Small Business Subcontracting Plans & Reporting

Small Business Subcontracting Plans & Reporting A Pre-award Plan with Post-Award Ramifications

Session Expectations History of this requirement Policy and Regulations behind Small Business Subcontracting Plans (SBSP) and subsequent reporting Determine the need for a SBSP Examine the elements of a SBSP Methodology used to complete a SBSP

Session Expectations, cont d Tools to assist in the development of required SBSP goals Review and acceptance by the Federal Government (or not!) SBSP reporting

History Lesson The Small Business Act, Public Law 83-163 (1958) The Act Established the authority for loans, procurement set-asides, management counseling, certificates of competency and advocacy to assist small businesses

History Lesson Public Law 95-507 (1978) Amended The Act to require that Small Business Concerns have the maximum practicable opportunity to participate in the performance of contracts awarded by any federal agency.

History Lesson Public Law 95-507, cont d Established subcontracting plan requirements for certain prime contracts and provided the statutory basis for the Business Development Program Further required the establishment of an Office of Small and Disadvantaged Business Utilization in each Federal agency.

History Lesson Public Law 100-656 (1988) amendment to The Act Established a process for setting goals for procurement prime contract and subcontract awards to small and small disadvantaged business concerns

History Lesson Public Law 100-656 also Required that liquidated damages be assessed against prime contractors who fail to make a good faith effort to achieve their subcontracting plan goals

History Lesson Public Law 100-533 (1988) amended The Act to include participation by woman owned small businesses (WOSB) Public Law 103-355 (1994) amended The Act to set a Government-wide goal of 5% of total prime contract awards to WOSB

History Lesson Historically Underutilized Business Zone (HUBZone) Act of 1997 - Public Law 105-135 Created HUBZone program To provide Federal contracting assistance for qualified small business concerns located in HUBZones in an effort to increase employment, investment and economic development in those areas

History Lesson Public Law 106-50, 1999, The Veterans entrepreneurship and Small Business Development Act Established a goal for subcontracts awarded by prime contractors to Veterans, Service Disabled Veterans Owned and veteran controlled small business concerns

CFR Part 48, FAR Subpart 19.7 and Part 319 of the HHSAR Implements the small business program Establish policy regarding small businesses and small disadvantaged businesses including subcontracting requirements for contracts valuded at $550,000 or more

Honorable Mention A-110 (2 CFR Part 215) 215.44 Procurement procedures (b) Positive efforts shall be made by recipients to utilize small businesses, minority-owned firms, and women s business enterprises, whenever possible. Recipients of Federal awards shall take all of the following steps to further this goal. (1) Ensure that small businesses, minority-owned firms, and women s business enterprises are used to the fullest extent practicable.

FAR 52.219-8 and 52.219-9 FAR 52.219-8 Utilization of Small Business Concerns FAR 52.219-9 Small Business Subcontracting Plan

FAR Clause 52.219-9 Small Business Subcontracting Plan Does not apply to small business concerns Applies to federal contracts, typically does not apply to federal assistance awards Includes helpful definitions Subcontract: Any agreement (other than one involving an employer-employee relationship) entered into by a Federal Government prime Contractor or subcontractor calling for supplies or services required for performance of a contract or subcontract

FAR Clause 52.219-9, Cont d The offeror, upon request by the Contracting Officer, shall submit and negotiate a subcontracting plan, where applicable, that separately addresses subcontracting with small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business concerns, small disadvantaged business and women-owned business concerns.

FAR Clause 52.219-9, cont d The plan shall be included in and made a part of the resultant contract. Failure to submit and negotiate the subcontracting plan shall make the offeror ineligible for award of a contract.

FAR 52.219-9, cont d the offeror will require all subcontractors (except small business concerns) that receive subcontracts in excess of $550,000 to adopt a subcontracting plan that complies with the requirements of this clause.

FAR 52.219-9, cont d The offeror will submit periodic reports so that the Government can determine the extend of compliance by the offeror with the subcontracting plan. The offeror will ensure that its subcontractors agree to submit periodic reports.

