Attachment G - Subcontracting Plan Checklist Instructions.pdf

Updated May 2023

MODEL INDIVIDUAL SUBCONTRACTING PLAN

INSTRUCTIONAL REMINDERS

An Individual Subcontracting Plan:

• Applies to a specific federal agency single contract.

• Covers the entire contract period, including all options whether exercised or not.

• Contains goals that are based on the Offeror’s planned subcontracting (and purchasing) in support of the specific contract.

• Indirect costs incurred for common or joint purposes may be included in the plan, allocated on a pro-rated basis to the contract. If included in the plan, indirect costs must be included in the reports after award.

• For contracts with option periods, the individual plan will include:

o separate goals for the base period o separate goals for each option period o a sum total of all periods for the entire contract term

NOTE: The Model Individual Subcontracting Plan template is a tool contractors may choose to use when preparing their Individual Subcontracting Plans. The Model Individual

Subcontracting plan:

• Is NOT a fill-in-the-blank form.

• Does not replace the FAR requirements listed in clause 52.219-9.

• Reflects objectives Western Area Power Administration (WAPA) encourages contractors to adopt.

REMINDER: WHEN SELECTING INDIVIDUAL SUBCONTRACTING PLAN TYPE,

UNDER A MULTIPLE AWARD ID/IQ CONTRACT USED BY MORE THAN ONE (1)

AGENCY, CONTRACTORS ARE REQUIRED TO REPORT SMALL BUSINESS

SUBCONTRACTING FOR EACH FUNDING AGENCY-ISSUED ORDER IN THE

GOVERNMENT-WIDE ELECTRONIC SUBCONTRACTING REPORTING SYSTEM (eSRS)

AFTER AWARD1.

Use the Individual Subcontracting Plan Template:

• For a new contract award whose total value, including options, exceeds $750,000 ($1.5 million for construction).

• For existing contracts when either a contract modification causes the value of the contract to exceed the threshold required for a subcontracting plan, or as a result of size changes due to re-representation (FAR 52.219-28). When a subcontracting plan is required, the plan shall cover the remaining periods of the contract2.

1 FAR 52.219-9 (d)(10)(iii) 2 FAR 19.705-2(e)

Before preparing the subcontracting plan:

• Review the FAR requirements set forth in the FAR subpart 19.73, The Small Business

Subcontracting Program, particularly:

o FAR 19.704, Subcontracting Plan Requirements o FAR clause 52.219-8, Utilization of Small Business Concerns4 o FAR clause 52.219-9, Small Business Subcontracting Plan o FAR clause 52.219-16, Liquidated damages

• Understand the statutory requirements in FAR 19.702:

o Any contractor receiving a contract, for more than the simplified acquisition threshold, must agree in the contract that SB (including ANCs and Indian tribes), VOSB, SDVOSB, HUBZone, SDB (including ANCs and Indian tribes), and WOSB concerns will have the maximum practicable opportunity to participate in contract performance consistent with its efficient performance.

o Timely pay amounts due pursuant to the terms of their subcontracts with SB, VOSB, SDVOSB, HUBZone, SDB (including ANCs and Indian tribes), and WOSB concerns.

o Each contract modification that causes the value of a contract without a subcontracting plan to exceed $750,000 ($1.5 million for construction), shall require the Contractor to submit a subcontracting plan for the contract, if the Contracting Officer (CO) determines that subcontracting opportunities exist5.

o Failure to submit and negotiate the subcontracting plan shall make the Offeror ineligible for award of the contract.

• Recognize that the negotiated subcontracting plan will become a material part of the contract upon award6 subject to monitoring by the federal government after award.

“Material” means it is just as important as the specifications, delivery schedule, and price of the prime contract and is subject to the assessment of liquidated damages for failing to make a

“good faith effort7.” Monitoring will be done by examining subcontracting plan.

reports. Small business subcontracting performance will be considered by the government as part of the annual performance evaluations.

• Understand the reporting requirements after award (FAR 52.219-9(l)). Submit required reports in the government-wide Electronic Subcontract Reporting System (eSRS):

o Individual plans require three (3) reports each year:

3 The FAR is found at https://www.acquisition.gov/far/subpart-19.7.

4 Note the requirement in this clause indicating you agree to implement the U.S. policy to maximize opportunities for SB, SDB, WOSB, VOSB, SDVOSB and HUBZone small businesses to participate as subcontractors to the “fullest extent.”

