Federal Acquisition Regulation: Credit for Lower-Tier Small Business Subcontracting
| Published date | 26 June 2019 |
| Citation | 84 FR 30071 |
| Record Number | 2019-12481 |
| Section | Proposed rules |
| Court | General Services Administration |
Federal Register, Volume 84 Issue 123 (Wednesday, June 26, 2019)
[Federal Register Volume 84, Number 123 (Wednesday, June 26, 2019)]
[Proposed Rules]
[Pages 30071-30081]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-12481]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 19, 42, and 52
[FAR Case 2018-003; Docket No. 2018-0005, Sequence No. 1]
RIN 9000-AN61
Federal Acquisition Regulation: Credit for Lower-Tier Small
Business Subcontracting
AGENCY: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule.
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SUMMARY: DoD, GSA, and NASA are proposing to amend the Federal
Acquisition Regulation (FAR) to implement a section of the National
Defense Authorization Act for Fiscal Year 2014 and regulatory changes
made by the Small Business Administration (SBA).
DATES: Interested parties should submit written comments to the
Regulatory Secretariat Division at one of the addresses shown below on
or before August 26, 2019 to be considered in the formation of the
final rule.
ADDRESSES: Submit comments in response to FAR Case 2018-003 by any of
the following methods:
Regulations.gov: http://www.regulations.gov. Submit
comments via the Federal eRulemaking portal by searching for ``FAR Case
2018-003''. Select the link ``Comment Now'' that corresponds with ``FAR
Case 2018-003''. Follow the instructions provided on the screen. Please
include your name, company name (if any), and ``FAR Case 2018-003'' on
your attached document.
Mail: General Services Administration, Regulatory
Secretariat Division (MVCB), ATTN: Lois Mandell, 1800 F Street NW, 2nd
Floor, Washington, DC 20405.
Instructions: Please submit comments only and cite ``FAR Case 2018-
003'', in all correspondence related to this case. All comments
received will be posted without change to http://www.regulations.gov,
including any personal and/or business confidential information
provided. To confirm receipt of your comment(s), please check
www.regulations.gov, approximately two to three days after submission
to verify posting (except allow 30 days for posting of comments
submitted by mail).
FOR FURTHER INFORMATION CONTACT: Ms. Marilyn Chambers, Procurement
Analyst, at 202-285-7380 for clarification of content. For information
pertaining to status or publication schedules, contact the Regulatory
Secretariat Division at 202-501-4755. Please cite ``FAR Case 2018-
003''.
SUPPLEMENTARY INFORMATION:
I. Background
DoD, GSA, and NASA are proposing to revise the Federal Acquisition
Regulation (FAR) to implement section 1614 of the National Defense
Authorization Act (NDAA) for Fiscal Year (FY) 2014 (Pub. L. 113-66), as
implemented by the Small Business
[[Page 30072]]
Administration (SBA) in their final rule published in the Federal
Register on December 23, 2016, at 81 FR 94246. SBA's final rule and
section 1614 address credit for lower-tier small business
subcontracting.
Section 1614 of the NDAA for FY 2014 amended the Small Business Act
to provide that, where a prime contractor has an individual
subcontracting plan for a contract with a single executive agency, the
prime contractor shall receive credit towards its subcontracting goals
for awards made to small business concerns at any tier by
subcontractors with individual subcontracting plans. In addition,
section 1614 also provided new assurances for offerors to include in
subcontracting plans. The new assurances relate to activities to be
performed by the contractor to monitor the performance of
subcontractors with regard to subcontracting plans, and by
subcontractors to monitor the performance of their subcontractors with
regard to subcontracting plans. Section 1614 requires the contractor to
demonstrate procedures established to ensure subcontractors at all
tiers comply with their subcontracting plans. Section 1614 also revised
the definition of ``subcontract'' in the Small Business Act.
SBA's final rule requires a prime contractor with an individual
subcontracting plan to receive subcontracting credit for subcontracts
awarded to small business concerns at any tier by subcontractors with
individual subcontracting plans. Further, the changes require the prime
contractor to have two sets of goals in its individual subcontracting
plan: one set of goals includes the prime contractor's direct
subcontract awards (i.e., the first-tier goals), while the second set
of goals includes subcontracts awarded at any tier by other than small
business subcontractors with individual subcontracting plans (i.e.,
lower-tier goals). The purpose of the lower-tier goals is to ensure
maximum practicable opportunity for small business concerns at the
prime contractor's first tier, as well as at all lower tiers, in the
performance of the contract. This requirement to have two sets of
subcontracting goals applies only to the prime contractor's individual
subcontracting plan and does not apply to subcontractors'
subcontracting plans.
Per SBA's final rule, the prime contractor's performance under the
individual subcontracting plan must be evaluated based on its combined
performance under the first-tier and lower-tier goals. In addition, the
final rule implemented the statutory requirements related to the new
assurances and written statement to be included in subcontracting
plans.
The FAR currently requires other than small businesses with
subcontracts valued over $700,000 ($1.5 million for construction) to
have subcontracting plans and to report their subcontracting
achievements in the Electronic Subcontracting Reporting System (eSRS).
DoD, GSA, and NASA propose to use these existing subcontracting reports
in eSRS as a way for the prime contractor to monitor subcontractors'
achievements.
II. Discussion and Analysis
A. The proposed changes to the FAR are summarized in the following
paragraphs.
1. Subpart 19.7, The Small Business Subcontracting Program. This
subpart is amended to update the definition of subcontract and add
definitions of first-tier and lower-tier subcontracts. The existing
text at FAR 19.704 is reorganized to group together basic requirements
for all subcontracting plans, special requirements for commercial
plans, special requirements for individual subcontracting plans, and
special requirements for master subcontracting plans. Existing text
regarding the requirements for the current (i.e., first-tier) goals is
revised for clarity, but the requirements are unchanged. Text is added
concerning the new assurances related to monitoring the performance of
subcontractors with regard to subcontracting plans, and the written
statement regarding the contractor's records to demonstrate procedures
adopted to ensure subcontractors at all tiers comply with their
subcontracting plans. A new paragraph (d) entitled ``Special
requirements for individual subcontracting plans'' is added to address
existing and new requirements specific to individual plans. This
paragraph covers existing requirements such as individual subcontract
reports in eSRS, as well as the new requirements related to lower-tier
goals.
2. Subpart 42.15, Contractor Performance Information. This subpart
is amended to include an additional element for the contracting officer
to consider when assessing the contractor's combined performance under
the first-tier and lower-tier subcontracting goals.
3. Subpart 52.2, Text of Provisions and Clauses. This rule proposes
to amend the following contract clauses:
52.212-5, Contract Terms and Conditions Required to
Implement Statutes or Executive Orders--Commercial Items, is amended to
revise the dates of 52.219-9, Small Business Subcontracting Plan, and
its Alternates.
52.219-9, Small Business Subcontracting Plan, is amended
to update the definition of subcontract, to add definitions of first-
tier and lower-tier subcontracts, to add the new assurances at 52.219-
9(d)(9), and to add a written statement at 52.219-9(d)(12) to be
included in the subcontracting plan. Paragraphs (d)(1) and (2) of
52.219-9 are combined for clarity. Further, this clause is amended to
insert a new paragraph (e) applicable only to individual subcontracting
plans that require the inclusion of separate goals for subcontracting
at the lower tiers. The new paragraph addresses the requirement to have
lower-tier goals; it also gives information on receiving credit toward
those goals. In addition, a new paragraph (m) is added to provide
guidance to contractors regarding when and how to include the clause in
subcontracts. Conforming and editorial changes are made to the
alternates for FAR 52.219-9.
