Verification Alignment and Service-Disabled Business Adjustment Act
Floor Speech
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Mr. SCHNEIDER. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 1615) to transfer the responsibility of verifying small business concerns owned and controlled by veterans or service-disabled veterans to the Small Business Administration, and for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows: H.R. 1615
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Verification Alignment and Service-disabled Business Adjustment Act'' or the ``VA-SBA Act''.
(b) Table of Contents.--The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. Sec. 2. Transfer date. Sec. 3. Amendment to and transfer of veteran-owned and service-disabled veteran-owned business database. Sec. 4. Additional requirements for database. Sec. 5. Procurement program for small business concerns owned and controlled by service-disabled veterans. Sec. 6. Certification for small business concerns owned and controlled by veterans. Sec. 7. Status of self-certified small business concerns owned and controlled by service-disabled veterans. Sec. 8. Transfer of the Center for Verification and Evaluation of the Department of Veterans Affairs to the Small Business Administration. Sec. 9. Report. Sec. 10. Determination of budgetary effects. SEC. 2. TRANSFER DATE.
For purposes of this Act, the term ``transfer date'' means the date that is 2 years after the date of enactment of this Act, except that such date may be extended an unlimited number of times by a period of not more than 6 months if the Administrator of the Small Business Administration and the Secretary of Veterans Affairs jointly issue a notice to Congress and the Law Revision Counsel of the House of Representatives containing--
(1) a certification that such extension is necessary;
(2) the rationale for and the length of such extension; and
(3) a plan to comply with the requirements of this Act within the timeframe of the extension. SEC. 3. AMENDMENT TO AND TRANSFER OF VETERAN-OWNED AND SERVICE-DISABLED VETERAN-OWNED BUSINESS DATABASE.
(a) 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--
(1) in subsection (e)--
(A) by striking ``the Secretary'' and inserting ``the Administrator''; and
(B) by striking ``subsection (f)'' and inserting ``section 36 of the Small Business Act'';
(2) in subsection (f)--
(A) by striking ``the Secretary'' each place such term appears, other than in the last place such term appears under paragraph (2)(A), and inserting ``the Administrator'';
(B) in paragraph (1), by striking ``small business concerns owned and controlled by veterans with service-connected disabilities'' each place such term appears and inserting ``small business concerns owned and controlled by service- disabled veterans'';
(C) in paragraph (2)--
(i) in subparagraph (A), by striking ``to access'' and inserting ``to obtain from the Secretary of Veterans Affairs''; 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, such verification; 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).'';
(D) by striking paragraphs (4) and (7);
(E) by redesignating paragraphs (5) and (6) as paragraphs (4) and (5), respectively, and redesignating paragraph (8) as paragraph (6);
(F) in paragraph (4), as so redesignated, by striking ``The Secretary'' and inserting ``The Administrator''; and
(G) in paragraph (6), as so redesignated--
(i) in subparagraph (A)--
(I) 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 section 36(g))''; and
(II) by striking ``verification'' and inserting ``certification'';
(ii) in subparagraph (B)--
(I) in clause (i), 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
(II) 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);
(3) by redesignating subsection (k) (relating to definitions) as subsection (l);
(4) by inserting after subsection (j) (relating to annual reports) the following:
``(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
(5) subsection (l) (relating to definitions), as so redesignated, by adding at the end the following:
``(4) The term Administrator means the Administrator of the Small Business Administration.''.
(b) 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 subsection (a)), is transferred to section 36 of the Small Business Act (15 U.S.C. 657f), inserted so as to appear after subsection (e).
(c) Conforming Amendments.--The following amendments shall take effect on the transfer date:
(1) 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''.
(2) Title 38.--Section 8128 of title 38, United States Code, is amended by striking ``section 8127(f) of this title'' and inserting ``section 36 of the Small Business Act''. SEC. 4. ADDITIONAL REQUIREMENTS FOR DATABASE.
(a) Administration 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.
(b) Rule of Construction.--Nothing in this Act or the amendments made by this Act may be construed--
(1) 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
(2) 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 section 3(b) of this Act).
(c) 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. SEC. 5. PROCUREMENT PROGRAM FOR SMALL BUSINESS CONCERNS OWNED AND CONTROLLED BY SERVICE-DISABLED VETERANS.
(a) 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--
(1) by striking subsections (d) and (e);
(2) by redesignating subsections (a), (b), and (c) as subsections (c), (d), and (e) respectively;
(3) by inserting before subsection (c), as so redesignated, the following:
``(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 the concern as a `small business concern owned and controlled by service-disabled veterans'; and
``(2) require the periodic recertification of such status.'';
(4) in subsection (d), as so redesignated, by striking ``and that the award can be made at a fair market price'' and inserting ``, that the award can be made at a fair market price, and if each concern is certified by the Administrator as a small business concern owned and controlled by service- disabled veterans''; and
(5) by adding at the end the following:
``(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.--
``(A) 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 (b), to determine the veracity of any statements or information provided as part of such certification or otherwise provided under subsection (b).
