Federal Acquisition Regulation: Good Faith in Small Business Subcontracting
| Published date | 03 June 2020 |
| Citation | 85 FR 34155 |
| Record Number | 2020-10511 |
| Section | Proposed rules |
| Court | Defense Department,General Services Administration |
Federal Register, Volume 85 Issue 107 (Wednesday, June 3, 2020)
[Federal Register Volume 85, Number 107 (Wednesday, June 3, 2020)]
[Proposed Rules]
[Pages 34155-34159]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-10511]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 19, 42, and 52
[FAR Case 2019-004, Docket No. FAR-2019-0030, Sequence No. 1]
RIN 9000-AN87
Federal Acquisition Regulation: Good Faith in 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 2017, which requires examples
of failure to make good faith efforts to comply with a small business
subcontracting plan.
DATES: Interested parties should submit written comments at the address
shown below on or before August 3, 2020 to be considered in the
formation of the final rule.
ADDRESSES: Submit comments in response to FAR Case 2019-004 to https://www.regulations.gov. Submit comments via the Federal eRulemaking portal
by searching for ``FAR Case 2019-004''. Select the link ``Comment Now''
that corresponds with FAR Case 2019-004. Follow the instructions
provided at the ``Comment Now'' screen. Please include your name,
company name (if any), and ``FAR Case 2019-004'' on your attached
document. If your comment cannot be submitted using https://www.regulations.gov, call or email the points of contact in the FOR
FURTHER INFORMATION CONTACT section of this document for alternate
instructions.
Instructions: Please submit comments only and cite FAR Case 2019-
004 in all correspondence related to this case. Comments received
generally will be posted without change to https://www.regulations.gov,
including any personal and/or business confidential information
provided. To confirm receipt of your comment(s), please check https://www.regulations.gov, approximately two to three days after submission
to verify posting.
FOR FURTHER INFORMATION CONTACT: Ms. Malissa Jones, Procurement
Analyst, at (703)605-2815, or by email at [email protected], for
clarification of content. For information pertaining to status or
publication schedules, contact the Regulatory Secretariat Division at
202-501-4755 or [email protected]. Please cite FAR Case 2019-004.
SUPPLEMENTARY INFORMATION:
I. Background
DoD, GSA, and NASA are proposing to amend the FAR to implement
section 1821 of the National Defense Authorization Act (NDAA) for
Fiscal Year (FY) 2017 (15 U.S.C 637 note, Pub. L. 114-328). Section
1821 requires the Small Business Administration (SBA) to amend its
regulations to provide examples of activities that would be considered
a failure to make a good faith effort to comply with a small business
subcontracting plan. SBA issued a rule at 84 FR 65647, November 29,
2019, to implement section 1821 of the NDAA for FY 2017. In its rule,
SBA amends 13 CFR 125.3(d)(3) to provide guidance on evaluating whether
the prime contractor made a good faith effort to comply with its small
business subcontracting plan and a list of examples of activities
reflective of a failure to make a good faith effort.
Additionally, SBA revised 13 CFR 125.3(c)(1)(iv) to require that
prime contractors with commercial subcontracting plans include indirect
costs in their subcontracting goals. Other than small business concerns
that have a commercial subcontracting plan report on performance
through a summary subcontract report (SSR). SBA's regulations currently
require that contractors using a commercial subcontracting plan must
include indirect costs in their SSRs, but do not require these
contractors to include indirect costs in their subcontracting goals,
which leads to inconsistencies when comparing the data reported in the
SSR to the goals in the commercial subcontracting plan.
Small business subcontracting plans are required from large prime
contractors when a contract is expected to exceed $700,000 ($1.5
million for construction) and has subcontracting possibilities. FAR
19.704 lists the elements of the plan, which include the contractor's
goals for subcontracting to small business concerns and a description
of the efforts the contractor 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. Failure to make a good faith effort to comply
with the plan may result in the assessment of liquidated damages per
FAR 52.219-16, Liquidated Damages--Subcontracting Plan.
II. Discussion and Analysis
The proposed changes to the FAR are summarized in the following
paragraphs.
