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(f) Restrictions on subcontracting. (b) Conditions. (1) Debarment for any Where a concern or individual listed on of the causes set forth in (a) of this the debarred bidders' list is proposed as $ 1-1.604 shall be made only upon apa subcontractor, the contracting officer proval of the head of the executive should decline to approve subcontracting agency or his duly authorized representwith that firm or individual in any in ative. stance in which consent is required of (2) The existence of any of the causes the Government before the subcontract set forth in (a) of this $ 1-1.604 does not is made, unless it is determined by the necessarily require that a firm or indiagency to be in the best interest of the vidual be debarred. In each instance, Government to do so.

whether the offense or failure, or inade

quacy of performance, be of a criminal, § 1-1.604 Causes and conditions appli. cable to determination of debarment

fraudulent, or serious nature, the deci

sion to debar shall be made within the by an executive agency.

discretion of the executive agency and Subject to the following conditions, shall be rendered in the best interests of each executive agency is authorized to the Govermnent. Likewise, all mitigatdebar a firm or individual in the public

ing factors may be considered in deterinterest for any of the following causes:

mining the seriousness of the offense, (a) Causes. (1) Conviction for com

failure, or inadequacy of performance, mission of a criminal offense as an inci

and in deciding whether debarment is dent to obtaining or attempting to obtain

warranted. a public or private contract, or subcon

(3) The existence of a cause set forth tract thereunder, or in the performance in (a) (1) and (2) of this § 1-1.604 shall of such contract or subcontact.

be established by criminal conviction by (2) Conviction under the Federal

a court of competent jurisdiction. In the Antitrust Statutes arising out of the sub

event that an appeal taken from such mission of bids or proposals.

conviction results in a reversal of the (3) Violation of contract provisions,

conviction, the debarment shall be reas set forth below, of a character which

moved upon the request of the bidder is regarded by the agency involved to be

(unless other cause for debarment so serious as to justify debarment exists). action

(4) The existence of a cause set forth (i) Willful failure to perform in ac in (a) (3) and (4) of this § 1-1.604 shall cordance with the specifications or with be established by evidence which the exin the time limit provided in the ecutive agency determines to be clear contract.

and convincing in nature. (ii) A record of failure to perform, or

(5) Debarment for the cause set forth of unsatisfactory performance, in ac

in (a) (5) of this $ 1-1.604 (debarment by cordance with the terms of one or more another agency) shall be proper procontracts; Provided, That such failure or

vided that one of the causes for debarunsatisfactory performance has occurred

ment set forth in (a) (1) through (4) within a reasonable period of time pre of this § 1-1.604 was the basis for deceding the determination to debar. Fail

barment by the original debarring ure to perform or unsatisfactory per

agency. Such debarment may be based formance caused by acts beyond the con

entirely on the record of facts obtained trol of the firm or individual as a con

by the original debarring agency, or upon tractor shall not be considered to be a a combination of such facts and a basis for debarment.

tional facts. (iii) Violation of the contractual pro (c) Period of debarment. (1) Debarvision against contingent fees.

ment of a firm or individual for causes (iv) Acceptance of a contingent fee, other than failure to comply with the which is paid in violation of contractual provisions of Equal Opportunity Clause provision against contingent fees.

(see § 1-1.602–1(e)), shall be for a rea(4) Any other cause of such serious sonable, definitely stated period of time and compelling nature, affecting respon commensurate with the seriousness of sibility as a Government contractor, as the offense or the failure or inadequacy may be determined by the head of the of performance. As a general rule, a peagency to warrant debarment.

riod of debarment shall not exceed three (5) Debarment by some other execu- years. However, when debarment for an tive agency.

additional period is deemed necessary

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notice of the proposed additional debar- debarment should not be imposed in
ment shall be furnished to that concern whole or in part.
or individual in accordance with $ 1- (c) Scope of debarment. (1) A de-
1.604-1. Except as precluded by statute, barment may include all known affiliates
a debarment may be removed or the pe of a concern or individual. (See § 1-1.-
riod thereof may be reduced by the head 603(a)).
of the agency or by his authorized rep- (2) Each decision to include a known
resentative, upon the submission of an affiliate within the scope of a proposed
application, supported by documentary debarment is to be made on a case by
evidence, setting forth appropriate case basis, after giving due regard to all
grounds for the granting of relief; such the relevant facts and circumstances.
as, newly discovered material evidence, (3) The criminal, fraudulent, or seri-
reversal of a conviction, bona fide change ously improper conduct of an individual
of ownership or management, or the may be imputed to the business concern
elimination of the causes for which the with which he is connected, where such
debarment was imposed.

