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A Comprehensive Guide to Small Business Subcontracting Plans

By: Stephanie Hagan on September 20th, 2023

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A Comprehensive Guide to Small Business Subcontracting Plans

GSA Schedule | Resources and Insight | 9 Min Read

It’s no secret the federal government prioritizes small business participation in federal contracts. In Fiscal Year (FY) 2019, the federal government awarded $162.9 billion in contract dollars to small businesses. How does the government accomplish this?

The federal government requires Other Than Small Businesses (OTSB) to create a “practicable opportunity” for small businesses to participate in federal procurement. One of the ways to accomplish this is through small business subcontracting .

A lot of our clients ask if they need to make a small business subcontracting plan as GSA Schedule contractors. The answer depends on a few factors, so let’s cover what a small business contracting plan is, if you need one, and how to create the different types of subcontracting plans. 

What is Subcontracting and What Does it Mean in Federal Contracting?

Small business subcontracting allows contractors to outsource a portion of their federal contracting dollars to small businesses. These small businesses do not work directly with the government, instead they work with the contractors to provide the federal government with products and services. Some government contracts require contractors to submit a small business subcontracting plan including GSA Schedule contracts. 

What is a Small Business Subcontracting Plan?

The purpose of the small business subcontracting plan is to ensure Other Than Small Businesses (OTSBs), any business that is not considered a small business, are setting aside part of the federal money they receive to subcontract to small businesses. The plan is essentially a projection of how you want to allocate your contract requirements between your company and small businesses.

A small business subcontracting plan helps you determine and meet your subcontracting goals because you have to set-aside a dollar estimate for small businesses before you begin working on your contract.

There are two types of plans: commercial and individual. We will go into further detail on these below.

How Do I Know if I Need a Subcontracting Plan?

If you have a federal contract over the Simplified Acquisition Threshold (SAT) of $750,000 and you are not a small business (qualifications explained in further detail below), then you will need a subcontracting plan.

It’s important to note some contracts and task orders will have their own set of requirements, but most other contracts will follow the Federal Acquisition Regulation (FAR) which states :

“Any contractor receiving a contract with a value greater than the Simplified Acquisition Threshold must agree in the contract that small business…concerns will have the maximum practicable opportunity to participate in contract performance consistent with its efficient performance.”

In other words, the federal government wants to ensure you are subcontracting whenever you can.

How Does the Government Define a Small Business?

How do you know what constitutes a small business in the U.S.? The Small Business Administration (SBA) has created a list of qualifications you have to meet to be considered a small business in the eyes of the government. You must:

  • Be organized for profit (non-profits will have to make a subcontracting plan).
  • Have a place of business in the U.S.
  • Operate primarily within the U.S. If you are not a U.S. company, you must have U.S. headquarters and make a significant contribution to the American economy through taxes or use of American products, materials, or labor.
  • Meet the numerical size standards as defined by the SBA using the Size Standards Tool . This is defined based on NAICS Codes . It’s important to note different contracts may have different NAICS, so you may be considered small on one contract and other than small on another, so you will need to fill out a subcontracting plan for any contract that you are considered an OTSB.

The SBA has created several programs to help small businesses win federal procurement dollars . There are five subcategories of small businesses associated with federal contracting:

  • Small Disadvantaged Business
  • Women-Owned Small Business (WOSB)
  • Veteran-Owned Small Business (VOSB)
  • Service-Disabled Veteran-Owned Small Business (SDVOSB)

What Are the Types of Subcontracting Plans?

If you have to submit a subcontracting plan for your GSA Schedule contract, there are two options: commercial and individual.

What is a Commercial Subcontracting Plan?

A commercial subcontracting plan is defined by the FAR as a plan that “covers the fiscal year and applies to the entire production of commercial items by either the entire company or a portion thereof (e.g., division, plant, or product line).”

What does this mean? Essentially, a commercial plan covers all federal contracts for that year. You don’t need to make a separate plan for each of your contracts if you have multiple. It’s also based on actual spend, so when you are planning out what you expect the value of your subcontracting to be, you’re going to base it off of what your spending was on subcontracting the previous year.

This plan covers most of your corporate expenses as well, not just the specific expenses within your contracting agreement. It’s renewed annually on October 30, and you can renegotiate your plan with new goals each year.

