Untitled

Small Business Act

* Act of July 30, 1953 (P.L. 83-167, Chapter 282, Title II, Sec. 201-223, 67 Stat. 232, as amended, 15 U.S. C. 631-632, 637b, 644, 651)

Note-Section numbers refer to U.S. Code numbers

Declaration of Policy

Sec. 631. (a) The essence of the American economic system of pri-vate enter-prise is free competition. Only through full and free competi-tion 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 ex-pansion 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 pre-serve free competitive enterprise, to insure that a fair proportion of the total purchases and contracts or subcontracts for property and servic-es for the Government (including but not limited to contracts or sub-contracts 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)(1) It is the declared policy of the Congress that the Federal Government, through the Small Business Administration, acting 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;

(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 informa-tion concerning State, Federal, and private programs and initiatives to enhance the ability of small busi-nesses to compete in international markets; and

(F) ensuring that the inter-ests of small businesses are ade-quately 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 pro-motion 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) It is the declared policy of the Congress that the Government, through the Small Business Admin-istration, should aid and assist small business concerns which are en-gaged in the production of food and fiber, ranching, and raising of live-stock, 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)(1) The assistance programs authorized by sections 636(i) and 636(j) of this title are to be utilized to assist in the establishment, preservation, and strengthening of small business concerns and improve the managerial skills employed in such enterprises, with special attention to small business concerns (1) located in urban or rural areas with high proportions of unemployed or low-income individuals; or (2) owned by low-income individuals; and to mobilize for these objectives private as well as public managerial skills and resources.

(2)(A) With respect to the programs authorized by section 636(j) of this title, the Congress finds-

(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 con-trol little productive capital be-cause they have limited opportu-nities for small busi-ness owner-ship

(iii) that the broadening of small business ownership among groups that presently own and con-trol little productive capital is essen-tial to provide for the well-being of this Nation by promot-ing their in-creased 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 section 637(a) of this title can be an effective procurement assistance tool for development of business ownership among groups that own and control little productive capital; and

(vi) that the procurement authority under section 637(a) of this title shall be used only as a tool for developing business ownership among groups that own and control little productive capital.

(B) It is therefore the purpose of the programs authorized by section 636(j) of this title to-

(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 avail-able financial, techni-cal, and man-agement assistance as may be neces-sary.

(e) Further, it is the declared policy of the Congress that the Government should aid and assist victims of floods and other catastro-phes, and small-business concerns which are displaced as a result of federally aided construction programs.

(f)(1) with respect to the Administration's business development programs the Congress finds-

(A) that the opportunity for full participation in our freeenterprise 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 eco-nomically disadvantaged groups;

(E) that such conditions can be improved by providing the maxi-mum practicable opportunity for the development of small business con-cerns 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, sup-plies, services, materials, and con-struction work from such concerns; and

(G) that such procurements also benefit the United States encouraging the expansion of suppliers for such procurement, thereby encouraging competition among such suppliers and promoting economy in such procurements.

(2) It is therefore the purpose of section 637(a) of this title to-

(A) promote the business development of small business con-cerns owned and controlled by socially and economically disadvan-taged individu-als so that such con-cerns 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, techni-cal, and management 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) In administering the disaster loan program authorized by section 636 of this title, to the maximum extent possible, the Administration shall provide assistance and counsel-ing to disaster victims in filing applications, providing information relevant to loan processing, and in loan closing and prompt disburse-ment of loan proceeds and shall give the disaster program a high priority in allocating funds for ad-ministrative expenses.

(h)(1) With respect to the pro-grams 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 de-cades there have been substantial gains in the social and economic status of women as they have sought economic equality and inde-pendence;

(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 discrimina-tory barriers to the cre-ation and development of small business concerns owned and con-trolled by women;

(F) the removal of such barriers is essential to provide a fair opportunity for full partici-pation 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 Govern-ment 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 dis-criminatory barriers while not ad-versely affecting the rights of social-ly and economically disadvan-taged individuals.