FAR 52.219-9, cont d The failure of the Contractor or subcontractor to comply in good faith with 1) the clause of this contract entitled Utilization of Small Business Concerns; of 2) An approved plan required by this clause, shall be a material breach of the contract.

Determining the Need for a Plan FAR 19.705-2 Dollar Threshold: Contract or contract modification is expected to exceed $550,000 ($1,000,000 for construction) Subcontracting possibilities: Contract solicitation appears to offer subcontracting possibilities

Determining the Need for a Plan SBSP are not required From small business concerns For personal services contracts For contracts or modifications that will be performed entirely outside of the US For contract solicitations that do not contain 52.219-8, Utilization of Small Business Concerns

Elements of the SBSP Must contain goals expressed in both dollars and percentages. A description of the principal types of supplies/services to be subcontracted A description of the method used to develop the subcontracting goals A statement as to whether indirect costs are included in establishing the subcontracting goals

Elements of the SBSP The name of the individual who will administer the subcontracting program and a description of the duties of that person A description of the efforts that will be made to ensure that small business concerns have an equitable opportunity to compete for subcontracts

Elements of the SBSP Assurances that FAR Clause 52.219-9, will be included in all subcontracts that offer subcontracting (procurement) opportunities. Assurances that the Contractor will 1) cooperate in any studies or surveys; 2) submit periodic reports so that the Government can determine the extend of compliance;

Elements of the SBSP A description of the types of records that will be maintained concerning procedures adopted to comply with the requirements and goals of the SBSP Verification that your Institution has established and will utilize established procedures to ensure timely payment to small businesses Description of how you will make a good faith effort to comply with the approved SBSP

Signature page Elements of the SBSP Creator of the SBSP Federal Contracting Officer Small Business Specialist Small Business Administration Procurement Center Representative

Elements of the SBSP The Office of Acquisition Management and Policy at NIH posts a Fact Sheet on Subcontracting at: http://ocm.od.nih.gov/programnotes/subcon tracting/subcontractingfactsheet/subcontrac ting_fact_sheet.htm which explains the goals, flow-down and reporting requirements.

Completing the Plan Who? Who qualifies as a Small Business for purposes of the SBSP? Disadvantaged Small Business Concern = A socially and economically disadvantaged small business concern that is at least 51% owned and controlled by one or more socially and economically disadvantaged individuals

Completing the Plan Who? Who qualifies as a Small Business for purposes of the SBSP? Woman Owned Small Business Concern (WOSB) = a small business concern that is at least 51% owned and controlled by a woman or women. Historically Underutilized Business Zone Small Business Concern (HUBZone) = a small business concern that appears on the List of Qualified HUBZone Small Business Concerns maintained by the Small Business Administraiont www.sba.gov/hubzone

Completing the Plan Who? Who qualifies as a Small Business for purposes of the SBSP? Service-Disabled Veteran Owned Business = a small business concern that; a) not less than 51% of which is owned by one or more service-disabled veterans or, in the case of any publicly owned business, not less than 51% of the stock of which is owned by one or more servicedisabled veterans and b) the management and daily business operation of which are controlled by one or more service-disabled veterans OR in the case of a veteran with a permenant and severe disability, the spouse or permanent caregive of such a service-disabled veteran

Completing the Plan Who? Who qualifies as a Small Business for purposes of the SBSP? Veteran Owned Business = a small business concern when; a) not less than 51% is owned by one or more veterans or, in the case of any publicly owned business, not less than 51% of the stock of which is owned by one or more veterans and b) the management and daily business operation of which are controlled by one or more veterans

Completing the Plan Who? Other than small business = any entity that is not classified as a small business (large businesses, state and local governments, nonprofit organizations, public utilities, educational institutions and foreign-owned firms that receive federal contracts, if any portion of that contract is to be performed in the United States.

