public and private institutions, the analysis of commercial opportunities represented by such technologies, and such other functions as the development, business planning, market research, and financial packaging required for commercialization. Insofar as such Centers pursue these activities, Federal agencies are encouraged to employ these Centers to interface with small businesses for such purposes as facilitating small business participation in Federal procurement and fostering commercialization of Federally-funded research and development.
(
Editorial Notes
References in Text
Statutory Notes and Related Subsidiaries
Change of Name
General Accounting Office redesignated Government Accountability Office by section 8 of
Committee on Small Business of Senate changed to Committee on Small Business and Entrepreneurship of Senate. See Senate Resolution No. 123, One Hundred Seventh Congress, June 29, 2001.
1 See References in Text note below.
§656. Women's Business Center program
(a) Definitions
In this section—
(1) the term "Assistant Administrator" means the Assistant Administrator of the Office of Women's Business Ownership established under subsection (g);
(2) the term "private nonprofit organization" means an entity that is described in
(3) the term "small business concern owned and controlled by women", either startup or existing, includes any small business concern—
(A) that is not less than 51 percent owned by 1 or more women; and
(B) the management and daily business operations of which are controlled by 1 or more women; and
(4) the term "women's business center site" means the location of—
(A) a women's business center; or
(B) 1 or more women's business centers, established in conjunction with another women's business center in another location within a State or region—
(i) that reach a distinct population that would otherwise not be served;
(ii) whose services are targeted to women; and
(iii) whose scope, function, and activities are similar to those of the primary women's business center or centers in conjunction with which it was established.
(b) Authority
The Administration may provide financial assistance to private nonprofit organizations to conduct 5-year projects for the benefit of small business concerns owned and controlled by women. The projects shall provide—
(1) financial assistance, including training and counseling in how to apply for and secure business credit and investment capital, preparing and presenting financial statements, and managing cash flow and other financial operations of a business concern;
(2) management assistance, including training and counseling in how to plan, organize, staff, direct, and control each major activity and function of a small business concern; and
(3) marketing assistance, including training and counseling in identifying and segmenting domestic and international market opportunities, preparing and executing marketing plans, developing pricing strategies, locating contract opportunities, negotiating contracts, and utilizing varying public relations and advertising techniques.
(c) Conditions of participation
(1) Non-Federal contributions
As a condition of receiving financial assistance authorized by this section, the recipient organization shall agree to obtain, after its application has been approved and notice of award has been issued, cash contributions from non-Federal sources as follows:
(A) in the first and second years, 1 non-Federal dollar for each 2 Federal dollars; and
(B) in the third, fourth, and fifth years, 1 non-Federal dollar for each Federal dollar.
(2) Form of non-Federal contributions
Not more than one-half of the non-Federal sector matching assistance may be in the form of in-kind contributions that are budget line items only, including office equipment and office space.
(3) Form of Federal contributions
The financial assistance authorized pursuant to this section may be made by grant, contract, or cooperative agreement and may contain such provision, as necessary, to provide for payments in lump sum or installments, and in advance or by way of reimbursement. The Administration may disburse up to 25 percent of each year's Federal share awarded to a recipient organization after notice of the award has been issued and before the non-Federal sector matching funds are obtained.
(4) Failure to obtain non-Federal funding
If any recipient of assistance fails to obtain the required non-Federal contribution during any project, it shall not be eligible thereafter for advance disbursements pursuant to paragraph (3) during the remainder of that project, or for any other project for which it is or may be funded by the Administration, and prior to approving assistance to such organization for any other projects, the Administration shall specifically determine whether the Administration believes that the recipient will be able to obtain the requisite non-Federal funding and enter a written finding setting forth the reasons for making such determination.
(d) Contract authority
A women's business center may enter into a contract with a Federal department or agency to provide specific assistance to women and other underserved small business concerns. Performance of such contract should not hinder the women's business centers in carrying out the terms of the grant received by the women's business centers from the Administration.
(e) Submission of 5-year plan
Each applicant organization initially shall submit a 5-year plan to the Administration on proposed fundraising and training activities, and a recipient organization may receive financial assistance under this program for a maximum of 5 years per women's business center site.
(f) Criteria
The Administration shall evaluate and rank applicants in accordance with predetermined selection criteria that shall be stated in terms of relative importance. Such criteria and their relative importance shall be made publicly available and stated in each solicitation for applications made by the Administration. The criteria shall include—
(1) the experience of the applicant in conducting programs or ongoing efforts designed to impart or upgrade the business skills of women business owners or potential owners;
(2) the present ability of the applicant to commence a project within a minimum amount of time;
(3) the ability of the applicant to provide training and services to a representative number of women who are both socially and economically disadvantaged; and
(4) the location for the women's business center site proposed by the applicant.
(g) Office of Women's Business Ownership
(1) Establishment
There is established within the Administration an Office of Women's Business Ownership, which shall be responsible for the administration of the Administration's programs for the development of women's business enterprises (as defined in
(2) Assistant Administrator of the Office of Women's Business Ownership
(A) Qualification
The position of Assistant Administrator shall be a Senior Executive Service position under
(B) Responsibilities and duties
(i) Responsibilities
The responsibilities of the Assistant Administrator shall be to administer the programs and services of the Office of Women's Business Ownership established to assist women entrepreneurs in the areas of—
(I) starting and operating a small business;
(II) development of management and technical skills;
(III) seeking Federal procurement opportunities; and
(IV) increasing the opportunity for access to capital.
(ii) Duties
The Assistant Administrator shall—
(I) administer and manage the Women's Business Center program;
(II) recommend the annual administrative and program budgets for the Office of Women's Business Ownership (including the budget for the Women's Business Center program);
(III) establish appropriate funding levels therefore 1 ;
(IV) review the annual budgets submitted by each applicant for the Women's Business Center program;
(V) select applicants to participate in the program under this section;
(VI) implement this section;
(VII) maintain a clearinghouse to provide for the dissemination and exchange of information between women's business centers;
(VIII) serve as the vice chairperson of the Interagency Committee on Women's Business Enterprise;
(IX) serve as liaison for the National Women's Business Council; and
(X) advise the Administrator on appointments to the Women's Business Council.
(C) Consultation requirements
In carrying out the responsibilities and duties described in this paragraph, the Assistant Administrator shall confer with and seek the advice of the Administration officials in areas served by the women's business centers.
(h) Program examination
(1) In general
The Administration shall—
(A) develop and implement an annual programmatic and financial examination of each women's business center established pursuant to this section, pursuant to which each such center shall provide to the Administration—
(i) an itemized cost breakdown of actual expenditures for costs incurred during the preceding year; and
(ii) documentation regarding the amount of matching assistance from non-Federal sources obtained and expended by the center during the preceding year in order to meet the requirements of subsection (c) and, with respect to any in-kind contributions described in subsection (c)(2) that were used to satisfy the requirements of subsection (c), verification of the existence and valuation of those contributions; and
(B) analyze the results of each such examination and, based on that analysis, make a determination regarding the programmatic and financial viability of each women's business center.
(2) Conditions for continued funding
In determining whether to award a contract (as a sustainability grant) under subsection (l) or to renew a contract (either as a grant or cooperative agreement) under this section with a women's business center, the Administration—
(A) shall consider the results of the most recent examination of the center under paragraph (1); and
(B) may withhold such award or renewal, if the Administration determines that—
(i) the center has failed to provide any information required to be provided under clause (i) or (ii) of paragraph (1)(A), or the information provided by the center is inadequate; or
(ii) the center has failed to provide any information required to be provided by the center for purposes of the report of the Administration under subsection (j), or the information provided by the center is inadequate.
(i) Contract authority
The authority of the Administrator to enter into contracts shall be in effect for each fiscal year only to the extent and in the amounts as are provided in advance in appropriations Acts. After the Administrator has entered into a contract, either as a grant or a cooperative agreement, with any applicant under this section, it shall not suspend, terminate, or fail to renew or extend any such contract unless the Administrator provides the applicant with written notification setting forth the reasons therefore 1 and affords the applicant an opportunity for a hearing, appeal, or other administrative proceeding under
(j) Management report
(1) In general
The Administration shall prepare and submit to the Committees on Small Business of the House of Representatives and the Senate a report on the effectiveness of all projects conducted under this section.
(2) Contents
Each report submitted under paragraph (1) shall include information concerning, with respect to each women's business center established pursuant to this section—
(A) the number of individuals receiving assistance;
(B) the number of startup business concerns formed;
(C) the gross receipts of assisted concerns;
(D) the employment increases or decreases of assisted concerns;
(E) to the maximum extent practicable, increases or decreases in profits of assisted concerns; and
(F) the most recent analysis, as required under subsection (h)(1)(B), and the subsequent determination made by the Administration under that subsection.
(k) Authorization of appropriations
(1) In general
There is authorized to be appropriated, to remain available until the expiration of the pilot program under subsection (l)—
(A) $12,000,000 for fiscal year 2000;
(B) $12,800,000 for fiscal year 2001;
(C) $13,700,000 for fiscal year 2002; and
(D) $14,500,000 for fiscal year 2003.
(2) Use of amounts
(A) In general
Except as provided in subparagraph (B), amounts made available under this subsection for fiscal year 1999, and each fiscal year thereafter, may only be used for grant awards and may not be used for costs incurred by the Administration in connection with the management and administration of the program under this section.
(B) Exceptions
Of the amount made available under this subsection for a fiscal year, the following amounts shall be available for selection panel costs, post-award conference costs, and costs related to monitoring and oversight:
(i) For fiscal year 2000, 2 percent.
(ii) For fiscal year 2001, 1.9 percent.
(iii) For fiscal year 2002, 1.9 percent.
(iv) For fiscal year 2003, 1.6 percent.
(3) Expedited acquisition
Notwithstanding any other provision of law, the Administrator, acting through the Assistant Administrator, may use such expedited acquisition methods as the Administrator determines to be appropriate to carry out this section, except that the Administrator shall ensure that all small business sources are provided a reasonable opportunity to submit proposals.
(4) Reservation of funds for sustainability pilot program
(A) In general
Subject to subparagraph (B), of the total amount made available under this subsection for a fiscal year, the following amounts shall be reserved for sustainability grants under subsection (l):
(i) For fiscal year 2000, 17 percent.
(ii) For fiscal year 2001, 18.8 percent.
(iii) For fiscal year 2002, 30.2 percent.
(iv) For fiscal year 2003, 30.2 percent.
(B) Use of unawarded funds for sustainability pilot program grants
If the amount reserved under subparagraph (A) for any fiscal year is not fully awarded to private nonprofit organizations described in subsection (l)(1)(B), the Administration is authorized to use the unawarded amount to fund additional women's business center sites or to increase funding of existing women's business center sites under subsection (b).
(l) Repealed. Pub. L. 110–28, title VIII, §8305(b), May 25, 2007, 121 Stat. 210
(m) Continued funding for centers
(1) In general
A nonprofit organization described in paragraph (2) shall be eligible to receive, subject to paragraph (3), a 3-year grant under this subsection.
(2) Applicability
A nonprofit organization described in this paragraph is a nonprofit organization that has received funding under subsection (b) or (l).
(3) Application and approval criteria
(A) Criteria
Subject to subparagraph (B), the Administrator shall develop and publish criteria for the consideration and approval of applications by nonprofit organizations under this subsection.
(B) Contents
Except as otherwise provided in this subsection, the conditions for participation in the grant program under this subsection shall be the same as the conditions for participation in the program under subsection (l), as in effect on May 25, 2007.
(C) Notification
Not later than 60 days after the date of the deadline to submit applications for each fiscal year, the Administrator shall approve or deny any application under this subsection and notify the applicant for each such application.
(4) Award of grants
(A) In general
Subject to the availability of appropriations, the Administrator shall make a grant for the Federal share of the cost of activities described in the application to each applicant approved under this subsection.
(B) Amount
A grant under this subsection shall be for not more than $150,000, for each year of that grant.
(C) Federal share
The Federal share under this subsection shall be not more than 50 percent.
(D) Priority
In allocating funds made available for grants under this section, the Administrator shall give applications under this subsection or subsection (l) priority over first-time applications under subsection (b).
(5) Renewal
(A) In general
The Administrator may renew a grant under this subsection for additional 3-year periods, if the nonprofit organization submits an application for such renewal at such time, in such manner, and accompanied by such information as the Administrator may establish.
(B) Unlimited renewals
There shall be no limitation on the number of times a grant may be renewed under subparagraph (A).
(n) Privacy requirements
(1) In general
A women's business center may not disclose the name, address, or telephone number of any individual or small business concern receiving assistance under this section without the consent of such individual or small business concern, unless—
(A) the Administrator is ordered to make such a disclosure by a court in any civil or criminal enforcement action initiated by a Federal or State agency; or
(B) the Administrator considers such a disclosure to be necessary for the purpose of conducting a financial audit of a women's business center, but a disclosure under this subparagraph shall be limited to the information necessary for such audit.
(2) Administration use of information
This subsection shall not—
(A) restrict Administration access to program activity data; or
(B) prevent the Administration from using client information (other than the information described in subparagraph (A)) to conduct client surveys.
(3) Regulations
The Administrator shall issue regulations to establish standards for requiring disclosures during a financial audit under paragraph (1)(B).
(o) Study and report on representation of women
(1) Study
The Administrator shall periodically conduct a study to identify industries, as defined under the North American Industry Classification System, underrepresented by small business concerns owned and controlled by women.
