[Code of Federal Regulations]
[Title 13, Volume 1]
[Revised as of January 1, 2006]
From the U.S. Government Printing Office via GPO Access
[CITE: 13CFR125]
[Page 422-445]
TITLE 13--BUSINESS CREDIT AND ASSISTANCE
CHAPTER I--SMALL BUSINESS ADMINISTRATION
PART 125_GOVERNMENT CONTRACTING PROGRAMS
Sec.
125.1 Programs included.
125.2 Prime contracting assistance.
125.3 Subcontracting assistance.
125.4 Government property sales assistance.
125.5 Certificate of Competency Program.
125.6 Prime contractor performance requirements (limitations on
subcontracting).
125.7 [Reserved]
Subpart A_Definitions for the Service-Disabled Veteran-Owned Small
Business Concern Program
125.8 What definitions are important in the Service-Disabled Veteran-
Owned (SDVO) Small Business Concern (SBC) Program?
Subpart B_Eligibility Requirements for the SDVO SBC Program
125.9 Who does SBA consider to own an SDVO SBC?
125.10 Who does SBA consider to control an SDVO SBC?
125.11 What size standards apply to SDVO SBCs?
125.12 May an SDVO SBC have affiliates?
125.13 May 8(a) Program participants, HUBZone SBCs, Small and
Disadvantaged Businesses, or Women-Owned Small Businesses
qualify as SDVO SBCs?
Subpart C_Contracting with SDVO SBCs
125.14 What are SDVO contracts?
[[Page 423]]
125.15 What requirements must an SDVO SBC meet to submit an offer on a
contract?
125.16 Does SDVO SBC status guarantee receipt of a contract?
125.17 Who decides if a contract opportunity for SDVO competition
exists?
125.18 What requirements are not available for SDVO contracts?
125.19 When may a contracting officer set-aside a procurement for SDVO
SBCs?
125.20 When may a contracting officer award sole source contracts to
SDVO SBCs?
125.21 Are there SDVO contracting opportunities at or below the
simplified acquisition threshold?
125.22 May SBA appeal a contracting officer's decision not to reserve a
procurement for award as an SDVO contract?
125.23 What is the process for such as appeal?
Subpart D_Protests Concerning SDVO SBCs
125.24 Who may protest the status of an SDVO SBC?
125.25 How does one file a service disabled veteran-owned status
protest?
125.26 What are the grounds for filing an SDVO SBC protest?
125.27 How will SBA process an SDVO protest?
125.28 What are the procedures for appealing an SDVO status protest?
Subpart E_Penalties and Retention of Records
125.29 What penalties may be imposed under this part?
Authority: 15 U.S.C. 632(p), (q); 634(b)(6); 637; 644 and 657(f).
Source: 61 FR 3312, Jan. 31, 1996, unless otherwise noted.
Sec. 125.1 Programs included.
The regulations in this part relate to the Government contracting
assistance programs of SBA. There are five main programs: Prime
contracting assistance; Subcontracting assistance; Government property
sales assistance; the Certificate of Competency program; and Service-
Disabled Veteran-Owned Small Business Concern contracting assistance.
The objective of the programs is to assist small businesses in obtaining
a fair share of Federal Government contracts, subcontracts, and property
sales.
[61 FR 3312, Jan. 31, 1996, as amended at 69 FR 25266, May 5, 2004]
Sec. 125.2 Prime contracting assistance.
(a) General. Small business concerns must receive any award or
contract, or any contract for the sale of Government property, that SBA
and the procuring or disposal agency determine to be in the interest of:
(1) Maintaining or mobilizing the Nation's full productive capacity;
(2) War or national defense programs;
(3) Assuring that a fair proportion of the total purchases and
contracts for property, services and construction for the Government in
each industry category are placed with small business concerns; or
(4) Assuring that a fair proportion of the total sales of Government
property is made to small business concerns.
(b) Responsibilities in the acquisition planning process. (1) SBA
Procurement Center Representatives (PCRs) are generally located at
Federal agencies and buying activities which have major contracting
programs. PCRs are responsible for reviewing all acquisitions not set-
aside for small businesses to determine whether a set-aside is
appropriate and to identify alternative strategies to maximize the
participation of small businesses in the procurement.
(2) As early in the acquisition planning process as practicable, but
no later than 30 days before the issuance of a solicitation, or prior to
placing an order without a solicitation, the procuring activity must
coordinate with the procuring activity's Small Business Specialist (SBS)
when the acquisition strategy contemplates an acquisition meeting the
dollar amounts in paragraph (b)(2)(i) of this section, unless the
contract or order is entirely reserved or set-aside for small business
concerns as authorized under the Small Business Act. The SBS must notify
the agency Office of Small and Disadvantaged Business Utilization
(OSDBU) if the strategy or plan includes bundled requirements that the
agency has not identified as bundled or includes unnecessary or
unjustified bundling of requirements. If the strategy involves
[[Page 424]]
substantial bundling, the SBS shall assist in identifying alternative
strategies that would reduce or minimize the scope of the bundling.
(i) The procuring activity must coordinate the acquisition strategy
with the cognizant SBS in accordance with paragraph (b)(2) of this
section if the estimated acquisition, contract or order value is:
(A) $7 million or more for the Department of Defense;
(B) $5 million or more for the National Aeronautics and Space
Administration, the General Services Administration, and the Department
of Energy; and
(C) $2 million or more for all other agencies.
(ii) If the strategy contemplates multiple award contracts or
multiple award orders under the Federal Supply Schedule or a task or
delivery order contract awarded by another agency, the thresholds in
paragraph (b)(2)(i) of this section apply to the cumulative estimated
value of the multiple award contracts or orders, including options.
(3) A procuring activity must provide a copy of a proposed
acquisition strategy (e.g., Department of Defense Form 2579, or
equivalent) to the applicable PCR (or to the SBA Office of Government
Contracting Area Office serving the area in which the buying activity is
located if a PCR is not assigned to the procuring activity) at least 30
days prior to a solicitation's issuance whenever a proposed acquisition
strategy:
(i) Includes in its description goods or services currently being
performed by a small business and the magnitude of the quantity or
estimated dollar value of the proposed procurement would render small
business prime contract participation unlikely;
(ii) Seeks to package or consolidate discrete construction projects;
or
(iii) Meets the definition of a bundled requirement as defined in
paragraph (d)(1)(i) of this section.
(4) Whenever any of the circumstances identified in paragraph (b)(2)
of this section exist, the procuring activity must also submit to the
applicable PCR (or to the SBA Office of Government Contracting Area
Office serving the area in which the buying activity is located if a PCR
is not assigned to the procuring activity) a written statement
explaining why:
(i) If the proposed acquisition strategy involves a bundled
requirement, the procuring activity believes that the bundled
requirement is necessary and justified under the analysis required by
paragraph (d)(3)(iii) of this section; or
(ii) If the description of the requirement includes goods or
services currently being performed by a small business and the magnitude
of the quantity or estimated dollar value of the proposed procurement
would render small business prime contract participation unlikely, or if
a proposed procurement for construction seeks to package or consolidate
discrete construction projects:
(A) The proposed acquisition cannot be divided into reasonably small
lots to permit offers on quantities less than the total requirement;
(B) Delivery schedules cannot be established on a basis that will
encourage small business participation;
(C) The proposed acquisition cannot be offered so as to make small
business participation likely; or
(D) Construction cannot be procured as separate discrete projects.
(5) In conjunction with their duties to promote the set-aside of
procurements for small business, PCRs will identify small businesses
that are capable of performing particular requirements, including teams
of small business concerns for larger or bundled requirements (see Sec.
121.103(f)(3) of this chapter).
(6)(i) If a PCR believes that a proposed procurement will render
small business prime contract participation unlikely, or if a PCR does
not believe a bundled requirement to be necessary and justified, the PCR
shall recommend to the procurement activity alternative procurement
methods which would increase small business prime contract
participation. Such alternatives may include:
(A) Breaking up the procurement into smaller discrete procurements;
(B) Breaking out one or more discrete components, for which a small
business set-aside may be appropriate; and
[[Page 425]]
(C) Reserving one or more awards for small companies when issuing
multiple awards under task order contracts.
(ii) Where bundling is necessary and justified, the PCR will work
with the procuring activity to tailor a strategy that preserves small
business prime contract participation to the maximum extent practicable.
(iii) The PCR will also work to ensure that small business
participation is maximized through teaming arrangements and
subcontracting opportunities. This may include:
(A) Recommending that the solicitation and resultant contract
specifically state the small business subcontracting goals, which are
expected of the contractor awardee;
(B) Recommending that the small business subcontracting goals be
based on total contract dollars instead of subcontract dollars;
(C) Reviewing an agency's oversight of its subcontracting program,
including its overall and individual assessment of a contractor's
compliance with its small business subcontracting plans. The PCR will
furnish a copy of the information to the SBA Commercial Market
Representative (CMR) servicing the contractor; and
(D) Recommending that a separate evaluation factor with significant
weight is established for the extent to which offerors attained their
subcontracting goals on previous contracts.
(7) In cases where there is disagreement between a PCR and the
contracting officer over the suitability of a particular acquisition for
a small business set-aside, whether or not the acquisition is a bundled
or substantially bundled requirement within the meaning of paragraph (d)
of this section, the PCR may initiate an appeal to the head of the
contracting activity. If the head of the contracting activity agrees
with the contracting officer, SBA may appeal the matter to the secretary
of the department or head of the agency. The time limits for such
appeals are set forth in 19.505 of the Federal Acquisition Regulation
(FAR) (48 CFR 19.505).