Commercial is the preferred plan for product manufacturers because this type of plan automatically includes indirect spending, including all of your corporate expenses (more detail on indirect vs. indirect spending below). It’s more difficult for product manufacturers to tie direct contract spending to subcontracting goals.

Constructing a Commercial Subcontracting Plan

The first thing you need to do to create your commercial subcontracting plan is report what period the plan is going to cover (the fiscal year), and what your expected sales are for that year. Please note you will report your company-wide sales, not just your federal contract sales.

Next, you’ll need to estimate the total dollar amount that will be subcontracted for each category of small business, including WOSB, SDVOSB, VOSB, small disadvantaged, and HubZone. The SBA has recommended percentages (outlined in image number 3) they want you to try to hit in your plan for each subcategory. However, when you’re reporting your subcontracting numbers, one small business can count for multiple categories.

Subcontracting graphic 1

As mentioned before, this plan is based on actual spend, not what you’re hoping to subcontract from what you’re receiving from the government. This projection is made from how you spent your subcontracting dollars last year.

What is an Individual Subcontracting Plan?

According to the FAR, an individual 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.”

To sum it up, you will need an individual plan for each of your contracts. Unlike the commercial plan, the goals are based on what you expect to subcontract for the period of the entire contract, instead of your past performance from the previous fiscal year.

Constructing an Individual Subcontracting Plan

First, you need to estimate the value of each contract, including all option periods. As seen below, the plan is broken into base and option periods. Even if you don’t end up getting all these option periods, you will need to lay out what you predict to contract and what the value would be for the base and each option period.

subcontracting graphic 3

For example, if you have a $200 contract from the government (much smaller than any actual contract), you might expect $100 to be subcontracted. Of that $100, you might give $71 of that to OTSBs, and $29 to small businesses. In this plan, you’ll need to delineate how much you will allocate to each small business subcategory.

We provided an example below based on the SBA’s recommended percentages, but this is not what your contract will look like exactly. The percentages could be higher or lower based on what you and your Contracting Officer thinks your company can accomplish.

Subcontracting graphic 2

Once you figure out what you want to spend in your contract and what your spending goals are, you should know what is appropriate to report on your subcontracting plan. This is where direct and indirect subcontracting come in.

Direct vs Indirect Subcontracting

While commercial subcontracting plans don’t differentiate between direct or indirect subcontracting, it’s important for you to know the difference between the two, especially if you select an individual subcontracting plan.

Direct subcontracting is exactly what it sounds like--anything that is directly related to work performed under the contract. For example, if you’re contracted to provide plumbing services and you subcontract out to small businesses in Tampa and Atlanta, those will both count toward subcontracting goals as direct subcontracting.

Indirect subcontracting is anything that represents the costs of performing the business. For instance, you may need to hire an accounting firm to do your taxes. You can still count these toward your subcontracting goals, but they are considered non-controllable sources. You can include these costs in individual plans, but you need to state whether you intend to include them and how you will account for these costs. Remember these are automatically included in a commercial plan.

Reporting Your Subcontracting Plan

After you construct your plan, you will need to report its progress to the government on a fairly regular basis. For both commercial and individual plans you will need to fill out a Summary Subcontract Report (SSR) in the Electronic Subcontracting Reporting System (eSRS) .

In the SSR, you will report your subcontracting numbers by business type whether it’s a large or small business (including small business categories), and compare these numbers to the goals laid out in your plan.

If you’re not hitting your goals, you’ll need to show the federal government you are making a “good faith effort.” You can make notes in the remarks section of the report to demonstrate the lengths of your effort. The SSR report is due once a year by October 30.

If you created an individual plan, you will need to submit an additional report in the eSRS aptly named the Individual Subcontracting Report (ISR). These are due twice a year on April 30 and October 30. Just like the SSR, you’ll need to report how much money went toward subcontracting and compare it to your goals. Unlike the SSR, this report is cumulative and will automatically fill in the totals from all your contracts if you have multiple.

Developing and Meeting Your Subcontracting Goals

Plans are essential to success, but they only work well if they’re executed properly. After you create your subcontracting plan, you’ll want to work out how you can effectively meet your goals.

There are several resources available to help you conduct outreach activity and find small businesses who might want to subcontract with you. Some resources include:

  • Dynamic Business Search
  • National Women’s Business Council
  • Veteran Owned Business Directory
  • Minority Business Development Agency

As we all know, deadlines always seem to sneak up on us, so make sure you designate someone to act as an administrator for your contracting and subcontracting goals. This person can put structures in place to ensure your company is trying its best to hit all its goals. 