B. In addition to comments on the revisions described sections A.
1. through 3. of this preamble, DoD, GSA, and NASA invite input on the
following:
To minimize public burden, the Government intends to use
Individual Subcontract Reports (ISRs) submitted in eSRS by
subcontractors with individual subcontracting plans to calculate a
prime contractor's achievement for the lower-tier goals. Therefore,
this proposed rule does not require any additional action by the prime
contractor in eSRS to approve or acknowledge achievement for the lower-
tier goals. If the lower-tier subcontractors do not submit ISRs in
eSRS, this could impact the prime contractor's achievement toward the
lower-tier goals, which could impact the evaluation of the prime
contractor's performance rating when their combined performance is
assessed under the first-tier and lower-tier subcontracting goals under
FAR subpart 42.15, Contractor Performance Information. This potential
outcome is no different than what could happen under current
regulation, as the FAR currently requires an assessment of the prime
contractor's performance against, and efforts to achieve, the goals
identified in the small business subcontracting plan when the contract
includes the clause at 52.219-9.
o Do prime contractors want or need to approve or acknowledge
achievement for the lower-tier goals in eSRS?
o If so, what is the benefit of such an approval or acknowledgement
in eSRS?
[[Page 30073]]
o If so, how much time should prime contractors have to approve or
acknowledge the achievements?
What non-proprietary data would prime contractors need to
see in eSRS in order to monitor achievement for their lower-tier goals?
Would a mandatory lower-tier goal inadvertently encourage
more subcontracting at the first tier to other than small businesses,
who would subcontract to small businesses, in order to meet the lower-
tier goal?
What alternative processes or methodologies, permitting
prime contractors to take credit for subcontracts awarded to small
business at tiers below the first tier, would be more efficient for
prime contractors to manage?
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold and for Commercial Items, Including Commercially Available
Off-The-Shelf Items
DoD, GSA, and NASA do not intend to apply the requirements of
section 1614 of the NDAA for FY 2014 to contracts at or below the
simplified acquisition threshold (SAT), and except for the new
definitions, do not intend to apply the requirements to contracts for
the acquisition of commercial items, including commercially available
off-the-shelf (COTS) items. The clause at FAR 52.219-9 is prescribed
for use in solicitations and contracts that are expected to exceed
$700,000 ($1.5 million for construction of any public facility); this
threshold is above the SAT. The proposed revisions on lower-tier
subcontract goals do not apply to contracts using FAR clause 52.212-5,
which provides the statutory terms and conditions that apply to
commercial items (see the proposed text at 52.219-9(e) and (m)).
IV. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). E.O.
13563 emphasizes the importance of quantifying both costs and benefits,
of reducing costs, of harmonizing rules, and of promoting flexibility.
This is not a significant regulatory action and, therefore, was not
subject to review under Section 6(b) of E.O. 12866, Regulatory Planning
and Review, dated September 30, 1993. This rule is not a major rule
under 5 U.S.C. 804.
V. Executive Order 13771
This proposed rule is not expected to be an E.O. 13771 regulatory
action, because this proposed rule is not significant under E.O. 12866.
VI. Regulatory Flexibility Act
DoD, GSA, and NASA do not expect this proposed rule to have a
significant economic impact on a substantial number of small entities
within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601 et
seq., because the requirements of this rule apply to other than small
entities. However, an Initial Regulatory Flexibility Analysis (IRFA)
has been performed and is summarized as follows:
DoD, GSA, and NASA are proposing to amend the FAR to implement
section 1614 of the NDAA for FY 2014, as implemented in the SBA
regulations on December 23, 2016 at 81 FR 94246. Section 1614
requires prime contractors to receive small business subcontracting
credit for subcontracts that their other than small business
subcontractors award to small businesses, adds an assurance in
subcontracting plans for approval and monitoring of subcontracting
plans by the offeror and all subcontractors required to maintain
subcontracting plans, and requires a written statement of the
records the offeror will maintain to ensure compliance with the
subcontracting plan at the lower tiers.
The objectives of this proposed rule are to implement statutory
requirements. The authorizing legislation for this action is section
1614 of the NDAA for FY 2014.
This rule may have a positive economic impact on any small
business entity that wishes to participate in Federal procurement as
a subcontractor. Small businesses may see increased opportunities to
compete for subcontracts, as prime contractors encourage their
first-tier subcontractors who are other than small to improve their
performance in support of the prime contractor's lower-tier goals.
This potential increase in opportunities may increase the overall
number of subcontracts awarded to small businesses. According to the
Federal Funding Accountability and Transparency Act Subaward
Reporting System (FSRS), there are 19,596 unique entities who are
subcontractors. Approximately 80 percent of the entities registered
in the System for Award Management are small entities. Therefore, we
estimate that 80 percent (15,677) of the subcontractors in FSRS are
small entities. These small entities may benefit from this rule.
This rule does not impose any new reporting, recordkeeping or
other compliance requirements for small entities.
This rule does not duplicate, overlap, or conflict with any
other Federal rules.
There are no known alternatives which would accomplish the
stated objectives of the applicable statute.
The Regulatory Secretariat Division has submitted a copy of the
IRFA to the Chief Counsel for Advocacy of the Small Business
Administration. A copy of the IRFA may be obtained from the Regulatory
Secretariat Division. DoD, GSA, and NASA invite comments from small
business concerns and other interested parties on the expected impact
of this rule on small entities.
DoD, GSA, and NASA will also consider comments from small entities
concerning the existing regulations in subparts affected by the rule in
accordance with 5 U.S.C. 610. Interested parties must submit such
comments separately and should cite 5 U.S.C. 610 (FAR Case 2018-003),
in correspondence.
VII. Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. chapter 35) applies as this
proposed rule contains information collection requirements. Office of
Management and Budget control number 9000-0007, Subcontracting Plans,
will be revised to reflect the additional burden imposed by the
proposed rule.
With this proposed rule, the public reporting burden for this
collection is expected to increase from an average of 5 hours to 5.25
hours per response for subcontracting plans with first-tier
subcontracting goals. The increase of 0.25 hour per response is to
account for the additional assurances the offeror or contractor must
provide in the subcontracting plan.
Plans that also require lower-tier subcontracting goals are
estimated to take an additional 2 hours per response. The 2 hour
estimate includes the time for reviewing instructions, searching
existing data sources, gathering and maintaining the data needed,
completing and reviewing the collection of information, and
establishing the lower-tier subcontracting goals through negotiations
with the contracting officer.
Based on this proposed rule, the revised annual reporting burden
has been estimated as follows:
Commercial plan:
Respondents 542
Responses per respondent 1
Total annual responses 542
Hours per response 5.25 hrs.
Response burden hours 2,846
Individual plan:
Respondents 3,808
Responses per respondent 1
Total annual responses 3,808
Hours per response 5.25 hrs.
Response burden hours 19,992 hrs.
Individual plan with lower-tier goals:
Respondents 2,970
Responses per respondent 1
[[Page 30074]]
Total annual responses 2,970
Hours per response 2 hrs.
Response burden hours 5,940 hrs.