Completing the SBSP What? What purchases should be included in the SBSP? All dollars that are spent outside the organization (materials/supplies, travel, equipment, postage, advertisement, printing, subawards to other entities)

Completing the Plan What? What purchases should be excluded from the SBSP? All dollars that are spent inside the organization (direct labor/fringe, interdepartmental costs [photocopying, computer centers, animal care, postage], purchases from the federal government)

Completing the Plan Where? Where do I find small business to purchase from?? Purchasing/Procurement - If your Institution is a major recipient of research funding from the Federal Government, the Institution is obligated to develop and maintain a program to promote the use of small and disadvantaged businesses when procuring goods and services.

Completing the Plan Where? Some additional resources Central Contractor Registration CCR www.ccr.gov Dynamic Small Business Search

Completing the Plan Where? Dynamic Small Business Search

Completing the Plan Where? Some additional resources Local community websites (city, county, organizational, etc) Examples http://www.aaccwp.com/membership_directory.php http://www.alleghenycounty.us/mwdbe/ http://www.veteranscorp.org/business/bizsearch.aspx

Completing the SBSP When? When is the SBSP done? The Request for Proposals (RFP) should direct offerors when to submit the SBSP Some RFPs include a factor in the evaluation criteria which weighs the SBSP goals in the consideration for award. If so, SBSP must be submitted with the initial proposal submission Sometimes, SBSP is not required until the offeror is notified that they are in a competitive range

Completing the SBSP How? How do we create the SBSP? Detailed budgets for planned purchases must be created (catalogue numbers, vendor, cost, units) Using the detailed budgets for items to be purchased, approach Small Businesses to determine if they can provide the items

Completing the Plan - Goals Separate dollar and percentage goals for Small Businesses, Small Disadvantaged Businesses, Women-owned Small Businesses, HUBZone Businesses, Veteran Owned Small Businesses, Service-Disabled Veteran Owned Small Businesses, and other than small businesses must be presented in the plan.

Completing the Plan - Goals Percentages are determined by dividing the planned purchases in each category into the total planned subcontracted dollar amount Planned subcontracted dollar amount is the dollar amount of the purchases that qualify My require separate goals by option/year

Goals Established by Statutes 23% - Small Businesses 5% - Women-owned businesses 3% - HUBZone small businesses 3% - Veteran and Service-disabled veteran owned small businesses (Important Note a small business may intersect multiple categories)

Completing the SBSP Helpful Tools Budget Worksheet Subcontracting Plan Worksheet

SBSP Review & Acceptance Contracting Officers and Small Business Administration review for: Accuracy Completeness are all six elements represented? Past performance Determination of whether the SBSP should be waived (no subcontracting opportunities), requires concurrence by one level above Contracting Officer

SBSP Review & Acceptance Federal Agency and SBA Can: Conduct needs assessments and compliance reviews Federal Agency and SBA Cannot: Prescribe the amount of subcontracting Require the prime contractor to use a particular small business

SBSP Post Award Responsbilities Meeting your agreed upon goals Use small businesses whenever possible- regardless of the cost Meet with purchasing on a continual basis to identify additional small business concerns Outreach Continue to search out small businesses to purchase from Reporting

SBSP Reporting Requirements October 2005 - The President s Management Agenda, the Small Business Administration and the Integrated Acquisition Environment, along with a number of Federal Agency partners, collaborated to develop an electronic tool to collect subcontracting accomplishments Electronic Tool = esrs (Electronic Subcontracting Reporting System) http://www.esrs.gov

SBSP Reporting Requirements Electronic Tool = esrs (Electronic Subcontracting Reporting System) Web-bsed Government-wide subcontracting system that allows electronic submission, management (acceptance, revision, rejection) reports, and analyses of subcontracting data http://www.esrs.gov

SBSP Reporting Requirements Two required reports ISR (Individual Subcontracting Report), formerly paper SF 294 SSR (Summary Subcontracting Report), formerly paper SF 295 Purpose to document the dollars awarded in each goaled category.

