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Submitted URL: https://www.ecfr.gov/current/title-13/chapter-I/part-121#121.201
Effective URL: https://www.ecfr.gov/current/title-13/chapter-I/part-121
Submission: On May 09 via manual from US — Scanned from DE
Effective URL: https://www.ecfr.gov/current/title-13/chapter-I/part-121
Submission: On May 09 via manual from US — Scanned from DE
Form analysis 9 forms found in the DOM
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ECFR
THE ELECTRONIC CODE OF FEDERAL REGULATIONS
ENHANCED CONTENT :: CROSS REFERENCE
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ENHANCED CONTENT :: CROSS REFERENCE
TITLE 13
This content is from the eCFR and is authoritative but unofficial.
Displaying title 13, up to date as of 5/07/2024. Title 13 was last amended
5/02/2024.
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1. Title 13 —Business Credit and Assistance
2. Chapter I —Small Business Administration
3. Part 121
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* Table of Contents
ENHANCED CONTENT - TABLE OF CONTENTS
Part 121Small Business Size Regulations121.101 – 121.1206
Subpart ASize Eligibility Provisions and Standards121.101 – 121.1103
Provisions of General Applicability121.101 – 121.110
§ 121.101What are SBA size standards?§ 121.102How does SBA establish size
standards?§ 121.103How does SBA determine affiliation?§ 121.104How does SBA
calculate annual receipts?§ 121.105How does SBA define “business concern or
concern”?§ 121.106How does SBA calculate number of employees?§ 121.107How
does SBA determine a concern's “primary industry”?§ 121.108What are the
penalties for misrepresentation of size status?§ 121.109What is a small
business status advisory opinion?§ 121.110What must a concern do in order to
be identified as a small business concern in any Federal procurement
databases?
Size Standards Used To Define Small Business Concerns121.201
§ 121.201What size standards has SBA identified by North American Industry
Classification System codes?
Size Eligibility Requirements For SBA Financial Assistance121.301 – 121.305
§ 121.301What size standards and affiliation principles are applicable to
financial assistance programs?§ 121.302When does SBA determine the size
status of an applicant?§ 121.303What size procedures are used by SBA before
it makes a formal size determination?§ 121.304What are the size requirements
for refinancing an existing SBA loan?§ 121.305What size eligibility
requirements exist for obtaining financial assistance relating to particular
procurements?
Size Eligibility Requirements for Government Procurement121.401 – 121.412
§ 121.401What procurement programs are subject to size determinations?§
121.402What size standards are applicable to Federal Government Contracting
programs?§ 121.403Are SBA size determinations and NAICS code designations
binding on parties?§ 121.404When is the size status of a business concern
determined?§ 121.405May a business concern self-certify its small business
size status?§ 121.406How does a small business concern qualify to provide
manufactured products or other supply items under a small business set-aside,
service-disabled veteran-owned small business, HUBZone, WOSB or EDWOSB, or
8(a) contract?§ 121.407What are the size procedures for multiple item
procurements?§ 121.408What are the size procedures for SBA's Certificate of
Competency Program?§ 121.409What size standard applies in an unrestricted
procurement for Certificate of Competency purposes?§ 121.410What are the size
standards for SBA's Section 8(d) Subcontracting Program?§ 121.411What are the
size procedures for SBA's Section 8(d) Subcontracting Program?§ 121.412What
are the size procedures for partial small business set-asides?
Size Eligibility Requirements for Sales or Lease of Government
Property121.501 – 121.512
§ 121.501What programs for sales or leases of Government property are subject
to size determinations?§ 121.502What size standards are applicable to
programs for sales or leases of Government property?§ 121.503Are SBA size
determinations binding on parties?§ 121.504When does SBA determine the size
status of a business concern?§ 121.505What is the effect of a
self-certification?§ 121.506What definitions are important for sales or
leases of Government-owned timber?§ 121.507What are the size standards and
other requirements for the purchase of Government-owned timber (other than
Special Salvage Timber)?§ 121.508What are the size standards and other
requirements for the purchase of Government-owned Special Salvage Timber?§
121.509What is the size standard for leasing of Government land for coal
mining?§ 121.510What is the size standard for leasing of Government land for
uranium mining?§ 121.511What is the size standard for buying Government-owned
petroleum?§ 121.512What is the size standard for stockpile purchases?
Size Eligibility Requirements for the 8(a) Business Development
Program121.601 – 121.604
§ 121.601What is a small business for purposes of admission to SBA's 8(a)
Business Development program?§ 121.602At what point in time must a 8(a) BD
applicant be small?§ 121.603How does SBA determine whether a Participant is
small for a particular 8(a) BD subcontract?§ 121.604Are 8(a) BD Participants
considered small for purposes of other SBA assistance?
Size and Eligibility Requirements for the Small Business Innovation Research
(SBIR) and Small Business Technology Transfer (STTR) Programs121.701 –
121.705
§ 121.701What SBIR and STTR programs are subject to size and eligibility
determinations and what definitions are important?§ 121.702What size and
eligibility standards are applicable to the SBIR and STTR programs?§
121.703Are formal size determinations binding on parties?§ 121.704When does
SBA determine the size and eligibility status of a business concern?§
121.705Must a business concern self-certify its size and eligibility status?
Size Eligibility Requirements for Paying Reduced Patent Fees121.801 – 121.805
§ 121.801May patent fees be reduced if a concern is small?§ 121.802What size
standards are applicable to reduced patent fees programs?§ 121.803Are formal
size determinations binding on parties?§ 121.804When does SBA determine the
size status of a business concern?§ 121.805May a business concern
self-certify its size status?
Size Eligibility Requirements for Compliance With Programs of Other
Agencies121.901 – 121.904
§ 121.901Can other Government agencies obtain SBA size determinations?§
121.902What size standards are applicable to programs of other agencies?§
121.903How may an agency use size standards for its programs that are
different than those established by SBA?§ 121.904When does SBA determine the
size status of a business concern?
Procedures for Size Protests and Requests for Formal Size
Determinations121.1001 – 121.1010
§ 121.1001Who may initiate a size protest or request a formal size
determination?§ 121.1002Who makes a formal size determination?§ 121.1003Where
should a size protest be filed?§ 121.1004What time limits apply to size
protests?§ 121.1005How must a protest be filed with the contracting officer?§
121.1006When will a size protest be referred to an SBA Government Contracting
Area Office?§ 121.1007Must a protest of size status relate to a particular
procurement and be specific?§ 121.1008What occurs after SBA receives a size
protest or request for a formal size determination?§ 121.1009What are the
procedures for making the size determination?§ 121.1010How does a concern
become recertified as a small business?
Appeals of Size Determinations and NAICS Code Designations121.1101 – 121.1103
§ 121.1101Are formal size determinations subject to appeal?§ 121.1102Are
NAICS code designations subject to appeal?§ 121.1103What are the procedures
for appealing a NAICS code or size standard designation?
Subpart BOther Applicable Provisions121.1201 – 121.1206
Waivers of the Nonmanufacturer Rule for Classes of Products and Individual
Contracts121.1201 – 121.1206
§ 121.1201What is the Nonmanufacturer Rule?§ 121.1202When will a waiver of
the Nonmanufacturer Rule be granted for a class of products?§ 121.1203When
will a waiver of the Nonmanufacturer Rule be granted for an individual
contract?§ 121.1204What are the procedures for requesting and granting
waivers?§ 121.1205How is a list of previously granted class waivers
obtained?§ 121.1206How will potential offerors be notified of applicable
waivers?
Appendix A to Part 121
Paycheck Protection Program Sample Addendum A
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URL https://www.ecfr.gov/current/title-13/part-121 Citation 13 CFR Part 121
Agency Small Business Administration
--------------------------------------------------------------------------------
Part 121
AUTHORITY:
15 U.S.C. 632, 634(b)(6), 636(a)(36), 662, and 694a(9).
SOURCE:
61 FR 3286, Jan. 31, 1996, unless otherwise noted.
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PART 121—SMALL BUSINESS SIZE REGULATIONS
AUTHORITY:
15 U.S.C. 632, 634(b)(6), 636(a)(36), 662, and 694a(9).
SOURCE:
61 FR 3286, Jan. 31, 1996, unless otherwise noted.
EDITORIAL NOTE
EDITORIAL NOTE:
Nomenclature changes to part 121 appear at 72 FR 50039 and 50040, Aug. 30, 2007.
SUBPART A—SIZE ELIGIBILITY PROVISIONS AND STANDARDS
PROVISIONS OF GENERAL APPLICABILITY
§ 121.101 WHAT ARE SBA SIZE STANDARDS?
(a) SBA's size standards define whether a business entity is small and, thus,
eligible for Government programs and preferences reserved for “small business”
concerns. Size standards have been established for types of economic activity,
or industry, generally under the North American Industry Classification System
(NAICS).
(b) NAICS is described in the North American Industry Classification
Manual-United States, which is available from the National Technical Information
Service, 5285 Port Royal Road, Springfield, VA 22161; by calling 1(800) 553-6847
or 1(703) 605-6000; or via the Internet at
http://www.ntis.gov/products/naics.aspx. The manual includes definitions for
each industry, tables showing relationships between 1997 NAICS and 1987 SICs,
and a comprehensive index. NAICS assigns codes to all economic activity within
twenty broad sectors. Section 121.201 provides a full table of small business
size standards matched to the U.S. NAICS industry codes. A full table matching a
size standard with each NAICS Industry or U.S. Industry code is also published
annually by SBA in the Federal Register.
[65 FR 30840, May 15, 2000, as amended at 67 FR 52602, Aug. 13, 2002; 74 FR
46313, Sept. 9, 2009]
§ 121.102 HOW DOES SBA ESTABLISH SIZE STANDARDS?
(a) SBA considers economic characteristics comprising the structure of an
industry, including degree of competition, average firm size, start-up costs and
entry barriers, and distribution of firms by size. It also considers
technological changes, competition from other industries, growth trends,
historical activity within an industry, unique factors occurring in the industry
which may distinguish small firms from other firms, and the objectives of its
programs and the impact on those programs of different size standard levels.
(b) As part of its review of a size standard, SBA will investigate if any
concern at or below a particular standard would be dominant in the industry. SBA
will take into consideration market share of a concern and other appropriate
factors which may allow a concern to exercise a major controlling influence on a
national basis in which a number of business concerns are engaged. Size
standards seek to ensure that a concern that meets a specific size standard is
not dominant in its field of operation.
(c) As part of its review of size standards, SBA's Office of Size Standards will
examine the impact of inflation on monetary-based size standards (e.g.,
receipts, net income, assets) at least once every five years and submit a report
to the Administrator or designee. If SBA finds that inflation has significantly
eroded the value of the monetary-based size standards, it will issue a proposed
rule to increase size standards.
(d) Please address any requests to change existing size standards or establish
new ones for emerging industries to the Division Chief, Office of Size
Standards, Small Business Administration, 409 3rd Street, SW., Washington, DC
20416.
(e) When SBA publishes a final rule in the Federal Register revising, modifying,
or establishing a size standard, SBA will include in the final rule, an
instruction that interested persons may file a petition for reconsideration of a
revised, modified, or established size standard at SBA's Office of Hearings and
Appeals (OHA) within 30 calendar days after publication of the final rule in
accordance with 15 U.S.C. 632(a)(9) and part 134, subpart I of this chapter. The
instruction will provide the mailing address, facsimile number, and email
address of OHA.
(f) Within 14 calendar days after a petition for reconsideration of a size
standard is filed, unless it appears OHA will dismiss the petition for
reconsideration, SBA will publish a document in the Federal Register announcing
the size standard or standards that have been challenged, the Federal Register
citation of the final rule, the assigned OHA docket number, and the date of the
close of record. The document will further state that interested parties may
contact OHA to intervene in the dispute pursuant to § 134.906 of this chapter.
(g) Where OHA grants a petition for reconsideration of a size standard that had
been revised or modified, OHA will remand the case to SBA's Office of Size
Standards for further action in accordance with § 134.916(a) of this chapter.
[61 FR 3286, Jan. 31, 1996, as amended at 67 FR 3045, Jan. 23, 2002; 82 FR
25506, June 2, 2017]
§ 121.103 HOW DOES SBA DETERMINE AFFILIATION?
(a) General Principles of Affiliation.
(1) Concerns and entities are affiliates of each other when one controls or has
the power to control the other, or a third party or parties controls or has the
power to control both. It does not matter whether control is exercised, so long
as the power to control exists.
(2) SBA considers factors such as ownership, management, previous relationships
with or ties to another concern, and contractual relationships, in determining
whether affiliation exists.
(3) Control may be affirmative or negative. Negative control includes, but is
not limited to, instances where a minority shareholder has the ability, under
the concern's charter, by-laws, or shareholder's agreement, to prevent a quorum
or otherwise block action by the board of directors or shareholders.
(4) Affiliation may be found where an individual, concern, or entity exercises
control indirectly through a third party.
(5) In determining whether affiliation exists, SBA will consider the totality of
the circumstances, and may find affiliation even though no single factor is
sufficient to constitute affiliation.
(6) In determining the concern's size, SBA counts the receipts, employees, or
other measure of size of the concern whose size is at issue and all of its
domestic and foreign affiliates, regardless of whether the affiliates are
organized for profit.
(7) For SBA's Small Business Innovation Research (SBIR) and Small Business
Technology Transfer (STTR) programs, the bases for affiliation are set forth in
§ 121.702.
(8) For applicants in SBA's Business Loan, Disaster Loan, and Surety Bond
Guarantee Programs, the size standards and bases for affiliation are set forth
in § 121.301.
(b) Exceptions to affiliation coverage.
(1) Business concerns owned in whole or substantial part either by investment
companies licensed, or by development companies qualifying, under the Small
Business Investment Act of 1958, as amended, or by investment companies to which
a Reinvestor SBIC (within the meaning of 13 CFR 107.720(a)(2)) has provided a
meaningful percentage of Equity Capital are not considered affiliates of such
investment companies or development companies.
(2)
(i) Business concerns owned and controlled by Indian Tribes, Alaska Native
Corporations (ANCs) organized pursuant to the Alaska Native Claims Settlement
Act (43 U.S.C. 1601 et seq.), Native Hawaiian Organizations (NHOs), Community
Development Corporations (CDCs) authorized by 42 U.S.C. 9805, or wholly-owned
entities of Indian Tribes, ANCs, NHOs, or CDCs are not considered affiliates of
such entities.
(ii) Business concerns owned and controlled by Indian Tribes, ANCs, NHOs, CDCs,
or wholly-owned entities of Indian Tribes, ANCs, NHOs, or CDCs, are not
considered to be affiliated with other concerns owned by these entities because
of their common ownership or common management. In addition, affiliation will
not be found based upon the performance of common administrative services so
long as adequate payment is provided for those services. Affiliation may be
found for other reasons.
(A) Common administrative services which are subject to the exception to
affiliation include, bookkeeping, payroll, recruiting, other human resource
support, cleaning services, and other duties which are otherwise unrelated to
contract performance or management and can be reasonably pooled or otherwise
performed by a holding company, parent entity, or sister business concern
without interfering with the control of the subject firm.
(B) Contract administration services include both services that could be
considered “common administrative services” under the exception to affiliation
and those that could not.
(1) Contract administration services that encompass actual and direct day-to-day
oversight and control of the performance of a contract/project are not shared
common administrative services, and would include tasks or functions such as
negotiating directly with the government agency regarding proposal terms,
contract terms, scope and modifications, project scheduling, hiring and firing
of employees, and overall responsibility for the day-to-day and overall project
and contract completion.
(2) Contract administration services that are administrative in nature may
constitute administrative services that can be shared, and would fall within the
exception to affiliation. These administrative services include tasks such as
record retention not related to a specific contract (e.g., employee time and
attendance records), maintenance of databases for awarded contracts, monitoring
for regulatory compliance, template development, and assisting accounting with
invoice preparation as needed.
(C) Business development may include both services that could be considered
“common administrative services” under the exception to affiliation and those
that could not. Efforts at the holding company or parent level to identify
possible procurement opportunities for specific subsidiary companies may
properly be considered “common administrative services” under the exception to
affiliation. However, at some point the opportunity identified by the holding
company's or parent entity's business development efforts becomes concrete
enough to assign to a subsidiary and at that point the subsidiary must be
involved in the business development efforts for such opportunity. At the
proposal or bid preparation stage of business development, the appropriate
subsidiary company for the opportunity has been identified and a representative
of that company must be involved in preparing an appropriate offer. This does
not mean to imply that one or more representatives of a holding company or
parent entity cannot also be involved in preparing an offer. They may be
involved in assisting with preparing the generic part of an offer, but the
specific subsidiary that intends to ultimately perform the contract must control
the technical and contract specific portions of preparing an offer. In addition,
once award is made, employee assignments and the logistics for contract
performance must be controlled by the specific subsidiary company and should not
be performed at a holding company or parent entity level.
(3) Business concerns which are part of an SBA approved pool of concerns for a
joint program of research and development or for defense production as
authorized by the Small Business Act are not affiliates of one another because
of the pool.
(4) Business concerns which lease employees from concerns primarily engaged in
leasing employees to other businesses or which enter into a co-employer
arrangement with a Professional Employer Organization (PEO) are not affiliated
with the leasing company or PEO solely on the basis of a leasing agreement.
(5) For financial, management or technical assistance under the Small Business
Investment Act of 1958, as amended, (an applicant is not affiliated with the
investors listed in paragraphs (b)(5) (i) through (vi) of this section.
(i) Venture capital operating companies, as defined in the U.S. Department of
Labor regulations found at 29 CFR 2510.3-101(d);
(ii) Employee benefit or pension plans established and maintained by the Federal
government or any state, or their political subdivisions, or any agency or
instrumentality thereof, for the benefit of employees;
(iii) Employee benefit or pension plans within the meaning of the Employee
Retirement Income Security Act of 1974, as amended (29 U.S.C. 1001, et seq.);
(iv) Charitable trusts, foundations, endowments, or similar organizations exempt
from Federal income taxation under section 501(c) of the Internal Revenue Code
of 1986, as amended (26 U.S.C. 501(c));
(v) Investment companies registered under the Investment Company Act of 1940, as
amended (1940 Act) (15 U.S.C. 80a-1, et seq.); and
(vi) Entities determined by SBA to be Traditional Investment Companies under 13
CFR 107.150(b)(2) and private funds exempt from registration under section
3(c)(1) or 3(c)(7) of the 1940 Act.
(6) A firm that has an SBA-approved mentor-protégé agreement authorized under §
125.9 of this chapter is not affiliated with its mentor or protégé firm solely
because the protégé firm receives assistance from the mentor under the
agreement. Similarly, a protégé firm is not affiliated with its mentor solely
because the protégé firm receives assistance from the mentor under a federal
mentor-protégé program where an exception to affiliation is specifically
authorized by statute or by SBA under the procedures set forth in § 121.903.
Affiliation may be found in either case for other reasons as set forth in this
section.
(7) The member shareholders of a small agricultural cooperative, as defined in
the Agricultural Marketing Act (12 U.S.C. 1141j), are not considered affiliated
with the cooperative by virtue of their membership in the cooperative.
(8) These exceptions to affiliation and any others set forth in § 121.702 apply
for purposes of SBA's SBIR and STTR programs.
(9) In the case of a solicitation for a bundled contract or a Multiple Award
Contract with a value in excess of the agency's substantial bundling threshold,
a small business contractor may enter into a Small Business Teaming Arrangement
with one or more small business subcontractors and submit an offer as a small
business without regard to affiliation, so long as each team member is small for
the size standard assigned to the contract or subcontract. The agency shall
evaluate the offer in the same manner as other offers with due consideration of
the capabilities of the subcontractors.
(10)
(i) The relationship of a faith-based organization to another organization is
not considered an affiliation with the other organization under this subpart if
the relationship is based on a religious teaching or belief or otherwise
constitutes a part of the exercise of religion. In addition, the eligibility
criteria set forth in 15 U.S.C. 636(a)(36)(D) are satisfied for any faith-based
organization having not more than 500 employees (including individuals employed
on a full-time, part-time, or other basis) that pays Federal payroll taxes using
its own Internal Revenue Service Employer Identification Number (EIN) or that
would support a deduction under the second sentence of 26 U.S.C. 512(b)(12) if
the organization generated unrelated business taxable income. For purposes of
this paragraph (b)(10), the term “faith-based organization” includes, but is not
limited to, any organization associated with a church or convention or
association of churches within the meaning of 26 U.S.C. 414(e)(3)(D). The term
“organization” has the meaning given in 26 U.S.C. 414(m)(6)(A). The terms
“church” and “convention or association of churches” have the same meaning that
they have in 26 U.S.C. 414.
(ii) No specific process or filing is necessary to claim the benefit of the
exemption in paragraph (b)(10)(i) of this section. In applying for a loan under
the Paycheck Protection Program (PPP), a faith-based organization may make all
necessary certifications with respect to common ownership or management or other
eligibility criteria based upon affiliation, if the organization would be an
eligible borrower but for application of SBA affiliation rules and if the
organization falls within the terms of the exemption described in paragraph
(b)(10)(i) of this section. If a faith-based organization indicates any
relationship that may pertain to affiliation, such as ownership of, ownership
by, or common management with any other organization, on or in connection with a
loan application, and if the faith-based organization applying for a loan falls
within the terms of the exemption described in paragraph (b)(10)(i) of this
section with respect to that relationship, the faith-based organization may
indicate on a separate sheet that it is entitled to the exemption. That sheet
may be identified as addendum A, and no further listing of the other
organization or description of the relationship to that organization is
required. See appendix A to this part for a sample “Addendum A”, but the format
need not be used as long as the substance is the same.
(c) Affiliation based on stock ownership.
(1) A person (including any individual, concern or other entity) that owns, or
has the power to control, 50 percent or more of a concern's voting stock, or a
block of voting stock which is large compared to other outstanding blocks of
voting stock, controls or has the power to control the concern.
(2) If two or more persons (including any individual, concern or other entity)
each owns, controls, or has the power to control less than 50 percent of a
concern's voting stock, and such minority holdings are equal or approximately
equal in size, and the aggregate of these minority holdings is large as compared
with any other stock holding, SBA presumes that each such person controls or has
the power to control the concern whose size is at issue. This presumption may be
rebutted by a showing that such control or power to control does not in fact
exist.
(3) If a concern's voting stock is widely held and no single block of stock is
large as compared with all other stock holdings, the concern's Board of
Directors and CEO or President will be deemed to have the power to control the
concern in the absence of evidence to the contrary.
(d) Affiliation arising under stock options, convertible securities, and
agreements to merge.
(1) In determining size, SBA considers stock options, convertible securities,
and agreements to merge (including agreements in principle) to have a present
effect on the power to control a concern. SBA treats such options, convertible
securities, and agreements as though the rights granted have been exercised.
(2) Agreements to open or continue negotiations towards the possibility of a
merger or a sale of stock at some later date are not considered “agreements in
principle” and are thus not given present effect.
(3) Options, convertible securities, and agreements that are subject to
conditions precedent which are incapable of fulfillment, speculative,
conjectural, or unenforceable under state or Federal law, or where the
probability of the transaction (or exercise of the rights) occurring is shown to
be extremely remote, are not given present effect.
(4) An individual, concern or other entity that controls one or more other
concerns cannot use options, convertible securities, or agreements to appear to
terminate such control before actually doing so. SBA will not give present
effect to individuals', concerns' or other entities' ability to divest all or
part of their ownership interest in order to avoid a finding of affiliation.
(e) Affiliation based on common management. Affiliation arises where one or more
officers, directors, managing members, or partners who control the board of
directors and/or management of one concern also control the board of directors
or management of one or more other concerns.
(f) Affiliation based on identity of interest. Affiliation may arise among two
or more persons with an identity of interest. Individuals or firms that have
identical or substantially identical business or economic interests (such as
family members, individuals or firms with common investments, or firms that are
economically dependent through contractual or other relationships) may be
treated as one party with such interests aggregated. Where SBA determines that
such interests should be aggregated, an individual or firm may rebut that
determination with evidence showing that the interests deemed to be one are in
fact separate.
(1) Firms owned or controlled by married couples, parties to a civil union,
parents, children, and siblings are presumed to be affiliated with each other if
they conduct business with each other, such as subcontracts or joint ventures or
share or provide loans, resources, equipment, locations or employees with one
another. This presumption may be overcome by showing a clear line of fracture
between the concerns. Other types of familial relationships are not grounds for
affiliation on family relationships.
(2) SBA may presume an identity of interest based upon economic dependence if
the concern in question derived 70% or more of its receipts from another concern
over the previous three fiscal years.
(i) This presumption may be rebutted by a showing that despite the contractual
relations with another concern, the concern at issue is not solely dependent on
that other concern, such as where the concern has been in business for a short
amount of time and has only been able to secure a limited number of contracts or
where the contractual relations do not restrict the concern in question from
selling the same type of products or services to another purchaser.
(ii) A business concern owned and controlled by an Indian Tribe, ANC, NHO, CDC,
or by a wholly-owned entity of an Indian Tribe, ANC, NHO, or CDC, is not
considered to be affiliated with another concern owned by that entity based
solely on the contractual relations between the two concerns.
EXAMPLE 1 TO PARAGRAPH (F).
Firm A has been in business for 9 months and has two contracts. Contract 1 is
with Firm B and is valued at $900,000 and Contract 2 is with Firm C and is
valued at $200,000. Thus, Firm B accounts for over 70% of Firm A's receipts.
Absent other connections between A and B, the presumption of affiliation between
A and B is rebutted because A is a new firm.
EXAMPLE 2 TO PARAGRAPH (F).
Firm A has been in business for five years and has approximately 200 contracts.
Of those contracts, 195 are with Firm B. The value of Firm A's contracts with
Firm B is greater than 70% of its revenue over the previous three years. Unless
Firm A can show that its contractual relations with Firm B do not restrict it
from selling the same type of products or services to another purchaser, SBA
would most likely find the two firms affiliated.
(g) Affiliation based on the newly organized concern rule. Except as provided in
§ 124.109(c)(4)(iii), affiliation may arise where former or current officers,
directors, principal stockholders, managing members, or key employees of one
concern organize a new concern in the same or related industry or field of
operation, and serve as the new concern's officers, directors, principal
stockholders, managing members, or key employees, and the one concern is
furnishing or will furnish the new concern with contracts, financial or
technical assistance, indemnification on bid or performance bonds, and/or other
facilities, whether for a fee or otherwise. A concern may rebut such an
affiliation determination by demonstrating a clear line of fracture between the
two concerns. A “key employee” is an employee who, because of his/her position
in the concern, has a critical influence in or substantive control over the
operations or management of the concern.
(h) Affiliation based on joint ventures. A joint venture is an association of
individuals and/or concerns with interests in any degree or proportion intending
to engage in and carry out business ventures for joint profit over a two-year
period, for which purpose they combine their efforts, property, money, skill, or
knowledge, but not on a continuing or permanent basis for conducting business
generally. This means that a specific joint venture generally may not be awarded
contracts beyond a two-year period, starting from the date of the award of the
first contract, without the partners to the joint venture being deemed
affiliated for the joint venture. However, a joint venture may be issued an
order under a previously awarded contract beyond the two-year period. Once a
joint venture receives a contract, it may submit additional offers for a period
of two years from the date of that first award. An individual joint venture may
be awarded one or more contracts after that two-year period as long as it
submitted an offer prior to the end of that two-year period. SBA will find joint
venture partners to be affiliated, and thus will aggregate their receipts and/or
employees in determining the size of the joint venture for all small business
programs, where the joint venture submits an offer after two years from the date
of the first award. The same two (or more) entities may create additional joint
ventures, and each new joint venture may submit offers for a period of two years
from the date of the first contract to the joint venture without the partners to
the joint venture being deemed affiliates. At some point, however, such a
longstanding inter-relationship or contractual dependence between the same joint
venture partners may lead to a finding of general affiliation between and among
them. SBA may also determine that the relationship between a prime contractor
and its subcontractor is a joint venture pursuant to paragraph (h)(3) of this
section. For purposes of this paragraph (h), contract refers to prime contracts,
novations of prime contracts, and any subcontract in which the joint venture is
treated as a similarly situated entity as the term is defined in part 125 of
this chapter.
EXAMPLE 1 TO PARAGRAPH (H) INTRODUCTORY TEXT.
Joint Venture AB receives a contract on April 2, year 1. Joint Venture AB may
receive additional contracts through April 2, year 3. On June 6, year 2, Joint
Venture AB submits an offer for Solicitation 1. On July 13, year 2, Joint
Venture AB submits an offer for Solicitation 2. On May 27, year 3, Joint Venture
AB is found to be the apparent successful offeror for Solicitation 1. On July
22, year 3, Joint Venture AB is found to be the apparent successful offeror for
Solicitation 2. Even though the award of the two contracts emanating from
Solicitations 1 and 2 would occur after April 2, year 3, Joint Venture AB may
receive those awards without causing general affiliation between its joint
venture partners because the offers occurred prior to the expiration of the
two-year period.
EXAMPLE 2 TO PARAGRAPH (H) INTRODUCTORY TEXT.
Joint Venture XY receives a contract on August 10, year 1. It may receive two
additional contracts through August 10, year 3. On March 19, year 3, XY receives
its fifth contract. It receives no other contract awards through August 10, year
3 and has submitted no additional offers prior to August 10, year 3. Because two
years have passed since the date of the first contract award, after August 10,
year 3, XY cannot receive an additional contract award. The individual parties
to XY must form a new joint venture if they want to seek and be awarded
additional contracts as a joint venture.
EXAMPLE 3 TO PARAGRAPH (H) INTRODUCTORY TEXT.
Joint Venture XY receives a contract on December 15, year 1. On May 22, year 3
XY submits an offer for Solicitation S. On December 8, year 3, XY submits a
novation package for contracting officer approval for Contract C. In January,
year 4 XY is found to be the apparent successful offeror for Solicitation S and
the relevant contracting officer seeks to novate Contract C to XY. Because both
the offer for Solicitation S and the novation package for Contract C were
submitted prior to December 15 year 3, both contract award relating to
Solicitation S and novation of Contract C may occur without a finding of general
affiliation.
(1) Form of joint venture. A joint venture: must be in writing; must do business
under its own name and be identified as a joint venture in the System for Award
Management (SAM) for the award of a prime contract or agreement; and may be in
the form of a formal or informal partnership or exist as a separate limited
liability company or other separate legal entity.
(i) If a joint venture exists as a formal separate legal entity, it cannot be
populated with individuals intended to perform contracts awarded to the joint
venture for any contract or agreement which is set aside or reserved for small
business, unless all parties to the joint venture are similarly situated as that
term is defined in part 125 of this chapter (i.e., the joint venture may have
its own separate employees to perform administrative functions, including one or
more Facility Security Officer(s), but may not have its own separate employees
to perform contracts awarded to the joint venture).
(ii) A populated joint venture that is not comprised entirely of similarly
situated entities will be ineligible for any contract or agreement which is set
aside or reserved for small business.
(iii) In determining the size of a populated joint venture (whether one
involving similarly situated entities or not), SBA will aggregate the revenues
or employees of all partners to the joint venture.
(2) Size of joint ventures.
(i) A joint venture of two or more business concerns may submit an offer as a
small business for a Federal procurement, subcontract or sale so long as each
concern is small under the size standard corresponding to the NAICS code
assigned to the contract. For a competitive 8(a) procurement, a joint venture
between an 8(a) Participant and one or more other small business concerns
(including two firms approved by SBA to be a mentor and protégé under § 125.9 of
this chapter) must also meet the requirements of § 124.513(c) and (d) of this
chapter as of the date of the final proposal revision for negotiated
acquisitions and final bid for sealed bidding in order to be eligible for award.
(ii) Two firms approved by SBA to be a mentor and protégé under § 125.9 of this
chapter may joint venture as a small business for any Federal government prime
contract or subcontract, provided the protégé qualifies as small for the size
standard corresponding to the NAICS code assigned to the procurement, and the
joint venture meets the requirements of § 124.513 (c) and (d), § 125.8(b) and
(c), § 128.402(c) and (d), § 126.616(c) and (d), or § 127.506(c) and (d) of this
chapter, as appropriate. Except for sole source 8(a) awards, the joint venture
must meet the requirements of § 124.513(c) and (d), § 125.8(b) and (c), §
125.18(b)(2) and (3), § 126.616(c) and (d), or § 127.506(c) and (d) of this
chapter, as appropriate, as of the date of the final proposal revision for
negotiated acquisitions and final bid for sealed bidding. For a sole source 8(a)
award, the joint venture must demonstrate that it meets the requirements of §
124.513(c) and (d) prior to the award of the contract.