As part of this proposed rulemaking, the FAR Council is soliciting
comments from the public in order to:
Evaluate whether the proposed revisions to this collection of
information are necessary for the proper performance of the functions
of the FAR Council, including whether the information will have
practical utility;
Evaluate the accuracy of the FAR Council's estimate of the burden
of the revised collection of information, including the validity of the
methodology and assumptions used;
Enhance the quality, utility, and clarity of the information to be
collected; and
Minimize the burden of the collection of information on those who
are to respond, including through the use of appropriate collection
techniques.
Organizations and individuals desiring to submit comments on the
information collection requirements associated with this rulemaking
should submit comments not later than August 26, 2019 to: FAR Desk
Officer, OMB, Room 10102, NEOB, Washington, DC 20503, and a copy to the
General Services Administration, Regulatory Secretariat Division
(MVCB). The copy to GSA can be submitted by either of the following
methods:
Federal eRulemaking Portal: This website provides the
ability to type short comments directly into the comment field or
attach a file for lengthier comments. Go to http://www.regulations.gov
and follow the instructions on the site.
Mail: General Services Administration, Regulatory
Secretariat Division (MVCB), 1800 F Street NW, 2nd Floor, Washington,
DC 20405. ATTN: Lois Mandell/IC 9000-0007, Subcontracting Plans.
Instructions: All items submitted must cite Information Collection
9000-0007, Subcontracting Plans. Comments received generally will be
posted without change to http://www.regulations.gov, including any
personal and/or business confidential information provided. To confirm
receipt of your comment(s), please check www.regulations.gov,
approximately two to three days after submission to verify posting
(except allow 30 days for posting of comments submitted by mail).
List of Subjects in 48 CFR Parts 19, 42, and 52
Government procurement.
Dated: June 10, 2019.
William F. Clark,
Director, Office of Government-wide Acquisition Policy, Office of
Acquisition Policy, Office of Government-wide Policy.
Therefore, DoD, GSA, and NASA are proposing to amend 48 CFR parts
19, 42, and 52 as set forth below:
0
1. The authority citation for 48 CFR parts 19, 42, and 52 continues to
read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51
U.S.C. 20113.
PART 19--SMALL BUSINESS PROGRAMS
0
2. Amend section 19.701 by adding in alphabetical order the definitions
of ``First-tier subcontract'' and ``Lower-tier subcontract'' and
revising the definition of ``Subcontract'' to read as follows:
19.701 Definitions.
* * * * *
First-tier subcontract means any subcontract directly with the
prime contractor.
* * * * *
Lower-tier subcontract means any subcontract other than a
subcontract directly with the prime contractor.
* * * * *
Subcontract means a legally binding agreement--
(1) Between a contractor, that is under contract to another party
to perform work, and a third party (i.e., the subcontractor);
(2) For the subcontractor to perform a part of the work that the
contractor has undertaken; and
(3) That is not an employer-employee relationship.
* * * * *
0
3. Revise section 19.704 to read as follows:
19.704 Subcontracting plan requirements.
(a) General. When determining whether a subcontracting plan is
necessary, consider the cumulative value of the basic contract and all
options for multiyear contracts or contracts containing options.
(b) Basic requirements. Each subcontracting plan under 19.301-2(e)
and 19.702(a)(1), (2), and (3) shall include the following:
(1) The total planned subcontracting dollars for the subcontracting
plan.
(2) Separate goals expressed as dollars and as a percentage of
total planned subcontracting dollars for each of the following
categories:
(i) Small business concerns (including ANCs and Indian tribes).
(ii) Veteran-owned small business concerns.
(iii) Service-disabled veteran-owned small business concerns.
(iv) HUBZone small business concerns.
(v) Small disadvantaged business concerns (including ANCs and
Indian tribes).
(vi) Women-owned small business concerns.
(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 business (including ANCs and Indian tribes), and women-
owned small business concerns.
(4) A description of the method used to develop the subcontracting
goals.
(5) A description of the method used to identify potential sources
for solicitation purposes.
(6) A statement as to whether or not the offeror included indirect
costs in establishing subcontracting goals, and a description of the
method used to determine the proportionate share of indirect costs to
be incurred with small business (including ANCs and Indian tribes),
veteran-owned small business, service-disabled veteran-owned small
business, HUBZone small business, small disadvantaged business
(including ANCs and Indian tribes), and women-owned small business
concerns.
(7) The name of an individual employed by the offeror who will
administer the offeror's subcontracting program, and a description of
the duties of the individual.
(8) A description of the efforts the offeror will make to ensure
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 have an
equitable opportunity to compete for subcontracts.
(9) Assurances that the offeror will include the clause at 52.219-
8, Utilization of Small Business Concerns (see 19.708(a)), in all
subcontracts that offer further subcontracting opportunities, and that
the offeror will require all subcontractors (except small business
concerns) that receive subcontracts in excess of $700,000 ($1.5 million
for construction) to adopt a plan that complies with the requirements
of the clause at 52.219-9, Small Business Subcontracting Plan (see
19.708(b)).
(10) Assurances at a minimum that the offeror, and all
subcontractors
[[Page 30075]]
required to maintain subcontracting plans, will--
(i) Review and approve subcontracting plans submitted by their
subcontractors;
(ii) Monitor their subcontractors' compliance with their approved
subcontracting plans;
(iii) Ensure that subcontracting reports are submitted by their
subcontractors when required;
(iv) Acknowledge receipt of their subcontractors' reports;
(v) Compare the performance of their subcontractors to their
subcontracting plans and goals; and
(vi) Discuss performance with their subcontractors when necessary
to ensure their subcontractors make a good faith effort to comply with
their subcontracting plans. See 13 CFR 125.3(d)(3) for examples of good
faith effort.
(11) Assurances that the offeror will do the following:
(i) Cooperate in any studies or surveys as may be required.
(ii) Submit periodic reports so that the Government can determine
the extent of compliance by the offeror with the subcontracting plan.
(iii) Submit the Summary Subcontract Report (SSR) using the
Electronic Subcontracting Reporting System (eSRS) (https://www.esrs.gov), following the instructions in the eSRS. The SSR shall be
submitted annually by October 30 for the twelve-month period ending
September 30. When an SSR is rejected, the contractor is required to
submit a revised SSR within 30 days of receiving the notice of SSR
rejection.
(iv) Ensure that its subcontractors with subcontracting plans agree
to submit the SSR using the eSRS.
(12) A description of the types of records that will be maintained
concerning procedures adopted to comply with the requirements and goals
in the plan, including establishing source lists; and a description of
the offeror's efforts to locate small business, veteran-owned small
business, service-disabled veteran-owned small business, HUBZone small
business, small disadvantaged business, and women-owned small business
concerns and to award subcontracts to them.
(13) A written statement of the types of records the offeror will
maintain to demonstrate procedures that have been adopted to ensure
subcontractors at all tiers comply with the requirements and goals set
forth in the subcontracting plan established in accordance with
paragraph (b) of this section, including--
(i) The establishment of source lists of small business concerns,
veteran-owned small business concerns, service-disabled veteran-owned
small business concerns, HUBZone small business concerns, small
disadvantaged business concerns, and women-owned small business
concerns;
(ii) The efforts to identify and award subcontracts to such small
business concerns; and
(iii) The size or socioeconomic certifications or representations
received in connection with each subcontract.
