# Presentation: 703379

## VA’s Thriving Through Partnership Industry Conference
October 3-4, 2005

Subcontracting Plans and You

- October 3-4, 2005
**Subcontracting Plans and You**

- Small Business—the Engine that drives America’s
-                              economy

##      Small Business Goals and How They Are Set

- Statutory
- SBA/VA-Negotiated
- Secretary’s Goals

##            Small BusinessThe Statutory Goals

- Small Business Concerns (23%)
- Small Disadvantaged (5%)
- Women-Owned (5%)
- HUBZone (3%)
- Service-Disabled Veteran-Owned (3%)

##             Small Businessthe Secretary’s Goals (FY 04)

- Small Business Concerns (35%)
-  Small Disadvantaged (5%)
- Section 8(a) SDB (5%)
- Women-Owned (6%)
- HUBZone (3%)
- Service-Disabled Veteran-Owned (3%)
- Veteran-Owned (7%)

## SUBCONTRACTING PROGRAM

## Statutory Requirements

- FAR 19.702
- Required when the contract award or mod will exceed $500 K ($1M for construction) AND awardee is a large business.

**Notes:**
Section 8(d) of the Small Business Act imposes the following requirements regarding subcontracting with small businesses:

In negotiated acquisitions and sealed bids, EACH solicitation over $500K and any contract modification expected to exceed $500K ($1 million for construction in both cases), and that has subcontracting possibilities, shall require the apparently successful offeror to submit an acceptable subcontracting plan.  If the offeror fails to submit an acceptable plan within the prescribed time frame, the offeror will be ineligible for award.

Subcontracting plans are NOT required from small businesses, for personal services contracts, or for contracts or contract modifications that will be performed entirely outside of any State, the District of Columbia, Puerto Rico or any possessions of the United States.  Subcontracting plans are also not required for any modification to a contract which did not originally contact the clause at 52.219-8, Utilization of Small Business Concerns, or any contract awarded before the effective date of P.L. 95-507.

## What Goes In A Subcontracting Plan?

- FAR 19.704
- 11 Required Elements

## Required Elements

**(1)  SEPARATE Percentage goals for small business, HUBZone small business, small disadvantaged business, women-owned small business, veteran-owned and service-disabled veteran owned business**
**(2)  Total dollars to be subcontracted and a statement of the total dollars to be subcontracted to the small business types listed in (1).**
**(3)  Description of the principal types of supplies and services to be subcontracted and an identification of those planned for subcontracting to the identified small business types.**

**Notes:**
The service-disabled veteran owned small business goal was added in accordance with P.L. 106-50, Veterans Entreprenurship and Small Business Development Act of 1999, which became effective on August 17, 1999.  Although FAR implementing language has not yet been issued, this law has become effective and VA will require this element in all subcontracting plans.  The current goal for service-disabled veteran-owned small business participation in subcontracting is 3% of the total dollars subcontracted. There is also a “best effort” goal for veteran-owned businesses and VA’s goal for that is 7%.  HUBZone goal is incremental by 1/2% each year until it reaches 3%. The HUBZone goal for the year 2001 is 2%.

The minimum goals established across the Federal Government are:

23% for small business 
5% for small, disadvantaged business
5% for women-owned small business
2% for this year for HUBZone small business
BEST EFFORT for veteran owned small business
3% for service-disabled veteran owned small business

## Required Elements

- (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 offeror has 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 businesses.
- (7) The name of the CONTRACTOR’s employee who will administer the offeror’s subcontracting program, AND, a description of that individual’s duties.

**Notes:**
The contractor must identify how the company developed the subcontracting goals they have proposed in their plan.  This may involve the company’s make-or-buy program; the type of products and/or services in relation to the availability of small business firms within the marketplace, and whether or not indirect costs have been included in the amount to be subcontracted.

## Required Elements

- (8)  A description of the efforts the offeror will make to ensure that small businesses of all types have an equitable opportunity to compete for subcontracts.
- (9)  Assurances that the offeror will include the clause at 52.219-8 (flow-down clause) in all subcontracts that offer further subcontracting opportunities and that the offeror will require all LARGE subcontractors who receive subcontracts over $500K ($1M for construction) to adopt a plan IAW 52.219-9.

**Notes:**
These efforts should include outreach through trade organizations, trade shows, local business organizations, and such assistance as informal or formal mentoring programs, financial assistance or technical assistance.  Company needs to identify what they will do to attract the qualified small firms.  Once these firms are attracted, what will be done to insure their inclusion in the company’s process?  How are requirements broken down to insure opportunities for these firms?  What type of training is provided to Small Business Specialists and company personnel?  How is the Small Business Liaison Officer involved?

## Required Elements

- (10) Assurances that the offeror will--
- Cooperate in any studies or surveys
- Submit periodic reports so Government can determine extent of compliance with the plan
- Submit Standard Form 295 and 294, as appropriate, IAW form instructions
- (11)  A description of the types of records maintained concerning procedures adopted to comply with the requirements and goals in the plan, including source lists, and a description of the offeror’s efforts to locate and award subcontracts to all types of small business concerns.

**Notes:**
These studies and reports are not agency specific.  Requests can be made of Federal Contractors by any authorized Federal Government representative of any Federal agency, such as VA, SBA, and DCMC,  and those requests must be complied with.  

## FAR 15.304  Evaluation factors and significant subfactors 

- Section (C ) (3)(iii) For solicitations involving bundling that offer a significant opportunity for subcontracting, the contracting officer must include a factor to evaluate past performance indicating the extent to which the offeror attained applicable goals for small business participation under contracts that required subcontracting plans (15 U.S.C. 637(d)(4)(G)(ii)).

## FAR 15.304  Evaluation factors and significant subfactors 

- ( C)(5) For solicitations involving bundling that offer a significant opportunity for subcontracting, the contracting officer must include proposed small business subcontracting participation in the subcontracting plan as an evaluation factor (15 U.S.C. 637(d)(4)(G)(i)).

## FAR 15.305 Proposal Evaluation

- (a)(5) S*mall business subcontracting evaluation.* Solicitations must be structured to give offers from small business concerns the highest rating for the evaluation factors in 15.304(c)(3)(iii) and (c)(5).

## Reporting Requirements	

- Standard Form 294
- Standard Form 295

## Standard Form 294

- Subcontracting Report for Individual Contracts
- Not for Commercial Plans
- Not required from small businesses
- Submitted semi-annually 30 days after close of each reporting period
- Reporting periods end March 31st and Sep 30th

## Standard Form 295

- Summary Subcontract Report
- Used for commercial and individual plans
- due on October 30th each year for the previous fiscal year ended Sep 30
- Separate report is required for EACH Federal Government agency, covering only that agency’s contracts