(2) It is, therefore, the purpose of those programs and activi-ties conducted under the authority of this chapter that assist women entre-preneurs to-

(A) vigorously promote the legitimate interest of small business concerns owned and controlled by women;

(B) remove, insofar as pos-sible, the discriminatory barriers that are encountered by women in ac-cessing capital and other factors of production; and

(C) require that the Govern-ment engage in a systematic and sustained effort to identify, define and analyze those discriminatory barriers facing women and that such effort directly involve the participa-tion of women business owners in the public/private sector partner-ship.

Small-Business Concern

Sec. 632. (a) Criteria

(1) For the purposes of this chapter, a small-business concern, including but not limited to enter-prises that are en-gaged in the busi-ness 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: Provided, That notwithstanding any other provision of law, an agricultural enterprise shall be deemed to be a small business concern if it (including its affiliates) has annual receipts not in excess of $500,000.

(2) In addition to the criteria specified in paragraph (1), the Ad-ministrator may specify detailed definitions or standards (by number of employees or dollar volume of business) by which a business concern is to be recognized as a small business concern for the purposes of this chapter or any other Act. Unless specifically authorized by statute, the Secretary of a department or the head of a Federal agency may not prescribe for the use of such department or agency a size standard for categorizing a business concern as a small business concern, unless such proposed size standard-

(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 aver-age gross receipts of the con-cern during that period; and

(3) 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 vari-ous industries and consider other factors deemed to be relevant by the Administrator.

(b) "Agency" defined-For pur-poses 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 section 551(1) of Title 5, but does not in-clude the United States Postal Ser-vice or the General Accounting Office.

(c) Qualified employee trust; eligibility for loan guarantee; defini-tion; regulations for treatment of trust as qualified employee trust

(1) For purposes of this chap-ter, a qualified employee trust shall be eligible for any loan guarantee under section 636(a) of this title with respect to a small business concern on the same basis as if such trust were the same legal entity as such concern.

(2) For purposes of this chap-ter, 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 section 4975(e)(7) of Title 26)-

(i) which is maintained by such concern, and

(ii) which provides that each participant in the plan is entitled to direct the plans as to the manner in which voting rights under qualifying employer securities (as defined in section 4975(e)(8) of Title 26) which are allocated to the account of such participant are to be exercised with respect to a corporate matter which (by law or chapter) must be decided by a majority vote of outstanding common shares voted; and

(B) in the case of any loan guarantee under section 636(a) of this title, the trustee of which enters into an agreement with the Administrator which is binding on the trust and on such small business concern and which provides that-

(i) the loan guaranteed under section 636(a) of this title shall be used solely for the purchase of qualifying employer securities of such concern,

(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 allocat-ed 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 section 4975(e)(8) of Title 26),

(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 distri-bution from the plan has a right, in the case of qualifying em-ployer securities which are not readily tradable 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 sec-tion 4975(e)(7) of Title 26) as the Administrator may pre-scribe, and

(C) in the case of a loan guarantee under section 636(a) of this title, such organization enters into an agreement with the Adminis-tration which is described in para-graph (2)(B).

(d) "Qualified Indian tribe" de-fined-For purposes of section 636 of this title, the term "qualified Indian tribe" means an Indian tribe as defined in section 450b(a) of Title 25, which owns and controls 100 per centum of a small business concern.

(e) "Public or private organization for the handicapped" defined-For purposes of section 636 of this title, the term "Public or private organiza-tion for the handicapped" means one-

(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 individual;

(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 assis-tance 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 purpose of section 636 of this title, 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 selec-tion of any type of employment for which the person would otherwise be qualified or qualifiable.