If you consistently miss your goals and cannot demonstrate to the government you are working in “good faith” to improve, you risk rejection or cancellation of your contract. You may also be responsible for the liquidated damages. So it’s important to stay on top of your goals and plan realistically.

Our consultants at Winvale are always here to help you with your GSA Schedule contract and subcontracting needs. If you have any further questions about subcontracting or want to learn more about how you can be a successful contractor, don’t hesitate to contact us .

For more information on small business subcontracting plans, check out our Lunch and Learn webinar . 

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About Stephanie Hagan

Stephanie Hagan is the Training and Communications Manager for Winvale. Stephanie grew up in Sarasota, Florida, and earned her Bachelor's of Arts in Journalism and Rhetoric/Communications from the University of Richmond.

types of small business subcontracting plans

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types of small business subcontracting plans

Legal news and notes for small government contractors

Published by koprince mccall pottroff llc  |  edited by shane j. mccall, far update: good faith in small business subcontracting.

For many contracts, large businesses must establish and have the government approve a subcontracting plan that details the goals and efforts the large prime contractor will take to award subcontracts to various types of small businesses. Well, how does the government hold large businesses accountable for these goals? The FAR will soon have a final rule addressing good faith efforts to comply with a small business subcontracting plan.

Back in late 2019, SBA updated its own rules on subcontracting plans to address. The SBA rules were intended to make it easier to hold large business prime contractors accountable for meeting the goals of their small business subcontracting plans. In line with the  2017 NDAA , SBA updated its rules found at  13 C.F.R. § 125.3(d)  so that it will be a material breach of a contract or subcontract if a contractor with a subcontracting plan fails to comply in good faith with the requirement to submit reports and cooperate with agencies to determine subcontracting plan compliance. 

Now, the FAR has followed suit in a rule effective September 10, 2021. This will eliminate the inconsistencies between the FAR and SBA rules, which is always nice so both contractors and agencies are on the same page when it comes to subcontracting plans. Here’s a little background on the changes.

Small business subcontracting plans are required from large prime contractors when a contract is expected to exceed $750,000 ($1.5 million for construction) and has subcontracting possibilities. These plans are required for the acquisition of commercial items and COTS items.

FAR 19.704 lists what is required in these plans. This includes goals for subcontracting efforts to provide fair opportunities to compete for subcontracts for various types of small business concerns, including small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns. Failure to make a good faith effort to comply with the plan can result in liquidated damages under FAR 52.219-16 .

There are two main changes in the rule. First, all indirect costs, with certain exceptions, are included in commercial plans and summary subcontract report (SSRs). Second, revised FAR 19.705-7 now has examples of a good faith efforts to comply with a subcontracting plan, and examples of a failure to make a good faith effort.

Here are some takeaways from the implementation of this rule.

Material Breach . The comments to the rule make clear that “a failure to make a good faith effort to comply with a subcontracting plan is a material breach, sufficient for the assessment of liquidated damages, and also for other remedies the Government may have.” So, this is not something to be taken lightly by prime contractors operating under a subcontracting plan.

Key Good Faith Actions . The rule provides examples of actions that indicated good faith efforts to comply with the subcontracting plan. Here are a few of those:

  • Market research to identify small businesses “through all reasonable means, such as searching SAM, posting notices or solicitations on SBA’s SUBNet, participating in business matchmaking events, and attending preproposal conferences.”
  • “Assisting interested small businesses in obtaining bonding, lines of credit, required insurance, necessary equipment, supplies, materials, or services.”
  • “Participating in a formal mentor-protégé program with one or more small business protégés.”

Like the SBA rule, the FAR rule now provides examples of actions that could be considered “failure to make a good faith effort to comply with a subcontracting plan” at FAR 19.705-7 . Contractors should take a close look at these examples. But here are some highlights:

  • Turning in subcontracting plan reports late.
  • Not paying small business subcontractors “terms of the contract” with them.
  • Not having a designated employee to monitor the subcontracting plan.
  • Failure to maintain records or procedures to show compliance with subcontracting plan requirements.
  • Not doing market research (such as outreach, industry days, and database searches) to identify small business subcontractors.
  • “If a contractor does not either correct substantiated findings or participate in subcontracting plan management training offered by the Government, it could be perceived by the contracting officer as a failure to make a good faith effort.”

