construction) with small business concerns. Every effort should be made to encourage participation by such concerns in the procurement of supplies and services that are within their capabilities. Heads of procuring activities and heads of field purchasing and contract administration activities are responsible for the effective implementation of the Small Business Program within their respective activities. Procurement and technical personnel attached to such activities shall be informed of the benefits that accrue to the Nation and to the Department of Defense through the proper use of the capabilities of small business concerns in the procurement of military requirements.

(b) Small business concerns, both esestablished and potential supplies (§§ 1.701-2 and 1.701-3), shall be afforded an equitable opportunity to compete for all contracts that they can perform. Therefore, the Military Departments shall, to the extent consistent with the best interests of the Government, and in order to broaden the industrial base:

(1) Attempt to locate additional qualified small business suppliers by all appropriate methods, including use of the facilities of SBA, particularly where only a limited number of small business concerns are on bidders' mailing lists; (2) Give wide publicity to purchasing methods and practices;

(3) Publicize proposed procurements by use of advance notices or other appropriate methods (see § 1.1003);

(4) Include all established and qualified potential small business suppliers on the bidders' mailing lists (see § 2.205 of this chapter);

(5) Send solicitations to all firms on the appropriate list, except that, where less than a complete list is to be used pursuant to § 2.205-4, at least a pro rata number of small business concerns shall be solicited;

(6) Divide proposed procurement of supplies and services, except construction, into quantities not less than economic production runs, so as to permit bidding on quantities less than the total requirements; allow the maximum time practicable for preparation and submission of bids, proposals, or quotations; where feasible, establish delivery schedules which will encourage small business participation;

(7) Examine each major procurement to determine the extent to which

small business subcontracting should be encouraged or required;

(8) Use small business concerns to the maximum extent feasible as planned producers in the Industrial Readiness Planning Program; and

(9) Maintain liaison with Federal, State (including Governors' Commissions), and local agencies and other organizations for the purpose of providing information and assistance to small busi

ness concerns.

(c) The extent of small business participation in defense procurement shall be accurately measured, reported, and publicized. All solicitations shall require each prospective supplier to represent whether he is small business concern for purposes of the specific procurement (see §§ 1.701 and 1.703). Records of the total value of contracts and subcontracts placed with small business concerns during each fiscal year shall be maintained by the use of DD Form 350 (Individual Procurement Action Report), DD Form 1057 (Monthly Procurement Summary by Purchasing Office) (see § 1.110), and DD Form 1140-1 (Defense Small Business Subcontracting Program Monthly Report of Participating Large Company on Subcontract Commitments to Small Business Concerns) (see § 1.707).

[29 F.R. 11810, Aug. 19, 1964] § 1.703

Determination of status as small business concern.

(a) Except as provided in paragraph (b) of this section, the contracting officer shall accept at face value for the particular procurement involved, a representation by the bidder or offeror that it is a small business concern (see § 1.7011).

(b) Representation by a bidder or offeror that it is a small business concern shall be effective, even though questioned in accordance with the terms of this paragraph, unless the SBA, in response to such question and pursuant to the procedures in subparagraph (3) of this paragraph, determines that the bidder or offeror in question is not a small business concern. The controlling point in time for a determination concerning the size status of a questioned bidder or offeror shall be the date of award, except that no bidder or offeror shall be eligible for award as a small business concern unless he has in good faith represented himself as small business prior to the

opening of bids or closing date for submission of offers (see § 2.405(b) of this chapter with respect to minor informalities and irregularities in bids).

(1) Any bidder or offeror may, prior to award of a contract involving small business set-asides, question the small business status of any apparently successful bidder or offeror by sending a written protest to the contracting officer responsible for the particular procurement. The protest shall contain the basis for the protest together with specific detailed evidence supporting the protestant's claim that such bidder or offeror is not a small business. Such protest must be received by the contracting officer prior to the close of business on the 5th working day after bid opening date or closing date for the receipt of proposals. A protest received after such time shall be considered timely, if in the case of mailed protests, such protest is sent by registered or certified mail and the postmark thereon indicates that the protest would have been delivered within this time limit but for delays beyond the control of the protestant or, in the case of telegraphed protests, the telegram date and time line indicates that the protest would have been delivered within this time limit but for delays beyond the control of the protestant. A protest received after award of a contract, even though timely will not be considered a "protest" and will be returned to the sender with an explanation of why it could not be acted upon. Any contracting officer who receives a timely protest shall forward such protest record to the Small Business Administration regional office serving the area in which the protested concern is located. The Small Business Administration will promptly notify the contracting officer of the date of its receipt of any such protest and will advise the questioned bidder or offeror that his small business status is under review.

