calendar quarters, "number of employees" means the average employment of such concern and its affiliates during the period such concern has been in existence based on the number of persons employed during the pay period ending nearest the last day of each month.

§ 1-1.701-6 Industry.

"Industry" means a grouping of establishments primarily engaged in similar lines of activity as listed and described in the Standard Industrial Classification Manual (and the 1963 supplement thereto) prepared and published by the Bureau of the Budget, Executive Office of the President.

§ 1-1.701-7

Certificate of competency.

A "certificate of competency" means a certificate issued by SBA pursuant to the authority contained in the Small Business Act (15 U.S.C. 637(b) (7) ) stating that the holder of the certificate is competent as to capacity and credit to perform a specific Government procurement contract. (Also see § 1-1.708.) § 1-1.701-8 Set-aside for small business. A set-aside for small business is the act of reserving the entire amount (total set-aside) or a portion (partial setaside) of a procurement for the exclusive participation of small business concerns. Set-asides may be made for individual items or for classes of items (class set-asides).

District of Columbia three or more of the following services: Janitorial and custodial services, protective guard services, commissary services, fire prevention services, refuse collection services, safety engineering services, messenger services, grounds maintenance and landscaping services, and air-conditioning and refrigeration maintenance: Provided, however, That whenever the contracting officer determines prior to the issuance of bids that the estimated value of one of the foregoing services constitutes more than 50 percent of the estimated value of the entire contract, the contract shall not be classified as base maintenance but in the industry in which such service is classified.

[32 F.R. 2626, Feb. 8, 1967]

§ 1-1.702

Small business policies.

(a) General policy. It is the policy of the Government to aid, counsel, assist, and protect, insofar as possible, the interests of small business concerns in order to preserve free competitive enterprise; and to place with small business concerns a fair proportion of the total Government purchases and contracts for property and services (including contracts for maintenance, repair, construction, and research and development).

(b) Specific policies. The following specific small business policies shall be followed by procurement agencies in òrder to further the general policy stated in (a) of this § 1-1.702:

(1) Small business concerns shall be afforded an equitable opportunity to compete for prime contracts and subcontracts.

(2) Bidders mailing lists (see § 12.205) shall include all established and potential small business suppliers who have made acceptable application for inclusion or who appear from other information (including recommendations by the SBA representative) to be qualified for inclusion therein.

(3) Invitations for bids or requests for proposals shall be sent to all firms on the appropriate mailing list except that where less than a complete list is used pursuant to § 1-2.205-4, a pro rata number of small business concerns shall be solicited.

(4) Proposed procurements and contract awards shall be publicized in the "Commerce Business Daily" in accordance with Subpart 1-1.10.

and

(5) Procurement of property services shall be divided into reasonably small lots (not less than economic production runs) in order to permit bidding on quantities less than the total requirements.

(6) The maximum amount of time practicable (see § 1.202-1) shall be allowed for preparation and submission of bids and proposals.

(7) Delivery schedules shall be established on a realistic basis which will encourage small business participation to the extent consistent with the actual requirements of the Government.

(8) Applicable specifications, plans, and drawings either shall be furnished with invitations for bids and requests for proposals or, when not so furnished, information as to locations where they may be obtained or examined shall be furnished.

(9) Procurements shall be set aside for exclusive participation by small business concerns in accordance with § 1-1.706.

(10) In the event of equal low bids, preference shall be given to small business concerns in accordance with § 1-2.407-6.

(11) Subcontracting to small business concerns shall be encouraged in accordance with § 1-1.710.

(12) Procurement agencies and SBA are responsible for consulting and cooperating in carrying out the purposes of the Small Business Act, as amended (15 U.S.C. 631-647), in accordance with § 1-1.705.

(13) Placement of small purchases with small business concerns shall be encouraged (see § 1-3.602).

§ 1-1.703 Determination of status as a small business concern.

§ 1-1.703-1 Representation by bidder or offeror.

(a) Except as provided in paragraph (b) of this § 1-1.703-1, the contracting officer shall accept as conclusive for the purpose of a specific procurement a representation by the bidder or offeror that it is a small business concern as defined by SBA.

(b) A representation by a bidder or offeror that it is a small business concern shall be effective, even though questions in accordance with the terms of § 1-1.703-2, unless the SBA, in response to such question and pursuant to the procedures in § 1-1.703-2, 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 it has in good faith represented itself as small business prior to the opening of bids or closing date for submission of offers (see § 1-2.405 (b) regarding minor informalities and irregularities in bids).

[30 F.R. 9590, July 31, 1965]

§ 1-1.703-2 Protest regarding small business status.

(a) Any bidder or offeror may challenge the small business status of any other bidder or offeror on the same procurement by sending a writter. protest, as defined in paragraph (b) of this § 1-1.703-2, to the contracting officer responsible for the particular procurement. Any contracting officer who receives a timely protest, or who wishes to question the small business status of a bidder or offeror himself, shall forward such protest record (or submit his protest) to the SBA regional office serving the area in which the protested concern is located.

(b) As used in this section, "protest" means a challenge in writing from any bidder or offeror as to the small business status of any other bidder or offeror on the same 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 concern. 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 any 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.

(c) Upon receipt of a protest, the SBA Regional Director or his delegate will promptly notify the contracting officer of the date it was received, and will inform the affected bidder or offeror that its size status is under review.

(d) SBA will, within 10 working days, if possible, after receipt of a protest, investigate and determine the small business status of the protested bidder or offeror and notify the contracting officer, the protestant, and the protested bidder or offeror of its decision. Such decision is final unless appealed in accordance with paragraph (f) of this § 1-1.703-2 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.

(e) Procurement action shall be suspended pending SBA's determination or expiration of the 10-day period, whichever is earlier, unless unusual conditions make it necessary that an award be

made. If SBA's determination is not received by the contracting officer within 10 working days after SBA's receipt of the protest, the contracting officer shall ascertain when such determination can be expected. In cases where further delay in awarding the contract would be disadvantageous to the Government, it shall be presumed that the questioned bidder or offeror is a small business con

cern.

(f) 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.

(g) 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 paragraph (h) of this § 1-1.703-2.

(h) An appeal from a product classification determination made by a contracting officer may be taken not less than 10 days before the bid opening date or closing date for the submission of proposals wherein the bid opening or closing date is more than 30 days after the issuance of the invitation for bids or request for proposals, or not less than 5 working days before the bid opening date or closing date for the submission of proposals in cases wherein the bid opening date or closing date for the submission of proposals is 30 days or less after the issuance of an invitation for bids or a request for proposals. Such appeals shall be directed to the SBA Size Appeals Board, Washington, D.C.

[30 F.R. 9590, July 31, 1965]

It is a requirement of the Small Business Act that SBA and procurement agencies consult and cooperate in carrying out the policies of that Act. Such consultation and cooperation is particularly significant in the areas and programs described in §§ 1-1.705-2 through 1-1.705-7.

§ 1-1.705-2 SBA representatives.

SBA may assign one or more representatives (hereinafter referred to as "SBA representatives") on a full- or part-time basis to any procuring activity for the purpose of carrying out SBA responsibilities under the Small Business Act. SBA representatives will comply with agency directives concerning the conduct of procurement personnel and instructions concerning release of procurement information.

§ 1-1.705-3 Screening of procurements.

(a) Individual set-asides. SBA representatives (cleared for security where classified procurements are to be screened) shall, upon request, promptly be afforded an opportunity at the procuring activity to review all proposed procurements if it is anticipated that the resulting contract or contracts will exceed $2,500 unless in the case of procurements which are not expected to exceed $10,000, the head of the procuring activity determines that such review would unduly delay the procurement process. A copy of the determination and the justification therefor shall be furnished to the SBA representative. Where it is anticipated that the resulting contract or contracts will exceed $2,500, such SBA representatives shall, upon request, promptly be afforded an opportunity to make recommendations concerning proposed procurements, including that they be exclusively or partially set aside for small business con

cerns.

The contracting officer shall afford the SBA representative an opportunity to recommend appropriate names of small business concerns for inclusion in lists of bidders for firms to be solicited in

connection with current and future procurements.

(b) Class set-asides. SBA representatives shall be afforded an opportunity to make recommendations that current and future procurements, or portions thereof, of selected items or services, or groups of like items or services, shall be set aside as provided in § 1-1.706, for exclusive small business participation. Such set-asides, when approved by the contracting officer, shall be known as class set-asides. Concurrence in a class set-aside shall not be dependent upon the existence of a current procurement if future procurements can be clearly foreseen.

