Overview
Title
To amend title 10, United States Code, to require payments to contractors for subcontracting with Pacific Insular Area concerns, and for other purposes.
ELI5 AI
H. R. 9453 is a rule that wants big companies working for the government to get extra money if they hire small businesses from certain Pacific Islands, but they have to follow special rules to get this money.
Summary AI
H. R. 9453 proposes to change title 10 of the United States Code to promote business with certain small businesses in the Pacific Insular Areas, which include the Northern Mariana Islands, American Samoa, and Guam. The bill allows the Secretary of Defense to give additional payments to prime contractors when they subcontract to these small businesses. To qualify, these businesses must meet specific criteria, such as being mainly owned by U.S. citizens and hiring a majority of their employees from these areas. Additionally, annual reports on the program's impact and suggestions for improvement are required for ten years.
Published
Keywords AI
Sources
Bill Statistics
Size
Language
Complexity
AnalysisAI
Summary of the Bill
H.R. 9453 is a legislative proposal aimed at amending title 10 of the United States Code. Its core intention is to incentivize prime contractors to engage with small businesses situated within the Pacific Insular Areas, namely the Northern Mariana Islands, American Samoa, and Guam. The bill authorizes the Secretary of Defense to provide a bonus to these contractors, calculated as five percent of the value of their subcontracts with qualifying businesses in these regions. Such measures are designed to promote economic development within these areas by leveraging military contracts, with certain criteria set for defining eligible businesses.
Significant Issues
Several issues arise from this bill, primarily concerning the implementation and potential unintended consequences of the payment incentives. A central concern is that the five percent bonus may encourage excessive subcontracting, potentially inflating costs and leading to wasteful government spending if not properly monitored. Moreover, the bill does not establish caps on total payments, raising questions about possible uncontrolled financial commitments.
The criteria for qualifying as a "Pacific Insular Area concern" also present challenges. The definitions may unintentionally exclude some eligible small businesses, especially those temporarily unable to meet the 50% employee residency requirement. Additionally, the ambiguity in language, such as "attempt to maintain" employment levels, complicates enforcement and compliance.
Lastly, the absence of robust mechanisms to verify claims or address fraudulent applications poses a risk of misuse of funds, while also lacking clear metrics to assess the economic impact in annual reports, potentially leading to insufficient accountability and transparency.
Impact on the Public and Stakeholders
The bill's overarching goal is to stimulate economic activity in Pacific Insular Areas through increased business opportunities. If successful, it could lead to job creation and economic growth in territories that often receive less attention in federal contracting. The direct beneficiaries would be the local businesses and communities in these regions, provided they meet the specific criteria set by the bill.
However, there are mixed potential outcomes for prime contractors. While there is an opportunity to gain financial bonuses, the conditions attached might also impose administrative burdens and risks regarding compliance and verification processes. Furthermore, the bill's execution without sufficient safeguards could result in inefficient use of taxpayer dollars, prompting concerns among broader taxpayer constituencies about fiscal responsibility.
In conclusion, H.R. 9453 could bring significant benefits to the Pacific Insular Areas by fostering local economic development, but it also carries risks of inefficiency and favoritism that need careful consideration and mitigation to ensure its goals are met without unintended negative impacts.
Issues
The five percent payment incentive to prime contractors might encourage unnecessary subcontracting, leading to potential wasteful spending if not adequately monitored. This issue is significant due to its potential financial impact and is mentioned in Sections 1 and 4903.
The economic impact criteria and metrics are not clearly defined for the annual report, potentially leading to vague assessments of the program's success. This is a critical oversight affecting accountability and transparency, as noted in Sections 1 and 4903.
The criteria for 'Pacific Insular Area concern' might inadvertently favor certain businesses that can meet the specific ownership and employee residence requirements, potentially excluding other deserving small businesses. This has political and ethical implications and is discussed in Sections 1 and 4903.
The term 'attempt to maintain' in the employment requirement for the Pacific Insular Area concern may be ambiguous and difficult to enforce or measure compliance. This poses a legal challenge in Sections 1 and 4903.
There is no specified mechanism for addressing or correcting potential fraud or misrepresentation in applications for the five percent payment, which is a significant issue in terms of legal accountability. This is mentioned in Section 1.
The payment mechanism could potentially incentivize unnecessarily high subcontract values, leading to wasteful spending by inflating subcontract proposals to receive a larger payment, as highlighted in Section 4903.
The section does not specify any cap or limit on the total amount of payments that can be made, which could lead to uncontrolled financial spending. This is a concern raised in Section 4903.
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Payments to contractors for subcontracting with Pacific Insular Area concerns Read Opens in new tab
Summary AI
The section allows the Secretary of Defense to pay a prime contractor a bonus of 5% of the subcontract's value when they work with small businesses in the Pacific Insular Areas, such as the Northern Mariana Islands, American Samoa, and Guam. This aims to encourage economic growth in these regions, with specific requirements for eligible Pacific Insular Area businesses regarding ownership, office location, and employee residency.
4903. Payments to contractors for subcontracting with Pacific Insular Area concerns Read Opens in new tab
Summary AI
The section allows the Secretary of Defense to pay a prime contractor 5% of a subcontract's value when they work with a small business in the Northern Mariana Islands, American Samoa, or Guam. The report on this program's impact is required yearly, and these small businesses must be mainly owned by U.S. citizens, based in those regions, and employ locals.