(3) Ostensible subcontractors. A contractor and its ostensible subcontractor are
treated as joint venturers for size determination purposes. An ostensible
subcontractor is a subcontractor that is not a similarly situated entity, as
that term is defined in § 125.1 of this chapter, and performs primary and vital
requirements of a contract, or of an order, or is a subcontractor upon which the
prime contractor is unusually reliant. As long as each concern is small under
the size standard corresponding to the NAICS code assigned to the contract (or
the prime contractor is small if the subcontractor is the SBA-approved mentor to
the prime contractor), the arrangement will qualify as a small business.
(i) All aspects of the relationship between the prime and subcontractor are
considered, including, but not limited to, the terms of the proposal (such as
contract management, transfer of the subcontractor's incumbent managers,
technical responsibilities, and the percentage of subcontracted work),
agreements between the prime and subcontractor (such as bonding assistance or
the teaming agreement), whether the subcontractor is the incumbent contractor
and is ineligible to submit a proposal because it exceeds the applicable size
standard for that solicitation, and whether the prime contractor relies solely
on the subcontractor's experience because it lacks any relevant experience of
its own. No one factor is determinative.
(ii) A prime contractor may use the experience and past performance of a
subcontractor to enhance or strengthen its offer, including that of an incumbent
contractor. It is only where that subcontractor will perform primary and vital
requirements of a contract or order, or the prime contractor is unusually
reliant on the subcontractor, that SBA will find the subcontractor to be an
ostensible subcontractor.
(iii) In the case of a contract or order set-aside or reserved for small
business for services, specialty trade construction or supplies, SBA will find
that a small business prime contractor is performing the primary and vital
requirements of the contract or order, and is not unduly reliant on one or more
subcontractors that are not small businesses, where the prime contractor can
demonstrate that it, together with any subcontractors that qualify as small
businesses, will meet the limitations on subcontracting provisions set forth in
§ 125.6 of this chapter.
(iv) In a general construction contract, the primary and vital requirements of
the contract are the management, supervision and oversight of the project,
including coordinating the work of various subcontractors, not the actual
construction work performed.
(4) Receipts/employees attributable to joint venture partners. For size
purposes, a concern must include in its receipts its proportionate share of
joint venture receipts. Proportionate receipts do not include proceeds from
transactions between the concern and its joint ventures (e.g., subcontracts from
a joint venture entity to joint venture partners) already accounted for in the
concern's tax return. In determining the number of employees, a concern must
include in its total number of employees its proportionate share of individuals
employed by the joint venture. For the calculation of receipts, the appropriate
proportionate share is the same percentage of receipts or employees as the joint
venture partner's percentage share of the work performed by the joint venture.
For a populated joint venture (where work is performed by the joint venture
entity itself and not by the individual joint venture partners) the appropriate
share is the same percentage as the joint venture partner's percentage ownership
share in the joint venture. For the calculation of employees, the appropriate
share is the same percentage of employees as the joint venture partner's
percentage ownership share in the joint venture, after first subtracting any
joint venture employee already accounted for in one of the partner's employee
counts.
(5) Facility security clearances. A joint venture may be awarded a contract
requiring a facility security clearance where either the joint venture itself or
the individual partner(s) to the joint venture that will perform the necessary
security work has (have) a facility security clearance.
(i) Where a facility security clearance is required to perform primary and vital
requirements of a contract, the lead small business partner to the joint venture
must possess the required facility security clearance.
(ii) Where the security portion of the contract requiring a facility security
clearance is ancillary to the principal purpose of the procurement, the partner
to the joint venture that will perform that work must possess the required
facility security clearance.
(i) Affiliation based on franchise and license agreements. The restraints
imposed on a franchisee or licensee by its franchise or license agreement
relating to standardized quality, advertising, accounting format and other
similar provisions, generally will not be considered in determining whether the
franchisor or licensor is affiliated with the franchisee or licensee provided
the franchisee or licensee has the right to profit from its efforts and bears
the risk of loss commensurate with ownership. Affiliation may arise, however,
through other means, such as common ownership, common management or excessive
restrictions upon the sale of the franchise interest.
[61 FR 3286, Jan. 31, 1996]
EDITORIAL NOTE
EDITORIAL NOTE:
For Federal Register citations affecting § 121.103, see the List of CFR Sections
Affected, which appears in the Finding Aids section of the printed volume and at
www.govinfo.gov.
§ 121.104 HOW DOES SBA CALCULATE ANNUAL RECEIPTS?
(a) Receipts means all revenue in whatever form received or accrued from
whatever source, including from the sales of products or services, interest,
dividends, rents, royalties, fees, or commissions, reduced by returns and
allowances. Generally, receipts are considered “total income” (or in the case of
a sole proprietorship “gross income”) plus “cost of goods sold” as these terms
are defined and reported on Internal Revenue Service (IRS) tax return forms
(such as Form 1120 for corporations; Form 1120S for S corporations; Form 1120,
Form 1065 or Form 1040 for LLCs; Form 1065 for partnerships; Form 1040, Schedule
F for farms; Form 1040, Schedule C for other sole proprietorships). Receipts do
not include net capital gains or losses; taxes collected for and remitted to a
taxing authority if included in gross or total income, such as sales or other
taxes collected from customers and excluding taxes levied on the concern or its
employees; proceeds from transactions between a concern and its domestic or
foreign affiliates; and amounts collected for another by a travel agent, real
estate agent, advertising agent, conference management service provider, freight
forwarder or customs broker. For size determination purposes, the only
exclusions from receipts are those specifically provided for in this paragraph.
All other items, such as subcontractor costs, reimbursements for purchases a
contractor makes at a customer's request, investment income, and employee-based
costs such as payroll taxes, may not be excluded from receipts.
(1) The Federal income tax return and any amendments filed with the IRS on or
before the date of self-certification must be used to determine the size status
of a concern. SBA will not use tax returns or amendments filed with the IRS
after the initiation of a size determination.
(2) When a concern has not filed a Federal income tax return with the IRS for a
fiscal year which must be included in the period of measurement, SBA will
calculate the concern's annual receipts for that year using any other available
information, such as the concern's regular books of account, audited financial
statements, or information contained in an affidavit by a person with personal
knowledge of the facts.
(b) Completed fiscal year means a taxable year including any short year.
“Taxable year” and “short year” have the meanings attributed to them by the IRS.
(c) Period of measurement.
(1) Except for the Business Loan, Disaster Loan, Surety Bond Guarantee, and
Small Business Investment Company (SBIC) Programs, annual receipts of a concern
that has been in business for 5 or more completed fiscal years means the total
receipts of the concern over its most recently completed 5 fiscal years divided
by 5.
(2) Except for the Business Loan, Disaster Loan Programs, Surety Bond Guarantee,
and SBIC Programs, annual receipts of a concern which has been in business for
less than 5 complete fiscal years means the total receipts for the period the
concern has been in business divided by the number of weeks in business,
multiplied by 52.
(3) Except for the Business Loan, Disaster Loan, Surety Bond Guarantee, and SBIC
Programs, where a concern has been in business 5 or more complete fiscal years
but has a short year as one of the years within its period of measurement,
annual receipts means the total receipts for the short year and the 4 full
fiscal years divided by the total number of weeks in the short year and the 4
full fiscal years, multiplied by 52.
(4) For the Business Loan, Disaster Loan, Surety Bond Guarantee, and SBIC
Programs, a concern that has been in business for three or more completed fiscal
years may elect to calculate annual receipts using either the total receipts of
the concern over its most recently completed 5 fiscal years divided by 5, or the
total receipts of the concern over its most recently completed 3 fiscal years
divided by 3. Annual receipts of a concern which has been in business for less
than three complete fiscal years means the total receipts for the period the
concern has been in business divided by the number of weeks in business,
multiplied by 52. Where a concern has been in business three or more complete
fiscal years but has a short year as one of the years within its period of
measurement, annual receipts means the total receipts for the short year and the
two full fiscal years divided by the total number of weeks in the short year and
the two full fiscal years, multiplied by 52. For the purposes of this
subsection, the Business Loan Programs consist of the 7(a) Loan Program, the
Microloan Program, the Intermediary Lending Pilot Program, and the Development
Company Loan Program (“504 Loan Program”). The Disaster Loan Programs consist of
Economic Injury Disaster Loans, Military Reservist Economic Injury Disaster
Loans, and Immediate Disaster Assistance Program loans.
(d) Annual receipts of affiliates.
(1) The average annual receipts size of a business concern with affiliates is
calculated by adding the average annual receipts of the business concern with
the average annual receipts of each affiliate.
(2) If a concern has acquired an affiliate or been acquired as an affiliate
during the applicable period of measurement or before the date on which it
self-certified as small, the annual receipts used in determining size status
includes the receipts of the acquired or acquiring concern. This aggregation
applies for the entire period of measurement, not just the period after the
affiliation arose. However, if a concern has acquired a segregable division of
another business concern during the applicable period of measurement or before
the date on which it self-certified as small, the annual receipts used in
determining size status do not include the receipts of the acquired division
prior to the acquisition.
(3) Except for the Business Loan and Disaster Loan Programs, if the business
concern or an affiliate has been in business for a period of less than 5 years,
the receipts for the fiscal year with less than a 12-month period are annualized
in accordance with paragraph (c)(2) of this section. Receipts are determined for
the concern and its affiliates in accordance with paragraph (c) of this section
even though this may result in using a different period of measurement to
calculate an affiliate's annual receipts.
(4) The annual receipts of a former affiliate are not included if affiliation
ceased before the date used for determining size. This exclusion of annual
receipts of such former affiliate applies during the entire period of
measurement, rather than only for the period after which affiliation ceased.
However, if a concern has sold a segregable division to another business concern
during the applicable period of measurement or before the date on which it
self-certified as small, the annual receipts used in determining size status
will continue to include the receipts of the division that was sold.
(e) Unless otherwise defined in this section, all terms shall have the meaning
attributed to them by the IRS.
[61 FR 3286, Jan. 31, 1996, as amended at 65 FR 48604, Aug. 9, 2000; 69 FR
29203, May 21, 2004; 81 FR 34258, May 31, 2016; 84 FR 66578, Dec. 5, 2019; 87 FR
34120, June 6, 2022]
§ 121.105 HOW DOES SBA DEFINE “BUSINESS CONCERN OR CONCERN”?
(a)
(1) Except for small agricultural cooperatives, a business concern eligible for
assistance from SBA as a small business is a business entity organized for
profit, with a place of business located in the United States, and which
operates primarily within the United States or which makes a significant
contribution to the U.S. economy through payment of taxes or use of American
products, materials or labor.
(2) A small agricultural cooperative is an association (corporate or otherwise)
acting pursuant to the provisions of the Agricultural Marketing Act (12 U.S.C.A.
1141j) whose size does not exceed the size standard established by SBA for other
similar agricultural small business concerns. A small agricultural cooperative's
member shareholders are not considered to be affiliates of the cooperative by
virtue of their membership in the cooperative. However, a business concern or
cooperative that does not qualify as small under this part may not be a member
of a small agricultural cooperative.
(b) A business concern may be in the legal form of an individual proprietorship,
partnership, limited liability company, corporation, joint venture, association,
trust or cooperative, except that where the form is a joint venture there can be
no more than 49 percent participation by foreign business entities in the joint
venture.
(c) A firm will not be treated as a separate business concern if a substantial
portion of its assets and/or liabilities are the same as those of a predecessor
entity. In such a case, the annual receipts and employees of the predecessor
will be taken into account in determining size.
[61 FR 3286, Jan. 31, 1996, as amended at 70 FR 51248, Aug. 30, 2005]
§ 121.106 HOW DOES SBA CALCULATE NUMBER OF EMPLOYEES?
(a) In determining a concern's number of employees, SBA counts all individuals
employed on a full-time, part-time, or other basis. This includes employees
obtained from a temporary employee agency, professional employee organization or
leasing concern. SBA will consider the totality of the circumstances, including
criteria used by the IRS for Federal income tax purposes, in determining whether
individuals are employees of a concern. Volunteers (i.e., individuals who
receive no compensation, including no in-kind compensation, for work performed)
are not considered employees.
(b) Where the size standard is number of employees, the method for determining a
concern's size includes the following principles:
(1) The average number of employees of the concern is used (including the
employees of its domestic and foreign affiliates) based upon numbers of
employees for each of the pay periods for the preceding completed 24 calendar
months.
(2) Part-time and temporary employees are counted the same as full-time
employees.
(3) If a concern has not been in business for 24 months, the average number of
employees is used for each of the pay periods during which it has been in
business.
(4)
(i) The average number of employees of a business concern with affiliates is
calculated by adding the average number of employees of the business concern
with the average number of employees of each affiliate. If a concern has
acquired an affiliate or been acquired as an affiliate during the applicable
period of measurement or before the date on which it self-certified as small,
the employees counted in determining size status include the employees of the
acquired or acquiring concern. Furthermore, this aggregation applies for the
entire period of measurement, not just the period after the affiliation arose.
(ii) The employees of a former affiliate are not counted if affiliation ceased
before the date used for determining size. This exclusion of employees of a
former affiliate applies during the entire period of measurement, rather than
only for the period after which affiliation ceased. However, if a concern has
sold a segregable division to another business concern during the applicable
period of measurement or before the date on which it self-certified as small,
the employees used in determining size status will continue to include the
employees of the division that was sold.
[61 FR 3286, Jan. 31, 1996, as amended at 69 FR 29203, May 21, 2004; 84 FR
66579, Dec. 5, 2019; 87 FR 34120, June 6, 2022]
§ 121.107 HOW DOES SBA DETERMINE A CONCERN'S “PRIMARY INDUSTRY”?
In determining the primary industry in which a concern or a concern combined
with its affiliates is engaged, SBA considers the distribution of receipts,
employees and costs of doing business among the different industries in which
business operations occurred for the most recently completed fiscal year. SBA
may also consider other factors, such as the distribution of patents, contract
awards, and assets.
§ 121.108 WHAT ARE THE PENALTIES FOR MISREPRESENTATION OF SIZE STATUS?
(a) Presumption of Loss Based on the Total Amount Expended. In every contract,
subcontract, cooperative agreement, cooperative research and development
agreement, or grant which is set aside, reserved, or otherwise classified as
intended for award to small business concerns, there shall be a presumption of
loss to the United States based on the total amount expended on the contract,
subcontract, cooperative agreement, cooperative research and development
agreement, or grant whenever it is established that a business concern other
than a small business concern willfully sought and received the award by
misrepresentation.
(b) Deemed Certifications. The following actions shall be deemed affirmative,
willful and intentional certifications of small business size and status:
(1) Submission of a bid, proposal, application or offer for a Federal grant,
contract, subcontract, cooperative agreement, or cooperative research and
development agreement reserved, set aside, or otherwise classified as intended
for award to small business concerns.
(2) Submission of a bid, proposal, application or offer for a Federal grant,
contract, subcontract, cooperative agreement or cooperative research and
development agreement which in any way encourages a Federal agency to classify
the bid or proposal, if awarded, as an award to a small business concern.
(3) Registration on any Federal electronic database for the purpose of being
considered for award of a Federal grant, contract, subcontract, cooperative
agreement, or cooperative research and development agreement, as a small
business concern.
(c) Signature Requirement. Each offer, proposal, bid, or application for a
Federal contract, subcontract, or grant shall contain a certification concerning
the small business size and status of a business concern seeking the Federal
contract, subcontract or grant. An authorized official must sign the
certification on the same page containing the size status claimed by the
concern.
(d) Limitation of Liability. Paragraphs (a) through (c) of this section may be
determined not to apply in the case of unintentional errors, technical
malfunctions, and other similar situations that demonstrate that a
misrepresentation of size was not affirmative, intentional, willful or
actionable under the False Claims Act, 31 U.S.C. §§ 3729, et seq. A prime
contractor acting in good faith should not be held liable for misrepresentations
made by its subcontractors regarding the subcontractors' size. Relevant factors
to consider in making this determination may include the firm's internal
management procedures governing size representation or certification, the
clarity or ambiguity of the representation or certification requirement, and the
efforts made to correct an incorrect or invalid representation or certification
in a timely manner. An individual or firm may not be held liable where
government personnel have erroneously identified a concern as small without any
representation or certification having been made by the concern and where such
identification is made without the knowledge of the individual or firm.
(e) Penalties for Misrepresentation.
(1) Suspension or debarment. The SBA suspension and debarment official or the
agency suspension and debarment official may suspend or debar a person or
concern for misrepresenting a firm's size status pursuant to the procedures set
forth in 48 CFR subpart 9.4.
(2) Civil Penalties. Persons or concerns are subject to severe penalties under
the False Claims Act, 31 U.S.C. 3729-3733, the Program Fraud Civil Remedies Act,
31 U.S.C. 3801-3812 and any other applicable laws or regulations, including 13
CFR part 142.
(3) Criminal Penalties. Persons or concerns are subject to severe criminal
penalties for knowingly misrepresenting the small business size status of a
concern in connection with procurement programs pursuant to section 16(d) of the
Small Business Act, 15 U.S.C. 645(d), as amended, 18 U.S.C. 1001, 18 U.S.C. 287,
and any other applicable laws. Persons or concerns are subject to criminal
penalties for knowingly making false statements or misrepresentations to SBA for
the purpose of influencing any actions of SBA pursuant to section 16(a) of the
Small Business Act, 15 U.S.C. 645(a), as amended, including failure to correct
“continuing representations” that are no longer true.
(4) Limitation on Liability. An individual or business concern will not be
subject to the penalties imposed under 15 U.S.C. 645(a) where it acted in good
faith reliance on a small business status advisory opinion accepted by SBA under
§ 121.109.
[78 FR 38816, June 28, 2013, as amended at 80 FR 7536, Feb. 11, 2015; 81 FR
31491, May 19, 2016]
§ 121.109 WHAT IS A SMALL BUSINESS STATUS ADVISORY OPINION?
(a) Defined. A small business status advisory opinion is a written opinion
issued by either a Small Business Development Center (SBDC) operating under part
130 of this chapter or a Procurement Technical Assistance Center (PTAC)
operating under 10 U.S.C. chapter 142 which concludes that a firm is entitled to
represent itself as a small business concern for purposes of federal government
procurement opportunities.
(b) Submission. An SBDC or PTAC must submit a copy of each small business status
advisory opinion it issues to the following Agency official for review:
Associate General Counsel, Office of Procurement Law, U.S. Small Business
Administration, 409 Third Street SW., Washington, DC 20416 or by fax to (202)
205-6390 marked Attn: Small Business Status Advisory Opinion. A small business
status advisory opinion must:
(1) Provide a written analysis explaining the reasoning underlying the SBDC or
PTAC's determination that the covered concern, along with its affiliates, either
does or does not exceed the size standard(s). This analysis must be dated and
signed by an SBDC or PTAC business counselor or similarly qualified individual.
(2) Include, as an attachment, a completed copy of an SBA Form 355 for the
covered concern and its affiliates.
(3) Include, as an attachment, copies of the evidence (such as payroll records,
time sheets, federal income tax returns, etc.) provided by the covered concern
to the SBDC or PTAC clearly documenting its annual receipts and/or number of
employees as those terms are defined by §§ 121.104 and 121.106.
(c) Review. Unless a referral is made under paragraph (e) of this section, SBA
will decide within 10 business days of receiving a small business status
advisory opinion to accept or reject it based on its consistency with part 121.
SBA will provide written notification of that decision to the SBDC or PTAC that
issued the small business status advisory opinion as well as to the covered
concern.
(d) Reliance. A concern that receives a small business status advisory opinion
holding that it does not exceed the applicable size standard(s) may rely upon
that determination for purposes of responding to Federal procurement
opportunities from the date it is issued unless and until that advisory opinion
is rejected by SBA in accordance with paragraph (c) of this section or the
concern undergoes a significant change in its ownership, management, or other
factors bearing on its status as a small business concern. However, the firm's
size may be protested by interested parties in connection with a specific
procurement.
(e) Referral for size determination. Nothing in this section precludes the
Associate General Counsel, Office of Procurement Law from requesting a formal
size determination for a concern that is the subject of a small business status
advisory opinion pursuant to § 121.1001(b)(9).
(f) Penalties for misrepresentation —
(1) Suspension or debarment. The SBA suspension and debarment official may
suspend or debar a person or concern for misrepresenting a concern's size for
purposes of obtaining a small business size status advisory opinion pursuant to
the procedures set forth in 48 CFR subpart 9.4.
(2) Civil penalties. Persons or concerns are subject to severe penalties under
the False Claims Act, 31 U.S.C. 3729-3733, and under the Program Fraud Civil
Remedies Act, 331 U.S.C. 3801-3812, and any other applicable laws.
(3) Criminal Penalties. Persons or concerns are subject to severe criminal
penalties for knowingly misrepresenting the small business size status of a
concern in connection with procurement programs pursuant to section 16(d) of the
Small Business Act, 15 U.S.C. 645(d), as amended, 18 U.S.C. 1001, 18 U.S.C. 287,
and any other applicable laws. Persons or concerns are subject to criminal
penalties for knowingly making false statements or misrepresentations for the
purpose of influencing any actions of SBA pursuant to section 16(a) of the Small
Business Act, 15 U.S.C. 645(a), as amended, including failure to correct
“continuing representations” that are no longer true.
[80 FR 7536, Feb. 11, 2015]
§ 121.110 WHAT MUST A CONCERN DO IN ORDER TO BE IDENTIFIED AS A SMALL BUSINESS
CONCERN IN ANY FEDERAL PROCUREMENT DATABASES?
(a) In order to be identified as a small business concern in the System for
Award Management (SAM) database (or any successor thereto), a concern must
certify its size in connection with specific size standards at least annually.
(b) If a firm identified as a small business concern in SAM fails to certify its
size within one year of a size certification, the firm will not be listed as a
small business concern in SAM, unless and until the firm recertifies its size.
[78 FR 38817, June 28, 2013. Redesignated at 80 FR 7536, Feb. 11, 2015]
SIZE STANDARDS USED TO DEFINE SMALL BUSINESS CONCERNS
§ 121.201 WHAT SIZE STANDARDS HAS SBA IDENTIFIED BY NORTH AMERICAN INDUSTRY
CLASSIFICATION SYSTEM CODES?
The size standards described in this section apply to all SBA programs unless
otherwise specified in this part. The size standards themselves are expressed
either in number of employees or annual receipts in millions of dollars, unless
otherwise specified. The number of employees or annual receipts indicates the
maximum allowed for a concern and its affiliates to be considered small.
Expand Table
Small Business Size Standards by NAICS Industry
NAICS codes NAICS U.S. industry title Size standards in millions of dollars Size
standards in number of employees Sector 11—Agriculture, Forestry, Fishing and
Hunting Subsector 111—Crop Production 111110 Soybean Farming $2.25 111120
Oilseed (except Soybean) Farming $2.25 111130 Dry Pea and Bean Farming $2.75
111140 Wheat Farming $2.25 111150 Corn Farming $2.5 111160 Rice Farming $2.5
111191 Oilseed and Grain Combination Farming $2.25 111199 All Other Grain
Farming $2.25 111211 Potato Farming $4.25 111219 Other Vegetable (except Potato)
and Melon Farming $3.75 111310 Orange Groves $4.0 111320 Citrus (except Orange)
Groves $4.25 111331 Apple Orchards $4.5 111332 Grape Vineyards $4.0 111333
Strawberry Farming $5.5 111334 Berry (except Strawberry) Farming $3.75 111335
Tree Nut Farming $3.75 111336 Fruit and Tree Nut Combination Farming $5.0 111339
Other Noncitrus Fruit Farming $3.5 111411 Mushroom Production $4.5 111419 Other
Food Crops Grown Under Cover $4.5 111421 Nursery and Tree Production $3.25
111422 Floriculture Production $3.75 111910 Tobacco Farming $2.5 111920 Cotton
Farming $3.25 111930 Sugarcane Farming $5.0 111940 Hay Farming $2.5 111991 Sugar
Beet Farming $2.5 111992 Peanut Farming $2.5 111998 All Other Miscellaneous Crop
Farming $2.5 Subsector 112—Animal Production and Aquaculture 112111 Beef Cattle
Ranching and Farming $2.5 112112 Cattle Feedlots $22.0 112120 Dairy Cattle and
Milk Production $3.75 112210 Hog and Pig Farming $4.0 112310 Chicken Egg
Production $19.0 112320 Broilers and Other Meat Type Chicken Production $3.5
112330 Turkey Production $3.75 112340 Poultry Hatcheries $4.0 112390 Other
Poultry Production $3.75 112410 Sheep Farming $3.5 112420 Goat Farming $2.5
112511 Finfish Farming and Fish Hatcheries $3.75 112512 Shellfish Farming $3.75
112519 Other Aquaculture $3.75 112910 Apiculture $3.25 112920 Horse and Other
Equine Production $2.75 112930 Fur-Bearing Animal and Rabbit Production $3.75
112990 All Other Animal Production $2.75 Subsector 113—Forestry and Logging
113110 Timber Tract Operations $19.0 113210 Forest Nurseries and Gathering of
Forest Products $20.5 113310 Logging 500 Subsector 114—Fishing, Hunting and
Trapping 114111 Finfish Fishing $25.0 114112 Shellfish Fishing $14.0 114119