(14) Assurances that the offeror will make a good faith effort to
acquire articles, equipment, supplies, services, or materials, or
obtain the performance of construction work from the small business
concerns that the offeror used in preparing the bid or proposal, in the
same or greater scope, amount, and quality used in preparing and
submitting the bid or proposal. Responding to a request for a quote
does not constitute use in preparing a bid or proposal. An offeror used
a small business concern in preparing the bid or proposal if--
(i) The offeror identifies the small business concern as a
subcontractor in the bid or proposal or associated small business
subcontracting plan, to furnish certain supplies or perform a portion
of the contract; or
(ii) The offeror used the small business concern's pricing or cost
information or technical expertise in preparing the bid or proposal,
where there is written evidence of an intent or understanding that the
small business concern will be awarded a subcontract for the related
work if the offeror is awarded the contract.
(15) Assurances that the contractor will provide the contracting
officer with a written explanation if the contractor fails to acquire
articles, equipment, supplies, services or materials or obtain the
performance of construction work as described in paragraph (b)(14) of
this section. This written explanation will be submitted to the
contracting officer within 30 days of contract completion.
(16) Assurances that the contractor will not prohibit a
subcontractor from discussing with the contracting officer any material
matter pertaining to payment to or utilization of a subcontractor.
(17) Assurances that the contractor will pay its small business
subcontractors on time and in accordance with the terms and conditions
of the subcontract, and notify the contracting officer if the
contractor pays a reduced or an untimely payment to a small business
subcontractor (see 52.242-5).
(c) Special requirements for commercial plans. A commercial plan
(as defined in 19.701) is the preferred type of subcontracting plan for
contractors furnishing commercial items. Once a contractor's commercial
plan has been approved, the Government shall not require another
subcontracting plan from the same contractor while the plan remains in
effect, as long as the product or service being provided by the
contractor continues to meet the definition of a commercial item.
(1) The commercial plan shall include the total projected sales,
expressed in dollars.
(2) Total planned subcontracting dollars (see paragraph (b)(1) of
this section) is equal to the total value of projected subcontracts to
support the sales for a commercial plan.
(3) The contractor shall--
(i) Submit the commercial plan to either the first contracting
officer awarding a contract subject to the plan during the contractor's
fiscal year, or, if the contractor has ongoing contracts with
commercial plans, to the contracting officer responsible for the
contract with the latest completion date. The contracting officer shall
negotiate the commercial plan for the Government. The approved
commercial plan shall remain in effect during the contractor's fiscal
year for all Government contracts in effect during that period;
(ii) Submit a new commercial plan, 30 working days before the end
of the contractor's fiscal year, to the contracting officer responsible
for the uncompleted Government contract with the latest completion
date. The contractor must provide to each contracting officer
responsible for an ongoing contract subject to the plan, the identity
of the contracting officer that will be negotiating the new plan;
(iii) When the new commercial plan is approved, provide a copy of
the approved plan to each contracting officer responsible for an
ongoing contract that is subject to the plan; and
(iv) Comply with the reporting requirements stated in paragraph
(b)(11) of this section by submitting one SSR in eSRS, for all
contracts covered by its commercial plan. This report will be
acknowledged or rejected in eSRS by the contracting officer who
approved the plan. The report shall be submitted within 30 days after
the end of the Government's fiscal year.
(d) Special requirements for individual subcontracting plans. (1)
Base and option periods. In addition to the elements required by
paragraph (b) of this section, an individual
[[Page 30076]]
subcontracting plan shall contain separate statements and goals based
on total subcontract dollars for the base period and for each option.
(2) Lower-tier goals. (i) Additional separate goals shall be
expressed as dollars and as a percentage of total planned
subcontracting dollars for subcontracts at lower tiers awarded by other
than small business subcontractors with individual subcontracting
plans, for each of the categories in paragraph (b)(2) of this section.
(ii) These goals are not required in individual subcontracting
plans for--
(A) Contracts intended for use by multiple executive agencies; or
(B) Contracts that include the clause at 52.212-5, Contract Terms
and Conditions Required to Implement Statutes or Executive Orders-
Commercial Items.
(3) Percentage of total contract dollars. A contracting officer may
require the goals referenced in paragraph (b)(2) of this section to be
calculated as a percentage of total contract dollars, in addition to
the goals established as a percentage of total planned subcontracting
dollars.
(4) Reporting in eSRS. The individual subcontracting plan shall
include contractor assurances regarding the following:
(i) Compliance with the reporting requirements stated in paragraph
(b)(11) of this section by submission in eSRS of one SSR for each
agency.
(ii) Submission of the Individual Subcontract Report (ISR), using
eSRS, semiannually during contract performance for the periods ending
March 31 and September 30. A report is also required for each contract
within 30 days of contract completion. Reports are due 30 days after
the close of each reporting period, unless otherwise directed by the
contracting officer. Reports are required when due, regardless of
whether there has been any subcontracting activity since the inception
of the contract or the previous reporting period. When a contracting
officer rejects an ISR, the contractor is required to submit a revised
ISR within 30 days of receiving the notice of the ISR rejection.
(iii) Include subcontracting data for each order when reporting
subcontracting achievements for indefinite-delivery, indefinite-
quantity contracts where the contract is intended for use by multiple
agencies.
(iv) Ensuring that its subcontractors with subcontracting plans
agree to submit the ISR using the eSRS.
(v) Providing its prime contract number, its unique entity
identifier, and the email address of the offeror's official responsible
for acknowledging receipt of or rejecting the ISRs to all first-tier
subcontractors with subcontracting plans so they can enter this
information into the eSRS when submitting their ISRs.
(vi) Requiring that each subcontractor with a subcontracting plan
provide the prime contract number, its own unique entity identifier,
and the email address of the subcontractor's official responsible for
acknowledging receipt of or rejecting the ISRs, to its subcontractors
with subcontracting plans.
(e) Special requirements for master subcontracting plans.
Contractors may establish, on a plant or division-wide basis, a master
subcontracting plan (see 19.701) that contains all the elements
required by the clause at 52.219-9, Small Business Subcontracting Plan,
except goals. Master subcontracting plans shall be effective for a 3-
year period after approval by the contracting officer; however, it is
incumbent upon contractors to maintain and update master subcontracting
plans. Changes required to update master subcontracting plans are not
effective until approved by the contracting officer. A master
subcontracting plan, when incorporated in an individual plan, shall
apply to that contract throughout the life of the contract.
19.705-4 [Amended]
0
4. Amend section 19.705-4 by--
0
a. In paragraph (b) removing ``15''; and
0
b. In paragraph (c) removing ``the 15 elements'' and adding ``the
required elements'' in its place.
0
5. Amend section 19.705-6 by revising paragraph (f)(2) to read as
follows:
19.705-6 Postaward responsibilities of the contracting officer.
* * * * *
(f) * * *
(2) Review ISRs, SSRs, and where applicable, additional standard
reports, in eSRS within 60 days of the report ending date (e.g., by
November 30th for a report submitted for the fiscal year ended
September 30th).
