HISTORICALLY UNDERUTILIZED BUSINESS ZONES.

SEC. 602. HISTORICALLY UNDERUTILIZED BUSINESS ZONES. (a) Definitions.— Section 3 of the Small Business Act (15 U.S.C. 632) (as amended by section 412 of this Act) is amended by adding at the end the following: “(p) Definitions Relating to HUBZones.— In this Act: “(1) Historically underutilized business zone.— The term “historically underutilized business zone’ means any area located within 1 or more— “(A) qualified census tracts; “(B) qualified nonmetropolitan counties; or “(C) lands within the external boundaries of an Indian reservation. “(2) HUBZone.— The term ‘HUBZone’ means a historically underutilized business zone. “(3) HUBZone small business concern.— The term ‘HUBZone small business concern’ means a small business concern— “(A) that is owned and controlled by 1 or more persons, each of whom is a United States citizen; and “(B) the principal office of which is located in a HUBZone; or “(4) Qualified areas.— “(A) Qualified census tract.— The term ‘qualified census tract’ has the meaning given that term in section 42(d)(5)(C)(ii)(I) of the Internal Revenue Code of 1986. “(B) Qualified nonmetropolitan county.— The term ‘qualified nonmetropolitan county’ means any county— “(i) that, based on the most recent data available from the Bureau of the Census of the Department of Commerce— “(I) is not located in a metropolitan statistical area (as defined in section 143(k)(2)(B) of the Internal Revenue Code of 1986); and “(II) in which the median household income is less than 80 percent of the nonmetropolitan State median household income; or “(ii) that, based on the most recent data available from the Secretary of Labor, has an unemployment rate that is not less than 140 percent of the statewide 111 STAT. 2628average unemployment rate for the State in which the county is located. “(5) Qualified hubzone small business concern.— “(A) In general.— A HUBZone small business concern is ‘qualified’, if— “(i) the small business concern has certified in writing to the Administrator (or the Administrator otherwise determines, based on information submitted to the Administrator by the small business concern, or based on certification procedures, which shall be established by the Administration by regulation) that— “(I) it is a HUBZone small business concern; “(II) not less than 35 percent of the employees of the small business concern reside in a HUBZone, and the small business concern will attempt to maintain this employment percentage during the performance of any contract awarded to the small business concern on the basis of a preference provided under section 31(b); and “(III) with respect to any subcontract entered into by the small business concern pursuant to a contract awarded to the small business concern under section 31, the small business concern will ensure that— “(aa) in the case of a contract for services (except construction), not less than 50 percent of the cost of contract performance incurred for personnel will be expended for its employees or for employees of other HUBZone small business concerns; and “(bb) in the case of a contract for procurement of supplies (other than procurement from a regular dealer in such supplies), not less than 50 percent of the cost of manufacturing the supplies (not including the cost of materials) will be incurred in connection with the performance of the contract in a HUBZone by 1 or more HUBZone small business concerns; and “(ii) no certification made or information provided by the small business concern under clause (i) has been, in accordance with the procedures established under section 31(c)(1)— “(I) successfully challenged by an interested party; or “(II) otherwise determined by the Administrator to be materially false. “(B) Change in percentages.— The Administrator may utilize a percentage other than the percentage specified in item (aa) or (bb) of subparagraph (A)(i)(III), if the Administrator determines that such action is necessary to reflect conventional industry practices among small business concerns that are below the numerical size standard for businesses in that industry category. “(C) Construction and other contracts.— The Administrator shall promulgate final regulations imposing 111 STAT. 2629requirements that are similar to those specified in subclauses (IV) and (V) of subparagraph (A)(i) on contracts for general and specialty construction, and on contracts for any other industry category that would not otherwise be subject to those requirements. The percentage applicable to any such requirement shall be determined in accordance with subparagraph (B). “(D) List of qualified small business concerns.— The Administrator shall establish and maintain a list of qualified HUBZone small business concerns, which list shall, to the extent practicable— “(i) include the name, address, and type of business with respect to each such small business concern; “(ii) be updated by the Administrator not less than annually; and “(iii) be provided upon request to any Federal agency or other entity.”. (b) Federal Contracting.— (1) In general.