Other Marine Fishing $11.5 114210 Hunting and Trapping $8.5 Subsector
115—Support Activities for Agriculture and Forestry 115111 Cotton Ginning $16.0
115112 Soil Preparation, Planting, and Cultivating $9.5 115113 Crop Harvesting,
Primarily by Machine $13.5 115114 Postharvest Crop Activities (except Cotton
Ginning) $34.0 115115 Farm Labor Contractors and Crew Leaders $19.0 115116 Farm
Management Services $15.5 115210 Support Activities for Animal Production $11.0
115310 Support Activities for Forestry $11.5 115310 (Exception 1) Forest Fire
Suppression1 $34.01 115310 (Exception 2) Fuels Management Services1 $34.01
Sector 21—Mining, Quarrying, and Oil and Gas Extraction Subsector 211—Oil and
Gas Extraction 211120 Crude Petroleum Extraction 1,250 211130 Natural Gas
Extraction 1,250 Subsector 212—Mining (except Oil and Gas) 212114 Surface Coal
Mining 1,250 212115 Underground Coal Mining 1,500 212210 Iron Ore Mining 1,400
212220 Gold Ore and Silver Ore Mining 1,500 212230 Copper, Nickel, Lead, and
Zinc Mining 1,400 212290 Other Metal Ore Mining 1,250 212311 Dimension Stone
Mining and Quarrying 500 212312 Crushed and Broken Limestone Mining and
Quarrying 750 212313 Crushed and Broken Granite Mining and Quarrying 850 212319
Other Crushed and Broken Stone Mining and Quarrying 550 212321 Construction Sand
and Gravel Mining 500 212322 Industrial Sand Mining 750 212323 Kaolin, Clay, and
Ceramic and Refractory Minerals Mining 650 212390 Other Nonmetallic Mineral
Mining and Quarrying 600 Subsector 213—Support Activities for Mining 213111
Drilling Oil and Gas Wells 1,000 213112 Support Activities for Oil and Gas
Operations $47.0 213113 Support Activities for Coal Mining $27.5 213114 Support
Activities for Metal Mining $41.0 213115 Support Activities for Nonmetallic
Minerals (except Fuels) $20.5 Sector 22—Utilities Subsector 221—Utilities 221111
Hydroelectric Power Generation 750 221112 Fossil Fuel Electric Power Generation
950 221113 Nuclear Electric Power Generation 1,150 221114 Solar Electric Power
Generation 500 221115 Wind Electric Power Generation 1,150 221116 Geothermal
Electric Power Generation 250 221117 Biomass Electric Power Generation 550
221118 Other Electric Power Generation 650 221121 Electric Bulk Power
Transmission and Control 950 221122 Electric Power Distribution 1,100 221210
Natural Gas Distribution 1,150 221310 Water Supply and Irrigation Systems $41.0
221320 Sewage Treatment Facilities $35.0 221330 Steam and Air-Conditioning
Supply $30.0 Sector 23—Construction Subsector 236—Construction of Buildings
236115 New Single-family Housing Construction (Except For-Sale Builders) $45.0
236116 New Multifamily Housing Construction (except For-Sale Builders) $45.0
236117 New Housing For-Sale Builders $45.0 236118 Residential Remodelers $45.0
236210 Industrial Building Construction $45.0 236220 Commercial and
Institutional Building Construction $45.0 Subsector 237—Heavy and Civil
Engineering Construction 237110 Water and Sewer Line and Related Structures
Construction $45.0 237120 Oil and Gas Pipeline and Related Structures
Construction $45.0 237130 Power and Communication Line and Related Structures
Construction $45.0 237210 Land Subdivision $34.0 237310 Highway, Street, and
Bridge Construction $45.0 237990 Other Heavy and Civil Engineering Construction
$45.0 237900 (Exception) Dredging and Surface Cleanup Activities2 $37.02
Subsector 238—Specialty Trade Contractors 238110 Poured Concrete Foundation and
Structure Contractors $19.0 238120 Structural Steel and Precast Concrete
Contractors $19.0 238130 Framing Contractors $19.0 238140 Masonry Contractors
$19.0 238150 Glass and Glazing Contractors $19.0 238160 Roofing Contractors
$19.0 238170 Siding Contractors $19.0 238190 Other Foundation, Structure, and
Building Exterior Contractors $19.0 238210 Electrical Contractors and Other
Wiring Installation Contractors $19.0 238220 Plumbing, Heating, and
Air-Conditioning Contractors $19.0 238290 Other Building Equipment Contractors
$22.0 238310 Drywall and Insulation Contractors $19.0 238320 Painting and Wall
Covering Contractors $19.0 238330 Flooring Contractors $19.0 238340 Tile and
Terrazzo Contractors $19.0 238350 Finish Carpentry Contractors $19.0 238390
Other Building Finishing Contractors $19.0 238910 Site Preparation Contractors
$19.0 238990 All Other Specialty Trade Contractors $19.0 238990 (Exception)
Building and Property Specialty Trade Services13 $19.013 Sectors
31-33—Manufacturing Subsector 311—Food Manufacturing 311111 Dog and Cat Food
Manufacturing 1,250 311119 Other Animal Food Manufacturing 650 311211 Flour
Milling 1,050 311212 Rice Milling 750 311213 Malt Manufacturing 500 311221 Wet
Corn Milling and Starch Manufacturing 1,300 311224 Soybean and Other Oilseed
Processing 1,250 311225 Fats and Oils Refining and Blending 1,100 311230
Breakfast Cereal Manufacturing 1,300 311313 Beet Sugar Manufacturing 1,150
311314 Cane Sugar Manufacturing 1,050 311340 Nonchocolate Confectionery
Manufacturing 1,000 311351 Chocolate and Confectionery Manufacturing from Cacao
Beans 1,250 311352 Confectionery Manufacturing from Purchased Chocolate 1,000
311411 Frozen Fruit, Juice, and Vegetable Manufacturing 1,100 311412 Frozen
Specialty Food Manufacturing 1,250 311421 Fruit and Vegetable Canning3 1,0003
311422 Specialty Canning 1,400 311423 Dried and Dehydrated Food Manufacturing
750 311511 Fluid Milk Manufacturing 1,150 311512 Creamery Butter Manufacturing
750 311513 Cheese Manufacturing 1,250 311514 Dry, Condensed, and Evaporated
Dairy Product Manufacturing 1,000 311520 Ice Cream and Frozen Dessert
Manufacturing 1,000 311611 Animal (except Poultry) Slaughtering 1,150 311612
Meat Processed from Carcasses 1,000 311613 Rendering and Meat Byproduct
Processing 750 311615 Poultry Processing 1,250 311710 Seafood Product
Preparation and Packaging 750 311811 Retail Bakeries 500 311812 Commercial
Bakeries 1,000 311813 Frozen Cakes, Pies, and Other Pastries Manufacturing 750
311821 Cookie and Cracker Manufacturing 1,250 311824 Dry Pasta, Dough, and Flour
Mixes Manufacturing from Purchased Flour 850 311830 Tortilla Manufacturing 1,250
311911 Roasted Nuts and Peanut Butter Manufacturing 750 311919 Other Snack Food
Manufacturing 1,250 311920 Coffee and Tea Manufacturing 1,000 311930 Flavoring
Syrup and Concentrate Manufacturing 1,100 311941 Mayonnaise, Dressing, and Other
Prepared Sauce Manufacturing 850 311942 Spice and Extract Manufacturing 650
311991 Perishable Prepared Food Manufacturing 700 311999 All Other Miscellaneous
Food Manufacturing 700 Subsector 312—Beverage and Tobacco Product Manufacturing
312111 Soft Drink Manufacturing 1,400 312112 Bottled Water Manufacturing 1,100
312113 Ice Manufacturing 750 312120 Breweries 1,250 312130 Wineries 1,000 312140
Distilleries 1,100 312230 Tobacco Manufacturing 1,500 Subsector 313—Textile
Mills 313110 Fiber, Yarn, and Thread Mills 1,250 313210 Broadwoven Fabric Mills
1,000 313220 Narrow Fabric Mills and Schiffli Machine Embroidery 550 313230
Nonwoven Fabric Mills 850 313240 Knit Fabric Mills 500 313310 Textile and Fabric
Finishing Mills 1,000 313320 Fabric Coating Mills 1,000 Subsector 314—Textile
Product Mills 314110 Carpet and Rug Mills 1,500 314120 Curtain and Linen Mills
750 314910 Textile Bag and Canvas Mills 500 314994 Rope, Cordage, Twine, Tire
Cord, and Tire Fabric Mills 1,000 314999 All Other Miscellaneous Textile Product
Mills 550 Subsector 315—Apparel Manufacturing 315120 Apparel Knitting Mills 850
315210 Cut and Sew Apparel Contractors 750 315250 Cut and Sew Apparel
Manufacturing (except Contractors) 750 315990 Apparel Accessories and Other
Apparel Manufacturing 600 Subsector 316—Leather and Allied Product Manufacturing
316110 Leather and Hide Tanning and Finishing 800 316210 Footwear Manufacturing
1,000 316990 Other Leather and Allied Product Manufacturing 500 Subsector
321—Wood Product Manufacturing 321113 Sawmills 550 321114 Wood Preservation 550
321211 Hardwood Veneer and Plywood Manufacturing 600 321212 Softwood Veneer and
Plywood Manufacturing 1,250 321215 Engineered Wood Member Manufacturing 500
321219 Reconstituted Wood Product Manufacturing 750 321911 Wood Window and Door
Manufacturing 1,000 321912 Cut Stock, Resawing Lumber, and Planing 500 321918
Other Millwork (including Flooring) 500 321920 Wood Container and Pallet
Manufacturing 500 321991 Manufactured Home (Mobile Home) Manufacturing 1,250
321992 Prefabricated Wood Building Manufacturing 500 321999 All Other
Miscellaneous Wood Product Manufacturing 500 Subsector 322—Paper Manufacturing
322110 Pulp Mills 1,050 322120 Paper Mills 1,250 322130 Paperboard Mills 1,250
322211 Corrugated and Solid Fiber Box Manufacturing 1,250 322212 Folding
Paperboard Box Manufacturing 750 322219 Other Paperboard Container Manufacturing
1,000 322220 Paper Bag and Coated and Treated Paper Manufacturing 750 322230
Stationery Product Manufacturing 750 322291 Sanitary Paper Product Manufacturing
1,500 322299 All Other Converted Paper Product Manufacturing 500 Subsector
323—Printing and Related Support Activities 323111 Commercial Printing (except
Screen and Books) 650 323113 Commercial Screen Printing 500 323117 Books
Printing 1,250 323120 Support Activities for Printing 550 Subsector
324—Petroleum and Coal Products Manufacturing 324110 Petroleum Refineries4
1,5004 324121 Asphalt Paving Mixture and Block Manufacturing 500 324122 Asphalt
Shingle and Coating Materials Manufacturing 1,100 324191 Petroleum Lubricating
Oil and Grease Manufacturing 900 324199 All Other Petroleum and Coal Products
Manufacturing 950 Subsector 325—Chemical Manufacturing 325110 Petrochemical
Manufacturing 1,300 325120 Industrial Gas Manufacturing 1,200 325130 Synthetic
Dye and Pigment Manufacturing 1,050 325180 Other Basic Inorganic Chemical
Manufacturing 1,000 325193 Ethyl Alcohol Manufacturing 1,000 325194 Cyclic
Crude, Intermediate, and Gum and Wood Chemical Manufacturing 1,250 325199 All
Other Basic Organic Chemical Manufacturing 1,250 325211 Plastics Material and
Resin Manufacturing 1,250 325212 Synthetic Rubber Manufacturing 1,000 325220
Artificial and Synthetic Fibers and Filaments Manufacturing 1,050 325311
Nitrogenous Fertilizer Manufacturing 1,050 325312 Phosphatic Fertilizer
Manufacturing 1,350 325314 Fertilizer (Mixing Only) Manufacturing 550 325315
Compost Manufacturing 550 325320 Pesticide and Other Agricultural Chemical
Manufacturing 1,150 325411 Medicinal and Botanical Manufacturing 1,000 325412
Pharmaceutical Preparation Manufacturing 1,300 325413 In-Vitro Diagnostic
Substance Manufacturing 1,250 325414 Biological Product (except Diagnostic)
Manufacturing 1,250 325510 Paint and Coating Manufacturing 1,000 325520 Adhesive
Manufacturing 550 325611 Soap and Other Detergent Manufacturing 1,100 325612
Polish and Other Sanitation Good Manufacturing 900 325613 Surface Active Agent
Manufacturing 1,100 325620 Toilet Preparation Manufacturing 1,250 325910
Printing Ink Manufacturing 750 325920 Explosives Manufacturing 750 325991 Custom
Compounding of Purchased Resins 600 325992 Photographic Film, Paper, Plate,
Chemical, and Copy Toner Manufacturing 1,500 325998 All Other Miscellaneous
Chemical Product and Preparation Manufacturing 650 Subsector 326—Plastics and
Rubber Products Manufacturing 326111 Plastics Bag and Pouch Manufacturing 750
326112 Plastics Packaging Film and Sheet (including Laminated) Manufacturing
1,000 326113 Unlaminated Plastics Film and Sheet (except Packaging)
Manufacturing 750 326121 Unlaminated Plastics Profile Shape Manufacturing 600
326122 Plastics Pipe and Pipe Fitting Manufacturing 750 326130 Laminated
Plastics Plate, Sheet (except Packaging), and Shape Manufacturing 650 326140
Polystyrene Foam Product Manufacturing 1,000 326150 Urethane and Other Foam
Product (except Polystyrene) Manufacturing 750 326160 Plastics Bottle
Manufacturing 1,250 326191 Plastics Plumbing Fixture Manufacturing 750 326199
All Other Plastics Product Manufacturing 750 326211 Tire Manufacturing (except
Retreading)5 1,5005 326212 Tire Retreading 500 326220 Rubber and Plastics Hoses
and Belting Manufacturing 800 326291 Rubber Product Manufacturing for Mechanical
Use 750 326299 All Other Rubber Product Manufacturing 650 Subsector
327—Nonmetallic Mineral Product Manufacturing 327110 Pottery, Ceramics, and
Plumbing Fixture Manufacturing 1,000 327120 Clay Building Material and
Refractories Manufacturing 750 327211 Flat Glass Manufacturing 1,100 327212
Other Pressed and Blown Glass and Glassware Manufacturing 1,250 327213 Glass
Container Manufacturing 1,250 327215 Glass Product Manufacturing Made of
Purchased Glass 1,000 327310 Cement Manufacturing 1,000 327320 Ready-Mix
Concrete Manufacturing 500 327331 Concrete Block and Brick Manufacturing 500
327332 Concrete Pipe Manufacturing 750 327390 Other Concrete Product
Manufacturing 500 327410 Lime Manufacturing 1,050 327420 Gypsum Product
Manufacturing 1,500 327910 Abrasive Product Manufacturing 900 327991 Cut Stone
and Stone Product Manufacturing 500 327992 Ground or Treated Mineral and Earth
Manufacturing 600 327993 Mineral Wool Manufacturing 1,500 327999 All Other
Miscellaneous Nonmetallic Mineral Product Manufacturing 750 Subsector
331—Primary Metal Manufacturing 331110 Iron and Steel Mills and Ferroalloy
Manufacturing 1,500 331210 Iron and Steel Pipe and Tube Manufacturing from
Purchased Steel 1,000 331221 Rolled Steel Shape Manufacturing 1,000 331222 Steel
Wire Drawing 1,000 331313 Alumina Refining and Primary Aluminum Production 1,300
331314 Secondary Smelting and Alloying of Aluminum 750 331315 Aluminum Sheet,
Plate, and Foil Manufacturing 1,400 331318 Other Aluminum Rolling, Drawing, and
Extruding 750 331410 Nonferrous Metal (except Aluminum) Smelting and Refining
1,000 331420 Copper Rolling, Drawing, Extruding, and Alloying 1,050 331491
Nonferrous Metal (except Copper and Aluminum) Rolling, Drawing, and Extruding
900 331492 Secondary Smelting, Refining, and Alloying of Nonferrous Metal
(except Copper and Aluminum) 850 331511 Iron Foundries 1,000 331512 Steel
Investment Foundries 1,050 331513 Steel Foundries (except Investment) 700 331523
Nonferrous Metal Die-Casting Foundries 700 331524 Aluminum Foundries (except
Die-Casting) 550 331529 Other Nonferrous Metal Foundries (except Die-Casting)
500 Subsector 332—Fabricated Metal Product Manufacturing 332111 Iron and Steel
Forging 750 332112 Nonferrous Forging 950 332114 Custom Roll Forming 600 332117
Powder Metallurgy Part Manufacturing 550 332119 Metal Crown, Closure, and Other
Metal Stamping (except Automotive) 500 332215 Metal Kitchen Cookware, Utensil,
Cutlery, and Flatware (except Precious) Manufacturing 1,000 332216 Saw Blade and
Handtool Manufacturing 750 332311 Prefabricated Metal Building and Component
Manufacturing 750 332312 Fabricated Structural Metal Manufacturing 500 332313
Plate Work Manufacturing 750 332321 Metal Window and Door Manufacturing 750
332322 Sheet Metal Work Manufacturing 500 332323 Ornamental and Architectural
Metal Work Manufacturing 500 332410 Power Boiler and Heat Exchanger
Manufacturing 750 332420 Metal Tank (Heavy Gauge) Manufacturing 750 332431 Metal
Can Manufacturing 1,500 332439 Other Metal Container Manufacturing 600 332510
Hardware Manufacturing 750 332613 Spring Manufacturing 600 332618 Other
Fabricated Wire Product Manufacturing 500 332710 Machine Shops 500 332721
Precision Turned Product Manufacturing 500 332722 Bolt, Nut, Screw, Rivet, and
Washer Manufacturing 600 332811 Metal Heat Treating 750 332812 Metal Coating,
Engraving (except Jewelry and Silverware), and Allied Services to Manufacturers
600 332813 Electroplating, Plating, Polishing, Anodizing and Coloring 500 332911
Industrial Valve Manufacturing 750 332912 Fluid Power Valve and Hose Fitting
Manufacturing 1,000 332913 Plumbing Fixture Fitting and Trim Manufacturing 1,000
332919 Other Metal Valve and Pipe Fitting Manufacturing 750 332991 Ball and
Roller Bearing Manufacturing 1,250 332992 Small Arms Ammunition Manufacturing
1,300 332993 Ammunition (except Small Arms) Manufacturing 1,500 332994 Small
Arms, Ordnance, and Ordnance Accessories Manufacturing 1,000 332996 Fabricated
Pipe and Pipe Fitting Manufacturing 550 332999 All Other Miscellaneous
Fabricated Metal Product Manufacturing 750 Subsector 333—Machinery
Manufacturing6 333111 Farm Machinery and Equipment Manufacturing 1,250 333112
Lawn and Garden Tractor and Home Lawn and Garden Equipment Manufacturing 1,500
333120 Construction Machinery Manufacturing 1,250 333131 Mining Machinery and
Equipment Manufacturing 900 333132 Oil and Gas Field Machinery and Equipment
Manufacturing 1,250 333241 Food Product Machinery Manufacturing 500 333242
Semiconductor Machinery Manufacturing 1,500 333243 Sawmill, Woodworking, and
Paper Machinery Manufacturing 550 333248 All Other Industrial Machinery
Manufacturing 750 333310 Commercial and Service Industry Machinery Manufacturing
1,000 333413 Industrial and Commercial Fan and Blower and Air Purification
Equipment Manufacturing 500 333414 Heating Equipment (except Warm Air Furnaces)
Manufacturing 500 333415 Air-Conditioning and Warm Air Heating Equipment and
Commercial and Industrial Refrigeration Equipment Manufacturing 1,250 333511
Industrial Mold Manufacturing 500 333514 Special Die and Tool, Die Set, Jig and
Fixture Manufacturing 500 333515 Cutting Tool and Machine Tool Accessory
Manufacturing 500 333517 Machine Tool Manufacturing 500 333519 Rolling Mill and
Other Metalworking Machinery Manufacturing 500 333611 Turbine and Turbine
Generator Set Units Manufacturing 1,500 333612 Speed Changer, Industrial
High-Speed Drive, and Gear Manufacturing 750 333613 Mechanical Power
Transmission Equipment Manufacturing 750 333618 Other Engine Equipment
Manufacturing 1,500 333912 Air and Gas Compressor Manufacturing 1,000 333914
Measuring, Dispensing, and Other Pumping Equipment Manufacturing 750 333921
Elevator and Moving Stairway Manufacturing 1,000 333922 Conveyor and Conveying
Equipment Manufacturing 500 333923 Overhead Traveling Crane, Hoist, and Monorail
System Manufacturing 1,250 333924 Industrial Truck, Tractor, Trailer, and
Stacker Machinery Manufacturing 900 333991 Power-Driven Hand Tool Manufacturing
950 333992 Welding and Soldering Equipment Manufacturing 1,250 333993 Packaging
Machinery Manufacturing 600 333994 Industrial Process Furnace and Oven
Manufacturing 500 333995 Fluid Power Cylinder and Actuator Manufacturing 800
333996 Fluid Power Pump and Motor Manufacturing 1,250 333998 All Other
Miscellaneous General Purpose Machinery Manufacturing 700 Subsector 334—Computer
and Electronic Product Manufacturing6 334111 Electronic Computer Manufacturing
1,250 334112 Computer Storage Device Manufacturing 1,250 334118 Computer
Terminal and Other Computer Peripheral Equipment Manufacturing 1,000 334210
Telephone Apparatus Manufacturing 1,250 334220 Radio and Television Broadcasting
and Wireless Communications Equipment Manufacturing 1,250 334290 Other
Communications Equipment Manufacturing 800 334310 Audio and Video Equipment
Manufacturing 750 334412 Bare Printed Circuit Board Manufacturing 750 334413
Semiconductor and Related Device Manufacturing 1,250 334416 Capacitor, Resistor,
Coil, Transformer, and Other Inductor Manufacturing 550 334417 Electronic
Connector Manufacturing 1,000 334418 Printed Circuit Assembly (Electronic
Assembly) Manufacturing 750 334419 Other Electronic Component Manufacturing 750
334510 Electromedical and Electrotherapeutic Apparatus Manufacturing 1,250
334511 Search, Detection, Navigation, Guidance, Aeronautical, and Nautical
System and Instrument Manufacturing 1,350 334512 Automatic Environmental Control
Manufacturing for Residential, Commercial, and Appliance Use 650 334513
Instruments and Related Products Manufacturing for Measuring, Displaying, and
Controlling Industrial Process Variables 750 334514 Totalizing Fluid Meter and
Counting Device Manufacturing 850 334515 Instrument Manufacturing for Measuring
and Testing Electricity and Electrical Signals 750 334516 Analytical Laboratory
Instrument Manufacturing 1,000 334517 Irradiation Apparatus Manufacturing 1,200
334519 Other Measuring and Controlling Device Manufacturing 600 334610
Manufacturing and Reproducing Magnetic and Optical Media 1,250 Subsector
335—Electrical Equipment, Appliance and Component Manufacturing6 335131
Residential Electric Lighting Fixture Manufacturing 750 335132 Commercial,
Industrial, and Institutional Electric Lighting Fixture Manufacturing 600 335139
Electric Lamp Bulb and Other Lighting Equipment Manufacturing 1,250 335210 Small
Electrical Appliance Manufacturing 1,500 335220 Major Household Appliance
Manufacturing 1,500 335311 Power, Distribution, and Specialty Transformer
Manufacturing 800 335312 Motor and Generator Manufacturing 1,250 335313
Switchgear and Switchboard Apparatus Manufacturing 1,250 335314 Relay and
Industrial Control Manufacturing 750 335910 Battery Manufacturing 1,250 335921
Fiber Optic Cable Manufacturing 1,000 335929 Other Communication and Energy Wire
Manufacturing 1,000 335931 Current-Carrying Wiring Device Manufacturing 600
335932 Noncurrent-Carrying Wiring Device Manufacturing 1,000 335991 Carbon and
Graphite Product Manufacturing 900 335999 All Other Miscellaneous Electrical
Equipment and Component Manufacturing 600 Subsector 336—Transportation Equipment
Manufacturing6 336110 Automobile and Light Duty Motor Vehicle Manufacturing
1,500 336120 Heavy Duty Truck Manufacturing 1,500 336211 Motor Vehicle Body
Manufacturing 1,000 336212 Truck Trailer Manufacturing 1,000 336213 Motor Home
Manufacturing 1,250 336214 Travel Trailer and Camper Manufacturing 1,000 336310
Motor Vehicle Gasoline Engine and Engine Parts Manufacturing 1,050 336320 Motor
Vehicle Electrical and Electronic Equipment Manufacturing 1,000 336330 Motor
Vehicle Steering and Suspension Components (except Spring) Manufacturing 1,000
336340 Motor Vehicle Brake System Manufacturing 1,250 336350 Motor Vehicle
Transmission and Power Train Parts Manufacturing 1,500 336360 Motor Vehicle
Seating and Interior Trim Manufacturing 1,500 336370 Motor Vehicle Metal
Stamping 1,000 336390 Other Motor Vehicle Parts Manufacturing 1,000 336411
Aircraft Manufacturing 1,500 336412 Aircraft Engine and Engine Parts
Manufacturing 1,500 336413 Other Aircraft Parts and Auxiliary Equipment
Manufacturing7 1,2507 336414 Guided Missile and Space Vehicle Manufacturing
1,300 336415 Guided Missile and Space Vehicle Propulsion Unit and Propulsion
Unit Parts Manufacturing 1,250 336419 Other Guided Missile and Space Vehicle
Parts and Auxiliary Equipment Manufacturing 1,050 336510 Railroad Rolling Stock
Manufacturing 1,500 336611 Ship Building and Repairing 1,300 336612 Boat
Building 1,000 336991 Motorcycle, Bicycle, and Parts Manufacturing 1,050 336992
Military Armored Vehicle, Tank, and Tank Component Manufacturing 1,500 336999
All Other Transportation Equipment Manufacturing 1,000 Subsector 337—Furniture
and Related Product Manufacturing 337110 Wood Kitchen Cabinet and Countertop
Manufacturing 750 337121 Upholstered Household Furniture Manufacturing 1,000
337122 Nonupholstered Wood Household Furniture Manufacturing 750 337126
Household Furniture (except Wood and Upholstered) Manufacturing 950 337127
Institutional Furniture Manufacturing 500 337211 Wood Office Furniture
Manufacturing 1,000 337212 Custom Architectural Woodwork and Millwork
Manufacturing 500 337214 Office Furniture (except Wood) Manufacturing 1,100
337215 Showcase, Partition, Shelving, and Locker Manufacturing 500 337910
Mattress Manufacturing 1,000 337920 Blind and Shade Manufacturing 1,000
Subsector 339—Miscellaneous Manufacturing 339112 Surgical and Medical Instrument
Manufacturing 1,000 339113 Surgical Appliance and Supplies Manufacturing 800
339114 Dental Equipment and Supplies Manufacturing 750 339115 Ophthalmic Goods
Manufacturing 1,000 339116 Dental Laboratories 500 339910 Jewelry and Silverware
Manufacturing 700 339920 Sporting and Athletic Goods Manufacturing 750 339930
Doll, Toy, and Game Manufacturing 700 339940 Office Supplies (except Paper)
Manufacturing 750 339950 Sign Manufacturing 500 339991 Gasket, Packing, and
Sealing Device Manufacturing 600 339992 Musical Instrument Manufacturing 1,000
339993 Fastener, Button, Needle, and Pin Manufacturing 750 339994 Broom, Brush,
and Mop Manufacturing 750 339995 Burial Casket Manufacturing 1,000 339999 All
Other Miscellaneous Manufacturing 550 Sector 42—Wholesale Trade (These NAICS
codes shall not be used to classify Government acquisitions for supplies. They
also shall not be used by Federal Government contractors when subcontracting for
the acquisition for supplies. The applicable manufacturing NAICS code shall be
used to classify acquisitions for supplies. A Wholesale Trade or Retail Trade
business concern submitting an offer or a quote on a supply acquisition is
categorized as a nonmanufacturer and deemed small if it has 500 or fewer
employees and meets the requirements of 13 CFR 121.406.) Subsector 423—Merchant
Wholesalers, Durable Goods 423110 Automobile and Other Motor Vehicle Merchant
Wholesalers 250 423120 Motor Vehicle Supplies and New Parts Merchant Wholesalers
200 423130 Tire and Tube Merchant Wholesalers 200 423140 Motor Vehicle Parts
(Used) Merchant Wholesalers 125 423210 Furniture Merchant Wholesalers 100 423220
Home Furnishing Merchant Wholesalers 100 423310 Lumber, Plywood, Millwork, and
Wood Panel Merchant Wholesalers 150 423320 Brick, Stone, and Related
Construction Material Merchant Wholesalers 150 423330 Roofing, Siding, and
Insulation Material Merchant Wholesalers 225 423390 Other Construction Material
Merchant Wholesalers 100 423410 Photographic Equipment and Supplies Merchant
Wholesalers 200 423420 Office Equipment Merchant Wholesalers 200 423430 Computer
and Computer Peripheral Equipment and Software Merchant Wholesalers 250 423440
Other Commercial Equipment Merchant Wholesalers 100 423450 Medical, Dental, and
Hospital Equipment and Supplies Merchant Wholesalers 200 423460 Ophthalmic Goods
Merchant Wholesalers 175 423490 Other Professional Equipment and Supplies
Merchant Wholesalers 150 423510 Metal Service Centers and Other Metal Merchant
Wholesalers 200 423520 Coal and Other Mineral and Ore Merchant Wholesalers 200
423610 Electrical Apparatus and Equipment, Wiring Supplies, and Related
Equipment Merchant Wholesalers 200 423620 Household Appliances, Electric
Housewares, and Consumer Electronics Merchant Wholesalers 225 423690 Other
Electronic Parts and Equipment Merchant Wholesalers 250 423710 Hardware Merchant
Wholesalers 150 423720 Plumbing and Heating Equipment and Supplies (Hydronics)
Merchant Wholesalers 200 423730 Warm Air Heating and Air-Conditioning Equipment
and Supplies Merchant Wholesalers 175 423740 Refrigeration Equipment and
Supplies Merchant Wholesalers 125 423810 Construction and Mining (except Oil
Well) Machinery and Equipment Merchant Wholesalers 250 423820 Farm and Garden
Machinery and Equipment Merchant Wholesalers 125 423830 Industrial Machinery and
Equipment Merchant Wholesalers 100 423840 Industrial Supplies Merchant
Wholesalers 125 423850 Service Establishment Equipment and Supplies Merchant
Wholesalers 125 423860 Transportation Equipment and Supplies (except Motor
Vehicle) Merchant Wholesalers 175 423910 Sporting and Recreational Goods and
Supplies Merchant Wholesalers 100 423920 Toy and Hobby Goods and Supplies
Merchant Wholesalers 175 423930 Recyclable Material Merchant Wholesalers 125
423940 Jewelry, Watch, Precious Stone, and Precious Metal Merchant Wholesalers
125 423990 Other Miscellaneous Durable Goods Merchant Wholesalers 100 Subsector
424—Merchant Wholesalers, Nondurable Goods 424110 Printing and Writing Paper
Merchant Wholesalers 225 424120 Stationery and Office Supplies Merchant
Wholesalers 150 424130 Industrial and Personal Service Paper Merchant
Wholesalers 150 424210 Drugs and Druggists' Sundries Merchant Wholesalers 250
424310 Piece Goods, Notions, and Other Dry Goods Merchant Wholesalers 100 424340
Footwear Merchant Wholesalers 200 424350 Clothing and Clothing Accessories
Merchant Wholesalers 150 424410 General Line Grocery Merchant Wholesalers 250
424420 Packaged Frozen Food Merchant Wholesalers 200 424430 Dairy Product
(except Dried or Canned) Merchant Wholesalers 200 424440 Poultry and Poultry
Product Merchant Wholesalers 150 424450 Confectionery Merchant Wholesalers 225
424460 Fish and Seafood Merchant Wholesalers 100 424470 Meat and Meat Product
Merchant Wholesalers 150 424480 Fresh Fruit and Vegetable Merchant Wholesalers
100 424490 Other Grocery and Related Products Merchant Wholesalers 250 424510
Grain and Field Bean Merchant Wholesalers 200 424520 Livestock Merchant
Wholesalers 125 424590 Other Farm Product Raw Material Merchant Wholesalers 175
424610 Plastics Materials and Basic Forms and Shapes Merchant Wholesalers 150
424690 Other Chemical and Allied Products Merchant Wholesalers 175 424710
Petroleum Bulk Stations and Terminals 225 424720 Petroleum and Petroleum
Products Merchant Wholesalers (except Bulk Stations and Terminals) 200 424810
Beer and Ale Merchant Wholesalers 200 424820 Wine and Distilled Alcoholic
Beverage Merchant Wholesalers 250 424910 Farm Supplies Merchant Wholesalers 200
424920 Book, Periodical, and Newspaper Merchant Wholesalers 200 424930 Flower,
Nursery Stock, and Florists' Supplies Merchant Wholesalers 100 424940 Tobacco
Product and Electronic Cigarette Merchant Wholesalers 250 424950 Paint, Varnish,
and Supplies Merchant Wholesalers 150 424990 Other Miscellaneous Nondurable
Goods Merchant Wholesalers 100 Subsector 425—Wholesale Trade Agents and Brokers
425120 Wholesale Trade Agents and Brokers 125 Sector 44-45—Retail Trade (These
NAICS codes shall not be used to classify Government acquisitions for supplies.
They also shall not be used by Federal Government contractors when
subcontracting for the acquisition for supplies. The applicable manufacturing
NAICS code shall be used to classify acquisitions for supplies. A Wholesale
Trade or Retail Trade business concern submitting an offer or a quote on a
supply acquisition is categorized as a nonmanufacturer and deemed small if it
has 500 or fewer employees and meets the requirements of 13 CFR 121.406.)
