Small Business Subcontracting Plans
The Small Business Subcontracting Program is based on Public Law 95-507 that was passed in 1978 to ensure that prime contractors further the goals of increasing participation of small businesses in federal procurement. Per Federal Acquisition Regulation (FAR) Subpart 19.7 any contractor receiving a contract for more than the simplified acquisition threshold must agree in the contract that small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business and women-owned small business concerns will have the maximum practicable opportunity to participate in contract performance consistent with its efficient performance. It is further the policy of the United States that its prime contractors establish procedures to ensure the timely payment of amounts due pursuant to the terms of their subcontracts with small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business and women-owned small business concerns.
The government requires the adoption of FAR Clause 52.219-8, "Utilization of Small, Small Disadvantaged and Women-Owned Small Business Concerns," in all purchases/contracts over simplified acquisition threshold that offer subcontracting opportunities. The legislation requires certain prime contractors and subcontractors to prepare formal subcontracting plans. The law specifically requires submission and implementation of a subcontracting plan for contracts exceeding $650,000 including options, $1.5 million for construction, as well as reporting and record keeping for contractors with plans.
As prescribed in FAR 19.708(b), the Contracting Officer shall, when contracting by negotiation, insert FAR Clause 52.219-9, "Small, Small Disadvantaged and Women-Owned Small Business Subcontracting Plan," in solicitations and contracts that offer subcontracting possibilities and are expected to exceed $650,000, including options, or $1.5 million for construction. This clause does not apply to small business concerns.
Offerors submitting a proposal in response to the government´s solicitation shall submit a small business subcontracting plan that complies with the requirements of FAR Clause 52.219-9. Subcontracting plans are not required:
- From small business concerns
- For personal services contracts
- For contracts or contract modifications that will be performed entirely outside of the United States and its outlying areas
- For modifications to contracts within the general scope of the contract that do not contain the clause at 52.219-8, "Utilization of Small Business Concerns" (or equivalent prior clauses, e.g., contracts awarded before the enactment of Public Law 95-507).
Subcontracting Plan Types
There are four types subcontracting plans:
Individual Plan: This subcontracting plan covers the entire contract period (including option periods), applies to a specific contract, and has goals that are based on the offeror's planned subcontracting in support of the specific contract.
Master Plan: This subcontracting plan contains all the required elements of an individual contract plan, except goals, and may be incorporated into individual contract plans, provided the master plan has been approved.
Commercial Plan: This subcontracting plan, including goals, covers the offeror’s fiscal year and applies to the entire production of commercial items sold by either the entire company or a portion thereof (e.g., division, plant or product line).
Comprehensive Subcontracting Plan: This subcontracting plan has been approved under the Department of Defense (DoD) Comprehensive Subcontracting Plan Test Program which authorizes the negotiation, administration and reporting of subcontracting plans on a plant, division or company-wide basis as appropriate. The purpose of the test is to determine whether comprehensive subcontracting plans will result in increased subcontracting opportunities for Small Business while reducing the administrative burdens on contractors.
Subcontracting Plan Templates
The following templates may be used in the submission of an individual or master subcontracting plan and are provided as downloadable files below: