What Is Affiliation in Small Business Size Rules?
Affiliation means SBA adds another company's size to yours because one of you controls or can control the other, or a third party controls both.
Affiliation in plain English
When SBA decides whether you're small, it counts the receipts or employees of your affiliates along with your own. Control doesn't have to be used. Having the power to control is enough.
SBA looks at who owns and manages each company, close family or economic ties, and sometimes how much one company relies on another, such as a subcontractor that does the main work of a contract.
There are exceptions, such as for an SBA-approved mentor and protégé and for joint ventures that meet SBA's rules. SBIR and STTR count affiliates too, in their 500-employee limit.
Related terms
- Small business size standard: A size standard is SBA's cutoff for counting as a small business in an industry. SBA sets one per NAICS code, in average annual receipts or employees.
- Mentor-protégé program: SBA's Mentor-Protégé Program pairs a small business with an experienced mentor firm. The two can bid together as a joint venture that counts as small.
- Limitations on subcontracting: The limitations on subcontracting rule caps how much of a set-aside contract a small business can pay other firms to perform. On services, the cap is 50%.
- SBIR (Small Business Innovation Research): SBIR (Small Business Innovation Research) is a federal program that pays small businesses to do research and development. The awards aren't loans.
Put it to work
- Who can get government contracts, and how affiliates are counted
- Size standard checker
- 13 CFR 121.103, How does SBA determine affiliation?
Looking for another term? Browse the full glossary or the government contracting glossary guide.