FAR 19.7 The Small Business Subcontracting Program

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2 FAR 19.7 The Small Business Subcontracting Program Statutory - Any contractor receiving a contract over the simplified threshold shall agree to give small business the maximum practicable opportunity to participate in contract performance consistent with efficient performance.

3 Section 8(d) of Small Business Act (15 U.S.C. 637(d)) imposes the following requirements -Small Business Subcontracting Plans --over $550,000 (services and supplies) --over $1,000,000 (construction) -Subcontracting plans not required --small business --personal services --contracts or mods outside States or Territories --mods to contracts within scope that do not contain the clause , Utilization of Small Business Concerns or prior clauses

4 FAR Subcontracting Plan Requirements Evaluation Elements 1) Separate Percentage Goals for Small Business, HUBZone, Small Disadvantaged, Women-owned, Veteran Owned and Service Disabled Veteran Owned small businesses. a) Note that a separate goal for each socio economic category is required for the basic contract and each option period on multi year contracts. b) Compare the goals in the current plan with previous plans. c) Are the goals reasonable relative to the marketplace?

5 FAR Subcontracting Plan Requirements Evaluation Elements # of Firms # of Firms # of Firms # of Firms in NAICS in NAICS in NAICS in NAICS SDV W/O SDB/8a HUB SB , Data extracted from CCR within an eight state area surrounding the geographical contract performance area. No SDB, SDV or HUB Zone firms listed as proposed subs in the plan. Proposed SDB goal was 8.8%, SDV was 1.5% & HUB was 3.1%.

6 FAR Subcontracting Plan Requirements Evaluation Elements (2) Total dollars planned to be subcontracted and total dollars planned to be subcontracted to Small Business, HUBZone, Small Disadvantaged, Women-owned, Veteran Owned and Service Disabled Veteran Owned small businesses. (3) Description of principal types of supplies and services to be subcontracted. (4) Description of method used to develop the subcontracting goals. a) Who is involved in the company? b) When were the goals established? c) At what point in the proposal process was the SBLO involved? (We can provide assistance to SBLO s.)

7 SUBCONTRACTING PLAN (5) Description of method used to identify potential sources. a) Which databases are used? CCR, VETBIZ, MSDC lists. b) Results from outreach efforts. (6) Whether or not indirect costs were used in establishing subcontracting goals. a) If goals are low or not being met, look at indirect accounts during either the plan or program review. Computer repair, lawn care, snow removal, etc. A large percentage of G&A indirects lend themselves to small business. Goes to good faith.

8 SUBCONTRACTING PLAN (7) Name of individual employed who will administer the subcontracting program. a) Is the SBLO appointed in writing? b) When was the SBLO appointed? c) Written job description of SBLO. d) Reporting structure. e) Call the company and ask who you can talk to about small business.

9 SUBCONTRACTING PLAN 8) Description of efforts made to assure small business, HUBZ, SDB, WO, VET, SDV small businesses had equal opportunity. a) Call some of the unsuccessful bidders. b) Call some of the successful bidders. c) Review solicitations for subcontracting work. d) Talk to the PTAC s and SBDC s. (9) Assurances that clause Utilization of Small Business Concerns will be included in subcontracts over threshold to large business subcontractors.

10 SUBCONTRACTING PLAN (10) Assurances that the offeror will (i) cooperate in studies and surveys, (ii) submit periodic reports, (iii) submit SF 294, and SF 295, and (iv) ensure subcontractors submit their SF 294 and 295s. (11) Description of types of records that will be maintained, e.g. (i) Source lists (e.g., CCR, SUB-Net, guides and other data. (ii) Organization contacts in attempt to locate resources. (iii) Records on each subcontract solicitation. (iv) Records of outreach efforts. (v) Records of internal guidance. (vi) Contract-by-contract records to support award data.

11 SUBCONTRACTING PLAN Subcontracting Plan Checklist (AFARS Appendix DD) a) Use it as a minimum guide. Dig deeper. Past Performance a) Has the contractor met the goals of previous subcontracting plans? b) Did the contractor subcontract the total dollar amount they said they were going to subcontract. c) How did that affect their goal achievement? d) Is the percentage of the total contract dollars to be subcontracted increasing, decreasing or the same? e) Check Subcontracting Program Review ratings. f) Check with other agencies/districts, etc. DCMA?

12 SUBCONTRACTING PLAN SHALL BE A MATERIAL BREACH OF THE CONTRACT. ULTIMATELY, IT S THE CONTRACTING OFFICER S CALL

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