A. Inclusion of Indirect Costs in Commercial Plans
Section 19.704, Subcontracting plan requirements, and the clause at
52.219-9, Small Business Subcontracting Plan, are amended to require
that all indirect costs, with certain exceptions, are included in
commercial plans and SSRs.
B. Compliance With the Subcontracting Plan
Section 19.705-7, Liquidated damages, is renamed ``Compliance with
the subcontracting plan'' and is reorganized, with paragraph headings
[[Page 34156]]
added to make this section easier to read and understand. This section
includes examples of a good faith effort, and examples of a failure to
make a good faith effort to comply with the subcontracting plan,
including SBA's examples at 13 CFR 125.3(d). References to the examples
in 19.705-7 are added in other sections in subparts 19.7 and 42.15. A
reference to SBA's examples at 13 CFR 125.3(d), now located at FAR
19.705-7, is added in the clause at 52.219-16.
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold (SAT) and for Commercial Items, Including Commercially
Available Off-the-Shelf (COTS) Items
This rule proposes to implement a statutory requirement to provide
examples of activities that would be considered a failure to make a
good faith effort to comply with a small business subcontracting plan.
Because section 8(d) of the Small Business Act (15 U.S.C. 637(d))
requires subcontracting plans only for acquisitions valued above
$700,000 ($1.5 million for construction contracts), the requirements of
section 1821 of the NDAA for FY 2017 (15 U.S.C 637 note, Pub. L. 114-
328) would not apply to contracts at or below the SAT. The FAR Council
intends to apply the requirements of section 1821 to contracts for the
acquisition of commercial items. Revisions to the clauses at FAR
52.219-9 and 52.219-16 are proposed by this rule. Discussion of these
preliminary determinations is set forth below. The FAR Council will
consider public feedback before making a final determination on the
scope of the final rule.
A. Applicability to Contracts for the Acquisition of Commercial Items
Pursuant to 41 U.S.C. 1906, acquisitions of commercial items (other
than acquisitions of COTS items, which are addressed in 41 U.S.C. 1907)
are exempt from a provision of law unless the law (i) contains criminal
or civil penalties; (ii) specifically refers to 41 U.S.C. 1906 and
states that the law applies to acquisitions of commercial items; or
(iii) the FAR Council makes a written determination and finding that it
would not be in the best interest of the Federal Government to exempt
contracts for the procurement of commercial items from the provision of
law. If none of these conditions are met, the FAR is required to
include the statutory requirement(s) on a list of provisions of law
that are inapplicable to the acquisition of commercial items.
The purpose of this rule is to implement section 1821 of the NDAA
for FY 2017 and SBA's implementing regulations. Section 1821 requires
SBA to provide examples of activities that would be considered a
failure to make a good faith effort to comply with a small business
subcontracting plan. Both the FAR and SBA's regulations require
contractors with small business subcontracting plans, including
commercial plans, to make a good faith effort to comply with the plans.
SBA's rule did not exempt the acquisition of commercial items.
Section 1821 furthers the Administration's goal of supporting small
business. It advances the interests of small business subcontractors by
promoting good faith efforts by large prime contractors to find and use
small business concerns as subcontractors, thereby providing valuable
opportunities for small business concerns.
For these reasons, it is in the best interest of the Federal
Government to apply the requirements of this rule to the acquisition of
commercial items.
B. Applicability to Contracts for the Acquisition of COTS Items
Pursuant to 41 U.S.C. 1907, acquisitions of COTS items will be
exempt from a provision of law unless the law (i) contains criminal or
civil penalties; (ii) specifically refers to 41 U.S.C. 1907 and states
that the law applies to acquisitions of COTS items; (iii) concerns
authorities or responsibilities under the Small Business Act (15 U.S.C.
644) or bid protest procedures developed under the authority of 31
U.S.C. 3551 et seq., 10 U.S.C. 2305(e) and (f), or 41 U.S.C. 3706 and
3707; or (iv) the Administrator for Federal Procurement Policy makes a
written determination and finding that it would not be in the best
interest of the Federal Government to exempt contracts for the
procurement of COTS items from the provision of law. If none of these
conditions are met, the FAR is required to include the statutory
requirement(s) on a list of provisions of law that are inapplicable to
the acquisition of COTS items.
