Small Business Size
For the purpose of Government contracting a small business concern is one, including its affiliates, which is independently owned and operated, is not dominant in the field of operations in which it is competing for Government contracts, and can further qualify under the criteria concerning number of employees, average annual receipts, or the other criteria as prescribed by the Small Business Administration (SBA).
- Affiliates – Affiliation with another business concern is based on the power to control, whether exercised or not. Such factors as common ownership, common management and identity of interest (often found in members of the same family), among others, are indicators of affiliation. Power to control exists when a party or parties have 50 percent or more ownership. It may also exist with considerably less than 50 percent ownership by contractual arrangement or when one or more parties own a large share compared to other parties. Affiliated business concerns need not be in the same line of business. The calculation of a concern’s size includes the employees or receipts of all affiliates.
Small business size standards define the maximum size that a concern, together with all of its affiliates, may be if it is to be eligible for Federal contracts specifically designated for small business.
Determine Your Business Size
The Small Business Administration publishes a table of size standards established to define whether a business is small and thus eligible for government programs and preferences reserved for “small business” concerns. These standards are established for different types of economic activities or industries classified under the North American Industrial Classification System (NAICS). The SBA determines the business size based upon the business’ number of employees, average annual receipts, or other criteria as prescribed by the SBA.
First Step – You need to determine your primary NAICS along with other applicable NAICS depending on your company’s services or products. To determine your NAICS go to: http://www.census.gov/epcd/www/naics.html
Second Step – Determine whether your company meets the size standard established for a particular industry. The small business size standards define the maximum size that a firm, including all of its affiliates, may be. To determine if you meet SBA size standard for a small business go to: https://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf
For more information on SBA size standards go to:
Is my Business Eligible for Other Small Business Determinations?
Congress established programs to assist small businesses compete in the Federal Government marketplace by establishing small business contracting goals for prime and subcontract awards. These goals are based upon the total value of all prime contract awards for each fiscal year. The current Federal contracting goals are:
Small Business Type Goal
All Small Business 23%
Small, Disadvantaged Business 5%
Small, Woman-Owned Business 5%
Small, Service-Disabled Veteran-Owned 3%
Small, HUBZone Qualified 3%
The U.S. Small Business Administration (SBA) is responsible for the management and oversight of the small business procurement process across the Federal Government. SBA negotiates with Federal departments concerning their prime contracting goals and achievement with small businesses to ensure that small businesses have the maximum practicable opportunity to provide goods and services to the Federal Government. You should examine if you meet the eligibility for additional small business determinations.
Small Disadvantaged Business – A small business concern that is at least 51 percent owned by one or more individuals who are both socially and economically disadvantaged. This can include a publicly owned business that has at least 51 percent of its stock unconditionally owned by one or more socially and economically disadvantaged individuals and whose management and daily business is controlled by one or more such individuals. SBA certifies SDBs to make them eligible for special bidding benefits. Evaluation credits available to prime contractors boost subcontracting opportunities for SDBs. 8(a) concerns automatically qualify for SDB certification. For more information, go to:
Woman-Owned Business – a small business concern—(a) which is at least 51 percent owned by one or more women; or, in the case of any publicly owned business, at least 51 percent of the stock of which is owned by one or more women; and (b) whose management and daily business operations are controlled by one or more women.” Currently, this is a self-certifying process for federal contracting. However, if you are submitting a proposal for a federal subcontract the prime contractor may require certification that your business is in fact woman-owned. For a list of certifying agencies contact the PTAC at the number below.