(8) PCRs will work with the cognizant SBS and agency OSDBU as early
in the acquisition process as practicable to identify proposed
solicitations that involve bundling, and with the agency acquisition
officials to revise the acquisition strategies for such proposed
solicitations, where appropriate, to increase the probability of
participation by small businesses, including small business contract
teams, as prime contractors. If small business participation as prime
contractors appears unlikely, the SBS and PCR will facilitate small
business participation as subcontractors or suppliers.
(c) BPCR responsibilities. (1) SBA is required by section 403 of
Public Law 98-577 (15 U.S.C. 644(l)) to assign a breakout PCR (BPCR) to
major contracting centers. A major contracting center is a center that,
as determined by SBA, purchases substantial dollar amounts of other than
commercial items, and which has the potential to achieve significant
savings as a result of the assignment of a BPCR.
(2) BPCRs advocate full and open competition in the Federal
contracting process and recommend the breakout for competition of items
and requirements which previously have not been competed. They may
appeal the failure by the buying activity to act favorably on a
recommendation in accord with the appeal procedures set forth in Sec.
19.505 of the FAR (48 CFR 19.505). BPCRs also review restrictions and
obstacles to competition and make recommendations for improvement. Other
authorized functions of a BPCR are set forth in 48 CFR 19.403(c) of the
FAR and Section 15(l) of the Act (15 U.S.C. 644(l)).
(d) Contract bundling--(1) Definitions--(i) Bundled requirement or
bundling. The term bundled requirement or bundling refers to the
consolidation of two or more procurement requirements for goods or
services previously provided or performed under separate smaller
contracts into a solicitation of offers for a single contract that is
likely to be unsuitable for award to a small business concern due to:
(A) The diversity, size, or specialized nature of the elements of
the performance specified;
(B) The aggregate dollar value of the anticipated award;
(C) The geographical dispersion of the contract performance sites;
or
[[Page 426]]
(D) Any combination of the factors described in paragraphs (d)(1)(i)
(A), (B), and (C) of this section.
(ii) Separate smaller contract. A separate smaller contract is a
contract that has previously been performed by one or more small
business concerns or was suitable for award to one or more small
business concerns.
(iii) Single contract, as used in this definition, includes:
(A) Multiple awards of indefinite-quantity contracts under a single
solicitation for the same or similar supplies or services to two or more
sources; and
(B) An order placed against an indefinite quantity contract under a
Federal Supply Schedule contract or a task or delivery order contract
awarded by another agency (i.e., Government-wide acquisition contract or
multi-agency contract).
(iv) Substantial bundling means any bundling that meets the dollar
amounts specified in paragraph (b)(2)(i) of this section.
(2) Requirement to foster small business participation. The Small
Business Act requires each Federal agency to foster the participation of
small business concerns as prime contractors, subcontractors, and
suppliers in the contracting opportunities of the Government. To comply
with this requirement, agency acquisition planners must:
(i) Structure procurement requirements to facilitate competition by
and among small business concerns, including small business concerns
owned and controlled by veterans, small business concerns owned and
controlled by service-disabled veterans, qualified HUBZone small
business concerns, small business concerns owned and controlled by
socially and economically disadvantaged individuals and small business
concerns owned and controlled by women; and
(ii) Avoid unnecessary and unjustified bundling of contract
requirements that inhibits or precludes small business participation in
procurements as prime contractors.
(3) Requirement for market research. In addition to the requirements
of paragraph (b)(2) of this section and before proceeding with an
acquisition strategy that could lead to a contract containing bundled or
substantially bundled requirements, an agency must conduct market
research to determine whether bundling of the requirements is necessary
and justified. During the market research phase, the acquisition team
should consult with the applicable PCR (or if a PCR is not assigned to
the procuring activity, the SBA Office of Government Contracting Area
Office serving the area in which the buying activity is located).
(4) Requirement to notify current small business contractors of
intent to bundle. The procuring activity must notify each small business
which is performing a contract that it intends to bundle that
requirement with one or more other requirements at least 30 days prior
to the issuance of the solicitation for the bundled or substantially
bundled requirement. The procuring activity, at that time, should also
provide to the small business the name, phone number and address of the
applicable SBA PCR (or if a PCR is not assigned to the procuring
activity, the SBA Office of Government Contracting Area Office serving
the area in which the buying activity is located).
(5) Determining requirements to be necessary and justified. When the
procuring activity intends to proceed with an acquisition involving
bundled or substantially bundled procurement requirements, it must
document the acquisition strategy to include a determination that the
bundling is necessary and justified, when compared to the benefits that
could be derived from meeting the agency's requirements through separate
smaller contracts.
(i) The procuring activity may determine a consolidated requirement
to be necessary and justified if, as compared to the benefits that it
would derive from contracting to meet those requirements if not
consolidated, it would derive measurably substantial benefits. The
procuring activity must quantify the identified benefits and explain how
their impact would be measurably substantial. The benefits may include
cost savings and/or price reduction, quality improvements that will save
time or improve or enhance performance or efficiency, reduction in
acquisition cycle times, better terms and conditions, and any other
benefits that
[[Page 427]]
individually, in combination, or in the aggregate would lead to:
(A) Benefits equivalent to 10 percent of the contract or order value
(including options) where the contract or order value is $75 million or
less; or
(B) Benefits equivalent to 5 percent of the contract or order value
(including options) or $7.5 million, whichever is greater, where the
contract or order value exceeds $75 million.
(ii) Notwithstanding paragraph (d)(5)(i) of this section, the
Assistant Secretaries with responsibility for acquisition matters
(Service Acquisition Executives) or the Under Secretary of Defense for
Acquisition and Technology (for other Defense Agencies) in the
Department of Defense and the Deputy Secretary or equivalent in civilian
agencies may, on a non-delegable basis determine that a consolidated
requirement is necessary and justified when:
(A) There are benefits that do not meet the thresholds set forth in
paragraph (d)(5)(i) of this section but, in the aggregate, are critical
to the agency's mission success; and
(B) Procurement strategy provides for maximum practicable
participation by small business.
(iii) The reduction of administrative or personnel costs alone shall
not be a justification for bundling of contract requirements unless the
administrative or personnel cost savings are expected to be substantial,
in relation to the dollar value of the procurement to be consolidated
(including options). To be substantial, such cost savings must be at
least 10 percent of the contract value (including options).
(iv) In assessing whether cost savings and/or a price reduction
would be achieved through bundling, the procuring activity and SBA must
compare the price that has been charged by small businesses for the work
that they have performed and, where available, the price that could have
been or could be charged by small businesses for the work not previously
performed by small business.
(6) OMB Circular A-76 Cost Comparison Analysis. The substantial
benefit analysis set forth in paragraph (d)(5)(i) of this section is not
required where a requirement is subject to a Cost Comparison Analysis
under OMB Circular A-76 (See 5 CFR 1310.3 for availability).
(7) Substantial bundling. (i) Where a proposed procurement strategy
involves a substantial bundling of contract requirements, the procuring
agency must, in the documentation of that strategy, include a
determination that the anticipated benefits of the proposed bundled
contract justify its use, and must include, at a minimum:
(A) The analysis for bundled requirements set forth in paragraph
(d)(5)(i) of this section;
(B) An assessment of the specific impediments to participation by
small business concerns as prime contractors that will result from the
substantial bundling;
(C) Actions designed to maximize small business participation as
prime contractors, including provisions that encourage small business
teaming for the substantially bundled requirement;
(D) Actions designed to maximize small business participation as
subcontractors (including suppliers) at any tier under the contract or
contracts that may be awarded to meet the requirements; and
(E) The identification of the alternative strategies that would
reduce or minimize the scope of the bundling, and the rationale for not
choosing those alternatives (i.e., consider the strategies under
paragraphs (b)(6) (i) and (d) of this section).
(ii) At least 30 days prior to the solicitation release, the
procuring activity shall provide the PCR and the agency OSDBU a copy of
the proposed acquisition, including the analysis required by paragraph
(d)(7) of this section, the acquisition plan, any bundling information
required under paragraph (b)(3) of this section, and any other relevant
information. The PCR and agency OSDBU or SBS, as applicable, shall work
together to develop alternative acquisition strategies identified in
paragraph (b)(6) of this section to enhance small business
participation.
(8) Significant subcontracting opportunity. (i) Where a bundled or
substantially bundled requirement offers a significant opportunity for
subcontracting, the procuring agency must designate the following
factors as significant factors in evaluating offers:
[[Page 428]]
(A) A factor that is based on the rate of participation provided
under the subcontracting plan for small business in the performance of
the contract; and
(B) For the evaluation of past performance of an offeror, a factor
that is based on the extent to which the offeror attained applicable
goals for small business participation in the performance of contracts.
(ii) Where the offeror for such a bundled contract qualifies as a
small business concern, the procuring agency must give to the offeror
the highest score possible for the evaluation factors identified in
paragraph (d)(5)(i) of this section.
(e) OSDBU Oversight Functions. The Agency OSDBU must:
(1) Conduct annual reviews to assess the:
(i) Extent to which small businesses are receiving their fair share
of Federal procurements, including contract opportunities under programs
administered under the Small Business Act;
(ii) Adequacy of the bundling documentation and justification; and
(iii) Adequacy of actions taken to mitigate the effects of necessary
and justified contract bundling on small businesses (e.g., review agency
oversight of prime contractor subcontracting plan compliance under the
subcontracting program).
(2) Provide a copy of the assessment under paragraph (e)(1) of this
section to the Agency Head and SBA Administrator.