(g) "Energy measures" de-fined-For purposes of section 636 of this title, the term "energy mea-sures" includes-

(1) solar thermal energy equip-ment 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 trans-fer or some combination of these types;

(2) photovoltaic cells and related equipment;

(3) a product or service the primary purpose of which isconser-vation of energy through devices or techniques which in-crease the ener-gy efficiency of existing equipment, methods of operation, or systems which use fossil fuels, and which is on the Energy Conservation Mea-sures list of the Secretary of Energy or which the Administrator deter-mines 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 co-generation of energy, district heat-ing, or production of energy from industrial waste;

(6) hydroelectric power equip-ment;

(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" de-fined-For purposes of this chapter, the term "credit elsewhere" means the availability of credit from non-Federal sources on reasonable terms and conditions taking into consider-ation the prevailing rates and terms in the community in or near where the concern transacts business, or the homeowner resides, for similar purposes and periods of time.

(i) "Homeowners" defined-For purposes of section 636 of this title, the term "homeowners" includes owners and lessees of residential property and also includes personal property.

(j) "Small agricultural coopera-tive" defined-For the purposes of section 636(b)(2) of this title, the term "small agricultural cooperative" means an association (corporate or otherwise) acting pursuant to the provisions of the Agricultural Mar-keting Act (12 U.S.C. 1141 et seq.), whose size does not exceed the size standard established by the Admin-istration for other similar agricultur-al small business concerns. In de-termining such size, the Ad-ministration shall regard the association as a business concern and shall not in-clude the income or employ-ees of any member shareholder of such cooperative.

(k) "Disaster" defined-For the purposes of this chapter, the term "disaster" means a sudden event which causes severe damage includ-ing, but not limited to, floods, hurri-canes, tornadoes, earthquakes, fires, explosions, volcanoes, windstorms, landslides or mudslides, tidal waves, ocean conditions resulting in the closure of customary fishing waters, riots, civil disorders or other catas-trophes, except it does not include economic dislocations.

(l) "Computer crime" de-fined-For purposes of this chap-ter-

(1)1 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) "Small purchase threshold" defined-For purposes of this chap-ter, the term "small purchase thresh-old" has the meaning given such term in section 403(11) of Title 41, Public Contract.

* * * *

Availability of Infor-mation

Sec. 637b. (a) 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) Subsection (a) of this section 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.

Definitions

Sec. 637c. 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 section 551(1) of Title 5, but does not include the United States Postal Service or the General Accounting Office; and

(3) the term "Government procurement contract" means any contract for the procurement of any goods or services by any Federal agency.

* * * *

Awards or Contracts

Sec. 644. (a) Determination-To effectuate the purposes of this chap-ter, small-business concerns within the mean-ing of this chapter shall receive any award or contract or any part there-of, and be awarded any contract for the sale of Government property, as to which it is deter-mined by the Adminis-tration and the contracting procurement or disposal agency (1) to be in the interest of maintaining or mobilizing the Nation's full pro-ductive capacity, (2) to be in the interest of war or national defense programs, (3) to be in the interest of assuring that a fair proportion of the total purchases and contracts for property and services for the Gov-ernment in each industry category are placed with small-busi-ness con-cerns, or (4) to be in the interest of assuring that a fair pro-portion of the total sales of Govern-ment property be made to small-business concerns; but nothing contained in this chapter 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 Government or any agency thereof. These determinations may be made for individual awards or contracts or for classes of awards or contracts. If a proposed procurement includes in its statement of work goods or services currently being performed by a small business, and if the proposed procurement is in a quantity or estimated dollar value the magnitude of which renders small business prime contract participation unlikely, or if a proposed procurement for construction seeks to package or consolidate discrete construction projects, the Procurement Activity shall provide a copy of the proposed