On October 7, 2010, the U.S. Small Business Administration published a final rule effective February 4, 2011, aimed at expanding federal contracting opportunities for women-owned small businesses (WOSBs). The Women-Owned Small Business (WOSB) Federal Contract program authorizes contracting officers to set aside certain federal contracts for eligible:
- Women-owned small businesses (WOSBs) or
- Economically disadvantaged women-owned small businesses (EDWOSBs)
To participate in the Program, a WOSB or EDWOSB must meet the eligibility requirements and either 1) self-certify their business OR (2) be certified by an SBA-approved Third-Party Certifier
El Paso Hispanic Chamber of Commerce
National Women Business Owners Corporation
US Women’s Chamber of Commerce
Women’s Business Enterprise National Council (WBENC)
All WOSBs and EDWOSBs must register their status in the System for Award Management (SAM), as well as upload required documents to the WOSB Program Repository. SAM has been updated to allow WOSBs and EDWOSBs to register and certify. The WOSB Program Repository has been available since February 4th.
First, check to make sure that your NAICS code is included in the those eligible to participate in this set-aside program. The NAICS established were researched and determined that these industries were underrepresented or substantially underrepresented by WOSBs. The SBA has designated 330 NAICS codes as eligible for Federal contracting under the WOSB Program. To see a list of NAICS that are included in the program go to:
If your NAICS code is on the list then you should look into whether your meet the eligibility requirements and if so complete the self certification.
A WOSB is:
(1) A small business; and
(2) Not less than 51% unconditionally and directly owned and controlled by one or more women who are United States citizens.
- The ownership must be direct
b. The ownership cannot be subject to conditions
c. A woman must hold the highest officer position in the small business concern, but does not have to be an owner, and must manage it on a full-time basis and devote full-time to the business concern.
d. The woman must manage the day-to-day operations of the business.
e. The woman must make the long-term decisions for the business.
f. The woman must provide documents demonstrating she meets these requirements.
An EDWOSB is:
(1) A small business; and
(2) Not less than 51% unconditionally and directly owned and controlled by one or more women who are United States citizens and are economically disadvantaged.
- The ownership must be direct and not subject to conditions.
b. The economically disadvantaged woman must manage the day-to-day operations of the business.
c. A economically disadvantaged woman must hold the highest officer position in the small business concern, but does not have to be an owner, and must manage it on a full-time basis and devote full-time to the business concern.
d. The woman must hold the highest officer position in the small business concern.
e. The economically disadvantaged woman must make the long-term decisions for the business.
f. The economically disadvantaged woman must meet certain thresholds for personal net worth, adjusted gross income, and fair market value of all assets to be considered economically disadvantaged.
g. The economically disadvantaged woman must be able to provide documents demonstrating she meets these requirements.
What is economic disadvantage?
A woman is presumed economically disadvantaged if she has a personal net worth of less than $750,000, her adjusted gross yearly income averaged over the three years preceding the certification does not exceed $350,000, and the fair market value of all her assets (including her primary residence and the value of the business concern) does not exceed $6 million.
For specific steps on how to meet the self certification requirements, please contact the PTAC at the number below.
Service-Disabled, Veteran-Owned Business – A small business concern that is at least 51 percent unconditionally and directly owned by one or more service-disabled veterans. To participate in the Federal marketplace, the Veteran must have a service-connected disability that has been determined by the Department of Veterans Affairs or his or her respective military branch of service. For more information, please go to the VA Center of Veteran’s Enterprise.
HUBZone Business – The HUBZone Empowerment Contracting Program stimulates economic development and creates jobs in urban and rural communities by providing contracting preferences to small businesses that are located in a HUBZone and that hire employees who live in a HUBZone. SBA is responsible for certifying concerns for eligibility to receive HUBZone contracts and maintains a listing of qualified HUBZone small businesses federal agencies can use to locate prospective vendors. Qualifications include:
- it must be a small business by SBA standards
- it must be located in a “historically underutilized business zone(HUBZone),
- it must be wholly owned and controlled by at least 51% by one or more persons, each of whom is a United States Citizen,
- at least 35% of its employees must reside in a HUBZone.
To determine if your company is located in a HUBZone go to:
For additional information on small business size standards and programs, resources can be found at:
Code of Federal Regulations 13 CFR part 121
SBA’s Guide to Size Standards
If you need any assistance in determining your business size, please contact our office.