SBSP Reporting Requirements ISR completed twice a year by contract/subcontract Due April 30 for purchases made October 1 March 31 Due October 30 for purchases made April 1 September 30

SBSP Reporting Requirements SSR completed once a year Annual summary of subcontracts awarded by prime and subcontractors for a specific federal government Agency for the previous fiscal year. Non-DOD agencies - Due October 30 for purchases made October 1 September 30 DOD and NASA semiannually Due April 30 for purchases made October 1- March 31 Due October 30 for purchases made April 1- September 30

SBSP Reporting Requirements Prime contractors only report the subcontracts they awarded, not for dollars awarded by subcontractors at lower tiers Lower Tier Subcontractors report via esrs independent from the prime

SBSP Reporting Requirements Information needed by Prime Contractor to file an ISR DUNS number as it appears on the contract Product and Service Codes NAICS code Email address of Federal Government agency responsible for reviewing (accepting or rejecting) your report Current contract value Approved SBSP Time period the report covers Indicated as final if final

SBSP Reporting Requirements Information needed by lower tier subcontractor to file an ISR Prime contract number Subcontract number (number assigned by prime) DUNS number of the Prime contractor Email address of prime contracting official and the prime contractor s employee (your contact) Product and Service Codes NAICS Approved Small Business Subcontracting Plan Time period the report covers Indicated as final if the report is final

SBSP Reporting Requirements Information needed to file SSR Essentially same data as needed for ISR Cummulative purchasing amounts from ISR submissions Time period the report covers Indicated as final if indeed final

SBSP Reporting Requirements If you are delinquent in submitting reports: 1) the Government can withhold payment 2) the delinquency will be noted in your performance report 3) Can affect future contract awards

Liquidated Damages When a contractor fails to make a good faith effort to comply with a SBSP, FAR Cause 52.219-16 mandates that liquidated damages be paid to the federal government The amount of damages shall be equal to the actutal dollar amount by which the contractor failed to achieve the goal.

What if I am not meeting the SBSP goals? The Contracting Officer may notify you (via the rejection of your reports) if you are not meeting your goals Explain the reasons why you are not meeting you plan and provide a well thought out plan for how you will move forward toward meeting them.

Revising your Subcontracting Goals Reasons to revise your goals: An increase in contract dollars of more then $550,000 Workscope has changed which prevents you from meeting your goals. Loss of primary vendor and inability to identify a small business concern to serve as a replacement

Revising your Subcontracting Goals Increase in contract dollars exceeding $550,000 You will be asked to revise your SBSP to include the increase in subcontract dollars Goals and Methodology will need to be revised as well

Revising your Subcontracting Goals Workscope change prevents you from meeting your goals You must request and be approved to submit revised goals A revised SBSP must be submitted with revised goals and an explanation for the need to revise the goals

Revising your Subcontracting Goals Loss of primary vendor and inability to identify a small business concern as a replacement You must request and be approved to submit revised goals A revised plan must be submitted with revised goals and an explanation for the need to reduce the goals.

Small Business Administration s Role Assist Federal agencies in evaluating proposed SBSP Assist small businesses in obtaining subcontracts under federal contracts Counsel small businesses on how to market their products and services as subcontractors

SBSP and Reporting Questions??