But the rule is clear that agencies need to look at “the totality of the contractor’s actions” and, interestingly, mere failure “to meet its subcontracting goals does not, in and of itself, constitute a failure to make a good faith effort.” And there is an example of what may constitute a valid explanation: if there are no available small business sources for certain types of work.

Rebuttal . Note that there is an opportunity for a contractor to respond to an accusation of failure to make good faith efforts. In the rule on liquidated damages, it states: “Before the Contracting Officer makes a final decision that the Contractor has failed to make such good faith effort, the Contracting Officer shall give the Contractor written notice specifying the failure and permitting the Contractor to demonstrate what good faith efforts have been made and to discuss the matter.” As in most things in dealing with government agencies (and other aspects of life), failure to respond can be taken as an admission of fault.

This new rule is important for both large prime contractors and subcontractors. Prime contractors need to make sure they are making these good faith efforts to comply and provide actual opportunities for subcontractors. By that same token, it’s good for small business subcontractors to know about these rules as well and take advantage of these opportunities. Now that the FAR has been updated, there’s no excuse for large prime contractors not to comply and no excuse for agencies not to enforce these rules.

Questions about this post?  Email us  or give us a call at 785-200-8919 .

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  • Small Business Subcontracting Plan (SBSP)
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Description

The federal government has detailed regulations requiring contractors to treat small businesses fairly and provide maximum opportunity for their participation in federal contract work ( FAR 19.7 – The Small Business Subcontracting Program ).

For certain federal contracts, the sponsor will require a Small Business Subcontracting Plan (SBSP). This plan outlines specific goals for subcontracting to various types of small businesses and details the process for reaching those goals and reporting progress. Types of small business include:

  • Small business
  • Veteran-owned small business
  • Service-disabled veteran-owned small business
  • HUBZone small business
  • Women-owned small business

Federal law requires a subcontracting plan if the value of contract exceeds a set dollar amount—currently $750,000. This amount is known as the “simplified acquisition threshold. 1 ”

For more details, visit...

  FAR 19.702 – Statutory Requirements

  FAR 52.219-8 – Utilization of Small Business Concerns

  FAR 52.219-9 – Small Business Subcontracting Plan

1 The simplified acquisition threshold relevant to the SBSP is defined in the Federal Acquisition Regulations (FAR)

  how do i....

...create a Small Business Subcontracting Plan (SBSP) when required by my contract?

  • Step 1:  If the sponsor or SPA Award Negotiator notifies you that your contract needs a SBSP, review your contract to understand the reporting requirements (i.e. FAR 52.219-8 and 52.219-9 ). SPA will assist when it is time to report.
  • Step 2: Develop your SBSP. The Award Negotiator will obtain a SBSP template for you from the sponsor. For assistance completing the SBSP template, the department/PI should contact the Office of Procurement Diversity at [email protected] .
  • Step 3: Sign and submit your SBSP to the sponsor and send a final copy to the Award Negotiator at [email protected] . Sending the finalized SBSP will complete the award agreement and allow SPA to move forward with award execution.

SBSP Process Flow Chart

  Contacts

For assistance and/or questions in completing the SBSP:

Office of Procurement Diversity 

  Shauna Clayborn, Supplier Diversity Coordinator

  [email protected]

For questions about expense tracking and reporting:

Sponsored Programs Administration (SPA)

  Charletta Little, Coordinator, Audit and Compliance

  [email protected]

  FAQs

To comply with federal law (FAR subpart 19.7), all federally sponsored contracts in excess of $750,000 require implementation of a subcontracting plan with established goals for expenditures to small businesses.

Contact the Office of Procurement Diversity (OPD) at [email protected].

The PI/Department is responsible for managing and tracking expenditures as outlined in their SBSP. Accurate expenditures are necessary for future reporting obligations.

If the PI fails to submit a plan, they may be ineligible for the award.

The sponsor may determine that the PI and team have not made good faith efforts to procure small businesses. The University of Illinois could be held liable for fines and be required to return/refund the full amount of the contract.

It is important to formulate a realistic SBSP and execute its budgeting details. There are potential monetary penalties for not meeting goals (see FAR 19.702 ). Moreover, non-compliance issues, such as not meeting goals set in the SBSP are documented by federal agencies and could affect all future funding applicants at the University.