Subsector 441—Motor Vehicle and Parts Dealers 441110 New Car Dealers 200 441120
Used Car Dealers $30.5 441210 Recreational Vehicle Dealers $40.0 441222 Boat
Dealers $40.0 441227 Motorcycle, ATV, and All Other Motor Vehicle Dealers $40.0
441330 Automotive Parts and Accessories Retailers $28.5 441340 Tire Dealers
$25.5 Subsector 444—Building Material and Garden Equipment and Supplies Dealers
444110 Home Centers $47.0 444120 Paint and Wallpaper Retailers $34.0 444140
Hardware Retailers $16.5 444180 Other Building Material Dealers $25.0 444230
Outdoor Power Equipment Retailers $9.5 444240 Nursery, Garden Center, and Farm
Supply Retailers $21.5 Subsector 445—Food and Beverage Stores 445110
Supermarkets and Other Grocery Retailers (except Convenience Retailers) $40.0
445131 Convenience Retailers $36.5 445132 Vending Machine Operators $21.0 445230
Fruit and Vegetable Retailers $9.0 445240 Meat Retailers $9.0 445250 Fish and
Seafood Retailers $9.0 445291 Baked Goods Retailers $16.0 445292 Confectionery
and Nut Retailers $19.5 445298 All Other Specialty Food Retailers $10.0 445320
Beer, Wine, and Liquor Retailers $10.0 Subsector 449—Furniture, Home
Furnishings, Electronics, and Appliance Retailers 449110 Furniture Retailers
$25.0 449121 Floor Covering Retailers $9.0 449122 Window Treatment Retailers
$11.5 449129 All Other Home Furnishings Retailers $33.5 449210 Electronics and
Appliance Retailers $40.0 Subsector 455—General Merchandise Retailers 455110
Department Stores $40.0 455211 Warehouse Clubs and Supercenters $47.0 455219 All
Other General Merchandise Retailers $40.0 Subsector 456—Health and Personal Care
Retailers 456110 Pharmacies and Drug Retailers $37.5 456120 Cosmetics, Beauty
Supplies, and Perfume Retailers $34.0 456130 Optical Goods Retailers $29.5
456191 Food (Health) Supplement Retailers $22.5 456199 All Other Health and
Personal Care Retailers $9.5 Subsector 457—Gasoline Stations and Fuel Dealers
457110 Gasoline Stations with Convenience Stores $36.5 457120 Other Gasoline
Stations $33.5 457210 Fuel Dealers 100 Subsector 458—Clothing, Clothing
Accessories, Shoe, and Jewelry Retailers 458110 Clothing and Clothing
Accessories Retailers $47.0 458210 Shoe Retailers $34.0 458310 Jewelry Retailers
$20.5 458320 Luggage and Leather Goods Retailers $38.0 Subsector 459—Sporting
Goods, Hobby, Musical Instrument, Book, and Miscellaneous Retailers 459110
Sporting Goods Retailers $26.5 459120 Hobby, Toy, and Game Retailers $35.0
459130 Sewing, Needlework, and Piece Goods Retailers $34.0 459140 Musical
Instrument and Supplies Retailers $22.5 459210 Book Retailers and News Dealers
$36.0 459310 Florists $9.0 459410 Office Supplies and Stationery Retailers $40.0
459420 Gift, Novelty, and Souvenir Retailers $13.5 459510 Used Merchandise
Retailers $14.0 459910 Pet and Pet Supplies Retailers $32.0 459920 Art Dealers
$16.5 459930 Manufactured (Mobile) Home Dealers $19.0 459991 Tobacco, Electronic
Cigarette, and Other Smoking Supplies Retailers $11.5 459999 All Other
Miscellaneous Retailers $11.5 Sectors 48-49—Transportation and Warehousing
Subsector 481—Air Transportation 481111 Scheduled Passenger Air Transportation
1,500 481112 Scheduled Freight Air Transportation 1,500 481211 Nonscheduled
Chartered Passenger Air Transportation 1,500 481212 Nonscheduled Chartered
Freight Air Transportation 1,500 481219 Other Nonscheduled Air Transportation
$25.0 Subsector 482—Rail Transportation 482111 Line-Haul Railroads 1,500 482112
Short Line Railroads 1,500 Subsector 483—Water Transportation 483111 Deep Sea
Freight Transportation 1,050 483112 Deep Sea Passenger Transportation 1,500
483113 Coastal and Great Lakes Freight Transportation 800 483114 Coastal and
Great Lakes Passenger Transportation 550 483211 Inland Water Freight
Transportation 1,050 483212 Inland Water Passenger Transportation 550 Subsector
484—Truck Transportation 484110 General Freight Trucking, Local $34.0 484121
General Freight Trucking, Long-Distance, Truckload $34.0 484122 General Freight
Trucking, Long-Distance, Less Than Truckload $43.0 484210 Used Household and
Office Goods Moving $34.0 484220 Specialized Freight (except Used Goods)
Trucking, Local $34.0 484230 Specialized Freight (except Used Goods) Trucking,
Long-Distance $34.0 Subsector 485—Transit and Ground Passenger Transportation
485111 Mixed Mode Transit Systems $29.0 485112 Commuter Rail Systems $47.0
485113 Bus and Other Motor Vehicle Transit Systems $32.5 485119 Other Urban
Transit Systems $37.5 485210 Interurban and Rural Bus Transportation $32.0
485310 Taxi and Ridesharing Services $19.0 485320 Limousine Service $19.0 485410
School and Employee Bus Transportation $30.0 485510 Charter Bus Industry $19.0
485991 Special Needs Transportation $19.0 485999 All Other Transit and Ground
Passenger Transportation $19.0 Subsector 486—Pipeline Transportation 486110
Pipeline Transportation of Crude Oil 1,500 486210 Pipeline Transportation of
Natural Gas $41.5 486910 Pipeline Transportation of Refined Petroleum Products
1,500 486990 All Other Pipeline Transportation $46.0 Subsector 487—Scenic and
Sightseeing Transportation 487110 Scenic and Sightseeing Transportation, Land
$20.5 487210 Scenic and Sightseeing Transportation, Water $14.0 487990 Scenic
and Sightseeing Transportation, Other $25.0 Subsector 488—Support Activities for
Transportation 488111 Air Traffic Control $40.0 488119 Other Airport Operations
$40.0 488190 Other Support Activities for Air Transportation $40.0 488210
Support Activities for Rail Transportation $34.0 488310 Port and Harbor
Operations $47.0 488320 Marine Cargo Handling $47.0 488330 Navigational Services
to Shipping $47.0 488390 Other Support Activities for Water Transportation $47.0
488410 Motor Vehicle Towing $9.0 488490 Other Support Activities for Road
Transportation $18.0 488510 Freight Transportation Arrangement10 $20.010 488510
(Exception) Non-Vessel Owning Common Carriers and Household Goods Forwarders
$34.0 488991 Packing and Crating $34.0 488999 All Other Support Activities for
Transportation $25.0 Subsector 491—Postal Service 491110 Postal Service $9.0
Subsector 492—Couriers and Messengers 492110 Couriers and Express Delivery
Services 1,500 492210 Local Messengers and Local Delivery $34.0 Subsector
493—Warehousing and Storage 493110 General Warehousing and Storage $34.0 493120
Refrigerated Warehousing and Storage $36.5 493130 Farm Product Warehousing and
Storage $34.0 493190 Other Warehousing and Storage $36.5 Sector 51—Information
Subsector 512—Motion Picture and Sound Recording Industries 512110 Motion
Picture and Video Production $40.0 512120 Motion Picture and Video Distribution
$39.0 512131 Motion Picture Theaters (except Drive-Ins) $47.0 512132 Drive-In
Motion Picture Theaters $12.5 512191 Teleproduction and Other Postproduction
Services $39.0 512199 Other Motion Picture and Video Industries $28.5 512230
Music Publishers 900 512240 Sound Recording Studios $11.0 512250 Record
Production and Distribution 900 512290 Other Sound Recording Industries $22.5
Subsector 513—Publishing Industries 513110 Newspaper Publishers 1,000 513120
Periodical Publishers 1,000 513130 Book Publishers 1,000 513140 Directory and
Mailing List Publishers 1,000 513191 Greeting Card Publishers 1,000 513199 All
Other Publishers 1,000 513210 Software Publishers15 $47.015 Subsector
516—Broadcasting and Content Providers 516110 Radio Broadcasting Stations $47.0
516120 Television Broadcasting Stations $47.0 516210 Media Streaming
Distribution Services, Social Networks, and Other Media Networks and Content
Providers $47.0 Subsector 517—Telecommunications 517111 Wired Telecommunications
Carriers 1,500 517112 Wireless Telecommunications Carriers (except Satellite)
1,500 517121 Telecommunications Resellers 1,500 517122 Agents for Wireless
Telecommunications Services 1,500 517410 Satellite Telecommunications $44.0
517810 All Other Telecommunications $40.0 Subsector 518—Computing Infrastructure
Providers, Data Processing, Web Hosting, and Related Services 518210 Computing
Infrastructure Providers, Data Processing, Web Hosting, and Related Services
$40.0 Subsector 519—Web Search Portals, Libraries, Archives, and Other
Information Services 519210 Libraries and Archives $21.0 519290 Web Search
Portals and All Other Information Services 1,000 Sector 52—Finance and Insurance
Subsector 522—Credit Intermediation and Related Activities 522110 Commercial
Banking8 $850 million in assets8 522130 Credit Unions8 $850 million in assets8
522180 Savings Institutions and Other Depository Credit Intermediation8 $850
million in assets8 522210 Credit Card Issuing8 $850 million in assets8 522220
Sales Financing $47.0 522291 Consumer Lending $47.0 522292 Real Estate Credit
$47.0 522299 International, Secondary Market, and All Other Nondepository Credit
Intermediation $47.0 522310 Mortgage and Nonmortgage Loan Brokers $15.0 522320
Financial Transactions Processing, Reserve, and Clearinghouse Activities $47.0
522390 Other Activities Related to Credit Intermediation $28.5 Subsector
523—Securities, Commodity Contracts, and Other Financial Investments and Related
Activities 523150 Investment Banking and Securities Intermediation $47.0 523160
Commodity Contracts Intermediation $41.5 523210 Securities and Commodity
Exchanges $47.0 523910 Miscellaneous Intermediation $47.0 523940 Portfolio
Management and Investment Advice $47.0 523991 Trust, Fiduciary and Custody
Activities $47.0 523999 Miscellaneous Financial Investment Activities $47.0
Subsector 524—Insurance Carriers and Related Activities 524113 Direct Life
Insurance Carriers $47.0 524114 Direct Health and Medical Insurance Carriers
$47.0 524126 Direct Property and Casualty Insurance Carriers 1,500 524127 Direct
Title Insurance Carriers $47.0 524128 Other Direct Insurance (except Life,
Health and Medical) Carriers $47.0 524130 Reinsurance Carriers $47.0 524210
Insurance Agencies and Brokerages $15.0 524291 Claims Adjusting $25.0 524292
Pharmacy Benefit Management and Other Third Party Administration of Insurance
and Pension Funds $45.5 524298 All Other Insurance Related Activities $30.5
Subsector 525—Funds, Trusts and Other Financial Vehicles 525110 Pension Funds
$40.0 525120 Health and Welfare Funds $40.0 525190 Other Insurance Funds $40.0
525910 Open-End Investment Funds $40.0 525920 Trusts, Estates, and Agency
Accounts $40.0 525990 Other Financial Vehicles $40.0 Sector 53—Real Estate and
Rental and Leasing Subsector 531—Real Estate 531110 Lessors of Residential
Buildings and Dwellings9 $34.09 531120 Lessors of Nonresidential Buildings
(except Miniwarehouses) 9 $34.09 531130 Lessors of Miniwarehouses and
Self-Storage Units9 $34.09 531190 Lessors of Other Real Estate Property9 $34.09
531210 Offices of Real Estate Agents and Brokers10 $15.010 531311 Residential
Property Managers $12.5 531312 Nonresidential Property Managers $19.5 531320
Offices of Real Estate Appraisers $9.5 531390 Other Activities Related to Real
Estate $19.5 Subsector 532—Rental and Leasing Services 532111 Passenger Car
Rental $47.0 532112 Passenger Car Leasing $47.0 532120 Truck, Utility Trailer,
and RV (Recreational Vehicle) Rental and Leasing $47.0 532210 Consumer
Electronics and Appliances Rental $47.0 532281 Formal Wear and Costume Rental
$25.0 532282 Video Tape and Disc Rental $35.0 532283 Home Health Equipment
Rental $41.0 532284 Recreational Goods Rental $9.0 532289 All Other Consumer
Goods Rental $12.5 532310 General Rental Centers $9.0 532411 Commercial Air,
Rail, and Water Transportation Equipment Rental and Leasing $45.5 532412
Construction, Mining and Forestry Machinery and Equipment Rental and Leasing
$40.0 532420 Office Machinery and Equipment Rental and Leasing $40.0 532490
Other Commercial and Industrial Machinery and Equipment Rental and Leasing $40.0
Subsector 533—Lessors of Nonfinancial Intangible Assets (except Copyrighted
Works) 533110 Lessors of Nonfinancial Intangible Assets (except Copyrighted
Works) $47.0 Sector 54—Professional, Scientific and Technical Services Subsector
541—Professional, Scientific and Technical Services 541110 Offices of Lawyers
$15.5 541191 Title Abstract and Settlement Offices $19.5 541199 All Other Legal
Services $20.5 541211 Offices of Certified Public Accountants $26.5 541213 Tax
Preparation Services $25.0 541214 Payroll Services $39.0 541219 Other Accounting
Services $25.0 541310 Architectural Services $12.5 541320 Landscape
Architectural Services $9.0 541330 Engineering Services $25.5 541330 (Exception
1) Military and Aerospace Equipment and Military Weapons $47.0 541330 (Exception
2) Contracts and Subcontracts for Engineering Services Awarded Under the
National Energy Policy Act of 1992 $47.0 541330 (Exception 3) Marine Engineering
and Naval Architecture $47.0 541340 Drafting Services $9.0 541350 Building
Inspection Services $11.5 541360 Geophysical Surveying and Mapping Services
$28.5 541370 Surveying and Mapping (except Geophysical) Services $19.0 541380
Testing Laboratories and Services $19.0 541410 Interior Design Services $9.0
541420 Industrial Design Services $17.0 541430 Graphic Design Services $9.0
541490 Other Specialized Design Services $13.5 541511 Custom Computer
Programming Services $34.0 541512 Computer Systems Design Services $34.0 541513
Computer Facilities Management Services $37.0 541519 Other Computer Related
Services $34.0 541519 (Exception) Information Technology Value Added Resellers18
15018 541611 Administrative Management and General Management Consulting
Services $24.5 541612 Human Resources Consulting Services $29.0 541613 Marketing
Consulting Services $19.0 541614 Process, Physical Distribution and Logistics
Consulting Services $20.0 541618 Other Management Consulting Services $19.0
541620 Environmental Consulting Services $19.0 541690 Other Scientific and
Technical Consulting Services $19.0 541713 Research and Technology in
Nanotechnology11 1,00011 541714 Research and Technology in Biotechnology (except
Nanobiotechnology)11 1,00011 541715 Research and Development in the Physical,
Engineering, and Life Sciences (except Nanotechnology and Biotechnology)11 11
1,000 541715 (Exception 1) Aircraft, Aircraft Engine and Engine Parts11 11 1,500
541715 (Exception 2) Other Aircraft Parts and Auxiliary Equipment11 11 1,250
541715 (Exception 3) Guided Missiles and Space Vehicles, Their Propulsion Units
and Propulsion Parts11 11 1,300 541720 Research and Development in the Social
Sciences and Humanities $28.0 541810 Advertising Agencies10 $25.510 541820
Public Relations Agencies $19.0 541830 Media Buying Agencies $32.5 541840 Media
Representatives $21.0 541850 Indoor and Outdoor Display Advertising $34.5 541860
Direct Mail Advertising $22.0 541870 Advertising Material Distribution Services
$28.5 541890 Other Services Related to Advertising $19.0 541910 Marketing
Research and Public Opinion Polling $22.5 541921 Photography Studios, Portrait
$16.0 541922 Commercial Photography $9.0 541930 Translation and Interpretation
Services $22.5 541940 Veterinary Services $10.0 541990 All Other Professional,
Scientific and Technical Services $19.5 Sector 55—Management of Companies and
Enterprises Subsector 551—Management of Companies and Enterprises 551111 Offices
of Bank Holding Companies $38.5 551112 Offices of Other Holding Companies $45.5
Sector 56—Administrative and Support and Waste Management and Remediation
Services Subsector 561—Administrative and Support Services 561110 Office
Administrative Services $12.5 561210 Facilities Support Services12 $47.012
561311 Employment Placement Agencies $34.0 561312 Executive Search Services
$34.0 561320 Temporary Help Services $34.0 561330 Professional Employer
Organizations $41.5 561410 Document Preparation Services $19.0 561421 Telephone
Answering Services $19.0 561422 Telemarketing Bureaus and Other Contact Centers
$25.5 561431 Private Mail Centers $19.0 561439 Other Business Service Centers
(including Copy Shops) $26.5 561440 Collection Agencies $19.5 561450 Credit
Bureaus $41.0 561491 Repossession Services $19.0 561492 Court Reporting and
Stenotype Services $19.0 561499 All Other Business Support Services $21.5 561510
Travel Agencies10 $25.010 561520 Tour Operators10 $25.010 561591 Convention and
Visitors Bureaus $25.0 561599 All Other Travel Arrangement and Reservation
Services $32.5 561611 Investigation and Personal Background Check Services $25.0
561612 Security Guards and Patrol Services $29.0 561613 Armored Car Services
$43.0 561621 Security Systems Services (except Locksmiths) $25.0 561622
Locksmiths $25.0 561710 Exterminating and Pest Control Services $17.5 561720
Janitorial Services $22.0 561730 Landscaping Services $9.5 561740 Carpet and
Upholstery Cleaning Services $8.5 561790 Other Services to Buildings and
Dwellings $9.0 561910 Packaging and Labeling Services $19.5 561920 Convention
and Trade Show Organizers10 $20.010 561990 All Other Support Services $16.5
Subsector 562—Waste Management and Remediation Services 562111 Solid Waste
Collection $47.0 562112 Hazardous Waste Collection $47.0 562119 Other Waste
Collection $47.0 562211 Hazardous Waste Treatment and Disposal $47.0 562212
Solid Waste Landfill $47.0 562213 Solid Waste Combustors and Incinerators $47.0
562219 Other Nonhazardous Waste Treatment and Disposal $47.0 562910 Remediation
Services $25.0 562910 (Exception) Environmental Remediation Services14 14 1,000
562920 Materials Recovery Facilities $25.0 562991 Septic Tank and Related
Services $9.0 562998 All Other Miscellaneous Waste Management Services $16.5
Sector 61—Educational Services Subsector 611—Educational Services 611110
Elementary and Secondary Schools $20.0 611210 Junior Colleges $32.5 611310
Colleges, Universities and Professional Schools $34.5 611410 Business and
Secretarial Schools $20.5 611420 Computer Training $16.0 611430 Professional and
Management Development Training $15.0 611511 Cosmetology and Barber Schools
$13.0 611512 Flight Training $34.0 611513 Apprenticeship Training $11.5 611519
Other Technical and Trade Schools $21.0 611519 (Exception) Job Corps Centers16
$47.016 611610 Fine Arts Schools $9.0 611620 Sports and Recreation Instruction
$9.0 611630 Language Schools $20.5 611691 Exam Preparation and Tutoring $12.5
611692 Automobile Driving Schools $10.0 611699 All Other Miscellaneous Schools
and Instruction $16.5 611710 Educational Support Services $24.0 Sector 62—Health
Care and Social Assistance Subsector 621—Ambulatory Health Care Services 621111
Offices of Physicians (except Mental Health Specialists) $16.0 621112 Offices of
Physicians, Mental Health Specialists $13.5 621210 Offices of Dentists $9.0
621310 Offices of Chiropractors $9.0 621320 Offices of Optometrists $9.0 621330
Offices of Mental Health Practitioners (except Physicians) $9.0 621340 Offices
of Physical, Occupational and Speech Therapists and Audiologists $12.5 621391
Offices of Podiatrists $9.0 621399 Offices of All Other Miscellaneous Health
Practitioners $10.0 621410 Family Planning Centers $19.0 621420 Outpatient
Mental Health and Substance Abuse Centers $19.0 621491 HMO Medical Centers $44.5
621492 Kidney Dialysis Centers $47.0 621493 Freestanding Ambulatory Surgical and
Emergency Centers $19.0 621498 All Other Outpatient Care Centers $25.5 621511
Medical Laboratories $41.5 621512 Diagnostic Imaging Centers $19.0 621610 Home
Health Care Services $19.0 621910 Ambulance Services $22.5 621991 Blood and
Organ Banks $40.0 621999 All Other Miscellaneous Ambulatory Health Care Services
$20.5 Subsector 622—Hospitals 622110 General Medical and Surgical Hospitals
$47.0 622210 Psychiatric and Substance Abuse Hospitals $47.0 622310 Specialty
(except Psychiatric and Substance Abuse) Hospitals $47.0 Subsector 623—Nursing
and Residential Care Facilities 623110 Nursing Care Facilities (Skilled Nursing
Facilities) $34.0 623210 Residential Intellectual and Developmental Disability
Facilities $19.0 623220 Residential Mental Health and Substance Abuse Facilities
$19.0 623311 Continuing Care Retirement Communities $34.0 623312 Assisted Living
Facilities for the Elderly $23.5 623990 Other Residential Care Facilities $16.0
Subsector 624—Social Assistance 624110 Child and Youth Services $15.5 624120
Services for the Elderly and Persons with Disabilities $15.0 624190 Other
Individual and Family Services $16.0 624210 Community Food Services $19.5 624221
Temporary Shelters $13.5 624229 Other Community Housing Services $19.0 624230
Emergency and Other Relief Services $41.5 624310 Vocational Rehabilitation
Services $15.0 624410 Child Care Services $9.5 Sector 71—Arts, Entertainment and
Recreation Subsector 711—Performing Arts, Spectator Sports and Related
Industries 711110 Theater Companies and Dinner Theaters $25.0 711120 Dance
Companies $18.0 711130 Musical Groups and Artists $15.0 711190 Other Performing
Arts Companies $34.0 711211 Sports Teams and Clubs $47.0 711212 Racetracks $47.0
711219 Other Spectator Sports $16.5 711310 Promoters of Performing Arts, Sports
and Similar Events with Facilities $40.0 711320 Promoters of Performing Arts,
Sports and Similar Events without Facilities $22.0 711410 Agents and Managers
for Artists, Athletes, Entertainers and Other Public Figures $17.5 711510
Independent Artists, Writers, and Performers $9.0 Subsector 712—Museums,
Historical Sites and Similar Institutions 712110 Museums $34.0 712120 Historical
Sites $13.0 712130 Zoos and Botanical Gardens $34.0 712190 Nature Parks and
Other Similar Institutions $19.5 Subsector 713—Amusement, Gambling and
Recreation Industries 713110 Amusement and Theme Parks $47.0 713120 Amusement
Arcades $9.0 713210 Casinos (except Casino Hotels) $34.0 713290 Other Gambling
Industries $40.0 713910 Golf Courses and Country Clubs $19.0 713920 Skiing
Facilities $35.0 713930 Marinas $11.0 713940 Fitness and Recreational Sports
Centers $17.5 713950 Bowling Centers $12.5 713990 All Other Amusement and
Recreation Industries $9.0 Sector 72—Accommodation and Food Services Subsector
721—Accommodation 721110 Hotels (except Casino Hotels) and Motels $40.0 721120
Casino Hotels $40.0 721191 Bed-and-Breakfast Inns $9.0 721199 All Other Traveler
Accommodation $9.0 721211 RV (Recreational Vehicle) Parks and Campgrounds $10.0
721214 Recreational and Vacation Camps (except Campgrounds) $9.0 721310 Rooming
and Boarding Houses, Dormitories, and Workers' Camps $14.0 Subsector 722—Food
Services and Drinking Places 722310 Food Service Contractors $47.0 722320
Caterers $9.0 722330 Mobile Food Services $9.0 722410 Drinking Places (Alcoholic
Beverages) $9.0 722511 Full-Service Restaurants $11.5 722513 Limited-Service
Restaurants $13.5 722514 Cafeterias, Grill Buffets, and Buffets $34.0 722515
Snack and Nonalcoholic Beverage Bars $22.5 Sector 81—Other Services (Except
Public Administration) Subsector 811—Repair and Maintenance 811111 General
Automotive Repair $9.0 811114 Specialized Automotive Repair $9.0 811121
Automotive Body, Paint and Interior Repair and Maintenance $9.0 811122
Automotive Glass Replacement Shops $17.5 811191 Automotive Oil Change and
Lubrication Shops $11.0 811192 Car Washes $9.0 811198 All Other Automotive
Repair and Maintenance $10.0 811210 Electronic and Precision Equipment Repair
and Maintenance $34.0 811310 Commercial and Industrial Machinery and Equipment
(except Automotive and Electronic) Repair and Maintenance $12.5 811411 Home and
Garden Equipment Repair and Maintenance $9.0 811412 Appliance Repair and
Maintenance $19.0 811420 Reupholstery and Furniture Repair $9.0 811430 Footwear
and Leather Goods Repair $9.0 811490 Other Personal and Household Goods Repair
and Maintenance $9.0 Subsector 812—Personal and Laundry Services 812111 Barber
Shops $9.5 812112 Beauty Salons $9.5 812113 Nail Salons $9.0 812191 Diet and
Weight Reducing Centers $27.5 812199 Other Personal Care Services $9.0 812210
Funeral Homes and Funeral Services $12.5 812220 Cemeteries and Crematories $25.0
812310 Coin-Operated Laundries and Drycleaners $13.0 812320 Drycleaning and
Laundry Services (except Coin-Operated) $8.0 812331 Linen Supply $40.0 812332
Industrial Launderers $47.0 812910 Pet Care (except Veterinary) Services $9.0
812921 Photofinishing Laboratories (except One-Hour) $29.5 812922 One-Hour
Photofinishing $19.0 812930 Parking Lots and Garages $47.0 812990 All Other
Personal Services $15.0 Subsector 813—Religious, Grantmaking, Civic,
Professional and Similar Organizations 813110 Religious Organizations $13.0
813211 Grantmaking Foundations $40.0 813212 Voluntary Health Organizations $34.0
813219 Other Grantmaking and Giving Services $47.0 813311 Human Rights
Organizations $34.0 813312 Environment, Conservation and Wildlife Organizations
$19.5 813319 Other Social Advocacy Organizations $18.0 813410 Civic and Social
Organizations $9.5 813910 Business Associations $15.5 813920 Professional
Organizations $23.5 813930 Labor Unions and Similar Labor Organizations $16.5
813940 Political Organizations $14.0 813990 Other Similar Organizations (except
Business, Professional, Labor, and Political Organizations) $13.5 Sector
92—Public Administration 17 (Small business size standards are not established
for this sector. Establishments in the Public Administration sector are Federal,
state, and local government agencies which administer and oversee government
programs and activities that are not performed by private establishments.)
FOOTNOTES
1. NAICS code 115310—Support Activities for Forestry: Forest Fire Suppression
and Fuels Management Services are two components of Support Activities for
Forestry. Forest Fire Suppression includes establishments which provide services
to fight forest fires. These firms usually have fire-fighting crews and
equipment. Fuels Management Services firms provide services to clear land of
hazardous materials that would fuel forest fires. The treatments used by these
firms may include prescribed fire, mechanical removal, establishing fuel breaks,
thinning, pruning, and piling.
2. NAICS code 237990—Dredging: To be considered small for purposes of Government
procurement, a firm or its similarly situated subcontractors must perform at
least 40 percent of the volume dredged with their own equipment or equipment
owned by another small dredging concern.
3. NAICS code 311421—For purposes of Government procurement for food canning and
preserving, the standard of 1,000 employees excludes agricultural labor as
defined in 3306(k) of the Internal Revenue Code, 26 U.S.C. 3306(k).
4. NAICS code 324110—To qualify as small for purposes of Government procurement,
the petroleum refiner, including its affiliates, must be a concern that has
either no more than 1,500 employees or no more than 200,000 barrels per calendar
day total Operable Atmospheric Crude Oil Distillation capacity. Capacity
includes all domestic and foreign affiliates, all owned or leased facilities,
and all facilities under a processing agreement or an arrangement such as an
exchange agreement or a throughput. To qualify under the capacity size standard,
the firm, together with its affiliates, must be primarily engaged in refining
crude petroleum into refined petroleum products. A firm's “primary industry” is
determined in accordance with 13 CFR 121.107.
5. NAICS code 326211—For Government procurement, a firm is small for bidding on
a contract for pneumatic tires within Census NAICS Product Classification codes
3262111 and 3262113, provided that:
(a) The value of tires within Census NAICS Product Classification codes 3262111
and 3262113 that it manufactured in the United States during the previous
calendar year is more than 50 percent of the value of its total worldwide
manufacture,
(b) The value of pneumatic tires within Census NAICS Product Classification
codes 3262111 and 3262113 comprising its total worldwide manufacture during the
preceding calendar year was less than 5 percent of the value of all such tires
manufactured in the United States during that period, and
(c) The value of the principal product that it manufactured, 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 that period.
6. NAICS Subsectors 333, 334, 335 and 336—For rebuilding machinery or equipment
on a factory basis, or equivalent, use the NAICS code for a newly manufactured
product. Concerns performing major rebuilding or overhaul activities do not
necessarily have to meet the criteria for being a “manufacturer” although the
activities may be classified under a manufacturing NAICS code. Ordinary repair
services or preservation are not considered rebuilding.
7. NAICS code 336413—Contracts for the rebuilding or overhaul of aircraft ground
support equipment on a contract basis are classified under NAICS code 336413.
8. NAICS Codes 522110, 522130, 522180, and 522210—A financial institution's
assets are determined by averaging the assets reported on its four quarterly
financial statements for the preceding year. “Assets” for the purposes of this
size standard means the assets defined according to the Federal Financial
Institutions Examination Council 041 call report form for NAICS codes 522110,
522180, and 522210 and the National Credit Union Administration 5300 call report
form for NAICS code 522130.
9. NAICS codes 531110, 531120, 531130, and 531190—Leasing of Building Space to
the Federal Government by Owners: For Government procurement, a size standard of
$47 million in gross receipts applies to the owners of building space leased to
the Federal Government. The standard does not apply to an agent.
10. NAICS codes 488510 (excluding the exception), 531210, 541810, 561510, 561520
and 561920—As measured by total revenues, but excluding funds received in trust
for an unaffiliated third party, such as bookings or sales subject to
commissions. The commissions received are included as revenue.
11. NAICS code 541713, 541714, and 541715—
(a) Research and Development” means laboratory or other physical research and
development. It does not include economic, educational, engineering, operations,
systems, or other nonphysical research; or computer programming, data
processing, commercial and/or medical laboratory testing.
(b) For research and development contracts requiring the delivery of a
manufactured product, the appropriate size standard is that of the manufacturing
industry.
(c) For purposes of the Small Business Innovation Research (SBIR) and Small
Business Transfer Technology (STTR) programs, the term “research” or “research
and development” means any activity which is (A) a systematic, intensive study
directed toward greater knowledge or understanding of the subject studied; (B) a
systematic study directed specifically toward applying new knowledge to meet a
recognized need; or (C) a systematic application of knowledge toward the
production of useful materials, devices, and systems or methods, including
design, development, and improvement of prototypes and new processes to meet
specific requirements. See 15 U.S.C. 638(e)(5) and section 3 of the SBIR and
STTR policy directives available at www.sbir.gov. For size eligibility
requirements for the SBIR and STTR programs, see § 121.702 of this part.
(d) “Research and Development” for guided missiles and space vehicles includes
evaluations and simulation, and other services requiring thorough knowledge of
complete missiles and spacecraft.
12. NAICS code 561210—Facilities Support Services:
(a) If one or more activities of Facilities Support Services as defined in
paragraph (b) (below in this footnote) can be identified with a specific
industry and that industry accounts for 50 percent or more of the value of an
entire procurement, then the proper classification of the procurement is that of
the specific industry, not Facilities Support Services.
(b) “Facilities Support Services” requires the performance of three or more
separate activities in the areas of services or specialty trade contractors
industries. If services are performed, these service activities must each be in
a separate NAICS industry. If the procurement requires the use of specialty
trade contractors (plumbing, painting, plastering, carpentry, etc.), all such
specialty trade contractors activities are considered a single activity and
classified as “Building and Property Specialty Trade Services.” Since “Building
and Property Specialty Trade Services” is only one activity, two additional
activities of separate NAICS industries are required for a procurement to be
classified as “Facilities Support Services.”
13. NAICS code 238990—Building and Property Specialty Trade Services: If a
procurement requires the use of multiple specialty trade contractors (i.e.,
plumbing, painting, plastering, carpentry, etc.), and no specialty trade
accounts for 50 percent or more of the value of the procurement, all such
specialty trade contractors activities are considered a single activity and
classified as Building and Property Specialty Trade Services.
14. NAICS 562910—Environmental Remediation Services:
(a) For SBA assistance as a small business concern in the industry of
Environmental Remediation Services, other than for Government procurement, a
concern must be engaged primarily in furnishing a range of services for the
remediation of a contaminated environment to an acceptable condition including,
but not limited to, preliminary assessment, site inspection, testing, remedial
investigation, feasibility studies, remedial design, containment, remedial
action, removal of contaminated materials, storage of contaminated materials and
security and site closeouts. If one of such activities accounts for 50 percent
or more of a concern's total revenues, employees, or other related factors, the
concern's primary industry is that of the particular industry and not the
Environmental Remediation Services Industry.
(b) For purposes of classifying a Government procurement as Environmental
Remediation Services, the general purpose of the procurement must be to restore
or directly support the restoration of a contaminated environment (such as,
preliminary assessment, site inspection, testing, remedial investigation,
feasibility studies, remedial design, remediation services, containment, removal
of contaminated materials, storage of contaminated materials or security and
site closeouts), although the general purpose of the procurement need not
necessarily include remedial actions. Also, the procurement must be composed of
activities in three or more separate industries with separate NAICS codes or, in
some instances (e.g., engineering), smaller sub-components of NAICS codes with
separate, distinct size standards. These activities may include, but are not
limited to, separate activities in industries such as: Heavy Construction;
Specialty Trade Contractors; Engineering Services; Architectural Services;
Management Consulting Services; Hazardous and Other Waste Collection;
Remediation Services, Testing Laboratories; and Research and Development in the
Physical, Engineering and Life Sciences. If any activity in the procurement can
be identified with a separate NAICS code, or component of a code with a separate
distinct size standard, and that industry accounts for 50 percent or more of the
value of the entire procurement, then the proper size standard is the one for
that particular industry, and not the Environmental Remediation Service size
standard.
15. NAICS code 513210—For purposes of Government procurement, the purchase of
software subject to potential waiver of the nonmanufacturer rule pursuant to §
121.1203(d) should be classified under this NAICS code.
16. NAICS code 611519—Job Corps Centers. For classifying a Federal procurement,
the purpose of the solicitation must be for the management and operation of a
U.S. Department of Labor Job Corps Center. The activities involved include
admissions activities, life skills training, educational activities,
comprehensive career preparation activities, career development activities,
career transition activities, as well as the management and support functions
and services needed to operate and maintain the facility. For SBA assistance as
a small business concern, other than for Federal Government procurements, a
concern must be primarily engaged in providing the services to operate and
maintain Federal Job Corps Centers.
17. NAICS Sector 92—Small business size standards are not established for this
sector. Establishments in the Public Administration sector are Federal, State,
and local government agencies which administer and oversee government programs
and activities that are not performed by private establishments. Concerns
performing operational services for the administration of a government program
are classified under the NAICS private sector industry based on the activities
performed. Similarly, procurements for these types of services are classified
under the NAICS private sector industry that best describes the activities to be
performed. For example, if a government agency issues a procurement for law
enforcement services, the requirement would be classified using one of the NAICS
industry codes under 56161, Investigation, Guard, and Armored Car Services.
18. NAICS code 541519—An Information Technology Value Added Reseller (ITVAR)
provides a total solution to information technology acquisitions by providing
multi-vendor hardware and software along with significant value added services.
Significant value added services consist of, but are not limited to,
configuration consulting and design, systems integration, installation of
multi-vendor computer equipment, customization of hardware or software,
training, product technical support, maintenance, and end user support. For
purposes of Government procurement, an information technology procurement
classified under this exception and 150-employee size standard must consist of
at least 15% and not more than 50% of value added services, as measured by the
total contract price. In addition, the offeror must comply with the
manufacturing performance requirements, or comply with the non-manufacturer rule
by supplying the products of small business concerns, unless SBA has issued a
class or contract specific waiver of the non-manufacturer rule. If the contract
consists of less than 15% of value added services, then it must be classified
under a NAICS manufacturing industry. If the contract consists of more than 50%
of value added services, then it must be classified under the NAICS industry
that best describes the predominate service of the procurement.
[65 FR 30840, May 15, 2000]
EDITORIAL NOTE
EDITORIAL NOTES:
For Federal Register citations affecting § 121.201, see the List of CFR Sections
Affected, which appears in the Finding Aids section of the printed volume and at
www.govinfo.gov.
SIZE ELIGIBILITY REQUIREMENTS FOR SBA FINANCIAL ASSISTANCE
§ 121.301 WHAT SIZE STANDARDS AND AFFILIATION PRINCIPLES ARE APPLICABLE TO
FINANCIAL ASSISTANCE PROGRAMS?
The Small Business Act defines a small business concern as one which is
independently owned and operated, and which is not dominant in its field of
operation. SBA interprets this statutory definition to require, in certain
circumstances, the inclusion of other entities (“Affiliates”) owned by the
applicant or an owner of the applicant in determining the size of the applicant.