procurement to the Procurement Activity's Small Business Procure-ment Center Repre-sentative at least 30 days prior to the solicitation's issuance along with a statement explaining (1) why the proposed acquisition cannot be divided into reasonably small lots (not less than economic production runs) to permit offers on quantities less than the total requirements, (2) why delivery schedules cannot be established on a realistic basis that will encourage small business par-ticipation to the extent consistent with the actual requirements of the Government, (3) why the proposed acquisition cannot be offered so as to make small business participation likely, or (4) why construction can-not be pro-cured as separate discrete projects. The thirty-day notification process shall occur concurrently with other processing steps required prior to issuance of the solicitation. Within 15 days after receipt of the proposed procurement and accompa-nying statement, if the Procurement Center Representatives believes that the procurement as proposed will render small business prime contract participation unlikely, the Representative shall recommend to the Procurement Activity alternative procurement methods which would increase small business prime contracting opportunities. Whenever the Administration and the contracting procurement agency 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. For purposes of clause (3) of the first sentence of this subsection, an industry category is a discrete group of similar goods and services. Such groups shall be determined by the Administration in accordance with the four-digit standard industrial classification codes contained in the Standard Industrial Classification Manual published by the Office of Management and Budget, except that the Administration shall limit such an industry category to a greater extent than provided under such classification codes if the Administration receives evidence indicating that further segmentation for purposes of this paragraph is warranted due to special capital equipment needs or special labor or geographic requirements or to recognize a new industry. A market for goods or services may not be segmented under the preceding sentence due to geographic requirements unless the Government typically designates the area where work for contract for such goods or service is to be per-formed and Gov-ernment purchases comprise the major portion of the entire do-mestic market for such goods or services and, due to the fixed loca-tion of facilities, high mobilization costs, or similar eco-nomic factors, it is unrea-sonable to expect competi-tion from business concerns located outside of the general areas where such concerns are located. 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) Placement of contracts by contracting procurement agen-cy-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 section 694b of this title, the contracting procurement agency shall, to the extent practicable, place contracts so as to allow more than one small business concern to per-form such work.

(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 section 46 of Title 41.

(B) The term "public or private organization for the handi-capped" has the same mean-ing given such term in section 3(e).

(2)(A) During each of fiscal years 1989 through 1993, public or private organizations for the handi-capped shall be eligible to partici-pate in programs authorized under this section in an aggregate amount for each year as follows: In 1989 not more than $30,000,000, in 1990 not more than $40,000,000, and in each of 1991, 1992 and 1993 not more than $50,000,000.

(B) None of the amounts authorized for participation by sub-paragraph (A) may be placed on the procurement list maintained by the Committee pursuant to section 47 of Title 41.

(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 expe-rience 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 de-partment having procure-ment pow-ers 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 depart-ment 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 pre-ceding 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 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.

(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. Chapter 1) or any successor policy shall be authorized if the Secretary or his designee specifically determines that there is a reasonable expectation that offers will be obtained from a sufficient number of eligible concerns so that awards will be made at reasonable prices.

As soon as practicable and to the extent possible, in determining labor surplus areas, consideration shall be given to those persons who would be available for employment were suitable employment available. Until such definition reflects such number, the present criteria of such policy shall govern.

(e) Placement of contracts by departments, agencies, and instrumentalities of the executive branch; priorities.-In carrying out small business set-aside programs, departments, agencies, and instrumentalities of the executive branch shall award contracts, and encourage the placement of subcontracts for procurement to the following in the manner and in the order stated:

(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.

(f) Contract awards; other priori-ties.-After priority is given to the small business concerns specified in subsection (e) of this section, priori-ty shall also be given to the award-ing of contracts and the place-ment of subcontracts, on the basis of a total set-aside, to concerns which-

(1) are not eligible under sub-section (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.

(g) Goals for participation of small business concerns in procurement contracts-

(1) The President shall annually establish Government-wide goals for procurement contracts awarded to small business concerns and small business concerns owned and controlled by socially and economically disadvantaged individuals. The Government-side goal for participation by small business concerns shall be established at not less than 20 percent of the total value of all prime contract awards for each fiscal year. The Government-wide goal for participa-tion by small busi-ness concerns owned and controlled by socially and economically disad-vantaged individuals shall be estab-lished at not less than 5 percent of the total value of all prime contract and subcontract awards for each fiscal year. Notwithstanding the Gov-ern-ment-wide goal, each agen-cy shall have an annual goal that pres-ents, for that agency, the maxi-mum prac-ticable opportunity for small busi-ness concerns and small busi-ness concerns owned and controlled by socially and economically disad-vantaged individuals to participate in the performance of contracts let by such agency. The Administration and the Administrator of the Office of Federal Procurement Policy shall, when exercising their authority pursuant to paragraph (2), insure that the cumulative annual prime contract goals for all agencies meet or exceed the annual Government-wide prime contract goal established by the President pursuant to this paragraph.