[61 FR 3312, Jan. 31, 1996, as amended at 63 FR 31908, June 11, 1998; 64
FR 57370, Oct. 25, 1999; 65 FR 45833, July 26, 2000; 68 FR 60012, Oct.
20, 2003]
Sec. 125.3 Subcontracting assistance.
(a) General. The purpose of the subcontracting assistance program is
to provide the maximum practicable subcontracting opportunities for
small business concerns, including small business concerns owned and
controlled by veterans, small business concerns owned and controlled by
service-disabled veterans, certified HUBZone small business concerns,
certified small business concerns owned and controlled by socially and
economically disadvantaged individuals, and small business concerns
owned and controlled by women. The subcontracting assistance program
implements section 8(d) of the Small Business Act, which includes the
requirement that, unless otherwise exempt, other-than-small business
concerns awarded contracts that offer subcontracting possibilities by
the Federal Government in excess of $500,000, or in excess of $1,000,000
for construction of a public facility, must submit a subcontracting plan
to the appropriate contracting agency. The Federal Acquisition
Regulation sets forth the requirements for subcontracting plans in 48
CFR 19.7, and the clause at 48 CFR 52.219-9.
(b) Responsibilities of prime contractors. (1) Prime contractors
(including small business prime contractors) selected to receive a
Federal contract that exceeds the traditional simplified acquisition
threshold of $100,000, that will not be performed entirely outside of
any state, territory, or possession of the United States, the District
of Columbia, or the Commonwealth of Puerto Rico, and that is not for
services which are personal in nature, are responsible for ensuring that
small business concerns have the maximum practicable opportunity to
participate in the performance of the contract, including subcontracts
for subsystems, assemblies, components, and related services for major
systems, consistent with the efficient performance of the contract.
(2) A small business cannot be required to submit a formal
subcontracting plan or be asked to submit a formal subcontracting plan,
a small-business prime contractor is encouraged to provide maximum
practicable opportunity to other small businesses to participate in the
performance of the contract, consistent with the efficient performance
of the contract.
(3) Efforts to provide the maximum practicable subcontracting
opportunities for small business concern may include, as appropriate for
the procurement, one or more of the following actions:
(i) Breaking out contract work items into economically feasible
units, as appropriate, to facilitate small business participation;
(ii) Conducting market research to identify small business
subcontractors
[[Page 429]]
and suppliers through all reasonable means, such as performing on-line
searches on the Central Contractor Registration (NCR), posting Notices
of Sources Sought and/or Requests for Proposal on SBA's SUB-Net,
participating in Business Matchmaking events, and attending pre-bid
conferences;
(iii) Soliciting small business concerns as early in the acquisition
process as practicable to allow them sufficient time to submit a timely
offer for the subcontract;
(iv) Providing interested small businesses with adequate and timely
information about the plans, specifications, and requirements for
performance of the prime contract to assist them in submitting a timely
offer for the subcontract;
(v) Negotiating in good faith with interested small businesses;
(vi) Directing small businesses that need additional assistance to
SBA;
(vii) Assisting interested small businesses in obtaining bonding,
lines of credit, required insurance, necessary equipment, supplies,
materials, or services;
(viii) Utilizing the available services of small business
associations; local, state, and Federal small business assistance
offices; and other organizations; and
(ix) Participating in a formal mentor-prot[eacute]g[eacute] program
with one or more small-business prot[eacute]g[eacute]s that results in
developmental assistance to the prot[eacute]g[eacute]s.
(c) Additional responsibilities of large prime contractors. (1) In
addition to the responsibilities provided in paragraph (b) of this
section, a prime contractor selected for award of a contract or contract
modification that exceeds $500,000, or $1,000,000 in the case of
construction of a public facility, is responsible for:
(i) Submitting and negotiating before award an acceptable
subcontracting plan that reflects maximum practicable opportunities for
small businesses in the performance of the contract as subcontractors or
suppliers. A prime contractor may submit a commercial plan, described in
paragraph (c)(2) of this section, instead of an individual
subcontracting plan, when the product or service being furnished to the
Government meets the definition of a commercial item under 48 CFR 2.101;
(ii) Making a good-faith effort to achieve the dollar and percentage
goals and other elements in its subcontracting plan;
(iii) Submitting a timely, accurate, and complete SF-294,
Subcontracting Report for Individual Contract, and SF-295, Summary
Subcontract Report; or entering the same information into an electronic
database approved by SBA;
(iv) Cooperating in the reviews of subcontracting plan compliance,
including providing requested information and supporting documentation
reflecting actual achievements and good-faith efforts to meet the goals
and other elements in the subcontracting plan;
(v) Providing pre-award written notification to unsuccessful small
business offerors on all subcontracts over $100,000 for which a small
business concern received a preference. The written notification must
include the name and location of the apparent successful offeror and if
the successful offeror is a small business, veteran-owned small
business, service-disabled veteran-owned small business, HUBZone small
business, small disadvantaged business, or women-owned small business;
and
(vi) As a best practice, providing the pre-award written
notification cited in paragraph (c)(1)(v) of this section to
unsuccessful and small business offerors on subcontracts at or below
$100,000 whenever it is practical to do so.
(2) A commercial plan, also referred to as an annual plan or
company-wide plan, is the preferred type of subcontracting plan for
contractors furnishing commercial items. A commercial plan covers the
offeror's fiscal year and applies to the entire production of commercial
items sold by either the entire company or a portion thereof (e.g.,
division, plant, or product line). Once approved, the plan remains in
effect during the contractor's fiscal year for all Federal government
contracts in effect during that period. The contracting officer of the
agency that originally approved the commercial plan will exercise the
functions of the
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contracting officer on behalf of all agencies that award contracts
covered by the plan.
(3) The additional prime contractor responsibilities described in
paragraph (c)(1) of this section do not apply if:
(i) The prime contractor is a small business concern;
(ii) The prime contract or contract modification is a personal
services contract; or
(iii) The prime contract or contract modification will be performed
entirely outside of any state, territory, or possession of the United
States, the District of Columbia, or the Commonwealth of Puerto Rico.
(d) Determination of good-faith efforts. Evidence that a large
business prime contractor has made a good-faith effort to comply with
its subcontracting plan or other subcontracting responsibilities
includes supporting documentation that:
(1) The contractor performed one or more of the actions described in
paragraph (b) of this section, as appropriate for the procurement;
(2) Although the contractor may have failed to achieve its goal in
one socio-economic category, it over-achieved its goal by an equal or
greater amount in one or more of the other categories; or
(3) The contractor fulfilled all of the requirements of its
subcontracting plan.
(e) CMR Responsibilities. Commercial Market Representatives (CMRs)
are SBA's subcontracting specialists. CMRs are responsible for:
(1) Facilitating the matching of large prime contractors with small
business concerns;
(2) Counseling large prime contractors on their responsibilities to
maximize subcontracting opportunities for small business concerns;
(3) Instructing large prime contractors on identifying small
business concerns by means of the CCR, SUB-Net, Business Matchmaking
events, and other resources and tools;
(4) Counseling small business concerns on how to market themselves
to large prime contractors;
(5) Maintaining a portfolio of large prime contractors and
conducting Subcontracting Orientation and Assistance Reviews (SOARs).
SOARs are conducted for the purpose of assisting prime contractors in
understanding and complying with their small business subcontracting
responsibilities, including developing subcontracting goals that reflect
maximum practicable opportunity for small business; maintaining
acceptable books and records; and periodically submitting reports to the
Federal government; and
(6) Conducting periodic reviews, including compliance reviews in
accordance with paragraph (f) of this section.
(f) Compliance reviews. A prime contractor's performance under its
subcontracting plan is evaluated by means of on-site compliance reviews
and follow-up reviews. A compliance review is a surveillance review that
determines a contractor's achievements in meeting the goals and other
elements in its subcontracting plan for both open contracts and
contracts completed during the previous twelve months. A follow-up
review is done after a compliance review, generally within six to eight
months, to determine if the contractor has implemented SBA's
recommendations.
(2) All compliance reviews begin with a validation of the
contractor's most recent SF-295, Summary Subcontract Report, and SF-294,
Subcontracting Report for Individual Contracts, if applicable. The
validation includes a review of the contractor's methodology for
completing these reports and a sampling of specific documentation to
substantiate small business status.
(3) Upon completion of the review and evaluation of a contractor's
performance and efforts to achieve the requirements in its
subcontracting plans, the contractor's performance will be assigned one
of the following ratings: Outstanding, Highly Successful, Acceptable,
Marginal, or Unsatisfactory. The factors listed in paragraph (c) of this
section will be taken into consideration, where applicable, in
determining the contractor's rating. However, a contractor may be found
Unsatisfactory, regardless of other factors, if it cannot substantiate
the claimed achievements under its subcontracting plan.
(4) Any contractor that receives a marginal or unsatisfactory rating
must
[[Page 431]]
provide a written corrective action plan to SBA, or to both SBA and the
agency that conducted the compliance review if the agency conducting the
review has an agreement with SBA, within 30 days of its receipt of the
official compliance report.
(5) Any contractor that fails to comply with paragraph (f)(4) of
this section, or any contractor that fails to demonstrate a good-faith
effort, as set forth in paragraph (d) of this section, may be considered
for liquidated damages under the procedures in 48 CFR 19.705-7 and the
clause at 52.219-16. This action shall be considered by the contracting
officer upon receipt of a written recommendation to that effect from the
CMR. The CMR's recommendation must include a copy of the compliance
report and any other relevant correspondence or supporting
documentation.