(2) A contracting officer may, any time prior to award, question the small business status of the apparently successful bidder or offeror by sending a written notice to the SBA regional office of the region in which the bidder or offeror has his principal place of business. Such notice shall contain a statement of the basis for the question together with available supporting facts. SBA will advise the bidder or offeror in question that his small business status is under

review.

If

(3) The SBA Regional Director will determine the small business status of the questioned bidder or offeror and notify the contracting officer and the bidder or offeror of his determination, and award may be made on the basis of that determination. Such decision is final unless appeal in accordance with subparagraph (4) of this paragraph and the procuring activity is notified of the appeal prior to award. If an award was made prior to the time the contracting officer receives notice of the appeal, the contract shall be presumed to be valid and any determination rendered shall be considered in future procurements. the SBA Regional Director's determination is not received by the contracting officer within 10 working days after SBA's receipt of the protest or notice questioning small business status, it shall be presumed that the questioned bidder or offeror is a small business concern. This presumption will not be used as a basis for making an award to the questioned bidder or offeror without first ascertaining when a size determination can be expected from SBA, and where practicable, waiting for such determination, unless further delay in award would be disadvantageous to the Government. Pending SBA determination or expiration of the 10-day period, whichever is earlier, procurement action shall be suspended provided that such 10-day suspension period shall not apply to any urgent procurement action which, as determined by the contracting officer, must, in order to protect the public interest, be awarded without delay and as to which he inserts in the contract file a statement signed by him justifying this determination.

(4) An appeal from a size determination made by an SBA Regional Director may be taken before the close of business on the 5th working day after the receipt of such decision. Unless such written notice of appeal is received by the SBA Size Appeals Board, Washington, D.C., within this time and the contracting officer has been notified of such appeal prior to award, the appellant will be deemed to have waived its rights of appeal insofar as the pending procurement is concerned.

(5) The determination of the appropriate classification of a product establishing the small business definition to be used in a specific procurement shall be made by the contracting officer and his

determination shall be final unless appealed in accordance with subparagraph (6) of this paragraph.

(6) An appeal from product classification determination establishing the size definition used in a specific procurement made by a contracting officer may be taken not less than 10 days before bid opening date or closing date for submission of proposals where in the bid opening or closing date is more than 30 days after the issuance of the IFB or RFP, or not less than 5 working days before the bid opening date or closing date for submission of proposals in cases wherein the bid opening date or closing date for submission of proposals is 30 days or less after the issuance of an IFB or an RFP. Such appeals shall be directed to the SBA Size Appeals Board, Washington, D.C. [30 F.R. 5962, Apr. 29, 1965]

§ 1.704 Small business officials. [25 F.R. 14092, Dec. 31, 1960]

§ 1.704-1 Director for small business.

The Director for Small business for the Department of Defense advises the Assistant Secretary of Defense (Installations and Logistics) in matters relating to the establishment, implementation, and execution of an appropriate Small Business Program within the Department of Defense. Negotiations with SBA or other Government agencies or departments outside the Department of Defense concerning small business policy and programs shall be conducted through the Director for Small Business or with his authorization.

[26 FR. 5297, June 14, 1961] § 1.704-2

Departmental small business

advisors.

Each Military Department maintains an Office of Small Business as follows: (a) Army-Army Small Business Advisor, Office of the Assistant Secretary of the Army (Installations and Logistics), Pentagon, Washington, D.C.;

(b) Navy-Director of Navy Small Business Program, Office of Naval Material (MAT21D), Department of the Navy, Main Navy Building, Washington, D.C.;

(c) Air Force-Deputy for Small Business, Directorate of Procurement Policy, Deputy Chief of Staff, Systems and Logistics (AFSPP-B), Pentagon, Washington, D.C.;

(d) Defense Supply Agency-Defense Supply Agency Small Business Advisor,

Directorate of Procurement and Production, Code DSAH-PS, Cameron Station, Alexandria, Virginia.

