have more than 30,000 barrels-per-day crude oil or bona fide feed stock capacity from owned or leased facilities or from facilities made available to such concern under an arrangement such as, but not limited to, an exchange agreement (except one on a refined product for refined product basis), or throughput or other form of processing agreement, with the same effect as though such facilities had been leased; and (iii) the product to be delivered in the performance of the contract will contain at least 90 percent components refined by the bidder from either crude oil or bona fide feed stocks: Provided, however, That a petroleum refining concern which meets the requirements in (1) (i) and (ii) of this paragraph may furnish the product of a refinery not qualified as small business if such product is obtained pursuant to a bona fide exchange agreement, in effect on the date of the bid or offer, between the bidder or offeror and the refiner of the product to be delivered to the Government which requires exchanges in a stated ratio on a refined petroleum product for a refined petroleum product basis, and precludes a monetary settlement, and that the products exchanged for the products offered and to be delivered to the Government meet the requirements in (1) (iii) of this paragraph: And provided further, That the exchange of products for products to be delivered to the Government will be completed within 90 days after the expiration of the delivery period under the Government contract, and that any products furnished pursuant to a bona fide exchange agreement must be for delivery in the same Petroleum Administration for Defense (PAD) District as that in which the small refinery is located; or (2) its number of employees does not exceed 500 persons and the product to be delivered to the Government has been refined by a concern which qualifies under (1) of this paragraph. The proviso in (1) (iii) of this paragraph that the product to be delivered in the performance of the contract will contain at least 90 percent components refined by the bidder from either crude oil or bona fide feed stocks contemplates that, in accomplishing such refining, the bidder will utilize its own employees and facilities which it owns or obtains under a bona fide lease as distinguished from any other arrangement having the same effect as a lease. The provision permitting a concern which meets the requirements in (1) (i) and (ii) of this paragraph to furnish the product of a refinery not qualified as small business if such product is obtained pursuant to a bona fide exchange agreement which meets prescribed requirements, contemplates that the product exchanged by the bidder for the product to be furnished shall have been refined by the bidder utilizing only its own employees and its own facilities or facilities obtained through a bona fide lease. ("Bona fide feed stocks” means crude and any other hydrocarbon material actually charged to refinery processing units as distinguished from materials used as components in products to be delivered after merely filtering, settling, or blending. "Crude-oil capacity" means the maximum daily average throughput of a refinery in complete operation, with allowance for necessary shutdown time for routine maintenance, repairs, etc. It approximates the maximum daily average crude runs to stills that can be maintained for an extended period.) [29 F.R. 10104, July 24, 1964, as amended at 30 F.R. 9590, July 31, 1965; 32 F.R. 2624, Feb. 8, 1967; 36 F.R. 11435, June 12, 1971] Business concerns are affiliates of each other when either directly or indirectly (a) one concern (other than an investment company licensed under the Small Business Investment Act of 1958 or registered under the Investment Company Act of 1940, as amended), controls or has the power to control the other, or (b) a third party or parties (other than an investment company licensed under the Small Business Investment Act of 1958 or registered under the Investment Company Act of 1940, as amended), controls or has the power to control both. In determining whether concerns are independently owned and operated and whether affiliation exists, consideration shall be given to all appropriate factors, including common ownership, common management, and contractual relationships: Provided, however, That restraints imposed on a franchisee by its franchise agreement shall not be considered in determining whether the franchisor controls or has the power to control and, therefore, is affiliated with the franchisee, if the franchisee has the right to profit from his effort, commensurate with ownership, and bears the risk of loss or failure. [32 F.R. 2626, Feb. 8, 1967] § 1-1.701-3 Dominance in field of operation. A concern "is not dominant in its field of operation" when it does not exercise a controlling or major influence in a kind of business activity in which a number of business concerns are primarily engaged. In determining whether dominance exists, consideration shall be given to all appropriate factors, including volume of business, number of employees, financial resources, competitive status or position, ownership or control of materials, processes, patents and license agreements, facilities, sales territory, and nature of business activity. (a) Any concern, in connection with subcontracts of $2,500 or less which relate to Government procurement, will be considered a small business concern if, including its affiliates, its number of employees does not exceed 500 persons. (b) Any concern, in conneciton with subcontracts exceeding $2,500 which relate to Government procurement, will be considered a small business concern