(6) Reviews and evaluations of contractors with commercial plans are
identical to reviews and evaluations of other contractors, except that
contractors with commercial subcontracting plans do not submit the SF-
294, Subcontracting Report for Individual Contracts. Instead, goal
achievement is determined by comparing the goals in the approved
commercial subcontracting plan against the cumulative achievements on
the SF-295, Summary Subcontract Report, for the same period. The same
ratings criteria set forth in paragraph (f)(3) of this section apply to
contractors with commercial plans.
(7) SBA is authorized to enter into agreements with other Federal
agencies or entities to conduct compliance reviews and otherwise further
the objectives of the subcontracting program. Copies of these agreements
will be published on http://www.sba.gov/GC. SBA is the lead agency on
all joint compliance reviews with other agencies.
(g) Subcontracting consideration in source selection. When an
ordering agency anticipates placing an order against a Federal Supply
Schedule, government-wide acquisition contract (GWAC), or multi-agency
contract (MAC), the ordering agency may evaluate subcontracting as a
significant factor in its source selection process. In addition, the
ordering agency may also evaluate subcontracting as a significant factor
in source selection when entering into a blanket purchase agreement. At
the time of contract award, the contracting officer must disclose to all
competitors which one (or more) of these three elements will be
evaluated as an important source selection evaluation factor in any
subsequent procurement action. A small-business offeror automatically
receives the maximum possible score or credit on this evaluation factor
without having to submit a subcontracting plan and without having to
demonstrate subcontracting past performance. The factors that may be
evaluated, individually or in combination, are:
(1) The subcontracting to be performed on the specific requirement;
(2) The goals negotiated in previous subcontracting plans; and
(3) The contractor's past performance in meeting the subcontracting
goals contained in previous subcontracting plans.
[69 FR 75824, Dec. 20, 2004]
Sec. 125.4 Government property sales assistance.
(a) The purpose of SBA's Government property sales assistance
program is to:
(1) Insure that small businesses obtain their fair share of all
Federal real and personal property qualifying for sale or other
competitive disposal action; and
(2) Assist small businesses in obtaining Federal property being
processed for disposal, sale, or lease.
(b) SBA property sales assistance primarily consists of two
activities:
(1) Obtaining small business set-asides when necessary to insure
that a fair share of Government property sales are made to small
businesses; and
(2) Providing advice and assistance to small businesses on all
matters pertaining to sale or lease of Government property.
(c) The program is intended to cover the following categories of
Government property:
(1) Sales of timber and related forest products;
(2) Sales of strategic material from national stockpiles;
[[Page 432]]
(3) Sales of royalty oil by the Department of Interior's Minerals
Management Service;
(4) Leases involving rights to minerals, petroleum, coal, and
vegetation; and
(5) Sales of surplus real and personal property.
(d) SBA has established specific small business size standards and
rules for the sale or lease of the different kinds of Government
property. These provisions are contained in Sec. Sec. 121.501 through
121.514 of this chapter.
Sec. 125.5 Certificate of Competency Program.
(a) General. (1) The Certificate of Competency (COC) Program is
authorized under section 8(b)(7) of the Small Business Act. A COC is a
written instrument issued by SBA to a Government contracting officer,
certifying that one or more named small business concerns possess the
responsibility to perform a specific Government procurement (or sale)
contract. The COC Program is applicable to all Government procurement
actions. For purposes of this Section, the term ``United States''
includes its territories, possessions, and the Commonwealth of Puerto
Rico.
(2) A contracting officer must, upon determining an apparent low
small business offeror to be nonresponsible, refer that small business
to SBA for a possible COC, even if the next low apparently responsible
offeror is also a small business.
(3) A small business offeror referred to SBA as nonresponsible may
apply to SBA for a COC. Where the applicant is a non-manufacturing
offeror on a supply contract, the COC applies to the responsibility of
the non-manufacturer, not to that of the manufacturer.
(b) COC Eligibility. (1) The offeror seeking a COC has the burden of
proof to demonstrate its eligibility for COC review. To be eligible for
the COC program, a firm must meet the following criteria:
(i) It must qualify as a small business concern under the size
standard applicable to the procurement. Where the solicitation fails to
specify a size standard or Standard Industrial Classification (SIC)
code, SBA will assign the appropriate size standard to determine COC
eligibility. SBA determines size eligibility as of the date described in
Sec. 121.404 of this chapter.
(ii) A manufacturing, service, or construction concern must
demonstrate that it will perform a significant portion of the proposed
contract with its own facilities, equipment, and personnel. The contract
must be performed or the end item manufactured within the United States.
(iii) A non-manufacturer making an offer on a small business set-
aside contract for supplies must furnish end items that have been
manufactured in the United States by a small business. A waiver of this
requirement may be requested under Sec. Sec. 121.1301 through 121.1305
of this chapter for either the type of product being procured or the
specific contract at issue.
(iv) A non-manufacturer making an offer on an unrestricted
procurement or a procurement utilizing simplified acquisition threshold
procedures with a cost that does not exceed $25,000 must furnish end
items manufactured in the United States to be eligible for a COC.
(v) An offeror intending to provide a kit consisting of finished
components or other components provided for a special purpose, is
eligible if:
(A) It meets the Size Standard for the SIC code assigned to the
procurement;
(B) Each component comprising the kit was manufactured in the United
States; and
(C) In the case of a set-aside, each component comprising the kit
was manufactured by a small business under the size standard applicable
to the component provided. A waiver of this requirement may be requested
under Sec. Sec. 121.1301 through 121.1305 of this chapter.
(2) SBA will determine a concern ineligible for a COC if the
concern, or any of its principals, appears in the ``Parties Excluded
From Federal Procurement Programs'' section found in the U.S. General
Services Administration Office of Acquisition Policy Publication: List
of Parties Excluded From Federal Procurement or Nonprocurement Programs.
If a principal is unable to presently control the applicant concern, and
appears in the Procurement
[[Page 433]]
section of the list due to matters not directly related to the concern
itself, responsibility will be determined in accordance with paragraph
(f)(2) of this section.
(3) An eligibility determination will be made on a case-by-case
basis, where a concern or any of its principals appears in the
Nonprocurement Section of the publication referred to in paragraph
(b)(2) of this section.
(c) Referral of nonresponsibility determination to SBA. (1) A
contracting officer who determines that an apparently successful offeror
that has certified itself to be a small business with respect to a
specific Government procurement lacks any element of responsibility
(including competency, capability, capacity, credit, integrity or
tenacity or perseverance) must refer the matter in writing to the SBA
Government Contracting Area Office (Area Office) serving the area in
which the headquarters of the offeror is located. The referral must
include a copy of the following:
(i) Solicitation;
(ii) Offer submitted by the concern whose responsibility is at issue
for the procurement (its Best and Final Offer for a negotiated
procurement);
(iii) Abstract of Bids, where applicable, or the Contracting
Officer's Price Negotiation Memorandum;
(iv) Preaward survey, where applicable;
(v) Contracting officer's written determination of
nonresponsibility;
(vi) Technical data package (including drawings, specifications, and
Statement of Work); and
(vii) Any other justification and documentation used to arrive at
the nonresponsibility determination.
(2) Contract award must be withheld by the contracting officer for a
period of 15 working days (or longer if agreed to by SBA and the
contracting officer) following receipt by the appropriate Area Office of
a referral which includes all required documentation.
(3) The COC referral must indicate that the offeror has been found
responsive to the solicitation, and also identify the reasons for the
nonresponsibility determination.
(d) Application for COC. (1) Upon receipt of the contracting
officer's referral, the Area Office will inform the concern of the
contracting officer's negative responsibility determination, and offer
it the opportunity to apply to SBA for a COC by a specified date.
(2) The COC application must include all information and
documentation requested by SBA and any additional information which the
firm believes will demonstrate its ability to perform on the proposed
contract. The application should be returned as soon as possible, but no
later than the date specified by SBA.
(3) Upon receipt of a complete and acceptable application, SBA may
elect to visit the applicant's facility to review its responsibility.
SBA personnel may obtain clarification or confirmation of information
provided by the applicant by directly contacting suppliers, financial
institutions, and other third parties upon whom the applicant's
responsibility depends.
(e) Incomplete applications. If an application for a COC is
materially incomplete or is not submitted by the date specified by SBA,
SBA will close the case without issuing a COC and will notify the
contracting officer and the concern with a declination letter.
(f) Reviewing an application. (1) The COC review process is not
limited to the areas of nonresponsibility cited by the contracting
officer. SBA may, at its discretion, independently evaluate the COC
applicant for all elements of responsibility, but it may presume
responsibility exists as to elements other than those cited as
deficient. SBA may deny a COC for reasons of nonresponsibility not
originally cited by the contracting officer.
(2) A small business will be rebuttably presumed nonresponsible if
any of the following circumstances are shown to exist:
(i) Within three years before the application for a COC, the
concern, or any of its principals, has been convicted of an offense or
offenses that would constitute grounds for debarment or suspension under
FAR subpart 9.4 (48 CFR part 9, subpart 9.4), and the matter is still
under the jurisdiction of a court (e.g., the principals of a concern are
incarcerated, on probation or parole, or under a suspended sentence); or
[[Page 434]]
(ii) Within three years before the application for a COC, the
concern or any of its principals has had a civil judgment entered
against it or them for any reason that would constitute grounds for
debarment or suspension under FAR subpart 9.4 (48 CFR part, subpart
9.4).
