On Tuesday, April 19, 2016, the House will consider H.R. 4284, the Service Provider Opportunity Clarification Act of 2015, under suspension of the rules. The bill was introduced on December 17, 2015, by Rep. Carlos Curbelo (R-FL) and was referred to the Committee on Small Business, which considered this legislation as part of the markup of H.R. 4341, which was ordered reported, as amended, by voice vote, on January 13, 2016.
H.R. 4284 ensures transparency and accountability in the Federal subcontracting process by requiring the Small Business Administration (SBA) to provide examples of activities that describe what a failure to act in good faith means for entities (other than a small business) awarded certain prime contracts. This bill addresses contracts in excess of $700,000 (or $1.5 million if for construction of a public facility) that contain an SBA clause that: requires notification to potential offering companies of SBA requirements relating to contracts awrded pursuant to the negotiated method of procurement; or requires any bidder selected for a contract reward to submit to the appropriate federal agency a subcontracting plan which incorporates specified SBA information.
Since 1978 the Small Business Act has required that large prime contractors awarded contracts negotiate subcontracting plans detailing the opportunity for small business participation as subcontractors. Bad actors are held accountable through the imposition of liquidated damages if prime contractors fail to make a good faith effort to meet necessary goals. However, SBA regulatiors only offer examples of what prime contractors are supposed to do, and not what would constitute a violation. According to the bill’s sponsor, this has led to ambiguity and confusion for companies seeking to comply, while creating a loophole that allows bad actors to continue receiving Federal contracts.[1]
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[1] See Rep. Curbelo’s Press Release, “Reps. Curbelo and Clarke Introduce SPOC Act” December 18, 2015.
A Congressional Budget Office (CBO) estimate is currently unavailable.
For questions or further information please contact Jake Vreeburg with the House Republican Policy Committee by email or at 5-0190.
