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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; 37 FR 15372, Aug. 1, 1972) $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 de termining 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. 182 F.R. 2626. Feb. 8, 1967) 8 1-1.701-3 Dominance in field of
operation. A concern "ls 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 priinarily 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. § 1-1.701-4 Small business Government
subcontractors. (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. 8 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 ncarest 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 services, refuse collection services, safety has been an affiliate. The employees of a engineering services, messenger services, former affiliate are not included even grounds maintenance and landscaping though such concern had been an affili- services, and air-conditioning and reate during a portion of the applicable frigeration maintenance: Provided, howaccounting period.
ever, That whenever the contracting ofi(36 F.R. 11438, June 12, 1971)
cer determines prior to the issuance of
bids that the estimated value of one of § 1-1.701-6 Industry.
the foregoing services constitutes mare "Industry" means a grouping of estab than 50 percent of the estimated value lishments primarily engaged in similar of the entire contract, the contract shall lines of activity as listed and described not be classified as base maintenance in the Standard Industrial Classification but in the industry in which such sery(SIC) Manual, as amended, prepared ice is classified. and published by the Office of Manage 132 F.R. 2626, Feb. 8, 1967) ment and Budget (formerly Bureau of the Budget), Executive Office of the
§ 1-1.702 Small business policies. President. (The Standard Industrial (a) General policy. It is the policy of Classification (SIC) Manual, as the Government to aid, counsel, assist, amended, is used as a guide by the Small and protect, insofar as possible, the inBusiness Administration in defining in terests of small business concerns in dustries. Its use, therefore, is advisory order to preserve free competitive enterand not mandatory.)
prise; and to place with small business (36 F.R. 11438, June 12, 1971)
concerns a fair proportion of the total § 1-1.701-7
Government purchases and contracts for Certificate of competency.
property and services (including conA "certificate of competency" means a tracts for maintenance, repair, construccertificate issued by SBA pursuant to tion, and research and development). the authority contained in the Small (b) Specific policies. The following Business Act (15 U.S.C. 637(b) (7)) specific small business policies shall be stating that the holder of the certificate followed by procurement agencies in oris competent as to capacity and credit der to further the general policy stated to perform a specific Government pro In (a) of this § 1-1.702: curement contract. (Also see § 1-1.708.) (1) Small business concerns shall be § 1-1.701-8 Set-aside for small business.
afforded an equitable opportunity to
compete for prime contracts and subA set-aside for small business is the
contracts. act of reserving the entire amount (total
(2) Bidders mailing lists (see § 1-2.205 set-aside) or a portion (partial set
of this chapter) shall include all estabaside) of a procurement for the exclu
lished and potential small business supsive participation of small business con
pliers who have made acceptable applicerns. Set-asides may be made for indi
cation for inclusion or who appear from vidual items or for classes of items (class
other information (including recomset-asides).
mendations by the SBA representative) § 1-1.701-9 Small business restricted
to be qualified for inclusion therein. Prior advertising.
to the issuance of invitations for bids
and within the framework of the time Small business restricted advertising
available, contracting officers should Is a special method of negotiated pro
make every reasonable effort to find adcurement conducted in the same manner
ditional small business sources (includas for formal advertising, except that
ing notification to SBA where there is competition and awards are restricted
no local SBA representative), except to small business concerns.
where bidders lists are already excessively § 1-1.701-10 Base maintenance.
long and not all bidders thereon will be
solicited as provided in subparagraph (3) "Base maintenance" means furnishing
of this paragraph and § 1-2.205-4 of this at an installation within the several chapter. States, Puerto Rico, Virgin Islands, or the (3) Invitations for bids or requests for District of Columbia three or more of proposals shall be sent to all firms on the the following services: Janitorial and appropriate mailing list except that custodial services, protective guard sery- where less than a complete list is used Ices, commissary services, fire prevention pursuant to § 1-2.205-4, a pro rata num
ber of small business concerns shall be 1-1.703–1 Representation by bidder solicited.
or offeror. (4) Proposed procurements and con- (a) Except as provided in paragraph tract awards shall be publicized in the
(b) of this § 1-1.703-1, the contracting “Commerce Business Daily” in accord
officer shall accept as conclusive for the ance with Subpart 1-1.10.
purpose of a specific procurement a rep(5) Procurement of property and
resentation by a bidder or offeror that services shall be divided into reasonably
it is a small business concern as defined small lots (not less than economic pro- by SBA. duction runs) in order to permit bidding (b) In the submission of a bid or offer on quantities less than the total require
in connection with a specific procurements.
ment, a concern which meets the criteria (6) The maximum amount of time in § 1-1.701 and which either has not practicable (see $ 1.202-1) shall be al
been determined by the SBA to be inelilowed for preparation and submission of
gible, or has been determined to be inelibids and proposals.