(g) Decision by Area Director (``Director''). After reviewing the
information submitted by the applicant and the information gathered by
SBA, the Area Director will make a determination, either final or
recommended as set forth in the following chart:
------------------------------------------------------------------------
SBA official or Finality of
office with decision; options
Contracting actions authority to make for contracting
decision agencies
------------------------------------------------------------------------
$100,000 or less, or in Director may approve Final. The Director
accordance with Simplified or deny. will notify both
Acquisition Threshold applicant and
procedures. contracting agency
in writing of the
decision.
Between $100,000 and $25 (1) Director may (1) Final.
million. deny.
(2) Director may (2) Contracting
approve, subject to agency may proceed
right of appeal and under paragraph (h)
other options. or paragraph (i) of
this section.
Exceeding $25 million....... (1) Director may (1) Final.
deny.
(2) Director must (2) Contracting
refer to SBA agency may proceed
Headquarters under paragraph (j)
recommendation for of this section.
approval.
------------------------------------------------------------------------
(h) Notification of intent to issue on a contract with a value
between $100,000 and $25 million. Where the Director determines that a
COC is warranted, he or she will notify the contracting officer of the
intent to issue a COC, and of the reasons for that decision, prior to
issuing the COC. At the time of notification, the contracting officer
has the following options:
(1) Accept the Director's decision to issue the COC and award the
contract to the concern. The COC issuance letter will then be sent,
including as an attachment a detailed rationale of the decision; or
(2) Ask the Director to suspend the case for one of the following
purposes:
(i) To forward a detailed rationale for the decision to the
contracting officer for review within a specified period of time;
(ii) To afford the contracting officer the opportunity to meet with
the Area Office to review all documentation contained in the case file;
(iii) To submit any information which the contracting officer
believes SBA has not considered (at which time, SBA will establish a new
suspense date mutually agreeable to the contracting officer and SBA); or
(iv) To permit resolution of an appeal by the contracting agency to
SBA Headquarters under paragraph (i) of this section.
(i) Appeals of Area Director determinations. For COC actions with a
value exceeding $100,000, contracting agencies may appeal a Director's
decision to issue a COC to SBA Headquarters by filing an appeal with the
Area Office processing the COC application. The Area Office must honor
the request to appeal if the contracting officer agrees to withhold
award until the appeal process is concluded. Without such an agreement
from the contracting officer, the Director must issue the COC. When such
an agreement has been obtained, the Area Office will immediately forward
the case file to SBA Headquarters.
(1) The intent of the appeal procedure is to allow the contracting
agency the opportunity to submit to SBA Headquarters any documentation
which the Area Office may not have considered.
(2) SBA Headquarters will furnish written notice to the Director,
Office of Small and Disadvantaged Business Utilization (OSDBU) at the
secretariat level of the procuring agency (with a copy to the
contracting officer), that the case file has been received and that an
appeal decision may be requested by an authorized official at that
level. If the contracting agency decides to file an appeal, it must
notify SBA Headquarters through its Director, OSDBU, within 10 working
days (or a time period agreed upon by both agencies) of its receipt of
the notice under paragraph (h) of this section. The appeal and any
supporting documentation must be filed within 10 working days
[[Page 435]]
(or a different time period agreed to by both agencies) after SBA
receives the request for a formal appeal.
(3) The SBA Associate Administrator for Government Contracting (AA/
GC) will make a final determination, in writing, to issue or to deny the
COC.
(j) Decision by SBA Headquarters where contract value exceeds $25
million. (1) Prior to taking final action, SBA Headquarters will contact
the contracting agency at the secretariat level or agency equivalent and
afford it the following options:
(i) Ask SBA Headquarters to suspend the case so that the agency can
meet with Headquarters personnel and review all documentation contained
in the case file; or
(ii) Submit to SBA Headquarters for evaluation any information which
the contracting agency believes has not been considered.
(2) After reviewing all available information, the AA/GC will make a
final decision to either issue or deny the COC. If the AA/GC's decision
is to deny the COC, the applicant and contracting agency will be
informed in writing by the Area Office. If the decision is to issue the
COC, a letter certifying the responsibility of the firm will be sent to
the contracting agency by Headquarters and the applicant will be
informed of such issuance by the Area Office. Except as set forth in
paragraph (l) of this section, there can be no further appeal or
reconsideration of the decision of the AA/GC.
(k) Notification of denial of COC. The notification to an
unsuccessful applicant following either an Area Director or a
Headquarters denial of a COC will briefly state all reasons for denial
and inform the applicant that a meeting may be requested with
appropriate SBA personnel to discuss the denial. Upon receipt of a
request for such a meeting, the appropriate SBA personnel will confer
with the applicant and explain the reasons for SBA's action. The meeting
does not constitute an opportunity to rebut the merits of the SBA's
decision to deny the COC, and is for the sole purpose of giving the
applicant the opportunity to correct deficiencies so as to improve its
ability to obtain future contracts either directly or, if necessary,
through the issuance of a COC.
(l) Reconsideration of COC after issuance. (1) An approved COC may
be reconsidered and possibly rescinded, at the sole discretion of SBA,
where an award of the contract has not occurred, and one of the
following circumstances exists:
(i) The COC applicant submitted false or omitted materially adverse
information;
(ii) New materially adverse information has been received relating
to the current responsibility of the applicant concern; or
(iii) The COC has been issued for more than 60 days (in which case
SBA may investigate the firm's current circumstances).
(2) Where SBA reconsiders and reaffirms the COC the procedures under
paragraph (h) of this section do not apply.
(m) Effect of a COC. By the terms of the Act, a COC is conclusive as
to responsibility. Where SBA issues a COC on behalf of a small business
with respect to a particular contract, contracting officers are required
to award the contract without requiring the firm to meet any other
requirement with respect to responsibility.
(n) Effect of Denial of COC. Denial of a COC by SBA does not
preclude a contracting officer from awarding a contract to the referred
firm, nor does it prevent the concern from making an offer on any other
procurement.
(o) Monitoring performance. Once a COC has been issued and a
contract awarded on that basis, SBA will monitor contractor performance.
[61 FR 3312, Jan. 31, 1996; 61 FR 7987, Mar. 1, 1996]
Sec. 125.6 Prime contractor performance requirements (limitations on
subcontracting).
(a) In order to be awarded a full or partial small business set-
aside contract, an 8(a) contract, or an unrestricted procurement where a
concern has claimed a 10 percent small disadvantaged business (SDB)
price evaluation preference, a small business concern must agree that:
(1) In the case of a contract for services (except construction),
the concern
[[Page 436]]
will perform at least 50 percent of the cost of the contract incurred
for personnel with its own employees.
(2) In the case of a contract for supplies or products (other than
procurement from a non-manufacturer in such supplies or products), the
concern will perform at least 50 percent of the cost of manufacturing
the supplies or products (not including the costs of materials).
(3) In the case of a contract for general construction, the concern
will perform at least 15 percent of the cost of the contract with its
own employees (not including the costs of materials).
(4) In the case of a contract for construction by special trade
contractors, the concern will perform at least 25 percent of the cost of
the contract with its own employees (not including the cost of
materials).
(b) An SDVO SBC prime contractor can subcontract part of an SDVO
contract (as defined in Sec. 125.15) provided:
(1) In the case of a contract for services (except construction),
the SDVO SBC spends at least 50% of the cost of the contract performance
incurred for personnel on the concern's employees or on the employees of
other SDVO SBCs;
(2) In the case of a contract for general construction, the SDVO SBC
spends at least 15% of the cost of contract performance incurred for
personnel on the concern's employees or the employees of other SDVO
SBCs;
(3) In the case of a contract for construction by special trade
contractors, the SDVO SBC spends at least 25% of the cost of contract
performance incurred for personnel on the concern's employees or the
employees of other SDVO SBCs; and
(4) In the case of a contract for procurement of supplies or
products (other than procurement from a non-manufacturer in such
supplies or products), at least 50% of the cost of manufacturing the
supplies or products (not including the costs of materials), will be
performed by the SDVO SBC prime contractor or other SDVO SBCs.
(5) In accordance with Sec. 125.15(b)(3), the SDVO SBC joint
venture must perform the applicable percentage of work.
(c) A qualified HUBZone SBC prime contractor can subcontract part of
a HUBZone contract (as defined in Sec. 126.600 of this chapter)
provided:
(1) In the case of a contract for services (except construction),
the qualified HUBZone SBC spends at least 50% of the cost of the
contract performance incurred for personnel on the concern's employees
or on the employees of other qualified HUBZone SBCs;
(2) In the case of a contract for general construction, the
qualified HUBZone SBC spends at least 15% of the cost of contract
performance incurred for personnel on the concern's employees;
(3) In the case of a contract for construction by special trade
contractors, the qualified HUBZone SBC spends at least 25% of the cost
of contract performance incurred for personnel on the concern's
employees;
(4) In the case of a contract for procurement of supplies (other
than procurement from a regular dealer in such supplies), the qualified
HUBZone SBC spends at least 50% of the manufacturing cost (excluding the
cost of materials) on performing the contract in a HUBZone. One or more
qualified HUBZone SBCs may combine to meet this subcontracting
percentage requirement; and
(5) In the case of a contract for the procurement by the Secretary
of Agriculture of agricultural commodities, the qualified HUBZone SBC
may not purchase the commodity from a subcontractor if the subcontractor
will supply the commodity in substantially the final form in which it is
to be supplied to the Government.
(d) SBA may use different percentages if the Administrator
determines that such action is necessary to reflect conventional
industry practices among small business concerns that are below the
numerical size standard for businesses in that industry group.