* * * * *
PART 42--CONTRACT ADMINISTRATION AND AUDIT SERVICES
0
6. Amend section 42.1501 by redesignating paragraphs (a)(5) through
(a)(7) as paragraph (a)(6) through (a)(8); and adding a new paragraph
(a)(5) to read as follows:
42.1501 General.
(a) * * *
(5) Good faith effort to comply with the requirements of the small
business subcontracting plan (see 19.705-7(d)). See 13 CFR 125.3(d)(3)
for examples of good faith effort;
* * * * *
0
7. Amend section 42.1503 by--
0
a. Revising paragraph (b)(2)(v); and
0
b. In the Table 42-2, under the heading ``Evaluation Ratings
Definitions [For the small business subcontracting evaluation factor,
when 52.219-9 is used]'' by--
0
i. Removing from the entry for (a) Exceptional, in the first sentence
of the ``Definition'' column, ``goals as negotiated'' and adding
``goals as negotiated, including lower-tier goals as applicable'' in
its place;
0
ii. Removing from the entry for (b) Very Good, in the first sentence
of the ``Definition'' column, ``goals as negotiated'' and adding
``goals as negotiated, including lower-tier goals as applicable'' in
its place;
0
iii. Removing from the entry for (c) Satisfactory, in the first
sentence of the ``Definition'' column, ``subcontracting goals'' and
adding ``subcontracting goals, including lower-tier goals as
applicable,'' in its place;
0
iv. Removing from the entry for (d) Marginal, in the first sentence of
the ``Definition'' column, ``plan elements'' and adding ``plan
elements, including lower-tier goals as applicable,'' in its place; and
0
v. Removing from the entry for (e) Unsatisfactory, in the first
sentence of the ``Definition'' column, ``contract/order'' and adding
``contract/order, including lower-tier goals as applicable,'' in its
place.
The revision reads as follows.
42.1503 Procedures.
* * * * *
(b) * * *
(2) * * *
(v) Small business subcontracting, including--
(A) For an individual subcontracting plan that includes lower-tier
goals, the contractor's combined performance under the first-tier and
lower-tier goals; and
(B) Reduced or untimely payments to small business subcontractors
when 19.702(a) requires a subcontracting plan (as applicable, see Table
42-2).
* * * * *
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
8. Amend section 52.212-5 by--
0
a. Revising the date of the clause;
[[Page 30077]]
0
b. Amending paragraph (b) by--
0
i. Removing from paragraph (b)(17)(i) ``(AUG 2018)'' and adding
``([DATE])'' in its place;
0
ii. Removing from paragraph (b)(17)(ii) ``(NOV 2016)'' and adding
``([DATE])'' in its place;
0
iii. Removing from paragraph (b)(17)(iii) ``(NOV 2016)'' and adding
``([DATE])'' in its place;
0
iv. Removing from paragraph (b)(17)(iv) ``(NOV 2016)'' and adding
``([DATE])'' in its place; and
0
v. Removing from paragraph (b)(17)(v) ``(AUG 2018)'' and adding
``([DATE])'' in its place.
The revisions read as follows:
52.212-5 Contract Terms and Conditions Required To Implement Statutes
or Executive Orders--Commercial Items.
* * * * *
Contract Terms and Conditions Required To Implement Statutes or
Executive Orders--Commercial Items ([DATE])
* * * * *
0
9. Amend section 52.219-9 by--
0
a. Revising the date of the clause;
0
b. Adding in paragraph (b) in alphabetical order, the definitions
``First-tier subcontract'' and ``Lower-tier subcontract'';
0
c. Revising the definition ``Subcontract'';
0
d. Revising the third sentence of paragraph (c)(1);
0
e. Revising paragraphs (d)(1) through (d)(9);
0
f. In paragraph (d)(10)(iii) removing ``After November 30, 2017,
include'' and adding ``Include'' in its place;
0
g. In paragraph (d)(11) removing ``offeror's efforts'' and adding
``Offeror's efforts'' in its place;
0
h. In paragraph (d)(11)(vi) removing ``offeror'' and adding
``Offeror'' in its place;
0
i. Redesignating paragraphs (d)(12) through (d)(15) as paragraphs
(d)(13) through (d)(16);
0
j. Adding a new paragraph (d)(12);
0
k. In newly redesignated paragraph (d)(14) removing ``(d)(12)'' and
adding ``(d)(13)'' in its place;
0
l. Revising newly redesignated paragraph (d)(16);
0
m. Remove paragraph (j);
0
n. Redesignate paragraph (i) as paragraph (j);
0
o. Redesignate paragraphs (e) through (h) as paragraphs (f) through
(i);
0
p. Add a new paragraph (e);
0
q. In newly redesignated paragraph (f)(4) removing ``with 52.219-
8(d)(2)'' and adding ``with FAR 52.219-8(d)(5)'' in its place;
0
r. Revising newly redesignated paragraph (h);
0
s. In newly redesignated paragraph (i) removing ``offeror'' where it
appears and adding ``Offeror'' in its places;
0
t. Revising the fifth sentence of the introductory paragraph of
paragraph (l);
0
u. In paragraph (l)(1)(ii)(A) removing ``as prescribed by FAR
19.704(c)'' and adding ``(see paragraph (c)(1) of this clause)'' in its
place;
0
v. In paragraph (l)(1)(ii)(B) removing ``19.702(a)(3) or 19.301-2(e)''
and adding ``FAR 19.702(a)(3) or 19.301-2(e)'' in its place;
0
w. In paragraph (l)(2)(ii)(B) removing ``within thirty days '' and
adding ``within 30 days'' in its place;
0
x. Adding a new paragraph (m);
0
y. Revising the date of Alternate I and the third sentence of
paragraph (c)(1);
0
z. Revising the date of Alternate II and the third sentence of
paragraph (c)(1);
0
aa. Amending Alternate III by--
0
i. Revising the date of Alternate III;
0
ii. Removing from the introductory text ``(d)(10) and (l)'' and adding
``(d)(10),(e), and (l)'' in their places;
0
iii. Adding and reserving paragraph (e);
0
iv. Revising the fifth sentence of the introductory paragraph of
paragraph (l);
0
v. Removing from paragraph (l)(1)(ii)(A) ``as prescribed by FAR
19.704(c)'' and adding ``(see paragraph (c)(1) of this clause) in its
place; and
0
vi. Removing from paragraph (l)(1)(ii)(B) ``19.702(a)(3) or 19.301-
2(e)'' and adding ``FAR 19.702(a)(3) or 19.301-2(e)'' in its place; and
0
bb. Amending Alternate IV by--
0
i. Revising the date of Alternate IV;
0
ii. Removing from the introductory text ``(c) and (d)'' and adding
``(c), (d) and (e)'' in its place;
0
iii. Revising the third sentence of paragraph (c)(1);
0
iv. Revising paragraph (d); and
0
v. Adding a new paragraph (e).
The revisions and additions read as follows:
52.219-9 Small Business Subcontracting Plan.
* * * * *
Small Business Subcontracting Plan ([DATE])
* * * * *
(b) * * *
First-tier subcontract means any subcontract directly with the
prime contractor.
* * * * *
Lower-tier subcontract means any subcontract other than a
subcontract directly with the prime contractor.
* * * * *
Subcontract means a legally binding agreement--
(1) Between a contractor, that is under contract to another party
to perform work, and a third party (i.e., the subcontractor);
(2) For the subcontractor to perform a part of the work that the
contractor has undertaken; and
(3) That is not an employer-employee relationship.
* * * * *
(c)(1) * * * The Contracting Officer will incorporate the
subcontracting plan in the resultant contract.
* * * * *
(d) * * *
(1)(i) The total planned subcontracting dollars for an individual
subcontracting plan; or total projected sales, expressed in dollars,
and the total value of projected subcontracts to support the sales for
a commercial plan.
(ii) Separate goals, expressed as dollars and as a percentage of
total planned subcontracting dollars, for each of the following
categories:
(A) Small business concerns (including ANCs and Indian tribes).
(B) Veteran-owned small business concerns.
(C) Service-disabled veteran-owned small business concerns.
(D) HUBZone small business concerns.
