Frequently Asked Questions about the small business program

 What does it mean to be a “small business” for Government contracting purposes?

            There is no single definition of a “small business” for procurement purposes.  The definition usually varies by industry, and depends on the particular standard applicable to the industry.  Each industry has a code (called a “NAICS code”)and a size standard.  In addition, there are some special rules, for instance, for “nonmanufacturers.”

 Where do I find the NAICS code?

             Each solicitation (IFB, RFP or RFQ) must state the applicable NAICS code. 

 How do the NAICS codes measure size?

             Each code has its own size standard.  The standard is either expressed as a maximum  number of employees, or a maximum dollar amount of average annual receipts.  There is extensive guidance in SBA regulations about how to measure these.

 What if the NAICS code is wrong?

             If the solicitation contains an incorrect NAICS code, you may be able to appeal the matter to the SBA.  However, there are procedural requirements and time limits, so you should contact a lawyer at the earliest opportunity.

Can a small subsidiary of a large business be a “small business”?

             For these purposes, a company’s number of employees or average receipts is cumulated with those of all its “affiliates.”  So, the employees or receipts of a wholly-owned subsidiary will usually include those of the parent company, as well as all other affiliates.   

 Can a foreign company be a “small business”?

             In order for a company to qualify as a small business for Federal Government procurement purposes, it must have a place of business located in the United States, and either (1) operate primarily within the United States or (2) make “a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor.”

 How does the Government know if a company bidding on a contract is a small business?

             The company submitting a bid or offer must self-certify whether or not it is a small business for the purpose of the procurement.  The contracting officer will accept that self-certification as valid unless there is a proper protest, or “other credible information” which causes the contracting officer to question the certification.

 What if my competitor claims to be a small business but isn’t?

             You may have the right to protest the size status of your competitor.  There are procedural requirements and strict time limits, so you should contact a lawyer at the earliest opportunity.

 For purposes of filing a protest, must the procurement be set-aside for small business?

             SBA regulations changed a few years ago.  Now, a company can file a size protest even in unrestricted Government procurements, whenever status as a small business may be beneficial.  The full dimensions of this rule are still being fleshed out, but it includes situations such as tie bids, Certificates of Competency, and SDB evaluation preferences.

I have a different question.  Who can I call? 

    If we haven't answered your question, or if you need help with a specific problem involving small business contracting, please contact either Joseph Petrillo or Karen Powell.