(2) Report
Not later than 3 years after January 2, 2013, and every 5 years thereafter, the Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report on the results of each study under paragraph (1) conducted during the 5-year period ending on the date of the report.
(
Editorial Notes
References in Text
Subsec. (l), referred to in subsecs. (h)(2), (k)(1), (4), and (m)(2), (3)(B), (4)(D), was repealed by
Codification
May 25, 2007, referred to in subsec. (m)(3)(B), was in the original "the date of enactment of this Act", which was translated as meaning the date of enactment of
Amendments
2014—Subsec. (o)(2).
2013—Subsec. (o).
2010—Subsec. (c)(1).
Subsec. (c)(5).
2007—Subsec. (l).
Subsecs. (m), (n).
1999—Subsec. (a)(2) to (4).
Subsec. (b).
Subsec. (c)(1).
"(B) in the third and fourth years, 1 non-Federal dollar for each Federal dollar; and
"(C) in the fifth year, 2 non-Federal dollars for each Federal dollar."
Subsec. (h).
"(1)
"(2)
Subsec. (j).
"(1) the number of individuals receiving assistance;
"(2) the number of startup business concerns formed;
"(3) the gross receipts of assisted concerns;
"(4) increases or decreases in profits of assisted concerns; and
"(5) the employment increases or decreases of assisted concerns."
Subsec. (k)(1).
Subsec. (k)(2).
Subsec. (k)(4).
Subsec. (l).
1997—
1994—Subsec. (g).
Subsec. (h).
Statutory Notes and Related Subsidiaries
Change of Name
Committee on Small Business of Senate changed to Committee on Small Business and Entrepreneurship of Senate. See Senate Resolution No. 123, One Hundred Seventh Congress, June 29, 2001.
Effective Date of 2010 Amendment
Effective Date of 2007 Amendment
Effective Date of 1999 Amendments
Effective Date of 1997 Amendment
Amendment by
Regulations
Transitional Rule
Applicability
"(1)
"(2)
1 So in original. Probably should be "therefor".
§657. Oversight of regulatory enforcement
(a) Definitions
For purposes of this section, the term—
(1) "Board" means a Regional Small Business Regulatory Fairness Board established under subsection (c); and
(2) "Ombudsman" means the Small Business and Agriculture Regulatory Enforcement Ombudsman designated under subsection (b).
(b) SBA Enforcement Ombudsman
(1) Not later than 180 days after March 29, 1996, the Administrator shall designate a Small Business and Agriculture Regulatory Enforcement Ombudsman, who shall report directly to the Administrator, utilizing personnel of the Small Business Administration to the extent practicable. Other agencies shall assist the Ombudsman and take actions as necessary to ensure compliance with the requirements of this section. Nothing in this section is intended to replace or diminish the activities of any Ombudsman or similar office in any other agency.
(2) The Ombudsman shall—
(A) work with each agency with regulatory authority over small businesses to ensure that small business concerns that receive or are subject to an audit, on-site inspection, compliance assistance effort, or other enforcement related communication or contact by agency personnel are provided with a means to comment on the enforcement activity conducted by such personnel;
(B) establish means to receive comments from small business concerns regarding actions by agency employees conducting compliance or enforcement activities with respect to the small business concern, means to refer comments to the Inspector General of the affected agency in the appropriate circumstances, and otherwise seek to maintain the identity of the person and small business concern making such comments on a confidential basis to the same extent as employee identities are protected under
(C) based on substantiated comments received from small business concerns and the Boards, annually report to Congress and affected agencies evaluating the enforcement activities of agency personnel including a rating of the responsiveness to small business of the various regional and program offices of each agency;
(D) coordinate and report annually on the activities, findings and recommendations of the Boards to the Administrator and to the heads of affected agencies; and
(E) provide the affected agency with an opportunity to comment on draft reports prepared under subparagraph (C), and include a section of the final report in which the affected agency may make such comments as are not addressed by the Ombudsman in revisions to the draft.
(c) Regional Small Business Regulatory Fairness Boards
(1) Not later than 180 days after March 29, 1996, the Administrator shall establish a Small Business Regulatory Fairness Board in each regional office of the Small Business Administration.
(2) Each Board established under paragraph (1) shall—
(A) meet at least annually to advise the Ombudsman on matters of concern to small businesses relating to the enforcement activities of agencies;
(B) report to the Ombudsman on substantiated instances of excessive enforcement actions of agencies against small business concerns including any findings or recommendations of the Board as to agency enforcement policy or practice; and
(C) prior to publication, provide comment on the annual report of the Ombudsman prepared under subsection (b).
(3) Each Board shall consist of five members, who are owners, operators, or officers of small business concerns, appointed by the Administrator, after receiving the recommendations of the chair and ranking minority member of the Committees on Small Business of the House of Representatives and the Senate. Not more than three of the Board members shall be of the same political party. No member shall be an officer or employee of the Federal Government, in either the executive branch or the Congress.
(4) Members of the Board shall serve at the pleasure of the Administrator for terms of three years or less.
(5) The Administrator shall select a chair from among the members of the Board who shall serve at the pleasure of the Administrator for not more than 1 year as chair.
(6) A majority of the members of the Board shall constitute a quorum for the conduct of business, but a lesser number may hold hearings.
(d) Powers of Boards
(1) The Board may hold such hearings and collect such information as appropriate for carrying out this section.
(2) The Board may use the United States mails in the same manner and under the same conditions as other departments and agencies of the Federal Government.
(3) The Board may accept donations of services necessary to conduct its business, provided that the donations and their sources are disclosed by the Board.
(4) Members of the Board shall serve without compensation, provided that, members of the Board shall be allowed travel expenses, including per diem in lieu of subsistence, at rates authorized for employees of agencies under subchapter I of
(e) Centralized website
Not later than 6 months after October 10, 2022, the Ombudsman shall maintain a publicly available website that includes—
(1) hyperlinks to small entity compliance guides described under section 212(a)(1) of the Small Business Regulatory Enforcement Fairness Act of 1996; and
(2) with respect to each such small entity compliance guide, the contact information for an individual who can offer assistance to small entities with respect to the rules that are the subject of such guide.
(f) Report on agency compliance
The Ombudsman shall include in the annual report required under subsection (b)(2)(C) an assessment of agency compliance with the requirements of section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996 for the year covered by such annual report.
(
Editorial Notes
References in Text
Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996, referred to in subsecs. (e)(1) and (f), is section 212 of title II of
Prior Provisions
A prior section 2[30] of
Amendments
2022—Subsec. (b)(2)(B).
Subsecs. (e), (f).
Statutory Notes and Related Subsidiaries
Change of Name
Committee on Small Business of Senate changed to Committee on Small Business and Entrepreneurship of Senate. See Senate Resolution No. 123, One Hundred Seventh Congress, June 29, 2001.
Effective Date
Section effective on expiration of 90 days after Mar. 29, 1996, see section 224 of
§657a. HUBZone program
(a) In general
There is established within the Administration a program (to be known as the HUBZone program) to be carried out by the Administrator to provide for Federal contracting assistance, including promoting economic development in economically distressed areas (as defined in section 636(m)(11)),1 to qualified HUBZone small business concerns in accordance with this section.
(b) Definitions relating to HUBZones
In this section:
(1) Historically underutilized business zone
The terms "historically underutilized business zone" or "HUBZone" mean any area located within 1 or more—
(A) qualified census tracts;
(B) qualified nonmetropolitan counties;
(C) lands within the external boundaries of an Indian reservation;
(D) redesignated areas;
(E) base closure areas;
(F) qualified disaster areas; or
(G) a Governor-designated covered area.
(2) HUBZone small business concern
The term "HUBZone small business concern" means—
(A) a small business concern that is at least 51 percent owned and controlled by United States citizens;
(B) a small business concern that is—
(i) an Alaska Native Corporation owned and controlled by Natives (as determined pursuant to
(ii) a direct or indirect subsidiary corporation, joint venture, or partnership of an Alaska Native Corporation qualifying pursuant to
(C) a small business concern—
(i) that is wholly owned by one or more Indian tribal governments, or by a corporation that is wholly owned by one or more Indian tribal governments; or
(ii) that is owned in part by one or more Indian tribal governments, or by a corporation that is wholly owned by one or more Indian tribal governments, if all other owners are either United States citizens or small business concerns;
(D) a small business concern—
(i) that is wholly owned by one or more Native Hawaiian Organizations (as defined in
(ii) that is owned in part by one or more Native Hawaiian Organizations, or by a corporation that is wholly owned by one or more Native Hawaiian Organizations, if all other owners are either United States citizens or small business concerns;
(E) a small business concern that is—
(i) wholly owned by a community development corporation that has received financial assistance under part 1 of subchapter A of the Community Economic Development Act of 1981 (
(ii) owned in part by one or more community development corporations, if all other owners are either United States citizens or small business concerns; or
(F) a small business concern that is—
(i) a small agricultural cooperative organized or incorporated in the United States;
(ii) wholly owned by 1 or more small agricultural cooperatives organized or incorporated in the United States; or
(iii) owned in part by 1 or more small agricultural cooperatives organized or incorporated in the United States, if all owners are small business concerns or United States citizens.
(3) Qualified areas
(A) Qualified census tract
(i) In general
The term "qualified census tract" means a census tract that is covered by the definition of "qualified census tract" in
(ii) Exception
For any metropolitan statistical area in the Commonwealth of Puerto Rico, the term "qualified census tract" has the meaning given that term in
(I) 10 years after the date that the Administrator implements this clause, or
(II) the date on which the Financial Oversight and Management Board for the Commonwealth of Puerto Rico created by the Puerto Rico Oversight, Management, and Economic Stability Act ceases to exist,
whichever event occurs first.
(B) Qualified nonmetropolitan county
The term "qualified nonmetropolitan county" means any county that is reflected in the online tool described under subparagraph (A)(i) and—
(i) that was not located in a metropolitan statistical area (as defined in
(ii) in which—
(I) the median household income is less than 80 percent of the State median household income, based on a 5-year average of the available data from the Bureau of the Census of the Department of Commerce;
(II) the unemployment rate is not less than 140 percent of the average unemployment rate for the United States or for the State in which such county is located, whichever is less, based on a 5-year average of the available data from the Secretary of Labor; or
(III) there is located a difficult development area, as designated by the Secretary of Housing and Urban Development in accordance with
(C) Redesignated area
The term "redesignated area" means any census tract that ceases to be qualified under subparagraph (A) and any nonmetropolitan county that ceases to be qualified under subparagraph (B) for a period of 3 years after the date on which the census tract or nonmetropolitan county ceased to be so qualified.
(D) Base closure area
(i) In general
Subject to clause (ii), the term "base closure area" means—
(I) lands within the external boundaries of a military installation that were closed through a privatization process under the authority of—
(aa) the Defense Base Closure and Realignment Act of 1990 (part A of title XXIX of division B of
(bb) title II of the Defense Authorization Amendments and Base Closure and Realignment Act (
(cc)
(dd) any other provision of law authorizing or directing the Secretary of Defense or the Secretary of a military department to dispose of real property at the military installation for purposes relating to base closures of redevelopment, while retaining the authority to enter into a leaseback of all or a portion of the property for military use;
(II) the census tract or nonmetropolitan county in which the lands described in subclause (I) are wholly contained;
(III) a census tract or nonmetropolitan county the boundaries of which intersect the area described in subclause (I); and
(IV) a census tract or nonmetropolitan county the boundaries of which are contiguous to the area described in subclause (II) or subclause (III).
(ii) Limitation
A census tract or nonmetropolitan county described in clause (i) shall be considered to be a base closure area for a period beginning on the date on which the Administrator designates such census tract or nonmetropolitan county as a base closure area and ending on the date on which the base closure area ceases to be a qualified census tract under subparagraph (A) or a qualified nonmetropolitan county under subparagraph (B) in accordance with the online tool prepared by the Administrator described under subsection (d)(7), except that such period may not be less than 8 years.
(iii) Definitions
In this subparagraph:
(I) Census tract
The term "census tract" means a census tract delineated by the United States Bureau of the Census in the most recent decennial census that is not located in a nonmetropolitan county and does not otherwise qualify as a qualified census tract.
(II) Nonmetropolitan county
The term "nonmetropolitan county" means a county that was not located in a metropolitan statistical area (as defined in
(E) Qualified disaster area
(i) In general
Subject to clause (ii), the term "qualified disaster area" means any census tract or nonmetropolitan county located in an area where a major disaster has occurred or an area in which a catastrophic incident has occurred if such census tract or nonmetropolitan county ceased to be qualified under subparagraph (A) or (B), as applicable, during the period beginning 5 years before the date on which the President declared the major disaster or the catastrophic incident occurred.
(ii) Duration
A census tract or nonmetropolitan county shall be considered to be a qualified disaster area under clause (i) only for the period of time ending on the date the area ceases to be a qualified census tract under subparagraph (A) or a qualified nonmetropolitan county under subparagraph (B), in accordance with the online tool prepared by the Administrator described under subsection (d)(7) and beginning—
(I) in the case of a major disaster, on the date on which the President declared the major disaster for the area in which the census tract or nonmetropolitan county, as applicable, is located; or
(II) in the case of a catastrophic incident, on the date on which the catastrophic incident occurred in the area in which the census tract or nonmetropolitan county, as applicable, is located.
(iii) Definitions
In this subparagraph:
(I) Major disaster
The term "major disaster" means a major disaster declared by the President under
(II) Other definitions
The terms "census tract" and "nonmetropolitan county" have the meanings given such terms in subparagraph (D)(iii).