The fact that goods and services from a small business vendor may cost more is not considered by the government to be an acceptable excuse for not using them, unless the cost is prohibitive.

Contact the sponsor and work with them to submit a revised plan. Once complete, send the revised plan to your assigned Award Negotiator via [email protected].

In many cases, an amended plan will be required that includes prior and future supplier diversity goals.

The SPA Audit and Compliance team, with assistance from the department/PI. Audit and Compliance compiles and submits a semi-annual Individual Subcontracting Report (ISR), due in April and October, as well as an annual Summary Subcontract Report (SSR), also due in October.

The data is pulled from a combination of Banner and department tracking systems.

SPA will receive an e-mail confirming whether the report is accepted or rejected. If accepted, the report is complete and requires no further action until the next reporting period. If rejected, SPA will contact the department for assistance in resolving the rejection.

  • Quality goods and services to meet the needs of the University
  • Potential cost savings through competition
  • Support for small and local businesses
  • Creating jobs in the community
  • Ensuring fairness

  Additional Resources

Related documents and resources.

  • Purchasing Vendor Information Form (OBFS)
  • Small Business Administration (SBA), Dynamic Small Business Search Database (DSBS)
  • Illinois CMS Business Enterprise Program - BEP/VBP Certification Portal
  • Illinois Procurement Gateway (IPG) - Registered Vendor Directory

Related FAQs

  • How do I create a small business subcontracting plan (SBSP) when required by my contract?
  • Why is the SBSP required?
  • How do I find a certified small business?
  • Once awarded, who is responsible for tracking and managing small business subcontracting expenditures?
  • What if the PI fails to submit a SBSP within the time limit prescribed by the contracting officer?
  • What if the PI does not meet the spend goals detailed in the SBSP?
  • What if the original goals on the SBSP will not be met?
  • What if an amendment increases the award dollar amount?
  • Who completes the required Small Business Subcontracting Reports?
  • Where is the report data pulled from? (SBSP)
  • What happens after the report is submitted? (SBSP)
  • What are some potential benefits of participating in the Small Business Subcontracting Program?
  • Documents & Resources
  • Frequently Asked Questions (FAQs)
  • Apply to UMaine

Office of Research Administration

Small business subcontracting plans faqs.

Why do I need to create a small business subcontracting plan?

The Small Business Subcontracting Program was designed 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 over $750,000  ($1.5 million for construction) must agree in the contract that 1) small business, 2) veteran-owned small business (VOSB), 3) service-disabled veteran-owned small business (SVOSB), 4) Historically Underutilized Business (HUBZone) small business, 5) small disadvantaged business (SDB) and 6) women-owned small business (WOSB) concerns will have the maximum practicable opportunity to participate in contract performance.

When do I submit a small business subcontracting plan?

A small business subcontracting plan is generally required to be submitted with the proposal, and is subject to scrutiny during the negotiation phase of an award. Each Federal agency has established subcontracting goals and generally include them with the specific RFP; the goals are also often set out in the sample form for a subcontracting plan. At the time of the proposal, it is usually sufficient to prepare the subcontracting plan for the total cost of a multi-year proposal.

Are subrecipients subject to the small business subcontracting plan compliance?

Yes. A small business subcontracting plan is also required of any subrecipient whose total dollar subcontract amount is expected to exceed total costs of $750,000 for the entire period of performance.

Are there different types of small business subcontracting plans applicable to the University?

The most common small business subcontracting plan used by the University to date is:

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. If the offeror is submitting an individual plan, the plan must separately address subcontracting with small business, VOSB, SDVOSB, HUBZones, SDB and WOSB concerns with a separate part for the basic contract and separate parts for each option (if any). The plan shall be included in and made a part of the resultant contract.

Master Plan : A master plan contains all the elements required by the clause at 52.219-9, “Small Business Subcontracting Plan,” except goals and may be incorporated into individual contracts, provided the master plan has been approved. Contractors may establish a master plan, on a plant or division-wide basis. Master plans shall be effective for a three-year period after approval by the administrative contracting officer; however, it is incumbent upon contractors to maintain and update master plans.

This is something that the University is looking into for future use.

How do I look up a business classification or identify a small business supplier?