The purpose of this rule is to implement section 1821 of the NDAA
for FY 2017 and SBA's implementing regulations. Section 1821 requires
SBA to provide examples of activities that would be considered a
failure to make a good faith effort to comply with a small business
subcontracting plan. Both the FAR and SBA's regulations require
contractors with small business subcontracting plans, including
commercial plans, to make a good faith effort to comply with the plans.
SBA's rule did not exempt the acquisition of COTS items.
Section 1821 furthers the Administration's goal of supporting small
business. It advances the interests of small business subcontractors by
promoting good faith efforts by large prime contractors to find and use
small business concerns as subcontractors, thereby providing valuable
opportunities for small business concerns.
For these reasons, it is in the best interest of the Federal
Government to apply the requirements of this rule to the acquisition of
COTS items.
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 subject to E.O. 13771,
Reducing Regulation and controlling Regulatory Costs, because this rule
is not a significant regulatory action 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. 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 1821 of the NDAA for FY 2017 (Pub. L. 114-328). Section 1821
amends the Small Business Act (15 U.S.C 637 note), to require SBA to
provide examples of activities that would be considered a failure to
make a good faith effort to comply with the goals and other elements
in small business subcontracting plans. Additionally, SBA clarified
in its regulations that large prime contractors with commercial
subcontracting plans must
[[Page 34157]]
include indirect costs in the commercial subcontracting plan goals.
The objective of this proposed rule is to implement section 1821
of the NDAA for FY 2017 and SBA's implementing regulations, which
provide examples of activities that would be considered a failure to
make a good faith effort to comply with a small business
subcontracting plan. SBA has amended 13 CFR 125.3(d)(3) to provide
guidance on evaluating whether the prime contractor made a good
faith effort to comply with its small business subcontracting plan
and a list of examples of activities reflective of a failure to make
a good faith effort.
Additionally, SBA has revised 13 CFR 125.3(c)(1)(iv) to require
that large prime contractors with commercial subcontracting plans
include indirect costs in the commercial subcontracting plan goals.
Large prime contractors that have a commercial subcontracting plan
report on performance through a SSR in the Electronic Subcontracting
Reporting System (eSRS). SBA's regulations and the FAR currently
require that a contractor using a commercial subcontracting plan
include indirect costs in its SSR. However, these regulations do not
require contractors to include indirect costs in their commercial
subcontracting plan goals, which leads to inconsistencies when
comparing the data reported in the SSR to the goals in the
commercial subcontracting plan.
This rule may have a positive economic impact on any small
business entity that wishes to participate in Federal procurement as
a subcontractor. By providing examples of a failure to make a good
faith effort to comply with small business subcontracting plans,
contracting officers can determine more easily whether large prime
contractors have made a good faith effort to comply with their
subcontracting plans and hold large prime contractors accountable
for failing to make a good faith effort to comply with their
subcontracting plans. More diligence in developing and meeting
subcontracting goals on the part of large prime contractors could
have a positive impact of giving small business concerns more
opportunity to subcontract on Federal contracts. Data from the
Federal Procurement Data System indicate that in FY 2018 there were
2,397 entities with 15,758 awards that required small business
subcontracting plans. 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 proposed rule will require a large prime contractor with a
commercial subcontracting plan to include indirect costs in its
subcontracting goals. The benefit of requiring that indirect costs
be included in subcontracting goals in commercial subcontracting
plans is that it will increase the small business subcontracting
goal and thus increase the amount of funds the prime contractor will
subcontract to small business concerns, providing more opportunities
for subcontract awards to small business concerns.
This proposed rule does not include any new reporting,
recordkeeping or other compliance requirements for small entities.
This proposed rule does not duplicate, overlap, or conflict with
any other Federal rules.
There are no known significant alternative approaches that 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 SBA. 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 this rule
in accordance with 5 U.S.C. 610. Interested parties must submit
comments separately and should cite 5 U.S.C. 610 (FAR case 2019-004) in
correspondence.