(2) The head of each Federal agency shall, after consultation with the Administration, establish goals for the participation by small business concerns, and by small business concerns owned and controlled by socially and economically disadvantaged individuals, in procurement contracts of such agency. 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 and small business concerns owned and controlled by socially and economically disadvantaged individuals to per-form such contracts and to per-form sub-contracts under such con-tracts. Whenever the Administration and the head of any Federal agency fail to agree on established goals, the disagreement shall be submitted to the Administrator of the Office of Federal Procurement Policy for final determination. For the purpose of establishing goals under this subsec-tion, the head of each Federal agen-cy shall make consistent efforts to annually expand participation by small business concerns from each industry category in procurement contracts of the agency, including participation by small business concerns owned and controlled by socially and economically disadvan-taged individuals. The head of each Federal agency, in attempting to attain such participation, shall con-sider-

(A) contracts awarded as the result of unrestricted competition; and

(B) contracts awarded after competition restricted to eligible small business concerns under this section and under the program es-tablished under section 637(A) of this title.

(h) Reports to Administra-tion; submittal of information to Con-gress.-

(1) At the conclusion of each fiscal year, the head of each Federal agency shall report to the Adminis-tration on the extent of participation by small business concerns and small business concerns owned and controlled by socially and economi-cally disadvantaged individuals in procurement contracts of such agen-cy. Such reports shall contain ap-propriate justifica-tions for failure to meet the goals established under subsection (g) of this section.

(2) The Administration shall annually compile and analyze the reports submitted by the individual agencies pursuant to paragraph (1) and shall submit them to the Presi-dent. The Administrator's submis-sion to the President shall include the following:

(A) The Government-wide goals for participation by small business concerns and small busi-ness concerns owned and controlled by socially and economically disad-vantaged individuals and the perfor-mance in attaining such goals.

(B) The goals in effect for each agency and the agency's performance in attaining such goals.

(C) An analysis of any failure to achieve the Government-wide goals or any individual agency goals and the actions planned by such agency (and approved by the Administration) to achieve the goals in the succeeding fiscal year.

(D) The number and the dollar value of contracts awarded to small business concerns and small business concerns owned and controlled by socially and economically disadvantaged individuals through-

(i) noncompetitive negotiation, (ii) competition restricted to small business concerns owned and controlled by socially and economically disadvantaged individuals,

(iii) competition restricted to small business concerns, and

(iv) unrestricted competitions, for each agency and on a Government-wide basis.

(E) The number and dollar value of subcontracts awarded to small business concerns and small business concerns owned and con-trolled by socially and economi-cally disadvantaged individuals.

(F) The number and dollar value of prime contracts and sub-contracts awarded to women-owned small business enterprises.

(3) The President shall include the information required by para-graph (2) in each annual report to the Congress on the state of small business prepared pursuant to sec-tion 631b(a) of this title.

(i) Small business set-asides.-Nothing in this chapter or any other provision of law precludes exclusive small business set-asides for procure-ment 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 purchase proce-dures-Each contract for the pro-curement of goods and services which has an anticipated value not in excess of the small purchase threshold and which is subject to small purchase procedures shall be reserved exclusively for small busi-ness concerns unless the contracting officer is unable to obtain offers from two or more small business concerns that are competitive with market prices and in terms of quali-ty and delivery of the goods or services being purchased. In utiliz-ing small purchase procedures, contracting officers shall, wherever circumstances permit, choose a method of payment which minimiz-es paperwork and facilitates prompt payment to contractors.