``(B) Examination of certified concerns.--The procedures established under paragraph (1) shall provide for the examination of risk-based samples of small business concerns certified under subsection (b), or of any small business concern that the Administrator believes poses a particular risk or with respect to which the Administrator receives specific and credible information alleging that the small business concern no longer meets eligibility requirements to be certified as a small business concern owned and controlled by service-disabled veterans.
``(3) Penalties.--In addition to the penalties described in section 16(d), any small business concern that is determined by the Administrator to have misrepresented the status of that concern as a small business concern owned and controlled by service-disabled veterans for purposes of subsection (b), shall be subject to--
``(A) section 1001 of title 18, United States Code;
``(B) sections 3729 through 3733 of title 31, United States Code; and
``(C) section 8127(g) of title 38, United States Code.
``(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.''.
(b) Penalties for Misrepresentation.--Section 16 of the Small Business Act (15 U.S.C. 645) is amended--
(1) in subsection (d)(1)--
(A) by striking ``,, a'' and inserting ``, a `small business concern owned and controlled by service-disabled veterans', a `small business concern owned and controlled by veterans', a''; and
(B) in paragraph (A), by striking ``9, 15, or 31'' and inserting ``8, 9, 15, 31, 36, or 36A''; and
(2) in subsection (e), by striking ``,, a'' and inserting ``, a `small business concern owned and controlled by service-disabled veterans', a `small business concern owned and controlled by veterans', a''. SEC. 6. 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 the 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 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 (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).
``(3) Penalties.--In addition to the penalties described in section 16(d), any small business concern that is determined by the Administrator to have misrepresented the status of that concern as a small business concern owned and controlled by veterans for purposes of subsection (a), shall be subject to--
``(A) section 1001 of title 18, United States Code;
``(B) sections 3729 through 3733 of title 31, United States Code; and
``(C) section 8127(g) of title 38, United States Code.''. SEC. 7. STATUS OF SELF-CERTIFIED SMALL BUSINESS CONCERNS OWNED AND CONTROLLED BY SERVICE-DISABLED VETERANS.
(a) In General.--Notwithstanding any other provision of law, any small business concern that self-certified as a small business concern owned and controlled by service- disabled veterans shall--
(1) 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
(2) 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.
(b) Non-Applicability to Department of Veterans Affairs.-- Subsection (a) shall not apply to participation in contracts (including subcontracts) with the Department of Veterans Affairs.
(c) 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 Act, including the transfer date and any extension of such transfer date made pursuant to section 2, and make such notice publicly available, on--
(1) the date of the enactment of this Act; and
(2) the date on which an extension described under section 2 is approved. SEC. 8. TRANSFER OF THE CENTER FOR VERIFICATION AND EVALUATION OF THE DEPARTMENT OF VETERANS AFFAIRS TO THE SMALL BUSINESS ADMINISTRATION.
(a) Abolishment.--The Center for Verification and Evaluation of the Department of Veterans Affairs defined under section 74.1 of title 38, Code of Federal Regulations, is abolished effective on the transfer date.
(b) Transfer of Functions.--All functions that, immediately before the effective date of this section, were functions of the Center for Verification and Evaluation shall--
(1) on the date of enactment of this Act, be functions of both the Center for Verification and Evaluation and the Small Business Administration, except that the Small Business Administration shall not have any authority to carry out any verification functions of the Center for Verification and Evaluation; and
(2) on the transfer date, be functions of the Small Business Administration.
(c) Transfer of Assets.--So much of the personnel, property, and records employed, used, held, available, or to be made available in connection with a function transferred under this section 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.
(d) 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 section is deemed, after the transfer date, to refer to the Small Business Administration. SEC. 9. REPORT.
Not later than the end of the 1-year period beginning on 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 issue a report to the Committees on Appropriations, Small Business, and Veterans' Affairs of the House of Representatives and the Committees on Appropriations, Small Business and Entrepreneurship, and Veterans' Affairs of the Senate on the planning for the transfer of functions and property required under this Act and the amendments made by this Act on the transfer date. Such report shall include--
(1) 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. SEC. 10. DETERMINATION OF BUDGETARY EFFECTS.
The budgetary effects of this Act, for the purpose of complying with the Statutory Pay-As-You-Go-Act of 2010, shall be determined by reference to the latest statement titled ``Budgetary Effects of PAYGO Legislation'' for this Act, submitted for printing in the Congressional Record by the Chairman of the House Budget Committee, provided that such statement has been submitted prior to the vote on passage.
Mr. Speaker, I rise today in support of H.R. 1615, the Verification Alignment and Service-Disabled Business Adjustment Act, or the VA-SBA Act.
I want to first take this opportunity to thank Chairman Takano and Ranking Member Roe of the Committee on Veterans' Affairs. This bill is a culmination of years of collaboration to ensure we are doing right by our Nation's veteran business owners. I thank the gentlemen for their cooperation and recognize the staff of our respective committees, both majority and minority, for seeing this effort through.