(F) Governor-designated covered area
(i) In general
A "Governor-designated covered area" means a covered area that the Administrator has designated by approving a petition described under clause (ii).
(ii) Petition
For a covered area to receive a designation as a Governor-designated covered area, the Governor of the State in which the covered area is wholly contained shall include such covered area in a petition to the Administrator requesting such a designation. In reviewing a request for designation included in such a petition, the Administrator may consider—
(I) the potential for job creation and investment in the covered area;
(II) the demonstrated interest of small business concerns in the covered area to be designated as a Governor-designated covered area;
(III) how State and local government officials have incorporated the covered area into an economic development strategy; and
(IV) if the covered area was a HUBZone before becoming the subject of the petition, the impact on the covered area if the Administrator did not approve the petition.
(iii) Limitations
Each calendar year, a Governor may submit not more than 1 petition described under clause (ii). Such petition shall include all covered areas in a State for which the Governor seeks designation as a Governor-designated covered area, except that the total number of covered areas included in such petition may not exceed 10 percent of the total number of covered areas in the State.
(iv) Certification
If the Administrator grants a petition described under clause (ii), the Governor of the Governor-designated covered area shall, not less frequently than annually, submit data to the Administrator certifying that each Governor-designated covered area continues to meet the requirements of clause (v)(I).
(v) Definitions
In this subparagraph:
(I) Covered area
The term "covered area" means an area in a State—
(aa) that is located outside of an urbanized area, as determined by the Bureau of the Census;
(bb) with a population of not more than 50,000; and
(cc) for which the average unemployment rate is not less than 120 percent of the average unemployment rate of the United States or of the State in which the covered area is located, whichever is less, based on the most recent data available from the American Community Survey conducted by the Bureau of the Census.
(II) Governor
The term "Governor" means the chief executive of a State.
(III) State
The term "State" means each of the several States, the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands, and American Samoa.
(4) Qualified HUBZone small business concern
The term "qualified HUBZone small business concern" means a HUBZone small business concern that has been certified by the Administrator in accordance with the procedures described in this section.
(5) Native American small business concerns
(A) Alaska Native Corporation
The term "Alaska Native Corporation" has the same meaning as the term "Native Corporation" in
(B) Alaska Native Village
The term "Alaska Native Village" has the same meaning as the term "Native village" in
(C) Indian reservation
The term "Indian reservation"—
(i) has the same meaning as the term "Indian country" in
(I) any lands that are located within a State in which a tribe did not exercise governmental jurisdiction on December 21, 2000, unless that tribe is recognized after December 21, 2000, by either an Act of Congress or pursuant to regulations of the Secretary of the Interior for the administrative recognition that an Indian group exists as an Indian tribe (part 83 of title 25, Code of Federal Regulations); and
(II) lands taken into trust or acquired by an Indian tribe after December 21, 2000, if such lands are not located within the external boundaries of an Indian reservation or former reservation or are not contiguous to the lands held in trust or restricted status on December 21, 2000; and
(ii) in the State of Oklahoma, means lands that—
(I) are within the jurisdictional areas of an Oklahoma Indian tribe (as determined by the Secretary of the Interior); and
(II) are recognized by the Secretary of the Interior as eligible for trust land status under part 151 of title 25, Code of Federal Regulations (as in effect on December 21, 2000).
(6) Agricultural commodity
The term "agricultural commodity" has the same meaning as in
(c) Eligible contracts
(1) Definitions
In this subsection—
(A) the term "contracting officer" has the meaning given that term in
(B) the term "full and open competition" has the meaning given that term in
(2) Authority of contracting officer
(A) Sole source contracts
A contracting officer may award sole source contracts under this section to any qualified HUBZone small business concern, if—
(i) the qualified HUBZone small business 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 qualified HUBZone small business concerns will submit offers for the contracting opportunity;
(ii) the anticipated award price of the contract (including options) will not exceed—
(I) $7,000,000, in the case of a contract opportunity assigned a standard industrial classification code for manufacturing; or
(II) $3,000,000, in the case of all other contract opportunities; and
(iii) in the estimation of the contracting officer, the contract award can be made at a fair and reasonable price.
(B) Restricted competition
A contract opportunity may be awarded pursuant to this section on the basis of competition restricted to qualified HUBZone small business concerns if the contracting officer has a reasonable expectation that not less than 2 qualified HUBZone small business concerns will submit offers and that the award can be made at a fair market price.
(C) Appeals
Not later than 5 days from the date the Administration is notified of a procurement officer's decision not to award a contract opportunity under this section to a qualified HUBZone small business concern, the Administrator may notify the contracting officer of the intent to appeal the contracting officer's decision, and within 15 days of such date the Administrator may file a written request for reconsideration of the contracting officer's decision with the Secretary of the department or agency head.
(3) Price evaluation preference in full and open competitions
(A) In general
Subject to subparagraph (B), in any case in which a contract is to be awarded on the basis of full and open competition, the price offered by a qualified HUBZone small business concern shall be deemed as being lower than the price offered by another offeror (other than another small business concern), if the price offered by the qualified HUBZone small business concern is not more than 10 percent higher than the price offered by the otherwise lowest, responsive, and responsible offeror.
(B) Procurement of commodities
For purchases by the Secretary of Agriculture of agricultural commodities, the price evaluation preference shall be—
(i) 10 percent, for the portion of a contract to be awarded that is not greater than 25 percent of the total volume being procured for each commodity in a single invitation;
(ii) 5 percent, for the portion of a contract to be awarded that is greater than 25 percent, but not greater than 40 percent, of the total volume being procured for each commodity in a single invitation; and
(iii) zero, for the portion of a contract to be awarded that is greater than 40 percent of the total volume being procured for each commodity in a single invitation.
(C) Procurement of commodities for international food aid export operations
The price evaluation preference for purchases of agricultural commodities by the Secretary of Agriculture for export operations through international food aid programs administered by the Farm Service Agency shall be 5 percent on the first portion of a contract to be awarded that is not greater than 20 percent of the total volume of each commodity being procured in a single invitation.
(D) Treatment of preference
A contract awarded to a HUBZone small business concern under a preference described in subparagraph (B) shall not be counted toward the fulfillment of any requirement partially set aside for competition restricted to small business concerns.
(4) Relationship to other contracting preferences
A procurement may not be made from a source on the basis of a preference provided in paragraph (2) or (3), if the procurement would otherwise be made from a different source under
(d) Eligibility requirements; enforcement
(1) Certification
In order to be eligible for certification by the Administrator as a qualified HUBZone small business concern, a HUBZone small business concern shall submit documentation to the Administrator stating that—
(A) at the time of certification and at each examination conducted pursuant to paragraph (4), the principal office of the concern is located in a HUBZone and not fewer than 35 percent of its employees reside in a HUBZone;
(B) the concern will attempt to maintain the applicable employment percentage under subparagraph (A) during the performance of any contract awarded to such concern on the basis of a preference provided under subsection (c); and
(C) the concern will ensure that the requirements of
(2) Verification
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 HUBZone small business concern to receive assistance under this section (including a challenge, filed by an interested party, relating to the veracity of documentation provided to the Administration by such a concern under paragraph (1)); and
(B) verification by the Administrator of the accuracy of any documentation provided by a HUBZone small business concern under paragraph (1).
(3) Timing
The Administrator shall verify the eligibility of a HUBZone small business concern using the procedures described in paragraph (2) within a reasonable time and not later than 60 days after the date on which the Administrator receives sufficient and complete documentation from a HUBZone small business concern under paragraph (1).
(4) Recertification
Not later than 3 years after the date that such HUBZone small business concern was certified as a qualified HUBZone small business concern, and every 3 years thereafter, the Administrator shall verify the accuracy of any documentation provided by a HUBZone small business concern under paragraph (1) to determine if such HUBZone small business concern remains a qualified HUBZone small business concern.
(5) Examinations
The Administrator shall conduct program examinations of qualified HUBZone small business concerns, using a risk-based analysis to select which concerns are examined, to ensure that any concern examined meets the requirements of paragraph (1).
(6) Loss of certification
A HUBZone small business concern that, based on the results of an examination conducted pursuant to paragraph (5) no longer meets the requirements of paragraph (1), shall have 30 days to submit documentation to the Administrator to be eligible to be certified as a qualified HUBZone small business concern. During the 30-day period, such concern may not compete for or be awarded a contract under this section. If such concern fails to meet the requirements of paragraph (1) by the last day of the 30-day period, the Administrator shall not certify such concern as a qualified HUBZone small business concern.
(7) HUBZone online tool
(A) In general
The Administrator shall develop a publicly accessible online tool that depicts HUBZones. Such online tool shall be updated—
(i) with respect to HUBZones described under subparagraphs (A) and (B) of subsection (b)(3), beginning on January 1, 2020, and every 5 years thereafter;
(ii) with respect to a HUBZone described under subsection (b)(3)(C), immediately after the area becomes, or ceases to be, a redesignated area; and
(iii) with respect to HUBZones described under subparagraphs (D), (E), and (F) of subsection (b)(3), immediately after an area is designated as a base closure area, qualified disaster area, or Governor-designated covered area, respectively.
(B) Data
The online tool required under subparagraph (A) shall clearly and conspicuously provide access to the data used by the Administrator to determine whether or not an area is a HUBZone in the year in which the online tool was prepared.
(C) Notification of update
The Administrator shall include in the online tool a notification of the date on which the online tool, and the data used to create the online tool, will be updated.
(8) List of qualified HUBZone small business concerns
The Administrator shall establish and publicly maintain on the internet a list of qualified HUBZone small business concerns that shall—
(A) to the extent practicable, include the name, address, and type of business with respect to such concern;
(B) be updated by the Administrator not less than annually; and
(C) be provided upon request to any Federal agency or other entity.
(9) Provision of data
Upon the request of the Administrator, the Secretary of Labor, the Administrator of the Federal Emergency Management Agency, the Secretary of Housing and Urban Development, and the Secretary of the Interior (or the Assistant Secretary for Indian Affairs), shall promptly provide to the Administrator such information as the Administrator determines to be necessary to carry out this subsection.
(10) Penalties
In addition to the penalties described in
(e) Performance metrics
(1) In general
Not later than 1 year after December 12, 2017, the Administrator shall publish performance metrics designed to measure the success of the HUBZone program established under this section in meeting the program's objective of promoting economic development in economically distressed areas (as defined in
(2) Collecting and managing HUBZone data
The Administrator shall develop processes to incentivize each regional office of the Administration to collect and manage data on HUBZones within the geographic area served by such regional office.
(3) Report
Not later than 90 days after the last day of each fiscal year, the Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report analyzing the data from the performance metrics established under this subsection and including—
(A) the number of HUBZone small business concerns that lost certification as a qualified HUBZone small business concern because of the results of an examination performed under subsection (d)(5); and
(B) the number of those concerns that did not submit documentation to be recertified under subsection (d)(6).
(f) Authorization of appropriations
There is authorized to be appropriated to carry out the program established by this section $10,000,000 for each of fiscal years 2020 through 2025.
(
Editorial Notes
References in Text
The Community Economic Development Act of 1981, referred to in subsec. (b)(2)(E)(i), is subchapter A (§§611–633) of
The Puerto Rico Oversight, Management, and Economic Stability Act, referred to in subsec. (b)(3)(A)(ii)(II), is
Codification
The text of
In subsec. (c)(1)(A), "
In subsec. (c)(1)(B), "
In subsec. (c)(4), "
Prior Provisions
A prior section 2[31] of
Amendments
2021—Subsec. (c)(2)(A)(ii)(I).
2017—Subsec. (a).
Subsec. (b).
Subsec. (b)(1).
Subsec. (b)(1)(G).
Subsec. (b)(2).
Subsec. (b)(3).
Subsec. (b)(3)(A)(i).
Subsec. (b)(3)(A)(ii).
Subsec. (b)(3)(B).
Subsec. (b)(3)(B)(i).
Subsec. (b)(3)(B)(ii)(I).
Subsec. (b)(3)(B)(ii)(II).
Subsec. (b)(3)(B)(ii)(III).
Subsec. (b)(3)(C).
Subsec. (b)(3)(D)(ii).
"(I) with respect to a census tract or nonmetropolitan county described in clause (i), for a period of not less than 8 years, beginning on the date the military installation undergoes final closure and ending on the date the Administrator makes a final determination as to whether or not to implement the applicable designation described in subparagraph (A) or (B) in accordance with the results of the decennial census conducted after the area was initially designated as a base closure area; and
"(II) if such area was treated as a HUBZone at any time after 2010, until such time as the Administrator makes a final determination as to whether or not to implement the applicable designation described in subparagraph (A) or (B), after the 2020 decennial census."
Subsec. (b)(3)(E).
Subsec. (b)(3)(F).
Subsec. (b)(4).
Subsec. (b)(5) to (7).
Subsec. (c).
Subsec. (d).
Subsec. (e).
Subsec. (f).
2015—Subsec. (c)(3).
2010—Subsec. (b)(2).
Subsec. (b)(2)(A).
Subsec. (b)(2)(A)(iii).
Subsec. (b)(2)(B).
Subsec. (b)(2)(C).
2004—Subsec. (b)(3)(C), (D).
Subsec. (d).
2000—Subsec. (b)(3).
Subsec. (d).