if it qualifies as such under § 1-1.701-1. § 1-1.701-5 Number of employees. In connection with the determination of small business status, "number of employees" means the average employment of any concern, including the employees of its domestic and foreign affiliates, based on the number of persons employed on a full time, part time, temporary, or other basis during the pay period ending nearest the last day of the third month in each calendar quarter for the preceding four quarters. If a concern has not been in existence for four full calendar quarters, "number of employees" means the average employment of such concern and its affiliates during the period such concern has been in existence based on the number of persons employed during the pay period ending nearest the last day of each month. If a concern has acquired an affiliate during the applicable accounting period, it is necessary in computing the applicant's number of employees to include the affiliate's number of employees during the entire applicable accounting period rather than only its employees during the period in which it has been an affiliate. The employees of a former affiliate are not included even though such concern had been an affili ate during a portion of the applicable accounting period. [36 F.R. 11438, June 12, 1971] § 1-1.701-6 Industry. "Industry" means a grouping of establishments primarily engaged in similar lines of activity as listed and described in the Standard Industrial Classification (SIC) Manual, as amended, prepared and published by the Office of Management and Budget (formerly Bureau of the Budget), Executive Office of the President. (The Standard Industrial Classification (SIC) Manual, as amended, is used as a guide by the Small Business Administration in defining industries. Its use, therefore, is advisory and not mandatory.) [36 F.R. 11438, June 12, 1971] § 1-1.701-7 Certificate of competency. A "certificate of competency" means a certificate issued by SBA pursuant to the authority contained in the Small Business Act (15 U.S.C. 637(b)(7)) stating that the holder of the certificate is competent as to capacity and credit to perform a specific Government procurement contract. (Also see § 1-1.708.) § 1-1.701-8 Set-aside for small business. A set-aside for small business is the act of reserving the entire amount (total set-aside) or a portion (partial setaside) of a procurement for the exclusive participation of small business concerns. Set-asides may be made for individual items or for classes of items (class set-asides). Small business restricted advertising is a special method of negotiated procurement conducted in the same manner as for formal advertising, except that competition and awards are restricted to small business concerns. § 1-1.701-10 Base maintenance. "Base maintenance" means furnishing at an installation within the several States, Puerto Rico, Virgin Islands, or the District of Columbia three or more of the following services: Janitorial and custodial services, protective guard services, commissary services, fire prevention services, refuse collection services, safety engineering services, messenger services, grounds maintenance and landscaping services, and air-conditioning and re frigeration maintenance: Provided, however, That whenever the contracting officer determines prior to the issuance of bids that the estimated value of one of the foregoing services constitutes more than 50 percent of the estimated value of the entire contract, the contract shall not be classified as base maintenance but in the industry in which such service is classified. [32 F.R. 2626, Feb. 8, 1967] § 1-1.702 Small business policies. (a) General policy. It is the policy of the Government to aid, counsel, assist, and protect, insofar as possible, the interests of small business concerns in order to preserve free competitive enterprise; and to place with small business concerns a fair proportion of the total Government purchases and contracts for property and services (including contracts for maintenance, repair, construction, and research and development). (b) Specific policies. The following specific small business policies shall be followed by procurement agencies in order to further the general policy stated in (a) of this § 1-1.702: (1) Small business concerns shall be afforded an equitable opportunity to compete for prime contracts and subcontracts. (2) Bidders mailing lists (see § 1-2.205 of this chapter) shall include all established and potential small business suppliers who have made acceptable application for inclusion or who appear from other information (including recommendations by the SBA representative) to be qualified for inclusion therein. Prior to the issuance of invitations for bids and within the framework of the time available, contracting officers should make every reasonable effort to find additional small business sources (including notification to SBA where there is no local SBA representative), except where bidders lists are already excessively long and not all bidders thereon will be solicited as provided in subparagraph (3) of this paragraph and § 1-2.205-4 of this chapter. (3) Invitations for bids or requests for proposals shall be sent to all firms on the appropriate mailing list except that where less than a complete list is used pursuant to § 1-2.205-4, a pro rata number of small business concerns shall be solicited. (4) Proposed procurements and contract awards shall be publicized in the "Commerce Business Daily" in accordance with Subpart 1-1.10. (5) Procurement of property and services shall be divided into reasonably small lots (not less than economic