8. Tips on Preparing a Subcontracting Plan 2026 04 15.pdf

Tips on Preparing a Subcontracting Plan

Subcontracting plans are required from “other than small businesses” for acquisitions that meet the threshold established in paragraph (a)(1)(i) of FAR 19.702, Statutory requirements.1

Step 1. Read the key Federal Acquisition Regulation (FAR) clauses for subcontracting to know what is required and the consequences:

a. 52.219-8 Utilization of Small Business Concerns. Note in the clause that accepting the contract means you will implement the U.S. policy to maximize opportunities for SBs, SDBs, WOSBs, VOSBs, SDVOSBs and HUBZone SBs2 to the “fullest extent.”

b. FAR 52.219-9, Small Business Subcontracting Plan. Identifies the required elements for a small business subcontracting plan submitted before award and addresses mandatory requirements contractors must follow after award, such as “reports.”

i. Subcontracting plans are more than just goals and dollars. It tells the story on how you will ensure SBs, SDBs, WOSBs, VOSBs, SDVOSBs and HUBZone SBs will participate.

ii. Understand what is a “good faith effort.” “Good faith effort” is defined in paragraph (d)(3) of the Small Business Regulations 13 CFR 125.3. See the Attachment below for the “good faith effort” list.

c. 52.219-16 Liquidated Damages-Subcontracting Plan. Consequences of failing to make a “good faith effort” as required by statute. See the Attachment for the definition of “good faith effort” and “failure to make a good faith effort” as defined in the Small Business Administration regulations.

Step 2. Determine what goods and services will be provided in-house and what will be purchased (subcontracted) from other sources.

Step 3. Seek socio-economic small businesses first (i.e., SDBs, WOSBs, VOSBs, SDVOSBs and HUBZone SBs) before small businesses in order to maximize small business subcontracting credit.

a. Look for subcontractors that can meet more than one small business definition. Ensure those dollars are credited against all applicable

1 The only entities not required to submit subcontracting plans are listed in the Federal Acquisition Regulation section 19.702(b).

https://www.acquisition.gov/content/19702-statutory-requirements https://www.acquisition.gov/content/19702-statutory-requirements https://www.acquisition.gov/content/52219-8-utilization-small-business-concerns https://www.acquisition.gov/content/52219-9alternate-iii https://www.ecfr.gov/cgi-bin/text-idx?SID=50ff66d5d1cc9357d5f4ce114fcc5c79&mc=true&node=pt13.1.125&rgn=div5#se13.1.125_13 https://www.ecfr.gov/cgi-bin/text-idx?SID=50ff66d5d1cc9357d5f4ce114fcc5c79&mc=true&node=pt13.1.125&rgn=div5#se13.1.125_13 https://www.acquisition.gov/content/52219-16-liquidated-damages-subcontracting-plan categories. For example, a $10,000 subcontract to a WOSB who is also SDVOSB is counted for in this way:

$10,000 for WOSB $10,000 for SDVOSB $10,000 for VOSB, since by definition a SDVOSB is also a VOSB $10,000 to SB since by definition this company is a SB, too!

b. Find potential small businesses:

i. GSAM 519.705-4(g) https://www.acquisition.gov/content/part-519-small-business-progra ms#TWPEPRYV

ii. Small Business Administration (SBA) Commercial Marketing Representative

iii. List of small businesses from GSA eLibrary website. Search by category. Check out other GSA contracts linked at this site to find small businesses providing services under other GSA contracts such as Alliant2, VETS2, STARS for small business sources

iv. Check current providers to see if they meet any of the requirements to qualify as a SB, SDB, WOSB, VOSB, SDVOSB. Contractors can rely on the written self-certifications by these types of small businesses.3 Ask!! Note: HUBZones must be certified as such by the SBA

v. SBA’s Subcontracting database, SUBNet

vi. SBA’s Dynamic Small Business Search

vii. Contacting an APEX Accelerator (formerly known as Procurement

Technical Assistance Center)

Step 4. Begin to craft the subcontracting plan. Remember: Goals + the Narrative = Subcontracting Plan.

a. Estimate the annual costs for all subcontracted purchases for the base and option period of the contract, from both large and small businesses

b. Set goals for each small business category. Goals should be realistic yet provide a “stretch.”

c. Check the math!! Make sure the percentages for SDB, WOSB, VOSB, SDVOSB and HUBZone are calculated using the “Total Subcontracted Dollars” as the denominator.

3 FAR 52.219-9(c)(2)(ii) https://www.acquisition.gov/content/part-519-small-business-programs#TWPEPRYV https://www.acquisition.gov/content/part-519-small-business-programs#TWPEPRYV https://subnet.sba.gov/client/dsp_Landing.cfm https://dsbs.sba.gov/ https://www.apexaccelerators.us/#/

d. Use GSA’s Model Subcontracting Plan - This will ensure you meet all of the required elements in the Plan. The Plan includes best practices, too!

