19.703 Eligibility requirements for participating in the program
Source: FAR 19.703 on acquisition.gov
Prime contractors must ensure subcontractors accurately represent their size and socioeconomic status, follow specific procedures for ANC and Indian tribe subcontracts, and be prepared for potential status challenges or protests.
Overview
FAR 19.703 outlines the eligibility requirements for subcontractors participating in the Small Business Subcontracting Program. It specifies how businesses must represent their size and socioeconomic status, the process for prime contractors to accept these representations, and the procedures for challenging such claims. The section also provides special rules for subcontracts awarded to Alaska Native Corporations (ANCs) and Indian tribes, including how these subcontracts count toward subcontracting goals and the process for designating which contractor receives credit. Additionally, it addresses the process for protesting a subcontractor’s size or socioeconomic status.
Key Rules
- Self-Representation Requirements
- Subcontractors must self-certify as a small business or specific socioeconomic category and meet the relevant definitions and size standards for the NAICS code assigned by the prime contractor.
- Acceptance of Representations
- Prime contractors may accept written or SAM-based representations unless there is reason to question them, but cannot require SAM registration solely for this purpose.
- Good Faith Reliance
- Prime contractors acting in good faith are not liable for subcontractor misrepresentations regarding size or status.
- Protest Procedures
- Any party may challenge a subcontractor’s size or status via protest, following specific CFR procedures.
- Special Rules for ANCs and Indian Tribes
- Subcontracts to ANCs or Indian tribes count toward goals regardless of size, with specific designation and notification requirements.
Responsibilities
- Contracting Officers: Must process protests, ensure proper crediting for ANC/Indian tribe subcontracts, and monitor compliance.
- Contractors (Primes): Must verify and accept subcontractor representations, follow designation and notification rules for ANC/Indian tribe subcontracts, and respond to protests.
- Subcontractors: Must accurately represent their size and status and provide timely documentation if required.
Practical Implications
- Ensures only eligible businesses are counted toward subcontracting goals, protecting program integrity.
- Prime contractors must have processes to verify and document subcontractor status, and be aware of protest procedures.
- Special attention is needed for ANC and Indian tribe subcontracts to ensure proper credit and compliance with notification timelines.
(a) Except as provided in paragraph (c) of this section, to be eligible as a subcontractor under the program, a concern must represent itself as a small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, or women-owned small business concern.
(1) To represent itself as a small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, or women-owned small business concern, a concern must meet the appropriate definition (see 2.101 and 19.001). For subcontracting purposes, a concern is small if it does not exceed the size standard for the NAICS code that the prime contractor determines best describes the product or service being acquired by the subcontract.
(2)
(i) Unless the prime contractor has reason to question the representation, it may accept a subcontractor's written representations of its size and socioeconomic status as a small business, small disadvantaged business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, or a women-owned small business, if the subcontractor represents that the size and socioeconomic status representation with its offer are current, accurate, and complete as of the date of the offer for the subcontracts; or
(ii) Unless the prime contractor has reason to question the representation, it may accept a subcontractor's representation of its size and socioeconomic status as a small business, small disadvantaged business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, or a women-owned small business in the System for Award Management (SAM) if–
(A) The subcontractor is registered in SAM; and
(B) The subcontractor represents that the size and socioeconomic status representations made in SAM are current, accurate and complete as of the date of the offer for the subcontract.
(iii) The prime contractor may not require the use of SAM for the purposes of representing size or socioeconomic status in connection with a subcontract.
(iv) In accordance with 13 CFR 121.411, 126.900, 127.700, and 128.600, a prime contractor acting in good faith is not liable for misrepresentations made by its subcontractors regarding the subcontractor's size or socioeconomic status.
(b) The contractor, the contracting officer, or any other interested party can challenge a subcontractor's size status representation by filing a protest, in accordance with 13 CFR 121.1001 through 121.1008.
(c)
(1) In accordance with http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title43-section1626&num=0&edition=prelim" target="_blank">43 U.S.C. 1626, the following procedures apply:
(i) Subcontracts awarded to an ANC or Indian tribe shall be counted towards the subcontracting goals for small business and small disadvantaged business (SDB) concerns, regardless of the size or Small Business Administration certification status of the ANC or Indian tribe.
(ii) Where one or more subcontractors are in the subcontract tier between the prime contractor and the ANC or Indian tribe, the ANC or Indian tribe shall designate the appropriate contractor(s) to count the subcontract towards its small business and small disadvantaged business subcontracting goals.
(A) In most cases, the appropriate contractor is the contractor that awarded the subcontract to the ANC or Indian tribe.
(B) If the ANC or Indian tribe designates more than one contractor to count the subcontract toward its goals, the ANC or Indian tribe shall designate only a portion of the total subcontract award to each contractor. The sum of the amounts designated to various contractors cannot exceed the total value of the subcontract.
(C) The ANC or Indian tribe shall give a copy of the written designation to the contracting officer, the prime contractor, and the subcontractors in between the prime contractor and the ANC or Indian tribe within 30 days of the date of the subcontract award.
(D) If the contracting officer does not receive a copy of the ANC's or the Indian tribe’s written designation within 30 days of the subcontract award, the contractor that awarded the subcontract to the ANC or Indian tribe will be considered the designated contractor.
(2) A contractor acting in good faith may rely on the written representation of an ANC or an Indian tribe as to the status of the ANC or Indian tribe unless an interested party challenges its status or the contracting officer has independent reason to question its status. In the event of a challenge of a representation of an ANC or Indian tribe, the interested parties shall follow the procedures at 26.103(b) through (e).
(d) Protests challenging the socioeconomic status of a HUBZone small business concern must be filed in accordance with https://www.ecfr.gov/current/title-13/section-126.801" target="_blank">13 CFR 126.801.