  A business may self-certify as a small business on the System of Awards (SAM) database. https://www.sam.gov/SAM/

  • Check the Small Business Administration (SBA) – Dynamic Small Business Search (DSBS) to search for companies/vendors/suppliers with various small business designations
  • Check the Vendor Information Pages (VIP) for Veteran companies – https://www.va.gov/osdbu/
  • Check the Women’s Business Enterprise National Council (WBENC) – https://www.wbenc.org/
  • Check the National Minority Business Council (NMBC) – http://www.nmbc.org/
  • Check the Procurement Services Vendor/Supplier Search (requires single sign on) to search University of Maine System Marketplace for companies/vendors/suppliers that have small business designations
  • Run a query (UMS_VENDORS_MM_CLASS) (single sign on required) to view a listing of University diversity designated vendors to satisfy the small business subcontracting plan requirements.

How do I justify the goals proposed to the Sponsor?

Your goals development should take into account:

  • Historical data, previous spend history.
  • Projected forecast based upon current year’s data.
  • Projected goals based on experience, business forecasts, & commitment to improvement, etc.

You will need to liaise with procurement or discuss previous specific purchases with your financial administrator to get an idea of what is realistic. Be prepared to justify in detail the goals proposed at the award/negotiation stage with the sponsor. For example, for certain specific pieces of equipment that are only made by large companies, a sole source justification is done per Procurement process guidance. It would be therefore, difficult to justify even 1% target under this budget category for a small disadvantaged business when you know that this is required.

What if the small business supplier is too expensive?

Products and services from small business suppliers may be priced higher than what might be obtained through a large-business or university strategic contract. This, however, is not an acceptable explanation for not purchasing through a small business enterprise unless the cost difference is significant. Remember that when the PI commits to the spending goals and supplier sources identified in the small business plan, the spend should be placed with those suppliers, or suppliers within the same small business category or categories, regardless of possible savings elsewhere.

What if a conflict of interest exists with a small business supplier?

Any potential or actual conflict of interest (COI) with suppliers must be identified, and the University’s COI policy and procedures must be followed.

What are the recordkeeping requirements of a small business subcontracting plan?

52.219-9(d)(11) describes “ the types of records that will be maintained concerning procedures that have been adopted to comply with the requirements and goals in the plan ”, including;

  • Source lists that identify small business types
  • Organizations contacted in an attempt to locate sources
  • Records with FAR-specified information on each subcontract solicitation resulting in an award of more than $150,000
  • Records of any outreach efforts
  • Records of internal guidance and encouragement provided to buyers

What are the reporting requirements for a small business subcontracting plan?

The requirement is to prepare and submit annual reports through the Electronic Subcontracting Reporting System: eSRS . This Internet-based tool streamlines the process of reporting on subcontracting plans and provides Federal agencies with access to analytical data on subcontracting performance and accomplishments.

Reports are required when due, regardless of whether there has been any subcontracting activity since the inception of the contract or since the previous report.

  • Submit all individual subcontracting reports (ISR) to ORA 10 days in advance of the submission deadline for review and approval.
  • Submit all Individual Subcontracting Reports (ISR) within 30 days of the close of each reporting period.
  • Check specific reporting periods with the Federal Agency – (generally semi annual/annual)
  • Save a copy of the final submitted report on file and send a copy to ORA.

Who do I contact if I am not able to spend with a small business included in my goals?

After the small business subcontracting plan is accepted by the sponsor, the expectation is that the goals will be met. Therefore, it will be necessary to explain in writing the reason spending could not occur during a federal reporting period and describe what efforts will be made to purchase from that business in the future. The PI must notify the sponsor of these circumstances.

If spend will not occur at all with the business, explain the reason why in writing and document the name of an alternate small business to provide the goods or services.  If another small business cannot be used, document why, and the name of the large business from which the goods or services will be purchased. The PI must then contact the Sponsor to explain the situation.

What if there is a change to the Prime contract with the sponsor? Whenever a request to alter the contract is to be submitted, you should contact ORA to determine if a modified Small Business Subcontracting Plan is required. This could include adding an additional phase, extending the date, or increasing the contract dollar amount

 What happens when a project does not meet its goals?

University of Maine could be held liable for fines.

Per FAR 19.702, legislation enacted in 1989 outlines financial penalties, referred to as “liquidated damages” for the prime contractor in the amount of the actual cash value for any shortfall not realized per Small Business Administration small/disadvantaged business subcontracting plan goals.

