but i’m not a minority and i’m not disadvantaged…how can i...

De-mystifying Small Business Size

Categories and How They Apply

But I’m not a minority and I’m not disadvantaged…how can I be a Small Business?

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2017

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De-mystifying Small Business Self-Certification

How can I be a small business?

• Many Small Businesses miss out on opportunity to participate in Federal and other government contracting

• Misunderstanding of what qualifies as Small or Minority business and that:o Business Size (Federal contracting) determined by

Revenue or Number of Employeeso Formal SBA Certification documents are not required

Except for HUBZone, 8a, and ANCo Many categories of Small Business don’t require

certification through a third party, including SB, SDB, WOSB, VOSB, SDVOSB

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MINORITY, SOCIAL AND ECONOMIC DISADVANTAGE

MINORITY

• Includes Asian-Indian,

Asian-Pacific, Black,

Hispanic, Native

American Indian,

Alaskan or Hawaiian

Native

• business is at least 51%

owned or 51% of the

stock* is owned

(*publicly traded firm)

• management and daily

operations are controlled

by those minority group

members

SOCIALLY

DISADVANTAGED

Can demonstrate

• Personal experiences of

substantial and chronic

social disadvantage as a

result of subjected to

gender bias, racial or

ethnic prejudice or

cultural bias

• Negative impact on

entrance into the

business world or

advancement in the

business world because

of the stated

disadvantage(s)

ECONOMICALLY

DISADVANTAGED

• Also Socially

disadvantaged

• Ability to compete

impaired by diminished

capital and credit

opportunities

• Assets cannot exceed

$4 million

• Personal income cannot

exceed $250,000,

averaged over 3 years

• Adjusted net worth must

be less than $250,000

SOURCES:

U. S. Small Business Administration - https://www.sba.gov/content/minority-owned-businesses;

https://www.sba.gov/content/economic-disadvantage-eligibility; https://www.sba.gov/content/social-disadvantage-eligibility

National Minority Supplier Development Council - http://www.nmsdc.org/mbes/what-is-an-mbe/

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U. S. Small Business Administration

SMALL BUSINESS – FEDERAL CONTRACTING

A Small Business Concern is:• Independently owned and operated,• Organized for profit• Is not dominant in its field• Depending on the industry, size standard eligibility is

based on the average number of employees for the preceding twelve months or on sales volume averaged over a three-year period. (North American Industry Classification System (NAICS)

SBA ties the description of the product or services described by NAICS to either:

• Average number of employees in the preceding 12 month period, or• Average receipts (revenue) in the preceding 3 year period

When a business calculates their size to determine if they are a small business, they must include the annual receipts and the employees of their affiliates. Affiliation is determined by the ability to control. When the ability to control exists, even if it is not exercised, affiliation exists.

• This is why we ask for the “Total Number of Employees” on our prequalification forms and size certification forms.

• If a company is a “manufacturer” of goods, depending on that number, the business may not be able to be considered small based on the NAICS for their product offering and SBA Size designation for that NAICS

EXAMPLE: 332322 Sheet Metal Work Manufacturing – Size Standard = 500 Employees5

How does the SBA determine a business’s size standard?


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U. S. Small Business Administration Table of Size Standards


Manufacturers and Plants – Number of Employees determines size

Services – Revenue determines size

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More boxes mean more value…

The more categories a business can check, the more value you bring to a Prime Contractor with Small Business Subcontracting plan goals.

NAICS Code

Full NAICS Description

Self-Performing Yes or No

Check the box for ALL APPLICABLE Size Categories

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Small Business Types by Socio-Economic Category


SMALL BUSINESS CATEGORY DESCRIPTION

Small (SB)• Must meet SBA Criteria for Small Business• Can Self-Certify

Small Disadvantaged (SDB)

• Must meet SBA Criteria for Small Business• Considered Disadvantaged Socially and Economically• Can Self-Certify, or• Can Be Certified through Organizations other than SBA (State, DOT, Airport, Minority

Council or other organization(s) [DBE, SDBE, EDWOSB*, WDBE, SMDBE, LSDBE and Others])

8(a) Small Disadvantaged (SDB)

