Minority Business Development Program Reform Act of 1988

(Measure indefinitely postponed in Senate)

Minority Business Development Program Reform Act of 1988 - Title I: Congressional Findings and Program Purposes - Expresses congressional findings and purposes with respect to improving the Small Business Administration's minority small business and capital ownership development program (Program).

Title II: Program Organization, Eligibility, and Participation - Amends the Small Business Act to establish within the Office of Minority Small Business and Capital Ownership Development a Division of Minority Small Business Certification to analyze and process applications and make on-site visits to determine eligibility.

Authorizes the Associate Administrator for Minority Small Business and Capital Ownership Development to certify as Program participants eligible small business concerns owned and controlled by socially and economically disadvantaged individuals. Provides that a certified Program participant shall not be eligible to participate in the Program for more than eight years. Sets forth eligibility and certification requirements, including ownership and personal net worth tests to determine whether a small business concern is socially and economically disadvantaged. Mandates that each Program participant annually certify its continuing eligibility.

States that a Program participant shall be graduated: (1) upon successful completion of the Program; (2) upon exceeding the applicable size standard established by the Small Business Administration (SBA); (3) if it is no longer owned by socially and economically disadvantaged individuals; or (4) if it elects to graduate prior to the expiration of its Program participation term.

Sets forth circumstances under which a participant is terminated from the Program and provisions for challenging a participant's eligibility.

Provides a special rule permitting procurement assistance to more than one small business concern owned by a socially and economically disadvantaged Indian tribe if certain conditions are met.

Title III: Enhancing the Program's Business Development Aspects - Requires a Program participant to submit a business plan for review by its assigned Business Opportunity Specialist. Requires that the plan be approved by the SBA prior to the participant's being awarded a contract under the Program. Specifies provisions to be included in the plan. Requires annual plan review and modifications as appropriate.

Authorizes the SBA Administrator to make available to Program participants financial assistance to help defray the costs incurred in the preparation of offers necessary to compete for the award of Government and commercial contracts.

Requires the Program to: (1) establish a training program to be delivered at the regional level to instruct participants in preparing effective proposals to competitive solicitations issued by Federal agencies; and (2) provide assistance to public or private entities to conduct seminars to help participants to develop business plans that will enhance their potential for operating profitably upon graduation.

Authorizes the SBA to make loans directly to small business concerns under the Program, or under the minority small business program, for the purchase of equipment, facilities, materials, supplies, or other necessary production or technical assets and for working capital. Sets forth limitations in connection with such assistance.

Title IV: Business Development Through Federal Contracting Opportunities - Prohibits the SBA from awarding to a Program participant a contract under the minority small business concern provisions, unless the participant certifies that the aggregate dollar amount of all contracts awarded to it by the SBA does not exceed a specified schedule of its new sales. Directs the Administrator to take measures to assure that not more than 25 percent of a participant's new sales are from noncompetitively awarded contracts in the final year of Program participation. Sets forth the circumstances under which the SBA may award such contracts notwithstanding such schedule.

Requires certain Federal agencies to prepare a forecast of expected contracting opportunities or classes of contracting opportunities for the next and succeeding fiscal years considered to be suitable for award to minority small business concerns. Mandates that the forecasts be available to small business concerns.

Requires each Program participant annually to forecast its needs for contract awards for the next Program year and the succeeding Program year during the review of its business plan.

Requires the SBA to award contracts to the minority business concern recommended by the procuring agency offering the contract opportunity if: (1) the Program participant is determined to be a responsible contractor; (2) the award of contract would be consistent with the participant's business plan; and (3) the award of the contract would not result in the participant's exceeding the requirements of the schedule of new sales.

Requires that awards be made to participants selected through a competition restricted to eligible candidates. Authorizes the Administrator to consider the geographical distribution of contracts and to direct the award of any contract to achieve an equitable distribution among the various regions and among Program participants. Sets forth conditions to govern the competition for awards, as well as administrative provisions and limitations, including protest procedures. Describes conditions under which an agency is authorized to conduct a competition conforming to methods used prior to the effective date of this Act.

Requires a small business concern that is awarded a contract under the Program to complete performance of the contract, even if the period of contract performance extends beyond the firm's graduation from the Program. Requires the Government contracting officer to limit contract modifications to those necessary to attain contract performance when the contract is being performed by a contractor who either has been terminated for cause from the Program or is unable to meet Program requirements. Permits the SBA to approve a contract modification within 30 days after a participant's graduation if the modification was recommended for approval by the procuring agency prior to the graduation date.

Sets forth the circumstances under which a socially and economically disadvantaged small business concern may transfer a contract to another business concern.

Provides for appeals of agency decisions regarding minority small business contract opportunities.

Directs the SBA to study and report to the House and Senate Small Business Committees on the geographic distribution of contract awards under the minority small business program, including recommendations for effecting a more equitable distribution of contracting opportunities in States with significant minority business populations.

Instructs the SBA to make sustained and substantial efforts to solicit applications for Program certification from concerns in areas of high unemployment or underemployment, in labor surplus areas, and in States having few participants.

Title V: Improved Program Management and Congressional Oversight - Requires that the Associate Administrator for Minority Small Business and Capital Ownership Development be a career appointee in the competitive service or in the Senior Executive Service.

Designates in each SBA field office a position of Business Opportunity Specialist to assist Program participants and carry out various responsibilities in connection with small business procurement.

Sets forth conflict of interest provisions for former employees engaged in activities with respect to Program participants for one year after the end of such employment.

