made. This notice shall (i) reference the earlier notice of proposed debarment, (ii) specify the reasons for debarment, (iii) state the period of debarment, including effective dates, and (iv) advise that the debarment is effective throughout the Department of Defense. If, following the notice of proposed debarment, a determination is made that debarment will not be effected, the firm or individual shall be notified in writing accordingly. (b) Copies of the notice of debarment and of any removals from such debarment shall be furnished to the General Services Administration. [Amdt. 22, 22 F. R. 8000, Oct. 8, 1957] § 1.605 Suspension of bidders. Suspension of a contractor or bidder is a drastic action which must be based upon adequate evidence rather than mere accusation. Placing the name of an individual or firm on the consolidated list will be for the purpose of protecting the interest of the Government and not for punishment. The suspension of a bidder is an administrative determination which may be modified when determined to be in the interest of the Government. [Amdt. 22, 22 F. R. 8000, Oct. 8, 1957] §1.605-1 Causes and conditions under which Departments may suspend contractors. The Secretary of a Department or his authorized representative may, in the interest of the Government, suspend a firm or individual: (a) Suspected of (1) Commission of fraud or a criminal offense as an incident to obtaining, attempting to obtain, or in the performance of a public contract; (2) Violation of the Federal antitrust statutes arising out of the submission of bids and proposals; or (3) Commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, receiving stolen property, or any other offense indicating a lack of business integrity or business honesty, which seriously and directly affects the question of present responsibility as a Government contractor, or, (b) For other cause of such serious and compelling nature as may be determined by the Secretary of the Department concerned to justify suspension. Suspension of a firm or individual by the Secretary of a Department, or his au thorized representative, shall operate to § 1.605-2 Period of suspension. All suspensions shall be for a temporary period pending the completion of investigation and such legal proceedings as may ensue. Upon the completion of such investigation or proceedings, the suspension shall be removed and, if appropriate, changed to a debarment in accordance with § 1.604.1 (a). [Amdt. 22, 22 F. R. 8000, Oct. 8, 1957] § 1.605-3 Restrictions during period of suspension. During a period of suspension of a firm or individual, the following policies and procedures shall be applicable: (a) Bids and proposals will not be solicited from suspended contractors. If received, bids and proposals will not be considered and award for contracts may not be made to suspended contractors unless it is determined to be in the best interest of the Government by the Secretary of a Department or his authorized representative. (b) Suspended contractors will be subject to the provisions of paragraphs (b), (c), and (d) of § 1.603-1. [Amdt. 22, 22 F. R. 8000, Oct. 8, 1957] § 1.605-4 Notice of suspension. The firm or individual concerned shall be furnished a written notice by the Secretary of the Department concerned, or his authorized representative, of the suspension within 10 days after the effective date of the suspension. The notice of suspension shall state (a) That the suspension is based on information that the firm or individual has committed irregularities of a serious nature in business dealings with the Government or that the suspension is based on irregularities which seriously reflect on the propriety of further dealings of the firm or individual with the Government; (b) That the suspension is for a temporary period pending the completion of an investigation and such legal proceedings as may ensue; (c) That bids and proposals will not be solicited from the firm or individual and if received will not be considered, and awards of contracts may not be made unless it is determined to be in the best interest of the Government by the Secretary of the Department or his authorized representative to do so; and (d) That the suspension is effective throughout the Department of Defense. All inquiries concerning suspended contractors shall be referred to the Secretary of the Department concerned or his authorized representative for appropriate action. The Department shall not give further information to the contrac tor or his representatives concerning the reasons for suspension beyond that stated in the notice of suspension set forth above until the Department of Justice has been advised of the inquiry. [Amdt. 22, 22 F. R. 8001, Oct. 8, 1957] Prior Amendments 1956: 21 F. R. 9348, Nov. 30. 