Representatives of a national trade or industry group or any interested
SBC may request a change in subcontracting percentage requirements for
the categories defined by six digit industry codes in the North American
Industry Classification System (NAICS) pursuant to the following
procedures.
[[Page 437]]
(1) Format of request. Requests from representatives of a trade or
industry group and interested SBCs should be in writing and sent or
delivered to the Associate Administrator of the Office of Government
Contracting, U.S. Small Business Administration, 409 3rd Street, SW.,
Washington, DC 20416. The requester must demonstrate to SBA that a
change in percentage is necessary to reflect conventional industry
practices among small business concerns that are below the numerical
size standard for businesses in that industry category, and must support
its request with information including, but not limited to:
(i) Information relative to the economic conditions and structure of
the entire national industry;
(ii) Market data, technical changes in the industry and industry
trends;
(iii) Specific reasons and justifications for the change in the
subcontracting percentage;
(iv) The effect such a change would have on the Federal procurement
process; and
(v) Information demonstrating how the proposed change would promote
the purposes of the small business, 8(a), SDB, woman-owned business, or
HUBZone programs.
(2) Notice to public. Upon an adequate preliminary showing to SBA,
SBA will publish in the Federal Register a notice of its receipt of a
request that it considers a change in the subcontracting percentage
requirements for a particular industry. The notice will identify the
group making the request, and give the public an opportunity to submit
information and arguments in both support and opposition.
(3) Comments. SBA will provide a period of not less than 30 days for
public comment in response to the Federal Register notice.
(4) Decision. SBA will render its decision after the close of the
comment period. If SBA decides against a change, SBA will publish notice
of its decision in the Federal Register. Concurrent with the notice, SBA
will advise the requester of its decision in writing. If SBA decides in
favor of a change, SBA will propose an appropriate change to this part.
(e) Definitions. The following definitions apply to this section:
(1) Cost of the contract. All allowable direct and indirect costs
allocable to the contract, excluding profit or fees.
(2) Cost of contract performance incurred for personnel. Direct
labor costs and any overhead which has only direct labor as its base,
plus the concern's General and Administrative rate multiplied by the
labor cost.
(3) Cost of manufacturing. Those costs incurred by the firm in the
production of the end item being acquired. These are costs associated
with the manufacturing process, including the direct costs of
fabrication, assembly, or other production activities, and indirect
costs which are allocable and allowable. The cost of materials, as well
as the profit or fee from the contract, are excluded.
(4) Cost of materials. Includes costs of the items purchased,
handling and associated shipping costs for the purchased items (which
includes raw materials), off-the-shelf items (and similar
proportionately high-cost common supply items requiring additional
manufacturing or incorporation to become end items), special tooling,
special testing equipment, and construction equipment purchased for and
required to perform on the contract. In the case of a supply contract,
the acquisition of services or products from outside sources following
normal commercial practices within the industry are also included.
(5) Off-the-shelf item. An item produced and placed in stock by a
manufacturer, or stocked by a distributor, before orders or contracts
are received for its sale. The item may be commercial or may be produced
to military or Federal specifications or description. Off-the-shelf
items are also known as Nondevelopmental Items (NDI).
(6) Personnel. Individuals who are ``employees'' under Sec. 121.106
of this chapter except for purposes of the HUBZone program, where the
definition of ``employee'' is found in Sec. 126.103 of this chapter.
(7) Subcontracting. That portion of the contract performed by a
firm, other than the concern awarded the contract, under a second
contract, purchase
[[Page 438]]
order, or agreement for any parts, supplies, components, or
subassemblies which are not available off-the-shelf, and which are
manufactured in accordance with drawings, specifications, or designs
furnished by the contractor, or by the government as a portion of the
solicitation. Raw castings, forgings, and moldings are considered as
materials, not as subcontracting costs. Where the prime contractor has
been directed by the Government to use any specific source for parts,
supplies, components subassemblies or services, the costs associated
with those purchases will be considered as part of the cost of
materials, not subcontracting costs.
(f) Compliance will be considered an element of responsibility and
not a component of size eligibility.
(g) The period of time used to determine compliance will be the
period of performance which the evaluating agency uses to evaluate the
proposal or bid. If the evaluating agency fails to articulate in its
solicitation the period of performance it will use to evaluate the
proposal or bid, the base contract period, excluding options, will be
used to determine compliance. In indefinite quantity contracts,
performance over the guaranteed minimum will be used to determine
compliance unless the evaluating agency articulates a different period
of performance which it will use to evaluate the proposal or bid in its
solicitation.
(h) Work to be performed by subsidiaries or other affiliates of a
concern is not counted as being performed by the concern for purposes of
determining whether the concern will perform the required percentage of
work.
(i) Where an offeror is exempt from affiliation under Sec.
121.103(h)(3) of this chapter and qualifies as a small business concern,
the performance of work requirements set forth in this section apply to
the cooperative effort of the joint venture, not its individual members.
(j) Where an offeror is exempt from affiliation under Sec.
121.103(f)(3) of this chapter and qualifies as a small business concern,
the performance of work requirements set forth in this section apply to
the cooperative effort of the team or joint venture, not its individual
members.
[61 FR 3312, Jan. 31, 1996; 61 FR 39305, July 20, 1996; as amended at 64
FR 57372, Oct. 25, 1999; 65 FR 45835, July 26, 2000; 69 FR 25266, May 5,
2004; 69 FR 29208, May 21, 2004; 69 FR 29420, May 24, 2004; 70 FR 14527,
Mar. 23, 2005; 70 FR 51248, Aug. 30, 2005]
Sec. 125.7 [Reserved]
Subpart A_Definitions for the Service-Disabled Veteran-Owned Small
Business Concern Program
Source: 69 FR 25267, May 5, 2004, unless otherwise noted.
Sec. 125.8 What definitions are important in the Service-Disabled
Veteran-Owned (SDVO) Small Business Concern (SBC) Program?
(a) Contracting Officer has the meaning given such term in section
27(f)(5) of the Office of Federal Procurement Policy Act (41 U.S.C.
423(f)(5)).
(b) Interested Party means the contracting activity's contracting
officer, the SBA or any concern that submits an offer for a specific
SDVO contract.
(c) Permanent caregiver is the spouse, or an individual, 18 years of
age or older, who is legally designated, in writing, to undertake
responsibility for managing the well-being of the service-disabled
veteran with a permanent and severe disability, to include housing,
health and safety. A permanent caregiver may, but does not need to,
reside in the same household as the service-disabled veteran with a
permanent and severe disability. In the case of a service-disabled
veteran with a permanent and severe disability lacking legal capacity,
the permanent caregiver shall be a parent, guardian, or person having
legal custody. There may be no more than one permanent caregiver per
service-disabled veteran with a permanent and severe disability.
(d) Service-Disabled Veteran with a Permanent and Severe Disability
means a veteran with a service-connected disability that has been
determined by the VA, in writing, to have a permanent and total service-
connected disability as set forth in 38 CFR 3.340 for
[[Page 439]]
purposes of receiving disability compensation or a disability pension.
(e) Service-Connected has the meaning given that term in section
101(16) of Title 38, United States Code.
(f) Service-disabled veteran is a veteran with a disability that is
service-connected.
(g) SBC owned and controlled by service-disabled veterans (also
known as a Service-Disabled Veteran-Owned SBC) is a concern--
(1) Not less than 51% of which is owned by one or more service-
disabled veterans or, in the case of any publicly owned business, not
less than 51% of the stock of which is owned by one or more service-
disabled veterans;
(2) The management and daily business operations of which are
controlled by one or more service-disabled veterans or, in the case of a
service-disabled veteran with permanent and severe disability, the
spouse or permanent caregiver of such veteran; and
(3) That is small as defined by Sec. 125.11.
(h) Spouse has the meaning given the term in section 101(31) of
Title 38, United States Code.
(i) Veteran has the meaning given the term in section 101(2) of
Title 38, United States Code.
[69 FR 25267, May 5, 2004, as amended at 70 FR 14527, Mar. 23, 2005]
Subpart B_Eligibility Requirements for the SDVO SBC Program
Source: 69 FR 25267, May 5, 2004, unless otherwise noted.
Sec. 125.9 Who does SBA consider to own an SDVO SBC?
A concern must be at least 51% unconditionally and directly owned by
one or more service-disabled veterans. More specifically:
(a) Ownership must be direct. Ownership by one or more service
disabled veterans must be direct ownership. A concern owned principally
by another business entity that is in turn owned and controlled by one
or more service-disabled veterans does not meet this requirement.
Ownership by a trust, such as a living trust, may be treated as the
functional equivalent of ownership by service-disabled veterans where
the trust is revocable, and service-disabled veterans are the grantors,
trustees, and the current beneficiaries of the trust.
(b) Ownership of a partnership. In the case of a concern which is a
partnership, at least 51% of every class of partnership interest must be
unconditionally owned by one or more service-disabled veterans. The
ownership must be reflected in the concern's partnership agreement.
(c) Ownership of a limited liability company. In the case of a
concern which is a limited liability company, at least 51% of each class
of member interest must be unconditionally owned by one or more service-
disabled veterans.
(d) Ownership of a corporation. In the case of a concern which is a
corporation, at least 51% of the aggregate of all stock outstanding and
at least 51% of each class of voting stock outstanding must be
unconditionally owned by one or more service-disabled veterans.
(e) Stock options' effect on ownership. In determining unconditional
ownership, SBA will disregard any unexercised stock options or similar
agreements held by service-disabled veterans. However, any unexercised
stock options or similar agreements (including rights to convert non-
voting stock or debentures into voting stock) held by non-service-
disabled veterans sill be treated as exercised, except for any ownership
interests which are held by investment companies licensed under the
Small Business Investment Act of 1958.