VII. Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. chapter 35) applies to this
rule; however, these changes to the FAR do not impose additional
information collection requirements to the paperwork burden previously
approved under OMB Control Number 9000-0007, Subcontracting Plans.
List of Subjects in 48 CFR Parts 19, 42, and 52
Government procurement.
William F. Clark,
Director, Office of Government-Wide Acquisition Policy, Office of
Acquisition Policy, Office of Government-Wide Policy.
Therefore, for the reasons listed in the preamble, DoD, GSA, and
NASA are proposing to amend 48 CFR parts 19, 42, and 52 to read as
follows:
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 19.704 by--
0
a. Removing from paragraph (a)(6) ``subcontracting goals'' and adding
``subcontracting goals (for commercial plans, see paragraph (d) of this
section)'' in its place;
0
b. Revising the introductory text of paragraph (d); and
0
c. Removing from paragraph (d)(4) ``one SSR'' and adding ``one SSR that
includes all indirect costs, except as described in paragraph (d) of
this section,'' in its place.
The revision reads as follows:
19.704 Subcontracting plan requirements.
* * * * *
(d) A commercial plan (as defined in 19.701) is the preferred type
of subcontracting plan for contractors furnishing commercial items. The
subcontracting goals established for a commercial plan shall include
all indirect costs with the exception of those such as the following:
Employee salaries and benefits; payments for petty cash; depreciation;
interest; income taxes; property taxes; lease payments; bank fees;
fines, claims, and dues; original equipment manufacturer relationships
during warranty periods (negotiated up front with the product);
utilities and other services purchased from a municipality or an entity
solely authorized by the municipality to provide those services in a
particular geographical region; and philanthropic contributions. 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. The contractor shall--
* * * * *
19.705-4 [Amended]
0
3. Amend section 19.705-4 by removing from paragraph (c), in the fourth
sentence, ``faith effort'' and adding ``faith effort (see 19.705-7)''.
0
4. Amend section 19.705-6 by revising paragraphs (g)(1), (h), and (i)
to read as follows:
19.705-6 Postaward responsibilities of the contracting officer.
* * * * *
(g) * * *
(1) Assess whether the prime contractor made a good faith effort to
comply with its small business subcontracting plan. See 19.705-7(b) for
more information on the determination of good faith effort.
* * * * *
(h) Initiate action to assess liquidated damages in accordance with
19.705-7 upon a recommendation by the administrative contracting
officer, if one is assigned, or receipt of other reliable evidence to
indicate that assessing liquidated damages is warranted.
[[Page 34158]]
(i) Take action to enforce the terms of the contract upon receipt
of a notice from the contract administration office under 19.706(f).
* * * * *
0
5. Amend section 19.705-7 by--
0
a. Revising the section heading;
0
b. Adding a paragraph heading to paragraph (a);
0
c. Removing from paragraph (a) ``small disadvantaged business'' and
adding ``small disadvantaged business,'' in its place;
0
d. Revising paragraphs (b), (c), (d), and (e);
0
e. Adding a paragraph heading to the introductory text of paragraph
(f);
0
f. Removing paragraph (g); and
0
g. Redesignating paragraph (h) as paragraph (f)(5).
The revisions and additions read as follows:
19.705-7 Compliance with the subcontracting plan.
(a) General. * * *
(b) Determination of good faith effort. (1) In determining whether
a contractor failed to make a good faith effort to comply with its
subcontracting plan, a contracting officer must look to the totality of
the contractor's actions, consistent with the information and
assurances provided in its plan. The fact that the contractor failed to
meet its subcontracting goals does not, in and of itself, constitute a
failure to make a good faith effort (see 19.701). For example,
notwithstanding a contractor's diligent effort to identify and solicit
offers from any of the small business, veteran-owned small business,
service-disabled veteran-owned small business, HUBZone small business,
small disadvantaged business, and women-owned small business concerns,
factors such as unavailability of anticipated sources or unreasonable
prices may frustrate achievement of the contractor's subcontracting
goals. The contracting officer may consider any of the following,
though not all inclusive, to be indicators of a good faith effort:
(i) Breaking out work to be subcontracted into economically
feasible units, as appropriate, to facilitate small business
participation.