(a) For Business Loans (other than for 7(a) Business Loans) and for Disaster
Loans (other than physical disaster loans), an applicant business concern must
satisfy two criteria:
(1) The size of the applicant alone (without affiliates) must not exceed the
size standard designated for the industry in which the applicant is primarily
engaged; and
(2) The size of the applicant combined with its affiliates must not exceed the
size standard designated for either the primary industry of the applicant alone
or the primary industry of the applicant and its affiliates, which ever is
higher. These size standards are set forth in § 121.201.
(b) For 7(a) Business Loans and Development Company programs, an applicant
business concern must meet one of the following standards:
(1) The same standards applicable under paragraph (a) of this section; or
(2) Including its affiliates, tangible net worth not in excess of $20 million,
and average net income after Federal income taxes (excluding any carry over
losses) for the preceding two completed fiscal years not in excess of $6.5
million.
(i) If the applicant is not required by law to pay State (and local, if any)
income taxes at the enterprise level, multiply its net income by the marginal
State income tax rate (or by the combined State and local income tax rates, as
applicable) that would have applied if it were a taxable corporation.
(ii) Multiply the applicant's net income, less any deduction for State and local
income taxes calculated under paragraph (b)(2)(i) of this section, by the
marginal Federal income tax rate that would have applied if the applicant were a
taxable corporation.
(iii) Sum the results obtained in paragraphs (b)(2)(i) and (b)(2)(ii) of this
section.
(c) For the Small Business Investment Company (SBIC) program, an applicant must
meet one of the following standards:
(1) The same standards applicable under paragraph (a) of this section; or
(2) Including its affiliates, tangible net worth not in excess of $24 million,
and average net income after Federal income taxes (excluding any carry-over
losses) for the preceding two completed fiscal years not in excess of $8
million. If the applicant is not required by law to pay Federal income taxes at
the enterprise level, but is required to pass income through to its
shareholders, partners, beneficiaries, or other equitable owners, the
applicant's “net income after Federal income taxes” will be its net income
reduced by an amount computed as follows:
(i) If the applicant is not required by law to pay State (and local, if any)
income taxes at the enterprise level, multiply its net income by the marginal
State income tax rate (or by the combined State and local income tax rates, as
applicable) that would have applied if it were a taxable corporation.
(ii) Multiply the applicant's net income, less any deduction for State and local
income taxes calculated under paragraph (c)(2)(i) of this section, by the
marginal Federal income tax rate that would have applied if the applicant were a
taxable corporation.
(iii) Add the results obtained in paragraphs (c)(2)(i) and (c)(2)(ii) of this
section.
(d) For Surety Bond Guarantee assistance—a business concern, combined with its
affiliates, must meet the size standard for the primary industry in which such
business concern, combined with its affiliates, is engaged.
(e) The applicable size standards for purposes of SBA's financial assistance
programs, excluding the Surety Bond Guarantee assistance program, are increased
by 25 percent whenever the applicant agrees to use all of the financial
assistance within a labor surplus area. The U.S. Department of Labor (DOL)
issues the Labor Surplus Area (LSA) list on a fiscal year basis on its website
at www.dol.gov/agencies/eta/lsa.
(f) Affiliation. Any of the circumstances described below establishes
affiliation for applicants of SBA's Business Loan, Disaster Loan, and Surety
Bond Programs. For this rule, the Business Loan Programs consist of the 7(a)
Loan Program (Direct and Guaranteed Loans), the Microloan Program, the
Intermediary Lending Pilot Program, and the Development Company Loan Program
(“504 Loan Program”). The Disaster Loan Programs consist of Physical Disaster
Business Loans, Economic Injury Disaster Loans, Military Reservist Economic
Injury Disaster Loans, and Immediate Disaster Assistance Program loans. The
following principles apply for the Business Loan, Disaster Loan, and Surety Bond
Guarantee Programs:
(1) Ownership.
(i) When the Applicant owns more than 50 percent of another business, the
Applicant and the other business are affiliated.
(ii) When a business owns more than 50 percent of an Applicant, the business
that owns the Applicant is affiliated with the Applicant. Additionally, if the
business entity owner that owns more than 50 percent of the Applicant also owns
more than 50 percent of another business that operates in the same 3-digit NAICS
subsector as the Applicant, then the business entity owner, the other business
and the Applicant are all affiliated.
(iii) When an individual owns more than 50 percent of the Applicant and the
individual also owns more than 50 percent of another business entity that
operates in the same 3-digit NAICS subsector as the Applicant, the Applicant and
the individual owner's other business entity are affiliated.
(iv) When the Applicant does not have an owner that owns more than 50 percent of
the Applicant, if an owner of 20 percent or more of the Applicant is a business
that operates in the same 3-digit NAICS subsector as the Applicant, the
Applicant and the owner are affiliated.
(v) When the Applicant does not have an owner that owns more than 50 percent of
the Applicant, if an owner of 20 percent or more of the Applicant also owns more
than 50 percent of another business entity that operates in the same 3-digit
NAICS subsector as the Applicant, the Applicant and the owner's other business
entity are affiliated.
(vi) Ownership interests of spouses and minor children must be combined when
determining amount of ownership interest.
(vii) When determining the percentage of ownership that an individual owns in a
business, SBA considers the pro rata ownership of entities. For example, John
Smith, Jane Doe, and Jane Doe, Inc., each own an interest in the Applicant. Jane
Doe owns 15 percent of the Applicant, and she also owns 100 percent of Jane Doe,
Inc. Jane Doe, Inc. owns 50 percent of the Applicant. SBA considers Jane Doe to
own 65 percent of the Applicant.
(2) Stock options, convertible securities, and agreements to merge.
(i) For purposes of this subparagraph, SBA considers stock options, convertible
securities, and agreements to merge (including agreements in principle) to have
a present effect on the ownership of the entity. SBA treats such options,
convertible securities, and agreements as though the rights granted have been
exercised.
(ii) Agreements to open or continue negotiations towards the possibility of a
merger or a sale of stock at a later date are not considered “agreements in
principle” and are thus not given present effect.
(iii) Options, convertible securities, and agreements that are subject to
conditions precedent which are incapable of fulfillment, speculative,
conjectural, or unenforceable under state or Federal law, or where the
probability of the transaction (or exercise of the rights) occurring is shown to
be extremely remote, are not given present effect.
(iv) SBA will not give present effect to individuals', concerns', or other
entities' ability to divest all or part of their ownership interest to avoid a
finding of affiliation.
(3) Determining the concern's size. In determining the concern's size, SBA
counts the receipts, employees (see § 121.201), or the alternate size standard
(if applicable) of the concern whose size is at issue and all of its domestic
and foreign affiliates, regardless of whether the affiliates are organized for
profit.
(4) Exceptions to affiliation. For exceptions to affiliation, see § 121.103(b).
(g) For COVID-19 Economic Injury Disaster (COVID EIDL) loans, an “affiliated
business” or “affiliate” is a business in which an eligible entity has an equity
interest or right to profit distributions of not less than 50 percent, or in
which an eligible entity has the contractual authority to control the direction
of the business, provided that such affiliation shall be determined as of any
arrangements or agreements in existence as of January 31, 2020. For exceptions
to affiliation, see § 121.103(b).
[61 FR 3286, Jan. 31, 1996, as amended at 66 FR 30648, June 7, 2001; 67 FR 3056,
Jan. 23, 2002; 69 FR 29204, May 21, 2004; 70 FR 69047, 69052, Nov. 14, 2005; 70
FR 72594, Dec. 6, 2005; 71 FR 62208, Oct. 24, 2006; 73 FR 41254, July 18, 2008;
74 FR 20580, May 5, 2009; 74 FR 36110, July 22, 2009; 75 FR 48550, Aug. 11,
2010; 79 FR 33669, June 12, 2014; 79 FR 71296, Dec. 2, 2014; 81 FR 41428, June
27, 2016; 85 FR 7651, Feb. 10, 2020; 85 FR 80588, Dec. 14, 2020; 86 FR 50218,
Sept. 8, 2021; 87 FR 69154, Nov. 17, 2022; 88 FR 21086, Apr. 10, 2023; 89 FR
11712, Feb. 15, 2024]
§ 121.302 WHEN DOES SBA DETERMINE THE SIZE STATUS OF AN APPLICANT?
(a) The size status of an applicant for SBA financial assistance is determined
as of the date the application for financial assistance is accepted for
processing by SBA, except for applications under the Preferred Lenders Program
(PLP), the Disaster Loan program, the SBIC program, and the New Markets Venture
Capital (NMCV) program.
(b) For the Preferred Lenders Program, size is determined as of the date of
approval of the loan by the Preferred Lender.
(c) For disaster loan assistance (other than physical disaster loans), size
status is determined as of the date the disaster commenced, as set forth in the
Disaster Declaration. For pre-disaster mitigation loans, size status is
determined as of the date SBA accepts a complete Pre-Disaster Mitigation Small
Business Loan Application for processing. Refer to § 123.408 of this chapter to
find out what SBA considers to be a complete Pre-Disaster Mitigation Small
Business Loan Application.
(d) For financial assistance from an SBIC licensee or an NMVC company, size is
determined as of the date a concern's application is accepted for processing by
the SBIC or the NMVC company.
(e) Changes in size after the applicable date when size is determined will not
disqualify an applicant for assistance.
[61 FR 3286, Jan. 31, 1996, as amended at 64 FR 48276, Sept. 3, 1999; 67 FR
11880, Mar. 15, 2002; 67 FR 62337, Oct. 7, 2002; 69 FR 29204, May 21, 2004; 70
FR 72594, Dec. 6, 2005; 73 FR 41254, July 18, 2008; 75 FR 48550, Aug. 11, 2010;
79 FR 33669, June 12, 2014; 85 FR 7652, Feb. 10, 2020; 85 FR 80589, Dec. 14,
2020]
§ 121.303 WHAT SIZE PROCEDURES ARE USED BY SBA BEFORE IT MAKES A FORMAL SIZE
DETERMINATION?
(a) A concern that submits an application for financial assistance is deemed to
have certified that it is small under the applicable size standard. SBA may
question the concern's status based on information supplied in the application
or from any other source.
(b) A small business investment company, a development company, a surety bond
company, or a preferred lender may accept as true the size information provided
by an applicant, unless credible evidence to the contrary is apparent.
(c) Size is initially considered by the individual with final financial
assistance authority. This is not a formal size determination. A formal
determination may be requested prior to a denial of eligibility based on size.
(d) An applicant may request a formal size determination when assistance has
been denied for size ineligibility. Except for disaster loan eligibility, a
request for a formal size determination must be made to the Government
Contracting Area Director serving the area in which the headquarters of the
applicant is located, regardless of the location of the parent company or
affiliates. For disaster loan assistance, the request for a size determination
must be made to the Area Director for the Disaster Area Office which denied the
assistance.
(e) There are no time limitations for making a formal size determination for
purposes of financial assistance. The official making the formal size
determination must provide a copy of the determination to the applicant, to the
requesting SBA official, and to other interested SBA program officials.
§ 121.304 WHAT ARE THE SIZE REQUIREMENTS FOR REFINANCING AN EXISTING SBA LOAN?
(a) A concern that applies to refinance an existing SBA loan or guarantee will
be considered small for the refinancing even though its size has increased since
the date of the original financing to exceed its applicable size standard,
provided that:
(1) The increase in size is due to natural growth (as distinguished from merger,
acquisition or similar management action); and
(2) SBA determines that refinancing is necessary to protect the Government's
financial interest.
(b) If a concern's size has increased other than by natural growth, the concern
and its affiliates must be small at the time the application for refinancing is
accepted for processing by SBA.
§ 121.305 WHAT SIZE ELIGIBILITY REQUIREMENTS EXIST FOR OBTAINING FINANCIAL
ASSISTANCE RELATING TO PARTICULAR PROCUREMENTS?
A concern qualified as small for a particular procurement, including an 8(a)
subcontract, is small for financial assistance directly and primarily relating
to the performance of the particular procurement.
SIZE ELIGIBILITY REQUIREMENTS FOR GOVERNMENT PROCUREMENT
§ 121.401 WHAT PROCUREMENT PROGRAMS ARE SUBJECT TO SIZE DETERMINATIONS?
The rules set forth in §§ 121.401 through 121.412 apply to all Federal
procurement programs for which status as a small business is required or
advantageous, including the small business set-aside program, SBA's Certificate
of Competency program, SBA's 8(a) Business Development program, SBA's HUBZone
program, the Women Owned Small Business (WOSB) Federal Contract Program, SBA's
Service-Disabled Veteran-Owned Small Business program, the Small Business
Subcontracting program, and the Federal Small Disadvantaged Business (SDB)
program.
[75 FR 62280, Oct. 7, 2010, as amended at 88 FR 26200, Apr. 27, 2023]
§ 121.402 WHAT SIZE STANDARDS ARE APPLICABLE TO FEDERAL GOVERNMENT CONTRACTING
PROGRAMS?
(a) A concern must not exceed the size standard for the NAICS code specified in
the solicitation. The contracting officer must specify the size standard in
effect on the date the solicitation is issued. If SBA amends the size standard
and it becomes effective before the date initial offers (including price) are
due, the contracting officer may amend the solicitation and use the new size
standard.
(b) The procuring agency contracting officer, or authorized representative,
designates the proper NAICS code and corresponding size standard in a
solicitation, selecting the single NAICS code which best describes the principal
purpose of the product or service being acquired. Except for multiple award
contracts as set forth in paragraph (c) of this section, every solicitation,
including a request for quotations, must contain only one NAICS code and only
one corresponding size standard.
(1) Primary consideration is given to the industry descriptions in the U.S.
NAICS Manual, the product or service description in the solicitation and any
attachments to it, the relative value and importance of the components of the
procurement making up the end item being procured, and the function of the goods
or services being purchased.
(2) A procurement is generally classified according to the component which
accounts for the greatest percentage of contract value. Acquisitions for
supplies must be classified under the appropriate manufacturing or supply NAICS
code, not under a Wholesale Trade or Retail Trade NAICS code. A concern that
submits an offer or quote for a contract, order, or subcontract where the NAICS
code assigned to the contract, order, or subcontract is one for supplies, and
furnishes a product it did not itself manufacture or produce, is categorized as
a nonmanufacturer and deemed small if it has 500 or fewer employees and meets
the requirements of § 121.406(b).
(c) Multiple Award Contracts (see definition at § 125.1).
(1) For a Multiple Award Contract, the contracting officer must:
(i) Assign the solicitation a single NAICS code and corresponding size standard
which best describes the principal purpose of the acquisition as set forth in
paragraph (b) of this section, only if the NAICS code will also best describe
the principal purpose of each order to be placed under the Multiple Award
Contract; or
(ii) Divide the solicitation into discrete categories (such as Contract Line
Item Numbers (CLINs), Special Item Numbers (SINs), Sectors, Functional Areas
(FAs), or the equivalent), and assign each discrete category the single NAICS
code and corresponding size standard that best describes the principal purpose
of the goods or services to be acquired under that category (CLIN, SIN, Sector,
FA or equivalent) as set forth in paragraph (b) of this section. A concern must
meet the applicable size standard for each category (CLIN, SIN, Sector, FA or
equivalent) for which it seeks an award as a small business concern.
(2)
(i) The contracting officer must assign a single NAICS code for each order
issued against a Multiple Award Contract. The NAICS code assigned to an order
must be a NAICS code included in the underlying Multiple Award Contract. When
placing an order under a Multiple Award Contract with multiple NAICS codes, the
contracting officer must assign the NAICS code and corresponding size standard
that best describes the principal purpose of each order. In cases where an
agency can issue an order against multiple SINs with different NAICS codes, the
contracting officer must select the single NAICS code that best represents the
acquisition. If the NAICS code corresponding to the principal purpose of the
order is not contained in the underlying Multiple Award Contract, the
contracting officer may not use the Multiple Award Contract to issue that order.
(ii) With respect to an order issued against a multiple award contract, an
agency will receive small business credit for goaling only if the business
concern awarded the order has represented its status as small for the underlying
multiple award contract for the same NAICS code as that assigned to the order,
provided recertification has not been required or occurred for the contract or
order.
(d) The NAICS code assigned to a procurement and its corresponding size standard
is final unless timely appealed to SBA's Office of Hearings and Appeals (OHA),
or unless SBA assigns an NAICS code or size standard as provided in paragraph
(e) of this section.
(e) When a NAICS code designation or size standard in a solicitation is unclear,
incomplete, missing, or prohibited, SBA may clarify, complete, or supply a NAICS
code designation or size standard, as appropriate, in connection with a formal
size determination or size appeal.
(f) Any offeror or other interested party adversely affected by an NAICS code
designation or size standard designation may appeal the designations to OHA
under part 134 of this chapter.
[61 FR 3286, Jan. 31, 1996, as amended at 65 FR 30863, May 15, 2000; 69 FR
29205, May 21, 2004; 75 FR 61604, Oct. 6, 2010; 76 FR 5683, Feb. 2, 2011; 76 FR
8252, Feb. 11, 2011; 78 FR 61130, Oct. 2, 2013; 81 FR 34259, May 31, 2016; 85 FR
66180, Oct. 16, 2020]
§ 121.403 ARE SBA SIZE DETERMINATIONS AND NAICS CODE DESIGNATIONS BINDING ON
PARTIES?
Formal size determinations and NAICS code designations made by authorized SBA
officials are binding upon the parties. Opinions otherwise provided by SBA
officials to contracting officers or others are advisory in nature, and are not
binding or appealable.
[61 FR 3286, Jan. 31, 1996, as amended at 65 FR 30863, May 15, 2000]
§ 121.404 WHEN IS THE SIZE STATUS OF A BUSINESS CONCERN DETERMINED?
(a) Time of size. SBA determines the size status of a concern, including its
affiliates, as of the date the concern submits a written self-certification that
it is small to the procuring activity as part of its initial offer or response
which includes price.
(1) Multiple award contracts. With respect to Multiple Award Contracts, orders
issued against a Multiple Award Contract, and Blanket Purchase Agreements issued
against a Multiple Award Contract:
(i) Single NAICS. If a single NAICS code is assigned as set forth in §
121.402(c)(1)(i), SBA determines size status for the underlying Multiple Award
Contract at the time of initial offer (or other formal response to a
solicitation), which includes price, based upon the size standard set forth in
the solicitation for the Multiple Award Contract, unless the concern was
required to recertify under paragraph (g)(1), (2), or (3) of this section.
(A) Unrestricted Multiple Award Contracts. For an unrestricted Multiple Award
Contract, if a business concern (including a joint venture) is small at the time
of offer and contract-level recertification for the Multiple Award Contract, it
is small for goaling purposes for each order issued against the contract, unless
a contracting officer requests a size recertification for a specific order or
Blanket Purchase Agreement. Except for orders and Blanket Purchase Agreements
issued under any Federal Supply Schedule contract, if an order or a Blanket
Purchase Agreement under an unrestricted Multiple Award Contract is set-aside
exclusively for small business (i.e., small business set-aside, 8(a) small
business, service-disabled veteran-owned small business, HUBZone small business,
or women-owned small business), a concern must recertify its size status and
qualify as a small business at the time it submits its initial offer, which
includes price, for the particular order or Blanket Purchase Agreement. However,
where the underlying Multiple Award Contract has been awarded to a pool of
concerns for which small business status is required, if an order or a Blanket
Purchase Agreement under that Multiple Award Contract is set-aside exclusively
for concerns in the small business pool, concerns need not recertify their
status as small business concerns (unless a contracting officer requests size
certifications with respect to a specific order or Blanket Purchase Agreement).
(B) Set-aside Multiple Award Contracts. Except as set forth in §
124.503(i)(1)(iv) for sole source 8(a) orders, for a Multiple Award Contract
that is set aside or reserved for small business (i.e., small business
set-aside, 8(a) small business, service-disabled veteran-owned small business,
HUBZone small business, or women-owned small business), if a business concern
(including a joint venture) is small at the time of offer and contract-level
recertification for the Multiple Award Contract, it is small for each order or
Blanket Purchase Agreement issued against the contract, unless a contracting
officer requests a size recertification for a specific order or Blanket Purchase
Agreement.
(ii) Multiple NAICS. If multiple NAICS codes are assigned as set forth in §
121.402(c)(1)(ii), SBA determines size status at the time a business concern
submits its initial offer (or other formal response to a solicitation) which
includes price for a Multiple Award Contract based upon the size standard set
forth for each discrete category (e.g., CLIN, SIN, Sector, FA or equivalent) for
which the business concern submits an offer and represents that it qualifies as
small for the Multiple Award Contract, unless the business concern was required
to recertify under paragraph (g)(1), (2), or (3) of this section. If the
business concern (including a joint venture) submits an offer for the entire
Multiple Award Contract, SBA will determine whether it meets the size standard
for each discrete category (CLIN, SIN, Sector, FA or equivalent).
(A) Unrestricted Multiple Award Contracts. For an unrestricted Multiple Award
Contract, if a business concern (including a joint venture) is small at the time
of offer and contract-level recertification for discrete categories on the
Multiple Award Contract, it is small for goaling purposes for each order issued
against any of those categories, unless a contracting officer requests a size
recertification for a specific order or Blanket Purchase Agreement. Except for
orders or Blanket Purchase Agreements issued under any Federal Supply Schedule
contract, if an order or Blanket Purchase Agreement for a discrete category
under an unrestricted Multiple Award Contract is set-aside exclusively for small
business (i.e., small business set, 8(a) small business, service-disabled
veteran-owned small business, HUBZone small business, or women-owned small
business), a concern must recertify its size status and qualify as a small
business at the time it submits its initial offer, which includes price, for the
particular order or Agreement. However, where the underlying Multiple Award
Contract for discrete categories has been awarded to a pool of concerns for
which small business status is required, if an order or a Blanket Purchase
Agreement under that Multiple Award Contract is set-aside exclusively for
concerns in the small business pool, concerns need not recertify their status as
small business concerns (unless a contracting officer requests size
certifications with respect to a specific order or Blanket Purchase Agreement).
(B) Set-aside Multiple Award Contracts. Except as set forth in §
124.503(i)(1)(iv) for sole source 8(a) orders, for a Multiple Award Contract
that is set aside or reserved for small business (i.e., small business
set-aside, 8(a) small business, service-disabled veteran-owned small business,
HUBZone small business, or women-owned small business), if a business concern
(including a joint venture) is small at the time of offer and contract-level
recertification for discrete categories on the Multiple Award Contract, it is
small for each order or Agreement issued against any of those categories, unless
a contracting officer requests a size recertification for a specific order or
Blanket Purchase.
(iii) SBA will determine size at the time of initial offer (or other formal
response to a solicitation), which includes price, for an order or Agreement
issued against a Multiple Award Contract if the contracting officer requests a
new size certification for the order or Agreement.
(iv) For a Multiple Award Contract, where concerns are not required to submit
price as part of the offer for the contract, size for the contract will be
determined as of the date of initial offer, which may not include price. Size
for set-aside orders will be determined in accordance with subparagraphs (i)(A),
(i)(B), (ii)(A), or (ii)(B), as appropriate.
(2) Agreements. With respect to “Agreements” including Blanket Purchase
Agreements (BPAs) (except for BPAs issued against a GSA Schedule Contract),
Basic Agreements, Basic Ordering Agreements, or any other Agreement that a
contracting officer sets aside or reserves awards to any type of small business,
a concern must qualify as small at the time of its initial offer (or other
formal response to a solicitation), which includes price, for the Agreement.
Because an Agreement is not a contract, the concern must also qualify as small
for each order issued pursuant to the Agreement in order to be considered small
for the order and for an agency to receive small business goaling credit for the
order.
(b) Eligibility for SBA programs. A concern applying to be certified as a
Participant in SBA's 8(a) Business Development program (under part 124, subpart
A, of this chapter), as a HUBZone small business (under part 126 of this
chapter), or as a women-owned small business concern (under part 127 of this
chapter) must qualify as a small business for its primary industry
classification as of the date of its application and, where applicable, the date
the SBA program office requests a formal size determination in connection with a
concern that otherwise appears eligible for program certification.
(c) Certificates of competency. The size status of an applicant for a
Certificate of Competency (COC) relating to an unrestricted procurement is
determined as of the date of the concern's application for the COC.
(d) Nonmanufacturer rule, ostensible subcontractor rule, and joint venture
agreements. Compliance with the nonmanufacturer rule set forth in §
121.406(b)(1), the ostensible subcontractor rule set forth in § 121.103(h)(3),
and the joint venture agreement requirements in § 124.513(c) and (d), § 125.8(b)
and (c), § 128.402(c) and (d), § 126.616(c) and (d), or § 127.506(c) and (d) of
this chapter, as appropriate, is determined as of the date of the final proposal
revision for negotiated acquisitions and final bid for sealed bidding.
(e) Subcontracting. For subcontracting purposes, a concern must qualify as small
as of the date that it certifies that it is small for the subcontract. The
applicable size standard is that which is set forth in § 121.410 and which is in
effect at the time the concern self-certifies that it is small for the
subcontract. A prime contractor may rely on the self-certification of
subcontractor provided it does not have a reason to doubt the concern's
self-certification.
(f) Two-step procurements. For purposes of architect-engineering, design/build
or two-step sealed bidding procurements, a concern must qualify as small as of
the date that it certifies that it is small as part of its initial bid or
proposal (which may or may not include price).
(g) Effect of size certification and recertification. A concern that represents
itself as a small business and qualifies as small at the time it submits its
initial offer (or other formal response to a solicitation) which includes price
is generally considered to be a small business throughout the life of that
contract. Similarly, a concern that represents itself as a small business and
qualifies as small after a required recertification under paragraph (g)(1), (2),
or (3) of this section is generally considered to be a small business throughout
the life of that contract. Where a concern grows to be other than small, the
procuring agency may exercise options and still count the award as an award to a
small business, except that a required recertification as other than small under
paragraph (g)(1), (2), or (3) of this section changes the firm's status for
future options and orders. The following exceptions apply to this paragraph (g):
(1) Within 30 days of an approved contract novation, a contractor must recertify
its small business size status to the procuring agency, or inform the procuring
agency that it is other than small. If the contractor is other than small, the
agency can no longer count the options or orders issued pursuant to the
contract, from that point forward, towards its small business goals.
(2)
(i) In the case of a merger, acquisition, or sale which results in a change in
controlling interest under § 121.103, where contract novation is not required,
the contractor must, within 30 days of the transaction becoming final, recertify
its small business size status to the procuring agency, or inform the procuring
agency that it is other than small. If the contractor is other than small, the
agency can no longer count the options or orders issued pursuant to the
contract, from that point forward, towards its small business goals. The agency
and the contractor must immediately revise all applicable Federal contract
databases to reflect the new size status.
(ii) Recertification is required:
(A) When a concern, or an affiliate of the concern, acquires or is acquired by
another concern;
(B) From both the acquired concern and the acquiring concern if each has been
awarded a contract as a small business; and
(C) In the context of a joint venture that has been awarded a contract or order
as a small business, from any partner to the joint venture that has been
acquired, is acquiring, or has merged with another business entity.
(iii) If the merger, sale or acquisition occurs after offer but prior to award,
the offeror must recertify its size to the contracting officer prior to award.
If the merger, sale or acquisition (including agreements in principle) occurs
within 180 days of the date of an offer relating to the award of a contract,
order or agreement and the offeror is unable to recertify as small, it will not
be eligible as a small business to receive the award of the contract, order or
agreement. If the merger, sale or acquisition (including agreements in
principal) occurs more than 180 days after the date of an offer, award can be
made, but it will not count as an award to small business.
(iv) Recertification is not required when the ownership of a concern that is at
least 51% owned by an entity (i.e., tribe, Alaska Native Corporation, or
Community Development Corporation) changes to or from a wholly-owned business
concern of the same entity, as long as the ultimate owner remains that entity.
EXAMPLE 1 TO PARAGRAPH (G)(2)(III).
Indian Tribe X owns 100% of small business ABC. ABC wins an award for a small
business set-aside contract. In year two of contract performance, X changes the
ownership of ABC so that X owns 100% of a holding company XYZ, Inc., which in
turn owns 100% of ABC. This restructuring does not require ABC to recertify its
status as a small business because it continues to be 100% owned (indirectly
rather than directly) by Indian Tribe X.
(3) For the purposes of contracts (including Multiple Award Contracts) with
durations of more than five years (including options), a contracting officer
must request that a business concern recertify its small business size status no
more than 120 days prior to the end of the fifth year of the contract, and no
more than 120 days prior to exercising any option thereafter. If the contractor
certifies that it is other than small, the agency can no longer count the
options or orders issued pursuant to the contract towards its small business
prime contracting goals. A contracting officer may also request size
recertification, as he or she deems appropriate, prior to the 120-day point in
the fifth year of a long-term multiple award contract. The agency and the
contractor must immediately revise all applicable Federal contract databases to
reflect the new size status.
(i) A business concern that certified itself as other than small, either
initially or prior to an option being exercised, may recertify itself as small
for a subsequent option period if it meets the applicable size standard.
(ii) Re-certification does not change the terms and conditions of the contract.
The limitations on subcontracting, non-manufacturer and subcontracting plan
requirements in effect at the time of contract award remain in effect throughout
the life of the contract. However, a contracting officer may require a
subcontracting plan if a prime contractor's size status changes from small to
other than small as a result of a size recertification.
(iii) A request for a size re-certification shall include the size standard in
effect at the time of re-certification that corresponds to the NAICS code that
that was initially assigned to the contract.
(iv) A contracting officer must assign a NAICS code and size standard to each
order under a long-term contract. The NAICS code and size standard assigned to
an order must correspond to a NAICS code and size standard assigned to the
underlying long-term contract and must be assigned in accordance with §§
121.402(b) and (c). A concern will be considered small for that order only if it
certified itself as small under the same or lower size standard.
(v) Where the contracting officer explicitly requires concerns to recertify
their size status in response to a solicitation for an order, SBA will determine
size as of the date the concern submits its self-representation as part of its
response to the solicitation for the order.
(4) The requirements in paragraphs (g)(1), (2), and (3) of this section apply to
Multiple Award Contracts. However, if the Multiple Award Contract was set-aside
for small businesses, partially set-aside for small businesses, or reserved for
small business, then in the case of a contract novation, or merger or
acquisition where no novation is required, where the resulting contractor is now
other than small, the agency cannot count any new or pending orders issued
pursuant to the contract, from that point forward, towards its small business
goals. This includes set-asides, partial set-asides, and reserves for 8(a) BD
Participants, certified HUBZone small business concerns, SDVO SBCs, and
ED/WOSBs.
(5) If during contract performance a subcontractor that is not a similarly
situated entity performs primary and vital requirements of a contract, the
contractor and its ostensible subcontractor will be treated as joint venturers.
See § 121.103(h)(3).
(6) Where a joint venture must recertify its small business size status under
paragraph (g), the joint venture can recertify as small where all parties to the
joint venture qualify as small at the time of recertification, or the protégé
small business in a still active mentor-protégé joint venture qualifies as small
at the time of recertification. A joint venture can recertify as small even
though the date of recertification occurs more than two years after the joint
venture received its first contract award (i.e., recertification is not
considered a new contract award under § 121.103(h)).
(h) Follow-on contracts. A follow-on or renewal contract is a new contracting
action. As such, size is determined as of the date the concern submits a written
self-certification that it is small to the procuring agency as part of its
initial offer including price for the follow-on or renewal contract.
[69 FR 29205, May 21, 2004, as amended at 71 FR 19813, Apr. 18, 2006; 71 FR
66443, Nov. 15, 2006; 76 FR 5683, Feb. 2, 2011; 76 FR 8252, Feb. 11, 2011; 78 FR
42403, July 16, 2013; 78 FR 38817, June 28, 2013; 78 FR 61131, Oct. 2, 2013; 81
FR 34259, May 31, 2016; 81 FR 48578, July 25, 2016; 83 FR 12851, Mar. 26, 2018;
84 FR 65239, Nov. 26, 2019; 84 FR 65661, Nov. 29, 2019; 85 FR 66180, Oct. 16,
2020; 85 FR 72917, Nov. 16, 2020; 86 FR 2959, Jan. 14, 2021; 86 FR 10732, Feb.
23, 2021; 86 FR 38538, July 22, 2021; 87 FR 73412, Nov. 29, 2022; 88 FR 26200,
Apr. 27, 2023]
§ 121.405 MAY A BUSINESS CONCERN SELF-CERTIFY ITS SMALL BUSINESS SIZE STATUS?
(a) A concern must self-certify it is small under the size standard specified in
the solicitation, or as clarified, completed or supplied by SBA pursuant to §
121.402(d).
