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Published by koprince mccall pottroff llc  |  edited by shane j. mccall, far update: good faith in small business subcontracting.

For many contracts, large businesses must establish and have the government approve a subcontracting plan that details the goals and efforts the large prime contractor will take to award subcontracts to various types of small businesses. Well, how does the government hold large businesses accountable for these goals? The FAR will soon have a final rule addressing good faith efforts to comply with a small business subcontracting plan.

Back in late 2019, SBA updated its own rules on subcontracting plans to address. The SBA rules were intended to make it easier to hold large business prime contractors accountable for meeting the goals of their small business subcontracting plans. In line with the  2017 NDAA , SBA updated its rules found at  13 C.F.R. § 125.3(d)  so that it will be a material breach of a contract or subcontract if a contractor with a subcontracting plan fails to comply in good faith with the requirement to submit reports and cooperate with agencies to determine subcontracting plan compliance. 

Now, the FAR has followed suit in a rule effective September 10, 2021. This will eliminate the inconsistencies between the FAR and SBA rules, which is always nice so both contractors and agencies are on the same page when it comes to subcontracting plans. Here’s a little background on the changes.

Small business subcontracting plans are required from large prime contractors when a contract is expected to exceed $750,000 ($1.5 million for construction) and has subcontracting possibilities. These plans are required for the acquisition of commercial items and COTS items.

FAR 19.704 lists what is required in these plans. This includes goals for subcontracting efforts to provide fair opportunities to compete for subcontracts for various types of small business concerns, including small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns. Failure to make a good faith effort to comply with the plan can result in liquidated damages under FAR 52.219-16 .

There are two main changes in the rule. First, all indirect costs, with certain exceptions, are included in commercial plans and summary subcontract report (SSRs). Second, revised FAR 19.705-7 now has examples of a good faith efforts to comply with a subcontracting plan, and examples of a failure to make a good faith effort.

Here are some takeaways from the implementation of this rule.

Material Breach . The comments to the rule make clear that “a failure to make a good faith effort to comply with a subcontracting plan is a material breach, sufficient for the assessment of liquidated damages, and also for other remedies the Government may have.” So, this is not something to be taken lightly by prime contractors operating under a subcontracting plan.

Key Good Faith Actions . The rule provides examples of actions that indicated good faith efforts to comply with the subcontracting plan. Here are a few of those:

• Market research to identify small businesses “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.”
• “Assisting interested small businesses in obtaining bonding, lines of credit, required insurance, necessary equipment, supplies, materials, or services.”
• “Participating in a formal mentor-protégé program with one or more small business protégés.”

Like the SBA rule, the FAR rule now provides examples of actions that could be considered “failure to make a good faith effort to comply with a subcontracting plan” at FAR 19.705-7 . Contractors should take a close look at these examples. But here are some highlights:

• Turning in subcontracting plan reports late.
• Not paying small business subcontractors “terms of the contract” with them.
• Not having a designated employee to monitor the subcontracting plan.
• Failure to maintain records or procedures to show compliance with subcontracting plan requirements.
• Not doing market research (such as outreach, industry days, and database searches) to identify small business subcontractors.
• “If a contractor does not either correct substantiated findings or participate in subcontracting plan management training offered by the Government, it could be perceived by the contracting officer as a failure to make a good faith effort.”

But the rule is clear that agencies need to look at “the totality of the contractor’s actions” and, interestingly, mere failure “to meet its subcontracting goals does not, in and of itself, constitute a failure to make a good faith effort.” And there is an example of what may constitute a valid explanation: if there are no available small business sources for certain types of work.

Rebuttal . Note that there is an opportunity for a contractor to respond to an accusation of failure to make good faith efforts. In the rule on liquidated damages, it states: “Before the Contracting Officer makes a final decision that the Contractor has failed to make such good faith effort, the Contracting Officer shall give the Contractor written notice specifying the failure and permitting the Contractor to demonstrate what good faith efforts have been made and to discuss the matter.” As in most things in dealing with government agencies (and other aspects of life), failure to respond can be taken as an admission of fault.

This new rule is important for both large prime contractors and subcontractors. Prime contractors need to make sure they are making these good faith efforts to comply and provide actual opportunities for subcontractors. By that same token, it’s good for small business subcontractors to know about these rules as well and take advantage of these opportunities. Now that the FAR has been updated, there’s no excuse for large prime contractors not to comply and no excuse for agencies not to enforce these rules.

