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TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED MATTERS

Subtitle E—Small Business Matters

P. L. 116-

House Conference Report   116-617

(b) Amendment to and Transfer of Veteran-owned and Service-disabled Veteran-owned Business Database.--

(1) Amendment of veteran-owned and service-disabled veteran-owned business database.--Effective on the transfer date, section 8127 of title 38, United States Code, is amended--

(A) in subsection (e), by striking ``the Secretary under subsection (f)'' and inserting ``the Administrator under section 36 of the Small Business Act'';

(B) in subsection (f)--

(i) by striking ``the Secretary'' each place it appears, except in the last place it appears in paragraph (2)(A), and inserting ``the Administrator'';

(ii) in paragraph (1), by striking ``small business concerns owned and controlled by veterans with service-connected disabilities'' and inserting ``small business concerns owned and controlled by service-disabled veterans'';

(iii) in paragraph (2)--

(I) in subparagraph (A)--

(aa) by striking ``to access'' and inserting ``to obtain from the Secretary of Veterans Affairs''; and

(bb) by inserting ``, United States Code,'' after ``title 5''; and

(II) by striking subparagraph (B) and inserting the following:

``(B) For purposes of this subsection--

``(i) the Secretary of Veterans Affairs shall--

``(I) verify an individual's status as a
veteran or a service-disabled veteran; and
``(II) establish a system to permit the
Administrator to access, but not alter, the
verification of such status; and

``(ii) the Administrator shall verify--

``(I) the status of a business concern as a small business concern; and

``(II) the ownership and control of such business concern.

``(C) The Administrator may not certify a concern under subsection (b) or section 36A if the Secretary of Veterans Affairs cannot provide the verification described under subparagraph (B)(i)(I).'';

(iv) in paragraph (3), by striking ``such veterans'' and inserting ``a veteran described in paragraph (1)'';

(v) by striking paragraphs (4) and (7);

(vi) by redesignating paragraphs (5) and (6) as paragraphs (4) and (5), respectively, and redesignating paragraph (8) as paragraph (6);

(vii) in paragraph (4), as so redesignated, by striking ``The Secretary'' and inserting ``The Administrator''; and

(viii) in paragraph (6), as so redesignated--

(I) in subparagraph (A)--

(aa) by striking ``verify the status of the concern as a small business concern or the ownership or control of the concern'' and inserting ``certify the status of the concern as a small business concern owned and controlled by veterans (under section 36A) or a small business concern owned and controlled by service-disabled veterans (under subsection (g) of this section)'';

(bb) by striking ``verification'' and inserting
``certification''; and

(cc) by striking ``the Small Business Administration (as established under section 5(i) of the Small Business Act)'' and inserting ``the Administration (as established under section 5(i))'';

(II) in subparagraph (B)--

(aa) in clause

(i)--

(AA) by striking ``small business concern owned and controlled by veterans with service-connected disabilities'' and inserting ``small business concern owned and controlled by service-disabled veterans''; and

(BB) by striking ``of the Small Business Administration''; and

(bb) in clause

(ii)--

(AA) by amending subclause (I) to read
as follows:

``(I) the Secretary of Veterans Affairs or
the Administrator; or''; and
(BB) in subclause

(II), by striking ``the contracting officer of the Department'' and inserting ``the applicable contracting officer''; and

(III) by striking subparagraph (C);

(C) by redesignating subsections (k) (relating to limitations on subcontracting) and (l) (relating to definitions) as subsections (l) and (m), respectively;

(D) by inserting after subsection (j) (relating to annual reports) the following new subsection:

``(k) Annual Transfer for Certification Costs.--For each fiscal year, the Secretary of Veterans Affairs shall reimburse the Administrator in an amount necessary to cover any cost incurred by the Administrator for certifying small business concerns owned and controlled by veterans that do not qualify as small business concerns owned and controlled by service-disabled veterans for the Secretary for purposes of this section and section 8128 of this title. The Administrator is authorized to accept such reimbursement. The amount of any such reimbursement shall be determined jointly by the Secretary and the Administrator and shall be provided from fees collected by the Secretary under multiple-award schedule contracts. Any disagreement about the amount shall be resolved by the Director of the Office of Management and Budget.''; and

(E) in subsection (m) (relating to definitions), as so redesignated--

(i) by redesignating paragraphs (1), (2), and (3) as paragraphs (2), (3), and (4), respectively; and

(ii) by inserting before paragraph (2), as so redesignated, the following new paragraph:

``(1) The term `Administrator' means the Administrator of the Small Business Administration.''.