(b) A contracting officer may accept a concern's self-certification as true for
the particular procurement involved in the absence of a written protest by other
offerors or other credible information which causes the contracting officer or
SBA to question the size of the concern.
(c) Procedures for protesting the self-certification of an offeror are set forth
in §§ 121.1001 through 121.1009.
§ 121.406 HOW DOES A SMALL BUSINESS CONCERN QUALIFY TO PROVIDE MANUFACTURED
PRODUCTS OR OTHER SUPPLY ITEMS UNDER A SMALL BUSINESS SET-ASIDE,
SERVICE-DISABLED VETERAN-OWNED SMALL BUSINESS, HUBZONE, WOSB OR EDWOSB, OR 8(A)
CONTRACT?
(a) General. In order to qualify as a small business concern for a small
business set-aside, service-disabled veteran-owned small business set-aside or
sole source contract, HUBZone set-aside or sole source contract, WOSB or EDWOSB
set-aside or sole source contract, 8(a) set-aside or sole source contract,
partial set-aside, or set aside of an order against a multiple award contract to
provide manufactured products or other supply items, an offeror must either:
(1) Be the manufacturer or producer of the end item being procured (and the end
item must be manufactured or produced in the United States); or
(2) Comply with the requirements of paragraph (b), (c) or (d) of this section as
a nonmanufacturer, a kit assembler or a supplier under Simplified Acquisition
Procedures.
(b) Nonmanufacturers.
(1) A firm may qualify as a small business concern for a requirement to provide
manufactured products or other supply items as a nonmanufacturer if it:
(i) Does not exceed 500 employees (or 150 employees for the Information
Technology Value Added Reseller exception to NAICS Code 541519, which is found
at § 121.201, footnote 18);
(ii) Is primarily engaged in the retail or wholesale trade and normally sells
the type of item being supplied;
(iii) Takes ownership or possession of the item(s) with its personnel, equipment
or facilities in a manner consistent with industry practice; and
(iv) Will supply the end item of a small business manufacturer, processor or
producer made in the United States, or obtains a waiver of such requirement
pursuant to paragraph (b)(5) of this section.
(2) For size purposes, there can be only one manufacturer of the end item being
acquired. The manufacturer is the concern which, with its own facilities,
performs the primary activities in transforming inorganic or organic substances,
including the assembly of parts and components, into the end item being
acquired. The end item must possess characteristics which, as a result of
mechanical, chemical or human action, it did not possess before the original
substances, parts or components were assembled or transformed. The end item may
be finished and ready for utilization or consumption, or it may be semifinished
as a raw material to be used in further manufacturing. Firms which perform only
minimal operations upon the item being procured do not qualify as manufacturers
of the end item. Firms that add substances, parts, or components to an existing
end item to modify its performance will not be considered the end item
manufacturer where those identical modifications can be performed by and are
available from the manufacturer of the existing end item:
(i) SBA will evaluate the following factors in determining whether a concern is
the manufacturer of the end item:
(A) The proportion of total value in the end item added by the efforts of the
concern, excluding costs of overhead, testing, quality control, and profit;
(B) The importance of the elements added by the concern to the function of the
end item, regardless of their relative value; and
(C) The concern's technical capabilities; plant, facilities and equipment;
production or assembly line processes; packaging and boxing operations; labeling
of products; and product warranties.
(ii) Firms that provide computer and other information technology equipment
primarily consisting of component parts (such as motherboards, video cards,
network cards, memory, power supplies, storage devices, and similar items) who
install components totaling less than 50% of the value of the end item are
generally not considered the manufacturer of the end item.
(3) The nonmanufacturer rule applies only to procurements that have been
assigned a manufacturing or supply NAICS code, or the Information Technology
Value Added Resellers (ITVAR) exception to NAICS code 541519. The
nonmanufacturer rule does not apply to contracts that have been assigned a
service (except for the ITVAR exception to NAICS code 541519), construction, or
specialty trade construction NAICS code.
(4) The nonmanufacturer rule applies only to the supply component of a
requirement classified as a manufacturing, supply, or ITVAR contract. If a
requirement is classified as a service contract, but also has a supply
component, the nonmanufacturer rule does not apply to the supply component of
the requirement. The rental of an item(s) is a service and should be treated as
such in the application of the nonmanufacturer rule and the limitation on
subcontracting.
EXAMPLE 1 TO PARAGRAPH (B)(4).
A procuring agency seeks to acquire computer integration and maintenance
services. Included within that requirement, the agency also seeks to acquire
some computer hardware. If the procuring agency determines that the principal
nature of the procurement is services and classifies the procurement as a
services procurement, the nonmanufacturer rule does not apply to the computer
hardware portion of the requirement. This means that while a contractor must
meet the applicable performance of work requirement set forth in § 125.6 for the
services portion of the contract, the contractor does not have to supply the
computer hardware of a small business manufacturer.
EXAMPLE 2 TO PARAGRAPH (B)(4).
A procuring agency seeks to acquire computer hardware, as well as computer
integration and maintenance services. If the procuring agency determines that
the principal nature of the procurement is for supplies and classifies the
procurement as a supply procurement, the nonmanufacturer rule applies to the
computer hardware portion of the requirement. A firm seeking to qualify as a
small business nonmanufacturer must supply the computer hardware manufactured by
a small business. Because the requirement is classified as a supply contract,
the contractor does not have to meet the performance of work requirement set
forth in § 125.6 for the services portion of the contract.
(5) The Administrator or designee may waive the requirement set forth in
paragraph (b)(1)(iv) of this section under the following two circumstances:
(i) The contracting officer has determined that no small business manufacturer
or processor reasonably can be expected to offer a product meeting the
specifications (including period for performance) required by a particular
solicitation and SBA reviews and accepts that determination; or
(ii) SBA determines that no small business manufacturer or processor of the
product or class of products is available to participate in the Federal
procurement market.
(6) The two waiver possibilities identified in paragraph (b)(5) of this section
are called “individual” and “class” waivers respectively, and the procedures for
requesting and granting them are contained in § 121.1204.
(7) SBA's waiver of the nonmanufacturer rule means that the firm can supply the
product of any size business without regard to the place of manufacture.
However, SBA's waiver of the nonmanufacturer rule has no effect on requirements
external to the Small Business Act which involve domestic sources of supply,
such as the Buy American Act or the Trade Agreements Act.
(c) The limitations on subcontracting (performance of work) requirements, the
ostensible subcontracting rule, and the nonmanufacturer rule do not apply to
small business set-aside acquisitions with an estimated value between the
micro-purchase threshold and the simplified acquisition threshold (as both terms
are defined in the FAR at 48 CFR 2.101).
(d) Multiple item acquisitions.
(1) If at least 50% of the estimated contract value is composed of items that
are manufactured by small business concerns, then a waiver of the
nonmanufacturer rule is not required. There is no requirement that each and
every item acquired in a multiple-item procurement be manufactured by a small
business.
(2) If more than 50% of the estimated contract value is composed of items
manufactured by other than small concerns, then a waiver is required. SBA may
grant a contract specific waiver for one or more items in order to ensure that
at least 50% of the value of the products to be supplied by the nonmanufacturer
comes from domestic small business manufacturers or are subject to a waiver.
(3) If a small business is both a manufacturer of item(s) and a nonmanufacturer
of other item(s), the manufacturer size standard should be applied.
(e) These requirements do not apply to small business concern subcontractors.
[61 FR 3286, Jan. 31, 1996; 61 FR 7986, Mar. 1, 1996, as amended at 65 FR 30863,
May 15, 2000; 69 FR 29205, May 21, 2004; 76 FR 8252, Feb. 11, 2011; 78 FR 61132,
Oct. 2, 2013; 81 FR 4469, Jan. 26, 2016; 81 FR 34259, May 31, 2016; 81 FR 48579,
July 25, 2016; 83 FR 12851, Mar. 26, 2018; 84 FR 65661, Nov. 29, 2019; 85 FR
66182, Oct. 16, 2020; 88 FR 26201, Apr. 27, 2023]
§ 121.407 WHAT ARE THE SIZE PROCEDURES FOR MULTIPLE ITEM PROCUREMENTS?
If a procurement calls for two or more specific end items or types of services
with different size standards and the offeror may submit an offer on any or all
end items or types of services, the offeror must meet the size standard for each
end item or service item for which it submits an offer. If the procurement calls
for more than one specific end item or type of service and an offeror is
required to submit an offer on all items, the offeror may qualify as a small
business for the procurement if it meets the size standard of the item which
accounts for the greatest percentage of the total contract value.
§ 121.408 WHAT ARE THE SIZE PROCEDURES FOR SBA'S CERTIFICATE OF COMPETENCY
PROGRAM?
(a) A firm which applies for a COC must file an “Application for Small Business
Size Determination” (SBA Form 355). If the initial review of SBA Form 355
indicates the applicant, including its affiliates, is small for purposes of the
COC program, SBA will process the application for COC. If the review indicates
the applicant, including its affiliates is other than small SBA will initiate a
formal size determination as set forth in § 121.1001(b)(3)(ii). In such a case,
SBA will not further process the COC application until a formal size
determination is made.
(b) A concern is ineligible for a COC if a formal SBA size determination finds
the concern other than small.
[61 FR 3286, Jan. 31, 1996, as amended at 81 FR 34259, May 31, 2016]
§ 121.409 WHAT SIZE STANDARD APPLIES IN AN UNRESTRICTED PROCUREMENT FOR
CERTIFICATE OF COMPETENCY PURPOSES?
For the purpose of receiving a Certificate of Competency in an unrestricted
procurement, the applicable size standard is that corresponding to the NAICS
code set forth in the solicitation. The offeror need not be the manufacturer of
any of the items acquired.
[61 FR 3286, Jan. 31, 1996, as amended at 65 FR 30863, May 15, 2000; 81 FR
34259, May 31, 2016]
§ 121.410 WHAT ARE THE SIZE STANDARDS FOR SBA'S SECTION 8(D) SUBCONTRACTING
PROGRAM?
For subcontracting purposes pursuant to sections 8(d) of the Small Business Act,
a concern is small for subcontracts which relate to Government procurements if
it does not exceed the size standard for the NAICS code that the prime
contractor believes best describes the product or service being acquired by the
subcontract. However, subcontracts for engineering services awarded under the
National Energy Policy Act of 1992 have the same size standard as Military and
Aerospace Equipment and Military Weapons under NAICS code 541330.
[61 FR 3286, Jan. 31, 1996, as amended at 65 FR 30863, May 15, 2000; 69 FR
29205, May 21, 2004; 74 FR 46313, Sept. 9, 2009]
§ 121.411 WHAT ARE THE SIZE PROCEDURES FOR SBA'S SECTION 8(D) SUBCONTRACTING
PROGRAM?
(a) Prime contractors may rely on the information contained in the System for
Award Management (SAM) (or any successor system or equivalent database
maintained or sanctioned by SBA) as an accurate representation of a concern's
size and ownership characteristics for purposes of maintaining a small business
source list.
(b) Even if a concern is on a small business source list, it must still qualify
and self-certify as a small business at the time it submits its offer as a
section 8(d) subcontractor. Prime contractors (or subcontractors) may accept
paper self-certifications as to size and socioeconomic status or a
subcontractor's electronic self-certification as to size or socioeconomic
status, if the solicitation for the subcontract contains a clause which provides
that the subcontractor verifies by submission of the offer that the size or
socioeconomic representations and certifications are accurate and complete.
Electronic submission may include any method acceptable to the prime contractor
(or subcontractor) including, but not limited to, size representations and
certifications made in SAM (or any successor system) and electronic conveyance
of subcontractor certifications in prime contractor systems in connection with
an offer for a subcontract. Prime contractors or subcontractors may not require
the use of SAM (or any successor system) for purposes of representing size or
socioeconomic status in connection with a subcontract.
(c) Upon determination of the successful subcontract offeror for a competitive
subcontract over the simplified acquisition threshold, but prior to award, the
prime contractor must inform each unsuccessful subcontract offeror in writing of
the name and location of the apparent successful offeror.
(d) The self-certification of a concern subcontracting or proposing to
subcontract under section 8(d) of the Small Business Act may be protested by the
contracting officer, the prime contractor, the appropriate SBA official or any
other interested party.
(e) Presumption of Loss Based on the Total Amount Expended. In every contract,
subcontract, cooperative agreement, cooperative research and development
agreement, or grant which is set aside, reserved, or otherwise classified as
intended for award to small business concerns, there shall be a presumption of
loss to the United States based on the total amount expended on the contract,
subcontract, cooperative agreement, cooperative research and development
agreement, or grant whenever it is established that a business concern other
than a small business concern willfully sought and received the award by
misrepresentation.
(f) Deemed Certifications. The following actions shall be deemed affirmative,
willful and intentional certifications of small business size and status:
(1) Submission of a bid, proposal, application or offer for a Federal grant,
contract, subcontract, cooperative agreement, or cooperative research and
development agreement reserved, set aside, or otherwise classified as intended
for award to small business concerns.
(2) Submission of a bid, proposal, application or offer for a Federal grant,
contract, subcontract, cooperative agreement or cooperative research and
development agreement which in any way encourages a Federal agency to classify
the bid or proposal, if awarded, as an award to a small business concern.
(3) Registration on any Federal electronic database for the purpose of being
considered for award of a Federal grant, contract, subcontract, cooperative
agreement, or cooperative research and development agreement, as a small
business concern.
(g) Signature Requirement. Each offer, proposal, bid, or application for a
Federal contract, subcontract, or grant shall contain a certification concerning
the small business size and status of a business concern seeking the Federal
contract, subcontract or grant. An authorized official must sign the
certification on the same page containing the size status claimed by the
concern.
(h) Limitation of Liability. Paragraphs (d) through (f) of this section may be
determined not to apply in the case of unintentional errors, technical
malfunctions, and other similar situations that demonstrate that a
misrepresentation of size was not affirmative, intentional, willful or
actionable under the False Claims Act, 31 U.S.C. §§ 3729, et seq. A prime
contractor acting in good faith should not be held liable for misrepresentations
made by its subcontractors regarding the subcontractors' size. Relevant factors
to consider in making this determination may include the firm's internal
management procedures governing size representation or certification, the
clarity or ambiguity of the representation or certification requirement, and the
efforts made to correct an incorrect or invalid representation or certification
in a timely manner. An individual or firm may not be held liable where
government personnel have erroneously identified a concern as small without any
representation or certification having been made by the concern and where such
identification is made without the knowledge of the individual or firm.
(i) Penalties for Misrepresentation.
(1) Suspension or debarment. The SBA suspension and debarment official or the
agency suspension and debarment official may suspend or debar a person or
concern for misrepresenting a firm's size status pursuant to the procedures set
forth in 48 CFR subpart 9.4.
(2) Civil Penalties. Persons or concerns are subject to severe penalties under
the False Claims Act, 31 U.S.C. 3729-3733, the Program Fraud Civil Remedies Act,
31 U.S.C. 3801-3812 and any other applicable laws or regulations, including 13
CFR part 142.
(3) Criminal Penalties. Persons or concerns are subject to severe criminal
penalties for knowingly misrepresenting the small business size status of a
concern in connection with procurement programs pursuant to section 16(d) of the
Small Business Act, 15 U.S.C. 645(d), as amended, 18 U.S.C. 1001, 18 U.S.C. 287,
and any other applicable laws. Persons or concerns are subject to criminal
penalties for knowingly making false statements or misrepresentations to SBA for
the purpose of influencing any actions of SBA pursuant to section 16(a) of the
Small Business Act, 15 U.S.C. 645(a), as amended, including failure to correct
“continuing representations” that are no longer true.
[61 FR 3286, Jan. 31, 1996, as amended at 69 FR 29205, May 21, 2004; 78 FR
42403, July 16, 2013; 78 FR 38817, June 28, 2013; 79 FR 29661, May 23, 2014; 81
FR 31491, May 19, 2016; 81 FR 94250, Dec. 23, 2016; 88 FR 26201, Apr. 27, 2023]
§ 121.412 WHAT ARE THE SIZE PROCEDURES FOR PARTIAL SMALL BUSINESS SET-ASIDES?
A firm is required to meet size standard requirements only for the small
business set-aside portion of a procurement, and is not required to qualify as a
small business for the unrestricted portion.
SIZE ELIGIBILITY REQUIREMENTS FOR SALES OR LEASE OF GOVERNMENT PROPERTY
§ 121.501 WHAT PROGRAMS FOR SALES OR LEASES OF GOVERNMENT PROPERTY ARE SUBJECT
TO SIZE DETERMINATIONS?
Sections 121.501 through 121.512 apply to small business size determinations for
the purpose of the sale or lease of Government property, including the Timber
Sales Program, the Special Salvage Timber Sales Program, and the sale of
Government petroleum, coal and uranium.
§ 121.502 WHAT SIZE STANDARDS ARE APPLICABLE TO PROGRAMS FOR SALES OR LEASES OF
GOVERNMENT PROPERTY?
(a) Unless otherwise specified in this part—
(1) A concern primarily engaged in manufacturing is small for sales or leases of
Government property if it does not exceed 500 employees;
(2) A concern not primarily engaged in manufacturing is small for sales or
leases of Government property if it has annual receipts not exceeding $9
million.
(b) Size status for such sales and leases is determined by the primary industry
of the applicant business concern.
[61 FR 3286, Jan. 31, 1996, as amended at 67 FR 3056, Jan. 23, 2002; 70 FR
72594, Dec. 6, 2005; 73 FR 41254, July 18, 2008; 79 FR 33669, June 12, 2014; 84
FR 34281, July 18, 2019; 87 FR 69154, Nov. 17, 2022]
§ 121.503 ARE SBA SIZE DETERMINATIONS BINDING ON PARTIES?
Formal size determinations based upon a specific Government sale or lease, or
made in response to a request from another Government agency under § 121.901,
are binding upon the parties. Other SBA opinions provided to contracting
officers or others are only advisory, and are not binding or appealable.
§ 121.504 WHEN DOES SBA DETERMINE THE SIZE STATUS OF A BUSINESS CONCERN?
SBA determines the size status of a concern (including its affiliates) as of the
date the concern submits a written self-certification that it is small to the
Government as part of its initial offer including price where there is a
specific sale or lease at issue, or as set forth in § 121.903 if made in
response to a request of another Government agency.
§ 121.505 WHAT IS THE EFFECT OF A SELF-CERTIFICATION?
(a) A contracting officer may accept a concern's self-certification as true for
the particular sale or lease involved, in the absence of a written protest by
other offerors or other credible information which would cause the contracting
officer or SBA to question the size of the concern.
(b) Procedures for protesting the self-certification of an offeror are set forth
in §§ 121.1001 through 121.1009.
§ 121.506 WHAT DEFINITIONS ARE IMPORTANT FOR SALES OR LEASES OF GOVERNMENT-OWNED
TIMBER?
(a) Computation of Market Share means the small business share, expressed as a
percentage for a market area, based on the purchase by small business over the
preceding 5-year period. The computation is done every five years.
(b) Forest product industry means logging, wood preserving, and the manufacture
of lumber and wood related products such as veneer, plywood, hardboard, particle
board, or wood pulp, and of products of which lumber or wood related products
are the principal raw materials.
(c) Integrated Resource Timber Contracts means contracts that combine product
removal and service work when the value of included timber exceeds the value of
services.
(d) Logging of timber means felling and bucking, yarding, and/or loading. It
does not mean hauling.
(e) Manufacture of logs means, at a minimum, breaking down logs into rough cuts
of the finished product.
(f) Sell means, in addition to its usual and customary meaning, the exchange of
sawlogs for sawlogs on a product-for-product basis with or without monetary
adjustment, and an indirect transfer, such as the sale of the assets of a
concern after it has been awarded one or more set-aside sales of timber.
(g) Significant logging of timber means that a concern uses its own employees to
perform at least two of the following: felling and bucking, yarding, and
loading.
[61 FR 3286, Jan. 31, 1996, as amended at 88 FR 26201, Apr. 27, 2023]
§ 121.507 WHAT ARE THE SIZE STANDARDS AND OTHER REQUIREMENTS FOR THE PURCHASE OF
GOVERNMENT-OWNED TIMBER (OTHER THAN SPECIAL SALVAGE TIMBER)?
(a) To be small for purposes of the sale of Government-owned timber (other than
Special Salvage Timber) a concern must:
(1) Be primarily engaged in the logging or forest products industry;
(2) Not exceed 500 employees, taking into account its affiliates; and
(3) If it does not intend at the time of the offer to resell the timber—
(i) Agree that it will manufacture the logs with its own facilities or those of
another business which meets the requirements of paragraphs (a)(1) and (a)(2) of
this section;
(ii) Agree that if it eventually resells the timber, it will resell no more than
30% of the sawtimber volume to other businesses which do not meet the
requirements of paragraphs (a)(1) and (a)(2) of this section; and
(iii) Agree that if it becomes acquired or controlled by a business which does
not meet the requirements of paragraphs (a)(1) and (a)(2) of this section, it
will require as a condition of the acquisition or change of control that the
acquiring or controlling business resell at least 70% of the sawtimber volume to
businesses which do meet the requirements of paragraphs (a)(1) and (a)(2) of
this section; or
(4) If it intends at the time of offer to resell the timber—
(i) Agree that it will not sell more than 30% of such timber (50% of such timber
if the concern is an Alaskan business) to a business which does not meet the
requirements of paragraphs (a)(1) and (a)(2) of this section; and
(ii) Agree that if it becomes acquired or controlled by a business which does
not meet the requirements of paragraphs (a)(1) and (a)(2) of this section, it
will require as a condition of the acquisition or change of control that the
acquiring or controlling business resell at least 70% of the sawtimber volume
(or at least 50% of the sawtimber volume, if it is an Alaskan business) to
businesses which meet the requirements of paragraphs (a)(1) and (a)(2) of this
section.
(b) For a period of three years following the date upon which a concern
purchases timber under a small business set-aside (other than through the
Special Salvage Timber Sale program), it must maintain a record of:
(1) The name, address and size status of every concern to which it sells the
timber or sawlogs; and
(2) The species, grades and volumes of sawlogs sold.
(c) For a period of three years following the date upon which a concern
purchases timber, it must by contract require all small business repurchasers of
the sawlogs or timber it purchased under the small business set-aside to
maintain the records described in paragraph (b) of this section.
(d) The Director of Government Contracting may waive one or more of the
requirements set forth in paragraphs (a)(3) and (a)(4) of this section in
limited circumstances where conditions make the requirement(s) impractical or
prohibitive. A request for waiver must be made to the Director of Government
Contracting and contain facts, arguments, and any appropriate supporting
documentation as to why a waiver should be granted.
(e) Sawtimber volume from Integrated Resource Timber Contracts shall be included
in the Computation of Market Share and set-aside trigger.
[61 FR 3286, Jan. 31, 1996, as amended at 88 FR 26201, Apr. 27, 2023]
§ 121.508 WHAT ARE THE SIZE STANDARDS AND OTHER REQUIREMENTS FOR THE PURCHASE OF
GOVERNMENT-OWNED SPECIAL SALVAGE TIMBER?
(a) In order to purchase Government-owned Special Salvage Timber from the United
States Forest Service or the Bureau of Land Management as a small business, a
concern must:
(1) Be primarily engaged in the logging or forest product industry;
(2) Have, together with its affiliates, no more than twenty-five employees
during any pay period for the last twelve months; and
(3) If it does not intend at the time of offer to resell the timber—
(i) Agree that it will manufacture a significant portion of the logs with its
own employees; and
(ii) Agree that it will log the timber only with its own employees or with
employees of another business which is eligible for award of a Special Salvage
Timber sales contract; or
(4) If it intends at the time of offer to resell the timber, agree that it will
perform a significant portion of timber logging with its own employees and that
it will subcontract the remainder of the timber logging to a concern which is
eligible for award of a Special Salvage Timber sales contract.
§ 121.509 WHAT IS THE SIZE STANDARD FOR LEASING OF GOVERNMENT LAND FOR COAL
MINING?
A concern is small for this purpose if it:
(a) Together with its affiliates, does not have more than 250 employees;
(b) Maintains management and control of the actual mining operations of the
tract; and
(c) Agrees that if it subleases the Government land, it will be to another small
business, and that it will require its sublessors to agree to the same.
§ 121.510 WHAT IS THE SIZE STANDARD FOR LEASING OF GOVERNMENT LAND FOR URANIUM
MINING?
A concern is small for this purpose if it, together with its affiliates, does
not have more than 100 employees.
§ 121.511 WHAT IS THE SIZE STANDARD FOR BUYING GOVERNMENT-OWNED PETROLEUM?
A concern is small for this purpose if it is primarily engaged in petroleum
refining and meets the size standard for a petroleum refining business.
§ 121.512 WHAT IS THE SIZE STANDARD FOR STOCKPILE PURCHASES?
A concern is small for this purpose if:
(a) It is primarily engaged in the purchase of materials which are not domestic
products; and
(b) Its annual receipts, together with its affiliates, do not exceed $76.5
million.
[61 FR 3286, Jan. 31, 1996, as amended at 67 FR 3056, Jan. 23, 2002; 70 FR
72594, Dec. 6, 2005; 73 FR 41254, July 18, 2008; 79 FR 33669, June 12, 2014; 84
FR 34281, July 18, 2019; 87 FR 69154, Nov. 17, 2022]
SIZE ELIGIBILITY REQUIREMENTS FOR THE 8(A) BUSINESS DEVELOPMENT PROGRAM
§ 121.601 WHAT IS A SMALL BUSINESS FOR PURPOSES OF ADMISSION TO SBA'S 8(A)
BUSINESS DEVELOPMENT PROGRAM?
An applicant must not exceed the size standard corresponding to its primary
industry classification in order to qualify for admission to SBA's 8(a) Business
Development Program.
[69 FR 29205, May 21, 2004]
§ 121.602 AT WHAT POINT IN TIME MUST A 8(A) BD APPLICANT BE SMALL?
A 8(a) BD applicant must be small for its primary industry at the time SBA
certifies it for admission into the program.
[61 FR 3286, Jan. 31, 1996, as amended at 69 FR 29206, May 21, 2004]
§ 121.603 HOW DOES SBA DETERMINE WHETHER A PARTICIPANT IS SMALL FOR A PARTICULAR
8(A) BD SUBCONTRACT?
(a) Self certification by Participant. A 8(a) BD Participant must certify that
it qualifies as a small business under the NAICS code assigned to a particular
8(a) BD subcontract as part of its initial offer including price to the
procuring agency. The Participant also must submit a copy of its offer,
including its self-certification as to size, to the appropriate SBA district
office at the same time it submits the offer to the procuring agency. See §
121.404 for the time at which size is determined for, and § 121.406 for the
applicability of the nonmanufacturer rule to, 8(a) BD procurements.
(b) Verification of size by SBA. Within 30 days of its receipt of a
Participant's size self-certification for a particular 8(a) BD subcontract, the
SBA district office serving the geographic area in which the Participant's
principal office is located will review the Participant's self-certification and
determine if it is small for purposes of that subcontract. The SBA district
office will review the Participant's most recent financial statements and other
relevant data and then notify the Participant of its decision.
(c) Changes in size between date of self-certification and date of award.
(1) Where SBA verifies that the selected Participant is small for a particular
procurement, subsequent changes in size up to the date of award, except those
due to merger with or acquisition by another business concern, will not affect
the firm's size status for that procurement.
(2) Where a Participant has merged with or been acquired by another business
concern between the date of its self-certification and the date of award, the
concern must recertify its size status, and SBA must verify the new
certification before award can occur.
(3) Recertification is not required when the ownership of a concern that is at
least 51% owned by an entity (i.e., tribe, Alaska Native Corporation, or
Community Development Corporation) changes to or from a wholly-owned business
concern of the same entity, as long as the ultimate owner remains that entity.
(d) Finding Participant to be other than small.
(1) A Participant may request a formal size determination (pursuant to §§
121.1001 through 121.1009) with the SBA Government Contracting Area Office
serving the geographic area in which the principal office of the Participant is
located within 5 working days of its receipt of notice from the SBA district
office that it is not small for a particular 8(a) BD subcontract.
(2) Where the Participant does not timely request a formal size determination,
SBA may accept the procurement in support of another Participant, or may rescind
its acceptance of the offer for the 8(a) BD program, as appropriate.
[61 FR 3286, Jan. 31, 1996, as amended at 65 FR 30863, May 15, 2000; 69 FR
29206, May 21, 2004; 85 FR 66182, Oct. 16, 2020]
§ 121.604 ARE 8(A) BD PARTICIPANTS CONSIDERED SMALL FOR PURPOSES OF OTHER SBA
ASSISTANCE?
A concern which SBA determines to be a small business for the award of a 8(a) BD
subcontract will be considered to have met applicable size eligibility
requirements of other SBA programs where that assistance directly and primarily
relates to the performance of the 8(a) BD subcontract in question.
[61 FR 3286, Jan. 31, 1996, as amended at 69 FR 29206, May 21, 2004]
SIZE AND ELIGIBILITY REQUIREMENTS FOR THE SMALL BUSINESS INNOVATION RESEARCH
(SBIR) AND SMALL BUSINESS TECHNOLOGY TRANSFER (STTR) PROGRAMS
§ 121.701 WHAT SBIR AND STTR PROGRAMS ARE SUBJECT TO SIZE AND ELIGIBILITY
DETERMINATIONS AND WHAT DEFINITIONS ARE IMPORTANT?
(a) These sections apply to SBA's SBIR and STTR programs, 15 U.S.C. 638.
(b) Definitions —
(1) Funding agreement officer means a contracting officer, a grants officer, or
a cooperative agreement officer.
(2) Funding agreement means any contract, grant or cooperative agreement entered
into between any Federal agency and any small business for the purposes of the
SBIR or STTR program.
(3) Hedge fund has the meaning given that term in section 13(h)(2) of the Bank
Holding Company Act of 1956 (12 U.S.C. 1851(h)(2)). The hedge fund must have a
place of business located in the United States and be created or organized in
the United States, or under the law of the United States or of any State.
(4) Portfolio company means any company that is owned in whole or part by a
venture capital operating company, hedge fund, or private equity firm.
(5) Private equity firm has the meaning given the term “private equity fund” in
section 13(h)(2) of the Bank Holding Company Act of 1956 (12 U.S.C. 1851(h)(2)).
The private equity firm must have a place of business located in the United
States and be created or organized in the United States, or under the law of the
United States or of any State.
(6) Venture capital operating company means an entity described in §
121.103(b)(5)(i), (v), or (vi). The venture capital operating company must have
a place of business located in the United States and be created or organized in
the United States, or under the law of the United States or of any State.
[77 FR 76225, Dec. 27, 2012]
§ 121.702 WHAT SIZE AND ELIGIBILITY STANDARDS ARE APPLICABLE TO THE SBIR AND
STTR PROGRAMS?
To be eligible for award of funding agreements in SBA's SBIR and STTR programs,
a business concern must meet the requirements below at the time of award of an
SBIR or STTR Phase I or Phase II funding agreement:
(a) Ownership and control for the SBIR program.
(1) An SBIR awardee must:
(i) Be a concern which is more than 50% directly owned and controlled by one or
more individuals (who are citizens or permanent resident aliens of the United
States), other small business concerns (each of which is more than 50% directly
owned and controlled by individuals who are citizens or permanent resident
aliens of the United States), an Indian tribe, ANC or NHO (or a wholly owned
business entity of such tribe, ANC or NHO), or any combination of these;
(ii) Be a concern which is more than 50% owned by multiple venture capital
operating companies, hedge funds, private equity firms, or any combination of
these (for agencies electing to use the authority in 15 U.S.C. 638(dd)(1)); or
(iii) Be a joint venture in which each entity to the joint venture must meet the
requirements set forth in paragraph (a)(1)(i) or (a)(1)(ii) of this section. A
joint venture that includes one or more concerns that meet the requirements of
paragraph (a)(1)(ii) of this section must comply with § 121.705(b) concerning
registration and proposal requirements.
(2) No single venture capital operating company, hedge fund, or private equity
firm may own more than 50% of the concern unless that single venture capital
operating company, hedge fund, or private equity firm qualifies as a small
business concern that is more than 50% directly owned and controlled by
individuals who are citizens or permanent resident aliens of the United States.
(3) If an Employee Stock Ownership Plan owns all or part of the concern, each
stock trustee and plan member is considered an owner.
(4) If a trust owns all or part of the concern, each trustee and trust
beneficiary is considered an owner.