1957: 22 F. R. 2508, Apr. 12. § 1.608 Sample of list. [Insert Classification] CONSOLIDATED RESTRICTED LISTING OF FIRMS AND INDIVIDUALS DEBARRED OR INELIGIBLE (Type A listings shall not be awarded contracts and shall not be solicited by bid or proposal.) (Type B listings shall not be awarded contracts in any amount and shall not be solicited by bid or proposal for materials, supplies, articles, or equipment in which declared ineligible. However, contracts may be awarded and bids or proposals may be solicited for commodities in which not declared ineligible regardless of amount. Type B listings include those firms found ineligible to receive awards of contracts exceeding $10,000 by reason of findings of the Secretary of Labor that a given firm is not a "manufacturer" or "regular dealer" in stipulated commodities (see § 1.602 (e)). These findings are extended by Department of Defense policy to cover transactions of lesser amounts.) (Type C listings shall not be awarded contracts and shall not be solicited by bid or proposal for construction, alteration, or repair of public buildings or public work in the United States or elsewhere as specified in the Buy American Act. However, listings may be awarded contracts and may be solicited by bid or proposal for other than construction, alteration, or repair of public buildings or public work as specified in the Buy American Act.) (Type D listings shall not be solicited by bid or proposal; if bids or proposals are received, they will not be considered or evaluated nor will awards of contracts be made to such listings unless it is determined by the Secretary of a Department or his authorized representative to be in the best interest of the Government. CODIFICATION: § 1.608 was revised by Amendment 23, 22 F. R. 11042, Dec. 31, 1957. Subsequently, the second parenthetical Conviction for fraud (Gen. Services Admin.). Suspended. statement beginning "Type B listings" was amended to read as set forth above by Amendment 28, 23 F. R. 3619, May 27, 1958. outside the § 1.609 Procurement United States. In regard to procurement outside the United States, its Territories and possessions, the principles and procedures set forth in the foregoing provisions of Subpart F of this part, will commanders be applied by overseas whenever possible, and as modified by the following provisions, with due consideration to laws or customs of the foreign countries in which such lists are to be applicable. [Amdts. 30 and 32, 23 F. R. 4727, June 27, 1958] § 1.609-1 Responsibilities and area coverage. The Commander-in-Chief, United States European Command, the Commander-in-Chief, Pacific, and the Commander-in-Chief, Caribbean, or the Commanders of a component command which each of these unified commanders may designate, will establish and maintain a consolidated list of offshore suppliers to whom contracts will not be awarded and from whom bids or proposals will not be solicited. CINCEUR consolidated list will include names in the North Atlantic and Mediterranean areas including all of Europe, North Africa and the Middle East. The CINCPAC consolidated list will include names in the Far East and Pacific Ocean areas excluding United States Territories The and possessions. The CINCARIB consolidated list will include names in Central and South America excluding Territories and possessions. All other overseas commanders will utilize and contribute to such list as appropriate to their geographical location or areas in which they award contracts. Lists shall not be established or maintained except as provided above. [Amdts. 30 and 32, 23 F. R. 4727, June 27, 1958] § 1.609-2 Information contained on overseas lists. The lists shall show as a minimum the following information: (a) The names and addresses of those firms or individuals to whom contracts shall not be awarded and from whom bids or proposals will not be solicited. (Names will be set forth in alphabetical order with appropriate cross reference where more than one name is involved in a single action and where a parent firm or individual in one country is known to control subsidiaries, branches or agencies in the same or other countries.); (b) The basis or authority for each action; (c) The extent of restrictions imposed; (d) The termination date for each debarred listing; and (e) The originating activity, component or agency. § 1.609-3 Protection of lists. The lists and all correspondence relative thereto shall be protected to prevent inspection of contents by personnel who are not required to have access to such information. The lists shall be marked "For Official Use Only". [Amdts. 30 and 32, 23 F. R. 4728, June 27, 1958] § 1.609-4 Maintenance and distribution of lists. The lists shall be kept current by issuance of notices of additions or deletions and by periodic reprinting. Copies of the list shall be distributed to contracting officers as the unified commanders and their component commanders direct. CINCEUR, CINCPAC, and CINCARIB will exchange lists directly. Copies will also be furnished to the Assistant Secretary of Defense (Supply & Logistics), the Assistant Secretary of Defense (International Security Affairs), the Assistant Secretary of the Army (Logistics) (Assistant Judge Advocate General), the Chief of Naval Ma terial (Code M22), and the Commander, Air Material Command (MCPI). [Amdts. 