DEFINITIONS OF SMALL BUSINESS CATEGORIES
Looking Into Government Contracts Awarded to Small Businesses
Source: GAO review of laws and regulations.
Small business concern
A small business concern is one that is independently owned and operated and is not dominant in its field of operation. 15 U.S.C. 632(a)(1). A small business concern is further defined as (1) a business entity that is organized for profit; (2) with a place of business located in the U.S.; and (3) which operates primarily within the U.S. or which makes a significant contribution to the U. S. economy through tax payments or use of American products, materials, or labor; and (4) meets the size standard for its primary business activity or industry as designated by the applicable North American Industry Classification System (NAICS) codes. 13 C.F.R. 121.101(a); 121.105(a); FAR 19.001.
Small disadvantaged business concern
A small disadvantaged business is a small business concern that is 51% or more owned by one or more socially and economically disadvantaged persons who manage and operate the concern. 15 U.S.C. 637(d)(3)(C). Black Americans, Hispanic Americans, Asian Pacific Americans, Subcontinent Asian Americans, and Native Americans are presumed by regulation to be socially disadvantaged. 13 C.F.R. 124.103(b). Other individuals can qualify if they show by a “preponderance of the evidence” that they are socially disadvantaged. 13 C.F.R. 124.103(c). A small disadvantaged must also (1) meet SBA’s established size standard for its main industry; and (2) have principals who have a net worth, excluding the value of the business and personal home, of less than $750,000. 13 C.F.R. 124.1002(b) (c).
Woman-owned small business concern
A woman-owned business is a small business concern that is 51% owned by one or more women who manage and operate the concern. 15 U.S.C. 637(d)(3)(D); FAR 2.101.
Veteran-owned small business concern
A veteran-owned business is a small business concern that is 51% owned by one or more veterans who manage and operate the concern. 15 U.S.C. 637(d)(3)(E); FAR 2.101.
Service-disabled veteran-owned small business concern
A service-disabled-veteran-owned business is a small business concern that is 51% owned by one or more service-disabled veterans who manage and operate the concern. 15 U.S.C. 632(q)(2); FAR 2.101.
HUBZone small business concern
An HUB-Zone firm is a small business concern that (1) meets SBA’s size standards for its primary industry classification; (2) is owned and controlled by one or more U.S. citizens; (2) has a principal office located in a HUBZone (a historically underutilized business zone, which is in an area located within one or more qualified census tracts, qualified non-metropolitan counties, or lands within the external boundaries of an Indian reservation); and (3) has at least 35 percent of its employees residing in a HUBZone. 15 U.S.C. 632(p)(3) (5); 13 C.F.R. 126.103; 126.203.
Historically black college or University & Minority Institutions
A historically black college or university means an institution determined by the Secretary of Education to meet the requirements of 34 C.F.R. 608.2. FAR 2.101.
A minority institution is an institution of higher education whose enrollment of a single minority or a combination of minorities (American Indian, Alaskan Native, Black, and Hispanic—Mexican, Puerto Rican, Cuban, and Central or South American) exceeds 50 percent of the total enrollment. FAR 2.101; 20 U.S.C. 1067k(2) (3).
Source: GAO review of laws and regulations.
Page 23 GAO-04-381 Contract Management