5 For example, a $100,000 change order to a $1,450,000 construction contract will now increase the total value of the contract to $1,550,000. A subcontracting plan will be required for the remaining years of the contract.

6 FAR19.705-5.

7 “Good faith effort” is defined in the Small Business Administration (SBA) regulations at 13 CFR

125(d)(3).

https://www.acquisition.gov/far/subpart-19.7

▪ Individual Subcontract Reports (ISRs), including task order level reporting for IDIQ contracts whose intended purpose is to be used by all federal agencies8.

▪ Summary Subcontract Report (SSR) due no later than October 30 each year.

▪ Final ISR due 30 days after contract completion.

Note: For more information, check out the SBA website where you can find the subcontracting regulations, compliance reviews and points of contact: SBA Prime-Subcontracting.

How to increase small business participation?

• Market research – Market research – Market research!

• Resources to find small businesses:

o SBA Commercial Marketing Representative: SBA CMRs o Procurement Technical Assistance Centers: PTAC website o Trade and professional organizations and conferences o Department of Commerce Minority Business Development Agencies: MBDA website o State, county, and city minority business offices o Small, minority, women-owned, and veteran business organizations o Local Chambers of Commerce: Chambers of Commerce website o Department of Veterans Affairs (VOSBs and SDVOSBs) o Dynamic Small Business Search: DSBS website

• See if current suppliers meet the size status for the NAICS code that best describes the subcontract and the socio-economic definitions in FAR part 2.

• Break out elements of large contracts into smaller contracts suitable for small business participation.

• Required under FAR 52.219-9(e):

o Arrange solicitations, time for the preparation of bids, quantities, specifications, and delivery schedules so as to facilitate the participation by SBs, SDBs, WOSBs, VOSBs, SDVOSBs and HUBZones.

o Where the Contractor’s lists of potential SB, SDB, WOSB, VOSB, SDVOSB, and HUBZone small business subcontractors are excessively long, reasonable effort shall be made to give all such small business concerns an opportunity to compete over a period of time.

o Adequate and timely consideration of the potentialities of small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns in all “make-or-buy” decisions.

o Counsel and discuss subcontracting opportunities with representatives of SBs, SDBs, VOSBs, SDVOSBs, WOSBs and HUBZone small businesses.

o Confirm that a subcontractor, representing itself as a HUBZone small business concern, is certified by SBA as a HUBZone small business concern in accordance with 52.219-8(d)(2).

o Provide notice to subcontractors concerning penalties and remedies for misrepresentations of business status as small, veteran-owned small business, HUBZone small, small disadvantaged, or women-owned small business for the purpose of obtaining a subcontract that is to be included as part or all of a goal contained in the Contractor’s subcontracting plan.

8 FAR 52.219-9(d)(10)(iii) https://www.sba.gov/federal-contracting/contracting-guide/prime-subcontracting https://www.sba.gov/document/support--commercial-market-representatives https://www.aptac-us.org/ https://www.mbda.gov/ https://www.uschamber.com/co/chambers https://web.sba.gov/pro-net/search/dsp_dsbs.cfm o For all competitive subcontracts over the simplified acquisition threshold, as defined in FAR

2.101 on the date of subcontract award, in which a small business concern received a small business preference, upon determination of the successful subcontract Offeror, prior to award of the subcontract, the Contractor must inform each unsuccessful small business subcontract

Offeror in writing of the name and location of the apparent successful Offeror and if the successful subcontract Offeror is a small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, or women-owned small business concern.

o Assign each subcontract the NAICS code and corresponding size standard that best describes the principal purpose of the subcontract.

How do I develop subcontracting goals?

Note: The WAPA subcontracting goals listed below are the agency’s goals9 and are provided for your information only, subject to change. The following tips are offered to assist you with calculating the subcontracting plan goals to be listed in the individual subcontracting plan:

• Decide what your company can provide internally, then determine what is left to outsource.

• Estimate total subcontracting dollars (“outsourcing”, “purchases” or “spend”) planned to both small and “other than small” business10 (OTSB) concerns for each period of the contract (base period and each option period):

• Separately identify the dollars that will be subcontracted to both large/OTSB and to small businesses, which, when added together, make up the total dollars subcontracted to all concerns and 100%.

• For the small businesses, identify if your supplier also meets one of the small business socio-economic categories (small disadvantaged business (SDB), women-owned small business (WOSB), veteran-owned small business (VOSB), service-disabled veteran-owned small business (SDVOSB) and Historically Underutilized Business Zone small business (HUBZone). Note: small businesses can meet more than one (1) socio-economic category11.