Increases monetary penalties for misrepresentation as a small business or minority concern. Adds other sanctions for such misrepresentation, including administrative remedies, suspension and debarment, and ineligibility for SBA procurement programs.

Requires a Program participant to report annually to its assigned Business Opportunity Specialist: (1) a listing of parties receiving compensation to assist in obtaining a Federal contract for the participant; and (2) the amount of compensation received by such persons during the relevant reporting period and a description of the activities performed for such compensation.

Directs the Administrator to appoint a Task Force on Small Business Development to assess the developmental cycles and financing problems of various industries and recommend solutions. Requires the Task Force to file a written report with the Administrator no later than April 15, 1990, and directs the SBA to make the report available immediately to the House and Senate Small Business Committees.

Directs the Administrator to develop and implement a process for the systematic collection of data on the benefits derived by the U.S. economy and by socially and economically disadvantaged individuals as a result of the operation of the Program. Requires the Administrator to report annually to the congressional Small Business Committees, beginning on April 30, 1989, on the Minority Small Business and Capital Ownership Development Program. Prescribes report contents.

Revises definitions relating to the minority small business procurement program to include Native Hawaiian community service organizations as Indian tribes.

Title VI: Annual Contract Participation Goals; Report; Authorizations - Amends the Small Business Act to require the President annually to establish specified goals for procurement contracts awarded to small business concerns and small business concerns owned and controlled by socially and economically disadvantaged individuals. Prescribes minimum participation goals.

Requires the SBA to report to the President annually on the attainment of goals for participation by small business concerns. Directs the President to include the information in the annual report to the Congress on the State of Small Business.

Requires Federal prime contracts that contain subcontracting goals for small businesses and disadvantaged small businesses to provide for liquidated damages if the prime contractor fails to make a good faith effort to comply with the goals.

Requires agencies to ensure that the implementation of contract goals for minority small business concerns does not alter or change the procurement process used to implement other procurement programs.

Authorizes appropriations.

Title VII: Small Business Competitiveness Demonstration Program - Part A: Short Title and Findings - Small Business Competitiveness Demonstration Program Act of 1988 - Sets forth congressional findings relating to small business participation in the Federal procurement process.

Part B: Demonstration Program - Establishes a Small Business Competitiveness Demonstration Program for 1989 through 1992, to provide for the testing of innovative procurement methods and procedures in connection with the following industry groups: (1) construction; (2) refuse systems and related services; and (3) architectural and engineering services. Requires participating agencies to establish annual small business participation goals, for each designated industry, of 30 percent of the dollar value of the contract awards worth $25,000 or more Requires semi-annual monitoring for each designated industry, of goal attainment. Mandates modifications of agency solicitation practices if goals are not reached.

Directs participating agency heads to implement a program to increase small business participation in specified categories historically low in such participation.

Provides for competitive awarding of procurement contracts, but authorizes restricted competition if small business participation goals are not met.

Directs the Administrator for Federal Procurement Policy to: (1) implement a data collection, reporting, and reviewing system in connection with subcontract awards to small businesses in general and disadvantaged small businesses in particular; and (2) report results to specified congressional committees, including a section prepared by the SBA Administrator on the effects of the intensive goaling and management program to expand small business participation in certain procurement activities.

Part C: Amendments to the Small Business Act - Amends the Small Business Act to disregard procurements of $25,000 or less in establishing goals for small business and disadvantaged small business participation. (Such a provision exists in current law but is effective only until September 30, 1988.)

Eliminates the SBA program for the review of size standards for eligibility for special procurement programs of business concerns in the following categories: (1) construction; (2) architectural and engineering services; (3) shipbuilding and ship repair; and (4) refuse systems and related services.

Part D: Other Amendments - Revises the Federal Property and Administrative Services Act definition of "architectural and engineering services."

Title VIII: Preferred Surety Bond Guarantee Program - Preferred Surety Bond Guarantee Program Act of 1988 - Amends the Small Business Investment Act of 1958 to empower the Small Business Administration to: (1) enter into surety bond guarantee commitments under terms that vary on the basis of SBA experience with the particular surety; and (2) engage in a pilot program under which it may authorize any surety meeting specified standards to issue, monitor, and service guarantee bonds (including making indemnification payments against losses in avoiding breach) without further SBA approval. (Current law requires prior SBA approval of bond underwriting and administration decisions.)

Revises SBA guarantee liability limits to equal not more than: (1) 70 percent of any loss paid by a surety authorized to issue bonds without further SBA approval; and (2) 90 percent of both losses paid by sureties needing SBA approval for bond issuance and losses associated either with bonds issued to small businesses owned and controlled by socially and economically disadvantaged individuals or with contracts valued at $150,000 or less.

Disclaims SBA indemnification liability if a surety breaches material provisions of the guarantee agreement or substantially violates relevant SBA regulations.

Sets forth reporting, recordkeeping, and annual audit requirements with respect to sureties participating in the expanded surety guarantee program.

Directs the Comptroller General to submit to specified congressional committees a report evaluating the effects during the program's first two fiscal years on both participation by standard surety firms and access to bonds by small business concerns, especially those owned and controlled by the economically disadvantaged.

Terminates on September 30 of either 1991 or the third fiscal year following this title's enactment the program permitting sureties to issue bonds without prior SBA approval.

Declares that appropriations to the revolving fund for surety bond guarantees shall be without fiscal year limitation. Authorizes FY 1989 guarantees to a $1,600,000,000 limit.

Sets small business size standards with respect to pilot program participation.

Title IX: Effective Dates - Sets forth effective dates in connection with various provisions of this Act.