Use the ones that you do or plan to do.

Step 5. Draft the narrative of the plan, making sure you meet all of the requirements for the plan outlined in FAR 52.219-9. Ensure the narrative in the Plan supports the goals.

d. Ensure there are no disconnects between the goals and the narrative supporting the goals. For example, do the goals proposed match the description of what supplies and services will be subcontracted?

e. If there are any percentages proposed that are less than the statutory requirements outlined in the Small Business Act (i.e., 23% SB, 5% SDB, 5% WOSB, 3% SDVOSB and 3% HUBZone), explain why in the narrative of the plan. Be sure to explain how you will continue to make a good faith effort throughout the life of the contract to find those businesses where the percentages are less than statutory.

f. It is important to identify who is responsible for administering the subcontracting plan. Note: This is a required element for a subcontracting plan and failing to appoint a company official may indicate a failure to make a good faith effort (see the SBA regulations in the Attachment).

g. Understand the reporting, recordkeeping requirements and the assurances required in the subcontracting plan.

h. Understand the required actions listed in FAR 52.219-9(e). Including these in the subcontracting plan demonstrates the commitment to perform these actions.

USING GSA’S MODEL SUBCONTRACTING PLAN AS A TOOL WILL

ENSURE THE SUBCONTRACTING PLAN MEETS ALL OF THE FAR

REQUIREMENTS. THE MODEL PLAN INCLUDES BEST PRACTICES

THAT MAY ENHANCE DEMONSTRATION OF THE “GOOD FAITH

EFFORT” THE COMPANY WILL TAKE TO MAXIMIZE OPPORTUNITIES

FOR SBS, SDBS, WOSBS, VOSBS, SDVOSBS AND HUBZONE SBS

TO PARTICIPATE AS SUBCONTRACTORS.

Finally, REMEMBER two key requirements when preparing a subcontracting plan:

1. Agreement by the contractor to implement the statutory requirement to “maximize practicable opportunities for SBs, SDBs, WOSBs, VOSBs, SDVOSBs and HUBZone SBs” to participate as subcontractors to the “fullest extent” (FAR 52.219-8). Subcontracting plans must reflect maximum and not minimum goals.

2. The plan will be reviewed by the CO, the GSA Small Business Technical Advisor and the SBA Procurement Center Representative. Make sure your plan tells a good small business story!

3. Contracting Officers are required to incorporate the negotiated plan as a material part of the contract upon award. This means failing to make a “good faith effort” will be treated the same way as failing to meet other requirements in the contract to perform and may put the company at risk for the assessment of liquidated damages (FAR 52.219-16).

ATTACHMENT - “GOOD FAITH EFFORT”

Defined in SBA Regulations 13 CFR 125.3(d)(3) (Includes Failure to Make a Good Faith Effort)

(i) Evidence that a large business prime contractor has made a good faith effort to comply with its subcontracting plan or other subcontracting responsibilities includes supporting documentation that:

(A) The contractor performed one or more of the actions described in paragraph (b) of this section, as appropriate for the procurement;

(B) Although the contractor may have failed to achieve its goal in one socioeconomic category, it over-achieved its goal by an equal or greater amount in one or more of the other categories; or

(C) The contractor fulfilled all of the requirements of its subcontracting plan.

(ii) Examples of activities reflective of a failure to make a good faith effort to comply with a subcontracting plan include, but are not limited, to:

(A) Failure to submit the acceptable individual or summary subcontracting reports in eSRS by the report due dates or as provided by other agency regulations within prescribed time frames;

(B) Failure to pay small business concern subcontractors in accordance with the terms of the contract with the prime;

(C) Failure to designate and maintain a company official to administer the subcontracting program and monitor and enforce compliance with the plan;

(D) Failure to maintain records or otherwise demonstrate procedures adopted to comply with the plan including subcontracting flow-down requirements;

(E) Adoption of company policies or documented procedures that have as their objectives the frustration of the objectives of the plan;

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(F) Failure to correct substantiated findings from federal subcontracting compliance reviews or participate in subcontracting plan management training offered by the government;

(G) Failure to conduct market research identifying potential small business concern subcontractors through all reasonable means including outreach, industry days, or the use of federal database marketing systems such as SBA's Dynamic Small Business Search (DSBS) or SUBNet Systems or any successor federal systems;

(H) Failure to comply with regulations requiring submission of a written explanation to the contracting officer to change small business concern subcontractors that were used in preparing offers; or

(I) Falsifying records of subcontracting awards to SBCs.