(2) Transfer of requirements relating to database to the small business act.--Effective on the transfer date, subsection (f) of section 8127 of title 38, United States Code (as amended by paragraph (1)), is transferred to section 36 of the Small Business Act (15 U.S.C. 657f), and inserted so as to appear after
subsection (e).

(3) Conforming amendments.--The following amendments shall take effect on the transfer date:

(A) Small business act.--Section 3(q)(2)(C)(i)(III) of the Small Business Act (15 U.S.C. 632(q)(2)(C)(i)(III)) is amended by striking ``section 8127(f) of title 38, United States Code'' and inserting ``section 36''.

(B) Title 38.--Section 8128 of title 38, United States Code, is amended by striking ``maintained by the Secretary under section 8127(f) of this title'' and inserting ``maintained by the Administrator of the Small Business Administration under section 36 of the Small Business Act''.

(c) Additional Requirements for Database.--

(1) Administrator access to database before the transfer date.--During the period between the date of the enactment of this Act and the transfer date, the Secretary of Veterans Affairs shall provide the Administrator of the Small Business Administration with access to the contents of the database described under section 8127(f) of title 38, United States Code.

(2) Rule of construction.--Nothing in this section or the amendments made by this section may be construed--

(A) as prohibiting the Administrator of the Small Business Administration from combining the contents of the database described under section 8127(f) of title 38, United States Code, with other databases maintained by the Administration; or

(B) as requiring the Administrator to use any system or technology related to the database described under section 8127(f) of title 38, United States Code, on or after the transfer date to comply with the requirement to maintain a database under subsection (f) of section 36 of the Small Business Act (as transferred pursuant to subsection (b)(2) of this section).

(3) Recognition of the issuance of joint regulations.--The date specified under section 1832(e) of the National Defense Authorization Act for Fiscal Year 2017 (15 U.S.C. 632 note) shall be deemed to be October 1, 2018.

(d) Procurement Program for Small Business Concerns Owned and Controlled by Service-disabled Veterans.--

(1) Procurement program for small business concerns owned and controlled by service-disabled veterans.--Section 36 of the Small Business Act (15 U.S.C. 657f) is amended--

(A) by redesignating subsection (d) as paragraph (3), adjusting the margin accordingly, and transferring such paragraph to subsection (h) of such section, as added by subparagraph (F) of this paragraph, so as to appear after paragraph (2);

(B) by striking subsection (e);

(C) by redesignating subsections (a), (b), and (c) as subsections (c), (d), and (e) respectively;

(D) by inserting before subsection (c), as so redesignated, the following new subsections:

``(a) Contracting Officer Defined.--For purposes of this section, the term `contracting officer' has the meaning given such term in section 2101 of title 41, United States Code.

``(b) Certification of Small Business Concerns Owned and Controlled by Service-Disabled Veterans.--With respect to a procurement program or preference established under this Act that applies to prime contractors, the Administrator shall--

``(1) certify the status of a concern as a small business concern owned and controlled by service-disabled veterans; and

``(2) require the periodic recertification of such status.'';

(E) in subsection (d), as so redesignated, by inserting ``certified under subsection (b)'' before ``if the contracting officer'';

(F) by adding at the end the following new subsections:

``(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).

``(i) Provision of Data.--Upon the request of the Administrator, the head of any Federal department or agency shall promptly provide to the Administrator such information as the Administrator determines to be necessary to carry out subsection (b) or to be able to certify the status of the concern as a small business concern owned and controlled by veterans under section 36A.''; and

(G) in paragraph (3) of subsection (h), as redesignated and transferred by subparagraph (A) of this paragraph, by inserting ``and section 36A'' before the period at the end.

