Types of Subcontracting Plans.docx

Types of Subcontracting Plans

1. How many types of subcontracting plans are there?

There are three types of subcontracting plans:

a. Individual

b. Commercial

c. Master

GSA has mostly individual subcontracting plans. Of the 2,200+ subcontracting plans, approximately 25% of subcontracting plans are commercial. GSA has the most commercial subcontracting plans of any federal agency so care must be given when the responsibility for the plan falls on the GSA contracting officer. Why? Once approved, the commercial plan is used for all federal agencies’ contracts so negotiate the best goals that reflect maximum opportunities for SBs, SDBs, WOSBs, VOSBs, SDVOSBs and HUBZone to participate as subcontractors.

GSA sees a small number of master plans being used by offerors each year. A description of master plans and how they are used is discussed later.

2. Who decides what type of plan to use?

While FAR indicates that commercial plans are the preferred subcontracting plan type, it is up to the contractor to determine which type of plan meets the company’s “spending” model. Most likely, the FAR preference is based upon the preference for FAR part 12 commercial acquisitions.

3. What are the differences between an individual plan and a commercial plan?

There are a couple of differences between the two types of plans:

a. An individual plan is contract-specific A commercial plan is company-specific

b. An individual plan covers the entire contract, inclusive of all options, whether or not they are exercised.

A commercial plan covers only one year: the company’s fiscal year.

Note: A new commercial plan must be submitted 30 days prior to the expiration of the current plan.

4. What reports are required after award for an individual plan? For a commercial plan?

Reports record actual subcontracted dollars that went to SBs, SDBs, WOSBs, VOSBs, SDVOSBs and HUBZone small businesses. Contractors indicate in the subcontracting plan how they will accumulate subcontracted data either by payment method or commitment method. Dollars recorded in eSRS reports must be consistent with the method in the plan.

a. Individual plans require 3 reports each year and a final report after contract completion:

i. Semi-annual Individual Subcontract Reports (ISRs) due no later than April 30 and October 30 each year. These are cumulative reports and provide information on how well the contractor is doing in meeting the goals established in the contract’s subcontracting plan.

ii. Annual Summary Subcontract Report (SSR) due no later than October 30 each fiscal year. Unlike the ISRs, the SSR:

1. Is not cumulative, but reports subcontracting that occurred during the government’s fiscal year (Oct 1 through Sept 30)

2. Only one agency SSR is filed in eSRS, regardless of how many GSA contracts the company has.

3. Individual SSR must include indirect costs even if the individual subcontracting plan indicates indirect costs are not included in the plan itself.

The data in the SSR is used to evaluate the agency’s performance in meeting its small business goals.

b. Commercial plans require only one report each year. Like the individual plan SSR, the commercial plan SSR is filed no later than October 30 each year and is used to calculate how well an agency met its small business subcontracting goals.

The commercial plan SSR is also the only documentation a CO has to evaluate how well the contractor did in meeting its commercial subcontracting goals. Remember though that the SSR timeframe (government’s fiscal year) may not match the contractor’s fiscal year. OSDBU notes the commercial plan SSR is the only means the CO has to evaluate the contractor’s small business performance.

c. Remember the differences between ISRs and SSRs:

ISRs measure contractor’s progress against the goals of the contract’s subcontracting plan SSRs measure each agency’s small business subcontracting goal achievement

5. What about indirect costs? How are they applied in subcontracting plans?

Under individual subcontracting plans, the contractor chooses whether or not to include indirects. Usually a contractor chooses to include indirect costs when they are having difficulty meeting statutory small business subcontracting goals.

Under commercial plans, the contractor is required to include indirects as the commercial plan covers everything the company will purchase (with few exceptions) during its fiscal year.

6. To summarize the differences between an individual plan and a commercial plan:

New plan required each year

3 reports required per year:

· Semi-annual ISRs

· Annual SSR Only 1 report each year – Annual SSR

Report required after contract completion – Final ISR

7. What is a Master Plan? How is a Master Plan used?

Think of the master plan as a way for contractors to streamline their individual subcontracting plans. Several established, Department of Defense contractors use Master plans, seeking approval from the Defense Contract Management Agency (DCMA) in order for the Master plan to be used for a defined period of time in crafting all of its government subcontracting plans. A contractor may craft and seek approval for use of a master plan when confronted with the same type of individual plan being used over and over with only the goals changing. Or, what they subcontract for rarely fluctuates.

A master plan:

· Includes all of the required elements of a subcontracting plan listed in FAR 52.219-9, Small business subcontracting plan, except goals

· Must be approved by a government contracting officer (usually DCMA) in order to be used

· Is valid and can be used in crafting individual plans during a 3 year period from the date the government CO signed and approved the Master plan

· Transforms into an individual plan when goals are added for a specific government acquisition

Remember: approved master plan + goals individual subcontracting plan

8. What should I do if I see a Master Plan used as part of an individual subcontracting plan?

Check to see if the Master plan:

· Was signed and approved by a government CO, usually DCMA

· Is still valid? The master plan must be within 3 years of the date of the approval by the government CO.

If signed and still valid, continue your review as you would any other individual subcontracting plan. Review the goals proposed for your acquisition and negotiate to reflect the “maximum practicable opportunity for small business, small disadvantaged business, women-owned small business, veteran-owned small business, service-disabled veteran-owned small business and HUBZone small business to participate” in government contracts as both prime and subcontractors.[footnoteRef:1] [1: FAR 19.702, Statutory requirement]

9. If a master plan is only good for 3 years, and my contract is for 5 years, do I have to get a new plan at the end of the 3 year period?

No. The 3 year period only refers to when the prime can use the master plan to create individual subcontracting plans. When goals for a particular acquisition are added to a current, approved master plan, it becomes an individual plan. The individual plan, once negotiated and incorporated into the contract upon award covers the entire contract.