§ 1-1.705-4 Access to information.

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, bidders lists, and planned requirements immediately upon receipt by the procuring activity. SBA representative will be furnished such other available or reasonably obtainable information as may be required for the SBA referral program.

The

§ 1-1.705-5 Joint small business set. asides.

The policies and procedures for joint small business set-asides, set forth in § 1-1.706, were developed cooperatively with the SBA and Government procurement agencies.

§ 1-1.705-6 Certificates of competency.

Section 1-1.708 prescribes policies and procedures governing cooperative action with SBA concerning certificates of competency.

§ 1-1.705-7 Performance of contract by SBA.

In accordance with the Small Business Act (15 U.S.C. 637(a)), in any case in which the Administrator of SBA certifies to the head of the procuring agency concerned that SBA is competent to perform any specific contract, the contracting officer is authorized, in his discretion, to award the contract to SBA upon such terms and conditions, consistent with applicable procurement regulations, as may be agreed upon between SBA and the contracting officer.

§ 1-1.706 Procurement set-asides for small business.

§ 1-1.706-1 General.

(a) Purpose. The purpose of small business set-asides is to increase small business participation in Government procurement.

(b) Applicability. This section is applicable to small business set-aside programs of executive agencies in connection with all procurement of property and services, maintenance, repair and construction, and research and development.

(c) Implementation. Subject to any applicable preference for labor surplus area set-asides as provided in § 1-1.802, any individual procurement or class of procurements, or an appropriate part thereof, shall be set aside for the exclusive participation of small business concerns when such action (1) is jointly determined by an SBA representative and the contracting officer upon the initiation of either agency, or (2) if no SBA representative is available, is unilaterally determined by the contracting officer to be in the interest of maintaining or mobilizing the Nation's full productive capacity, or to be in the interest of war or national defense programs, or to be in the interest of assuring that a fair proportion of Government procurement is placed with small business concerns.

(d) Initiation of set-asides. Insofar as practicable, joint determinations initiated by SBA representatives shall be used as the basis for small business setasides rather than unilateral determinations. This, however, does not preclude an agency from initiating with SBA a proposal for a joint determination. The impracticability of arranging a joint determination should not be treated as an obstacle to making a set-aside based on a unilateral determination initiated by the contracting officer in an otherwise appropriate case. § 1-1.706-2

proposals.

Review of SBA set-aside

(a) (1) When an SBA representative has recommended that all, or a portion, of an individual procurement or class of procurements be set aside for small business, the contracting officer (or other designated representative) of the procurement agency shall promptly either

(i) concur in the recommendation, or

(ii) disapprove the recommendation, stating in writing his reasons for disapproval. The SBA representative shall be allowed two working days to appeal any such disapproval to the head of the procuring activity or his designee for decision. During consideration of such appeal there shall be full and free interchange of all pertinent facts between the SBA representative and the procuring activity concerned. Within one working day after receipt of a decision from the head of the procuring activity or his designee disapproving a recommended set-aside, the SBA representative may request the contracting officer to suspend procurement actions affected by the recommended set-aside pending a further appeal by the Administrator of SBA to the head of the agency concerned for determination. SBA shall be allowed seven working days after making any such request within which (1) the Administrator of SBA may appeal the decision of the head of the procuring activity (or his designee) to the head of the agency concerned, and (ii) to notify the contracting officer whether such an appeal has in fact been taken. If such notification is not received by the contracting officer within the seven-day period, it shall be deemed that the SBA request to suspend procurement action has been withdrawn and that no appeal to the head of the agency was taken. Where an appeal to the head of the agency concerned has been taken and the contracting officer has been notified of that fact within the seven-day period, the head of the procuring activity will, in accordance with agency procedures, forward through appropriate channels to the head of the agency a full justification of his decision.

(2) Any procurement action affected by a set-aside recommendation which has been disapproved by the contracting officer and appealed by the SBA representative shall be suspended pending the decision of the head of the procuring activity or his designee. If the decision sustains the disapproval and if the SBA representative requests further suspension in accordance with (1) of this § 11.706-2(a), the suspension shall continue until (i) the SBA appeal is deemed to have been withdrawn (as provided in (1) of this § 1-1.706-2(a), or (ii) the matter is determined by the head of the agency concerned. Such suspension shall not