30 and 32, 23 F. R. 4728, June 27, 1958] § 1.609-5 Sample of list. The lists will be prepared in accordance with the format shown in § 1.608. [Amdts. 30 and 32, 23 F. R. 4728, June 27, 1958] § 1.609-6 Basis of addition of firms and individuals on lists. In addition to the names of offshore firms or individuals which may be included on the lists as falling into the categories outlined in § 1.602, the names of firms or individuals abroad shall be included on the list in the following additional categories: (a) Those who are "designated nationals" under the Foreign Assets Control Regulations; (b) Those found by the Assistant Secretary of Defense (ISA) or his authorized representative to have engaged in improper East-West trade activity; (c) Those found by the Assistant Secretary of Defense (ISA) or his authorized representative to be ineligible because they do not meet the political or security criteria; (d) Those found by a United States Diplomatic Mission or a Country Team (consisting of members of the United States Diplomatic Mission in the country or countries in which the firms or individuals are located) to be ineligible because they do not meet the labor-political criteria; and (e) Those who for other causes of a serious and compelling nature are so designated by the unified commander. [Amdts. 30 and 32, 23 F. R. 4728, June 27, 1958] of § 1.609-7 Treatment to be accorded firms or individuals in debarred or ineligible status. The provisions § 1.603 will be complied with, if applicable. In addition, contracts will not be awarded to, nor shall bids or proposals be solicited from, or furnished to firms or individuals abroad which come into the categories (a) through (e) of § 1.609-6. With respect to (a) of § 1.609-6, an exception may be made by the Secretary of the Treasury only. With respect to (b), (c), and (d) of § 1.609-6, an exception may be made by the Assistant Secretary of Defense (ISA) or his authorized representative. [Amdts. 30 and 32, 23 F. R. 4728, June 27, 1958) § 1.609-8 Causes and conditions under which unified commanders may place names on the consolidated list. CINCEUR, CINCPAC, and CINCARIB, or their designated component commanders are respectively authorized to place on the list names of firms or individuals doing business within the areas for which they are responsible, for any of the causes and under the conditions set forth in §§ 1.609-6 and 1.609-7. Overseas commanders or unified commanders overseas other than CINCEUR, CINCPAC, and CINCARIB are similarly authorized to designate firms or individuals in their command areas and will promptly notify either CINCEUR, CINCPAC, or CINCARIB, who will add the names to their consolidated lists. In these cases the information contained in § 1.609-2 will be furnished. The listing shall operate to deny contracts to such firms or individuals throughout the Department of Defense. [Amdts. 30 and 32, 23 F. R. 4728, June 27, 1958] § 1.609-9 Liaison with United States diplomatic missions. The Chief of the United States Diplomatic Mission, or such attache or other officer as he directs, in the country where the firm or individual concerned is located, will be notified of actions contemplated under the foregoing sections which may have important political significance. In such cases of contemplated action against a branch or subsidiary firm or agency in one or more countries, the Chief of the United States Diplomatic Mission in each country, including that in which the parent or principal is located, will be notified. [Amdts. 30 and 32, 23 F. R. 4728, June 27, 1958] § 1.610 Use of overseas lists within continental United States. Due to the length of the lists, the numerous revisions and distances involved, as well as the infrequent contracting by continental United States offices with offshore suppliers, the CINCEUR, CINCPAC, and CINCARIB consolidated lists of ineligible, debarred and suspended bidders will not be distributed to contracting officers in the United States. However, no contracts will be awarded by contracting officers in the United States, its Territories or possessions, to offshore suppliers without ascertaining that the names of the firms or individuals in volved do not appear on the overseas consolidated lists. These lists will be held for reference in each of the Military Departments and will be utilized in accordance with procedures established by each of the Departments. [Amdts. 