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REGISTRATION, DEFINITIONS AND REFERENCES
Supplier Registration
Definitions
Annotated Checklist of Small Business Designations
Relating to Small Business Subcontracting Plans
Subcontracting Plan designations, generally
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General Rules
- To be eligible as a subcontractor, a concern must represent itself as a small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, or woman-owned small business concern.1
- Firms may self-certify as to their status as:
- Small Business Concerns,
- Veteran Owned Concerns,
- Service Disabled Veteran Owned Concerns, and
- Women-Owned Small Businesses
- A prime contractor acting in good faith may rely on the written representation of its subcontractor that it meets the appropriate definition for any of the above designations.2
- Firms must be SBA-certified to be counted as:
- Small and Disadvantaged Businesses Concerns
- HUBZone small business concerns
A contractor must confirm that a subcontractor representing itself as an SDB or HUBZone by accessing the CCR dynamic small business search database (formally SBA's PRO-Net) or by contacting the appropriate SBA office.3 |
Small Business Concern |
To be eligible as a “small business concern” a firm must be:
- For profit;
- Contribute to U.S. Economy. (Owners need not be U.S. citizens but firm must have place of business in U.S. or contribute to U.S. buy payment of taxes, etc.);4 and
- Firm and its “affiliates”5 must be small under NAICS code that the prime contractor believes best describes subcontracted work6
- A concern must qualify as small as of the date that it certifies that it is small for the subcontract.7 A concern that qualified as a small business at the time it receives a contract is generally considered a small business throughout the life of that contract.8
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Small and Disadvantaged Business (“SDB”) |
To be eligible for SBA certification as a SDB a firm must be:
- A “small business concern” for purposes of work and its primary size standard
- 51% owned by “socially and economically” disadvantaged individuals
- Controlled by socially and economically disadvantaged individuals9
- “Socially disadvantaged” individuals are individuals who have been subjected to prejudice/bias within American society; certain individuals (e.g. Black Americans, Hispanic Americans, among others) are presumed to be socially disadvantaged10
- “Economically disadvantaged” individuals are those that, because of their social disadvantage, have diminished capital and credit opportunities as compared to others in similar line of business. In measuring economic disadvantage, SDB program has maximum personal net worth of $750,000 (excluding ownership interest in firm and primary personal residence)11
- Firms that are participants in SBA’s “8(a)” program are SDBs (although not all SDBs are in the 8(a) program). Federal subcontracting plan requirements do not separately count 8(a) participation.
- “A firm cannot represent itself to be an SDB concern in order to receive a preference as an SDB for any Federal subcontracting program if it is not on the SBA-maintained list of qualified SDBs.”12
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HUBZone Small Business |
To be eligible for SBA certification as a HUBZone a firm must be:
- A “small business concern” in primary industry classification and for purposes of the work;
- Owned and controlled by U.S. citizens;
- “Principal office” must be in historically underutilized business (“HUB”) zone; and
- At least 35% of employees must reside in HUBZone13
- HUBZones can be identified on SBA website at: http://map.sba.gov/hubzone/init.asp#address
- Prime contractors must check SBA certification (as set out in CCR database) to verify a concern’s representation that it is a HUBZone small business concern
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Veteran Owned Small Business
(VOSB) |
To be eligible as a VOSB, a firm must be:
- A “small business concern” for purposes of the work
- At least 51% owned by one or more veterans (i.e., served in active duty and not dishonorably discharged)
- Controlled (management and daily business operations) by one or more veterans 14
- This is a “self-certifying” designation (i.e., SBA does not certify). Prime contractors can rely on a concern’s self certification that it is a VOSB under the applicable NAICS code for subcontracting plan requirements.
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Service Disabled Veteran Owned Small Business
(SDVOSB) |
To be eligible as SDVOSB, firm must be:
- A “small business concern” for purposes of the work
- At least 51% owned by one or more service-disabled veterans (i.e., veteran with service connected disability)15; and
- Controlled by one or more service-disabled veterans or, in the case of a veteran with permanent and sever disability, the spouse or permanent caregiver of such veteran16
- This is a “self-certifying” designation (i.e., SBA does not certify). Prime contractors can rely on a concern’s self certification that it is a SDVOSB under the applicable NAICS code for subcontracting plan requirements.
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Woman Owned Small Business
(WOSB) |
To be eligible as a WOSB, firm must be:
- A “small business concern”
- At least 51% owned by one or more women
- Controlled by one or more women17
- This is a “self-certifying” designation (i.e., SBA does not certify). Prime contractors can rely on a concern’s self certification that it is a WOSB under the applicable NAICS code for subcontracting plan requirements.
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3– 48 CFR 19.703; 70 Fed. Reg 43581 (Jul. 27, 2005) (amending 48 CFR 19.703(c) to require confirmation of HUBZone subcontractor status)
4– To be eligible as a “small business concern,” a firm must be: (i) an entity organized for profit; (ii) with a place of business located in United States, and which operates primarily in U.S. or which makes a significant contribution to U.S. through payment of taxes, use of
5– SBA’s affiliation rules are broad and sometime counterintuitive. Generally, “[c]oncerns 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 . . . SBA considers factors such as ownership, management, previous relationships with or ties to another concern, and contractual relationships, in determining whether affiliation exists.” 13 CFR 121.103(a)
6– The SBA establishes small business size standards on an industry-by-industry basis. See 13 CFR 121.201. “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.” 13 CFR 121.410.
11– 13 CFR 124.1003(c) 13 CFR 124.104;
12– 13 CFR 124.1001(d); “Once SBA certifies a firm to be an SDB by placing it on the list of qualified SDBs, the firm will generally remain on the SBA-maintained list of certified SDBs for a period of three years from the date of its certification.” 13 CFR 124.1014(a)
[policy and commitment] [registration, definitions and references]
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