More Emphasis on Achieving Small Business Subcontracting Goals - Attainit

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More Emphasis on Achieving Small Business Subcontracting Goals

The National Defense Authorization Act (NDAA) of 2016 includes several small business provisions related to achieving small business subcontracting goals. Notably:

  • The Small Business Administration (SBA) Scorecard is changing to place more emphasis on subcontracting achievement and number of small businesses, not just dollars to small businesses. Subcontracting weight is going from 10 percent of scorecard grade to 50 percent.
  • Small business subcontracting performance is now part of the job performance evaluation for senior executives at all agencies. Before, the evaluation included only prime contract small business performance.
  • The Department of Defense is required to report to Congress when prime contractors do not meet the small business goals listed in their comprehensive subcontracting plans.

See below for details on these provisions. Other NDAA 2016 small business provisions are highlighted here. http://smbiz.house.gov/news/documentsingle.aspx?DocumentID=398475

 

SEC. 868. MODIFICATION TO AND SCORECARD PROGRAM FOR SMALL BUSINESS CONTRACTING GOALS.

(a) Amendment To Governmentwide Goal For Small Business Participation In Procurement Contracts.—Section 15(g)(1)(A)(i) of the Small Business Act (15 U.S.C. 644(g)(1)(A)(i)) is amended by adding at the end the following: “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.”.

(b) Scorecard Program For Evaluating Federal Agency Compliance With Small Business Contracting Goals.—

(1) IN GENERAL.—Not later than September 30, 2016, the Administrator of the Small Business Administration, in consultation with the Federal agencies, shall—

(A) develop a methodology for calculating a score to be used to evaluate the compliance of each Federal agency with meeting the goals established pursuant to section 15(g)(1)(B) of the Small Business Act (15 U.S.C. 644(g)(1)(B)) based on each such goal; and

(B) develop a scorecard based on such methodology.

(2) USE OF SCORECARD.—Beginning in fiscal year 2017, the Administrator shall establish and carry out a program to use the scorecard developed under paragraph (1) to 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.

(3) CONTENTS OF SCORECARD.—The scorecard developed under paragraph (1) shall include, for each Federal agency, the following information:

(A) A determination of whether the Federal agency met each of the prime contract goals established pursuant to section 15(g)(1)(B) of the Small Business Act (15 U.S.C. 644(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 the Federal agency 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.

(4) 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 (3)(A); and

(B) fifty percent of the score on the information provided in subparagraphs (B) through (E) of paragraph (3), 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.

(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 section 15(h)(2) of the Small Business Act (15 U.S.C. 644(h)(2)).

(6) REPORT.—After the Administrator uses the scorecard for fiscal year 2018 to assign scores to Federal agencies, but not later than March 31, 2019, the Administrator shall submit a report to the Committee on Small Business of the House of Representatives and the Committee on Small Business and Entrepreneurship of the Senate. Such report shall include the following:

(A) A description of any increase in the dollar amount of prime contracts and subcontracts awarded 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 description of any increase in the dollar amount of prime contracts and subcontracts, and the total number of contracts, awarded 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 in each North American Industry Classification System code.

(C) The recommendation of the Administrator on continuing, modifying, expanding, or terminating the program established under this subsection.

(7) GAO REPORT ON SCORECARD METHODOLOGY.—Not later than September 30, 2018, 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 that—

(A) evaluates whether the methodology used to calculate a score under this subsection accurately and effectively—

(i) measures the compliance of each Federal agency with meeting the goals established pursuant to section 15(g)(1)(B) of the Small Business Act (15 U.S.C. 644(g)(1)(B)); and

(ii) encourages Federal agencies to expand opportunities for 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 compete for and be awarded Federal procurement contracts across North American Industry Classification System codes; and

(B) if warranted, makes recommendations on how to improve such methodology to improve its accuracy and effectiveness.

(8) DEFINITIONS.—In this subsection:

(A) ADMINISTRATOR.—The term “Administrator” means the Administrator of the Small Business Administration.

(B) FEDERAL AGENCY.—The term “Federal agency” has the meaning given the term “agency” by section 551(1) of title 5, United States Code, but does not include the United States Postal Service or the Government Accountability Office.

(C) SCORECARD.—The term “scorecard” shall mean any summary using a rating system to evaluate a Federal agency’s efforts to meet goals established under section 15(g)(1)(B) of the Small Business Act (15 U.S.C. 644(g)(1)(B)) that—

(i) includes the measures described in paragraph (3); and

(ii) assigns a score to each Federal agency evaluated.

(D) SMALL BUSINESS ACT DEFINITIONS.—

(i) IN GENERAL.—The terms “small business concern”, “small business concern owned and controlled by service-disabled veterans”, “qualified HUBZone small business concern”, and “small business concern owned and controlled by women” have the meanings given such terms under section 3 of the Small Business Act (15 U.S.C. 632).

(ii) SMALL BUSINESS CONCERNS OWNED AND CONTROLLED BY SOCIALLY AND ECONOMICALLY DISADVANTAGED INDIVIDUALS.—The term “small business concern owned and controlled by socially and economically disadvantaged individuals” has the meaning given that term under section 8(d)(3)(C) of the Small Business Act (15 U.S.C. 637(d)(3)(C)).

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SEC. 871. INCLUDING SUBCONTRACTING GOALS IN AGENCY RESPONSIBILITIES.

Section 1633(b) of the National Defense Authorization Act for Fiscal Year 2013 (Public Law 112–239; 126 Stat. 2076; 15 U.S.C. 631 note) is amended by striking “assume responsibility for of the agency’s success in achieving small business contracting goals and percentages” and inserting “assume responsibility for the agency’s success in achieving each of the small business prime contracting and subcontracting goals and percentages”.

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SEC. 872. REPORTING RELATED TO FAILURE OF CONTRACTORS TO MEET GOALS UNDER NEGOTIATED COMPREHENSIVE SMALL BUSINESS SUBCONTRACTING PLANS.

Paragraph (2) of section 834(d) of the National Defense Authorization Act for Fiscal Years 1990 and 1991 (15 U.S.C. 637 note), as added by section 821(d)(2) of the Carl Levin and Howard P. “Buck” McKeon National Defense Authorization Act for Fiscal Year 2015 (Public Law 113–291; 128 Stat. 3434), is amended by striking “may not negotiate” and all that follows through the period at the end and inserting “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.”.

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