30 and 32, 23 F. R. 4728, June 27, 1958] SUBPART G-SMALL BUSINESS CONCERNS [ADDED] SOURCE: §§ 1.700 to 1.708 contained in Amendment 24, 22 F. R. 11053, Dec. 31, 1957, except as otherwise noted. § 1.700 Scope of subpart. To implement the Small Business Act of 1953, as amended, and the Armed Services Procurement Act, as amended, this subpart sets forth (a) policy with reference to small business concerns, (b) policy governing relationship with the Small Business Administration, (c) small business set-aside procedures, and (d) the Defense Small Business Subcontracting Program. This subpart applies only in the United States, its Territories, its possessions, and Puerto Rico. [Amdt. 37, 23 F. R. 9209, Nov. 29, 1958] § 1.701 Definitions. As used throughout this subpart, the following terms shall have the meanings set forth below. § 1.701-1 Small business concern— (a) General definition. A small business concern is a concern that (1) is not dominant in its field of operations and, with its affiliates, employs fewer than 500 employees, or (2) is certified as a small business concern by SBA. (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 an area of business activity. 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, sales territory, and 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, consid eration is given to all appropriate factors including common ownership, common management, and contractual relationships. (d) Number of employees. In connection with the determination of small business status, except as SBA otherwise determines in a particular industry or part thereof, "number of employees" means the average employment of any concern and its affiliates based on the number of persons employed during the pay period ending nearest the 15th of the third month in each calendar quarter for the preceding four quarters. If a concern has not been in existence for four full 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 15th of each month. A (e) Small business certificate. small business certificate is a certificate issued by SBA pursuant to the authority contained in sections 203 and 212 of the Small Business Act of 1953, as amended, certifying that the holder of the certiflcate is a small business concern for the purpose of Government procurement and in accordance with the terms of the certificate. § 1.701-2 Established supplier. An "established supplier" of an item is a concern which is a "source of supplies," within the meaning of § 1.201-9, and which has supplied the items satisfactorily to one or more military departments, or a concern with which mobilization planning is in effect. A "po § 1.701-3 Potential supplier. tential supplier" of an item is a concern which is a "source of supplies," within the meaning of §1.201-9, but which is not an established supplier. § 1.701-4 Regular dealer (non-manufacturer) as small business concern. One who submits bids or offers in its own name, but who proposes to furnish a product not manufactured by itself, shall be deemed to be a small business concern only if (a) it is a small business concern within the meaning of § 1.701-1; (b) it is a regular dealer (non-manufacturer) (see § 1.201-9 (a)); and (c) in the case of a procurement set aside for small business (see § 1.706) or involving equal low bids (see § 2.406-4 of this subchapter), it agrees to furnish in the per formance of the contract products manufactured or produced in the United States, its Territories, its possessions, or Puerto Rico, by small business concerns: Provided, That this section does not apply to construction or service contractors. § 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 and services with small business concerns. (b) Each military department shall implement this policy by affording small business concerns an equitable opportunity to compete for prime contracts in accordance with the following: (1) bidders' mailing lists (see § 2.204 of this subchapter) shall be maintained and shall include all established and potential small business suppliers who have made acceptable application for inclusion or who appear from other information (including recommendation by the SBA representative), to be qualified for inclusion therein. (2) Invitations for Bids or Requests for Proposals shall be sent to all firms on the appropriate list, except that where less than the complete list is to be used pursuant to § 2.204-5 of this subchapter a pro-rata number of established or potential small business suppliers shall be solicited; (3) procurement of supplies and 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; the maximum amount of time practicable shall be allowed for preparation and submission of bids and proposals; and delivery schedules shall be suitable for small business participation; and (4) for specification requirements, see §2.201 (d) of this subchapter. As to subcontracting, see § 1.707. (c) Records of the total value of all contracts placed with small business concerns during each fiscal year, and reports based thereon, are maintained by each military department through the Department of Defense Procurement Reporting System described in § 1.110 and § 16.807 of this subchapter. Accordingly, each military department shall, in soliciting bids or proposals, request from any bidder or offeror, or other source, |