Business Definitions

“Size” Business Definitions

Small business concern – A small business concern for the purpose of Government procurement is a concern, including its affiliates, which is independently owned and operated, is not dominant in the field of operation in which it is competing for Government contracts, and can further qualify under the criteria concerning number of employees, average annual receipts, or other criteria, as prescribed by the Small Business Administration. (See Code of Federal Regulations, Title 13, Part 121, as amended, which contains detailed industry definitions and related procedures.)

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. In determining whether affiliation exists, consideration is given to all appropriate factors including common ownership, common management, and contractual relationships; provided, that restraints imposed by a franchise agreement are not considered in determining whether the franchiser controls or has the power to control the franchisee, if the franchisee has the right to profit from its effort, commensurate with ownership, and bears the risk of loss or failure. Any business entity may be found to be an affiliate, whether or not it is organized for profit or located inside the United States.

Number of employees – In connection with the determination of small business status, "number of employees" means the average employment of any concern, including the employees of its domestic and foreign affiliates, based on the number of persons employed on a full-time, part-time, temporary or other basis during each of the pay periods of the preceding 24 months. If a concern has not been in existence for 24 months, "number of employees" means the average employment of such concern and its affiliates during the period that such concern has been in existence based on the number of persons employed during each of the pay periods of the period that such concern has been in business.

Annual receipts – 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. 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.S. 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.

“Type of Ownerships” Definitions

Small disadvantaged business concern is a small business that received certification as a small disadvantaged business concern, consistent with 13 CFR 124.1002, Subpart B, as part of its offer. Small disadvantaged business concern certification factors include: No material change in disadvantaged ownership and control has occurred since its certification. The concern is owned by one or more individuals, who received disadvantaged certification, with a net worth that must be less than $850,000 after taking into account the applicable exclusions set forth in 13 CFR 124.104(c)(2). On the date of its representation, it is identified as a certified small disadvantaged business in the database maintained by the Small Business Administration (PRO-Net).

Women-owned small business concern is a small business in which one or more women own at least 51% of the concern. In the case of any publicly owned business, at least 51% of the stock is owned by one or more women, and its management and daily business operations are controlled by one or more women.

HUBZone small business concern is a small business that must maintain a principal office located in a historically underutilized business zone, or HUBZone, and “attempt to maintain” at least 35% of its employees residing within that specific HUBZone. The list of Qualified HUBZone Small Business Concerns is maintained by the Small Business Administration.