• Must meet SBA Criteria for Small Business• Considered Disadvantaged Socially and Economically as Certified by SBA• CANNOT Self-Certify• Must recertify annually, 9 year program, can only participate 1X

Woman-Owned (WOSB)

• Must meet SBA Criteria for Small Business AND is 51% owned/controlled by woman/women

• Can Self-Certify• SBA has separate certification (not mandatory) for WOSB and EDWOSB*

Historically Underutilized Business Zone(HUBZone/HUBZ/ HUB)

• Must meet SBA Criteria for Small Business AND Principal Office in designated HUBZone• 35% or more of employees live in a HUBZone• CANNOT Self-Certify• For Federal contracts certification only through SBA accepted• State Certification acceptable for State, County and Municipal contracts

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Small Business Types by Socio-Economic Category


CATEGORY DESCRIPTION

Veteran-Owned (VOSB)• Must meet SBA Criteria for Small Business• 51% Owned/Controlled by Veteran(s) as defined in 38 USC 101(2)• Can Self-Certify

Service Disabled Veteran-Owned(SDVOSB)

• Must meet SBA Criteria for Small Business• 51% Owned/Controlled by Service Disabled Vet or Qualified Caregiver when severely

disabled• With 0% - 100% service-connected disability as defined in 38 USC 101(16) &

documented on DD 214 or equivalent• Can Self-Certify

Alaskan Native Corporation (ANC)And Tribal Corporations

• Must meet SBA Criteria for Small Business• CANNOT Self-Certify “Tribal Status”: Must provide documentation. Contact the SBA

Office of Native American Affairs for assistance.• Can Self-Certify SDB Status – NOTE: In practice, the SBA has not required that Tribal

members demonstrate that they qualify as “economically disadvantaged,” as these terms are defined only to SBA to manage an 8(a)

Historically Black Colleges & Universities(HBCUs), andMinority Institutions (MIs)

• HBCUs and MIs are normally not organized for profit, so they cannot be considered small businesses in accordance with SBA’s regulations (13 CFR 121.105); HOWEVER,since our contracts are with the Department of Defense (USACE, NAVY, etc.) or if they were with NASA, or the Coast Guard, HBCUs and MIs are counted as small disadvantaged businesses (SDBs)

• CANNOT Self-Certify – Should be documented with the Department of Education as an HBCU or MI

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Why is size standard important to Kirlin Builders?

SIZE MATTERS

Kirlin Builders (KB) demonstrates good faith effort in accordance with FAR 52.219-8 – Utilization of Small Business Concerns, and 52.219-9 – Small Business Subcontracting Plan as follows:

• On a contract-by-contract basis, providing records to support award data to the Government, including the name, address, and business size of each subcontractor

• Written representations by our subcontractors regarding their status as a small business concern

• Receiving evidence of SBA Certification by providing copies of award letters for:• HUBZone certification and renewal – every 3 years• 8a Business Development Program certification and renewal, annually

for 9 years

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Why is size standard important to Kirlin Builders?

SIZE MATTERS

KB provides notice to subcontractors of penalties for misrepresentation of business size as small (all categories) when they are trying to obtain a subcontract (from KB) that is to be included as part or all of a goal contained in our subcontracting plan.

The United States Government can impose a penalty against a firm misrepresenting their business size and/or disadvantaged status. These penalties include but are not limited to:

(1) Punished by imposition of a fine, imprisonment or both;(2) Administrative remedies prescribed by the Program Fraud Civil Remedies Act of 1986

(31 U.S.C. 3801-3812);(3) Suspension and debarment as specified in subpart 9.4 of Title 48, CFR (or any

successor regulation); and(4) Ineligibility for participation in programs conducted under the authority of the Small

Business Act of 1958 (15 U.S.C. 611 et seq.) for a period not to exceed 3 years.

Any Prime Contractor who knowingly allows a sub who has misrepresented its’ size in a bid for work for the Government is also subject to these and other penalties, including monetary penalties.

THANK YOU!You are a critical part of our success!

Here to help:

Lisa C. King

Administrator

Contracts and Small Business

301.315.7441

Internal – [email protected]

Subcontractors – [email protected]

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mailto:[email protected]

but i’m not a minority and i’m not disadvantaged…how can i...

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