• Apply the subcontracted dollars towards all small business socio-economic categories applicable to your suppliers. For example, a $30,000 subcontract awarded to a woman-owned, HUBZone, service-disabled veteran-owned small business:

o apply $30,000 against WOSB.

o apply $30,000 against HUBZone.

o apply $30,000 against SDVOSB.

o apply $30,000 against VOSB (since a SDVOSB is a VOSB).

o apply $30,000 against small business since WOSB, HUBZone and SDVOSB are socio-economic small business subcategories.

9 The goals are negotiated with the Small Business Administration (SBA) annually based on recent agency achievements. SBA is responsible for the Federal Government Goaling Program. Information on the goaling process which includes subcontracting can be found at: SBA Goaling Process.

10 The term “other than small business” is used to indicate all other certifications that are not small.

Examples include non-profits, universities, and educational institutions, utilities, state and local governments.

11 For example, a small business can be a WOSB as well as a SDVOSB. Find the definitions in FAR part 2 (https://www.acquisition.gov/far/part-2#FAR_Subpart_2_1).

https://www.sba.gov/contracting/contracting-officials/goaling https://www.acquisition.gov/far/part-2#FAR_Subpart_2_1

Note: This is not double/triple counting, but ensures credit is given to all socio-economic categories represented by the small business.

• The small business dollar amount must include all small business socio-economic subcategories; i.e., VOSB, SDVOSB, HUBZone, SDB, WOSB, (plus any "other small" businesses that do not fall within one of these specified subgroups). Note: Alaskan Native

Corporations (ANCs) and Indian tribes are included in both the SDB and total small business amounts.

• Once the dollars have been assigned to each socio-economic category, calculate the percentage for each category separately against the “Total dollars to be subcontracted”. Percent goals for each of these small business socio-economic categories must be expressed as a percentage of the TOTAL subcontracting dollars to all concerns (both OTSB and small)12.

*Caution: Only the OTSB total plus the small business total should equal the total dollars to be subcontracted in both dollars and percent. See calculation “notes” within Section III of this template for further assistance. Do NOT add together the small business socio-economic subcategories to reach the total small business figure, as the same dollars should already be included in the total for small business.

Planned Subcontracting by Business Size Sample

Dollars

WAPA

Goals

(FY23)

Total Subcontracted Dollars $1,000,000 100%

Other than Small Business (OTSB/Large) $800,000 80%

All Small (includes Veteran-Owned Small, Service-Disabled

Veteran-Owned Small, HUBZone small, Small Disadvantaged

Business, Women-Owned Small, and other small business concerns, i.e., ANCs, etc.

$200,000 20%

The Total dollars to be subcontracted will be used as the denominator in calculating the percentages for each socio-economic category.

Identify subcontracts awarded to the small business socio-economic subcategories and calculate the percentages using the total subcontract dollars as the denominator:

12 A Contracting Officer may also require the goals to be calculated as a percentage of total contract dollars, in addition to the goals required as a percentage of subcontracted dollars.

Planned Subcontracting by Business Size Sample

Dollars

WAPA

Goal (FY

2023)

Veteran-Owned Small Business $30,000 3%

Service-Disabled Veteran-Owned Small Business13 $30,000 3%

HubZone Small Business $30,000 3%

Small Disadvantaged Business $50,000 5%

Women-Owned Small Business $50,000 5%

Who reviews subcontracting plans? FAR subpart 19.7 indicates the responsibility for subcontracting plans before contract award, upon award and after award falls on the contracting officer (CO). Before award, the CO must:

• Negotiate an acceptable plan with the contractor.

• Consider recommendations by the agency small business advisor as well as the Small Business

Administration Procurement Center Representative. These are the technical experts when it comes to small business.

• Consider the contractor’s past performance in meeting small business subcontracting goals on past or similar contracts as a part of determining if the offeror is responsible.

How does a contracting officer review a subcontracting plan?

• Do the goals proposed demonstrate “maximum” practicable opportunity for SBs, SDBs, WOSBs, VOSBs, SDVOSBs and HUBZone to participate in the performance of the contract” as required by statute14?

• Does the narrative support the goals proposed? Think of the small business goals as the thesis statement and ensure the rest of the plan supports how the goals will be achieved throughout the life of the contract.