(E) Small disadvantaged business concerns (including ANCs and
Indian tribes).
(F) Women-owned small business concerns.
(iii) For individual subcontracting plans, and if required by the
Contracting Officer, goals shall also be expressed in terms of
percentage of total contract dollars, in addition to the goals
expressed as a percentage of total planned subcontracting dollars.
(iv) All subcontracts that contribute to contract performance, and
may include a proportionate share of products and services that are
normally allocated as indirect costs.
(v) In accordance with 43 U.S.C. 1626--
(A) Subcontracts awarded to an ANC or Indian tribe shall be counted
towards the subcontracting goals for small business and small
disadvantaged business concerns, regardless of the size or Small
Business Administration certification status of the ANC or Indian
tribe; and
(B) Where one or more subcontractors are in the subcontract tier
between the prime Contractor and the ANC or Indian tribe, the ANC or
Indian tribe shall designate the appropriate contractor(s) to count the
subcontract towards its small business and small disadvantaged business
subcontracting goals.
(1) In most cases, the appropriate contractor is the contractor
that awarded
[[Page 30078]]
the subcontract to the ANC or Indian tribe.
(2) If the ANC or Indian tribe designates more than one contractor
to count the subcontract toward its goals, the ANC or Indian tribe
shall designate only a portion of the total subcontract award to each
contractor. The sum of the amounts designated to various contractors
cannot exceed the total value of the subcontract.
(3) The ANC or Indian tribe shall give a copy of the written
designation to the Contracting Officer, the prime Contractor, and the
subcontractors in between the prime Contractor and the ANC or Indian
tribe within 30 days of the date of the subcontract award.
(4) If the Contracting Officer does not receive a copy of the ANC's
or the Indian tribe's written designation within 30 days of the
subcontract award, the contractor that awarded the subcontract to the
ANC or Indian tribe will be considered the designated contractor.
(2) A description of the principal types of supplies and services
to be subcontracted, and an identification of the types planned for
subcontracting to--
(i) Small business concerns;
(ii) Veteran-owned small business concerns;
(iii) Service-disabled veteran-owned small business concerns;
(iv) HUBZone small business concerns;
(v) Small disadvantaged business concerns; and
(vi) Women-owned small business concerns.
(3) A description of the method used to develop the subcontracting
goals in paragraph (d)(1) of this clause.
(4) A description of the method used to identify potential sources
for solicitation purposes (e.g., existing company source lists, SAM,
veterans service organizations, the National Minority Purchasing
Council Vendor Information Service, the Research and Information
Division of the Minority Business Development Agency in the Department
of Commerce, or small, HUBZone, small disadvantaged, and women-owned
small business trade associations). A firm may rely on the information
contained in SAM as an accurate representation of a concern's size and
ownership characteristics for the purposes of maintaining a small,
veteran-owned small, service-disabled veteran-owned small, HUBZone
small, small disadvantaged, and women-owned small business source list.
Use of SAM as its source list does not relieve a firm of its
responsibilities (e.g., outreach, assistance, counseling, or
publicizing subcontracting opportunities) in this clause.
(5) A statement as to whether or not the Offeror included indirect
costs in establishing subcontracting goals, and a description of the
method used to determine the proportionate share of indirect costs to
be incurred with--
(i) Small business concerns (including ANCs and Indian tribes);
(ii) Veteran-owned small business concerns;
(iii) Service-disabled veteran-owned small business concerns;
(iv) HUBZone small business concerns;
(v) Small disadvantaged business concerns (including ANCs and
Indian tribes); and
(vi) Women-owned small business concerns.
(6) The name of the individual employed by the Offeror who will
administer the Offeror's subcontracting program, and a description of
the duties of the individual.
(7) A description of the efforts the Offeror will make to assure
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 have an
equitable opportunity to compete for subcontracts.
(8) Assurances that the Offeror will include the clause of this
contract entitled ``Utilization of Small Business Concerns'' in all
subcontracts that offer further subcontracting opportunities, and that
the Offeror will require all subcontractors (except small business
concerns and when paragraph (m)(2) applies) that receive subcontracts
in excess of $700,000 ($1.5 million for construction of any public
facility) with further subcontracting possibilities to adopt a
subcontracting plan that complies with the requirements of this clause.
(9) Assurances at a minimum that the Offeror, and all
subcontractors required to maintain subcontracting plans, will--
(i) Review and approve subcontracting plans submitted by their
subcontractors;
(ii) Monitor their subcontractors' compliance with their approved
subcontracting plans;
(iii) Ensure that subcontracting reports are submitted by their
subcontractors when required;
(iv) Acknowledge receipt of their subcontractors' reports;
(v) Compare the performance of their subcontractors to their
subcontracting plans and goals; and
(vi) Discuss performance with their subcontractors when necessary
to ensure their subcontractors make a good faith effort to comply with
their subcontracting plans; see 13 CFR 125.3(d)(3) for examples of good
faith effort;
* * * * *
(12) A written statement of the types of records the Offeror will
maintain to demonstrate procedures that have been adopted to ensure
subcontractors at all tiers comply with the requirements and goals set
forth in the subcontracting plan established in accordance with this
clause, including--
(i) The establishment of source lists of small business concerns,
veteran-owned small business concerns, service-disabled veteran-owned
small business concerns, HUBZone small business concerns, small
disadvantaged business concerns, and women-owned small business
concerns;
(ii) The efforts to identify and award subcontracts to such small
business concerns; and
(iii) The size or socioeconomic certifications or representations
received in connection with each subcontract.
* * * * *
(16) Assurances that the Contractor will pay its small business
subcontractors on time and in accordance with the terms and conditions
of the underlying subcontract, and notify the Contracting Officer when
the prime Contractor makes either a reduced or an untimely payment to a
small business subcontractor (see the clause at FAR 52.242-5).
(e) The requirements of this paragraph (e) apply to an Offeror's
individual subcontracting plan except for contracts intended for use by
multiple executive agencies and contracts that include the clause at
FAR 52.212-5, Contract Terms and Conditions Required to Implement
Statutes or Executive Orders--Commercial Items.
(1) The Offeror's subcontracting plan shall also include separate
goals for subcontracts at lower tiers awarded by other than small
business subcontractors with individual subcontracting plans--
(i) Expressed as dollars and as a percentage of total planned
subcontracting dollars (see paragraph (d)(1)(ii) of this clause), for
each of the following categories:
(A) Small business concerns (including ANCs and Indian tribes).
(B) Veteran-owned small business concerns.
(C) Service-disabled veteran-owned small business concerns.
(D) HUBZone small business concerns.
[[Page 30079]]
(E) Small disadvantaged business concerns (including ANCs and
Indian tribes).
(F) Women-owned small business concerns.
(ii) If required by the Contracting Officer, goals shall also be
expressed in terms of percentage of total contract dollars, in addition
to the goals expressed as a percentage of total planned subcontracting
dollars; and
(iii) The offeror shall include all subcontracts that contribute to
contract performance, and may include a proportionate share of products
and services that are normally allocated as indirect costs.
(2) The Contractor will receive credit towards the goals described
in paragraph (e)(1) of this clause for achievements by subcontractors
with individual subcontracting plans that are reported via the ISR and
acknowledged in eSRS.