It is important to formulate a realistic small business subcontracting plan and execute its budgeting details.  As indicated above, there are potential monetary penalties for not meeting goals.  Moreover, non-compliance issues, such as not meeting goals set in the Small Business Subcontracting Plan, are documented by federal agencies and could affect all future funding applicants at the University.

The PI and department are responsible for managing and tracking spending on your small business subcontracting plan. Failure to meet the subcontracting goals may also negatively affect future funding prospects for other University of Maine applicants.

Who do I contact for more information and assistance?

Depending on what stage of the process you are in, please contact the following for assistance:

  • Plan review and submission – Proposal administrator
  • Justification and Negotiation – Award Reviewer
  • General inquiries: [email protected] and reference the PARS number
  • Notify Procurement when sourcing vendors that you have a small business subcontracting plan. RFP v RFB (we cannot necessarily go with the lowest value bid).
  • General inquiries – [email protected]

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IMAGES

  1. A Comprehensive Guide to Small Business Subcontracting Plans

    types of small business subcontracting plans

  2. Small Business Subcontracting Plan Template

    types of small business subcontracting plans

  3. PPT

    types of small business subcontracting plans

  4. PPT

    types of small business subcontracting plans

  5. Small Business Subcontracting Plan Template

    types of small business subcontracting plans

  6. PPT

    types of small business subcontracting plans

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  5. Successfully Navigating Subcontracting as a Small Business at SBC 2023

  6. Small Business University: Dwight Deneal

COMMENTS

  1. 19.704 Subcontracting plan requirements.

    (3) A description of the principal types of supplies and services to be subcontracted and an identification of types of supplies or services planned for subcontracting to small business (including ANCs and Indian tribes), veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged busi...

  2. Prime and subcontracting

    In this plan, which follows the requirements of FAR 52.219-9, the prime contractor sets goals for what it plans to subcontract to small businesses, small disadvantaged businesses, women-owned small businesses, HUBZone small businesses, veteran-owned small businesses, and service-disabled veteran-owned small businesses.

  3. A Comprehensive Guide to Small Business Subcontracting Plans

    There are two types of plans: commercial and individual. We will go into further detail on these below. How Do I Know if I Need a Subcontracting Plan?

  4. Subcontracting

    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 opportu...

  5. PDF Subcontracting Plans

    Four types of Subcontracting Plans: • 1. Individual Subcontracting Plan [FAR 19.704(a)] • 2. Master Subcontracting Plan [FAR 19.704(b)] • 3. Commercial Subcontracting Plan [FAR 19.704(d)] • 4. Comprehensive Subcontracting Plan [DFARS 219.702(1)] Federal Subk Plan Content

  6. Small Business Subcontracting Plans

    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...

  7. Small Business Subcontracting: Oversight of Contractor Compliance with

    These representatives may review small business subcontracting plans and provide recommendations for improving small business participation. When an agency is awarding a contract that includes a subcontracting plan, contracting officers are required to notify these representatives of the opportunity to review the proposed contract.

  8. PDF Lesson 1: Subcontracting Program vs. SB Participation Overview

    Concerns and FAR 52.219-9 Small Business Subcontracting Plan, the past performance ... Types of work performed by small businesses 4) Complexity of the work performed by small businesses 5) Reporting of small business performance in CPARS 6) History of prompt payments to small businesses

  9. PDF DLA Subcontracting Program Checklist (April 2023)

    Table 1 for a description of the different types of Small Business Subcontracting Plans. FAR 19.702 . Consider the contractor's compliance with its subcontracting plans on previous contracts as a factor in determining responsibility. For example, past performance information might be available as part of the vendor's proposal or in the

  10. Small Business Subcontracting Plan

    Individual Subcontracting Report (ISR): Shows subcontracting costs incurred under the specific GSA Schedule contract and is a cumulative report, showing all costs incurred since inception of the contract. A small business subcontracting plan explains how an "Other Than Small" business provides small business concerns with practicable opportunity.

  11. FAR Update: Good Faith in Small Business Subcontracting

    This includes goals for subcontracting efforts to provide fair opportunities to compete for subcontracts for various types of small business concerns, including small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns.