— The Small Business Act (15 U.S.C. 631 et seq.) is amended— (A) by redesignating section 31 as section 32; and (B) by inserting after section 30 the following: “SEC. 31. HUBZONE PROGRAM. “(a) In General.— There is established within the Administration a program to be carried out by the Administrator to provide for Federal contracting assistance to qualified HUBZone small business concerns in accordance with this section. “(b) Eligible Contracts.— “(1) Definitions.— In this subsection— “(A) the term ‘contracting officer’ has the meaning given that term in section 27(f)(5) of the Office of Federal Procurement Policy Act (41 U.S.C. 423(f)(5)); and “(B) the term ‘full and open competition’ has the meaning given that term in section 4 of the Office of Federal Procurement Policy Act (41 U.S.C. 403). “(2) Authority of contracting officer.— Notwithstanding any other provision of law— “(A) a contracting officer may award sole source contracts under this section to any qualified HUBZone small business concern, if— “(i) the qualified HUBZone small business concern is determined to be a responsible contractor with respect to performance of such contract opportunity, and the contracting officer does not have a reasonable expectation that 2 or more qualified HUBZone small business concerns will submit offers for the contracting opportunity; “(ii) the anticipated award price of the contract (including options) will not exceed— “(I) $5,000,000, in the case of a contract opportunity assigned a standard industrial classification code for manufacturing; or “(II) $3,000,000, in the case of all other contract opportunities; and 111 STAT. 2630 “(iii) in the estimation of the contracting officer, the contract award can be made at a fair and reasonable price; “(B) a contract opportunity shall be awarded pursuant to this section on the basis of competition restricted to qualified HUBZone small business concerns if the contracting officer has a reasonable expectation that not less than 2 qualified HUBZone small business concerns will submit offers and that the award can be made at a fair market price; and “(C) not later than 5 days from the date the Administration is notified of a procurement officer’s decision not to award a contract opportunity under this section to a qualified HUBZone small business concern, the Administrator may notify the contracting officer of the intent to appeal the contracting officer’s decision, and within 15 days of such date the Administrator may file a written request for reconsideration of the contracting officer’s decision with the Secretary of the department or agency head. “(3) Price evaluation preference in full and open competitions.— In any case in which a contract is to be awarded on the basis of full and open competition, the price offered by a qualified HUBZone small business concern shall be deemed as being lower than the price offered by another offeror (other than another small business concern), if the price offered by the qualified HUBZone small business concern is not more than 10 percent higher than the price offered by the otherwise lowest, responsive, and responsible offeror. “(4) Relationship to other contracting preferences.— A procurement may not be made from a source on the basis of a preference provided in paragraph (2) or (3), if the procurement would otherwise be made from a different source under section 4124 or 4125 of title 18, United States Code, or the Javits-Wagner-O’Day Act (41 U.S.C. 46 et seq.). “(c) 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 section 3(p)(5)); 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 section 3(p)(5). “(2) Examinations.— The procedures established under paragraph (1) may provide for program examinations (including random program examinations) by the Administrator of any small business concern making a certification or providing information to the Administrator under section 3(p)(5). “(3) Provision of data.— Upon the request of the Administrator, the Secretary of Labor, the Secretary of Housing and Urban Development, and the Secretary of the Interior (or the 111 STAT. 2631Assistant Secretary for Indian Affairs), shall promptly provide to the Administrator such information as the Administrator determines to be necessary to carry out this subsection. “(4) 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 ‘HUBZone small business concern’ for purposes of this section, shall be subject to— “(A) section 1001 of title 18, United States Code; and “(B) sections 3729 through 3733 of title 31, United States Code.”. (2) Initial limited applicability.— During the period beginning on the date of enactment of this Act and ending on September 30, 2000, section 31 of the Small Business Act (as added by paragraph (1) of this subsection) shall apply only to procurements by— (A) the Department of Defense; (B) the Department of Agriculture; (C) the Department of Health and Human Services; (D) the Department of Transportation; (E) the Department of Energy; (F) the Department of Housing and Urban Development; (G) the Environmental Protection Agency; (H) the National Aeronautics and Space Administration; (I) the General Services Administration; and (J) the Department of Veterans Affairs.