(b) Ownership and control for the STTR program.
(1) An STTR awardee must:
(i) Be a concern which is more than 50% directly owned and controlled by one or
more individuals (who are citizens or permanent resident aliens of the United
States), other small business concerns (each of which is more than 50% directly
owned and controlled by individuals who are citizens or permanent resident
aliens of the United States), an Indian tribe, ANC or NHO (or a wholly owned
business entity of such tribe, ANC or NHO), or any combination of these; or
(ii) Be a joint venture in which each entity to the joint venture must meet the
requirements set forth in paragraph (b)(1)(i) of this section.
(2) If an Employee Stock Ownership Plan owns all or part of the concern, each
stock trustee and plan member is considered an owner.
(3) If a trust owns all or part of the concern, each trustee and trust
beneficiary is considered an owner.
(c) Size and affiliation. An SBIR or STTR awardee, together with its affiliates,
must not have more than 500 employees. Concerns and entities are affiliates of
each other when one controls or has the power to control the other, or a third
party or parties controls or has the power to control both. It does not matter
whether control is exercised, so long as the power to control exists. For the
purposes of the SBIR and STTR programs, the following bases of affiliation
apply:
(1) Affiliation based on ownership. For determining affiliation based on equity
ownership, a concern is an affiliate of an individual, concern, or entity that
owns or has the power to control more than 50 percent of the concern's voting
equity. However, SBA may find a concern an affiliate of an individual, concern,
or entity that owns or has the power to control 40% or more of the voting equity
based upon the totality of circumstances. If no individual, concern, or entity
is found to control, SBA will deem the Board of Directors to be in control of
the concern.
(2) Affiliation arising under stock options, convertible securities, and
agreements to merge. In determining size, SBA considers stock options,
convertible securities, and agreements to merge (including agreements in
principle) to have a present effect on the power to control a concern. SBA
treats such options, convertible securities, and agreements as though the rights
granted have been exercised.
(i) Agreements to open or continue negotiations towards the possibility of a
merger or a sale of stock at some later date are not considered “agreements in
principle” and are thus not given present effect.
(ii) Options, convertible securities, and agreements that are subject to
conditions precedent which are incapable of fulfillment, speculative,
conjectural, or unenforceable under state or Federal law, or where the
probability of the transaction (or exercise of the rights) occurring is shown to
be extremely remote, are not given present effect.
(iii) An individual, concern or other entity that controls one or more other
concerns cannot use options, convertible securities, or agreements to appear to
terminate such control before actually doing so. SBA will not give present
effect to individuals', concerns' or other entities' ability to divest all or
part of their ownership interest in order to avoid a finding of affiliation.
(3) Affiliation based on common management. Affiliation arises where the CEO or
President of a concern (or other officers, managing members, or partners who
control the management of the concern) also controls the management of one or
more other concerns. Affiliation also arises where a single individual, concern,
or entity that controls the board of directors of one concern also controls the
board of directors or management of one or more other concerns.
(4) Affiliation based on identity of interest. Affiliation may arise among two
or more persons (including any individual, concern or other entity) with an
identity of interest. An individual, concern or entity may rebut a determination
of identity of interest with evidence showing that the interests deemed to be
one are in fact separate.
(i) SBA may presume an identity of interest between family members with
identical or substantially identical business or economic interests (such as
where the family members operate concerns in the same or similar industry in the
same geographic area).
(ii) SBA may presume an identity of interest based upon economic dependence if
the SBIR/STTR awardee relies upon another concern or entity for 70% or more of
its receipts.
(iii) An SBIR or STTR awardee is not affiliated with a portfolio company of a
venture capital operating company, hedge fund, or private equity firm, solely on
the basis of one or more shared investors, though affiliation may be found for
other reasons.
(5) Affiliation based on the newly organized concern rule. Affiliation may arise
where former or current officers, directors, principal stockholders, managing
members, general partners, or key employees of one concern organize a new
concern in the same or related industry or field of operation, and serve as the
new concern's officers, directors, principal stockholders, managing members,
general partners, or key employees, and the one concern is furnishing or will
furnish the new concern with contracts, financial or technical assistance,
indemnification on bid or performance bonds, and/or other facilities, whether
for a fee or otherwise. A concern may rebut such an affiliation determination by
demonstrating a clear line of fracture between the two concerns. A “key
employee” is an employee who, because of his/her position in the concern, has a
critical influence in or substantive control over the operations or management
of the concern. A concern will be considered “new” for the purpose of this rule
if it has been actively operating continuously for less than one year.
(6) Size requirement for joint ventures. Two or more small business concerns may
submit an application as a joint venture. The joint venture will qualify as
small as long as each concern is small under the size standard for the SBIR
program, found at § 121.702(c), or the joint venture meets the exception at §
121.103(h)(3)(ii) for two firms approved to be a mentor and protégé under SBA's
All Small Mentor-Protégé Program.
(7) Affiliation based on the ostensible subcontractor rule. A concern and its
ostensible subcontractor are treated as joint venturers. As such, they are
affiliates for size determination purposes and must meet the ownership and
control requirements applicable to joint ventures. An ostensible subcontractor
is a subcontractor or subgrantee that performs primary and vital requirements of
a funding agreement (i.e., those requirements associated with the principal
purpose of the funding agreement), or a subcontractor or subgrantee upon which
the concern is unusually reliant. All aspects of the relationship between the
concern and subcontractor are considered, including, but not limited to, the
terms of the proposal (such as management, technical responsibilities, and the
percentage of subcontracted work) and agreements between the concern and
subcontractor or subgrantee (such as bonding assistance or the teaming
agreement). To determine whether a subcontractor performs primary and vital
requirements of a funding agreement, SBA will consider whether the concern's
proposal complies with the performance requirements of the SBIR or STTR program.
(8) Affiliation based on license agreements. SBA will consider whether there is
a license agreement concerning a product or trademark which is critical to
operation of the licensee. The license agreement will not cause the licensor to
be affiliated with the licensee if the licensee has the right to profit from its
efforts and bears the risk of loss. Affiliation may arise, however, through
other means, such as common ownership or common management.
(9) Exception to affiliation for portfolio companies. If a venture capital
operating company, hedge fund, or private equity firm that is determined to be
affiliated with an awardee is a minority investor in the awardee, the awardee is
not affiliated with a portfolio company of the venture capital operating
company, hedge fund, or private equity firm, unless:
(i) The venture capital operating company, hedge fund, or private equity firm
owns a majority of the portfolio company; or
(ii) The venture capital operating company, hedge fund, or private equity firms
holds a majority of the seats of the board of directors of the portfolio
company.
(10) Totality of the circumstances. In determining whether affiliation exists,
SBA may consider the totality of the circumstances, and may find affiliation
even though no single factor is sufficient to constitute affiliation.
(11) Exception to affiliation for certain investment companies. There is an
exception to affiliation for Small Business Investment Companies (SBICs) that
invest in SBIR or STTR awardees, in accordance with 13 CFR 121.103(b)(1).
(d) Calculating ownership and control. SBA will review the small business'
equity ownership on a fully diluted basis for purposes of determining ownership,
control and affiliation in the SBIR and STTR programs. This means that SBA will
consider the total number of shares or equity that would be outstanding if all
possible sources of conversion were exercised, including, but not limited to:
Outstanding common stock or equity, outstanding preferred stock (on a converted
to common basis) or equity, outstanding warrants (on an as exercised and
converted to common basis), outstanding options and options reserved for future
grants, and any other convertible securities on an as converted to common basis.
[77 FR 76225, Dec. 27, 2012; 78 FR 11745, Feb. 20, 2013, as amended at 81 FR
34259, May 31, 2016; 81 FR 48579, July 25, 2016; 81 FR 71983, Oct. 19, 2016; 85
FR 66182, Oct. 16, 2020; 88 FR 26201, Apr. 27, 2023]
§ 121.703 ARE FORMAL SIZE DETERMINATIONS BINDING ON PARTIES?
Size determinations by authorized SBA officials are formal actions based upon a
specific funding agreement, and are binding upon the parties. Other SBA opinions
provided to funding agreement officers or others, are only advisory, and are not
binding or appealable.
§ 121.704 WHEN DOES SBA DETERMINE THE SIZE AND ELIGIBILITY STATUS OF A BUSINESS
CONCERN?
(a) The size and eligibility status of a concern for the purpose of a funding
agreement award under the SBIR and STTR programs is determined at the time of
award for both Phase I and Phase II SBIR and STTR awards, or on the date of the
request for a size determination, if an award is pending.
(b) A concern that qualified as a small business at the time it receives an SBIR
or STTR funding agreement is considered a small business throughout the life of
that specific funding agreement. Where a concern grows to be other than small,
the funding agreement agency may exercise the options on the award that is a
contract, grant or cooperative agreement or issue a continuation on a grant or
cooperative agreement and still count the award as an award to a small business
under the SBIR or STTR program. However, the following exceptions apply:
(1) In the case of a merger or acquisition, the awardee must, within 30 days of
the transaction becoming final (or the approved funding agreement novation if a
novation is required), recertify its small business size status to the funding
agreement agency or inform the funding agreement agency that it is other than
small. If the awardee is other than small, the agency can no longer fund the
options or issue a continuation pursuant to the funding agreement, from that
point forward, with SBIR or STTR funds. Funding agreement novations for reasons
other than a merger or acquisition do not necessarily require re-certification.
The funding agreement agency and the awardee must immediately revise all
applicable Federal contract and grant databases to reflect the new size status
from that point forward.
(2) For the purposes of SBIR and STTR funding agreements with durations of more
than five years, a funding agreement officer must request that a business
concern re-certify its small business size status no more than 120 days prior to
the end of the fifth year of the funding agreement, and no more than 120 days
prior to exercising any option or issuing any continuation. If the awardee
certifies that it is other than small, the funding agreement agency can no
longer fund the options or issue a continuation pursuant to the funding
agreement with SBIR or STTR funds. The funding agreement agency and the awardee
must immediately revise all applicable Federal contract and grant databases to
reflect the new size status from that point forward.
(c) Re-certification does not change the terms and conditions of the funding
agreement. The requirements in effect at the time of award remain in effect
throughout the life of the funding agreement.
(d) A request for a size re-certification shall include the size standard in
effect at the time of re-certification.
[77 FR 76226, Dec. 27, 2012]
§ 121.705 MUST A BUSINESS CONCERN SELF-CERTIFY ITS SIZE AND ELIGIBILITY STATUS?
(a) A business concern must self-certify that it meets the eligibility
requirements set forth in § 121.702 for a Phase I or Phase II SBIR or STTR
funding agreement.
(b) A business concern that is more than 50% owned by multiple venture capital
operating companies, hedge funds, or private equity firms and a joint venture
where one or more parties to the joint venture is more than 50% owned by
multiple venture capital operating companies, hedge funds, or private equity
firms must be registered with SBA as of the date it submits its initial proposal
(or other formal response) to a Phase I or Phase II SBIR announcement or
solicitation. The concern must indicate in any SBIR proposal or application that
it is registered with SBA as majority-owned by multiple venture capital
operating companies, hedge funds, or private equity firms.
(c) A small business concern that did not meet the requirements of paragraph (b)
of this section at the time of its SBIR proposal or application must notify the
funding agreement officer if, on the date of award, the concern is more than 50%
owned by multiple venture capital operating companies, hedge funds, or private
equity firms.
(1) The concern is still eligible to receive the award if it becomes
majority-owned by multiple venture capital operating companies, hedge funds, or
private equity firms after the time it submitted its initial proposal (or other
formal response) to a Phase I or Phase II SBIR announcement or solicitation if
the agency makes the award on or after the date that is 9 months from the end of
the period for submitting applications under the SBIR solicitation.
(2) This small business, known as a covered small business concern, would have
to certify that it meets the requirements of the SBIR program set forth in §§
121.702(a)(1)(ii) or 121.702(a)(1)(iii), and 121.702(a)(2) and 121.702(c) at the
time of award of the funding agreement.
(d) A funding agreement officer may accept a concern's self-certification as
true for the particular funding agreement involved in the absence of a written
protest or other credible information which would cause the funding agreement
officer or SBA to question the size or eligibility of the concern.
(e) Procedures for protesting an awardee's self-certification are set forth in
§§ 121.1001 through 121.1009. In adjudicating a protest, SBA may address both
the size status and eligibility of the SBIR or STTR awardee.
[77 FR 76227, Dec. 27, 2012]
SIZE ELIGIBILITY REQUIREMENTS FOR PAYING REDUCED PATENT FEES
§ 121.801 MAY PATENT FEES BE REDUCED IF A CONCERN IS SMALL?
These sections apply to size status for the purpose of paying reduced patent
fees authorized by Pub. L. 97-247, 96 Stat. 317. The eligibility requirements
for independent inventors and nonprofit organizations for the purpose of paying
reduced patent fees are set forth in regulations of the Patent and Trademark
Office of the Department of Commerce, 37 CFR 1.9, 1.27, 1.28.
§ 121.802 WHAT SIZE STANDARDS ARE APPLICABLE TO REDUCED PATENT FEES PROGRAMS?
A concern eligible for reduced patent fees is one:
(a) Whose number of employees, including affiliates, does not exceed 500
persons; and
(b) Which has not assigned, granted, conveyed, or licensed (and is under no
obligation to do so) any rights in the invention to any person who made it and
could not be classified as an independent inventor, or to any concern which
would not qualify as a non-profit organization or a small business concern under
this section.
§ 121.803 ARE FORMAL SIZE DETERMINATIONS BINDING ON PARTIES?
Size determinations by authorized SBA officials are formal actions, based upon a
specific patent application pursuant to the rules of the Patent and Trademark
Office, Department of Commerce, and are binding upon the parties. Other SBA
opinions provided to patent applicants or others are only advisory, and are not
binding or appealable.
§ 121.804 WHEN DOES SBA DETERMINE THE SIZE STATUS OF A BUSINESS CONCERN?
Size status is determined as of the date of the patent applicant's written
verification of size.
§ 121.805 MAY A BUSINESS CONCERN SELF-CERTIFY ITS SIZE STATUS?
(a) A concern verifies its size status with its submission of its patent
application.
(b) Any attempt to establish small size status improperly (fraudulently, through
gross negligence, or otherwise) may result in remedial action by the Patent and
Trademark Office.
(c) In the absence of credible information indicating otherwise, the Patent and
Trademark Office may accept the verification by the concern as a small business
as true.
(d) Questions concerning the size verification are resolved initially by the
Patent and Trademark Office. If not verified as small, the applicant may request
a formal SBA size determination.
SIZE ELIGIBILITY REQUIREMENTS FOR COMPLIANCE WITH PROGRAMS OF OTHER AGENCIES
§ 121.901 CAN OTHER GOVERNMENT AGENCIES OBTAIN SBA SIZE DETERMINATIONS?
Upon request by another Government agency, SBA will provide a size
determination, under SBA rules, standards and procedures, for its use in
determining compliance with small business requirements of its statutes,
regulations or programs.
§ 121.902 WHAT SIZE STANDARDS ARE APPLICABLE TO PROGRAMS OF OTHER AGENCIES?
SBA size standards. The size standards for compliance with programs of other
agencies are those for SBA programs which are most comparable to the programs of
such other agencies, unless the agency and SBA agree otherwise.
[67 FR 13716, Mar. 26, 2002]
§ 121.903 HOW MAY AN AGENCY USE SIZE STANDARDS FOR ITS PROGRAMS THAT ARE
DIFFERENT THAN THOSE ESTABLISHED BY SBA?
(a) Federal agencies or departments promulgating regulations relating to small
businesses usually use SBA size criteria. In limited circumstances, if they
decide the SBA size standard is not suitable for their programs, then agency
heads may establish a more appropriate small business definition for the
exclusive use in such programs, but only when:
(1) The size standard will determine:
(i) The size of a manufacturing concern by its average number of employees based
on the preceding 24 calendar months, determined according to § 121.106;
(ii) The size of a services concern by its average annual receipts over a period
of at least 5 years, determined according to § 121.104;
(iii) The size of other concerns on data over a period of at least 5 years,
determined according to § 121.104; or,
(iv) Other factors approved by SBA;
(2) The agency has consulted in writing with SBA's Division Chief, office of
Size Standards at least fourteen (14) calendar days before publishing the
proposed rule which is part of the rulemaking process. The written consultation
will include:
(i) What size standard the agency contemplates using;
(ii) To what agency program it will apply;
(iii) How the agency arrived at this particular size standard for this program;
and,
(iv) Why SBA's existing size standards do not satisfy the program requirements;
(3) The agency proposes the size standard for public comment pursuant to the
Administrative Procedure Act, 5 U.S.C. 553;
(4) The agency provides a copy of the proposed rule, when it publishes it for
public comment as part of the rulemaking process, to SBA's Division Chief,
Office of Size Standards; and
(5) SBA's Administrator approves the size standard before the agency adopts a
final rule or otherwise prescribes the size standard for its use. The agency's
request for the SBA Administrator's approval must include:
(i) Copies of all comments on the proposed size standard received in response to
the proposed rule;
(ii) A separate written justification for the intended size standard;
(iii) A copy of the intended final rule if available at that time, or a copy of
the intended final rule and preamble prior to its publication; and
(iv) Other information SBA may request in connection with the request.
(b) When approving any size standard established pursuant to this section, SBA's
Administrator will ensure that the size standard varies from industry to
industry to the extent necessary to reflect the differing characteristics of the
various industries, and consider other relevant factors.
(c) Where the agency head is developing a size standard for the sole purpose of
performing a Regulatory Flexibility Analysis pursuant to section 601(3) of the
Regulatory Flexibility Act, the department or agency may, after consultation
with the SBA Office of Advocacy, establish a size standard different from SBA's
which is more appropriate for such analysis.
[67 FR 13716, Mar. 26, 2002, as amended at 84 FR 66579, Dec. 5, 2019; 87 FR
34120, June 6, 2022]
§ 121.904 WHEN DOES SBA DETERMINE THE SIZE STATUS OF A BUSINESS CONCERN?
For compliance with programs of other agencies, SBA will base its size
determination on the size of the concern as of the date set forth in the request
of the other agency.
[67 FR 13716, Mar. 26, 2002]
PROCEDURES FOR SIZE PROTESTS AND REQUESTS FOR FORMAL SIZE DETERMINATIONS
§ 121.1001 WHO MAY INITIATE A SIZE PROTEST OR REQUEST A FORMAL SIZE
DETERMINATION?
(a) Size Status Protests.
(1) For SBA's Small Business Set-Aside Program, including the Property Sales
Program, or any instance in which a procurement or order has been restricted to
or reserved for small businesses or a particular group of small businesses
(including a partial set-aside), the following entities may file a size protest
in connection with a particular procurement, sale or order:
(i) Any offeror that the contracting officer has not eliminated from
consideration for any procurement-related reason, such as non-responsiveness,
technical unacceptability or outside of the competitive range;
(ii) The contracting officer;
(iii) The SBA Government Contracting Area Director having responsibility for the
area in which the headquarters of the protested offeror is located, regardless
of the location of a parent company or affiliates, the Director, Office of
Government Contracting, or the Associate General Counsel for Procurement Law;
and
(iv) Other interested parties. Other interested parties include large businesses
where only one concern submitted an offer for the specific procurement in
question. A concern found to be other than small in connection with the
procurement is not an interested party unless there is only one remaining
offeror after the concern is found to be other than small.
(2) For competitive 8(a) contracts, the following entities may protest:
(i) Any offeror that the contracting officer has not eliminated from
consideration for any procurement related reason, such as non-responsiveness,
technical unacceptability or outside of the competitive range;
(ii) The contracting officer; or
(iii) The SBA District Director, or designee, in either the district office
serving the geographical area in which the procuring activity is located or the
district office that services the apparent successful offeror, the Associate
Administrator for Business Development, or the Associate General Counsel for
Procurement Law.
(3) For SBA's Subcontracting Program, the following entities may protest:
(i) The prime contractor;
(ii) The contracting officer;
(iii) Other potential subcontractors;
(iv) The responsible SBA Government Contracting Area Director or the Director,
Office of Government Contracting, or the SBA's Associate General Counsel for
Procurement Law; and
(v) Other interested parties.
(4) For SBA's Small Business Innovation Research (SBIR) program and Small
Business Technology Transfer (STTR) program, the following entities may protest:
(i) An offeror or applicant for that solicitation;
(ii) The funding agreement officer; and
(iii) The responsible SBA Government Contracting Area Director; the Director,
Office of Government Contracting; the Associate Administrator, Investment
Division, or the Associate General Counsel for Procurement Law.
(5) For the Department of Defense's Small Disadvantaged Business (SDB) Program,
and any other similar program of another Federal agency, the following entities
may file a protest in connection with a particular SDB procurement:
(i) Any offeror for the specific SDB requirement whom the contracting officer
has not eliminated for reasons unrelated to size;
(ii) The contracting officer; and
(iii) The responsible SBA Area Director for Government Contracting, the SBA
Director, Office of Government Contracting, or the SBA Associate Administrator
for Business Development;
(6) For SBA's HUBZone program, the following entities may protest in connection
with a particular HUBZone procurement:
(i) Any offeror for a specific HUBZone set-aside contract that the contracting
officer has not eliminated from consideration for any procurement-related
reason, such as non-responsiveness, technical unacceptability or outside of the
competitive range;
(ii) Any concern that submitted an offer in full and open competition and its
opportunity for award will be affected by a price evaluation preference given
acertified HUBZone small business concern;
(iii) The contracting officer; and
(iv) The SBA Director, Office of HUBZone, or designee, or the SBA Associate
General Counsel for Procurement Law.
(7) For any unrestricted Government procurement in which a business concern has
represented itself as a small business concern, the following entities may
protest in connection with a particular procurement:
(i) Any offeror;
(ii) The contracting officer; and
(iii) The responsible SBA Government Contracting Area Director, the Director,
Office of Government Contracting, the Associate Administrator for Business
Development, or the Associate General Counsel for Procurement Law.
(8) For SBA's Service Disabled Veteran-Owned Small Business Concern program, the
following entities may protest in connection with a particular service-disabled
veteran-owned procurement:
(i) Any offeror for a specific service-disabled veteran-owned small business
set-aside contract that the contracting officer has not eliminated from
consideration for any procurement-related reason, such as non-responsiveness,
technical unacceptability or outside of the competitive range;
(ii) The contracting officer;
(iii) The SBA Government Contracting Area Director; and
(iv) The Director, Office of Government Contracting, or designee, or the
Associate General Counsel for Procurement Law.
(9) For SBA's WOSB Federal Contracting Program, the following entities may
protest:
(i) Any offeror for a specific contract set aside for WOSBs or WOSBs owned by
one or more women who are economically disadvantaged (EDWOSB) that the
contracting officer has not eliminated from consideration for any
procurement-related reason, such as non-responsiveness, technical
unacceptability or outside of the competitive range;
(ii) The contracting officer;
(iii) The SBA Government Contracting Area Director; and
(iv) The Director, Office of Government Contracting, or designee, or the
Associate General Counsel for Procurement Law.
(b) Request for Size Determinations.
(1) For SBA's Financial Assistance Programs, the following entities may request
a formal size determination:
(i) The applicant for assistance; and
(ii) The SBA official with authority to take final action on the assistance
requested. That official may also request the appropriate Government Contracting
Area Office to determine whether affiliation exists between an applicant for
financial assistance and one or more other entities for purposes of determining
whether the applicant would exceed the loan limit amount imposed by § 120.151 of
this chapter.
(iii) The SBA Associate Administrator for Investment or designee may request a
formal size determination for any purpose relating to the SBIC program (see part
107 of this chapter) or the NMVC program (see part 108 of this chapter). A
formal size determination includes a request to determine whether or not
affiliation exists between two or more entities for any purpose relating to the
SBIC program.
(2) For SBA's 8(a) BD program:
(i) Concerning initial or continued 8(a) BD eligibility, the following entities
may request a formal size determination:
(A) The 8(a) BD applicant concern or Participant; or
(B) The Director of the Division of Program Certification and Eligibility or the
Associate Administrator for Business Development.
(ii) Concerning individual sole source and competitive 8(a) contract awards
where SBA cannot verify the eligibility of the apparent successful offeror
because SBA finds the concern to be other than small, the following entities may
request a formal size determination:
(A) The Participant nominated for award of the particular sole source contract,
or found to be ineligible for a competitive 8(a) contract due to its size;
(B) The SBA program official with authority to execute the 8(a) contract or,
where applicable, the procuring activity contracting officer who has been
delegated SBA's 8(a) contract execution functions; or
(C) The SBA District Director in the district office that services the
Participant, the Associate Administrator for Business Development, or the
Associate General Counsel for Procurement Law.
(3) For SBA's Certificate of Competency Program, the following entities may
request a formal size determination:
(i) The offeror who has applied for a COC; and
(ii) The responsible SBA Government Contracting Area Director or the Director,
Office of Government Contracting.
(4) For SBA's sale or lease of government property, the following entities may
request a formal size determination:
(i) The responsible SBA Government Contracting Area Director or the Director,
Office of Government Contracting; and
(ii) Authorized officials of other Federal agencies administering a property
sales program.
(5) For eligibility to pay reduced patent fees, the following entities may
request a formal size determination:
(i) The applicant for the reduced patent fees; and
(ii) The Patent and Trademark Office.
(6) For purposes of determining compliance with small business requirements of
another Government agency program not otherwise specified in this section, an
official with authority to administer the program involved may request a formal
size determination.
(7) In connection with initial or continued eligibility for the WOSB program,
the following may request a formal size determination:
(i) The applicant or WOSB/EDWOSB; or
(ii) The Director of Government Contracting or the Deputy Director, Program and
Resource Management, for the Office of Government Contracting.
(8) In connection with initial or continued eligibility for the HUBZone program,
the following may request a formal size determination:
(i) The applicant or certified HUBZone small business concern; or
(ii) The Director, Office of HUBZone, or designee.
(9) For other purposes related to protecting the integrity of the Federal
procurement process, including validating that firms listed in the System for
Award Management database are small, the Government Contracting Area Director or
the Director, Office of Government Contracting may initiate a formal size
determination when sufficient information exists that calls into question a
firm's small business status. The current date will be used to determine size,
and SBA will initiate the process to remove from the database the small business
designation of any firm found to be other than small.
(10) For purposes of the small business mentor-protégé program authorized
pursuant to § 125.9 of this chapter (based on its status as a small business for
its primary or identified secondary NAICS code), the business concern seeking to
be a protégé or SBA may request a formal size determination.
(11) For purposes of determining compliance with small business requirements for
firms relying upon small business status advisory opinions, the Associate
General Counsel, Office of Procurement Law may request a formal size
determination. Additionally, any firm that is the subject of a small business
status advisory opinion holding that it is other than small may request a formal
size determination.
(12) In connection with eligibility for the SDVO program, the following may
request a formal size determination:
(i) The SDVO business concern; or
(ii) The Director of Government Contracting or designee.
(13) The SBA Inspector General may request a formal size determination with
respect to any of the programs identified in paragraph (b) of this section.
[61 FR 3286, Jan. 31, 1996, as amended at 63 FR 31907, June 11, 1998; 63 FR
35739, June 30, 1998; 69 FR 25266, May 5, 2004; 69 FR 29206, May 21, 2004; 69 FR
29420, May 24, 2004; 69 FR 44461, July 26, 2004; 73 FR 56947, Oct. 1, 2008; 74
FR 45753, Sept. 4, 2009; 75 FR 62280, Oct. 7, 2010; 76 FR 8253, Feb. 11, 2011;
77 FR 76227, Dec. 27, 2012; 78 FR 61132, Oct. 2, 2013; 80 FR 7536, Feb. 11,
2015; 81 FR 34259, May 31, 2016; 81 FR 48579, July 25, 2016; 84 FR 65239, Nov.
26, 2019; 85 FR 66182, Oct. 16, 2020; 88 FR 26202, Apr. 27, 2023]
§ 121.1002 WHO MAKES A FORMAL SIZE DETERMINATION?
The responsible Government Contracting Area Director or designee makes all
formal size determinations in response to either a size protest or a request for
a formal size determination, with the exception of size determinations for
purposes of the Disaster Loan Program, which will be made by the Disaster Area
Office Director or designee responsible for the area in which the disaster
occurred.
§ 121.1003 WHERE SHOULD A SIZE PROTEST BE FILED?
A protest involving a government procurement or sale must be filed with the
contracting officer for the procurement or sale, who must forward the protest to
the SBA Government Contracting Area Office serving the area in which the
headquarters of the protested concern is located, regardless of the location of
any parent company or affiliates.
§ 121.1004 WHAT TIME LIMITS APPLY TO SIZE PROTESTS?
(a) Protests by entities other than contracting officers or SBA —
(1) Sealed bids or sales (including protests on partial set-asides and reserves
of Multiple Award Contracts and set-asides of orders against Multiple Award
Contracts).
(i) A protest must be received by the contracting officer prior to the close of
business on the 5th day, exclusive of Saturdays, Sundays, and legal holidays,
after bid opening for
(A) The contract;
(B) An order issued against a Multiple Award Contract if the contracting officer
requested a new size certification in connection with that order; or
(C) Except for orders or Blanket Purchase Agreements issued under any Federal
Supply Schedule contract, an order or Blanket Purchase Agreement set aside for
small business (i.e., small business set-aside, 8(a) small business,
service-disabled veteran-owned small business, HUBZone small business, or
women-owned small business) where the underlying Multiple Award Contract was
awarded on an unrestricted basis.
(ii) Where the identified low bidder is determined to be ineligible for award, a
protest of any other identified low bidder must be received prior to the close
of business on the 5th day, exclusive of Saturdays, Sundays, and legal holidays,
after the contracting officer has notified interested parties of the identity of
that low bidder.
(2) Negotiated procurement (including protests on partial set-asides and
reserves of Multiple Award Contracts and set-asides of orders against Multiple
Award Contracts). A protest must be received by the contracting officer prior to
the close of business on the 5th day, exclusive of Saturdays, Sundays, and legal
holidays, after the contracting officer has notified the protestor of the
identity of the prospective awardee for
(i) The contract; or
(ii) An order issued against a Multiple Award Contract if the contracting
officer requested a size recertification in connection with that order; or
(iii) Except for orders or Blanket Purchase Agreements issued under any Federal
Supply Schedule contract, an order or Blanket Purchase Agreement set-aside for
small business (i.e., small business set-aside, 8(a) small business,
service-disabled veteran-owned small business, HUBZone small business, or
women-owned small business) where the underlying Multiple Award Contract was
awarded on an unrestricted basis without a reserve.
(3) Long-Term Contracts. For contracts with durations greater than five years
(including options), including all existing long-term contracts, Multi-agency
contracts, Governmentwide Acquisition Contracts and Multiple Award Contracts:
(i) Protests regarding size certifications made for contracts must be received
by the contracting officer prior to the close of business on the 5th day,
exclusive of Saturdays, Sundays, and legal holidays, after receipt of notice
(including notice received in writing, orally, or via electronic posting) of the
identity of the prospective awardee or award.
(ii) Protests regarding size certifications made for an option period must be
received by the contracting officer prior to the close of business on the 5th
day, exclusive of Saturdays, Sundays, and legal holidays, after receipt of
notice (including notice received in writing, orally, or via electronic posting)
of the size certification made by the protested concern.
(A) A contracting officer is not required to terminate a contract where a
concern is found to be other than small pursuant to a size protest concerning a
size certification made for an option period.
(B) [Reserved]
(iii) Protests relating to size certifications made in response to a contracting
officer's request for size certifications in connection with an individual order
must be received by the contracting officer prior to the close of business on
the 5th day, exclusive of Saturdays, Sundays, and legal holidays, after receipt
of notice (including notice received in writing, orally, or via electronic
posting) of the identity of the prospective awardee or award.
(4) Electronic notification of award. Where notification of award is made
electronically, such as posting on the Internet under Simplified Acquisition
Procedures, a protest must be received by the contracting officer before close
of business on the fifth day, exclusive of Saturdays, Sundays, and legal
holidays, after the electronic posting.
(5) No notice of award. Where there is no requirement for written pre-award
notice or notice of award, or where the contracting officer has failed to
provide written notification of award, the 5-day protest period will commence
upon oral notification by the contracting officer or authorized representative
or another means (such as public announcements or other oral communications) of
the identity of the apparent successful offeror.
