A bill to amend the Small Business Act.

(Reported to House from the Committee on Small Business with amendment, H. Rept. 98-541)

Amends the Small Business Act to prohibit the Small Business Administration (SBA) from: (1) refusing to accept and consider a referral from a Government procurement officer of a matter in which the eligibility of a small business as a Government contractor for a specific Government contract is in question; or (2) making such referral discretionally with such officer on any basis including the anticipated dollar value of the contract or the nature of the work to be performed.

Provides that no small business shall be denied the opportunity to submit its offer for a Federal contract solely because: (1) it is not on a qualified bidders list; (2) its products are not on a qualified products list; or (3) it has not received prior approval from a Federal agency to submit its offers relating to a certain type of work or class of contracts.

Requires that Federal contracts up to $25,000 include a policy clause declaring that small businesses shall have the maximum practicable opportunity to participate in Federal contracts. (Under current law, Federal contracts up to $10,000 are required to include such clause.)

Specifies identification requirements for subcontracting plans contained in the SBA's annual report to the House and Senate Small Business Committees on subcontracting plans which do not contain maximum practicable opportunities for small businesses to participate in such contracts.

Provides that a procurement requirement which is not suitable for award pursuant to the small business set-aside program shall be set aside for exclusive competition among small businesses if the Government procurement officer expects that: (1) offers will be obtained from at least two responsible small businesses offering the products of different small businesses; (2) awards will be made at reasonable prices; and (3) delivery of goods or services will be rendered within the time needs of the procuring agency.

Requires Federal agencies to reduce the number of requirements to be contained in contract solicitations in order to promote the maximum practicable opportunity for small businesses to submit offers. Sets forth the conditions which must exist in order for a Federal agency to solicit an offer from only one source or to negotiate with only one source for the purchase of spare or replacement parts. Directs the Office of Federal Procurement Policy, within 180 days, to promulgate regulations regarding such conditions.

Provides that when there is a conversion to contract of commercial activities not being presently performed by a private commercial source, such activities shall be set aside for exclusive competition among small businesses or awarded pursuant to the Government procurement contract set-aside program for small business under the Small Business Act.

Requires that total labor surplus area set-asides be authorized if the Government procurement officer expects that: (1) offers will be obtained from at least two responsible businesses; and (2) awards will be made at reasonable prices.

Requires that Federal agencies award contracts and encourage the placement of subcontracts on the basis of total and partial small business-labor surplus area set-asides and total and partial small business set-asides.

Requires Federal agencies to establish goals each year for the award of their procurement contracts and subcontracts to small businesses which perform a substantial proportion of their production in areas of concentrated unemployment or underemployment or in or near labor surplus areas, in addition to those small businesses owned and controlled by socially and economically disadvantaged individuals and small businesses generally. Eliminates the requirement that such goals apply to procurement contracts of $10,000 or more. Sets forth requirements for the establishment of such goals.

Requires that procurement contracts of $25,000 or less be reserved exclusively for small businesses unless the contracting officer is unable to obtain reasonable offers from two or more small businesses. Requires a presumption that procurement contracts between $25,000 and $2,000,0001 may be awarded through the small business set-aside program.

Requires that contracting officers, to the maximum extent practicable, choose a payment method which minimizes paperwork and facilitates prompt payment to small businesses.