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   <concept id="DFARS_252.270-7002" class="- topic/topic concept/concept ">
      <title class="- topic/title ">
         <ph props="autonumber" class="- topic/ph ">252.270-7002</ph>  Pilot Program to Incentivize Contracting with Employee-Owned Businesses.</title>
      <conbody outputclass="clause" class="- topic/body  concept/conbody ">
         <p class="- topic/p ">As prescribed in <xref href="270.105.dita#DFARS_270.105"
                  outputclass="fm:ParaNumOnly"
                  class="- topic/xref ">270.105</xref>(c), use the following clause:</p>
         <p outputclass="Ctr_SmCaps" class="- topic/p ">Pilot Program To Incentivize Contracting With Employee-Owned Businesses (Nov 2024)</p>
         <p outputclass="List1" class="- topic/p ">(a) <i class="+ topic/ph hi-d/i ">Definition.</i> As used in this clause—</p>
         <p outputclass="List1" class="- topic/p ">
            <i class="+ topic/ph hi-d/i ">Qualified business</i> means an S corporation as defined in <xref href="https://www.govinfo.gov/link/uscode/26/1361"
                  format="html"
                  scope="external"
                  class="- topic/xref ">26 U.S.C. 1361(a)(1)</xref> for which 100 percent of the outstanding stock is held through an employee stock ownership plan as defined in <xref href="https://www.govinfo.gov/link/uscode/26/4975"
                  format="html"
                  scope="external"
                  class="- topic/xref ">26 U.S.C. 4975(e)(7)</xref>.</p>
         <p outputclass="List1" class="- topic/p ">(b) <i class="+ topic/ph hi-d/i ">Limitations on subcontracting.</i> In performance of the contract, the Contractor shall not expend more than 50 percent of the amount paid under the contract on subcontracts, unless—</p>
         <p outputclass="List2" class="- topic/p ">(1) The subcontract is awarded to a qualified business;</p>
         <p outputclass="List2" class="- topic/p ">(2) The contract is for products and the subcontract is for materials not available from another qualified business; or</p>
         <p outputclass="List2" class="- topic/p ">(3) A waiver is granted.</p>
         <p outputclass="List1" class="- topic/p ">(c) <i class="+ topic/ph hi-d/i ">Reporting requirement.</i> Not later than 30 days after the end of the contract period of performance, the Contractor shall submit to the Contracting Officer the following information in writing:</p>
         <p outputclass="List2" class="- topic/p ">(1) The number of years the Contractor has been wholly-owned by its employee stock ownership plan. </p>
         <p outputclass="List2" class="- topic/p ">(2) Challenges, if any, the Contractor experienced in attracting and retaining a talented workforce in a competitive market due to the Contractor's corporate ownership structure. </p>
         <p outputclass="List2" class="- topic/p ">(3) Challenges, if any, the Contractor experienced that hinder its ability to contract with DoD to scale its technologies and capabilities due to the Contractor's corporate ownership structure. </p>
         <p outputclass="List2" class="- topic/p ">(4) Challenges, if any, the Contractor experienced, due to its corporate ownership structure, in obtaining capital necessary to bridge funding gaps, for example, between prototype demonstration and full-scale development.</p>
         <p outputclass="Endofclause" class="- topic/p ">(End of clause)</p>
      </conbody>
   </concept>
</dita>