* * * * *
(h) A commercial plan is the preferred type of subcontracting plan
for contractors furnishing commercial items. The commercial plan shall
relate to the Offeror's planned subcontracting generally, for both
commercial and Government business, rather than solely to the
Government contract. Once the Contractor's commercial plan has been
approved, the Government will not require another subcontracting plan
from the same Contractor while the plan remains in effect, as long as
the product or service being provided by the Contractor continues to
meet the definition of a commercial item. A contractor with a
commercial plan shall comply with the reporting requirements stated in
paragraph (d)(10) of this clause by submitting one SSR in eSRS for all
contracts covered by its commercial plan. The SSR shall be acknowledged
or rejected in eSRS by the Contracting Officer who approved the
commercial plan. The SSR shall be submitted within 30 days after the
end of the Government's fiscal year.
* * * * *
(l) * * * Subcontract award data shall not include 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. * * *
* * * * *
(m) Subcontracts. (1) The Contractor shall include this clause,
except for paragraph (e), in subcontracts that are required to have a
subcontracting plan (but see paragraph (m)(2) of this clause). The
Contractor shall not further alter this clause other than to identify
the appropriate parties.
(2) The Contractor shall not include this clause in subcontracts
when--
(i) The contract contains the clause at 52.212-5, Contract Terms
and Conditions Required to Implement Statutes or Executive Orders--
Commercial Items; or
(ii) A subcontractor provides a commercial item subject to the
clause at FAR 52.244-6, Subcontracts for Commercial Items.
Alternate I ([DATE]). * * *
* * * * *
(c)(1) * * * The Contracting Officer will incorporate the
subcontracting plan in the resultant contract. * * *
* * * * *
Alternate II ([DATE]). * * *
* * * * *
(c)(1) * * * The Contracting Officer will incorporate the
subcontracting plan in the resultant contract. * * *
* * * * *
Alternate III ([DATE]). * * *
* * * * *
(e) Reserved.
* * * * *
(l) * * * Subcontract award data shall not include 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. * * *
* * * * *
Alternate IV ([DATE]). * * *
* * * * *
(c)(1) * * * The Contracting Officer will incorporate the
subcontracting plan into the contract. * * *
* * * * *
(d) The Contractor's subcontracting plan shall include the
following:
(1)(i) The total planned subcontracting dollars for an individual
subcontracting plan; or the Contractor's total projected sales,
expressed in dollars, and the total value of projected subcontracts to
support the sales for a commercial plan.
(ii) Separate goals, expressed as dollars and as a percentage of
total planned subcontracting dollars, for each of the following
categories:
(A) Small business concerns (including ANCs and Indian tribes).
(B) Veteran-owned small business concerns.
(C) Service-disabled veteran-owned small business concerns.
(D) HUBZone small business concerns.
(E) Small disadvantaged business concerns (including ANCs and
Indian tribes).
(F) Women-owned small business concerns.
(iii) For individual subcontracting plans, and if required by the
Contracting Officer, goals shall also be expressed in terms of
percentage of total contract dollars, in addition to the goals
expressed as a percentage of total planned subcontracting dollars.
(iv) All subcontracts that contribute to contract performance, and
may include a proportionate share of products and services that are
normally allocated as indirect costs.
(v) In accordance with 43 U.S.C. 1626--
(A) Subcontracts awarded to an ANC or Indian tribe shall be counted
towards the subcontracting goals for small business and small
disadvantaged business concerns, regardless of the size or Small
Business Administration certification status of the ANC or Indian
tribe; and
(B) Where one or more subcontractors are in the subcontract tier
between the prime Contractor and the ANC or Indian tribe, the ANC or
Indian tribe shall designate the appropriate contractor(s) to count the
subcontract towards its small business and small disadvantaged business
subcontracting goals.
(1) In most cases, the appropriate contractor is the contractor
that awarded the subcontract to the ANC or Indian tribe.
(2) If the ANC or Indian tribe designates more than one contractor
to count the subcontract toward its goals, the ANC or Indian tribe
shall designate only a portion of the total subcontract award to each
contractor. The sum of the amounts designated to various contractors
cannot exceed the total value of the subcontract.
(3) The ANC or Indian tribe shall give a copy of the written
designation to the Contracting Officer, the prime Contractor, and the
subcontractors in between the prime Contractor and the ANC or Indian
tribe within 30 days of the date of the subcontract award.
(4) If the Contracting Officer does not receive a copy of the ANC's
or the Indian tribe's written designation within 30 days of the
subcontract award, the Contractor that awarded the subcontract to the
ANC or Indian tribe will be considered the designated Contractor.
(2) A description of the principal types of supplies and services
to be subcontracted, and an identification of the types planned for
subcontracting to--
(i) Small business concerns;
(ii) Veteran-owned small business concerns;
(iii) Service-disabled veteran-owned small business concerns;
[[Page 30080]]
(iv) HUBZone small business concerns;
(v) Small disadvantaged business concerns; and
(vi) Women-owned small business concerns.
(3) A description of the method used to develop the subcontracting
goals in paragraph (d)(1) of this clause.
(4) A description of the method used to identify potential sources
for solicitation purposes (e.g., existing company source lists, SAM,
veterans service organizations, the National Minority Purchasing
Council Vendor Information Service, the Research and Information
Division of the Minority Business Development Agency in the Department
of Commerce, or small, HUBZone, small disadvantaged, and women-owned
small business trade associations). The Contractor may rely on the
information contained in SAM as an accurate representation of a
concern's size and ownership characteristics for the purposes of
maintaining a small, veteran-owned small, service-disabled veteran-
owned small, HUBZone small, small disadvantaged, and women-owned small
business source list. Use of SAM as its source list does not relieve a
firm of its responsibilities (e.g., outreach, assistance, counseling,
or publicizing subcontracting opportunities) in this clause.
(5) A statement as to whether or not the Contractor included
indirect costs in establishing subcontracting goals, and a description
of the method used to determine the proportionate share of indirect
costs to be incurred with--
(i) Small business concerns (including ANCs and Indian tribes);
(ii) Veteran-owned small business concerns;
(iii) Service-disabled veteran-owned small business concerns;
(iv) HUBZone small business concerns;
(v) Small disadvantaged business concerns (including ANCs and
Indian tribes); and
(vi) Women-owned small business concerns.
(6) The name of the individual employed by the Contractor who will
administer the Contractor's subcontracting program, and a description
of the duties of the individual.
(7) A description of the efforts the Contractor will make to assure
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 have an
equitable opportunity to compete for subcontracts.
(8) Assurances that the Contractor will include the clause of this
contract entitled ``Utilization of Small Business Concerns'' in all
subcontracts that offer further subcontracting opportunities, and that
the Contractor will require all subcontractors (except small business
concerns and when paragraph (m)(2) applies) that receive subcontracts
in excess of $700,000 ($1.5 million for construction of any public
facility) with further subcontracting possibilities to adopt a
subcontracting plan that complies with the requirements of this clause.
(9) Assurances at a minimum that the Contractor, and all
subcontractors required to maintain subcontracting plans, will--
(i) Review and approve subcontracting plans submitted by their
subcontractors;
(ii) Monitor their subcontractors' compliance with their approved
subcontracting plans;
(iii) Ensure that subcontracting reports are submitted by
subcontractors when required;
(iv) Acknowledge receipt of their subcontractors' reports;
(v) Compare the performance of their subcontractors to their
subcontracting plans and goals; and
(vi) Discuss performance with their subcontractors when necessary
to ensure their subcontractors make a good faith effort to comply with
their subcontracting plans; see 13 CFR 125.3(d)(3) for examples of good
faith effort.