(k) Office of Small and Disad-vantaged Business Utilization; Di-rector-There is hereby established in each Federal agency having pro-curement powers an office to be known as the "Office of Small and Disadvantaged Business Utilization". The management of each such of-fice shall be vested in an officer or employee of such agency who shall-

(1) be known as the "Director of Small and Disadvantaged Busi-ness Utilization" for such agency,

(2) be appointed by the head of such agency,

(3) be responsible only to, and report directly 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, and report directly to, such Secretary or the Secretary's designee,

(4) be responsible for the implementation and execution of the functions and duties under this section and section 637 of this title which relate to such agency,

(5) assist small business con-cerns to obtain payments, required late payment interest penalties, or information regarding payments due to such concerns from an executive agency or a contractor, in conformi-ty with chapter 89 of Title 31, or any other protection for contractors or subcontrac-tors (including suppli-ers) that is included in the Federal Acquisition Regulation or any indi-vidual agency supplement to such Government-wide regulation,

(6) 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 this section and section 637 of this title,

(7) assign a small business technical adviser to each office to which the Administration has as-signed a procurement center repre-sentative-

(A) who shall be a full-time employee of the procuring activity and shall be well qualified,techni-cally 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 this section and section 637 of this title, and

(8) cooperate, and consult on a regular basis, with the Administra-tion with respect to carrying out the functions and duties described in paragraph (4) of this subsection, and

(9) make recommendations to contracting officers as to whether a particular contract requirement should be awarded pursuant to sub-section (a) of this section, or section 637(a) of this title or section 2323 of Title 10. Such recommendations shall be made with due regard to the requirements of subsection (m) of this section, and the failure of the contracting officer to accept any such recommendations shall be documented and included within the appropriate contract file.

This subsection shall not apply to the Administration.

(l) Breakout procurement center representatives.-

(1) The Administration shall assign to each major procurement center a breakout procurement cen-ter representative with such assis-tance as may be appropriate. The breakout procurement center repre-sentative shall carry out the activi-ties described in paragraph (2), and shall be an advocate for the break-out of items for procurement through full and open competition, whenever appropriate, while main-taining the integrity of the system in which such items are used, and an advocate for the use of full and open competi-tion, whenever appro-priate, for the procurement of sup-plies and services by such center. Any breakout procurement center representative assigned under this subsection shall be in addition to the representative referred to in subsection (k)(6) of this section.

(2) In addition to carrying out the responsibilities assigned by the Administration, a breakout procure-ment center representative is autho-rized to-

(A) attend any provision-ing 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 recommen-dations with respect to such requirements to the mem-bers of such conference or session;

(B) review, at any time, restrictions on competition previous-ly imposed on items through acqui-sition method coding or similar procedures, and recommend to per-sonnel of the appropriate activity the prompt reevaluation of such limita-tions;

(C) review restrictions on competition arising out of restric-tions on the rights of the United States in technical data, and, when appropriate, recommend that person-nel of the appropriate activity initi-ate a review of the validity of such an asserted restriction;

(D) obtain from any govern-mental source, and make available to personnel of the appropriate activity, technical data necessary for the preparation of a competitive solicitation package for any item of supply or service previously pro-cured noncompetitively due to the unavailability of such technical data;

(E) have access to procurement records and other data of the procurement center commensurate with the level of such representa-tive's approved security clearance classification;

(F) receive unsolicited engi-neering proposals and, when appro-priate (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 legit-imate acquisition objectives and forward to personnel of the appro-priate activity recommendations with respect to such proposal, or (ii) forward such proposals without analysis to personnel of the activity responsible for reviewing such pro-posals and who shall furnish the breakout procurement center repre-sentative 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 maxi-mum 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.

(3) A breakout procurement center representative is authorized to appeal the failure to act favorably on any recommendation made pur-suant to paragraph (2). Such appeal shall be filed and processed in the same manner and subject to the same conditions and limitations as an appeal filed by the Administrator pursuant to subsection (a).

(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 advis-ers shall be to assist the breakout procurement center representative for the center to which such advis-ers are assigned in carrying out the functions described in paragraph (2) and the representatives referred to in subsection (k)(6) of this section.