production runs) in order to permit bidding on quantities less than the total requirements. (6) The maximum amount of time practicable (see § 1.202-1) shall be allowed for preparation and submission of bids and proposals. (7) Delivery schedules shall be established on a realistic basis which will encourage small business participation to the extent consistent with the actual requirements of the Government. (8) Applicable specifications, plans, and drawings either shall be furnished with invitations for bids and requests for proposals or, when not so furnished, information as to locations where they may be obtained or examined shall be fur nished. (9) Procurements shall be set aside for exclusive participation by small business concerns in accordance with § 1-1.706. (10) In the event of equal low bids, preference shall be given to small business concerns in accordance with § 1-2.407-6. (11) Subcontracting to small business concerns shall be encouraged in accordance with § 1-1.710. (12) Procurement agencies and SBA are responsible for consulting and cooperating in carrying out the purposes of the Small Business Act, as amended (15 U.S.C. 631-647), in accordance with § 1-1.705. (13) Placement of small purchases with small business concerns shall be encouraged (see § 1-3.602). (14) Small business firms seeking Government contracts, but found to lack qualifications as prime contractors, should be referred to the nearest SBA office for management assistance, counseling, financial assistance, and other programs of assistance as may be appropriate. [29 F.R. 10104, July 24, 1964, as amended at 36 F.R. 3117, Feb. 18, 1971] § 1-1.703 Determination of status as a small business concern. § 1-1.703-1 Representation by bidder or offeror. (a) Except as provided in paragraph (b) of this § 1-1.703-1, the contracting officer shall accept as conclusive for the purpose of a specific procurement a representation by a bidder or offeror that it is a small business concern as defined by SBA. (b) In the submission of a bid or offer in connection with a specific procurement, a concern which meets the criteria in § 1-1.701 and which either has not been determined by the SBA to be ineligible, or has been determined to be ineligible but has subsequently been certified by the SBA as being a small business, may represent that it is a small business. A representation by a bidder or offeror that it is a small business concern shall be effective, even though questioned in accordance with the terms of § 1-1.703-2, unless the SBA, in response to such question and pursuant to the procedures set forth in § 1-1.703-2, determines that the bidder or offeror in question is not a small business concern. The controlling point in time for a determination concerning the size status of a questioned bidder or offeror shall be the date of award, except that no bidder or offeror shall be eligible for award as a small business concern unless it has in good faith represented itself as a small business prior to the opening of bids or the closing date for the submission of offers (see § 1-2.405(b) regarding minor informalities and irregularities in bids). In the absence of a written protest or other information which would cause him to question the veracity of the self-certification of the bidder or offeror, the contracting officer shall accept the self-certification at face value for the particular procurement involved. If the contracting officer has cause to question the veracity of a self-certification and elects to do so, he shall refer the eligibility issue to the SBA by filing a formal protest pursuant to § 1-1.703-2. If SBA determines that a concern is ineligible as a small business concern for the purpose of a particular procurement, that concern cannot thereafter become eligible for the purpose of such procurement by taking affirmative acts to constitute itself a small business. [36 F.R. 16656, Sept. 25, 1971] business status. small (a) Any bidder or offeror or other interested party may challenge the small business status of any other bidder or offeror on a particular procurement by sending or delivering a written protest, as defined in paragraph (b) of this § 11.703-2, to the contracting officer respon sible for the particular procurement. Any contracting officer who receives a timely protest, or who wishes to question the small business status of a bidder or offeror himself, shall promptly forward such protest (or submit his protest) to the SBA district office serving the geographical area in which the principal office of the protested concern, not including its affiliates, is located. (b) As used in this section, "protest" means a statement in writing from any bidder or offeror on a particular procurement (or from any other party interested therein) alleging that another bidder or offeror on such procurement is not a small business concern. The statement shall contain the basis for the protest, together with specific detailed evidence in support of the protestant's claim. Such protest must be received by the contracting officer prior to the close of business on the 5th working day after bid opening date or closing date for receipt of proposals, except that in the case of negotiated procurements, a protest may be filed with the contracting officer by any other offeror or other interested party within 5 working days after receipt from the contracting officer of notification of the identity of the offeror being protested. A protest received after such time limits shall be timely for the purpose of the procurement in question if, in the case of a mailed protest, such protest is sent by registered or certified mail and