  12. Model Subcontracting Plan

    forth in FAR 19.704, Subcontracting Plan Requirements and FAR clause 52.219-9, Small Business Subcontracting Plan before submitting their subcontracting plans. Definitions of Types of Plans: _____ COMMERCIAL PLAN: Covers the offeror's fiscal year and applies to the entire production of commercial

  13. SMALL BUSINESS SUBCONTRACTING PLAN (sample)

    SMALL BUSINESS SUBCONTRACTING PLAN (sample) [COMPANY XXX] (For informational purposes only. The following outline meets the minimum requirements as imposed by Section 8(d) of the Small Business Act, and meets the minimum requirements of the Federal Acquisition Regulation (FAR) Subpart 19.7. This model plan is intended to be used as a guideline.

  14. Small Business Subcontracting Plan (SBSP)

    Types of small business include: Small business Veteran-owned small business Service-disabled veteran-owned small business HUBZone small business Women-owned small business Federal law requires a subcontracting plan if the value of contract exceeds a set dollar amount—currently $750,000.

  15. Subpart 19.7

    19.705-1 General. (a) The contracting officer may encourage the development of increased subcontracting opportunities in negotiated acquisition by providing monetary incentives such as payments based on actual subcontracting achievement or award-fee contracting (see the clause at 52.219-10, Incentive Subcontracting Program, and 19.708 (c)).

  16. Small Business Subcontracting Plans

    Contractors that meet this criteria must establish a subcontracting plan with specific dollar and percent goals for subcontracting to small, HUBZone small, small disadvantaged, small women-owned, Veteran-owned small, and service-disabled Veteran-owned small business firms. This plan must be in place prior to contract award.

  17. PDF GAO-20-464, SMALL BUSINESS SUBCONTRACTING: Oversight of Contractor

    Small business subcontracting plans, which are required by the Small Business Act, 15 U.S.C. § 637(d), establish goals for small business subcontracting and describe how the contractor plans to achieve those goals. The Small Business Administration establishes small business size standards on an industry-by-industry basis. Federal Acquisition

  18. Small Business Subcontracting Plans FAQs

    Per Federal Acquisition Regulation (FAR) Subpart 19.7, any contractor receiving a contract over $750,000 ($1.5 million for construction) must agree in the contract that 1) small business, 2) veteran-owned small business (VOSB), 3) service-disabled veteran-owned small business (SVOSB), 4) Historically Underutilized Business (HUBZone) small busine...

  19. Contracting assistance programs

    A small business subcontracting plan directs the prime contractor to subcontract out parts of the award to small businesses. A subcontracting plan is required when these conditions are met: The contract is expected to exceed $750,000 ($1.5 million for construction). There are capable small businesses who could do subcontract work at a fair ...

  20. PDF DoD SUBCONTRACTING PROGRAM The Basics of Subcontracting (Sept 2019)

    • Specifies that small businesses will have maximum practicable opportunity to participate in contract performance performance • Requires the agency to collect data on the extent to which the contractor meets the goals of the subcontracting plan • Section 15(g) Small Business Act - 15 USC 644(g) • 15 USC 637 Note

  21. 13 CFR 125.3 -- What types of subcontracting assistance are available

    The purpose of the subcontracting assistance program is to provide the maximum practicable subcontracting opportunities for small business concerns, including small business concerns owned and controlled by veterans, small business concerns owned and controlled by service-disabled veterans, certified HUBZone small business concerns, certified sm...

  22. PDF Subpart 219.7—The Small Business Subcontracting Program

    Business Subcontracting Plan (DoD Contracts), FAR 52.219- 9, Small Business Subcontracting Plan, and FAR 52.219- 16, Liquidated Damages —Subcontracting Plan. (2) In contracts with contractors that have comprehensive su bcontracting plans approved under the Test. Program described in 219.702-70, do not use the clause at FAR 52.219-16 ...

  23. SBA Unveils Updated Equity Action Plan to Advance the Biden-Harris

    WASHINGTON - Today, Administrator Isabel Casillas Guzman, head of the U.S. Small Business Administration (SBA) and the voice in President Biden's Cabinet for America's more than 33 million small businesses and startups, announced the SBA's updated 2023 Equity Action Plan outlining actionable steps the agency will take to advance the Biden-Harris Administration's commitment to ...

  24. Understanding Different Types Of Small Business Loans

    Here are overviews of the 11 most popular types of small business loans. Learn about the 11 most popular types of small business loans and which is right for you. ... You'll need to provide records of the business's performance and valuation, in addition to your own business plan and financial projections. Lastly, lenders will want to know ...