19.704 Subcontracting plan requirements.

(a) Each subcontracting plan required under 19.301-2(e) and 19.702(a)(1)(i), (ii), and (iii) shall

include-

(1) Separate percentage goals for using small business (including ANCs and Indian tribes), veteranowned 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 as subcontractors;

(2) A statement of the total dollars planned to be subcontracted and a statement of the total dollars

planned to be subcontracted 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, as a percentage of total subcontract dollars. For individual subcontracting plans only, a

contracting officer may require the goals referenced in paragraph (a)(1) of this section to be

calculated as a percentage of total contract dollars, in addition to the goals established as a

percentage of total subcontract dollars;

(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 (for commercial plans, see paragraph (d) of this section), 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 $750,000 ($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 that the offeror 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

offeror with the subcontracting plan;

(iii) After November 30, 2017, include subcontracting data for each order when reporting

subcontracting achievements for indefinite-delivery, indefinite-quantity contracts with individual

subcontracting plans where the contract is intended for use by multiple agencies;

(iv) Submit the Individual Subcontract Report (ISR), and the Summary Subcontract Report (SSR)

using the Electronic Subcontracting Reporting System (eSRS) (http://www.esrs.gov), following the

instructions in the eSRS.

(A) The ISR shall be submitted semi-annually 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.

(B) 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;

(v) Ensure that its subcontractors with subcontracting plans agree to submit the ISR and/or the SSR

using the eSRS;

(vi) Provide its prime contract number, its unique entity identifier, and the e-mail 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; and

(vii) Require that each subcontractor with a subcontracting plan provide the prime contract number,

its own unique entity identifier, and the e-mail 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 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, servicedisabled veteran-owned small business, HUBZone small business, small disadvantaged business, and

women-owned small business concerns and to award subcontracts to them;

(12) 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;

(13) 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 (a)(12) of this section. This written explanation

will be submitted to the contracting officer within 30 days of contract completion;

(14) 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;

and

(15) Assurances that the offeror 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 offeror

pays a reduced or an untimely payment to a small business subcontractor (see 52.242-5).

(b) Contractors may establish, on a plant or division-wide basis, a master plan (see 19.701) that

contains all the elements required by the clause at 52.219-9, Small Business Subcontracting Plan,

except goals. Master 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 plans. Changes

required to update master plans are not effective until approved by the contracting officer. A master

plan, when incorporated in an individual plan, shall apply to that contract throughout the life of the

contract.

(c) For multiyear contracts or contracts containing options, the cumulative value of the basic

contract and all options is considered in determining whether a subcontracting plan is necessary. If

a subcontracting plan is necessary and the offeror is submitting an individual subcontracting plan,

the individual subcontracting plan shall contain all the elements required by paragraph (a) of this

section and shall contain separate statements and goals based on total subcontract dollars for the

basic contract and for each option.

(d) A commercial plan (as defined in 19.701) is the preferred type of subcontracting plan for

contractors furnishing commercial products and commercial services. 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

product or commercial service. The contractor shall—

(1) 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;
(2) 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;

(3) 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

(4) Comply with the reporting requirements stated in paragraph (a)(10) of this section by submitting

one SSR that includes all indirect costs, except as described in paragraph (d) of this section, 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.

Parent topic: Subpart 19.7 - The Small Business Subcontracting Program