Mr. Speaker, considering how veteran-owned businesses increase competition and solidify our industrial base, Congress created the SBA's Service-Disabled Veteran-Owned Small Business, SDVOSB, program to maximize their participation in the Federal marketplace.
In 2018, the Service-Disabled Veteran-Owned Small Business procurement program awarded $20.6 billion to over 180,000 contracts. Such awards accounted for approximately 4.27 percent of all contracts, exceeding the 3 percent statutory goal.
While this accomplishment should be applauded, the structure and resources of the program have not kept pace with the growth. Currently, the Department of Veterans Affairs requires all participants to go through a rigorous certification process. In contrast, the SBA allows businesses to self-certify that they meet the regulatory threshold.
The problem with two certification processes is simple: It creates confusion for business owners and contracting officers alike.
This bill harmonizes the two conflicting contracting programs by eliminating the VA certification and transferring it to the SBA. It also institutes a certification process under the SBA program to prevent concerns of fraud and abuse.
I thank all the members of the respective committees who have sponsored this bill, because it is certainly a step in the right direction to eliminate duplication and confusion between the two agencies. This bipartisan legislation will make it easier for the veteran-owned business to do business with our government.
House of Representatives, Committee on Veterans' Affairs, Washington, DC, November 4, 2019. Hon. Nydia M. Velazquez, Chairwoman, Committee on Small Business, House of Representatives, Washington, DC.
Dear Chairwoman Velazquez: I am writing with respect to H.R. 1615, the Verification Alignment and Service-Disabled Business Adjustment Act. Thank you for consulting with the Committee on Veterans' Affairs regarding the matters in H.R. 1615 that fall within the Committee's jurisdiction.
As a result of your consultation with us on this measure and in order to expeditiously move the bill to the floor, I forego further consideration of H.R. 1615. The Committee on Veterans' Affairs takes this action with our mutual understanding that we do not waive any jurisdiction over the subject matter contained in this or similar legislation, and the Committee will be appropriately consulted and involved as the bill or similar legislation moves forward so that we may address any remaining issues that fall within our jurisdiction. Further, I request your support for the appointment of an appropriate number of conferees from the Committee on Veterans' Affairs during any House-Senate conference involving this or similar legislation.
Finally, I would appreciate your response to this letter confirming this understanding regarding H.R. 1615 and would ask that a copy of our exchange of letters on this matter be included in the Committee Report and the Congressional Record during floor consideration of the measure. Thank you for the cooperative spirit in which you have worked regarding this matter and others between our respective committees. Sincerely, Mark Takano, Chairman. ____ House of Representatives, Committee on Small Business, Washington, DC, November 5, 2019. Hon. Mark Takano, Chairman, Committee on Veterans' Affairs, House of Representatives, Washington, DC.
Dear Chairman Takano: Thank you for your letter regarding the Committee on Veterans' Affairs jurisdictional interest in H.R. 1615, the ``Verification Alignment and Service-Disabled Business Adjustment Act'' and your willingness to forego consideration of H.R. 1615 by your committee. I agree that the Committee on Veterans' Affairs has a valid jurisdictional interest in certain provisions of H.R. 1615 and that the Committee's jurisdiction will not be adversely affected by your decision to forego consideration of H.R. 1615. As you have requested, I will support your request for an appropriate appointment of outside conferees from your Committee in the event of a House-Senate conference on this or similar legislation should such a conference be convened.
Finally, I will include a copy of your letter and this response in the Committee Report and in the Congressional Record during the floor consideration of this bill. Thank you again for your cooperation. Sincerely, Nydia M. Velazquez, Chairwoman.
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Mr. SCHNEIDER. Mr. Speaker, I continue to reserve the balance of my time.
As the largest purchaser of goods and services in the world, the Federal Government is in a unique position to support veteran-owned businesses, yet navigating this process remains complicated to many veteran entrepreneurs.
One of the most challenging obstacles for veteran-owned businesses is getting certified. This first step toward contracting with the Federal Government is the most important, but also the most complex. This is largely due to the fact that the SBA established its own program, which applies government-wide, and the VA administrators established their own program as well.
Although the two programs share the same goal, each has its own participation requirements. Creating more confusion is the fact that firms can self-certify for the SBA programs, ones verified by the VA may not necessarily be found eligible to receive an SBA set-aside contract, and vice versa.
Coordinating certifications between the SBA and the VA can allow the Federal Government to reap the benefits of goods and services provided by veteran-owned businesses.
Again, I would like to thank Chairman Takano and Ranking Member Roe. Finally, I commend the gentleman from Mississippi (Mr. Kelly) for leading this long effort and continuing to keep the needs of our veteran business owners in mind, as well as my colleague from Colorado (Mr. Crow).
Mr. Speaker, I urge my colleagues to support this bill, and I yield back the balance of my time.
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