Strengthening Subcontracting for Small Businesses Act of 2022

Floor Speech

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Ms. VELAZQUEZ. Madam Speaker, I move to suspend the rules and pass the bill (H.R. 7694) to amend the Small Business Act to modify the requirements relating to the evaluation of the subcontracting plans of certain offerors, and for other purposes.

The Clerk read the title of the bill.

The text of the bill is as follows: H.R. 7694

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE.

This Act may be cited as the ``Strengthening Subcontracting for Small Businesses Act of 2022''. SEC. 2. EVALUATION OF SUBCONTRACTING PLANS.

Section 8(d)(4)(G) of the Small Business Act (15 U.S.C. 637(d)(4)(G)) is amended--

(1) in the matter preceding clause (i), by striking ``bundled contract'' and all that follows through ``for subcontracting'' and inserting ``contract that includes a subcontracting plan required under this paragraph''; and

(2) in clause (i), by striking ``the rate provided under the subcontracting plan for small business participation'' and inserting ``the description in the subcontracting plan of the extent to which the offeror proposes to use small business concerns as subcontractors (at any tier)''.
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Ms. VELAZQUEZ. Madam Speaker, I yield myself such time as I may consume.

Madam Speaker, I rise today in support of H.R. 7694, the Strengthening Subcontracting for Small Businesses Act of 2022. Subcontracting plans are an important mechanism for small business utilization. In fact, for many small businesses, subcontracting plans represent the only way to participate in Federal contracts. That is why the Small Business Act requires contractors to have subcontracting plans in certain situations.

For example, subcontracting plans are required for contracts that exceed certain thresholds, have subcontracting possibilities, and are awarded using negotiated procedures. While having these plans in place is an important first step, it will not make a difference if the prime does not implement them.

The Small Business Act has a provision that allows agencies to subject prime contractors to liquidated damages if they do not employ good faith efforts to meet the subcontracting plans. However, the standard is ambiguous and not always enforced. As a result, primes often face no consequences for failing to meet their subcontracting plans. That is simply unacceptable.

We must do more to ensure prime contractors comply with their subcontracting plans. This is precisely what H.R. 7694 does. It requires agencies to evaluate past performance in meeting subcontracting plans when considering offers for new contract awards. In other words, by making sure that previous compliance with these plans is taken into consideration when making new awards, it would encourage more compliance with subcontracting plans.

I thank Representative Stauber and Representative Mfume for leading this effort, which represents an innovative solution to a longstanding problem.

Madam Speaker, I urge Members to support this legislation, and I reserve the balance of my time.

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Ms. VELAZQUEZ. Madam Speaker, I continue to reserve the balance of my time.

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Ms. VELAZQUEZ. Madam Speaker, I yield 3 minutes to the gentleman from Maryland (Mr. Mfume).

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Ms. VELAZQUEZ. Madam Speaker, I yield an additional 30 seconds to the gentleman from Maryland.

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Ms. VELAZQUEZ. Madam Speaker, I would just say thank you to both gentlemen, Mr. Stauber and Mr. Mfume, for their hard work, and I urge my colleagues to support this bill.

Madam Speaker, I yield back the balance of my time.

Ms. JACKSON LEE. Madam Speaker, I rise in strong support of H.R. 7694, the ``Strengthening Subcontracting for Small Businesses Act of 2022.''

This legislation would amend the Small Business Act to ensure that companies awarded government contracts utilize small businesses in their subcontracting plans.

H.R. 7694 would ensure that small businesses are not excluded from the government contracting process, which is an important concern in Congress.

With more than 65 percent of small businesses having experienced at least a moderately negative impact from the COVID-19 pandemic according to Statista Research, it is more vital than ever that we continue to strengthen small business.

This legislation will provide that urgently needed support.

As small businesses account for 44 percent of U.S. economic activity, they are the powerhouse behind the American workforce, creating two- thirds of the new jobs over the last 15 years.

Small business is vital in times of crisis, giving our economy the ability to be more flexible, innovative, and productive.

In my home district in Houston, there are over 600,000 small businesses engaged in industries across the spectrum.

Many of these small businesses received subcontracts following the devastation of Hurricanes Ike and Harvey, and their work helped rebuild Houston as well as restore local economic growth.

Just this week, there was a briefing on the COVID-19 pandemic response that underscored how important small business subcontracts were, and continue to be, to our capacity for COVID testing, quarantine, and much more.

Small businesses are always serving our communities, and this legislation on subcontracting will allow them to do more of what they're already doing: improving life for us all.

We need legislation that reinforces the value and capability that small businesses provide to the American economy, especially through contracts with the federal government.

I urge all my colleagues to support H.R. 7694, the Strengthening Subcontracting for Small Businesses Act.

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