• Is the plan complete? Are all requirements for a plan as listed in FAR clause 52.219-9 addressed? The Model Plan lists all of the requirements.

• Like any goal, do the goals proposed build on past achievement?

• Does the plan demonstrate how your company will keep its market research fresh to find qualified SBs, SDBs, WOSBs, VOSBs, SDVOSBs and HUBZone?

• How do the estimated goal percentages compare with the goals listed in the Small Business Act:

o 23% SB o 5% SDB o 5% WOSB o 3% SDVOSB o 3% HUBZone

13 SDVOSB should always be less than or equal to VOSB. By definition, a SDVOSB is also a VOSB.

14 FAR 19.702, Statutory requirement, and clause 52.219-8, Utilization of small business concerns.

If any of the proposed goals are less than the statutory goals, provide an explanation. “Tell the small business story”.

• Are there any “0” proposed? Provide an explanation as zero (0) for a goal does not make sense.

Can you find some dollars to give to the small business entity, maybe allocated from the indirect cost pool?

Prepare the individual subcontracting plan:

• Determine what will be subcontracted (supplies and services) throughout the life of the contract and the estimated costs of the subcontracts.

• Identify the size and socio-economic categories of your suppliers, especially SBs, SDBs, WOSBs, VOSBs, SDVOSBs and HUBZone small businesses. Best practice: if the size status of a supplier is unknown, check with the supplier to see if they can be considered small for the

NAICS applying to the subcontract. If so, do they also meet the definition of one or more of the socio-economic categories: SDB, WOSB, VOSB, SDVOSB or HUBZone?

• Market research – Market research – Market Research! Find new SB, SDB, WOSB, VOSB, SDVOSB and HUBZone suppliers who can meet the needs of the contract. If this is a follow-on or similar contract, does market research reveal greater opportunities for all types of small business than found in the past? Check the Dynamic Small Business Search: DSBS

Website.

• Calculate small business subcontracting goals, ensuring estimated dollars are applied against all socio-economic categories represented by the small business ; i.e., apply the same amount of dollars across multiple designations. Goals must reflect good-faith efforts and realistic stretch goals. Once the determination is made on what will be subcontracted, adapt the Model Plan to fit your subcontracting situation. Ensure the subcontracting plan reflects best faith efforts and realistic stretch goals. Put thought into maximum practicable opportunities that might be possible and achievable for all socio-economic categories as well as small business throughout the life of the contract.

• Complete the tables for each period of the contract, taking into consideration the time covered by the base period and each option (1 year?, 5 years?, 10 years?, etc.).

• Include a summary table, adding together all periods of performance (base + options).

• Ensure the narrative of the subcontracting plan supports the proposed goals:

o For example, does the description of what will be subcontracted match the goals proposed?

o Does supporting information from similar contracts, or past contracts support the proposed goals?

https://web.sba.gov/pro-net/search/dsp_dsbs.cfm&sa=D&ust=1602005366268000&usg=AFQjCNFSLULhrQkDuemMr90e5KMhhT1wrg https://web.sba.gov/pro-net/search/dsp_dsbs.cfm&sa=D&ust=1602005366268000&usg=AFQjCNFSLULhrQkDuemMr90e5KMhhT1wrg

REPORTING INSTRUCTIONS

FREQUENTLY ASKED QUESTIONS FOR CONTRACTORS

Why are subcontracting reports important?

Negotiated subcontracting plans become a material part of the contract. The reports monitor the progress against the plan. Failure to submit the reports as required under FAR 52.219-9 may negatively affect contractor performance evaluations or may indicate a lack of good faith effort to maximize practicable subcontracting opportunities for SBs, SDBs, WOSBs, VOSB, SDVOSBs and HUBZone small businesses as required by law.

What should I know before submitting a report?

• Understand the small business subcontracting program requirements in FAR subpart 19.7. Pay attention to the reporting requirements listed in FAR 52.219-9(l) and any supplemental instructions the CO may have included in the contract.

• Review the subcontracting plan.

• Understand the differences in the reports required for the type of subcontracting plan in the contract.

• Follow the directions on the eSRS home page such as “Quick Reference Guides” and the

Sample-Step-by-Step, such as:

o Do not include in the reports of purchases from a corporation, company, or subdivision that is an affiliate of the Contractor or subcontractor. Subcontract awards by the affiliates shall be treated as subcontract awards by the Contractor.

o Subcontract award data reported by the Contractor and subcontractors shall be limited to awards made to their immediate next-tier subcontractors. Credit cannot be taken for awards made to lower tier subcontractors, unless the Contractor or subcontractor has been designated to receive a small business or small disadvantaged business credit from an ANC or Indian tribe.

o Only include subcontracts involving performance in the United States or its outlying areas in these reports.

