cerizing, spinning, throwing, or twisting operations.) (iv) Service industries. (a) For servIces not elsewhere defined in this part, the average annual sales or receipts of the concern and its affiliates for the preceding 3 fiscal years must not exceed $1 million. (b) Any concern bidding on a contract for engineering services (other than marine engineering services), motion picture production, or motion picture services is classified as small if its average annual sales or receipts for its preceding 3 fiscal years do not exceed $5 million. (c) Any concern bidding on a contract for naval architectural and marine engineering services is classified as small if its average annual sales or receipts for its preceding 3 fiscal years do not exceed $6 million. (d) Any concern bidding on a contract for janitorial and custodial services is classified as small if its average annual sales or receipts for its preceding 3 fiscal years do not exceed $3 million. (e) Any concern bidding on a contract for base maintenance is classified as small if its average annual sales or receipts for its preceding 3 fiscal years do not exceed $5 million. (f) Any concern bidding on contracts for marine cargo handling services is classified as small if its annual sales or receipts do not exceed $5 million for the preceding 3 fiscal years. (g) Any concern bidding on a contract for food services is classified as small if its average annual sales or receipts for its preceding 3 fiscal years do not exceed $4 million. (h) (1) Any concern bidding on a contract for laundry services including linen supply, diaper services, and industrial laundering, is classified small if its average annual sales or receipts for its preceding 3 fiscal years do not exceed $3 million. (2) Any concern bidding on a contract for cleaning and dyeing including rug cleaning services is classified small if its average annual sales or receipts for its preceding 3 fiscal years do not exceed $1 million. (i) Any concern bidding on a contract for computer programing services is classified as small if its average annual sales or receipts for its preceding 3 fiscal years do not exceed $3 million. (j) Any concerr. bidding on a contract for flight training services is classified as small if its average annual sales or receipts for its preceding 3 fiscal years do not exceed $5 million. (k) Any concern bidding on a contract for motorcar rental and leasing services or truck rental and leasing services is classified as small if its average annual sales or receipts for its preceding 3 fiscal years do not exceed $5 million. (1) Any concern bidding on a contract for tire recapping services is classified as small if its average annual sales or receipts for its preceding 3 fiscal year do not exceed $3 million. (m) Any concern bidding on a contract for data processing services is classified as small if its average annual sales or receipts for its preceding 3 fiscal years do not exceed $3 million. (n) Any concern bidding on a contract for computer maintenance services is classified as small if its average annual sales or receipts for its preceding 3 fiscal years do not exceed $5 million. (v) Transportation industries—(a) General. Except as provided in (b) and (c) below, for passenger or freight transportation the number of employees of the concern and its affiliates must not exceed 500 persons. (b) Air transportation. For air transportation, the number of employees of the concern and its affiliates must not exceed 1,000 persons. (c) Trucking (local and long distance), warehousing, packing and crating, and/or freight forwarding. For trucking (local and long distance), warehousing, packing, and crating, and/or freight forwarding, the annual receipts of the concern and its affiliates must not exceed $5 million. No such concern, however, will be denied small business status for the purpose of Government procurement solely because of its contractual relationship with a large interstate van line if the concern's annual receipts have not exceeded $5 million during its most recently completed fiscal year. (vi) Research, development or testing industries. For research, development, or testing, which requires delivery of a manufactured product, a concern must (a) qualify as a small business manufacturer within the meaning of subdivision (ii) of this subparagraph for the industry in which the product is classified, or (b) qualify as a small business nonmanufacturer within the meaning of subdivision (iii) of this subparagraph. For research, development, or testing, which does not require delivery of a man ufactured product, the number of employees of the concern and its affiliates must not exceed 500 persons. (3) Small business subcontractors. In connection with subcontracts of $2,500 or less, any concern will be considered a small business concern if it, with its affiliates, employs not more than 500 employees. In connection with subcontracts exceeding $2,500, any concern shall be considered a small business concern if it qualifies as such under subparagraphs (1) and (2) of this paragraph. (b) Dominance in field of operations. A concern "is not dominant in its field of operations" when it does not exercise a controlling or major influence in a kind of business activity in which a number of business concerns are primarily engaged. In determining whether dominance exists, consideration is given to all appropriate factors including volume of business, number of employees, financial resources, competitive status or position, ownership or control of materials, processes, patents and license agreements, facilities, sales territory, and nature of business activity. (c) Affiliates. Business concerns are affiliates of each other when either directly or indirectly (1) one concern controls or has the power to control the other or (2) a third party controls or has the power to control both. In determining whether concerns are independently owned and operated and whether or not affiliation exists, consideration is given to all appropriate factors including common ownership, common management, and contractual relationships: Provided, however, That restraints imposed on a franchisee by its franchise agreement shall not be considered in determining whether the franchisor controls or has the power to control and, therefore, is affiliated with the franchisee, if the franchisee has the right to profit from his effort, commensurate with ownership, and bears the risk of loss or failure. (d) Service industries. For services not elsewhere defined in this part, the average annual sales or receipts of the concern and its affiliates for the preceding three fiscal years must not exceed $1 million ($1,250,000 if located in Alaska). Any concern bidding on a contract for engineering services, naval architectural services, motion picture production or motion picture services is classified as small if its average annual sales or re ceipts for its preceding three fiscal years do not exceed $5 million ($6,250,000 if located in Alaska). A (e) Small business certificate. small business certificate is a certificate issued by SBA pursuant to the authority contained in