grave impropriety was accomplished (2) Debarment of a firm or individual within the course of his official duty or for failure to comply with the provisions was effected by him with the knowledge of the Equal Opportunity Clause gen or approval of that concern. Likewise, erally shall continue until removed by where a concern is involved in criminal, the President's Committee or by the

dent's Committee or by the fraudulent, or seriously improper conagency itself with the concurrence of the duct, any individual who was involved President's Committee.

in the commission of the grave impropri8 1-1.604_) Procedural requirements

ety may be debarred.
relating to the imposition of debar § 1-1.605 Suspension of bidders.
ment.

(a) Agencies electing to utilize a sus(a) Initiation of debarment action. An

on af debarment action. An pension procedure shall employ the proagency seeking to debar a concern or in cedure set forth in this section. dividual (or any affiliate thereof) for (b) Suspension is a drastic action and, cause shall furnish that party with a as such, shall not be based upon an unwritten notice: (1) stating that debar- supported accusation. In assessing ment is being considered, (2) setting whether adequate evidence exists for inforth the reasons for the proposed de

voking a suspension, consideration barment, and (3) indicating that such should be given to the amount of credible party will be accorded an opportunity evidence which is available, to the exfor a hearing if he so requests within a

istence or absence of corroboration as stated period of time.

to important allegations, as well as to (b) Hearings. An opportunity for a the inferences which may properly be hearing conducted in a manner pre

drawn from the existence or absence of scribed by agency regulations shall be affirmative facts. This assessment should accorded to any concern or individual include an examination of basic docuwhich the agency proposes to debar. Such ments, such as contracts, inspection reregulations shall establish procedural ports, and correspondence. A suspension safeguards which satisfy the demands may be modified whenever it is deterof fairness, and which, at a mini

mined to be in the interest of the Governmum, shall provide that information in

de that information in ment to do so. opposition to the proposed action may 81-1.605–1 Causes and conditions unbe presented, in person or in writing, and, der which executive agencies may if desired, through an appropriate rep

suspend contractors. resentative. However, where one agency (a) An agency may, in the interest of has imposed debarment upon a concern the Government, suspend a firm or inor individual, a second agency may also dividual: impose a similar debarment for a con

(1) Suspected, upon adequate evicurrent period without according an op

dence, of portunity for a hearing provided that

(i) Commission of fraud or a criminal

offense as an incident to obtaining, atthe second agency furnishes notice of

tempting to obtain, or in the performthe proposed similar debarment to that

ance of a public contract: party, and accords that party an oppor

(ii) Violation of the Federal antitrust tunity to present information in his be- statutes arising out of the submission half to explain why the proposed similar of bids and proposals; or

der Wat

(iii) Commission of embezzlement, knowledge or approval of the business theft, forgery, bribery, falsification or firm. destruction of records, receiving stolen

$ 1-1.605–3 property, or any other offense indicating

Restrictions during period a lack of business integrity or business

of suspension. honesty, which seriously and directly af During a period of suspension of a firm fects the question of present responsi- or individual, the following policies and bility as a Government contractor; or procedures shall be applicable:

(2) For other cause of such serious (a) Bids and proposals shall not be and compelling nature, affecting respon solicited from suspended contractors. If sibility as a Government contractor, as received, bids and proposals shall not be may be determined by the agency to considered and awards for contracts warrant suspension.

shall not be made to suspend con(b) A suspension invoked by an tractors unless it is determined by the agency for any of the causes set forth agency to be in the best interest of the in (a) (1) and (2) of this § 1-1.605–1 Government. may be the basis for the imposition of a (b) Suspended contractors will be subconcurrent suspension by another ject to the provisions of f 1-1.603(f) reagency.

garding restrictions on subcontractors. § 1-1.605—2 Period and scope of sus. § 1-1.6054 Notice of suspension. pension.

(a) The firm or individual concerned (a) Period of suspension. All suspen- shall be furnished a written notice of the sions shall be for a temporary period suspension by the agency within 10 days pending the completion of an investiga- after the effective date. The notice shall tion and such legal proceedings as may state as follows: ensue. In the event that prosecutive (1) The suspension is based (i) on the action has not been initiated by the De information that the firm or individual partment of Justice within 12 months has committed irregularities of a serious from the date of the notice of suspen nature in business dealings with the sion, the suspension shall be terminated Government or (ii) on irregularities unless an Assistant Attorney General which seriously reflect on the propriety requests continuance of the suspension. of further dealings of the firm or inIf such a request is received the suspen dividual with the Government. (The sion may be continued for an additional irregularities should be described in gensix months. Notice of the proposed re- eral terms without disclosing the Govmoval of the suspension shall be given to ernment's evidence); the Department of Justice 30 days prior (2) The suspension is for a temporary to the expiration of the 12-month period. period pending the completion of an inIn no event shall a suspension continue vestigation and such legal proceedings beyond 18 months unless prosecutive as may ensue; action has been initiated within that (3) Bids and proposals will not be period. Whenever prosecutive action solicited from the firm or individual and, has been initiated, the suspension may if received, will not be considered for continue until the legal proceedings are award unless determined by the agency completed. Upon removal of a suspen to be in the best interest of the Governsion, consideration may be given to de- ment. barment in accordance with $ 1.604 of ; (4) The suspension is effective this subpart.

throughout the agency. All inquiries (b) Scope of suspension. (1) Suspen

concerning suspended contractors shall sion may include all known affiliates of

be handled in accordance with agency a concern (firm) or individual.

procedures. Where a matter has been (2) A decision to include known affil

referred to the Department of Justice, iates in a proposed suspension is an in

the agency shall not give further infordividual determination and, as such,

mation to the firm or individual concernmust be made on a case by case basis. (3) The criminal, fraudulent, or seri

ing the reasons for suspension beyond

that stated in the notice of suspension ously improper conduct of an individual may be imputed to the business firm with set forth in this § 1-1.605–4 until the Dewhich he is connected when the im- partment of Justice has been advised of propriety involved was performed within the inquiry and acquiesces in any such the course of his official duty, or with disclosure.

§ 1-1.606 Agency procedure. Each agency shall:

(a) Establish internal procedures and methods for giving effect to this Subpart 1-1.6.

(b) Notify the General Services Administration (GSA) of the name and address of its central office where debarment information should be sent.

(c) Furnish to GSA a copy of the notice of debarment (at time of issuance) on those debarments made under provisions of § 1-1.604(a), or the Buy American Act, and provide GSA with information as to any removals of such debarments.

(d) Check the list of debarred bidders furnished by GSA, and consider firms or individuals listed thereon for inclusion upon its own list, in accordance with the provisions of this Subpart 1-1.6.

(e) As needed, request from GSA a copy of the notice on any debarment case appearing on the list herein provided to be compiled and distributed by GSA. If desired, direct inquiry concerning any debarment case may be made of the agency which originated the action.

(f) Make its list available to all contracting officers within the agency. § 1-1.607 General Services Administra

tion responsibility. In addition to the agency procedure provided in § 1-1.606, GSA will:

(a) Compile and distribute to the designated central office address of each agency a listing of the administrative debarments and debarments under the Buy American Act made by the agencies, including the basis of action, in order that each executive agency may be informed of actions taken by each other agency. In general application, this listing will be for information purposes only and it is not intended to take the place of, or be an addition to, the lists maintained by the various agencies.

(b) Furnish to any agency, on specific request, a copy of the notice reflecting the basis for debarment action taken by another agency for causes contained in § 1-1.604 (a) or under the Buy American Act. · Subpart 1-1.7—Small Business

Concerns § 1-1.700 General.

(a) This subpart, which implements programs developed cooperatively with the Small Business Administration

(SBA) and the Government agencies having procurement responsibility, sets forth (1) procurement policy with reference to small business concerns; (2) policy governing the relationship of procurement agencies with SBA; (3) SBA certificate of competency program; (4) small business set-aside procedures; (5) small business subcontracting policies; and (6) information concerning SBA's size standards.

