ney General requests continuance of the suspension. If such a request is received the suspension may be continued for an additional six months. Notice of the proposed removal of the suspension shall be given to the Department of Justice 30 days prior to the expiration of the 12-month period. In no event shall a suspension continue beyond 18 months unless prosecutive action has been initiated within that period. Whenever prosecutive action has been initiated, the suspension may continue until the legal proceedings are completed. Upon removal of a suspension, consideration may be given to debarment in accordance with § 1.604 of this subpart.

(b) Scope of suspension. (1) Suspension may include all known affiliates of a concern (firm) or individual.

(2) A decision to include known affiliates in a proposed suspension is an individual determination and, as such, must be made on a case by case basis.

(3) The criminal, fraudulent, or seriously improper conduct of an individual may be imputed to the business firm with which he is connected when the impropriety involved was performed within the course of his official duty, or with knowledge or approval of the business firm.

§ 1-1.605-3 Notice of suspension.

A firm or individual that has been suspended shall be furnished immediately with a notice of the suspension, by registered mail, by the head of the agency or his designee. The notice of suspension shall state that:

(a) The suspension is based on (1) an outstanding indictment, or (2) adequate evidence that the firm or individual has committed irregularities of a serious nature in business dealings with the Government, or (3) adequate evidence of irregularities which seriously reflect on the propriety of further dealings of the firm or individual with the Government. (The notice shall identify the indictment or describe the nature of the irregularities, in general terms, without disclosing the Government's evidence);

(b) The suspension is for a temporary period pending the completion of

an investigation and such legal proceedings as may ensue;

(c) 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 by the head of the agency or his authorized representative to be in the best interest of the Government;

(d) The firm or individual will not be eligible for the award of a subcontract and whenever the firm or individual is proposed as a subcontractor, the contracting officer will decline to approve subcontracting with that firm or individual in any instance in which consent is required of the Government before the subcontract is made, unless it is determined by the agency to be in the best interest of the Government to grant approval;

(e) The suspension is effective throughout the agency; and

(f) A request for hearing will be considered unless the suspension is based upon an outstanding indictment or upon advice from either the Department of Justice or the Department of Labor that such a hearing would prejIudice the substantial interests of the Government, and the hearing will be held within 20 calendar days if the request is granted.

[39 FR 13777, Apr. 17, 1974]

§ 1-1.605-4 Hearings.

(a) Request for hearing. A hearing may be requested upon receipt of the notice of suspension unless the basis for suspension is an outstanding indictment against the firm or individual.

(b) Coordination with Department of Justice. The formal advice of the Department of Justice concerning the impact of release of evidentiary material on possible civil or criminal action against a firm or individual shall be requested upon receipt of a request for a hearing, except when the basis for suspension is already known to involve possible civil or criminal prosecution against the firm or individual. If such advice is orally given, the Department of Justice shall be requested to promptly confirm the advice in writing. The agency head or his designee

shall grant the request and hold a hearing or deny the request, as provided in paragraphs (d) and (e) of this § 1-1.605-4.

(c) Coordination with the Department of Labor. The formal advice of the Associate Solicitor (for General Legal Services) of the Department of Labor shall be sought concerning the possible impact of the release of evidentiary material on Department of Labor proceedings against a firm or individual when a suspension is based upon a contractor's violations of labor standards subject to legal proceedings before administrative law judges of the Department of Labor. The agency head or his designee shall grant the request and hold a hearing or shall deny the request, as provided in paragraphs (d) and (e) of this § 1-1.605-4.

(d) Hearing granted. If a decision is made to grant a hearing, the firm or individual shall be immediately informed and the hearing shall be held not later than 20 calendar days after receipt of the request. The head of the agency or his authorized representative shall promptly decide after the hearing whether to continue or terminate the suspension and shall promptly notify the firm or individual of this decision by registered mail.

(e) Hearing denied. If it is determined, based upon the advice received from the Department of Justice or the Department of Labor, that to hold a hearing would adversely affect possible civil or criminal prosecution or possible Labor proceedings against the firm or individual, this determination will be reduced to writing and made a part of the formal record. Notice shall then be furnished to the firm or individual within 20 calendar days after receipt of the request for a hearing that substantial interests of the Government would be prejudiced if a hearing were held but that any information or argument in opposition to the suspension may be presented in person, in writing, or through representation. Any information or argument submitted will be promptly considered by the head of the agency or his authorized representative and, if such action is deemed warranted, the suspension shall be terminated. The

firm or individual shall promptly be notified by registered mail whether the suspension is to be continued or terminated.

[39 FR 13777, Apr. 17, 1974]

§ 1-1.605-5 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 shall not be solicited from suspended contractors. If received, bids and proposals shall not be considered and awards for contracts shall not be made to suspended contractors unless it is determined by the agency to be in the best interest of the Government.

(b) Suspended contractors will be subject to the provisions of § 1-1.603(e) regarding restrictions on subcontractors.

[39 FR 13777, Apr. 17, 1974]

§ 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 Administration 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 setaside procedures; (5) small business subcontracting policies; and (6) information concerning SBA's size standards.

(b) This subpart applies only in the United States. As used in this subpart the term United States means the States, its territories and possessions, Puerto Rico, the Trust Territory of the Pacific Islands, and the District of Columbia.

[29 FR 10104, July 24, 1964, as amended at 35 FR 8482, June 2, 1970]

§ 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 § 1-1.701. “Concern" means any business entity organized for profit with a place of business located in the United States which makes a significant contribution to the U.S. economy through payment of taxes and/or use of American products, material, and/or labor, etc. "Concern" includes but is not limited to an individual, partnership, corporation, joint venture, association, or cooperative. For the purpose of making affiliation findings (see § 1-1.701-2) any business entity, whether organized for profit or not, and any foreign entity; i.e., any entity located outside the United States, shall be included. "Annual receipts" means the gross income (less returns and allowances, sales of fixed assets, and interaffiliate transactions) of a concern (and its domestic and foreign affiliates) from sales of products and services, interest, rents, fees, commissions, and/or from whatever other source derived, as entered on its regular books of account for its most recently completed fiscal year (whether on a cash, accrual, completed contracts, percentage of completion, or other acceptable accounting basis) and, in the case of a concern subject to U.S. Federal income taxation, reported or to be reported to the Department of the Treasury, Internal Revenue Service, for Federal income tax purposes. If a concern has been in business less than a year its annual receipts shall be computed by determining its average weekly receipts for the period in which it has

30-103 0-79-5

(2) Dredging. As small if it is bidding on a contract for dredging and (i) Its average annual receipts for its preceding 3 fiscal years do not exceed $9.5 million (see § 1-1.701-11 for size standard differentials which are applicable to specified nonforeign areas), and (ii) It performs the dredging of at least 40 percent of the yardage advertised in the plans and specifications with dredging equipment owned by the bidder or obtained from another small business dredging concern.

(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 Codes 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) 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.

(4) Rebuilding on a factory basis or equivalent. As small if it is bidding on a contract for rebuilding machinery or equipment on a factory basis, the purpose of which is to restore such machinery or equipment to as serviceable and as like new condition as possible and its number of employees does not exceed the number of employees specified for the classification code applicable to the manufacturer of the original item.

NOTE: The size standard contained herein is not limited to concerns who are manufacturers of the original item but is applicable to all bidders or offerors. The term "rebuilding on a factory basis" as used in this subsection does not include ordinary repair services such as those involving minor repair and/or preservation operations.

(5) 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.

(6) Manufacturing industries not listed in § 1-1.701-1(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.

(d) Small business nonmanufacturer. Any concern which submits a bid or