Calculating and accounting ma

Linoleum, asphalted-felt-base, and other hard surface floor coverings, not elsewhere classified..

The "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 last day of the 3d month in each calendar quarter for the preceding 4 quarters.

2 The size standard for SIC 2911 is set forth in § 1-1.701-1(i).

3 The size standards for SIC 30111, 30112, and 37171 are set forth in §§ 1-1.701-1 (c) (2) and 1-1.701-1(c)(3).

4 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 or 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.

(i) Refined petroleum products. Any concern bidding on a contract for a refined petroleum product other than a product classified in Standard Industrial Classification Industries No. 2951, Paving mixtures and blocks; No. 2952, Asphalt felts and coatings; No. 2992, Lubricating oils and greases; or No. 2999, Products of petroleum and coal, not elsewhere classified, is classified as small if (1) (i) its number of employees does not exceed 1,000 persons; (ii) if it does not

have more than 30,000 barrels-per-day crude oil or bona fide feed stock capacity from owned or leased facilities or from facilities made available to such concern under an arrangement such as, but not limited to, an exchange agreement (except one on a refined product for refined product basis), or throughput or other form of processing agreement, with the same effect as though such facilities had been leased; and (iii) the product to be delivered in the performance of the contract will contain at least 90 percent components refined by the bidder from either crude oil or bona fide feed stocks: Provided, however, That a petroleum refining concern which meets the requirements in (1) (i) and (ii) of this paragraph may furnish the product of a refinery not qualified as small business if such product is obtained pursuant to a bona fide exchange agreement, in effect on the date of the bid or offer, between the bidder or offeror and the refiner of the product to be delivered to the Government which requires exchanges in a stated ratio on a refined petroleum product for a refined petroleum product basis, and precludes a monetary settlement, and that the products exchanged for the products offered and to be delivered to the Government meet the requirements in (1) (iii) of this paragraph: And provided further, That the exchange of products for products to be delivered to the Government will be completed within 90 days after the expiration of the delivery period under the Government contract, and that any products furnished pursuant to a bona fide exchange agreement must be for delivery in the same Petroleum Administration for Defense (PAD) District as that in which the small refinery is located; or (2) its number of employees does not exceed 500 persons and the product to be delivered to the Government has been refined by a concern which qualifies under (1) of this paragraph. The proviso in (1) (iii) of this paragraph that the product to be delivered in the performance of the contract will contain at least 90 percent components refined by the bidder from either crude oil or bona fide feed stocks contemplates that, in accomplishing such refining, the bidder will utilize its own employees and facilities which it owns or obtains under a bona fide lease as distinguished from any other arrangement having the same effect as a lease. The provision permitting a concern which meets the requirements

in (1) (i) and (ii) of this paragraph to furnish the product of a refinery not qualified as small business if such product is obtained pursuant to a bona fide exchange agreement which meets prescribed requirements, contemplates that the product exchanged by the bidder for the product to be furnished shall have been refined by the bidder utilizing only its own employees and its own facilities or facilities obtained through a bona fide lease. ("Bona fide feed stocks" means crude and any other hydrocarbon material actually charged to refinery processing units as distinguished from materials used as components in products to be delivered after merely filtering, settling, or blending. "Crude-oil capacity" means the maximum daily average throughput of a refinery in complete operation, with allowance for necessary shutdown time for routine maintenance, repairs, etc. It approximates the maximum daily average crude runs to stills that can be maintained for an extended period.)

[29 F.R. 10104, July 24, 1964, as amended at 30 F.R. 9590, July 31, 1965; 32 F.R. 2624, Feb. 8, 1967; 36 F.R. 11435, June 12, 1971]

§ 1-1.701-2 Affiliates.

Business concerns are affiliates of each other when either directly or indirectly (a) one concern (other than an investment company licensed under the Small Business Investment Act of 1958 or registered under the Investment Company Act of 1940, as amended), controls or has the power to control the other, or (b) a third party or parties (other than an investment company licensed under the Small Business Investment Act of 1958 or registered under the Investment Company Act of 1940, as amended), controls or has the power to control both. In determining whether concerns are independently owned and operated and whether affiliation exists, consideration shall be 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.

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

§ 1-1.701-3 Dominance in field of operation.

A concern "is not dominant in its field of operation" 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 shall be 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.

(a) Any concern, in connection with subcontracts of $2,500 or less which relate to Government procurement, will be considered a small business concern if, including its affiliates, its number of employees does not exceed 500 persons.

(b) Any concern, in conneciton with subcontracts exceeding $2,500 which relate to Government procurement, will be considered a small business concern if it qualifies as such under § 1-1.701-1. § 1-1.701-5 Number of employees.

In connection with the determination of small business status, "number of employees" means the average employment of any concern, including the employees of its domestic and foreign affiliates, based on the number of persons employed on a full time, part time, temporary, or other basis during the pay period ending nearest the last day 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 last day of each month. If a concern has acquired an affiliate during the applicable accounting period, it is necessary in computing the applicant's number of employees to include the affiliate's number of employees during the entire applicable accounting period rather than only its employees during the period in which it has been an affiliate. The employees of a former affiliate are not included even though such concern had been an affili

ate during a portion of the applicable accounting period.

[36 F.R. 11438, June 12, 1971]

§ 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 (SIC) Manual, as amended, prepared and published by the Office of Management and Budget (formerly Bureau of the Budget), Executive Office of the President. (The Standard Industrial Classification (SIC) Manual, as amended, is used as a guide by the Small Business Administration in defining industries. Its use, therefore, is advisory and not mandatory.)

[36 F.R. 11438, June 12, 1971]

§ 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).

frigeration maintenance: Provided, however, That whenever the contracting offcer 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 order 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 § 1-2.205 of this chapter) 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. Prior to the issuance of invitations for bids and within the framework of the time available, contracting officers should make every reasonable effort to find additional small business sources (including notification to SBA where there is no local SBA representative), except where bidders lists are already excessively long and not all bidders thereon will be solicited as provided in subparagraph (3) of this paragraph and § 1-2.205-4 of this chapter.

(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.

(5) Procurement of property 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.

(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 fur nished.

(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).

(14) Small business firms seeking Government contracts, but found to lack qualifications as prime contractors, should be referred to the nearest SBA office for management assistance, counseling, financial assistance, and other programs of assistance as may be appropriate.

[29 F.R. 10104, July 24, 1964, as amended at 36 F.R. 3117, Feb. 18, 1971]

§ 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