What reports are required for an individual subcontracting plan?

There are two (2) types of reports required for individual subcontracting plans:

1. Individual Subcontracting Report (ISR) is contract specific.

o Data presented in the ISRs are cumulative over the life of the contract.

o When a subcontracting plan contains separate goals for the basic contract and each option, the dollar goal inserted on the ISR shall be the sum of the base period through the current option. For example, for a report submitted after the second option is exercised, the dollar goal would be the sum of the goals for the basic contract, the first option, and the second option.

o If a subcontracting plan has been added to the contract pursuant to 19.702(a)(3) or 19.301-

2(e), the Contractors achievements must be reported in the ISR on a cumulative basis from the date of incorporation of the subcontracting plan into the contract.

o Includes indirect costs in the report if the goals of the individual subcontracting plan included indirect costs.

o Three (3) ISRs are due within 30 days of the end of each reporting period:

▪ ISR for the period ending March 31

▪ ISR for the period ending September 30

▪ Final ISR for the contract within 30 days of contract completion

For Task order level reporting for IDIQ contracts used by more than one (1) federal agency, follow the instructions on the eSRS home page, such as the FAQs and the Sample ISR Step-by-Step.

2. Individual Plan Summary Subcontracting Report (SSR) is agency-specific:

o Encompasses all subcontracting under prime contracts and subcontracts the contractor has with an agency, regardless of the dollar value of the subcontracts.

o If the Contractor or a subcontractor is performing work for more than one (1) executive agency, a separate report shall be submitted to each executive agency covering only that agency’s contracts, provided at least one (1) of that agency’s contracts is over $750,000 (over

$1,500,000 for construction of a public facility) and contains a subcontracting plan.

o Includes indirect costs appropriately allocated.

I am unable to submit my first ISR in eSRS. What do I do?

Notify the contracting officer. It is probably due to a coding issue in the Federal Procurement Data

System (FPDS) when the contract was awarded or when the modification was issued as a result of re-representation (FAR 52.219-28). FPDS must indicate that a subcontracting plan is required. This is an important step as FPDS feeds the eSRS system. Once the FPDS data is corrected, you will be able to submit the ISRs in eSRS.

I am having difficulty in meeting the goals established in the contract’s subcontracting plan. What should I do?

A number of actions can be taken:

o Read the plan. Did you do what you said you were going to do in the plan to find qualified

SBs, SDBs, WOSBs, VOSBs, SDVOSBs and HUBZones?

o Did a key small business supplier grow into “other than small”? Explain any “0” or shortfalls in the “Remarks” section of the report. Be sure to identify what corrective action you will take to get back on tract. “Tell the story” in the report.

o Did you post your company’s subcontracting opportunities on the SBA SubNet database?

o Does your website make it easy for small businesses to find you and your company’s opportunities?

o How do you keep market research fresh? Check out the following resources recommended in the Model Subcontracting Plan Instructions:

▪ SBA Commercial Marketing Representative: SBA CMRs

▪ Procurement Technical Assistance Centers: PTAC website

▪ Trade and professional organizations and conferences

▪ Department of Commerce Minority Business Development

▪ Agencies: MBDA website

▪ State, county, and city minority business offices

▪ Small, minority, and women-owned, veteran business organizations

▪ Local chambers of commerce: Chambers of Commerce website

▪ Department of Veterans Affairs (VOSBs and SDVOSBs) https://eweb1.sba.gov/subnet/client/dsp_Landing.cfm https://www.sba.gov/document/support--commercial-market-representatives https://www.aptac-us.org/ https://www.mbda.gov/ https://www.uschamber.com/co/chambers

Dynamic Small Business Search: DSBS website o Do current suppliers meet the size status for the NAICS code that best describes the subcontract and the socio-economic definitions in FAR part 2.

o Are you able to break out elements of large acquisitions into smaller contracts suitable for small business participation?

o Did you follow the required actions listed in FAR 52.219-9(e)?

Note: Please remove these instructional pages and any instructional language (in blue) before submitting to the contracting officer for review and approval.

https://web.sba.gov/pro-net/search/dsp_dsbs.cfm