Editor’s Note: This is the first of a two-part series written by ConnXus founder Founder & Chief Connector Rod Robinson.
As a prime contractor to the federal government, many companies are required to flow-down the Small Business Subcontracting Plan requirements located in Federal Acquisition Regulation (FAR) Clause 52.219-9 to its large Tier I suppliers (i.e., a large majority-owned company awarded a contract). This regulation requires any large Tier I supplier receiving a single contract with a dollar value in excess of $650,000 (or $1,500,000 for construction) adopts a subcontracting plan that addresses subcontracting with the following classifications of diverse businesses:
- Small business
- Veteran-owned small business
- Service-disabled veteran-owned small business
- HUB Zone small business concerns
- Small disadvantaged business
- Woman-owned small business concerns
As prescribed by FAR 52.219-9, these plans are typically structured as follows:
Identification Data – Company information highlighting name and address, business description, key products and services, GSA contract #, type of plan and contract reporting period.
Goals – Dollar goals expressed in terms of percentages of total planned subcontracting dollars, for the use within each diverse business classification as follows:
- Small business
- Veteran-owned small business
- Service-disabled veteran-owned small business
- HUB Zone small business concerns
- Small disadvantaged business
- Woman-owned small business concerns
Description of the principal products and services to be subcontracted and an identification of the types of subcontractors (diverse businesses) to be used within each category
Description of the methods used to establish goals
Description of the method used to identify potential suppliers for solicitation purposes
A statement as to whether or not indirect costs were included in establishing subcontracting goals and a description of the method used to determine the proportionate share of indirect costs to be incurred with diverse businesses (by classification)
The name of the individual, at the company, who will administer the subcontracting program and a description of the duties of that individual
Assurances that the company will include the clause of “Utilization of Small Business Concerns” in all subcontracts that offer further subcontracting opportunities and the company will require all subcontractors (except small business concerns) that receive subcontracts in excess of $650,000 ($1.5 million for construction of any public facility) with further subcontracting possibilities to adopt a subcontracting plan that complies with the requirements of FAR 52.219-9
Assurances that the company will cooperate in any studies or surveys as may be required and submit periodic reports so that the Government can determine the extent of compliance with the subcontracting plan
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 company’s efforts to locate diverse businesses
Click the following link to read Part 2.