(f) Change of ownership. A concern may change its ownership or
business structure so long as one or more service-disabled veterans own
and control it after the change.
Sec. 125.10 Who does SBA consider to control an SDVO SBC?
(a) General. To be an eligible SDVO SBC, the management and daily
business operations of the concern must be controlled by one or more
service-disabled veterans (or in the case of a veteran with permanent
and severe disability, the spouse or permanent caregiver of such
veteran). Control by one or more service-disabled veterans
[[Page 440]]
means that both the long-term decisions making and the day-to-day
management and administration of the business operations must be
conducted by one or more service-disabled veterans (or in the case of a
veteran with permanent and severe disability, the spouse or permanent
caregiver of such veteran).
(b) Managerial position and experience. A service-disabled veteran
(or in the case of a service-disabled veteran with permanent and severe
disability, the spouse or permanent caregiver of such veteran) must hold
the highest officer position in the concern (usually President or Chief
Executive Officer) and must have managerial experience of the extent and
complexity needed to run the concern. The service-disabled veteran
manager (or in the case of a veteran with permanent and severe
disability, the spouse or permanent caregiver of such veteran) need not
have the technical expertise or possess the required license to be found
to control the concern if the service-disabled veteran can demonstrate
that he or she has ultimate managerial and supervisory control over
those who possess the required licenses or technical expertise.
(c) Control over a partnership. In the case of a partnership, one or
more service-disabled veterans (or in the case of a veteran with
permanent and severe disability, the spouse or permanent caregiver of
such veteran) must serve as general partners, with control over all
partnership decisions.
(d) Control over a limited liability company. In the case of a
limited liability company, one or more service-disabled veterans (or in
the case of a veteran with permanent or severe disability, the spouse or
permanent caregiver of such veteran) must serve as managing members,
with control over all decisions of the limited liability company.
(e) Control over a corporation. One or more service-disabled
veterans (or in the case of a veteran with permanent and severe
disability, the spouse or permanent caregiver of such veteran) must
control the Board of Directors of the concern. Service-disabled veterans
are considered to control the Board of Directors when either:
(1) One of more service-disabled veterans own at least 51% of all
voting stock of the concern, are on the Board of Directors and have the
percentage of voting stock necessary to overcome any super majority
voting requirements; or
(2) Service-disabled veterans comprise the majority of voting
directors through actual numbers or, where permitted by state law,
through weighted voting.
Sec. 125.11 What size standards apply to SDVO SBCs?
(a) At time of contract offer, an SDVO SBC must be small within the
size standard corresponding to the NAICS code assigned to the contract.
(b) If the contracting officer is unable to verify that the SDVO SBC
is small, the concern shall be referred to the responsible SBA
Government Contracting Area Director for a formal size determination in
accordance with part 121 of this chapter.
Sec. 125.12 May an SDVO SBC have affiliates?
A concern may have affiliates provided that the aggregate size of
the concern and all its affiliates is small as defined in part 121 of
this chapter.
Sec. 125.13 May 8(a) Program participants, HUBZone SBCs, Small and
Disadvantaged Businesses, or Women-Owned Small Businesses
qualify as SDVO SBCs?
Yes, 8(a) Program participants, HUBZone SBCs, Small and
Disadvantaged Businesses, and Women-Owned SBCs, may also qualify as SDVO
SBCs if they meet the requirements in this subject.
[70 FR 56814, Sept. 29, 2005]
Subpart C_Contracting with SDVO SBCs
Source: 69 FR 25268, May 5, 2004, unless otherwise noted.
Sec. 125.14 What are SDVO contracts?
SDVO contracts are contracts awarded to an SDVO SBC through a sole
source award or a set-aside award based on competition restricted to
SDVO SBCs.
[[Page 441]]
Sec. 125.15 What requirements must an SDVO SBC meet to submit an offer
on a contract?
(a) Representation of SDVO SBC status. An SDVO SBC must submit the
following representations with its initial offer (which includes price)
on a specific contract:
(1) It is an SDVO SBC;
(2) It is small under the NAICS code assigned to the procurement;
(3) It will meet the percentage of work requirements set forth in
Sec. 125.6;
(4) If applicable, it is an eligible joint venture; and
(5) If applicable, it is an eligible nonmanufacturer.
(b) Joint ventures. An SDVO SBC may enter into a joint venture
agreement with one or more other SBCs for the purpose of performing an
SDVO contract.
(1) Size of concerns to an SDVO SBC joint venture.
(i) A joint venture of at least one SDVO SBC and one or more other
business concerns may submit an offer as a small business for a
competitive SDVO SBC procurement so long as each concern is small under
the size standard corresponding to the NAICS code assigned to the
contract, provided:
(A) For a procurement having a revenue-based size standard, the
procurement exceeds half the size standard corresponding to the NAICS
code assigned to the contract; or
(B) For a procurement having an employee-based size standard, the
procurement exceeds $10 million;
(ii) For sole source and competitive SDVO SBC procurements that do
not exceed the dollar levels identified in paragraphs (b)(1)(i)(A) and
(B) of this section, an SDVO SBC entering into a joint venture agreement
with another concern is considered to be affiliated for size purposes
with the other concern with respect to performance of the SDVO contract.
The combined annual receipts or employees of the concerns entering into
the joint venture must meet the size standard for the NAICS code
assigned to the SDVO contract.
(2) Contents of joint venture agreement. Every joint venture
agreement to perform an SDVO contract must contain a provision:
(i) Setting forth the purpose of the joint venture;
(ii) Designating an SDVO SBC as the managing venturer of the joint
venture, and an employee of the managing venturer as the project manager
responsible for performance of the SDVO contract;
(iii) Stating that not less than 51% of the net profits earned by
the joint venture will be distributed to the SDVO SBC(s);
(iv) Specifying the responsibilities of the parties with regard to
contract performance, source of labor and negotiation of the SDVO
contract;
(v) Obligating all parties to the joint venture to ensure
performance of the SDVO contract and to complete performance despite the
withdrawal of any member;
(vi) Requiring the final original records be retained by the
managing venturer upon completion of the SDVO contract performed by the
joint venture;
(3) Performance of work. For any SDVO contract, the joint venture
must perform the applicable percentage of work required by Sec. 124.510
of this chapter.
(4) Contract execution. The procuring activity will execute an SDVO
contract in the name of the joint venture entity or SDVO SBC.
(5) Inspection of records. SBA may inspect the records of the joint
venture without notice at any time deemed necessary.
(c) Non-manufacturers. An SDVO SBC which is a non-manufacturer may
submit an offer on an SDVO contract for supplies if it meets the
requirements of the non-manufacturer rule set forth at
Sec. 121.406(b)(1) of this chapter.
[69 FR 25268, May 5, 2004, as amended at 70 FR 14527, Mar. 23, 2005]
Sec. 125.16 Does SDVO SBC status guarantee receipt of a contract?
No, SDVO SBCs should market their capabilities to appropriate
procuring agencies in order to increase their prospects of having a
procurement set-aside for SDVO contract award.
[[Page 442]]
Sec. 125.17 Who decides if a contract opportunity for SDVO competition
exists?
The contracting officer for the contracting activity decides if a
contract opportunity for SDVO competition exists.
Sec. 125.18 What requirements are not available for SDVO contracts?
A contracting activity may not make a requirement available for a
SDVO contract if:
(a) The contracting activity otherwise would fulfill that
requirement through award to Federal Prison Industries, Inc. under 18
U.S.C. 4124 or 4125, or to Javits-Wagner-O'Day Act participating non-
profit agencies for the blind and severely disabled, under 41 U.S.C. 46
et seq., as amended; or
(b) An 8(a) participant currently is performing that requirement or
SBA has accepted that requirement for performance under the authority of
the section 8(a) program, unless SBA has consented to release of the
requirement from the section 8(a) program.
Sec. 125.19 When may a contracting officer set-aside a procurement for
SDVO SBCs?
(a) The contracting officer first must review a requirement to
determine whether it is excluded from SDVO contracting pursuant to Sec.
125.18.
(b) If the contracting officer determines that Sec. 125.18 does not
apply, the contracting officer should consider setting aside the
requirement for 8(a), HUBZone, or SDVO SBC participation before
considering setting aside the requirement as a small business set-aside.
(c) If the CO decides to set-aside the requirement for competition
restricted to SDVO SBCs, the CO must:
(1) Have a reasonable expectation that at least two responsible SDVO
SBCs will submit offers; and
(2) Determine that award can be made at fair market price.
Sec. 125.20 When may a contracting officer award sole source contracts
to SDVO SBCs?
A contracting officer may award a sole source contract to an SDVO
SBC only when the contracting officer determines that:
(a) None of the provisions of Sec. Sec. 125.18 or 125.19 apply;
(b) The anticipated award price of the contract, including options,
will not exceed:
(1) $5,000,000 for a requirement within the NAICS codes for
manufacturing, or
(2) $3,000,000 for a requirement within all other NAICS codes;
(c) A SDVO SBC is a responsible contractor able to perform the
contract; and
(d) Contract award can be made at a fair and reasonable price.
Sec. 125.21 Are there SDVO contracting opportunities at or below the
simplified acquisition threshold?
Yes, if the requirement is at or below the simplified acquisition
threshold, the contracting officer may set-aside the requirement for
consideration among SDVO SBCs using simplified acquisition procedures or
may award a sole source contact to an SDVO SBC.