Printer Friendly Version - Close This Window/Tab After Printing http://dsbs.sba.gov/library/html/printer_friendly.html Page 1 of 3 4/9/2010 Welcome to the Dynamic Small Business Search All search form hotlinks open a new browser window. NEW MARKETING FEATURE FOR CONTRACTING OFFICERS: Use the "Quick Market Search" button above to go to the Quick Market Search This is generally a self-certifying database. The SBA does not make any representation as to the accuracy of any of the data included, other than certifications relating to 8(a) Business Development, HUBZone or Small Disadvantaged Business status. The SBA strongly recommends that contracting officers diligently review a bidder's small business self-certification before awarding a contract. Location of Firm: State(s): (How to make multiple selections.) (any state) AL - Alabama AK - Alaska AA - American Atlantic (APO/FPO) AE - American Europe (APO/FPO) AP - American Pacific (APO/FPO) AS - American Samoa AZ - Arizona AR - Arkansas CA - California Congressional District: (Requires exactly one state from the list at left.) 2-digit numeric (leading 0 if 1 digit), or AL for At Large County: Select 1 State, then press Lookup Lookup Area Code or Phone Number Initial Fragment, (1 to 12 characters, 999-999-9999 format) Metropolitan Statistical Area (4-digit numeric, leading 0's if fewer digits) SBA Servicing Office: (4-digit numeric, leading 0's if fewer digits) Zip Code or Zip Code Initial Fragment (1 to 5 numeric digits) Government Certifications: 8(a) Certified or 8(a) Joint Venture: Required (Active Certifications only) Required (Active Certifications and Previously Certified) Required (Previously Certified only) Not Required Disadvantaged Business Enterprise, Certification States: Not Required AL - Alabama AK - Alaska AA - American Atlantic (APO/FPO) AE - American Europe (APO/FPO) The SBA's 8(a), HUBZone and SDB certifications are also made available to external software via: SBSS Public Web Services For more information, see also SBA Certifications in the search help page. Ownership and Self-Certifications: Any Minority Owned: Any Native American Owned: Small Disadvantaged Business: Required (Active Certifications only) Required (Active Certifications and Previously Certified) Required (Previously Certified only) Not Required HUBZone Certification: Required (Active Certifications only) Required (Active Certifications and Previously Certified) Required (Previously Certified only) Not Required Tribally Owned Alaskan Native Corp (ANC) Owned Native Hawaiian Org (NHO) Owned Other Native American Other Minority Owned Community Development Corporation (CDC) Owned Self-Certified Small Disadvantaged Business Service Disabled Veteran Owned

Printer Friendly Version - Close This Window/Tab After Printing http://dsbs.sba.gov/library/html/printer_friendly.html Page 2 of 3 4/9/2010 Veteran Owned Woman Owned (definition) (To start over in this section, if you like, you can use this hotlink: Clear These Checkboxes) Nature of Business (comma separated, up to 5 entries or 40 characters) for: NAICS Code(s): Any All (slower) Help "Buy Green" NAICS Code(s): Any All (slower) Help Or keywords (comma separated, up to 25 entries or 125 characters) for: Keywords: Any All (slower) Help General Nature of Business: Manufacturing Construction Research & Development Services Has TECH-Net Award(s). (Does not require checking Research & Development, above.) Profile Last Updated (date): On or before On or after (MM/DD/YY or MM/DD/YYYY format) Minimum Acceptable Bonding Levels: Construction Bonding Level, in dollars (per contract): Construction Bonding Level, in dollars (aggregate): Service Bonding Level, in dollars (per contract): Service Bonding Level, in dollars (aggregate): Quality Assurance Standards: ANSI/ASQC Z1.4 ISO-9000 Series ISO 10012-1 MIL-Q-9858 MIL-STD-45662A Size: At least No more than Employee(s) and/or Annual Gross Revenue in dollars Capabilities: Accepts Government Credit Card?: Required Not Required GSA Advantage Contract?: Required Not Required Exporter?: Yes Wants to Be Either Not Required (To search on Dynamic Small Business Search export profiles, you can use the DSBS-affiliated Trade Mission Online Search.) Searching for a specific profile (use ONE of the following): CAGE Code: DUNS Number(s): (up to 5 characters) (comma separated, up to 25 DUNS numbers or 125 characters)

Printer Friendly Version - Close This Window/Tab After Printing http://dsbs.sba.gov/library/html/printer_friendly.html Page 3 of 3 4/9/2010 8(a) Case Number: Company Name or Trade Name: (slow) (up to 120 characters) (6-digit number) Do "sounds like" matching Do "first letters" matching Do "contains" matching Search Results Display Options: Maximum number of profiles to be returned at a time: 25 Show the following fields in the profile list: Name and Trade Name of Firm; Contact; Address and City, State Zip; Capabilities Narrative Edit the columns to be displayed Show those fields in: Table format font size (*): Tiny Normal Large Mail-merge format Delimited by: comma comma and blank tab (*) On some browsers, the font size options will also affect mail-merge format. NOTE: Search results will be randomized by the time of day you press the "Search Using These Criteria" button. Search Using These Criteria Reset Clear This listing is from the SBA's PRODUCTION environment. URL: http://dsbs.sba.gov/dsbs/search/dsp_dsbs.cfm