Statutory Notes and Related Subsidiaries
Effective Date of 2017 Amendment
"(1) with respect to subsection (i) [enacting provisions set out as a note under this section], on the date of the enactment of this section [Dec. 12, 2017]; and
"(2) with respect to subsections (a) through (h) [amending this section,
Effective Date
Section effective Oct. 1, 1997, see section 3 of
Initial Limited Applicability
Construction of 2017 Amendment
Report
1 See References in Text note below.
§657b. Veterans programs
(a) Office of Veterans Business Development
There is established in the Administration an Office of Veterans Business Development, which shall be administered by the Associate Administrator for Veterans Business Development (in this section referred to as the "Associate Administrator") appointed under
(b) Associate Administrator for Veterans Business Development
The Associate Administrator—
(1) shall be an appointee in the Senior Executive Service;
(2) shall be responsible for the formulation, execution, and promotion of policies and programs of the Administration that provide assistance to small business concerns owned and controlled by veterans and small business concerns owned and controlled by service-disabled veterans. The Associate Administrator shall act as an ombudsman for full consideration of veterans in all programs of the Administration; and
(3) shall report to and be responsible directly to the Administrator.
(c) Interagency task force
(1) Establishment
Not later than 90 days after February 14, 2008, the President shall establish an interagency task force to coordinate the efforts of Federal agencies necessary to improve capital and business development opportunities for, and ensure achievement of the pre-established Federal contracting goals for, small business concerns owned and controlled by service-disabled veterans and small business concerns owned and controlled by veterans (in this section referred to as the "task force").
(2) Membership
The members of the task force shall include—
(A) the Administrator, who shall serve as chairperson of the task force; and
(B) a senior level representative from—
(i) the Department of Veterans Affairs;
(ii) the Department of Defense;
(iii) the Administration (in addition to the Administrator);
(iv) the Department of Labor;
(v) the Department of the Treasury;
(vi) the General Services Administration;
(vii) the Office of Management and Budget; and
(viii) 4 representatives from a veterans service organization or military organization or association, selected by the President.
(3) Duties
The task force shall—
(A) consult regularly with veterans service organizations and military organizations in performing the duties of the task force; and
(B) coordinate administrative and regulatory activities and develop proposals relating to—
(i) improving capital access and capacity of small business concerns owned and controlled by service-disabled veterans and small business concerns owned and controlled by veterans through loans, surety bonding, and franchising;
(ii) ensuring achievement of the pre-established Federal contracting goals for small business concerns owned and controlled by service-disabled veterans and small business concerns owned and controlled by veterans through expanded mentor-protégé assistance and matching such small business concerns with contracting opportunities;
(iii) increasing the integrity of certifications of status as a small business concern owned and controlled by service-disabled veterans or a small business concern owned and controlled by veterans;
(iv) reducing paperwork and administrative burdens on veterans in accessing business development and entrepreneurship opportunities;
(v) increasing and improving training and counseling services provided to small business concerns owned and controlled by veterans; and
(vi) making other improvements relating to the support for veterans business development by the Federal Government.
(d) Participation in TAP Workshops
(1) In general
The Associate Administrator shall increase veteran outreach by ensuring that Veteran Business Outreach Centers regularly participate, on a nationwide basis, in the workshops of the Transition Assistance Program of the Department of Labor.
(2) Presentations
In carrying out paragraph (1), a Veteran Business Outreach Center may provide grants to entities located in Transition Assistance Program locations to make presentations on the opportunities available from the Administration for recently separating or separated veterans. Each presentation under this paragraph shall include, at a minimum, a description of the entrepreneurial and business training resources available from the Administration.
(3) Written materials
The Associate Administrator shall—
(A) create written materials that provide comprehensive information on self-employment and veterans entrepreneurship, including information on resources available from the Administration on such topics; and
(B) make the materials created under subparagraph (A) available to the Secretary of Labor for inclusion in the Transition Assistance Program manual.
(4) Reports
The Associate Administrator shall submit to Congress progress reports on the implementation of this subsection.
(e) Women veterans business training
The Associate Administrator shall—
(1) compile information on existing resources available to women veterans for business training, including resources for—
(A) vocational and technical education;
(B) general business skills, such as marketing and accounting; and
(C) business assistance programs targeted to women veterans; and
(2) disseminate the information compiled under paragraph (1) through Veteran Business Outreach Centers and women's business centers.
(f) Authorization of appropriations
There are authorized to be appropriated to carry out this section—
(1) $1,500,000 for fiscal year 2005; and
(2) $2,000,000 for fiscal year 2006.
(g) Access to surplus property for veteran-owned small businesses
(1) Definitions
In this subsection—
(A) the term "foreign excess property" has the meaning given the term in
(B) the term "state agency" has the meaning given the term, including the roles and responsibilities assigned, in
(2) Requirement
The Administrator, in coordination with the Administrator of General Services, shall provide access to and manage the distribution of surplus property, and foreign excess property returned to a State for handling as surplus property, owned by the United States under
(
Editorial Notes
Prior Provisions
A prior section 2[32] of
Amendments
2019—Subsec. (g).
2008—Subsec. (c).
Subsecs. (d), (e).
Subsec. (f).
2004—Subsec. (c).
Statutory Notes and Related Subsidiaries
Congressional Findings
"(1) Veterans of the United States Armed Forces have been and continue to be vital to the small business enterprises of the United States.
"(2) In serving the United States, veterans often faced great risks to preserve the American dream of freedom and prosperity.
"(3) The United States has done too little to assist veterans, particularly service-disabled veterans, in playing a greater role in the economy of the United States by forming and expanding small business enterprises.
"(4) Medical advances and new medical technologies have made it possible for service-disabled veterans to play a much more active role in the formation and expansion of small business enterprises in the United States.
"(5) The United States must provide additional assistance and support to veterans to better equip them to form and expand small business enterprises, thereby enabling them to realize the American dream that they fought to protect."
Congressional Purpose
"(1) expanding the eligibility for certain small business assistance programs to include veterans;
"(2) directing certain departments and agencies of the United States to take actions that enhance small business assistance to veterans; and
"(3) establishing new institutions to provide small business assistance to veterans or to support the institutions that provide such assistance."
Advisory Committee on Veterans Business Affairs
"(a)
"(1) the Administrator of the Small Business Administration (in this section referred to as the 'Administrator');
"(2) the Associate Administrator for Veterans Business Development of the Small Business Administration;
"(3) the Congress;
"(4) the President; and
"(5) other United States policymakers.
"(b)
"(1)
"(A) eight shall be veterans who are owners of small business concerns (within the meaning of the term under section 3 of the Small Business Act (
"(B) seven shall be representatives of veterans organizations.
"(2)
"(A)
"(B)
"(3)
"(4)
"(A)
"(B)
"(5)
"(A)
"(B)
"(i) six shall be appointed for a term of 4 years; and
"(ii) five shall be appointed for a term of 5 years.
"(6)
"(7)
"(A)
"(B)
"(c)
"(1) Review, coordinate, and monitor plans and programs developed in the public and private sectors, that affect the ability of small business concerns owned and controlled by veterans to obtain capital and credit and to access markets.
"(2) Promote the collection of business information and survey data as they relate to veterans and small business concerns owned and controlled by veterans.
"(3) Monitor and promote plans, programs, and operations of the departments and agencies of the United States that may contribute to the formation and growth of small business concerns owned and controlled by veterans.
"(4) Develop and promote initiatives, policies, programs, and plans designed to foster small business concerns owned and controlled by veterans.
"(5) Develop a comprehensive plan, to be updated annually, for joint public-private sector efforts to facilitate growth and development of small business concerns owned and controlled by veterans.
"(d)
"(1)
"(2)
"(3)
"(4)
"(e)
"(1)
"(2)
"(3)
"(f)
"(1)
"(2)
"(g)
SCORE Program
"(a)
"(1) The appointment by SCORE in its national office of an individual to act as National Veterans Business Coordinator, whose duties shall relate exclusively to veterans business matters, and who shall be responsible for the establishment and administration of a program to coordinate counseling and training regarding entrepreneurship to veterans through the chapters of SCORE throughout the United States.
"(2) The assistance of SCORE in the [sic] establishing and maintaining a toll-free telephone number and an Internet website to provide access for veterans to information about the counseling and training regarding entrepreneurship available to veterans through SCORE.
"(3) The collection of statistics concerning services provided by SCORE to veterans, including service-disabled veterans, for inclusion in each annual report published by the Administrator under section 4(b)(2)(B) of the Small Business Act (
"(b)
Entrepreneurial Assistance
"(1) Conducting of studies and research, and the distribution of information generated by such studies and research, on the formation, management, financing, marketing, and operation of small business concerns by veterans.
"(2) Provision of training and counseling to veterans concerning the formation, management, financing, marketing, and operation of small business concerns.
"(3) Provision of management and technical assistance to the owners and operators of small business concerns regarding international markets, the promotion of exports, and the transfer of technology.
"(4) Provision of assistance and information to veterans regarding procurement opportunities with Federal, State, and local agencies, especially such agencies funded in whole or in part with Federal funds.
"(5) Establishment of an information clearinghouse to collect and distribute information, including by electronic means, on the assistance programs of Federal, State, and local governments, and of the private sector, including information on office locations, key personnel, telephone numbers, mail and electronic addresses, and contracting and subcontracting opportunities.
"(6) Provision of Internet or other distance learning academic instruction for veterans in business subjects, including accounting, marketing, and business fundamentals.
"(7) Compilation of a list of small business concerns owned and controlled by service-disabled veterans that provide products or services that could be procured by the United States and delivery of such list to each department and agency of the United States. Such list shall be delivered in hard copy and electronic form and shall include the name and address of each such small business concern and the products or services that it provides."
Annual Report of Administrator
"(1) the availability of Small Business Administration programs for such small business concerns and the degree of utilization of such programs by such small business concerns during the preceding 12-month period, including statistical information on such utilization as compared to the small business community as a whole;
"(2) the percentage and dollar value of Federal contracts awarded to such small business concerns during the preceding 12-month period, based on the data collected pursuant to section 604(d) [set out below]; and
"(3) proposals to improve the access of such small business concerns to the assistance made available by the United States."
Data and Information Collection
"(a)
"(1) collect information concerning the procurement practices and procedures of each department and agency of the United States having procurement authority;
"(2) publish and disseminate such information to procurement officers in all Federal agencies; and
"(3) make such information available to any small business concern requesting such information.
"(b)
"(c)
"(d)
Definitions
Executive Documents
Ex. Ord. No. 13540. Interagency Task Force on Veterans Small Business Development
Ex. Ord. No. 13540, Apr. 26, 2010, 75 F.R. 22497, provided:
By the authority vested in me as President by the Constitution and the laws of the United States of America, including section 102 of title I of the Military Reservist and Veteran Small Business Reauthorization and Opportunity Act of 2008 (
(a) a senior level representative, designated by the head of the respective department or agency, from each of the following:
(i) the Department of the Treasury;
(ii) the Department of Defense;
(iii) the Department of Labor;
(iv) the Department of Veterans Affairs;
(v) the Office of Management and Budget;
(vi) the Small Business Administration (in addition to the Administrator); and
(vii) the General Services Administration; and
(b) four representatives from a veterans' service or military organization or association, who shall be appointed by the Administrator.
(a) consult regularly with veterans service and military organizations in performing the duties of the Task Force;
(b) coordinate administrative and regulatory activities and develop proposals relating to:
(i) improving capital access and capacity of small business concerns owned and controlled by veterans and service-disabled veterans through loans, surety bonding, and franchising;
(ii) ensuring achievement of the pre-established Federal contracting goals for small business concerns owned and controlled by veterans and service-disabled veterans through expanded mentor-protégé assistance and matching such small business concerns with contracting opportunities;
(iii) increasing the integrity of certifications of status as a small business concern owned and controlled by a veteran or service-disabled veteran;
(iv) reducing paperwork and administrative burdens on veterans in accessing business development and entrepreneurship opportunities;
(v) increasing and improving training and counseling services provided to small business concerns owned and controlled by veterans; and
(vi) making other improvements relating to the support for veterans business development by the Federal Government; and
(c) not later than 1 year after its first meeting and annually thereafter, forward to the President a report on the performance of its functions, including any proposals developed pursuant to subsection (b) of this section.
(b) Nothing in this order shall be construed to impair or otherwise effect [sic]:
(i) authority granted by law to an executive department, agency, or the head thereof; and
(ii) functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.
(c) Insofar as the Federal Advisory Committee Act, as amended ([former] 5 U.S.C. App.) [see
(d) This order is not intended to and does not create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
Barack Obama.
Extension of Term of Interagency Task Force on Veterans Small Business Development
Term of Interagency Task Force on Veterans Small Business Development extended until Sept. 30, 2025, by Ex. Ord. No. 14109, Sept. 29, 2023, 88 F.R. 68447, set out as a note under
Previous extensions of term of Interagency Task Force on Veterans Small Business Development were contained in the following prior Executive Orders:
Ex. Ord. No. 14048, Sept. 30, 2021, 86 F.R. 55465, extended term until Sept. 30, 2023.
Ex. Ord. No. 13889, Sept. 27, 2019, 84 F.R. 52743, extended term until Sept. 30, 2021.
Ex. Ord. No. 13811, Sept. 29, 2017, 82 F.R. 46363, extended term until Sept. 30, 2019.
Ex. Ord. No. 13708, Sept. 30, 2015, 80 F.R. 60271, extended term until Sept. 30, 2017.
Ex. Ord. No. 13652, Sept. 30, 2013, 78 F.R. 61817, extended term until Sept. 30, 2015.
Ex. Ord. No. 13591, Nov. 23, 2011, 76 F.R. 74623, extended term until Sept. 30, 2013.