(10) Assurances that the Contractor will--
(i) Cooperate in any studies or surveys as may be required;
(ii) Submit periodic reports so that the Government can determine
the extent of compliance by the Contractor with the subcontracting
plan;
(iii) Include subcontracting data for each order when reporting
subcontracting achievements for an indefinite-delivery, indefinite-
quantity contract with an individual subcontracting plan where the
contract is intended for use by multiple agencies;
(iv) Submit the Individual Subcontract Report (ISR) and/or the
Summary Subcontract Report (SSR), in accordance with paragraph (l) of
this clause using the Electronic Subcontracting Reporting System (eSRS)
at https://www.esrs.gov. The reports shall provide information on
subcontract awards to small business concerns (including ANCs and
Indian tribes that are not small businesses), veteran-owned small
business concerns, service-disabled veteran-owned small business
concerns, HUBZone small business concerns, small disadvantaged business
concerns (including ANCs and Indian tribes that have not been certified
by SBA as small disadvantaged businesses), women-owned small business
concerns, and for NASA only, Historically Black Colleges and
Universities and Minority Institutions. Reporting shall be in
accordance with this clause, or as provided in agency regulations;
(v) Ensure that its subcontractors with subcontracting plans agree
to submit the ISR and/or the SSR using eSRS;
(vi) Provide its prime contract number, its unique entity
identifier, and the email address of the Contractor's official
responsible for acknowledging receipt of or rejecting the ISRs, to all
first-tier subcontractors with subcontracting plans so they can enter
this information into the eSRS when submitting their ISRs; and
(vii) Require that each subcontractor with a subcontracting plan
provide the prime contract number, its own unique entity identifier,
and the email address of the subcontractor's official responsible for
acknowledging receipt of or rejecting the ISRs, to its subcontractors
with subcontracting plans.
(11) A description of 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 establishing source
lists; and a description of the Contractor's efforts to locate small
business, veteran-owned small business, service-disabled veteran-owned
small business, HUBZone small business, small disadvantaged business,
and women-owned small business concerns and award subcontracts to them.
The records shall include at least the following (on a plant-wide or
company-wide basis, unless otherwise indicated):
(i) Source lists (e.g., SAM), guides, and other data that identify
small business, veteran-owned small business, service-disabled veteran-
owned small business, HUBZone small business, small disadvantaged
business, and women-owned small business concerns.
(ii) Organizations contacted in an attempt to locate sources that
are small business, veteran-owned small business, service-disabled
veteran-owned small business, HUBZone small business, small
disadvantaged business, or women-owned small business concerns.
(iii) Records on each subcontract solicitation resulting in an
award of more than $150,000, indicating--
[[Page 30081]]
(A) Whether small business concerns were solicited and, if not, why
not;
(B) Whether veteran-owned small business concerns were solicited
and, if not, why not;
(C) Whether service-disabled veteran-owned small business concerns
were solicited and, if not, why not;
(D) Whether HUBZone small business concerns were solicited and, if
not, why not;
(E) Whether small disadvantaged business concerns were solicited
and, if not, why not;
(F) Whether women-owned small business concerns were solicited and,
if not, why not; and
(G) If applicable, the reason award was not made to a small
business concern.
(iv) Records of any outreach efforts to contact--
(A) Trade associations;
(B) Business development organizations;
(C) Conferences and trade fairs to locate small, HUBZone small,
small disadvantaged, service-disabled veteran-owned, and women-owned
small business sources; and
(D) Veterans service organizations.
(v) Records of internal guidance and encouragement provided to
buyers through--
(A) Workshops, seminars, training, etc.; and
(B) Monitoring performance to evaluate compliance with the
program's requirements.
(vi) On a contract-by-contract basis, records to support award data
submitted by the Contractor to the Government, including the name,
address, and business size of each subcontractor. Contractors having
commercial plans need not comply with this requirement.
(12) A written statement of the types of records the Contractor
will maintain to demonstrate procedures which have been adopted to
ensure subcontractors at all tiers comply with the requirements and
goals set forth in the subcontracting plan established in accordance
with this clause, including--
(i) The establishment of source lists of small business concerns,
veteran-owned small business concerns, service-disabled veteran-owned
small business concerns, HUBZone small business concerns, small
disadvantaged business concerns, and women-owned small business
concerns;
(ii) The efforts to identify and award subcontracts to such small
business concerns; and
(iii) The size or socioeconomic certifications or representations
received in connection with each subcontract.
(13) Assurances that the Contractor will make a good faith effort
to acquire articles, equipment, supplies, services, or materials, or
obtain the performance of construction work from the small business
concerns that it used in preparing the proposal for the modification,
in the same or greater scope, amount, and quality used in preparing and
submitting the modification proposal. Responding to a request for a
quote does not constitute use in preparing a proposal. The Contractor
used a small business concern in preparing the proposal for a
modification if--
(i) The Contractor identifies the small business concern as a
subcontractor in the proposal or associated small business
subcontracting plan, to furnish certain supplies or perform a portion
of the subcontract; or
(ii) The Contractor used the small business concern's pricing or
cost information or technical expertise in preparing the proposal,
where there is written evidence of an intent or understanding that the
small business concern will be awarded a subcontract for the related
work when the modification is executed.
(14) Assurances that the Contractor will provide the Contracting
Officer with a written explanation if the Contractor fails to acquire
articles, equipment, supplies, services or materials or obtain the
performance of construction work as described in (d)(13) of this
clause. This written explanation must be submitted to the Contracting
Officer within 30 days of contract completion.
(15) Assurances that the Contractor will not prohibit a
subcontractor from discussing with the Contracting Officer any material
matter pertaining to the payment to or utilization of a subcontractor.
(16) Assurances that the Contractor will pay its small business
subcontractors on time and in accordance with the terms and conditions
of the underlying subcontract, and notify the Contracting Officer when
the prime Contractor makes either a reduced or an untimely payment to a
small business subcontractor (see the clause at FAR 52.242-5).
(e) The requirements of this paragraph (e) apply to a Contractor's
individual subcontracting plan except for contracts intended for use by
multiple executive agencies and contracts that include the clause at
FAR 52.212-5, Contract Terms and Conditions Required to Implement
Statutes or Executive Orders--Commercial Items.
(1) The Contractor's subcontracting plan shall also include
separate goals for subcontracts at lower tiers awarded by other than
small business subcontractors with individual subcontracting plans--
(i) Expressed as dollars and as a percentage of total planned
subcontracting dollars (see paragraph (d)(1)(ii) of this clause), for
each of the following categories:
(A) Small business concerns (including ANCs and Indian tribes).
(B) Veteran-owned small business concerns.
(C) Service-disabled veteran-owned small business concerns.
(D) HUBZone small business concerns.
(E) Small disadvantaged business concerns (including ANCs and
Indian tribes).
(F) Women-owned small business concerns.
(ii) If required by the Contracting Officer, goals shall also be
expressed in terms of percentage of total contract dollars, in addition
to the goals expressed as a percentage of total planned subcontracting
dollars.
(iii) The Contractor shall include all subcontracts that contribute
to contract performance, and may include a proportionate share of
products and services that are normally allocated as indirect costs.
(2) The Contractor will receive credit towards the goals described
in paragraph (e)(1) of this clause for achievements by subcontractors
with individual subcontracting plans that are reported via the ISR and
acknowledged in eSRS.
[FR Doc. 2019-12481 Filed 6-25-19; 8:45 am]
BILLING CODE 6820-EP-P