(5)(A) The breakout procure-ment center representatives and technical advisers assigned pursuant to this subsection shall be-

(i) full-time employees of the Administra-tion; and

(ii) fully qualified, techni-cally trained, and familiar with the sup-plies and services pro-cured by the major procurement center to which they are assigned.

(B) In addition to the re-quirements of subparagraph (A), each breakout procurement center representative, and at least one technical adviser assigned to such representative, shall be an accredited engineer.

(C) The Administration shall establish personnel positions for breakout procurement represen-tatives and advisers assigned pursu-ant to this subsection, which are classified at a grade level of the General Schedule sufficient to at-tract and retain highly qualified personnel.

(6) For purposes of this sub-section, the term "major procure-ment center" means a procurement center that, in the opinion of the Administra-tor, purchases substantial dollar amounts of other than commercial items and which has the potential to incur significant savings as the result of the placement of a breakout procurement center repre-sentative.

(7)(A) At such times as the Administrator deems appropriate, the breakout procurement center representative shall conduct famil-iarization sessions for contracting officers and other appropriate per-sonnel of the procurement center to which such representative is as-signed. Such sessions shall ac-quaint the participants with the provisions of this subsection and shall instruct them in methods de-signed to further the purposes of such subsection.

(B) The breakout procure-ment center representative shall prepare and personally deliver an annual briefing and report to the head of the procurement center to which such representative is as-signed. Such briefing and report shall detail the past and planned activities of the representative and shall contain such recommendations for improvement in the operation of the center as may be appropriate. The head of such center shall per-sonally receive such briefing and report and shall, within sixty calen-dar days after receipt, respond, in writing, to each recommendation made by such representative.

(m) Relationship to other pro-curement programs.-

(1) Each agency subject to the requirements of section 2323 of Title 10 shall, when implementing such requirements-

(A) establish policies and procedures that insure that there will be no reduction in the number of dollar value of contracts awarded pursuant to this section and section 637(a) of this title in order to achieve any goal or other program objective; and

(B) assure that such require-ments will not alter or change the procurement process used to imple-ment this section or section 637(a) of this title.

(2) All procurement center representatives (including those referred to in subsection (k)(6) of this section), in addition to such other duties as may be assigned by the Administrator, shall-

(A) monitor the perform-ance of the procurement activities to which they are assigned to ascertain the degree of compliance with the require-ments of paragraph (1);

(B) report to their immedi-ate supervisors all instances of non-compliance with such requirements; and

(C) increase, insofar as possible, the number and dollar value of procurement that may be used for the programs established under this section, section 637(a) of this title, and section 2323 of Title 10.

(n) Determination of labor sur-plus areas.-For the 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 crite-ria shall not exceed twenty-five thousand. Such determination, as modified by the preceding sentence, shall be made by the Secretary of Labor.

(o) Costs of contract performance and manufacturing.-

(1) A concern may not be awarded a contract under subsection (a) as a small business concern unless the concern agrees that-

(A) in the case of a contract for services (except construction), at least 50 percent of the cost of con-tract performance incurred for per-sonnel shall be expended for em-ployees of the concern; and

(B) 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).

(2) The Administrator may change the percentage under sub-paragraph (A) or (B) of paragraph (1) if the Administrator determines that such change is necessary to re-flect conventional industry practic-es among business concerns that are below the numerical size standard for businesses in that industry cate-gory.

(3) The Administration shall establish, through public rulemak-ing, 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 deter-mined in accordance with paragraph (2).

Offenses and Penalties

Sec. 645. (a) False statements; overvalu-ation of securities.-Who-ever makes any statement knowing it to be false, or whoever willfully overval-ues any security, for the purpose of obtain-ing for himself or for any applicant any loan, or exten-sion thereof by renewal, deferment of action, or otherwise, or the ac-cep-tance, re-lease, or substitution of security therefor, or for the purpose of influ-encing in any way the action of the Administration, or for the purpose of obtaining money, proper-ty, or anything of value, under this chap-ter, shall be punished by a fine of not more than $5,000, or by impris-onment for not more than two years, or both.