§657c. Repealed. Pub. L. 112–239, div. A, title XVI, §1699(a), Jan. 2, 2013, 126 Stat. 2092
Section,
Statutory Notes and Related Subsidiaries
Representation of Authorization
§657d. Federal and State Technology Partnership Program
(a) Definitions
In this section and
(1) Applicant
The term "applicant" means an entity, organization, or individual that submits a proposal for an award or a cooperative agreement under this section.
(2) Business advice and counseling
The term "business advice and counseling" means providing advice and assistance on matters described in
(3) Catastrophic incident
The term "catastrophic incident" means a major disaster that is comparable to the description of a catastrophic incident in the National Response Plan of the Administration, or any successor thereto.
(4) FAST program
The term "FAST program" means the Federal and State Technology Partnership Program established under this section.
(5) Mentor
The term "mentor" means an individual described in
(6) Mentoring Network
The term "Mentoring Network" means an association, organization, coalition, or other entity (including an individual) that meets the requirements of
(7) Recipient
The term "recipient" means a person that receives an award or becomes party to a cooperative agreement under this section.
(8) SBIR program
The term "SBIR program" has the same meaning as in
(9) State
The term "State" means each of the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands.
(10) STTR program
The term "STTR program" has the same meaning as in
(b) Establishment of Program
The Administrator shall establish a program to be known as the Federal and State Technology Partnership Program, the purpose of which shall be to strengthen the technological competitiveness of small business concerns in the States.
(c) Grants and cooperative agreements
(1) Joint review
In carrying out the FAST program under this section, the Administrator and the SBIR program managers at the National Science Foundation and the Department of Defense shall jointly review proposals submitted by applicants and may make awards or enter into cooperative agreements under this section based on the factors for consideration set forth in paragraph (2), in order to enhance or develop in a State—
(A) technology research and development by small business concerns;
(B) technology transfer from university research to technology-based small business concerns;
(C) technology deployment and diffusion benefiting small business concerns;
(D) the technological capabilities of small business concerns through the establishment or operation of consortia comprised of entities, organizations, or individuals, including—
(i) State and local development agencies and entities;
(ii) representatives of technology-based small business concerns;
(iii) industries and emerging companies;
(iv) universities; and
(v) small business development centers; and
(E) outreach, financial support, and technical assistance to technology-based small business concerns participating in or interested in participating in an SBIR program, including initiatives—
(i) to make grants or loans to companies to pay a portion or all of the cost of developing SBIR proposals;
(ii) to establish or operate a Mentoring Network within the FAST program to provide business advice and counseling that will assist small business concerns that have been identified by FAST program participants, program managers of participating SBIR agencies, the Administration, or other entities that are knowledgeable about the SBIR and STTR programs as good candidates for the SBIR and STTR programs, and that would benefit from mentoring, in accordance with
(iii) to create or participate in a training program for individuals providing SBIR outreach and assistance at the State and local levels; and
(iv) to encourage the commercialization of technology developed through SBIR program funding.
(2) Selection considerations
In making awards or entering into cooperative agreements under this section, the Administrator and the SBIR program managers referred to in paragraph (1)—
(A) may only consider proposals by applicants that intend to use a portion of the Federal assistance provided under this section to provide outreach, financial support, or technical assistance to technology-based small business concerns participating in or interested in participating in the SBIR program;
(B) shall consider, at a minimum—
(i) whether the applicant has demonstrated that the assistance to be provided would address unmet needs of small business concerns in the community, and whether it is important to use Federal funding for the proposed activities;
(ii) whether the applicant has demonstrated that a need exists to increase the number or success of small high-technology businesses in the State, as measured by the number of first phase and second phase SBIR awards that have historically been received by small business concerns in the State;
(iii) whether the projected costs of the proposed activities are reasonable;
(iv) whether the proposal integrates and coordinates the proposed activities with other State and local programs assisting small high-technology firms in the State;
(v) the manner in which the applicant will measure the results of the activities to be conducted; and
(vi) whether the proposal addresses the needs of small business concerns—
(I) owned and controlled by women;
(II) owned and controlled by minorities; and
(III) located in areas that have historically not participated in the SBIR and STTR programs; and
(C) shall give special consideration to an applicant that is located in an area affected by a catastrophic incident.
(3) Proposal limit
Not more than one proposal may be submitted for inclusion in the FAST program under this section to provide services in any one State in any 1 fiscal year.
(4) Process
Proposals and applications for assistance under this section shall be in such form and subject to such procedures as the Administrator shall establish. The Administrator shall promulgate regulations establishing standards for the consideration of proposals under paragraph (2), including standards regarding each of the considerations identified in paragraph (2)(B).
(5) Additional assistance for catastrophic incidents
Upon application by an applicant that receives an award or has in effect a cooperative agreement under this section and that is located in an area affected by a catastrophic incident, the Administrator may—
(A) provide additional assistance to the applicant; and
(B) waive the matching requirements under subsection (e)(2).
(d) Cooperation and coordination
In carrying out the FAST program under this section, the Administrator shall cooperate and coordinate with—
(1) Federal agencies required by
(2) entities, organizations, and individuals actively engaged in enhancing or developing the technological capabilities of small business concerns, including—
(A) State and local development agencies and entities;
(B) State committees established under the Experimental Program to Stimulate Competitive Research of the National Science Foundation (as established under
(C) State science and technology councils; and
(D) representatives of technology-based small business concerns.
(e) Administrative requirements
(1) Competitive basis
Awards and cooperative agreements under this section shall be made or entered into, as applicable, on a competitive basis.
(2) Matching requirements
(A) In general
The non-Federal share of the cost of an activity (other than a planning activity) carried out using an award or under a cooperative agreement under this section shall be—
(i) 50 cents for each Federal dollar, in the case of a recipient that will serve small business concerns located in one of the 18 States receiving the fewest SBIR first phase awards (as described in
(ii) except as provided in subparagraph (B), 1 dollar for each Federal dollar, in the case of a recipient that will serve small business concerns located in one of the 16 States receiving the greatest number of such SBIR first phase awards; and
(iii) except as provided in subparagraph (B), 75 cents for each Federal dollar, in the case of a recipient that will serve small business concerns located in a State that is not described in clause (i) or (ii) that is receiving such SBIR first phase awards.
(B) Low-income areas
The non-Federal share of the cost of the activity carried out using an award or under a cooperative agreement under this section shall be 50 cents for each Federal dollar that will be directly allocated by a recipient described in subparagraph (A) to serve small business concerns located in a qualified census tract, as that term is defined in section 42(d)(5)(C)(ii) 1 of title 26. Federal dollars not so allocated by that recipient shall be subject to the matching requirements of subparagraph (A).
(C) Types of funding
The non-Federal share of the cost of an activity carried out by a recipient shall be comprised of not less than 50 percent cash and not more than 50 percent of indirect costs and in-kind contributions, except that no such costs or contributions may be derived from funds from any other Federal program.
(D) Rankings
For purposes of subparagraph (A), the Administrator shall reevaluate the ranking of a State once every 2 fiscal years, beginning with fiscal year 2001, based on the most recent statistics compiled by the Administrator.
(3) Duration
Awards may be made or cooperative agreements entered into under this section for multiple years, not to exceed 5 years in total.
(f) Reports
(1) Initial report
Not later than 120 days after December 21, 2000, the Administrator shall prepare and submit to the Committee on Small Business of the Senate and the Committee on Science and the Committee on Small Business of the House of Representatives a report, which shall include, with respect to the FAST program, including Mentoring Networks—
(A) a description of the structure and procedures of the program;
(B) a management plan for the program; and
(C) a description of the merit-based review process to be used in the program.
(2) Annual reports
The Administrator shall submit an annual report to the Committee on Small Business of the Senate and the Committee on Science and the Committee on Small Business of the House of Representatives regarding—
(A) the number and amount of awards provided and cooperative agreements entered into under the FAST program during the preceding year;
(B) a list of recipients under this section, including their location and the activities being performed with the awards made or under the cooperative agreements entered into; and
(C) the Mentoring Networks and the mentoring database, as provided for under
(i) the status of the inclusion of mentoring information in the database required by
(ii) the status of the implementation and description of the usage of the Mentoring Networks.
(g) Reviews by Inspector General
(1) In general
The Inspector General of the Administration shall conduct a review of—
(A) the extent to which recipients under the FAST program are measuring the performance of the activities being conducted and the results of such measurements; and
(B) the overall management and effectiveness of the FAST program.
(2) Report
During the first quarter of fiscal year 2004, the Inspector General of the Administration shall submit a report to the Committee on Small Business of the Senate and the Committee on Science and the Committee on Small Business of the House of Representatives on the review conducted under paragraph (1).
(h) Program levels
(1) In general
There is authorized to be appropriated to carry out the FAST program, including Mentoring Networks, under this section and
(2) Mentoring database
Of the total amount made available under paragraph (1) for fiscal years 2001 through 2005, a reasonable amount, not to exceed a total of $500,000, may be used by the Administration to carry out
(i) Termination
The authority to carry out the FAST program under this section shall terminate on September 30, 2005.
(
Editorial Notes
References in Text
Subpar. (C) of
Prior Provisions
A prior section 2[34] of
Amendments
2021—Subsec. (a)(9).
2015—Subsec. (a)(3) to (10).
Subsec. (c)(2)(C).
Subsec. (c)(5).
2001—Subsec. (c)(2)(B)(vi).
Subsec. (c)(4).
Statutory Notes and Related Subsidiaries
Change of Name
Committee on Small Business of Senate changed to Committee on Small Business and Entrepreneurship of Senate. See Senate Resolution No. 123, One Hundred Seventh Congress, June 29, 2001.
Committee on Science of House of Representatives changed to Committee on Science and Technology of House of Representatives by House Resolution No. 6, One Hundred Tenth Congress, Jan. 5, 2007. Committee on Science and Technology of House of Representatives changed to Committee on Science, Space, and Technology of House of Representatives by House Resolution No. 5, One Hundred Twelfth Congress, Jan. 5, 2011.
Findings
"(1) programs to foster economic development among small high-technology firms vary widely among the States;
"(2) States that do not aggressively support the development of small high-technology firms, including participation by small business concerns in the SBIR program, are at a competitive disadvantage in establishing a business climate that is conducive to technology development; and
"(3) building stronger national, State, and local support for science and technology research in these disadvantaged States will expand economic opportunities in the United States, create jobs, and increase the competitiveness of the United States in the world market."
1 See References in Text note below.
§657e. Mentoring Networks
(a) Findings
Congress finds that—
(1) the SBIR and STTR programs create jobs, increase capacity for technological innovation, and boost international competitiveness;
(2) increasing the quantity of applications from all States to the SBIR and STTR programs would enhance competition for such awards and the quality of the completed projects; and
(3) mentoring is a natural complement to the FAST program of reaching out to new companies regarding the SBIR and STTR programs as an effective and low-cost way to improve the likelihood that such companies will succeed in such programs in developing and commercializing their research.
(b) Authorization for Mentoring Networks
The recipient of an award or participant in a cooperative agreement under
(c) Criteria for Mentoring Networks
A Mentoring Network established using assistance under
(1) provide business advice and counseling to high technology small business concerns located in the State or region served by the Mentoring Network and identified under
(2) identify volunteer mentors who—
(A) are persons associated with a small business concern that has successfully completed one or more SBIR or STTR funding agreements; and
(B) have agreed to guide small business concerns through all stages of the SBIR or STTR program process, including providing assistance relating to—
(i) proposal writing;
(ii) marketing;
(iii) Government accounting;
(iv) Government audits;
(v) project facilities and equipment;
(vi) human resources;
(vii) third phase partners;
(viii) commercialization;
(ix) venture capital networking; and
(x) other matters relevant to the SBIR and STTR programs;
(3) have experience working with small business concerns participating in the SBIR and STTR programs;
(4) contribute information to the national database referred to in subsection (d); and
(5) agree to reimburse volunteer mentors for out-of-pocket expenses related to service as a mentor under this section.
(d) Mentoring database
The Administrator shall—
(1) include in the database required by
(2) work cooperatively with Mentoring Networks to maintain and update the database;
(3) take such action as may be necessary to aggressively promote Mentoring Networks under this section; and
(4) fulfill the requirements of this subsection either directly or by contract.
(
§657f. 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
(b) Certification of small business concerns owned and controlled by service-disabled veterans
With respect to a procurement program or preference established under this chapter 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
(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
(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
(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
(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
(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
(
Editorial Notes
Codification
In subsec. (e), "
The text of subsec. (f) of
Prior Provisions
A prior section 2[36] of
Amendments
2021—Subsecs. (a), (b).
Subsec. (c).
Subsec. (c)(2)(A).
Subsec. (d).
Subsec. (e).
Subsec. (f).
Subsec. (g).
Subsec. (h).
Subsec. (h)(3).
Subsec. (i).
Statutory Notes and Related Subsidiaries
Effective Date of 2021 Amendment
Transfer of Verification of Small Business Concerns Owned and Controlled by Veterans or Service-Disabled Veterans to the Small Business Administration
"(a)
"(c)
"(1)
"(2)
"(A) as prohibiting the Administrator of the Small Business Administration from combining the contents of the database described under
"(B) as requiring the Administrator to use any system or technology related to the database described under
"(3)
"(f)
"(1)
"(A) if the concern files a certification application with the Administrator of the Small Business Administration before the end of the 1-year period beginning on the transfer date, maintain such self-certification until the Administrator makes a determination with respect to such certification; and
"(B) if the concern does not file such a certification application before the end of the 1-year period beginning on the transfer date, lose, at the end of such 1-year period, any self-certification of the concern as a small business concern owned and controlled by service-disabled veterans.