The primary responsibility of the Chief of each Office of Small Business shall be in matters concerning small business. He advises the Secretary on small business matters, implements the Department of Defense Small Business Program within his Department, and represents his Department in negotiations with other Military Departments or Governmental agencies on small business matters.

[29 F.R. 11811, Aug. 19, 1964]

§ 1.704-3 Small business specialists.

(a) Small business specialists shall be appointed by name, in writing, for each prinicipal procurement, purchasing, and contract administration office and in such other offices as the Military Departments consider appropriate. They shall be responsible directly to the appointing authority and shall not be subject to the direction of contracting or technical personnel. The appointing authority is as follows:

(1) Army-Head of a Procuring Activity (see § 1.201-14);

(2) Navy-Head of a Procuring Activity or the official in charge of an activity having purchase authority of $10,000 or more, or in charge of a contract administration activity;

(3) Air Force-Director of Procurement and Production or comparable person at each central purchasing activity and Major Air Command, the chief of each contract administration activity, and the Base Commander of a local purchase activity;

(4) Defense Supply Agency-Head of a Procuring Activity and Commanding Officers of DSA activities not designated as a supply center.

A copy of each appointment and termination of appointment of all such specialists shall be forwarded to the appropriate departmental Office of Small Business (§ 1.704-2). In addition to performing that portion of the specific program outlined in paragraph (b) of this section that is normally performed in the activity to which he is assigned, the small business specialist shall be the small business advisor to the head of the activity and shall perform such additional functions as are prescribed for him in furtherance of the overall Small Business Program. A small business specialist

shall be appointed on a full-time basis in all activities having sufficient business to justify such action. This does not preclude the assignment of responsibility for the Labor Surplus Area Program prescribed by Subpart H of this part. When the volume of procurement does not warrant assignment of a small business specialist, the contracting officer shall be responsible for the program.

(b) A small business specialist appointed pursuant to paragraph (a) of this section shall perform the following duties, as determined to be appropriate to the activity by the appointing officer or his designee.

(1) He shall maintain a program designed to locate capable small business sources for current and future procurements, through SBA or other methods.

(2) He shall coordinate inquiries and requests for advice from small business concerns on procurement matters.

(3) Prior to issuance of solicitations or contract modifications for additional supplies or services in excess of $2,500, he shall determine that small business concerns will receive adequate consideration including initiation of set-asides (§ 1.706). This determination may be made jointly with the contracting officer or may be in the form of a recommendation to him. Disagreements between the small business specialist and the contracting officer shall be resolved by the appointing authority or his designee, whose decision shall be final (see § 1.308 (b) (4) as to the required record of contract actions).

(4) If small business concerns cannot be given an opportunity to compete because adequate specifications or drawings are not available, unless there are sufficient and valid reasons to the contrary, initiate action, in writing, with appropriate technical and contracting personnel to ensure that necessary specifications or drawings for the current or future procurements, as appropriate, are available.

(5) He shall review procurement programs for possible breakout of items suitable for procurement from small business concerns.

(6) He shall assure that financial assistance, available under existing regulations, is offered and that requests by small business concerns for proper assistance are not treated as a handicap in the award of contracts. (See Subparts D and E of Part 163 of this chapter.)

(9) He shall review and make appropriate recommendations to the contracting officer on any proposal to furnish Government-owned facilities to a contractor if such action may hurt the small business program.

(10) He shall assure that participation of small business concerns is accurately reported.

