Small Business Utilization Plan

However, if a voting trust is entered into for a legitimate purpose other than that described above, and it is valid within the appropriate jurisdiction, it may be considered valid for the purpose of a size determination, provided such consideration is determined to be in the best interest of the small business program. A concern may be found as controlling or having the power to control another concern when one or more of the following circumstances are found to exist, and it is reasonable to conclude that under the circumstances, such concern is directing or influencing, or has the power to direct or influence, the operation of such other concern. Officers, directors, employees, or principal stockholders of one concern serve as a working majority of the board of directors or officers of another concern. One concern shares common office space and/or employees and/or other facilities with another concern, particularly where such concerns are in the same or related industry or field of operation, or where such concerns were formerly affiliated. Former officers, directors, principal stockholders, and/or key employees of one concern organize a new concern in the same or a related industry or field operation, and serve as its officers, directors, principal stockholders, and/or key employees, and one concern is furnishing or will furnish the other concern with subcontracts, financial or technical assistance, and/or facilities, whether for a fee or otherwise.

(i) Definition of a joint venture for size determination purposes.

“Industry” means all concerns primarily engaged in similar lines of activity, as listed and described in the North American Classification System (NAICS) Manual.

“Fair market price” means a price based on reasonable costs under normal competitive conditions and not on lowest possible cost (see ).

(FAC 2005-94) (19 January 2017) (FAC 2005-95) (13 January 2017) (FAC 2005-100) () (FAC 2005-101) () (a) This part implements the acquisition-related sections of the Small Business Act (15 U. As used in this subpart-- “Affiliates.” Business concerns are affiliates of each other if, directly or indirectly, either one controls or has the power to control the other, or another concern controls or has the power to control both.

631, et seq.), applicable sections of the Armed Services Procurement Act (10 U. “Nonmanufacturer rule” means that a contractor under a small business set-aside or 8(a) contract shall be a small business under the applicable size standard and shall provide either its own product or that of another domestic small business manufacturing or processing concern (see 13 CFR 121.406).(B) The aggregate total of the joint venture is not small under the size standard corresponding to the NAICS code assigned to the contract and either— (1) For a revenue-based size standard, the estimated contract value exceeds half the size standard corresponding to the NAICS code assigned to the contract; or (2) For an employee-based size standard, the estimated contract value exceeds million. Concerns submitting offers on a particular acquisition as joint ventures are considered as affiliated and controlling or having the power to control each other with regard to performance of the contract.Moreover, an ostensible subcontractor which is to perform primary or vital requirements of a contract may have a controlling role such to be considered a joint venturer affiliated on the contract with the prime contractor.Such revenues shall be measured as entered on the regular books of account of the concern whether on a cash, accrual, or other basis of accounting acceptable to the U. Treasury Department for the purpose of supporting Federal income tax returns, except when a change in accounting method from cash to accrual or accrual to cash has taken place during such 3-year period, or when the completed contract method has been used.(i) In any case of change in accounting method from cash to accrual or accrual to cash, revenues for such 3-year period shall, prior to the calculation of the annual average, be restated to the accrual method.(1) Annual receipts of a concern which has been in business for 3 or more complete fiscal years means the annual average gross revenue of the concern taken for the last 3 fiscal years.For the purpose of this definition, gross revenue of the concern includes revenues from sales of products and services, interest, rents, fees, commissions and/or whatever other sources derived, but less returns and allowances, sales of fixed assets, interaffiliate transactions between a concern and its domestic and foreign affiliates, and taxes collected for remittance (and if due, remitted) to a third party. For the purpose of making affiliation findings (see ) any business entity, whether organized for profit or not, and any foreign business entity, i.e., any entity located outside the United States and its outlying areas. “Concern” includes but is not limited to an individual, partnership, corporation, joint venture, association, or cooperative.(iii) If a concern’s voting stock is distributed other than as described above, its management (officers and directors) is deemed to be in control of such concern. Stock options and convertible debentures exercisable at the time or within a relatively short time after a size determination and agreements to merge in the future, are considered as having a present effect on the power to control the concern.Therefore, in making a size determination, such options, debentures, and agreements are treated as though the rights held thereunder had been exercised. If the purpose of a voting trust, or similar agreement, is to separate voting power from beneficial ownership of voting stock for the purpose of shifting control of or the power to control a concern in order that such concern or another concern may qualify as a small business within the size regulations, such voting trust shall not be considered valid for this purpose regardless of whether it is or is not valid within the appropriate jurisdiction.


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