(ii) Conducting market research to identify potential small
business subcontractors 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.
(iii) Soliciting small business concerns as early in the
acquisition process as practicable to allow them sufficient time to
submit a timely offer for the subcontract.
(iv) Providing interested small businesses with adequate and timely
information about plans, specifications, and requirements for
performance of the prime contract to assist them in submitting a timely
offer for the subcontract.
(v) Negotiating in good faith with interested small businesses.
(vi) Directing small businesses that need additional assistance to
SBA.
(vii) Assisting interested small businesses in obtaining bonding,
lines of credit, required insurance, necessary equipment, supplies,
materials, or services.
(viii) Utilizing the available services of small business
associations; local, state, and Federal small business assistance
offices; and other organizations.
(ix) Participating in a formal mentor-prot[eacute]g[eacute] program
with one or more small-business prot[eacute]g[eacute]s that results in
developmental assistance to the prot[eacute]g[eacute]s.
(x) Although failing to meet the subcontracting goal in one
socioeconomic category, exceeding the goal by an equal or greater
amount in one or more of the other categories.
(xi) Fulfilling all of the requirements of the subcontracting plan.
(2) When considered in the context of the contractor's total effort
in accordance with its plan, the contracting officer may consider any
of the following, though not all inclusive, to be indicators of a
failure to make a good faith effort:
(i) Failure to attempt through market research to identify,
contact, solicit, or consider for contract award small business,
veteran-owned small business, service-disabled veteran-owned small
business, HUBZone small business, small disadvantaged business, or
women-owned small business concerns, through all reasonable means
including outreach, industry days, or the use of Federal systems such
as SBA's Dynamic Small Business Search or SUBNet systems.
(ii) Failure to designate and maintain a company official to
administer the subcontracting program and monitor and enforce
compliance with the plan.
(iii) Failure to submit an acceptable ISR, or the SSR, using the
eSRS, or as provided in agency regulations, by the report due dates
specified in 52.219-9, Small Business Subcontracting Plan.
(iv) Failure to maintain records or otherwise demonstrate
procedures adopted to comply with the plan including subcontracting
flowdown requirements.
(v) Adoption of company policies or documented procedures that have
as their objectives the frustration of the objectives of the plan.
(vi) Failure to pay small business subcontractors in accordance
with the terms of the contract with the prime contractor;
(vii) Failure to correct substantiated findings from Federal
subcontracting compliance reviews or participate in subcontracting plan
management training offered by the Government;
(viii) Failure to 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 19.704(a)(12).
(ix) Falsifying records of subcontract awards to small business
concerns.
(c) Documentation of good faith effort. If, at completion of the
basic contract or any option, or in the case of a commercial plan, at
the close of the fiscal year for which the plan is applicable, a
contractor has failed to comply with the requirements of its
subcontracting plan, which includes meeting its subcontracting goals,
the contracting officer shall review all available information for an
indication that the contractor has not made a good faith effort to
comply with the plan. If no such indication is found, the contracting
officer shall document the file accordingly.
(d) Notice of failure to make a good faith effort. If the
contracting officer decides in accordance with paragraph (b) of this
section that the contractor failed to make a good faith effort to
comply with its subcontracting plan, the contracting officer shall give
the contractor written notice in accordance with 52.219-16, Liquidated
Damages--Subcontracting Plan, specifying the material breach, which may
be included in the contractor's past performance information, advising
the contractor of the possibility that the contractor may have to pay
to the Government liquidated damages, and providing a period of 15
working days (or longer period as necessary) within which to respond.
The notice shall give the contractor an opportunity to demonstrate what
good faith efforts have been made before the contracting officer issues
the final decision, and shall further state that failure of the
contractor to respond may be taken as an admission that no valid
explanation exists.
(e) Payment of liquidated damages. (1) If, after consideration of
all the pertinent data, the contracting officer finds that the
contractor failed to make
[[Page 34159]]
a good faith effort to comply with its subcontracting plan, the
contracting officer shall issue a final decision to the contractor to
that effect and require the payment of liquidated damages in an amount
stated. The contracting officer's final decision shall state that the
contractor has the right to appeal under the clause in the contract
entitled Disputes. Calculations and procedures shall be in accordance
with 52.219-16, Liquidated Damages--Subcontracting Plan.