(b) This subpart applies only in the United States, its territories and possessions, Puerto Rico, and the District of Columbia. § 1-1.701 Definitions. - The definitions in this section apply throughout this Subpart 1-1.7. Those definitions relating to SBA size standards for procurement purposes are based on the governing regulations of SBA on the subject (13 CFR Part 121). § 1-1.701-1 Small business concern

(for Government procurement). (a) General. A small business concern for the purpose of Government procurement is a concern, including its affiliates, which is independently owned and operated, is not dominant in the field of operation in which it is bidding on Government contracts, and can further qualify under the criteria set forth in this section. (“Concern" means any business entity organized for profit with a place of business located in the United States, its possessions, and Puerto Rico, including but not limited to, an individual, partnership, corporation, joint venture, association, or cooperative. "Annual receipts” means the annual receipts less returns and allowances of a concern and its affiliates.) For the purpose of a procurement of a product classified into two or more industries with different size standards, the smallest of such size standards shall be used in determining a bidder's size status. If no standard for an industry, field of operation, or activity (e.g., animal specialty; fin fish; anthracite mining; management-logistics support to be performed outside of the several States, Puerto Rico, Virgin Islands, or the District of Columbia) has been set forth in this $ 1–1.701–1, a concern bidding on a Government contract is a small business if, including its affiliates, it is independently owned and operated, is not dominant in the field of operation in which it is

bidding on Government contracts, and has 500 employees or less.

(b) Construction. Any concern bid ding on a contract for construction, alteration, or repair (including painting and decorating) of buildings, bridges, roads, or other real property is classified:

(1) As small if its average annual receipts for its preceding three fiscal years do not exceed $7,500,000 (except that if the concern is located in Alaska, such receipts do not exceed $9,375,000).

(2) As small if it is bidding on a contract for dredging and its average annual receipts for its preceding three fiscal years do not exceed $5,000,000 (except that if the concern is located in Alaska, such receipts do not exceed $6,250,000).

(c) Manufacturing. Any concern bidding on a contract for a product it manufactured is classified:

(1) Food canning and preserving. As small if it is bidding on a contract for food canning and preserving and its number of employees does not exceed 500 persons, exclusive of agricultural labor as defined in the Federal Unemployment Tax Act, 26 U.S.C. 3306(k).

(2) Pneumatic tires. As small if it is bidding on a contract for pneumatic tires within Census Classification Codes 30111 and 30112: Provided, That (i) the value of the pneumatic tires within Census Classification 30111 and 30112 which it manufactured in the United States during the preceding calendar year is more than 50 percent of the value of its total worldwide manufacture, (ii) the value of the pneumatic tires within Census Classification Codes 30111 and 30112 which it manufactured worldwide during the preceding calendar year was less than 5 percent of the value of all such tires manufactured in the United States during said period, and (iii) the value of the principal products which it manufactured or otherwise produced or sold worldwide during the preceding calendar year is less than 10 percent of the total value of such products manufactured or otherwise produced or sold in the United States during said period.

(3) Manufacturing industries listed in § 1-1.701-1(h). As small if it is bidding on a contract for a product classified within an industry set forth in paragraph (h) of this section and its number of employees does not exceed the size standard established for that industry.

(4) Manufacturing industries not listed in § 1-1.7011 (h). As small if it

is bidding on a contract for a product classified within an industry not set forth in paragraph (h) of this section and its number of employees does not exceed 500 persons.

(5) Passenger cars. As small if it is bidding on a contract for passenger cars within Census Classification Code 37171: Provided, That (i) the value of the passenger cars within Census Classification Code 37171 which it manufactured or otherwise produced in the United States during the preceding calendar year is more than 50 percent of the value of its total worldwide manufacture or production of such passenger cars, (ii) the value of the passenger cars within Census Classification Code 37171, which it manufactured or otherwise produced during the preceding calendar year was less than 5 percent of the total value of all such cars manufactured or produced in the United States during the said period, and (iii) the value of the principal products which it manufactured or otherwise produced or sold during the preceding calendar year is less than 10 percent of the total value of such products manufactured or otherwise produced or sold in the United States during said period.

(d) Small business nonmanufacturer. Any concern which submits a bid or offer in its own name, other than for a construction or service contract, but which proposes to furnish a product not manufactured by itself, is deemed to be a small business concern when:

(1) It is a small business concern within the meaning of g 1-1.701–1(a);

(2) Its number of employees does not exceed 500 persons; and

(3) In the case of Government procurement reserved for or involving the preferential treatment of small business concerns (including equal low bids), such nonmanufacturer shall furnish in the performance of the contract the products of a small business manufacturer or producer which products are manufactured or produced in the United States, its possessions, or Puerto Rico. However, if the goods to be furnished are woolen, worsted, knitwear, duck, and webbing, dealers and converters shall furnish such products which have been manufactured or produced by a small weaver (small knitter for knitwear) and, if finishing is required, by a small finisher. If the procurement is for thread, dealers and converters shall furnish such products which have been finished by a small finisher.

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