sections 3 and 8(b) (6) of the Small Business Act certifying that the holder of the certificate is a small business concern for the purpose of Government procurement and in accordance with the terms of the certificate. [29 F.R. 2813, Feb. 29, 1964, as amended at 30 F.R. 5966, Apr. 29, 1965; 31 F.R. 13326, Oct. 14, 1966; 32 F.R. 12084, Aug. 23, 1967; 34 F.R. 12017, July 17, 1969; 34 F.R. 13830, Aug. 29, 1969; 34 F.R. 17886, Nov. 5, 1969; 35 F.R. 46, Jan. 3, 1970; 35 F.R. 6808, Apr. 30, 1970] An "established supplier" of an item is a concern which has supplied the items satisfactorily to one or more Military Departments, or a concern with which mobilization planning is in effect. [27 F.R. 11645, Nov. 27, 1962] § 1.701-3 Potential supplier. A "potential supplier" of an item is a concern which is a source of supplies, but, which is not an established supplier. [27 F.R. 11645, Nov. 27, 1962] § 1.701-4 Manufacturing industry employment size standards. The Standard Industrial Classification Manual (1963 edition) index provides an alphabetic listing of products and the industry with which the product is associated, which includes references to the Classification Code set forth below. MAJOR GROUP 19-ORDNANCE AND ACCESSORIES ending nearest the last day of the third month in each calendar quarter for the preceding four quarters. The three Standard Industrial Classification industries (3711, 3712, and 3714) have been combined because of a major problem of defining the reporting unit in terms of these industries. This difficulty arises from the fact that many large establishments have integrated operations which include the production of parts and bodies and the assembly of complete vehicles at the same location. • Includes maintenance as defined in the Federal Aviation Regulations (14 CFR 1.1) but excludes contracts solely for preventive maintenance as defined in 14 CFR 1.1. As defined in the Federal Aviation Regulations: "Maintenance' means inspection, overhaul, repair, preservation, and the replacement of parts but excludes preventive maintenance.' "Preventive maintenance' means simple or minor preservation operations and the replacement of small standard parts not involving complex assembly operations. Guided missile engines and engine parts are classified in SIC 3722. Missile control systems are classified in SIC 3662. 6 Shipbuilding and repairing industry includes establishments primarily engaged in building and repairing all types of ships, barges, canal boats, and lighters, of 5 gross tons and over, whether propelled by sail or motor powered or towed by other craft. Establishments primarily engaged in fabrication or repairing structural assemblies or components for ships, or subcontractors engaged in ship painting, joinery, carpentry work, electrical wiring installation, etc., are not included. The size standard for Boatbuilding and Repairing (establishments primarily engaged in building and repairing all types of boats, except rubber boats, under 5 gross tons) is 500. [29 F.R. 2814, Feb. 29, 1964, as amended at 29 F.R. 14818, Oct. 31, 1964; 30 F.R. 14888, Dec. 2, 1965; 31 F.R. 13327, Oct. 14, 1966; 32 F.R. 12085, Aug. 23, 1967; 32 F.R. 16400, Nov. 30, 1967; 35 F.R. 8427, May 29, 1970] § 1.702 General policy. (a) It is the policy of the Department of Defense to place a fair proportion of its total purchases and contracts for supplies, research and development, and services (including but not limited to contracts for maintenance, repairs and 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 established and potential supplies (§§ 1.701-2 and 1.701-3), shall be afforded an equitable opportunity to com pete 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 a 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 busi ness 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 11401 (Defense Small Business Subcontracting Program Quarterly Report of Participating Large Company on Subcontract Commitments to Small Business Concerns) (see § 1.707). [29 F.R. 11810, Aug. 19, 1964, as amended at 31 F.R. 13327, Oct. 10, 1966] § 1.703 Determination of status as small business concern. (a) General (1) Prior to solicitation. If a contracting officer or a small business specialist requires information from SBA concerning the size status of a concern in order to make a determination concerning (i) the initiation of a small business set-aside, or (ii) the forwarding of a small business restricted solicitation to such concern but time considerations preclude obtaining a formal SBA small business size determination, he may request informal advice on the matter from the SBA regional office having jurisdiction of the geographical area in which the contracting officer is located. While a contracting officer or a small business specialist may take action on the basis of such informal advice, such advice shall not be binding with respect to the final establishment of the eligibility of a concern as a small business for the purpose of a particular procurement; nor shall it be considered a formal SBA small business size determination (see paragraph (b) (3) and (4) of this section). (2) Subsequent to solicitation. 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. (b) Representation by a bidder or offeror. 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, or unless he could have (in those cases where a representation as to size of business has not been made), in good faith represented himself as a 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). A representation by a bidder or offeror that it is a small business concern will not be accepted by the contracting officer if it is known that such concern has previously been finally determined by SBA to be ineligible as a small business for the item or service being procured, and such concern has not subsequently been certified by SBA as being a small business. (1) Protest of small business status. Any bidder or offeror may, in connection with a contract involving a small business set-aside or otherwise involving small business preferential consideration, 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 fifth working day exclusive of Saturday, Sunday, and Federal Legal Holidays (hereinafter referred to as working day) after bid opening date for formally advertised and small business restricted advertised procurements. In procurements requiring submission of proposals, the contracting officer shall, except under the circumstances specified in § 3.508-2(b) of this chapter, notify the apparently unsuccessful offerors in writing of the name and location of the apparently successful offeror (s) and establish a deadline date (at least five working days plus a reasonable time for the notice to reach the unsuccessful offerors) by which any size protest on the instant procurement must be received. A protest received after the appropriate time indicated herein shall be considered timely, if in the case of (i) a mailed protest, it is sent by registered or certified mail and the postmark thereon indicates that it would have been delivered within the time limit except for delays beyond the control of the pro |