(2) The amount of damages attributable to the contractor's failure
to comply shall be an amount equal to the actual dollar amount by which
the contractor failed to achieve each subcontracting goal. For
calculations for commercial plans see paragraph (f) of this section.
(3) Liquidated damages shall be in addition to any other remedies
that the Government may have.
(f) Commercial plans. * * *
19.706 [Amended]
0
6. Amend section 19.706 by removing from paragraph (f)
``subcontracting plan'' and adding ``subcontracting plan (see 19.705-
7(b) for more information on the determination of good faith effort)''.
PART 42--CONTRACT ADMINISTRATION AND AUDIT SERVICES
0
7. Amend section 42.1501 by redesignating paragraphs (a)(5) thru (a)(7)
as paragraphs (a)(6) thru (a)(8) and adding new paragraph (a)(5) to
read as follows:
42.1501 General.
(a) * * *
(5) Complying with the requirements of the small business
subcontracting plan (see 19.705-7(b));
* * * * *
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
8. Amend section 52.212-5 by revising the date of the clause and
paragraphs (b)(17)(i), (b)(17)(v), and (b)(20) to 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)
* * * * *
(b) * * *
__(17)(i) 52.219-9, Small Business Subcontracting Plan (DATE)
(15 U.S.C. 637(d)(4)).
* * * * *
__(v) Alternate IV (DATE) of 52.219-9.
* * * * *
__(20) 52.219-16, Liquidated Damages--Subcontracting Plan (DATE)
(15 U.S.C. 637(d)(4)(F)(i)).
* * * * *
0
9. Amend section 52.219-9 by--
0
a. Revising the date of the clause;
0
b. Removing from paragraph (d)(2)(i) ``subcontracts'' and adding
``subcontracts, including all indirect costs except as described in
paragraph (g) of this clause,'' in its place;
0
c. Adding a new fifth sentence to paragraph (g);
0
d. Amending alternate IV by revising the date of the clause and
paragraph (d)(2)(i).
The revisions and additions read as follows:
52.219-9 Small Business Subcontracting Plan.
* * * * *
Small Business Subcontracting Plan (DATE)
* * * * *
(g) * * * A Contractor authorized to use a commercial
subcontracting plan shall include in its subcontracting goals and in
its SSR all indirect costs, with the exception of those such as the
following: Employee salaries and benefits; payments for petty cash;
depreciation; interest; income taxes; property taxes; lease
payments; bank fees; fines, claims, and dues; original equipment
manufacturer relationships during warranty periods (negotiated up
front with the product); utilities and other services purchased from
a municipality or an entity solely authorized by the municipality to
provide those services in a particular geographical region; and
philanthropic contributions. * * *
* * * * *
Alternate IV (DATE). * * *
(d) * * *
(2) * * *
(i) Total dollars planned to be subcontracted for an individual
subcontracting plan; or the Offeror's total projected sales,
expressed in dollars, and the total value of projected subcontracts
to support the sales for a commercial plan, including all indirect
costs, with the exception of those such as the following: Employee
salaries and benefits; payments for petty cash; depreciation;
interest; income taxes; property taxes; lease payments; bank fees;
fines, claims, and dues; original equipment manufacturer
relationships during warranty periods (negotiated up front with the
product); utilities and other services purchased from a municipality
or an entity solely authorized by the municipality to provide those
services in a particular geographical region; and philanthropic
contributions;
* * * * *
0
10. Amend 52.219-16 by revising the date of the clause and removing
from paragraph (b) ``plan, established'' and adding ``plan (see 19.705-
7), established'' in its place.
The revision reads as follows:
52.219-16 Liquidated Damages--Subcontracting Plan.
* * * * *
Liquidated Damages--Subcontracting Plan (DATE)
* * * * *
[FR Doc. 2020-10511 Filed 6-2-20; 8:45 am]
BILLING CODE 6820-EP-P