"(2)
"(3)
"(g)
"(1)
"(A) means any duty, obligation, power, authority, responsibility, right, privilege, activity, or program; and
"(B) does not include employees.
"(2)
"(3)
"(4)
"(5)
"(A)
"(i) which have been issued, made, granted, or allowed to become effective by the President, any Federal agency or official thereof, or by a court of competent jurisdiction, in the performance of functions which are transferred under this subsection; and
"(ii) which are in effect on the transfer date, or were final before the transfer date and are to become effective on or after the transfer date,
shall continue in effect according to their terms until modified, terminated, superseded, set aside, or revoked in accordance with law by the President, the Administrator of the Small Business Administration or other authorized official, a court of competent jurisdiction, or by operation of law.
"(B)
"(C)
"(D)
"(E)
"(F)
"(6)
§657f–1. Certification of small business concerns owned and controlled by veterans
(a) In general
With respect to the program established under
(1) certify the status of a concern as a small business concern owned and controlled by veterans; and
(2) require the periodic recertification of such status.
(b) 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
(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 (a).
(2) Examination of applicants
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 (a), to determine the veracity of any statements or information provided as part of such certification or otherwise provided under subsection (a).
(
§657g. Participation in federally funded projects
Any small business concern that is certified, or otherwise meets the criteria for participation in any program under
(
Editorial Notes
Codification
Section was enacted as part of the Small Business Reauthorization and Manufacturing Assistance Act of 2004, and also as part of the Consolidated Appropriations Act, 2005, and not as part of the Small Business Act which comprises this chapter.
Statutory Notes and Related Subsidiaries
Notice Regarding Participation of Small Business Concerns
§657h. Small business energy efficiency
(a) Definitions
In this section—
(1) the terms "Administration" and "Administrator" mean the Small Business Administration and the Administrator thereof, respectively;
(2) the term "association" means the association of small business development centers established under
(3) the term "disability" has the meaning given that term in
(4) the term "Efficiency Program" means the Small Business Energy Efficiency Program established under subsection (c)(1);
(5) the term "electric utility" has the meaning given that term in
(6) the term "high performance green building" has the meaning given that term in
(7) the term "on-bill financing" means a low interest or no interest financing agreement between a small business concern and an electric utility for the purchase or installation of equipment, under which the regularly scheduled payment of that small business concern to that electric utility is not reduced by the amount of the reduction in cost attributable to the new equipment and that amount is credited to the electric utility, until the cost of the purchase or installation is repaid;
(8) the term "small business concern" has the same meaning as in
(9) the term "small business development center" means a small business development center described in
(10) the term "telecommuting" means the use of telecommunications to perform work functions under circumstances which reduce or eliminate the need to commute;
(11) the term "Telecommuting Pilot Program" means the pilot program established under subsection (d)(1)(A); and
(12) the term "veteran" has the meaning given that term in
(b) Implementation of small business energy efficiency program
(1) In general
Not later than 90 days after December 19, 2007, the Administrator shall promulgate final rules establishing the Government-wide program authorized under subsection (d) of
(2) Program required
The Administrator shall develop and coordinate a Government-wide program, building on the Energy Star for Small Business program, to assist small business concerns in—
(A) becoming more energy efficient;
(B) understanding the cost savings from improved energy efficiency; and
(C) identifying financing options for energy efficiency upgrades.
(3) Consultation and cooperation
The program required by paragraph (2) shall be developed and coordinated—
(A) in consultation with the Secretary of Energy and the Administrator of the Environmental Protection Agency; and
(B) in cooperation with any entities the Administrator considers appropriate, such as industry trade associations, industry members, and energy efficiency organizations.
(4) Availability of information
The Administrator shall make available the information and materials developed under the program required by paragraph (2) to—
(A) small business concerns, including smaller design, engineering, and construction firms; and
(B) other Federal programs for energy efficiency, such as the Energy Star for Small Business program.
(5) Strategy and report
(A) Strategy required
The Administrator shall develop a strategy to educate, encourage, and assist small business concerns in adopting energy efficient building fixtures and equipment.
(B) Report
Not later than December 31, 2008, the Administrator shall submit to Congress a report containing a plan to implement the strategy developed under subparagraph (A).
(c) Small business sustainability initiative
(1) Authority
The Administrator shall establish a Small Business Energy Efficiency Program to provide energy efficiency assistance to small business concerns through small business development centers.
(2) Small business development centers
(A) In general
In carrying out the Efficiency Program, the Administrator shall enter into agreements with small business development centers under which such centers shall—
(i) provide access to information and resources on energy efficiency practices, including on-bill financing options;
(ii) conduct training and educational activities;
(iii) offer confidential, free, one-on-one, in-depth energy audits to the owners and operators of small business concerns regarding energy efficiency practices;
(iv) give referrals to certified professionals and other providers of energy efficiency assistance who meet such standards for educational, technical, and professional competency as the Administrator shall establish;
(v) to the extent not inconsistent with controlling State public utility regulations, act as a facilitator between small business concerns, electric utilities, lenders, and the Administration to facilitate on-bill financing arrangements;
(vi) provide necessary support to small business concerns to—
(I) evaluate energy efficiency opportunities and opportunities to design or construct high performance green buildings;
(II) evaluate renewable energy sources, such as the use of solar and small wind to supplement power consumption;
(III) secure financing to achieve energy efficiency or to design or construct high performance green buildings; and
(IV) implement energy efficiency projects;
(vii) assist owners of small business concerns with the development and commercialization of clean technology products, goods, services, and processes that use renewable energy sources, dramatically reduce the use of natural resources, and cut or eliminate greenhouse gas emissions through—
(I) technology assessment;
(II) intellectual property;
(III) Small Business Innovation Research submissions under
(IV) strategic alliances;
(V) business model development; and
(VI) preparation for investors; and
(viii) help small business concerns improve environmental performance by shifting to less hazardous materials and reducing waste and emissions, including by providing assistance for small business concerns to adapt the materials they use, the processes they operate, and the products and services they produce.
(B) Reports
Each small business development center participating in the Efficiency Program shall submit to the Administrator and the Administrator of the Environmental Protection Agency an annual report that includes—
(i) a summary of the energy efficiency assistance provided by that center under the Efficiency Program;
(ii) the number of small business concerns assisted by that center under the Efficiency Program;
(iii) statistics on the total amount of energy saved as a result of assistance provided by that center under the Efficiency Program; and
(iv) any additional information determined necessary by the Administrator, in consultation with the association.
(C) Reports to Congress
Not later than 60 days after the date on which all reports under subparagraph (B) relating to a year are submitted, the Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report summarizing the information regarding the Efficiency Program submitted by small business development centers participating in that program.
(3) Eligibility
A small business development center shall be eligible to participate in the Efficiency Program only if that center is certified under
(4) Selection of participating State programs
From among small business development centers submitting applications to participate in the Efficiency Program, the Administrator—
(A) shall, to the maximum extent practicable, select small business development centers in such a manner so as to promote a nationwide distribution of centers participating in the Efficiency Program; and
(B) may not select more than 1 small business development center in a State to participate in the Efficiency Program.
(5) Matching requirement
Subparagraphs (A) and (B) of
(6) Grant amounts
Each small business development center selected to participate in the Efficiency Program under paragraph (4) shall be eligible to receive a grant in an amount equal to—
(A) not less than $100,000 in each fiscal year; and
(B) not more than $300,000 in each fiscal year.
(7) Evaluation and report
The Comptroller General of the United States shall—
(A) not later than 30 months after the date of disbursement of the first grant under the Efficiency Program, initiate an evaluation of that program; and
(B) not later than 6 months after the date of the initiation of the evaluation under subparagraph (A), submit to the Administrator, the Committee on Small Business and Entrepreneurship of the Senate, and the Committee on Small Business of the House of Representatives, a report containing—
(i) the results of the evaluation; and
(ii) any recommendations regarding whether the Efficiency Program, with or without modification, should be extended to include the participation of all small business development centers.
(8) Guarantee
To the extent not inconsistent with State law, the Administrator may guarantee the timely payment of a loan made to a small business concern through an on-bill financing agreement on such terms and conditions as the Administrator shall establish through a formal rulemaking, after providing notice and an opportunity for comment.
(9) Implementation
Subject to amounts approved in advance in appropriations Acts and separate from amounts approved to carry out
(10) Authorization of appropriations
There are authorized to be appropriated such sums as are necessary to make grants and enter into cooperative agreements to carry out this subsection.
(11) Termination
The authority under this subsection shall terminate 4 years after the date of disbursement of the first grant under the Efficiency Program.
(d) Small business telecommuting
(1) Pilot program
(A) In general
The Administrator shall conduct, in not more than 5 of the regions of the Administration, a pilot program to provide information regarding telecommuting to employers that are small business concerns and to encourage such employers to offer telecommuting options to employees.
(B) Special outreach to individuals with disabilities
In carrying out the Telecommuting Pilot Program, the Administrator shall make a concerted effort to provide information to—
(i) small business concerns owned by or employing individuals with disabilities, particularly veterans who are individuals with disabilities;
(ii) Federal, State, and local agencies having knowledge and expertise in assisting individuals with disabilities, including veterans who are individuals with disabilities; and
(iii) any group or organization, the primary purpose of which is to aid individuals with disabilities or veterans who are individuals with disabilities.
(C) Permissible activities
In carrying out the Telecommuting Pilot Program, the Administrator may—
(i) produce educational materials and conduct presentations designed to raise awareness in the small business community of the benefits and the ease of telecommuting;
(ii) conduct outreach—
(I) to small business concerns that are considering offering telecommuting options; and
(II) as provided in subparagraph (B); and
(iii) acquire telecommuting technologies and equipment to be used for demonstration purposes.
(D) Selection of regions
In determining which regions will participate in the Telecommuting Pilot Program, the Administrator shall give priority consideration to regions in which Federal agencies and private-sector employers have demonstrated a strong regional commitment to telecommuting.
(2) Report to Congress
Not later than 2 years after the date on which funds are first appropriated to carry out this subsection, the Administrator shall transmit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report containing the results of an evaluation of the Telecommuting Pilot Program and any recommendations regarding whether the pilot program, with or without modification, should be extended to include the participation of all regions of the Administration.
(3) Termination
The Telecommuting Pilot Program shall terminate 4 years after the date on which funds are first appropriated to carry out this subsection.
(4) Authorization of appropriations
There is authorized to be appropriated to the Administration $5,000,000 to carry out this subsection.
(
Editorial Notes
Codification
Section is comprised of section 1203 of
Section was enacted as part of the Energy Independence and Security Act of 2007, and not as part of the Small Business Act which comprises this chapter.
Statutory Notes and Related Subsidiaries
Effective Date
Section effective on the date that is 1 day after Dec. 19, 2007, see section 1601 of
§657i. Coordination of disaster assistance programs with FEMA
(a) Coordination required
The Administrator shall ensure that the disaster assistance programs of the Administration are coordinated, to the maximum extent practicable, with the disaster assistance programs of the Federal Emergency Management Agency.
(b) Regulations required
The Administrator, in consultation with the Administrator of the Federal Emergency Management Agency, shall establish regulations to ensure that each application for disaster assistance is submitted as quickly as practicable to the Administration or directed to the appropriate agency under the circumstances.
(c) Completion; revision
The initial regulations shall be completed not later than 270 days after the date of the enactment of the Small Business Disaster Response and Loan Improvements Act of 2008. Thereafter, the regulations shall be revised on an annual basis.
(d) Report
The Administrator shall include a report on the regulations whenever the Administration submits the report required by
(
Editorial Notes
References in Text
The date of the enactment of the Small Business Disaster Response and Loan Improvements Act of 2008, referred to in subsec. (c), is the date of enactment of subtitle B (§§12051–12091) of title XII of
Codification
Prior Provisions
A prior section 2[37] of
Statutory Notes and Related Subsidiaries
Effective Date
Enactment of this section and repeal of
§657j. Information tracking and follow-up system for disaster assistance
(a) System required
The Administrator shall develop, implement, or maintain a centralized information system to track communications between personnel of the Administration and applicants for disaster assistance. The system shall ensure that whenever an applicant for disaster assistance communicates with such personnel on a matter relating to the application, the following information is recorded:
(1) The method of communication.
(2) The date of communication.
(3) The identity of the personnel.
(4) A summary of the subject matter of the communication.
(b) Follow-up required
The Administrator shall ensure that an applicant for disaster assistance receives, by telephone, mail, or electronic mail, follow-up communications from the Administration at all critical stages of the application process, including the following:
(1) When the Administration determines that additional information or documentation is required to process the application.
(2) When the Administration determines whether to approve or deny the loan.
(3) When the primary contact person managing the loan application has changed.
(c) Report on web portal for disaster loan application status
(1) In general
Not later than 90 days after November 25, 2015, the Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report relating to the creation of a web portal to the 1 track the status of applications for disaster assistance under
(2) Contents
The report under paragraph (1) shall include—
(A) information on the progress of the Administration in implementing the information system under subsection (a);
(B) recommendations from the Administration relating to the creation of a web portal for applicants to check the status of an application for disaster assistance under
(C) information on any related costs or staffing needed to implement such a web portal;
(D) information on whether such a web portal can maintain high standards for data privacy and data security;
(E) information on whether such a web portal will minimize redundancy among Administration disaster programs, improve management of the number of inquiries made by disaster applicants to employees located in the area affected by the disaster and to call centers, and reduce paperwork burdens on disaster victims; and
(F) such additional information as is determined necessary by the Administrator.