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Related Content

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• Small Business Subcontracting Plan (SBSP)
• Guidance & Resources
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Description

The federal government has detailed regulations requiring contractors to treat small businesses fairly and provide maximum opportunity for their participation in federal contract work ( FAR 19.7 – The Small Business Subcontracting Program ).

For certain federal contracts, the sponsor will require a Small Business Subcontracting Plan (SBSP). This plan outlines specific goals for subcontracting to various types of small businesses and details the process for reaching those goals and reporting progress. Types of small business include:

• Small business
• Veteran-owned small business
• Service-disabled veteran-owned small business
• HUBZone small business
• Women-owned small business

Federal law requires a subcontracting plan if the value of contract exceeds a set dollar amount—currently $750,000. This amount is known as the “simplified acquisition threshold. 1 ”

For more details, visit...

  FAR 19.702 – Statutory Requirements

  FAR 52.219-8 – Utilization of Small Business Concerns

  FAR 52.219-9 – Small Business Subcontracting Plan

1 The simplified acquisition threshold relevant to the SBSP is defined in the Federal Acquisition Regulations (FAR)

  how do i....

...create a Small Business Subcontracting Plan (SBSP) when required by my contract?

• Step 1:  If the sponsor or SPA Award Negotiator notifies you that your contract needs a SBSP, review your contract to understand the reporting requirements (i.e. FAR 52.219-8 and 52.219-9 ). SPA will assist when it is time to report.
• Step 2: Develop your SBSP. The Award Negotiator will obtain a SBSP template for you from the sponsor. For assistance completing the SBSP template, the department/PI should contact the Office of Procurement Diversity at [email protected] .
• Step 3: Sign and submit your SBSP to the sponsor and send a final copy to the Award Negotiator at [email protected] . Sending the finalized SBSP will complete the award agreement and allow SPA to move forward with award execution.

  Contacts

For assistance and/or questions in completing the SBSP:

Office of Procurement Diversity 

  Shauna Clayborn, Supplier Diversity Coordinator

  [email protected]

For questions about expense tracking and reporting:

Sponsored Programs Administration (SPA)

  Charletta Little, Coordinator, Audit and Compliance

  [email protected]

  FAQs

To comply with federal law (FAR subpart 19.7), all federally sponsored contracts in excess of $750,000 require implementation of a subcontracting plan with established goals for expenditures to small businesses.

Contact the Office of Procurement Diversity (OPD) at [email protected].

The PI/Department is responsible for managing and tracking expenditures as outlined in their SBSP. Accurate expenditures are necessary for future reporting obligations.

If the PI fails to submit a plan, they may be ineligible for the award.

The sponsor may determine that the PI and team have not made good faith efforts to procure small businesses. The University of Illinois could be held liable for fines and be required to return/refund the full amount of the contract.

It is important to formulate a realistic SBSP and execute its budgeting details. There are potential monetary penalties for not meeting goals (see FAR 19.702 ). Moreover, non-compliance issues, such as not meeting goals set in the SBSP are documented by federal agencies and could affect all future funding applicants at the University.

The fact that goods and services from a small business vendor may cost more is not considered by the government to be an acceptable excuse for not using them, unless the cost is prohibitive.

Contact the sponsor and work with them to submit a revised plan. Once complete, send the revised plan to your assigned Award Negotiator via [email protected].

In many cases, an amended plan will be required that includes prior and future supplier diversity goals.

The SPA Audit and Compliance team, with assistance from the department/PI. Audit and Compliance compiles and submits a semi-annual Individual Subcontracting Report (ISR), due in April and October, as well as an annual Summary Subcontract Report (SSR), also due in October.

The data is pulled from a combination of Banner and department tracking systems.

SPA will receive an e-mail confirming whether the report is accepted or rejected. If accepted, the report is complete and requires no further action until the next reporting period. If rejected, SPA will contact the department for assistance in resolving the rejection.

• Quality goods and services to meet the needs of the University
• Potential cost savings through competition
• Support for small and local businesses
• Creating jobs in the community
• Ensuring fairness

  Additional Resources

Related documents and resources.