gible but has subsequently been certified (7) Delivery schedules shall be estab
by the SBA as being a small business, may lished on a realistic basis which will en
represent that it is a small business. A courage small business participation to
representation by a bidder or offeror the extent consistent with the actual re
that it is a small business concern shall quirements of the Government.
be effective, even though questioned in (8) Applicable specifications, plans.
accordance with the terms of $ 1-1.703-2, and drawings either shall be furnished
unless the SBA, in response to such queswith invitations for bids and requests for
tion and pursuant to the procedures set proposals or, when not so furnished, in
forth in § 1-1.703-2, determines that the formation as to locations where they may bidder or offeror in question is not a small be obtained or examined shall be fur
business concern. The controlling point nished.
in time for a determination concerning (9) Procurements shall be set aside
the size status of a questioned bidder or for exclusive participation by small
offeror shall be the date of award, except business concerns in accordance with
that no bidder or offeror shall be eligible § 1-1.706.
for award as a small business concern (10) In the event of equal low bids,
unless it has in good faith represented itpreference shall be given to small busi
self as a small business prior to the openness concerns in accordance with
ing of bids or the closing date for the § 1-2.407-6.
submission of offers (see § 1-2.405(b) re(11) Subcontracting to small busi garding minor informalities and irreguness concerns shall be encouraged in larities in bids). In the absence of a writaccordance with § 1-1.710.
ten protest or other information which (12) Procurement agencies and SBA would cause him to question the veracity are responsible for consulting and co of the self-certification of the bidder or operating in carrying out the purposes of
offeror, the contracting officer shall acthe Small Business Act, as amended (15
cept the self-certification at face value U.S.C. 631-647), in accordance with
for the particular procurement involved.
If the contracting officer has cause to § 1-1.705.
question the veracity of a self-certifica(13) Placement of small purchases
tion and elects to do so, he shall refer with small business concerns shall be en
the eligibility issue to the SBA by filing couraged (see § 1-3.602).
a formal protest pursuant to § 1-1.703–2. (14) Small business firms seeking Gov.
If SBA determines that a concern is inernment contracts, but found to lack eligible as a small business concern for qualifications as prime contractors, the purpose of a particular procurement, should be referred to the nearest SBA that concern cannot thereafter become office for management assistance, coun eligible for the purpose of such procureseling, financial assistance, and other
ment by taking affirmative acts to conprograms of assistance as may be
stitute itself a small business. appropriate.
136 F.R. 16656, Sept. 25, 1971) (29 F.R. 10104, July 24, 1964, as amended at $ 1-1.703–2 Protest regarding small 36 F.R. 3117, Feb. 18, 1971)
business status. § 1-1.703 Determination of status as a (a) Any bidder or offeror or other insmall business concern.
terested party may challenge the small business status of any other bidder or after bid or proposal opening question offeror on a particular procurement by the small business status of any bidder sending or delivering a written protest, or offeror for the purpose of a particular as defined in paragraph (b) of this § 1 procurement by filing a written protest 1.703–2, to the contracting officer respon with the SBA district office in which the sible for the particular procurement. Any principal office of the protested concern. contracting officer who receives a timely not including its affiliates, is located. A protest, or who wishes to question the protest by a contracting officer shall be small business status of a bidder or timely for the purpose of the procureofferor himself, shall promptly forward ment in question whether filed before or such protest (or submit his protest) to after award. the SBA district office serving the geo (c) Upon receipt of a protest, the SBA graphical area in which the principal district director or his delegatee will office of the protested concern, not in immediately notify the contracting cluding its affiliates, is located.