(2) Penalties for misrepresentation.--Section 16 of the Small Business Act (15 U.S.C. 645) is amended--

(A) in subsection (d)(1)--

(i) in the matter preceding subparagraph (A)--

(I) by striking the comma that immediately follows another comma; and

(II) by striking ``, a `small'' and inserting ``, a `small business concern owned and controlled by service-disabled veterans', a `small business concern owned and controlled by veterans', a `small''; and

(ii) in subparagraph (A), by striking ``9, 15, or 31'' and inserting ``8, 9, 15, 31, 36, or 36A''; and

(B) in subsection (e)--

(i) by striking the comma that immediately follows another comma; and

(ii) by striking ``, a `small'' and inserting ``, a `small business concern owned and controlled by service-disabled veterans', a `small business concern owned and controlled by veterans', a `small''.

(e) Certification for Small Business Concerns Owned and Controlled by Veterans.--The Small Business Act (15 U.S.C. 631 et seq.) is amended by inserting after section 36 the following new section:

``SEC. 36A. CERTIFICATION OF SMALL BUSINESS CONCERNS OWNED AND CONTROLLED BY VETERANS.

``(a) In General.--With respect to the program established under section 8127 of title 38, United States Code, the Administrator shall--

``(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 section 36 (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 (a)); 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 (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).''.

(f) Status of Self-certified Small Business Concerns Owned and Controlled by Service-disabled Veterans.--

(1) In general.--Notwithstanding any other provision of law, any small business concern (as defined under section 3 of the Small Business Act (15 U.S.C. 632)) that self-certified as a small business concern owned and controlled by service-disabled veterans (as defined in section 36 of such Act (15
U.S.C. 657f)) shall--

(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) Non-applicability to department of veterans affairs.--Paragraph (1) shall not apply to participation in contracts (including subcontracts) with the Department of Veterans Affairs.

(3) Notice.--The Administrator shall notify any small business concern that self-certified as a small business concern owned and controlled by service-disabled veterans about the requirements of this section and the amendments made by this section, including the transfer date, and make such notice publicly available, on the date of the enactment of this Act.

(g) Transfer of the Center for Verification and Evaluation of the Department of Veterans Affairs to the Small Business Administration.--

(1) Definition.--In this subsection, the term ``function''--

(A) means any duty, obligation, power, authority, responsibility, right, privilege, activity, or program; and

(B) does not include employees.

(2) Abolishment.--The Center for Verification and Evaluation of the Department of Veterans Affairs, as defined under section 74.1 of title 38, Code of Federal Regulations, is abolished effective on the transfer date.

(3) Transfer of functions.--Effective on the transfer date, all functions that, immediately before the transfer date, were functions of the Center for Verification and Evaluation shall be functions of the Small Business Administration.

(4) Transfer of assets.--So much of the property (including contracts for the procurement of property or services) and records used, held, available, or to be made available in connection with a function transferred under this subsection shall be available to the Small Business Administration at such time or times
as the President directs for use in connection with the functions transferred.

(5) Savings provisions.--

(A) Continuing effect of legal documents.--All orders, determinations, rules, regulations, permits, agreements, grants, contracts, certificates, licenses, registrations, privileges, and other administrative actions--

(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) Proceedings not affected.--The provisions of this subsection shall not affect any proceedings, including notices of proposed rulemaking, or any application for any license, permit, certificate, or financial assistance pending before the Department of Veterans Affairs on the transfer date, with respect to functions transferred by this subsection but such proceedings and applications shall be continued. Orders shall be issued in such proceedings, appeals shall be taken therefrom, and payments shall be made pursuant to such orders, as if this subsection had not been enacted, and orders issued in any such proceedings shall continue in effect until modified, terminated, superseded, or revoked by a duly authorized official, by a court of competent jurisdiction, or by operation of law. Nothing in this subparagraph shall be deemed to
prohibit the discontinuance or modification of any such proceeding under the same terms and conditions and to the same extent that such proceeding could have been discontinued or modified if this subsection had not been enacted.