(
Editorial Notes
Codification
Amendments
2015—Subsec. (c).
Statutory Notes and Related Subsidiaries
Effective Date
Enactment of this section and repeal of
1 So in original. The word "the" probably should not appear.
§657k. Disaster processing redundancy
(a) In general
The Administrator shall ensure that the Administration has in place a facility for disaster loan processing that, whenever the Administration's primary facility for disaster loan processing becomes unavailable, is able to take over all disaster loan processing from that primary facility within 2 days.
(b) Authorization of appropriations
There are authorized to be appropriated such sums as may be necessary to carry out this section.
(
Editorial Notes
Codification
Statutory Notes and Related Subsidiaries
Effective Date
Enactment of this section and repeal of
§657l. Comprehensive disaster response plan
(a) Plan required
The Administrator shall develop, implement, or maintain a comprehensive written disaster response plan. The plan shall include the following:
(1) For each region of the Administration, a description of the disasters most likely to occur in that region.
(2) For each disaster described under paragraph (1)—
(A) an assessment of the disaster;
(B) an assessment of the demand for Administration assistance most likely to occur in response to the disaster;
(C) an assessment of the needs of the Administration, with respect to such resources as information technology, telecommunications, human resources, and office space, to meet the demand referred to in subparagraph (B); and
(D) guidelines pursuant to which the Administration will coordinate with other Federal agencies and with State and local authorities to best respond to the demand referred to in subparagraph (B) and to best use the resources referred to in that subparagraph.
(b) Completion; revision
The first plan required by subsection (a) shall be completed not later than 180 days after the date of the enactment of this section. Thereafter, the Administrator shall update the plan on an annual basis and following any major disaster relating to which the Administrator declares eligibility for additional disaster assistance under
(c) Knowledge required
The Administrator shall carry out subsections (a) and (b) through an individual with substantial knowledge in the field of disaster readiness and emergency response.
(d) Report
The Administrator shall include a report on the plan whenever the Administration submits the report required by
(
Editorial Notes
References in Text
The date of the enactment of this section, referred to in subsec. (b), is the date of enactment of
Codification
Statutory Notes and Related Subsidiaries
Effective Date
Enactment of this section and repeal of
Disaster Plan Improvements
§657m. Plans to secure sufficient office space
(a) Plans required
The Administrator shall develop long-term plans to secure sufficient office space to accommodate an expanded workforce in times of disaster.
(b) Report
The Administrator shall include a report on the plans developed under subsection (a) each time the Administration submits a report required under
(
Editorial Notes
Codification
Statutory Notes and Related Subsidiaries
Effective Date
Enactment of this section and repeal of
§657n. Immediate Disaster Assistance program
(a) Program required
The Administrator shall carry out a program, to be known as the Immediate Disaster Assistance program, under which the Administration participates on a deferred (guaranteed) basis in 85 percent of the balance of the financing outstanding at the time of disbursement of the loan if such balance is less than or equal to $25,000 for businesses affected by a disaster.
(b) Eligibility requirement
To receive a loan guaranteed under subsection (a), the applicant shall also apply for, and meet basic eligibility standards for, a loan under subsection (b) or (c) of
(c) Use of proceeds
A person who receives a loan under subsection (b) or (c) of
(d) Loan terms
(1) No prepayment penalty
There shall be no prepayment penalty on a loan guaranteed under subsection (a).
(2) Repayment
A person who receives a loan guaranteed under subsection (a) and who is disapproved for a loan under subsection (b) or (c) of
(e) Approval or disapproval
The Administrator shall ensure that each applicant for a loan under the program receives a decision approving or disapproving of the application within 36 hours after the Administration receives the application.
(
Editorial Notes
Codification
Statutory Notes and Related Subsidiaries
Effective Date
Enactment of this section and repeal of
1 So in original. Probably should be "subsection (a)".
§657o. Annual reports on disaster assistance
Not later than 45 days after the end of a fiscal year, the Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report on the disaster assistance operations of the Administration for that fiscal year. The report shall—
(1) specify the number of Administration personnel involved in such operations;
(2) describe any material changes to those operations, such as changes to technologies used or to personnel responsibilities;
(3) describe and assess the effectiveness of the Administration in responding to disasters during that fiscal year, including a description of the number and amounts of loans made for damage and for economic injury; and
(4) describe the plans of the Administration for preparing to respond to disasters during the next fiscal year.
(
Editorial Notes
Codification
Statutory Notes and Related Subsidiaries
Effective Date
Enactment of this section and repeal of
§657p. Outreach regarding health insurance options available to children
(a) Definitions
In this section—
(1) the terms "Administration" and "Administrator" means the Small Business Administration and the Administrator thereof, respectively;
(2) the term "certified development company" means a development company participating in the program under title V of the Small Business Investment Act of 1958 (
(3) the term "Medicaid program" means the program established under title XIX of the Social Security Act (
(4) the term "Service Corps of Retired Executives" means the Service Corps of Retired Executives authorized by
(5) the term "small business concern" has the meaning given that term in
(6) the term "small business development center" means a small business development center described in
(7) the term "State" has the meaning given that term for purposes of title XXI of the Social Security Act (
(8) the term "State Children's Health Insurance Program" means the State Children's Health Insurance Program established under title XXI of the Social Security Act (
(9) the term "task force" means the task force established under subsection (b)(1); and
(10) the term "women's business center" means a women's business center described in
(b) Establishment of task force
(1) Establishment
There is established a task force to conduct a nationwide campaign of education and outreach for small business concerns regarding the availability of coverage for children through private insurance options, the Medicaid program, and the State Children's Health Insurance Program.
(2) Membership
The task force shall consist of the Administrator, the Secretary of Health and Human Services, the Secretary of Labor, and the Secretary of the Treasury.
(3) Responsibilities
The campaign conducted under this subsection shall include—
(A) efforts to educate the owners of small business concerns about the value of health coverage for children;
(B) information regarding options available to the owners and employees of small business concerns to make insurance more affordable, including Federal and State tax deductions and credits for health care-related expenses and health insurance expenses and Federal tax exclusion for health insurance options available under employer-sponsored cafeteria plans under
(C) efforts to educate the owners of small business concerns about assistance available through public programs; and
(D) efforts to educate the owners and employees of small business concerns regarding the availability of the hotline operated as part of the Insure Kids Now program of the Department of Health and Human Services.
(4) Implementation
In carrying out this subsection, the task force may—
(A) use any business partner of the Administration, including—
(i) a small business development center;
(ii) a certified development company;
(iii) a women's business center; and
(iv) the Service Corps of Retired Executives;
(B) enter into—
(i) a memorandum of understanding with a chamber of commerce; and
(ii) a partnership with any appropriate small business concern or health advocacy group; and
(C) designate outreach programs at regional offices of the Department of Health and Human Services to work with district offices of the Administration.
(5) Website
The Administrator shall ensure that links to information on the eligibility and enrollment requirements for the Medicaid program and State Children's Health Insurance Program of each State are prominently displayed on the website of the Administration.
(6) Report
(A) In general
Not later than 2 years after February 4, 2009, and every 2 years thereafter, the Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report on the status of the nationwide campaign conducted under paragraph (1).
(B) Contents
Each report submitted under subparagraph (A) shall include a status update on all efforts made to educate owners and employees of small business concerns on options for providing health insurance for children through public and private alternatives.
(
Editorial Notes
References in Text
The Small Business Investment Act of 1958, referred to in subsec. (a)(2), is
The Social Security Act, referred to in subsec. (a)(3), (7), (8), is act Aug. 14, 1935, ch. 531,
Codification
Section was enacted as part of the Children's Health Insurance Program Reauthorization Act of 2009, and not as part of the Small Business Act which comprises this chapter.
Statutory Notes and Related Subsidiaries
Effective Date
Section effective Apr. 1, 2009, and applicable to child health assistance and medical assistance provided on or after that date, with certain exceptions, see section 3 of
§657q. Consolidation of contract requirements
(a) Definitions
In this section—
(1) the term "Chief Acquisition Officer" means the employee of a Federal agency appointed or designated as the Chief Acquisition Officer for the Federal agency under
(2) the term "consolidation of contract requirements", with respect to contract requirements of a Federal agency, means a use of a solicitation to obtain offers for a single contract or a multiple award contract—
(A) to satisfy 2 or more requirements of the Federal agency for goods or services that have been provided to or performed for the Federal agency under 2 or more separate contracts lower in cost than the total cost of the contract for which the offers are solicited; or
(B) to satisfy requirements of the Federal agency for construction projects to be performed at 2 or more discrete sites; and
(3) the term "senior procurement executive" means an official designated under
(b) Policy
The head of each Federal agency shall ensure that the decisions made by the Federal agency regarding consolidation of contract requirements of the Federal agency are made with a view to providing small business concerns with appropriate opportunities to participate as prime contractors and subcontractors in the procurements of the Federal agency.
(c) Limitation on use of acquisition strategies involving consolidation
(1) In general
The head of a Federal agency may not carry out an acquisition strategy that includes a consolidation of contract requirements of the Federal agency with a total value of more than $2,000,000, unless the senior procurement executive or Chief Acquisition Officer for the Federal agency, before carrying out the acquisition strategy—
(A) conducts market research;
(B) identifies any alternative contracting approaches that would involve a lesser degree of consolidation of contract requirements;
(C) makes a written determination that the consolidation of contract requirements is necessary and justified;
(D) identifies any negative impact by the acquisition strategy on contracting with small business concerns; and
(E) ensures that steps will be taken to include small business concerns in the acquisition strategy.
(2) Determination that consolidation is necessary and justified
(A) In general
A senior procurement executive or Chief Acquisition Officer may determine that an acquisition strategy involving a consolidation of contract requirements is necessary and justified for the purposes of paragraph (1)(C) if the benefits of the acquisition strategy substantially exceed the benefits of each of the possible alternative contracting approaches identified under paragraph (1)(B).
(B) Savings in administrative or personnel costs
For purposes of subparagraph (A), savings in administrative or personnel costs alone do not constitute a sufficient justification for a consolidation of contract requirements in a procurement unless the expected total amount of the cost savings, as determined by the senior procurement executive or Chief Acquisition Officer, is expected to be substantial in relation to the total cost of the procurement.
(C) Notice
Not later than 7 days after making a determination that an acquisition strategy involving a consolidation of contract requirements is necessary and justified under subparagraph (A), the senior procurement executive or Chief Acquisition Officer shall publish a notice on a public website that such determination has been made. Any solicitation for a procurement related to the acquisition strategy may not be published earlier than 7 days after such notice is published. Along with the publication of the solicitation, the senior procurement executive or Chief Acquisition Officer shall publish a justification for the determination, which shall include the information in subparagraphs (A) through (E) of paragraph (1).
(3) Benefits to be considered
The benefits considered for the purposes of paragraphs (1) and (2) may include cost and, regardless of whether quantifiable in dollar amounts—
(A) quality;
(B) acquisition cycle;
(C) terms and conditions; and
(D) any other benefit.
(
Editorial Notes
Prior Provisions
A prior section 2[44] of
Amendments
2015—Subsec. (c)(1).
Subsec. (c)(2)(C).
2014—Subsec. (a)(1).
Subsec. (a)(3).
2013—Subsec. (a)(2).
Subsec. (c)(1)(E).
Subsec. (c)(4).
"(A)
"(B)
"(C)
§657r. Mentor-protege programs
(a) Administration program
(1) Authority
The Administrator is authorized to establish a mentor-protege program for all small business concerns.
(2) Model for program
The mentor-protege program established under paragraph (1) shall be identical to the mentor-protege program of the Administration for small business concerns that participate in the program under
(3) Puerto Rico businesses
During the period beginning on August 13, 2018, and ending on the date on which the Oversight Board established under
(A) positive consideration in any past performance evaluation of the covered mentor; and
(B) the application of costs incurred for providing training to such covered protege to the subcontracting plan (as required under paragraph (4) or (5) of
(4) Covered territory businesses
During the period beginning on January 1, 2021, and ending on the date that is 4 years after such date, the Administrator shall identify potential incentives to a covered territory mentor that awards a subcontract to its covered territory protege, including—
(A) positive consideration in any past performance evaluation of the covered territory mentor; and
(B) the application of costs incurred for providing training to such covered territory protege to the subcontracting plan (as required under paragraph (4) or (5) of
(b) Programs of other agencies
(1) Approval required
Except as provided in paragraph (4), a Federal department or agency may not carry out a mentor-protege program for small business concerns unless—
(A) the head of the department or agency submits a plan to the Administrator for the program; and
(B) the Administrator approves such plan.
(2) Basis for approval
The Administrator shall approve or disapprove a plan submitted under paragraph (1) based on whether the program proposed—
(A) will assist proteges to compete for Federal prime contracts and subcontracts; and
(B) complies with the regulations issued under paragraph (3).
(3) Regulations
Not later than 270 days after January 2, 2013, the Administrator shall issue, subject to notice and comment, regulations with respect to mentor-protege programs, which shall ensure that such programs improve the ability of proteges to compete for Federal prime contracts and subcontracts and which shall address, at a minimum, the following:
(A) Eligibility criteria for program participants, including any restrictions on the number of mentor-protege relationships permitted for each participant, except that such restrictions shall not apply to up to 2 mentor-protege relationships if such relationships—
(i) are between a covered protege and a covered mentor; or
(ii) are between a covered territory protege and a covered territory mentor.