(11) He shall make available to SBA copies of solicitations when so requested. [29 F.R. 11811, Aug. 19, 1964, as amended at; 30 F.R. 14072, Nov. 9, 1965]

§ 1.705 Cooperation with the Small Business Administration. [25 F.R. 14092, Dec. 31, 1960]

(a) SBA may assign representatives to any purchasing activity to carry out SBA policies and programs. The SBA representative shall be informed of the procurement mission of the activity and shall be furnished necessary facilities. In accordance with the procedures of the Department concerned, SBA shall obtain security clearances for each of its representatives. SBA representatives and employees shall comply with departmental directives concerning the conduct of Military Department procurement personnel.

(b) The purchasing activities shall include in the appropriate bidders list or in any group of firms to be solicited in specific procurements, the names of

firms submitted by SBA unless there is a valid reason for not so doing.

[29 F.R. 11811, Aug. 19, 1964, as amended at 30 F.R. 14072, Nov. 9, 1965]

§ 1.705-3 Access to procurement infor

mation.

Upon request, and subject to applicable security regulations, SBA representatives shall be given access to available or reasonably obtainable information, including technical data (including drawings and specifications), procurement history, and bidders lists. The SBA representative will be furnished such other available or reasonably obtainable information as may be required for the SBA referral program.

[30 F.R. 14702, Nov. 9, 1965]

§ 1.705-4 Certificates of competency.

(a) SBA has statutory authority to certify the competency of any small business concern as to capacity and credit. "Capacity" means the overall ability of a prospective small business contractor to meet quality, quantity, and time requirements of a proposed contract and includes ability to perform, organization, experience, technical knowledge, skills, "know-how," technical equipment, and facilities or the ability to obtain them. Contracting officers shall accept SBA certificates of competency as conclusive of a prospective contractor's capacity (see §§ 1.903-1(b) and 1.903-2) and credit (see § 1.903-1(a)), unless the contracting officer has substantial doubt as to the concern's ability to perform, in which case the procedures in paragraph (f) of this section apply.

(b) In procurement where the highest competence obtainable or the best scientific approach is needed, as in certain negotiated procurement of research and development, highly complex equipment, or personal or professional services, the certificate of competency procedure is not applicable to the selection of the source offering the highest competence obtainable or best scientific approach. However, if a small business concern has been selected on the basis of the highest competence obtainable or best scientific approach and, prior to award, the contracting officer determines that the concern is not responsible because of lack of capacity or credit, the certificate of competency procedure is applicable.

(c) If a bid or proposal of a small business concern is to be rejected solely because the contracting officer has de

termined the concern to be non-responsible as to capacity or credit, the matter shall be referred to the SBA. This procedure applies only to proposed awards exceeding $2,500. For proposed awards exceeding $2,500, but not exceeding $10,000, its use is within the discretion of the contracting officer. A pre-award survey (see § 1.905) shall be made prior to a determination by a contracting officer that a small business concern is not responsible because of a lack of capacity or credit on a proposed award of more than $10,000. If a partial set-aside is involved and the bid of a small business concern on the unreserved portion is to be rejected for lack of capacity or credit and the same small business concern is entitled to consideration on the reserved portion of the set-aside if a certificate of competency is issued by the SBA, the entire quantity of the procurement (reserved and unreserved) for which that small business concern may be entitled, if competent, shall be referred to SBA and the referral papers so noted. The SBA may then certify the small business concern for the maximum quantity of the procurement for which it is eligible. The award shall be withheld until SBA action concerning issuance of a certificate of competency, or until 15 working days after the SBA is so notified, whichever is earlier, subject to the following:

(1) Under no circumstances will a referral be made to the SBA prior to a determination by the contracting officer that the bid or proposal of the small business concern is responsive.

(2) The activity performing the preaward survey shall furnish such survey to the procuring contracting officer. If the procuring contracting officer determines, in accordance with § 1.904, that the small business concern is not responsible solely by reason of a lack of capacity or credit, he will refer the matter direct to the SBA, or he may notify the pre-award survey activity to refer the matter to the SBA, whichever is the more expeditious (e.g., where the surveying activity is substantially closer to the cognizant SBA office than the procuring office, it may be more expeditious to have the surveying activity refer the matter to the Small Business Administration).

(3) Upon making a determination to refer the matter to the SBA, the procuring contracting officer shall furnish to the SBA, or to the surveying activity, whichever is consistent with the action taken under subparagraph (2) of this