(b) Protests by contracting officers, funding agreement officers or SBA. The
time limitations in paragraph (a) of this section do not apply to contracting
officers, funding agreement officers or SBA, and they may file protests before
or after awards, except to the extent set forth in paragraph (e) of this
section, including for purposes of the SBIR and STTR programs. Notwithstanding
paragraph (e), for purposes of the SBIR and STTR programs the funding agreement
officer or SBA may file a protest in anticipation of an award.
(c) Effect of contract award. A timely filed protest applies to the procurement
in question even though a contracting officer awarded the contract prior to
receipt of the protest.
(d) Untimely protests. A protest received after the allotted time limits must
still be forwarded to SBA. SBA will dismiss untimely protests.
(e) Premature protests. A protest filed by any party, including the contracting
officer, before bid opening or notification to offerors of the selection of the
apparent successful offer will be dismissed as premature.
(f) Apparent successful offeror. A party with standing, as set forth in §
121.1001(a), may file a protest only against an apparent successful offeror or
an offeror in line to receive an award.
(g) Bid protest corrective action. SBA will generally dismiss any size protest
relating to an initial apparent successful offeror where an agency decides to
reevaluate offers as a corrective action in response to a FAR subpart 33.1 bid
protest.
(1) SBA will complete the size determination where the procuring agency makes a
written request to SBA within two business days of the agency informing SBA of
the corrective action and demonstrates that the corrective action will not
result in a change of the apparent successful offeror, unless the protest
involves size issues determined as of the date of final proposal revision per §
121.404(d).
(2) When the apparent successful offeror is announced after reevaluation,
interested parties will again have the opportunity to protest the size of the
new or same apparent successful offeror within five business days after such
notification.
[61 FR 3286, Jan. 31, 1996, as amended at 69 FR 29206, May 21, 2004; 71 FR
66444, Nov. 15, 2006; 77 FR 76227, Dec. 27, 2012; 78 FR 61132, Oct. 2, 2013; 85
FR 66182, Oct. 16, 2020; 88 FR 26202, Apr. 27, 2023]
§ 121.1005 HOW MUST A PROTEST BE FILED WITH THE CONTRACTING OFFICER?
A protest must be delivered to the contracting officer by hand, telegram, mail,
facsimile, Federal Express or other overnight delivery service, e-mail, or
telephone. If a protest is made by telephone, the contracting officer must later
receive a confirming letter either within the 5-day period in § 121.1004(a)(1)
or postmarked no later than one day after the date of the telephone protest.
[61 FR 3286, Jan. 31, 1996, as amended at 69 FR 29206, May 21, 2004]
§ 121.1006 WHEN WILL A SIZE PROTEST BE REFERRED TO AN SBA GOVERNMENT CONTRACTING
AREA OFFICE?
(a) A contracting officer who receives a protest (other than from SBA) must
forward the protest promptly to the SBA Government Contracting Area Office
serving the area in which the headquarters of the offeror is located.
(b) A contracting officer's referral must contain the following information:
(1) The protest and any accompanying materials;
(2) A copy of the self-certification as to size;
(3) Identification of the applicable size standard;
(4) A copy of the solicitation;
(5) Identification of the date of bid opening or notification provided to
unsuccessful offerors;
(6) The date on which the protest was received; and
(7) A complete address and point of contact for the protested concern.
§ 121.1007 MUST A PROTEST OF SIZE STATUS RELATE TO A PARTICULAR PROCUREMENT AND
BE SPECIFIC?
(a) Particular procurement. A protest challenging the size of a concern which
does not pertain to a particular procurement or sale will not be acted on by
SBA.
(b) A protest must include specific facts. A protest must be sufficiently
specific to provide reasonable notice as to the grounds upon which the protested
concern's size is questioned. Some basis for the belief or allegation stated in
the protest must be given. A protest merely alleging that the protested concern
is not small or is affiliated with unnamed other concerns does not specify
adequate grounds for the protest. No particular form is prescribed for a
protest. Where materials supporting the protest are available, they should be
submitted with the protest.
(c) Non-specific protests will be dismissed. Protests which do not contain
sufficient specificity will be dismissed by SBA. The following are examples of
allegation specificity:
EXAMPLE 1:
An allegation that concern X is large because it employs more than 500 employees
(where 500 employees is the applicable size standard) without setting forth a
basis for the allegation is non-specific.
EXAMPLE 2:
An allegation that concern X is large because it exceeds the 500 employee size
standard (where 500 employees is the applicable size standard) because a higher
employment figure was published in publication Y is sufficiently specific.
EXAMPLE 3:
An allegation that concern X is affiliated with concern Y without setting forth
any basis for the allegation is non-specific.
EXAMPLE 4:
An allegation that concern X is affiliated with concern Y because Mr. A is the
majority shareholder in both concerns is sufficiently specific.
EXAMPLE 5:
An allegation that concern X has revenues in excess of $5 million (where $5
million is the applicable size standard) without setting forth a basis for the
allegation is non-specific.
EXAMPLE 6:
An allegation that concern X exceeds the size standard (where the applicable
size standard is $5 million) because it received Government contracts in excess
of $5 million last year is sufficiently specific.
[61 FR 3286, Jan. 31, 1996, as amended at 69 FR 29206, May 21, 2004]
§ 121.1008 WHAT OCCURS AFTER SBA RECEIVES A SIZE PROTEST OR REQUEST FOR A FORMAL
SIZE DETERMINATION?
(a) When SBA receives a size protest, the SBA Area Director for Government
Contracting, or designee, will notify the contracting officer, the protested
concern, and the protestor that the protest has been received. If the protest
pertains to a requirement involving SBA's HUBZone program, the Area Director
will also notify the D/HUB of the protest. If the protest pertains to a
requirement set aside for WOSBs or EDWOSBs, the Area Director will also notify
SBA's Director for Government Contracting of the protest. If the protest
pertains to a requirement involving SBA's SBIR or STTR programs, the Area
Director will also notify the Associate Administrator, Investment Division. If
the protest involves the size status of an SDB concern (see part 124, subpart B
of this chapter) the Area Director will notify SBA's Associate Administrator for
Business Development. If the protest pertains to a requirement that has been
reserved for competition among eligible 8(a) BD program participants, the Area
Director will notify the SBA district office servicing the 8(a) concern whose
size status has been protested. SBA will provide a copy of the protest to the
protested concern together with SBA Form 355, Application for Small Business
Size Determination, by certified mail, return receipt requested, or by any
overnight delivery service that provides proof of receipt. SBA will ask the
protested concern to complete the form and respond to the allegations in the
protest.
(b) When SBA receives a request for a formal size determination in accord with §
121.1001(b), SBA will provide a blank copy of SBA Form 355 to the concern whose
size is at issue.
(c) The protested concern or concern whose size is at issue must return the
completed SBA Form 355 and all other requested information to SBA within 3
working days from the date of receipt of the blank form from SBA. SBA has
discretion to grant an extension of time to file the form. The firm must attach
to the completed SBA Form 355 its answers to the allegations contained in the
protest, where applicable, together with any supporting material.
(d) If a concern whose size status is at issue fails to submit a completed SBA
Form 355, responses to the allegations of the protest, or other requested
information within the time allowed by SBA, or if it submits incomplete
information, SBA may presume that disclosure of the information required by the
form or other missing information would demonstrate that the concern is other
than a small business. A concern whose size status is at issue must furnish
information about its alleged affiliates to SBA, despite any third party claims
of privacy or confidentiality, because SBA will not disclose information
obtained in the course of a size determination except as permitted by Federal
law.
[61 FR 3286, Jan. 31, 1996, as amended at 63 FR 31908, June 11, 1998; 69 FR
29207, May 21, 2004; 73 FR 56948, Oct. 1, 2008; 74 FR 45753, Sept. 4, 2009; 75
FR 62280, Oct. 7, 2010; 77 FR 76227, Dec. 27, 2012]
§ 121.1009 WHAT ARE THE PROCEDURES FOR MAKING THE SIZE DETERMINATION?
(a) Time frame for making size determination.
(1) After receipt of a protest or a request for a formal size determination, if
no protest is pending under FAR subpart 33.1, the SBA Area Office will issue a
formal size determination within 15 business days, if possible;
(2) If a protest is pending under FAR subpart 33.1, the SBA Area Office will
suspend processing a valid, timely and specific size protest. Once the procuring
agency, GAO or the Court of Federal Claims issues a decision under FAR subpart
33.1, the SBA Area Office will recommence the size determination process.
(i) If the FAR subpart 33.1 decision denies the protest, SBA will issue a formal
size determination within 15 business days of the decision, if possible.
(ii) If the decision results in a cancellation of the award or change of the
apparent successful offeror, SBA will dismiss the size protest as moot.
(iii) If the decision requires re-evaluation of offers or other corrective
action but the award is not cancelled, SBA will continue to suspend processing
the protest.
(A) If after re-evaluation or other corrective action occurs the protested
concern remains the apparent successful offeror, SBA will issue a formal size
determination within 15 business days after notification of the apparent
successful offeror, if possible.
(B) If after re-evaluation or other corrective action occurs a different
apparent successful offeror is identified, SBA will dismiss the size protest as
moot. Interested parties may file a timely size protest with respect to the
newly identified apparent successful offeror after the notification of award.
(3) The contracting officer may award a contract after receipt of a protest if
the contracting officer determines in writing that an award must be made to
protect the public interest. Notwithstanding such a determination, the
provisions of paragraph (g) of this section apply to the procurement in
question.
(4) If SBA does not issue its determination in accordance with paragraph (a)(1)
of this section (or request an extension that is granted), the contracting
officer may award the contract if he or she determines in writing that there is
an immediate need to award the contract and that waiting until SBA makes its
determination will be disadvantageous to the Government. Notwithstanding such a
determination, the provisions of paragraph (g) of this section apply to the
procurement in question.
(b) Basis for determination. The size determination will be based primarily on
the information supplied by the protestor or the entity requesting the size
determination and that provided by the concern whose size status is at issue.
The determination, however, may also be based on grounds not raised in the
protest or request for size determination. SBA may use other information and may
make requests for additional information to the protestor, the concern whose
size status is at issue and any alleged affiliates, or other parties.
(c) Burden of persuasion. The concern whose size is under consideration has the
burden of establishing its small business size.
(d) Weight of evidence. SBA will give greater weight to specific, signed,
factual evidence than to general, unsupported allegations or opinions. In the
case of refusal or failure to furnish requested information within a required
time period, SBA may assume that disclosure would be contrary to the interests
of the party failing to make disclosure.
(e) Formal size determination. The SBA will base its formal size determination
upon the record, including reasonable inferences from the record, and will state
in writing the basis for its findings and conclusions.
(f) Notification of determination. SBA will promptly notify the contracting
officer, the protester, and the protested concern. SBA will send the
notification by verifiable means, which may include facsimile, electronic mail,
or overnight delivery service.
(g) Results of an SBA Size Determination.
(1) A contracting officer may award a contract to a protested concern after the
SBA Area Office has determined either that the protested concern is an eligible
small business or has dismissed all protests against it. If OHA subsequently
overturns the Area Office's determination or dismissal, the contracting officer
may apply the OHA decision to the procurement in question.
(2) A contracting officer shall not award a contract to a protested concern that
the Area Office has determined is not an eligible small business for the
procurement in question.
(i) If a contracting officer receives such a determination after contract award,
and no OHA appeal has been filed, the contracting officer shall terminate the
award.
(ii) If a timely OHA appeal is filed after contract award, the contracting
officer must consider whether performance can be suspended until an appellate
decision is rendered.
(iii) If OHA affirms the size determination finding the protested concern
ineligible, the contracting officer shall either terminate the contract or not
exercise the next option.
(3) The contracting officer must update the Federal Procurement Data System and
other procurement reporting databases to reflect the final agency size decision
(the formal size determination if no appeal is filed or the appellate decision).
(4) Once SBA has determined that a concern is other than small for purposes of a
particular procurement, the concern cannot later become eligible for the
procurement by reducing its size.
(5) A concern determined to be other than small under a particular size standard
is ineligible for any procurement or any assistance authorized by the Small
Business Act or the Small Business Investment Act of 1958 which requires the
same or a lower size standard, unless SBA recertifies the concern to be small
pursuant to § 121.1010 or OHA reverses the adverse size determination. After an
adverse size determination, a concern cannot self-certify as small under the
same or lower size standard unless it is first recertified as small by SBA. If a
concern does so, it may be in violation of criminal laws, including section
16(d) of the Small Business Act, 15 U.S.C. 645(d). If the concern has already
certified itself as small under the same or a smaller size standard on a pending
procurement or on an application for SBA assistance, the concern must
immediately inform the contracting officer or responsible official of the
adverse size determination.
(i) Not later than two days after the date on which SBA issues a final size
determination finding a business concern to be other than small, such concern
must update its size status in the System for Award Management (or any successor
system).
(ii) If a business concern fails to update its size status in the System for
Award Management (or any successor system) in response to an adverse size
determination, SBA will make such update within two days of the business's
failure to do so.
(h) Limited reopening of size determinations. SBA may, in its sole discretion,
reopen a formal size determination to correct an error or mistake, provided it
is within the appeal period and no appeal has been filed with OHA. Once the
agency has issued a final decision (either a formal size determination that is
not timely appealed or an appellate decision), SBA cannot re-open the size
determination.
[61 FR 3286, Jan. 31, 1996, as amended at 67 FR 47245, July 18, 2002; 69 FR
29207, May 21, 2004; 76 FR 5683, Feb. 2, 2011; 78 FR 38818, June 28, 2013; 88 FR
26202, Apr. 27, 2023]
§ 121.1010 HOW DOES A CONCERN BECOME RECERTIFIED AS A SMALL BUSINESS?
(a) A concern may request SBA to recertify it as small at any time by filing an
application for recertification with the Government Contracting Area Office
responsible for the area in which the headquarters of the applicant is located,
regardless of the location of parent companies or affiliates. No particular form
is prescribed for the application; however, the request for recertification must
be accompanied by a current completed SBA Form 355 and any other information
sufficient to show a significant change in its ownership, management, or other
factors bearing on its status as a small concern.
(b) Recertification will not be required nor will the prohibition against future
self-certification apply if the adverse SBA size determination is based solely
on a finding of affiliation due to a joint venture (e.g., ostensible
subcontracting) limited to a particular Government procurement or property sale,
or is based on an ineligible manufacturer where the eligible small business
bidder or offeror is a nonmanufacturer on a particular Government procurement.
(c) A denial of an application for recertification is a formal size
determination and may be reviewed by OHA at the discretion of that office.
(d) The granting of an application for recertification has future effect only.
While it is a formal size determination, notice of recertification is required
to be given only to the applicant.
APPEALS OF SIZE DETERMINATIONS AND NAICS CODE DESIGNATIONS
§ 121.1101 ARE FORMAL SIZE DETERMINATIONS SUBJECT TO APPEAL?
(a) Appeals from formal size determinations may be made to OHA. Unless an appeal
is made to OHA, the size determination made by a SBA Government Contracting Area
Office or Disaster Area Office is the final decision of the agency. The
procedures for appealing a formal size determination to OHA are set forth in
part 134 of this chapter. The OHA appeal is an administrative remedy that must
be exhausted before judicial review of a formal size determination may be sought
in a court.
(b) OHA will review all timely appeals of size determinations.
[69 FR 29207, May 21, 2004, as amended at 76 FR 5683, Feb. 2, 2011]
§ 121.1102 ARE NAICS CODE DESIGNATIONS SUBJECT TO APPEAL?
A NAICS code designation made by a procuring activity contracting officer may be
appealed to OHA. The procedures governing OHA appeals are set forth in part 134
of this chapter. The OHA appeal is an administrative remedy that must be
exhausted before judicial review of a NAICS code designation may be sought in a
court.
[67 FR 47245, July 18, 2002]
§ 121.1103 WHAT ARE THE PROCEDURES FOR APPEALING A NAICS CODE OR SIZE STANDARD
DESIGNATION?
(a)
(1) Any interested party adversely affected by a NAICS code designation may
appeal the designation to OHA. An interested party would include a business
concern seeking to change the NAICS code designation in order to be considered a
small business for the challenged procurement, regardless of whether the
procurement is reserved for small businesses or unrestricted. The only exception
is that, for a sole source contract reserved under SBA's 8(a) Business
Development program (see part 124 of this chapter), only SBA's Associate
Administrator for Business Development may appeal the NAICS code designation.
(2) A NAICS code appeal may include an appeal involving the applicable size
standard, such as where more than one size standard corresponds to the selected
NAICS code, or a question relating to the size standard in effect at the time
the solicitation was issued or amended.
(b) The contracting officer's determination of the applicable NAICS code is
final unless appealed as follows:
(1) An appeal from a contracting officer's NAICS code or size standard
designation must be served and filed within 10 calendar days after the issuance
of the solicitation or amendment affecting the NAICS code or size standard.
However, SBA may file a NAICS code appeal at any time before offers are due. OHA
will summarily dismiss an untimely NAICS code appeal.
(2)
(i) The appeal petition must be in writing and must be sent to the Office of
Hearings & Appeals, U.S. Small Business Administration, 409 3rd Street, SW.,
Suite 5900, Washington, DC 20416.
(ii) There is no required format for a NAICS code appeal, but an appeal must
include the following information: the solicitation or contract number; the
name, address, and telephone number of the contracting officer; a full and
specific statement as to why the NAICS code designation is erroneous, and
argument in support thereof; and the name, address and telephone number of the
appellant or its attorney.
(3) The appellant must serve the appeal petition upon the contracting officer
who assigned the NAICS code to the acquisition and SBA's Office of General
Counsel, Associate General Counsel for Procurement Law, 409 3rd Street, SW.,
Washington, DC 20416.
(c) Procedure after a NAICS code appeal is filed and served.
(1) Upon receipt of the service copy of a NAICS code appeal, the contracting
officer shall:
(i) Stay the date for the closing of receipt of offers;
(ii) Advise the public, by amendment to the solicitation or other method, of the
existence of the NAICS code appeal and the procedures and deadline for
interested parties to file and serve arguments concerning the appeal;
(iii) Send a copy of (or an electronic link to) the entire solicitation,
including amendments, to OHA;
(iv) File and serve any response to the appeal prior to the close of the record;
and
(v) Inform OHA of any amendments, actions or developments concerning the
procurement in question.
(2) Upon receipt of a NAICS code appeal, OHA shall:
(i) Notify the appellant, the contracting officer, the SBA and any other known
party of the date OHA received the appeal and the date the record will close;
and
(ii) Conduct the appeal in accordance with part 134 of this chapter.
(3) Any interested party may file and serve its response to the NAICS code
appeal.
[69 FR 29207, May 21, 2004; 74 FR 45753, Sept. 4, 2009, as amended at 76 FR
5683, Feb. 2, 2011; 78 FR 61132, Oct. 2, 2013; 85 FR 66183, Oct. 16, 2020]
SUBPART B—OTHER APPLICABLE PROVISIONS
WAIVERS OF THE NONMANUFACTURER RULE FOR CLASSES OF PRODUCTS AND INDIVIDUAL
CONTRACTS
§ 121.1201 WHAT IS THE NONMANUFACTURER RULE?
The Nonmanufacturer Rule is set forth in § 121.406(b).
§ 121.1202 WHEN WILL A WAIVER OF THE NONMANUFACTURER RULE BE GRANTED FOR A CLASS
OF PRODUCTS?
(a) A waiver for a class of products (class waiver) will be granted when there
are no small business manufacturers or processors available to participate in
the Federal market for that class of products.
(b) Federal market means acquisitions by the Federal Government from offerors
located in the United States, or such smaller area as SBA designates if it
concludes that the class of products is not supplied on a national basis.
(1) When considering the appropriate market area for a product, SBA presumes
that the entire United States is the relevant Federal market, unless it is
clearly demonstrated that a class of products cannot be procured on a national
basis. This presumption may be particularly difficult to overcome in the case of
manufactured products, since such items typically have a market area
encompassing the entire United States.
(2) When considering geographic segmentation of a Federal market, SBA will not
necessarily use market definitions dependent on airline radius, political, or
SBA regional boundaries. Market areas typically follow established
transportation routes rather than jurisdictional borders. SBA examines the
following factors, among others, in cases where geographic segmentation for a
class of products is urged:
(i) Whether perishability affects the area in which the product can practically
be sold;
(ii) Whether transportation costs are high as a proportion of the total value of
the product so as to limit the economic distribution of the product;
(iii) Whether there are legal barriers to transportation of the item;
(iv) Whether a fixed, well-delineated boundary exists for the purported market
area and whether this boundary has been stable over time; and
(v) Whether a small business, not currently selling in the defined market area,
could potentially enter the market from another area and supply the market at a
reasonable price.
(c) Available to participate in the context of the Federal market means that
contractors exist that have been awarded or have performed a contract to supply
a specific class of products to the Federal Government within 24 months from the
date of the request for waiver, either directly or through a dealer, or who have
submitted an offer on a solicitation for that class of products within that time
frame.
(d) Class of products is an individual subdivision within an NAICS Industry
Number as established by the Office of Management and Budget in the NAICS
Manual.
[61 FR 3286, Jan. 31, 1996, as amended at 65 FR 30863, May 15, 2000]
§ 121.1203 WHEN WILL A WAIVER OF THE NONMANUFACTURER RULE BE GRANTED FOR AN
INDIVIDUAL CONTRACT?
(a) Where appropriate, SBA will generally grant waivers for an individual
contract or order prior to the issuance of a solicitation, or, where a
solicitation has been issued, when the contracting officer provides all
potential offerors additional time to respond.
(b) SBA may grant a waiver after contract award, where the contracting officer
has determined that the modification is within the scope of the contract and the
agency followed the regulations prior to issuance of the solicitation and
properly and timely requested a waiver for any other items under the contract,
where required.
EXAMPLE TO PARAGRAPH (B):
The Government seeks to buy spare parts to fix Item A. After conducting market
research, the government determines that Items B, C, and D that are being
procured may be eligible for waivers and requests and receives waivers from SBA
for those items prior to issuing the solicitation. After the contract is
awarded, the Government determines that it will need additional spare parts to
fix Item A. The Government determines that adding the additional parts as a
modification to the original contract is within scope. The contracting officer
believes that one of the additional parts is also eligible for a waiver from
SBA, and requests the waiver at the time of the modification. If all other
criteria are met, SBA would grant the waiver, even though the contract has
already been awarded.
(c) An individual waiver for an item in a solicitation will be approved when the
SBA Director, Office of Government Contracting, reviews and accepts a
contracting officer's determination that no small business manufacturer or
processor can reasonably be expected to offer a product meeting the
specifications of a solicitation, including the period of performance.
(d) An individual waiver applies only to the contract for which it is granted
and does not apply to modifications outside the scope of the contract or other
procurement actions (e.g., follow-on or bridge contracts).
(e) An individual waiver in connection with a long-term contract (i.e., a
contract with a duration of longer than five years, including options) cannot
exceed five years. A procuring agency may seek a new waiver for an additional
five years if, after conducting market research, it demonstrates that there are
no available small business manufacturers and that a waiver remains appropriate.
(f) For a multiple item procurement, except those described in § 121.406(d)(1),
a waiver must be sought and granted for each item that the procuring agency
believes no small business manufacturer or processor can reasonably be expected
to offer a product meeting the specifications of the solicitation and which will
bring the total value of items to be procured from small business or subject to
a waiver to at least 50% of the estimated value of the contract.
(1) SBA's waiver applies only to the specific item(s) identified, not to the
entire contract.
(2) The estimated aggregate value of all items manufactured by small business
and those subject to a waiver must equal at least 50% of the value of the
contract. A contracting officer need not seek a waiver for each item for which
the procuring agency believes no small business manufacturer or processor can
reasonably be expected to offer a product meeting the specifications of the
solicitation.
(3) When a contracting officer seeks a waiver for an individual item, the term
“item” can be a specific broad identifying thing (e.g., all spare parts related
to aircraft X), but cannot be so broad as to have no real identification (e.g.,
all medical supplies).
(g) Waivers for the purchase of software.
(1) SBA may grant an individual waiver for the procurement of software provided
that the software being sought is an item that is of a type customarily used by
the general public or by non-governmental entities for purposes other than
governmental purposes, and the item:
(i) Has been sold, leased, or licensed to the general public, or has been
offered for sale, lease, or license to the general public;
(ii) Is sold in substantial quantities in the commercial marketplace; and
(iii) Is offered to the Government, without modification, in the same form in
which it is sold in the commercial marketplace.
(2) If the value of services provided related to the purchase of a supply item
that meets the requirements of paragraph (d)(1) of this section exceeds the
value of the item itself, the procurement should be identified as a service
procurement, even if the services are provided as part of the same license,
lease, or sale terms. If a contracting officer cannot make a determination of
the value of services being provided, SBA will assume that the value of the
services is greater than the value of items or supplies, and will not grant a
waiver.
(3) Subscription services, remote hosting of software, data, or other
applications on servers or networks of a party other than the U.S. Government
are considered by SBA to be services and not the procurement of a supply item.
Therefore SBA will not grant waivers of the nonmanufacturer rule for these types
of services.
[81 FR 34260, May 31, 2016, as amended at 88 FR 26203, Apr. 27, 2023]
§ 121.1204 WHAT ARE THE PROCEDURES FOR REQUESTING AND GRANTING WAIVERS?
(a) Waivers for classes of products.
(1) SBA may, at its own initiative, examine a class of products for possible
waiver of the Nonmanufacturer Rule.
(2) Any interested person, business, association, or Federal agency may submit a
request for a waiver for a particular class of products. Requests should be
addressed or hand-carried to the Director, Office of Government Contracting,
Small Business Administration, 409 3rd Street SW., Washington, DC 20416.
(3) Requests for a waiver of a class of products need not be in any particular
form, but should include a statement of the class of products to be waived, the
applicable NAICS code, and detailed information on the efforts made to identify
small business manufacturers or processors for the class.
(4) If SBA decides that there are small business manufacturers or processors in
the Federal procurement market, it will deny the request for waiver, issue
notice of the denial, and provide the names, addresses, and telephone numbers of
the sources found. If SBA does not initially confirm the existence of small
business manufacturers or processors in the Federal market, it will:
(i) Publish notices in the Commerce Business Daily and the Federal Register
seeking information on small business manufacturers or processors, announcing a
notice of intent to waive the Nonmanufacturer Rule for that class of products
and affording the public a 15-day comment period; and
(ii) If no small business sources are identified, publish a notice in the
Federal Register stating that no small business sources were found and that a
waiver of the Nonmanufacturer Rule for that class of products has been granted.
(5) An expedited procedure for issuing a class waiver may be used for emergency
situations, but only if the contracting officer provides a determination to the
Director, Office of Government Contracting that the procurement is proceeding
under the authority of FAR § 6.302-2 (48 CFR 6.302-2) for “unusual and
compelling urgency,” or provides a determination materially the same as one of
unusual and compelling urgency. Under the expedited procedure, if a small
business manufacturer or processor is not identified by a PASS search, the SBA
will grant the waiver for the class of products and then publish a notice in the
Federal Register. The notice will state that a waiver has been granted, and
solicit public comment for future procurements.
(6) The decision by the Director, Office of Government Contracting to grant or
deny a waiver is the final decision by the Agency.
(7) A waiver of the Nonmanufacturer Rule for classes of products has no specific
time limitation. SBA will, however, periodically review existing class waivers
to the Nonmanufacturer Rule to determine if small business manufacturers or
processors have become available to participate in the Federal market for the
waived classes of products and the waiver should be terminated.
(i) Upon SBA's receipt of evidence that a small business manufacturer or
processor exists in the Federal market for a waived class of products, the
waiver will be terminated by the Director, Office of Government Contracting.
This evidence may be discovered by SBA during a periodic review of existing
waivers or may be brought to SBA's attention by other sources.
(ii) SBA will announce its intent to terminate a waiver for a class of products
through the publication of a notice in the Federal Register, asking for comments
regarding the proposed termination.
(iii) Unless public comment reveals that no small business manufacturer or
processor in fact exists for the class of products in question, SBA will publish
a final Notice of Termination in the Federal Register.
(b) Individual waivers for specific solicitations.
(1) A contracting officer's request for a waiver of the Nonmanufacturer Rule for
specific solicitations need not be in any particular form, but must, at a
minimum, include:
(i) A definitive statement of each specific item sought to be waived and
justification as to why the specific item is required;
(ii) The proposed solicitation number, NAICS code, dollar amount of the
procurement, dollar amount of the item(s) for which a waiver is sought, and a
brief statement of the procurement history;
(iii) A determination by the contracting officer that no small business
manufacturer or processor reasonably can be expected to offer a product or
products meeting the specifications (including period of performance) required
by a particular solicitation. For a multiple item procurement, a contracting
officer must determine that no small business manufacturer or processor
reasonably can be expected to offer each item for which a waiver is sought.
Include a narrative describing market research and supporting documentation; and
(iv) For contracts or orders expected to exceed $500,000, a copy of the
Statement of Work.
(2) Unless an agency has justified a brand-name acquisition, the market research
conducted to support the waiver request should be tailored to attract the
attention of potential small business manufacturers or processors, not resellers
or distributors.
(3) Requests should be addressed to the Director, Office of Government
Contracting, Small Business Administration, 409 3rd Street, SW., Washington, DC
20416.
(4) SBA will examine the contracting officer's determination and any other
information it deems necessary to make an informed decision on the individual
waiver request.
(i) If SBA's research verifies that no small business manufacturers or
processors exist for the item, the Director, Office of Government Contracting
will grant an individual, one-time waiver.
(ii) If a small business manufacturer or processor is found for the product in
question, the Director, Office of Government Contracting will deny the request.
(iii) Where an agency requests a waiver for multiple items, SBA may grant a
waiver for all items requested, deny a waiver for all items requested, or grant
a waiver for some but not all of the items requested. SBA's determination will
specifically identify the items for which a waiver is granted, and the procuring
agency must then identify the specific items for which the waiver applies in its
solicitation.
(iv) The Director, Office of Government Contracting's decision to grant or deny
a waiver request represents the final agency decision by SBA.
(5) A nonmanufacturer rule waiver for a specific solicitation expires one year
after SBA's determination to grant the waiver. This means that contract award
must occur within one year of the date SBA granted the waiver. Where a contract
is not awarded within one year, the procuring agency must come back to SBA with
revised market research requesting that the waiver (or waivers in the case of a
multiple item procurement) be extended.
[61 FR 3286, Jan. 31, 1996, as amended at 65 FR 30863, May 15, 2000; 78 FR
61132, Oct. 2, 2013; 81 FR 34260, May 31, 2016; 88 FR 26203, Apr. 27, 2023]
§ 121.1205 HOW IS A LIST OF PREVIOUSLY GRANTED CLASS WAIVERS OBTAINED?
A list of classes of products for which waivers for the Nonmanufacturer Rule
have been granted is maintained in SBA Web site at:
https://www.sba.gov/document/support-non-manufacturer-rule-class-waiver-list A
list of such waivers may also be obtained by contacting the Office of Government
Contracting, U.S. Small Business Administration, 409 3rd Street, SW.,
Washington, DC 20416, or the nearest SBA Government Contracting Area Office.
[69 FR 29208, May 21, 2004, as amended at 74 FR 46313, Sept. 9, 2009; 88 FR
26204, Apr. 27, 2023]
§ 121.1206 HOW WILL POTENTIAL OFFERORS BE NOTIFIED OF APPLICABLE WAIVERS?
(a) Contracting officers must provide written notification to potential offerors
of any waivers being applied to a specific acquisition, whether it is a class
waiver or a contract specific waiver. This notification must be provided at the
time a solicitation is issued. If the notification is provided after a
solicitation is issued, the contracting officer must provide potential offerors
a reasonable amount of additional time to respond to the solicitation.
(b) If a contracting officer does not provide notice, and additional reasonable
time for responses when required, then the waiver cannot be applied to the
solicitation. This applies to both class waivers and individual waivers.
[81 FR 34260, May 31, 2016]
APPENDIX A TO PART 121—PAYCHECK PROTECTION PROGRAM SAMPLE ADDENDUM A
[Sample]
ADDENDUM A
✓ The Applicant claims an exemption from all SBA affiliation rules applicable to
Paycheck Protection Program loan eligibility because the Applicant has made a
reasonable, good faith determination that the Applicant qualifies for a
religious exemption under 13 CFR 121.103(b)(10), which says that “[t]he
relationship of a faith-based organization to another organization is not
considered an affiliation with the other organization . . . if the relationship
is based on a religious teaching or belief or otherwise constitutes a part of
the exercise of religion.”
[85 FR 20821, Apr. 15, 2020]
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