Facts About DLA Small Business
There is a close
relationship between the economy and small businesses. Small businesses make up
more than 99.7% of all employers, account for 39% of the country's gross
national product, create two out of every three new jobs, and produce two and
one half times more innovations per employee than large firms.
What is a Small Business
To be a small
business, vendors must adhere to industry size standards
established by the
U.S. Small Business Administration (SBA). When small firms register as a
government contractor in the System for Award Management (SAM), they also
self-certify their business as small.
The SBA, for most industries, defines a "small business" either in terms of the average number of employees over the past 12 months, or average annual receipts over the past three years. In addition, SBA defines a U.S. small business as a concern that:
- Has a place
of business in the US
primarily within the U.S. or makes a significant contribution to the U.S.
economy through payment of taxes or use of American products, materials or
independently owned and operated and is not dominant in its field on a national
The business may be
a sole proprietorship, partnership, corporation, or any other legal form. In
determining what constitutes a small business, the definition will vary to
reflect industry differences - especially size standards.
SBA's table of size standards
corresponds to the North American Industry Classification System (NAICS). All
federal agencies must use SBA size standards for small business contracting.
Vendors should select NAICS codes that best match their business activities and then determine if
their business meets the size standards for the
selected NAICS codes. Vendors can use the SBA's Size Standards Tool to
determine if they qualify as a small business.
For federal government
procurements, vendors must meet the small business size standard that
corresponds to the NAICS code selected by the contracting officer for that
contract. The selected contract NAICS code is not required to match up to a
vendor's principal activity NAICS code. The vendor qualifies as a small business
as long as it meets the size standard for the
Small Business Size Regulations are in Title 13 of the Code of Federal Regulations, part 121(13 CFR §121).
The SBA Office of Government Contracting
makes formal "size
determinations" that decide if a business qualifies as an eligible small
business for SBA programs.
What is a Small Business Set-Aside?
"set-aside for small business" reserves an acquisition exclusively for small
business participation. For a procurement to be totally set-aside, a contracting
officer must have a reasonable expectation that offers will be received by at
least two qualified small businesses and awards will be made at reasonable or
fair market prices.
detailed, regulatory information on small business set-asides, go to the Federal Acquisition Regulation (FAR). For small business set-asides not
in construction or service contracts, any small business proposing to provide a
product it did not manufacture, must furnish the product of a small business
manufacturer unless the SBA has granted either a waiver or exception to the