(b) Embezzlement, etc.-Who-ever being connected in any capaci-ty with the Administration, (1) em-bezzles, abstracts, purloins, or will-fully 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 Adminis-tration 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 Administra-tion, or (4) gives any unautho-rized information concerning any future action or plan of the Administration which might affect the value of securities, or, having such knowledge, invests or specu-lates, directly or indirectly, in the securities or property of any compa-ny or corporation receiving loans or other assistance from the Adminis-tration, 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 Adminis-tration, 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" or "small business concern owned and con-trolled by socially and economically disadvantaged individuals", in order to obtain for oneself or another any-

(A) prime contract to be awarded pursuant to section 638 or 644 of this title;

(B) subcontract to be award-ed pursuant to section 637(a) of this title;

(C) subcontract that is to be included as part or all of a goal cont-ained in a subcontracting plan re-quired pursuant to section 637(d) of this title; or

(D) prime or subcontract to be awarded as a result, or infurther-ance, of any other provision of Federal law that specifically refer-ences section 637(d) of this title; for a definition of program eligibility, shall be subject to the penalties and remedies described in paragraph (2).

(2) Any person who violates paragraph (1) shall-

(A) be punished by a fine of not more than $500,000 or by im-prisonment for not more than 10 years, or both;

(B) be subject to the admin-istrative remedies prescribed by the Program Fraud Civil Remedies Act of 1986 (31 U.S.C. 3801-3812);

(C) be subject to suspension and debarment as specified in sub-part 9.4 of title 48, Code of Federal Regulations (or any successor regu-lation) on the basis that such mis-representation indicates a lack of business integrity that seriously and directly affects the present responsi-bility to perform any contract awarded by the Federal Government or a subcontract under such a contract; 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 (15 U.S.C. 661 et seq.) for a period not to exceed 3 years.

(e) Representations under subsection (d) to be in writing.-Any rep-resentation of the status of any concern or person as a "small busi-ness concern" or "small business concern owned and controlled by socially and economically disadvan-taged individuals" in order to obtain any prime contract or subcontract enumerated in subsection (d) of this section shall be in writing.

(f) Misrepresentation of compli-ance with section 636(j)(10) (I).-Whoever falsely certifies past com-pliance with the requirements of section 636(j)(10)(I) of this title shall be subject to the penalties prescribed in subsection (d) of this section.

* * * *

National Small Busi-ness Tree Plant-ing Program

Sec. 651. (a) Authorization of grants and contracts with States.- The Adminis-trator is authorized to make grants to or to enter into con-tracts 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 amend-ment or modifica-tion thereof) under this section that the applicant also contribute to the project a sum equal to at least 25 per centum of a partic-ular 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 mainte-nance for a period of three years after the planting of the trees, but shall not include any value attribut-able 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 Dis-trict of Columbia, and the Common-wealth 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 Depart-ment of Com-merce in the annual population estimate or the decennial census, whichever is most current. The Administrator may give a prior-ity in awarding the remaining one-half of appropriated amounts to applicants who agree to contribute more than the requisite 25 per centum.

(b) Establishment by Administra-tor.-In order to accomplish the objectives of this section, the Ad-ministrator, 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 pro-gram.-To encourage and develop the capacity of small business con-cerns, to utilize this important seg-ment of our economy, and to permit rapid increases in employment op-portunities in local communities, grantees are directed to utilize small business contractors or concerns in connection with the program estab-lished 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 agen-cies; technical services.-For pur-pos-es 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 pro-viding without charge, in further-ance of this program, technical services with respect to the planting and growing of such trees.

(e) 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 1992 through 1994, and all of such sums may remain available until expended.

(f) Rules and regula-tions-Notwithstanding any other law, rule, or regulation, the adminis-tration shall publish in the Federal Register proposed rules and regula-tions 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 the President and Congress.-The Administrator shall submit annually to the President and the Congress a report on activities within the scope of this section.