Section 660.125  Small Business Set-Asides

a)         The Department may determine categories of construction, supply, and service procurements that will be set aside for small businesses located in Illinois.  The set-aside designation may be made for current and future procurements for a fair proportion of a specific construction, supply, or service, or for a class of like construction, supplies or services.  A fair proportion of construction contracts means no less than 25% nor more than 40% of the annual total contracts for construction.  A set-aside designation may last indefinitely or for a stated period of time, as determined by the Department.  (See Section 45-45(a) and (c) of the Code.)

b)         A business that meets the definition of a small business on the day of bid or proposal opening will be considered a small business for the duration of the contract.  (See Section 45-45(e)(1) of the Code.)

c)         If the Department wishes to make a procurement covered by a small business set-aside designation, the solicitation will note that responses are limited to those from responsible small businesses.  Bids or proposals received from businesses other than small businesses will be rejected as nonresponsive.  (See Section 45-45(a) of the Code.)

d)         If the Department determines that acceptance of the best bid or proposal will result in the payment of an unreasonable price, the Department will reject all bids or proposals and withdraw the designation of small business set-aside for the procurement in question.  When a small business set-aside is withdrawn, notification will be published in the Transportation Bulletin with an explanation.  After withdrawal of the small business set-aside, the procurement will be conducted in accordance with the limitations of the Code and this Part.  (See Section 45-45(d) of the Code.)

e)         Unless the Department provides a definition for a particular procurement that reflects industrial characteristics, a small business is one:

1)         Independently owned and operated.

2)         Not dominant in its field of operations, which means the business does not exercise a controlling or major influence in a kind of business activity in which a number of business concerns are primarily engaged.  In determining dominance, consideration will be given to all appropriate factors, including volume of business, number of employees, financial resources, competitive status or position, ownership or control of materials, processes, patents, license agreements, facilities, sales territory, and nature of business activity.

3)         With annual sales for most recently ended fiscal year no greater than:

A)        $10,000,000 for wholesale business;

B)        $10,000,000 for construction business; or

C)        $6,000,000 for retail business.

4)         With no more than 250 employees if a manufacturing business.

A)        A manufacturing business shall calculate how many people it employs by determining its average full-time equivalent employment, based on the number of persons employed on a full-time, part-time, temporary or other basis, for its most recently ended fiscal year.

B)        If a manufacturing business has been in existence for less than a full fiscal year, its average employment should be calculated for the period through one month prior to the bid or proposal due date.

5)         If the business is any combination of retailer, wholesaler or construction business, the annual sales for each component may not exceed the amounts shown in subsection (e)(3) of this Section.  For example, a business that is both a retailer and wholesaler may not have total sales exceeding $16,000,000; the retail component may not exceed $6,000,000; and the wholesale component may not exceed $10,000,000.  If the business is also a manufacturer, in addition to meeting the annual sales requirement, the number of manufacturing employees may not exceed the number shown in subsection (e)(4) of this Section.

6)         When computing the size of a business, the number of employees and annual sales and receipts, as applicable, of the business and all affiliates will be considered.  Concerns are affiliates when either one directly or indirectly controls or has the power to control the other, or, when a third party or parties controls or has the power to control both.  In determining whether concerns are independently owned and operated and whether affiliation exists, consideration will be given to all appropriate factors, including the use of common facilities, common ownership and management and contractual arrangements.  However, a franchise relationship will not affect small business status if the franchise has the right to profit commensurate with ownership and bears the risk of loss or failure.  (See Section 45-45(b) of the Code.)

f)          Contractors desiring to submit bids or proposals or to otherwise contract for items set aside for small businesses shall submit information verifying that the contractor qualifies as a small business under the Code.  The Department may establish procedures for verifying such information.

(Source:  Added at 29 Ill. Reg. 18147, effective October 19, 2005)