Sec. 125.22 May SBA appeal a contracting officer's decision not to
reserve a procurement for award as an SDVO contract?
The Administrator may appeal a contracting officer's decision not to
make a particular requirement available for award as an SDVO sole source
or a SDVO set-aside contact at or above the simplified acquisition
threshold.
Sec. 125.23 What is the process for such an appeal?
(a) Notice of appeal. When the contacting officer rejects a
recommendation by SBA's Procurement Center Representative to make a
requirement available for award as an SDVO contract, he or she must
notify the Procurement Center Representative as soon as practicable. If
the Administrator intends to appeal the decision, SBA must notify the
contracting officer no later than five business days after receiving
notice of the contracting officer's decision.
(b) Suspension of action. Upon receipt of notice of SBA's intent to
appeal, the contracting officer must suspend further action regarding
the procurement until the Secretary of the department or head of the
agency issues a written
[[Page 443]]
decision on the appeal, unless the Secretary of the department or head
of the agency makes a written determination that urgent and compelling
circumstances which significantly affect the interests of the United
States compel award of the contract.
(c) Deadline for appeal. Within 15 business days of SBA's
notification to the CO, SBA must file its formal appeal with the
Secretary of the department or head of the agency, or the appeal will be
deemed withdrawn.
(d) Decision. The Secretary of the department or head of the agency
must specify in writing the reasons for a denial of an appeal brought
under this section.
Subpart D_Protests Concerning SDVO SBCs
Source: 69 FR 25269, May 5, 2004, unless otherwise noted.
Sec. 125.24 Who may protest the status of an SDVO SBC?
(a) For Sole Source Procurements. SBA or the contracting officer may
protest the proposed awardee's service-disabled veteran status.
(b) For Competitive Set-Asides. Any interested party may protest the
apparent successful offeror's SDVO SBC status.
Sec. 125.25 How does one file a service disabled veteran-owned status
protest?
(a) General. The protest procedures described in this part are
separate from those governing size protests and appeals. All protests
relating to whether an eligible SDVO SBC is a ``small'' business for
purposes of any Federal program are subject to part 121 of this chapter
and must be filed in accordance with that part. If a protester protests
both the size of the SDVO SBC and whether the concern meets the SDVO SBC
requirements set forth in Sec. 125.15(a), SBA will process each protest
concurrently, under the procedures set forth in part 121 of this chapter
and this part. SBA does not review issues concerning the administration
of an SDVO contract.
(b) Format. Protests must be in writing and must specify all the
grounds upon which the protest is based. A protest merely asserting that
the protested concern is not an eligible SDVO SBC, without setting forth
specific facts or allegations is insufficient. Example: A protester
submits a protest stating that the awardee's owner is not a service-
disabled veteran. The protest does not state any basis for this
assertion. The protest allegation is insufficient.
(c) Filing. An interested party, other than the contracting officer
or SBA, must deliver their protests in person, by facsimile, by express
delivery service, or by U.S. mail (postmarked within the applicable time
period) to the contracting officer. The contracting officer or SBA must
submit their written protest directly to the Associate Administrator for
Government Contracting.
(d) Timeliness. (1) For negotiated acquisitions, an interested party
must submit its protest by close of business on the fifth business day
after notification by the contracting officer of the apparent successful
offeror.
(2) For sealed bid acquisitions, an interested party must submit its
protest by close of business on the fifth business day after bid
opening.
(3) Any protest submitted after the time limits is untimely, unless
it is from SBA or the CO.
(4) Any protest received prior to bid opening or notification of
intended awardee, whichever applies, is premature.
(e) Referral to SBA. The contracting officer must forward to SBA any
non-premature protest received, notwithstanding whether he or she
believes it is sufficiently specific or timely. The contracting officer
must send all protests, along with a referral letter, directly to the
Associate Administrator for Government Contracting, U.S. Small Business
Administration, 409 Third Street, SW., Washington, DC 20416 or by fax to
(202) 205-6390, marked Attn: Service-Disabled Veteran Status Protest.
The CO's referral letter must include information pertaining to the
solicitation that may be necessary for SBA to determine timeliness and
standing, including: the solicitation number; the name, address,
telephone number and facsimile number of the
[[Page 444]]
CO; whether the contract was sole source or set-aside; whether the
protester submitted an offer; whether the protested concern was the
apparent successful offeror; when the protested concern submitted its
offer (i.e., made the self-representation that it was a SDVO SBC);
whether the procurement was conducted using sealed bid or negotiated
procedures; the bid opening date, if applicable; when the protest was
submitted to the CO; when the protester received notification about the
apparent successful offeror, if applicable; and whether a contract has
been awarded.
[69 FR 25269, May 5, 2004, as amended at 70 FR 14527, Mar. 23, 2005]
Sec. 125.26 What are the grounds for filing an SDVO SBC protest?
(a) Status. In cases where the protest is based on service-connected
disability, permanent and severe disability, or veteran status, the
Associate Administrator for Government Contracting will only consider a
protest that presents specific allegations supporting the contention
that the owner(s) cannot provide documentation from the VA, DoD, or the
U.S. National Archives and Records Administration to show that they meet
the definition of service-disabled veteran or service disabled veteran
with a permanent and severe disability as set forth in Sec. 125.8.
(b) Ownership and control. In cases where the protest is based on
ownership and control, the Associate Administrator for Government
Contracting will consider a protest only if the protester presents
credible evidence that the concern is not 51% owned and controlled by
one or more service-disabled veterans. In the case of a veteran with a
permanent and severe disability, the protester must present credible
evidence that the concern is not controlled by the veteran, spouse or
permanent caregiver of such veteran.
[70 FR 14527, Mar. 23, 2005]
Sec. 125.27 How will SBA process an SDVO protest?
(a) Notice of receipt of protest. Upon receipt of the protest, SBA
will notify the contracting officer and the protester of the date SBA
received the protest and whether SBA will process the protest or dismiss
it under paragraph (b) of this section.
(b) Dismissal of protest. If SBA determines that the protest is
premature, untimely, nonspecific, or is based on non-protestable
allegations, SBA will dismiss the protest and will send the contracting
officer and the protester a notice of dismissal, citing the reason(s)
for the dismissal. The dismissal notice must also advise the protester
of his/her right to appeal the dismissal to SBA's Office of Hearings and
Appeals (OHA) in accordance with part 134 of this chapter.
(c) Notice to protested concern. If SBA determines that the protest
is timely, sufficiently specific and is based upon protestable
allegations, SBA will:
(1) Notify the protested concern of the protest and of its right to
submit information responding to the protest within ten business days
from the date of the notice; and
(2) Forward a copy of the protest to the protested concern, with a
copy to the contracting officer if one has not already been made
available.
(d) Time period for determination. SBA will determine the SDVO SBC
status of the protested concern within 15 business days after receipt of
the protest, or within any extension of that time which the contracting
officer may grant SBA. If SBA does not issue its determination within
the 15-day period, the contracting officer may award the contract,
unless the contracting officer has granted SBA an extension.
(e) Award of contract. The CO may award the contract after receipt
of a protest if the contracting officer determines in writing that an
award must be made to protect the public interest.
(f) Notification of determination. SBA will notify the contracting
officer, the protester, and the protested concern in writing of its
determination.
(g) Effect of determination. SBA's determination is effective
immediately and is final unless overturned by OHA on appeal. If SBA
sustains the protest, and the contract has not yet been awarded, then
the protested concern is ineligible for an SDVO SBC contract award. If a
contract has already been awarded, and SBA sustains the protest, then
the contracting officer cannot
[[Page 445]]
count the award as an award to an SDVO SBC and the concern cannot submit
another offer as an SDVO SBC on a future SDVO SBC procurement unless it
overcomes the reasons for the protest (e.g., it changes its ownership to
satisfy the definition of an SDVO SBC set forth in Sec. 125.8).
[70 FR 14528, Mar. 23, 2005]
Sec. 125.28 What are the procedures for appealing an SDVO status
protest?
The protested concern, the protester, or the contracting officer may
file an appeal of an SDVO status protest determination with OHA in
accordance with part 134 of this chapter. If the contract has already
been awarded and on appeal, the OHA Judge affirms that the SDVO SBC does
not meet a status or ownership and control requirement set forth in
these regulations, then the procuring agency cannot count the award as
an award to a SDVO SBC. In addition, the protested concern cannot self-
represent its status for another procurement until it has cured the
eligibility issue. If a contract has not yet been awarded and on appeal
the OHA Judge affirms that the protested concern does not meet the
status or ownership and control requirement set forth in this part, then
the protested concern is ineligible for an SDVO SBC contract award.
[70 FR 14528, Mar. 23, 2005]
Subpart E_Penalties and Retention of Records
Source: 69 FR 25270, May 5, 2004, unless otherwise noted.
Sec. 125.29 What penalties may be imposed under this part?
(a) Suspension or debarment. The Agency debarring official may
suspend or debar a person or concern pursuant to the procedures set
forth in part 145 of this chapter. The contracting agency debarring
official may debar or suspend a person or concern under the Federal
Acquisition Regulation, 48 CFR Part 9, subpart 9.4.
(b) Civil penalties. Persons or concerns are subject to severe civil
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.
(c) Criminal penalties. Persons or concerns are subject to severe
criminal penalties for knowingly misrepresenting the SDVO status of a
SBC in connection with procurement programs pursuant to section 16 of
the Small Business Act, 15 U.S.C. 645, as amended; 18 U.S.C. 1001; and
31 U.S.C. 3729-3733. Persons or concerns also 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.