the postmark thereon indicates that the protest would have been delivered within the time limit but for delays beyond the control of the protestant or, in the case of a telegraphed protest, the telegram date and time line indicates that the protest would have been delivered within the time limit but for delays beyond the control of the protestant. An untimely protest or one received after award of a contract, even though timely, shall be forwarded to the SBA district office serving the geographical area in which the principal office of the protested concern, not including its affiliates, is located. The SBA will make a determination on the protest but such determination shall not apply to the procurement in question. The contracting officer may at any time after bid or proposal opening question the small business status of any bidder or offeror for the purpose of a particular procurement by filing a written protest with the SBA district office in which the principal office of the protested concern, not including its affiliates, is located. A protest by a contracting officer shall be timely for the purpose of the procurement in question whether filed before or after award. (c) Upon receipt of a protest, the SBA district director or his delegatee will immediately notify the contracting officer and the protestant of the date such protest was received and that the size of the concern being protested is being considered by SBA. The SBA district director or his delegatee shall also immediately advise the protested bidder or offeror of the receipt of the protest and shall forward to the protested bidder or offeror a copy of the protest and a blank SBA Form 355, Application for Small Business Determination, by certified mail with return receipt requested. Such bidder or offeror must, within 3 working days after receiving the copy of the protest and the SBA Form 355, file the completed form as directed by SBA, and must attach thereto a statement in answer to the allegations in the letter of protest, together with evidence to support its position. If such bidder or offeror does not submit the completed SBA Form 355 with the attached statement and supporting evidence within the filing period provided herein, or within any additional period of time granted by SBA for cause, the SBA will rule that the protested concern is other than a small concern. (d) SBA will, within 10 working days, if possible, after receipt of a protest, investigate and determine the small business status of the protested bidder or offeror and, by certified mail with return receipt requested, notify the contracting officer, the protestant, and the protested bidder or offeror of its decision. Such decision shall be final unless appealed in accordance with paragraph (f) of this § 1-1.703-2 and the procuring activity is notified of the appeal prior to award. If an award has been made prior to the time the contracting officer receives notice of the appeal, the contract awarded shall be presumed to be valid and any determination rendered by SBA concerning the small business status of the concern involved shall be considered in future procurements. (e) Following receipt by the contracting officer of a protest as set forth in paragraphs (a) and (b) of this § 11.703-2, procurement action by the procuring activity shall be suspended pend ing SBA's determination of the status of the protested bidder or offeror or the expiration of the 10-day period prescribed in paragraph (d) of this § 11.703-2, unless unusual conditions make it necessary that an award be made. If SBA's determination is not received by the contracting officer within 10 working days after SBA's receipt of the protest, the contracting officer shall ascertain when such determination can be expected. In cases where further delay in awarding the contract would be disadvantageous to the Government, it shall be presumed that the protested bidder or offeror is a small business concern. (f) (1) An appeal from a size determination made by an SBA Regional Director or his delegatee may be taken by: (i) Any concern or other interested party which has protested the small business status of another concern pursuant to paragraphs (a) and (b) of this § 11.703-2 and whose protest has been denied by the SBA Regional Director or his delegatee; (ii) any concern or other interested party which has been adversely affected by the decision of the SBA Regional Director or his delegatee; or (iii) the SBA Associate Administrator for the SBA program involved. Written notices of appeal shall be addressed to the Chairman, Size Appeals Board, Small Business Administration, Washington, DC 20416. An appeal from a decision concerning the small business status of a bidder or offeror involved in a pending procurement may be taken within 5 working days after receipt of a decision by an SBA Regional Director or his delegatee. Unless written notice of such an appeal is received by the SBA Size Appeals Board before the close of business on the fifth working day after receipt of the decision, the appellant will be deemed to have waived its rights of appeal insofar as the pending procurement is concerned. (2) No particular form is prescribed for the notice of appeal. However, the appellant shall submit to the SBA Size Appeals Board an original and four legible copies of such notice and, to avoid time-consuming correspondence, the notice should include the following information: (i) Name and address of the concern on which the size determination was made; (ii) the character of the determination from which the appeal is taken and its date; (iii) if applicable, the IFB or contract number and date, and |