19.001
Definitions
Understanding and applying these definitions is critical for compliance with all small business program requirements under FAR Part 19.
Overview
FAR 19.001 provides key definitions used throughout Part 19, which governs Small Business Programs in federal contracting. Understanding these definitions is essential for both contracting officers and contractors to ensure proper application of small business regulations, eligibility, and compliance. The section clarifies what constitutes a "concern" (eligible business entity), "fair market price," "industry," and "similarly situated entity," each of which plays a critical role in determining small business status, subcontracting requirements, and competitive practices.
Key Rules
- Concern
- Defines eligible business entities for small business programs, emphasizing U.S. location and economic contribution.
- Fair Market Price
- Establishes that prices should reflect reasonable costs under normal competition, not just the lowest possible cost.
- Industry
- Relies on NAICS codes to group businesses for size and eligibility determinations.
- Similarly Situated Entity
- Specifies requirements for first-tier subcontractors to qualify as "similarly situated," impacting compliance with subcontracting limitations.
Responsibilities
- Contracting Officers: Must apply these definitions when determining eligibility, evaluating offers, and monitoring compliance with small business requirements.
- Contractors: Must understand and accurately represent their status and that of their subcontractors according to these definitions.
- Agencies: Ensure consistent application of definitions in all small business program actions and reporting.
Practical Implications
- These definitions underpin eligibility for small business set-asides, subcontracting plans, and compliance with limitations on subcontracting.
- Misinterpretation can lead to ineligibility, contract disputes, or compliance violations.
- Contractors should regularly review these definitions, especially when forming teams or selecting subcontractors.