(B) The types of developmental assistance to be provided by mentors, including how the assistance provided shall improve the competitive viability of the proteges.
(C) Whether any developmental assistance provided by a mentor may affect the status of a program participant as a small business concern due to affiliation.
(D) The length of mentor-protege relationships.
(E) The effect of mentor-protege relationships on contracting.
(F) Benefits that may accrue to a mentor as a result of program participation.
(G) Reporting requirements during program participation.
(H) Postparticipation reporting requirements.
(I) The need for a mentor-protege pair, if accepted to participate as a pair in a mentor-protege program of any Federal department or agency, to be accepted to participate as a pair in all Federal mentor-protege programs.
(J) Actions to be taken to ensure benefits for proteges and to protect a protege against actions by a mentor that—
(i) may adversely affect the protege's status as a small business concern; or
(ii) provide disproportionate economic benefits to the mentor relative to those provided the protege.
(K) The types of assistance provided by a mentor to assist with compliance with the requirements of contracting with the Federal Government after award of a contract or subcontract under this section.
(4) Limitation on applicability
Paragraph (1) does not apply to the following:
(A) Any mentor-protege program of the Department of Defense.
(B) Any mentoring assistance provided under a Small Business Innovation Research Program or a Small Business Technology Transfer Program.
(C) Until the date that is 1 year after the date on which the Administrator issues regulations under paragraph (3), any Federal department or agency operating a mentor-protege program in effect on January 2, 2013.
(c) Reporting
(1) In general
Not later than 2 years after January 2, 2013, and annually thereafter, the Administrator shall submit to the Committee on Small Business of the House of Representatives and the Committee on Small Business and Entrepreneurship of the Senate a report that—
(A) identifies each Federal mentor-protege program;
(B) specifies the number of participants in each such program, including the number of participants that are—
(i) small business concerns;
(ii) small business concerns owned and controlled by service-disabled veterans;
(iii) qualified HUBZone small business concerns;
(iv) small business concerns owned and controlled by socially and economically disadvantaged individuals; or
(v) small business concerns owned and controlled by women;
(C) describes the type of assistance provided to proteges under each such program;
(D) describes the benefits provided to mentors under each such program; and
(E) describes the progress of proteges under each such program with respect to competing for Federal prime contracts and subcontracts.
(2) Provision of information
The head of each Federal department or agency carrying out a mentor-protege program shall provide to the Administrator, on an annual basis, the information necessary for the Administrator to submit a report required under paragraph (1).
(d) Definitions
In this section, the following definitions apply:
(1) Mentor
The term "mentor" means a for-profit business concern, of any size, that—
(A) has the ability to assist and commits to assisting a protege to compete for Federal prime contracts and subcontracts; and
(B) satisfies any other requirements imposed by the Administrator.
(2) Mentor-protege program
The term "mentor-protege program" means a program that pairs a mentor with a protege for the purpose of assisting the protege to compete for Federal prime contracts and subcontracts.
(3) Protege
The term "protege" means a small business concern that—
(A) is eligible to enter into Federal prime contracts and subcontracts; and
(B) satisfies any other requirements imposed by the Administrator.
(4) Covered mentor
The term "covered mentor" means a mentor that enters into an agreement under this chapter, or under any mentor-protege program approved under subsection (b)(1), with a covered protege.
(5) Covered protege
The term "covered protege" means a protege of a covered mentor that is a Puerto Rico business.
(6) Covered territory mentor
The term "covered territory mentor" means a mentor that enters into an agreement under this chapter, or under any mentor-protege program approved under subsection (b)(1), with a covered territory protege.
(7) Covered territory protege
The term "covered territory protege" means a protege of a covered territory mentor that is a covered territory business.
(e) Current mentor protege agreements
Mentors and proteges with approved agreement in a program operating pursuant to subsection (b)(4)(C) shall be permitted to continue their relationship according to the terms specified in their agreement until the expiration date specified in the agreement.
(f) Submission of agency plans
Agencies operating mentor protege programs pursuant to subsection (b)(4)(C) shall submit the plans specified in subsection (b)(1)(A) to the Administrator within 6 months of the promulgation of rules required by subsection (b)(3). The Administrator shall provide initial comments on each plan within 60 days of receipt, and final approval or denial of each plan within 180 days after receipt.
(
Editorial Notes
Prior Provisions
A prior section 2[45] of
Amendments
2021—Subsec. (a)(4).
Subsec. (b)(3)(A).
Subsec. (d)(6), (7).
2018—Subsec. (a)(3).
Subsec. (b)(3)(A).
Subsec. (d)(4), (5).
2016—Subsec. (b)(3)(K).
§657s. Limitations on subcontracting
(a) In general
If awarded a contract under
(1) in the case of a contract for services, may not expend on subcontractors more than 50 percent of the amount paid to the concern under the contract;
(2) 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;
(3) in the case of a contract described in paragraphs (1) and (2)—
(A) shall determine for which category, services (as described in paragraph (1)) or supplies (as described in paragraph (2)), the greatest percentage of the contract is awarded;
(B) shall determine the amount awarded under the contract for that category of services or supplies; and
(C) may not expend on subcontractors, with respect to the amount determined under subparagraph (B), more than 50 percent of that amount; and
(4) in the case of a contract which is principally for supplies from a regular dealer in such supplies, and which is not a contract principally for services or construction, shall supply the product of a domestic small business manufacturer or processor, unless a waiver of such requirement is granted—
(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
(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.
(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).
(c) Modifications of percentages
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.
(d) Other contracts
(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.
(2) Uniformity
A requirement established under paragraph (1) shall apply to all covered small business concerns.
(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 (1).
(e) Definitions
In this section, the following definitions apply:
(1) Covered small business concern
The term "covered small business concern" means a business concern that—
(A) with respect to a contract awarded under
(B) with respect to a contract awarded under
(i) is a small business concern owned and controlled by women (as defined in that section); or
(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);
(C) with respect to a contract awarded under
(D) with respect to a contract awarded under
(E) with respect to a contract awarded under
(2) Similarly situated entity
The term "similarly situated entity" means a subcontractor that—
(A) if a subcontractor for a small business concern, is a small business concern;
(B) if a subcontractor for a small business concern eligible to receive contracts under
(C) if a subcontractor for a small business concern owned and controlled by women (as defined in
(D) if a subcontractor for a small business concern owned and controlled by women (as defined in
(E) if a subcontractor for a qualified HUBZone small business concern, is such a concern; or
(F) if a subcontractor for a small business concern owned and controlled by service-disabled veterans, is such a concern.
(
Editorial Notes
Amendments
2015—Subsec. (a)(4).
Statutory Notes and Related Subsidiaries
Inapplicability of Requirement To Review and Justify Certain Contracts
§657t. Office of Credit Risk Management
(a) Establishment
There is established within the Administration the Office of Credit Risk Management (in this section referred to as the "Office").
(b) Duties
The Office shall be responsible for supervising—
(1) any lender making loans under section 7(a) [
(2) any Lending Partner or Intermediary participant of the Administration in a lending program of the Office of Capital Access of the Administration; and
(3) any small business lending company or a non-Federally regulated lender without regard to the requirements of
(c) Director
(1) In general
The Office shall be headed by the Director of the Office of Credit Risk Management (in this section referred to as the "Director"), who shall be a career appointee in the Senior Executive Service (as defined in
(2) Duties
The Director shall be responsible for oversight of the lenders and participants described in subsection (b), including by conducting periodic reviews of the compliance and performance of such lenders and participants.
(d) Supervision duties for 7(a) lenders
(1) Reviews
With respect to 7(a) lenders, an employee of the Office shall—
(A) be present for and supervise any such review that is conducted by a contractor of the Office on the premise 1 of the 7(a) lender; and
(B) supervise any such review that is not conducted on the premise 1 of the 7(a) lender.
(2) Review report timeline
(A) In general
Notwithstanding any other requirements of the Office or the Administrator, the Administrator shall develop and implement a review report timeline which shall—
(i) require the Administrator to—
(I) deliver a written report of the review to the 7(a) lender not later than 60 business days after the date on which the review is concluded; or
(II) if the Administrator expects to submit the report after the end of the 60-day period described in clause (i), notify the 7(a) lender of the expected date of submission of the report and the reason for the delay; and
(ii) if a response by the 7(a) lender is requested in a report submitted under subparagraph (A), require the 7(a) lender to submit responses to the Administrator not later than 45 business days after the date on which the 7(a) lender receives the report.
(B) Extension
The Administrator may extend the time frame described in subparagraph (A)(i)(II) with respect to a 7(a) lender as the Administrator determines necessary.
(e) Enforcement authority against 7(a) lenders
(1) Informal enforcement authority
The Director may take an informal enforcement action against a 7(a) lender if the Director finds that the 7(a) lender has violated a statutory or regulatory requirement under section 7(a) [
(2) Formal enforcement authority
(A) In general
With the approval of the Lender Oversight Committee established under
(i) a statutory or regulatory requirement under section 7(a), including a requirement relating to credit elsewhere; or
(ii) any requirement described in a Standard Operating Procedures Manual or Policy Notice, related to a program or function of the Office of Capital Access.
(B) Enforcement actions
An enforcement action imposed on a 7(a) lender by the Director under subparagraph (A) shall be based on the severity or frequency of the violation and may include assessing a civil monetary penalty against the 7(a) lender in an amount that is not greater than $250,000.
(3) Appeal by lender
A 7(a) lender may appeal an enforcement action imposed by the Director described in this subsection to the Office of Hearings and Appeals established under
(f) Regulations
Not later than 1 year after June 21, 2018, the Administrator shall issue regulations, after opportunity for notice and comment, to carry out subsection (e).
(g) Servicing and liquidation responsibilities
During any period during which a 7(a) lender is suspended or otherwise prohibited from making loans under section 7(a) [
(h) Portfolio risk analysis of 7(a) loans
(1) In general
The Director shall annually conduct a risk analysis of the portfolio of the Administration with respect to all loans guaranteed under section 7(a).
(2) Report to Congress
On December 1, 2018, and every December 1 thereafter, the Director shall submit to Congress a report containing the results of each portfolio risk analysis conducted under paragraph (1) during the fiscal year preceding the submission of the report, which shall include—
(A) an analysis of the overall program risk of loans guaranteed under section 7(a);
(B) an analysis of the program risk, set forth separately by industry concentration;
(C) without identifying individual 7(a) lenders by name, a consolidated analysis of the risk created by the individual 7(a) lenders responsible for not less than 1 percent of the gross loan approvals set forth separately for the year covered by the report by—
(i) the dollar value of the loans made by such 7(a) lenders; and
(ii) the number of loans made by such 7(a) lenders;
(D) steps taken by the Administrator to mitigate the risks identified in subparagraphs (A), (B), and (C);
(E) the number of 7(a) lenders, the number of loans made, and the gross and net dollar amount of loans made;
(F) the number and dollar amount of total losses, the number and dollar amount of total purchases, and the percentage and dollar amount of recoveries at the Administration;
(G) the number and type of enforcement actions recommended by the Director;
(H) the number and type of enforcement actions approved by the Lender Oversight Committee established under
(I) the number and type of enforcement actions disapproved by the Lender Oversight Committee; and
(J) the number and dollar amount of civil monetary penalties assessed.
(i) Budget submission and justification
The Director shall annually provide, in writing, a fiscal year budget submission for the Office and a justification for such submission to the Administrator. Such submission and justification shall—
(1) include salaries and expenses of the Office and the charge for the lender oversight fees;
(2) be submitted at or about the time of the budget submission by the President under
(3) be maintained in an indexed form and made available for public review for a period of not less than 5 years beginning on the date of submission and justification.
(
Editorial Notes
Prior Provisions
A prior section 2[47] of
Amendments
2018—Subsec. (d).
"(1) be present for and supervise any such review that is conducted by a contractor of the Office on the premise of the 7(a) lender; and
"(2) supervise any such review that is not conducted on the premise of the 7(a) lender."
Statutory Notes and Related Subsidiaries
Change of Name
Effective Date of 2018 Amendment
Transfer of Functions
Establishing a Process for Waivers
"(a)
"(b)
Definitions of Terms Used in Pub. L. 115–189
1 So in original. Probably should be "premises".
§657u. Lender Oversight Committee
(a) Establishment
There is established within the Administration the Lender Oversight Committee (in this section referred to as the "Committee").
(b) Membership
The Committee shall consist of at least 8 members selected by the Administrator, of which—
(1) 3 members shall be voting members, 2 of whom shall be career appointees in the Senior Executive Service (as defined in
(2) the remaining members shall be nonvoting members who shall serve in an advisory capacity on the Committee.
(c) Duties
The Committee shall—
(1) review reports on lender oversight activities;
(2) review formal enforcement action recommendations of the Director of the Office of Credit Risk Management with respect to any lender making loans under
(3) in carrying out paragraph (2) with respect to formal enforcement actions taken under subsection (d) or (e) of
(4) in carrying out paragraph (2) with respect to any formal enforcement action not specified under subsection (d) or (e) of
(5) review, in an advisory capacity, any lender oversight, portfolio risk management, or program integrity matters brought by the Director; and
(6) take such other actions and perform such other functions as may be delegated to the Committee by the Administrator.
(d) Meetings
(1) In general
The Committee shall meet as necessary, but not less frequently than on a quarterly basis.
(2) Reports
The Committee shall submit to the Administrator a report detailing each meeting of the Committee, including if the Committee does or does not vote to approve a formal enforcement action of the Director of the Office of Credit Risk Management with respect to a lender.
(