(C) Suits not affected.--The provisions of this subsection shall not affect suits commenced before the transfer date, and in all such suits, proceedings shall be had, appeals taken, and judgments rendered in the same manner and with the same effect as if this subsection had not been enacted.

(D) Nonabatement of actions.--No suit, action, or other proceeding commenced by or against the Department of Veterans Affairs, or by or against any individual in the official capacity of such individual as an officer of the Department of Veterans Affairs, shall abate by reason of the enactment of this subsection.

(E) Administrative actions relating to promulgation of regulations.--Any administrative action relating to the preparation or promulgation of a regulation by the Department of Veterans Affairs relating to a function transferred under this subsection may be continued by the Administrator of the Small Business Administration with the same effect as if this subsection had not been enacted.

(F) Effect on personnel.--The Secretary of Veterans Affairs shall appoint any employee represented by a labor organization accorded exclusive recognition under section 7111 of title 5, United States Code, that is affected by the transfer of functions under this subsection to a position of a continuing nature for which the employee is qualified, at a grade and compensation not lower than the current grade and compensation of the employee.

(6) References.--Any reference in any other Federal law, Executive order, rule, regulation, or delegation of authority, or any document of or pertaining to a
function of the Center for Verification and Evaluation that is transferred under this subsection is deemed, after the transfer date, to refer to the Small Business Administration.

(h) Report.--Not later than 1 year after the date of the enactment of this Act, and every 6 months thereafter until the transfer date, the Administrator of the Small Business Administration and Secretary of Veterans Affairs shall jointly submit to the Committee on Appropriations, the Committee on Small Business, and the Committee on Veterans' Affairs of the House of Representatives and the Committee on Appropriations, the Committee on Small Business and Entrepreneurship, and the Committee on Veterans' Affairs of the Senate a report on the planning for the transfer of functions and property required under this section and the amendments made by this section on the transfer date, which shall include--

(1) a discussion of whether and how the verification database and operations of the Center for Verification and Evaluation of the Department of Veterans Affairs will be incorporated into the existing certification database of the Small Business Administration;

(2) projections for the numbers and timing, in terms of fiscal year, of--

(A) already verified concerns that will come up for recertification; and

(B) self-certified concerns that are expected to apply for certification;

(3) an explanation of how outreach to veteran service organizations, the service-disabled veteran-owned and veteran-owned small business community, and other stakeholders will be conducted; and

(4) other pertinent information determined by the Administrator and the Secretary.

The House bill contained a provision (sec. 831) that would amend section 8127 of title 38, United States Code, and sections 16 and 36 of the Small Business Act (as codified at sections 645 and 657f of title 15, United States Code) to transfer the function of certifying Service Disabled Veteran Owned Small Businesses (SDVOSBs) and Veteran Owned Small Businesses (VOSBs) from the Department of Veterans Affairs (VA) to the Small Business Administration (SBA), phase out self-certification of SDVOSBs for the purposes of the Federal-wide SDVOSB contracting goal in favor of affirmative certification by SBA, and better harmonize the mechanics of the SDVOSB contracting program with other small business contracting programs already administered by SBA.

The Senate amendment contained no similar provision.

The Senate recedes with an amendment that would eliminate in subsection (a) the possibility for indefinite postponements of the transfer date; eliminate in subsection (d) the requirement that SBA conduct risk-based examinations of certified firms separate from periodic recertification examinations; clarify in subsections (d) and (e) enforcement and penalties language to better conform to relevant sections of the Small Business Act; and clarify in subsection (g) that VA personnel are not directed to be transferred and shall be guaranteed continuous employment, and that legal documents, proceedings, suits, and administrative actions shall continue notwithstanding the transfer of the certification function.

House Committee Report 116-442 Accompanying H. R. 6395

Section 831--Transfer of Verification of Small Business Concerns Owned and Controlled by Veterans or Service-Disabled Veterans to the Small Business Administration

This section would amend section 8127 of title 38, United States Code, and transfer the verification of small business concerns owned and controlled by veterans or service-disabled veterans from the Department of Veterans Affairs to the Small Business Administration.