officer and the protestant of the date (b) As used in this section, "protest" such protest was received and that the means a statement in writing from any size of the concern being protested is bidder or offeror on a particular procure being considered by SBA. The SBA disment (or from any other party interested trict director or his delegatee shall also therein) alleging that another bidder or immediately advise the protested bidofferor on such procurement is not a der or offeror of the receipt of the prosmall business concern. The statement test and shall forward to the protested shall contain the basis for the protest, to bidder or offeror a copy of the protest gether with specific detailed evidence and a blank SBA Form 355, Applicain support of the protestant's claim. tion for Small Business Determination, Such protest must be received by the by certified mail with return receipt recontracting officer prior to the close quested. Such bidder or offeror must. of business on the 5th working day within 3 working days after receiving after bid opening date or closing date the copy of the protest and the SBA for receipt of proposals, except that in Form 355, file the completed form as the case of negotiated procurements, directed by SBA, and must attach therea protest may be filed with the con- to a statement in answer to the allegatracting officer by any other offeror tions in the letter of protest, together or other interested party within 5 with evidence to support its position. working days after receipt from the If such bidder or offeror does not subcontracting officer of notification of the mit the completed SBA Form 355 with identity of the offeror being protested. A the attached statement and supporting protest received after such time limits evidence within the filing period proshall be timely for the purpose of the pro vided herein, or within any additional curement in question if, in the case of a period of time granted by SBA for cause. mailed protest, such protest is sent by the SBA will rule that the protested registered or certified mail and the post concern is other than a small concern. mark thereon indicates that the protest (d) SBA will, within 10 working days, would have been delivered within the if possible, after receipt of a protest, time limit but for delays beyond the con investigate and determine the small trol of the protestant or, in the case of a business status of the protested bidder telegraphed protest, the telegram date or offeror and, by certified mail with and time line indicates that the protest return receipt requested, notify the conwould have been delivered within the tracting officer, the protestant, and the time limit but for delays beyond the con protested bidder or offeror of its detrol of the protestant. An untimely pro cision. Such decision shall be final untest or one received after award of a con less appealed in accordance with tract, even though timely, shall be for paragraph (f) of this § 1-1.703–2 and warded to the SBA district office serving the procuring activity is notified of the the geographical area in which the prin appeal prior to award. If an award has cipal office of the protested concern, not been made prior to the time the conincluding its affiliates, is located. The tracting officer receives notice of the SBA will make a determination on the appeal, the contract awarded shall be protest but such determination shall not presumed to be valid and any determiapply to the procurement in question. nation rendered by SBA concerning the The contracting officer may at any time small business status of the concern
involved shall be considered in future procurements.
(e) Following receipt by the contracting officer of a protest as set forth in paragraphs (a) and (b) of this $ 11.703-2, procurement action by the procuring activity shall be suspended pending SBA's determination of the status of the protested bidder or offeror or the expiration of the 10-day period prescribed in paragraph (d) of this § 11.703-2, 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 protested bidder or offeror is a small business concern.
(f) (1) An appeal from a size determination made by an SBA Regional Director or his delegatee may be taken by: (i) Any concern or other interested party which has protested the small business status of another concern pursuant to paragraphs (a) and (b) of this § 11.703–2 and whose protest has been denied by the SBA Regional Director or his delegatee; (ii) any concern or other interested party which has been adversely affected by the decision of the SBA Regional Director or his delegatee; or (iii) the SBA Associate Administrator for the SBA program involved. Written notices of appeal shall be addressed to the Chairman, Size Appeals Board, Small Business Administration, Washington, DC 20416. An appeal from a decision concerning the small business status of a bidder or offeror involved in a pending procurement may be taken within 5 working days after receipt of a decision by an SBA Regional Director or his delegatee. Unless written notice of such an appeal is received by the SBA Size Appeals Board before the close of business on the fifth working day after receipt of the decision, the appellant will be deemed to have waived its rights of appeal insofar as the pending procurement is concerned.
(2) No particular form is prescribed for the notice of appeal. However, the appellant shall submit to the SBA Size Appeals Board an original and four legible copies of such notice and, to avoid time-consuming correspondence, the notice should include the following infor
mation: (i) Name and address of the concern on which the size determination was made; (ii) the character of the determination from which the appeal is taken and its date; (iii) if applicable, the IFB or contract number and date, and the name and address of the contracting officer; (iv) a concise and direct statement of the reasons why the decision of the SBA Regional Director or his delegatee is alleged to be erroneous; (v) documentary evidence in support of such allegations; and (vi) action sought by the appellant.
(3) The SBA Size Appeals Board shall promptly acknowledge receipt of the notice of appeal and shall send a copy of such notice to the appropriate SBA Regional Director or his delegatee and to the contracting officer (if a pending procurement is involved). If the appellant is not the concern whose size status is in question, the Size Appeals Board shall also send a copy of the notice of appeal to such concern. The Board shall also notify all known interested parties that the appeal has been filed. In its discretion, the Board may also provide any of such interested parties with copies of the appellant's notice of appeal, or parts thereof, when the Board determines that this would be in the interest of fairness or would assist in the performance of its functions. After an appeal has been filed, any other interested party may file with the Board a signed statement, together with four legible copies thereof, as to why the appeal should or should not be denied. Such statement and supporting evidence shall be mailed or delivered to the SBA Size Appeals Board within 5 days of receipt of appropriate notification of appeal or other action in the proceeding unless an extension is granted for cause by the Chairman of the Board. If the appellant is the concern whose size status is in question, the Board will provide copies of such statements and appropriate evidence submitted in connection with the appeal (or reconsideration thereof) to such appellant.
(4) The SBA Size Appeals Board will consider the appeal on the written submission of the parties. The Board, in its discretion, may also conduct an oral inquiry to assist it in arriving at the facts necessary for deciding the appeal. After consideration of all relevant information, the Board will promptly render a decision which will state the reason for such deci. sion. The decision of the SBA Size Ap