• Purchasing Vendor Information Form (BusFin)
• Small Business Administration (SBA), Dynamic Small Business Search Database (DSBS)
• Illinois CMS Business Enterprise Program - BEP/VBP Certification Portal
• Illinois Procurement Gateway (IPG) - Registered Vendor Directory

Related FAQs

• How do I create a small business subcontracting plan (SBSP) when required by my contract?
• Why is the SBSP required?
• How do I find a certified small business?
• Once awarded, who is responsible for tracking and managing small business subcontracting expenditures?
• What if the PI fails to submit a SBSP within the time limit prescribed by the contracting officer?
• What if the PI does not meet the spend goals detailed in the SBSP?
• What if the original goals on the SBSP will not be met?
• What if an amendment increases the award dollar amount?
• Who completes the required Small Business Subcontracting Reports?
• Where is the report data pulled from? (SBSP)
• What happens after the report is submitted? (SBSP)
• What are some potential benefits of participating in the Small Business Subcontracting Program?
• Documents & Resources
• Frequently Asked Questions (FAQs)

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Challenging FAR 52.219-9 Small Business Subcontracting Plan Requirements

What is the Best Approach to Challenge the Requirements Under FAR 52.219-9? Minimize the Chance of Noncompliance and Contract Termination

FAR 52.219-9 small business subcontracting plan requirements are frequently seen in solicitations from the federal government. The underlying reason is to advance opportunities for small businesses in larger contracts. Contractors sometimes get into trouble because they fail to show good faith when trying to comply with the subcontracting requirements under the FAR, or promptly notify the government including failure to find new subcontractors or business locally that can perform the work.

This is an example of Congress ’s efforts to provide more contracting vehicles to smaller companies.

FAR Subcontracting Plan requirements usually seek to provide additional opportunities to Small Disadvantaged Business veteran (SDB) , Woman-Owned Small Businesses (WOSB), VOSB, SDVOSB  and each  HUBZone  small business concern.

What Should Your Plan Include? FAR 52.219 9 Small Business Subcontracting Plan Requirements

When you submit a subcontractor plan, it must include the following:

Separate goals, expressed in terms of total dollars subcontracted, and as a percentage of total planned subcontracting dollars, for the use of small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns as subcontractors.

• For individual plans, and if required by the Contracting Officer, goals shall also be expressed in terms of percentage of total contract dollars, in addition to the goals expressed as a percentage of total subcontract dollars.

The small business subcontracting plan shall also include all subcontracts that contribute to contract performance, and may include a proportionate share of products and services that are normally allocated as indirect costs.

• A description of the method used to develop the subcontracting goals
• A description of the method used to identify potential sources for solicitation purposes
• A statement as to whether or not the Offeror included indirect costs in establishing goals and a description of the method used to determine the proportionate share of indirect costs to be incurred by your subcontractors

 A common hurdle for bidders when developing FAR Clause 52.219-9 small business subcontracting organization requirements s whether there are actual contractors that are available to do the work. Others fear that when they submit the requirement in their bid, whether the Agency could terminate them for failure to meet the requirements.

These are valid concerns. However, Small Business Subcontracting Plans should be viewed as goals. Large businesses can run into problems when they do not in good faith try to meet those goals. Be aware that the SBA has issued  new rules about FAR 52.219-9 subcontracting plan requirements .

Do You have to Use Small-Business Subcontractors During Performance of the Contract?

If you have proposed to use small businesses in your proposal, then Yes. The new SBA rules now require you as a prime contractor under FAR clause 52.219-9 to make good-faith efforts to utilize their proposed small-business subcontractors during performance to the same degree that such small businesses were relied on when the prime prepared the response to the government’s bid. If the prime contractor is unable to make this effort, it must explain in writing to the contracting officer. There also is something to be said for the requirements of similarly situated small business rules when trying to meet this requirement.

Be Aware of Other Provisions Besides FAR 52.219-9

When challenging  FAR  52.219 9 small business subcontracting plan requirements in a bid protest, be mindful that some agencies may also have their own local rules in addition to FAR 52.219-9.  When responding to a solicitation, contractors should also look for additional information the agency requests that are over and beyond the basic government regulations.

• When filing a bid protest, making the argument that the goals are unrealistic will not get a favorable result. 
• Agencies have the discretion to decide what is best when choosing their procurement strategies.  

If there are no viable sources to meet the subcontracting plan requirements, then bidders should provide evidence to that effect in their proposals. If the source selection penalizes you, then you may have a viable challenge in a bid protest if the agency cannot provide conflicting facts.  See also  Small Business Set Aside Bid Protests.

Under the new rules, the agency contracting officer can require a subcontracting plan during contract performance in two situations:

• Demand that you provide a subcontracting plan when your small business size changes from small to large as a result of a size re certification on a federal contract that contains FAR clause 52.219-9.
• When there is a contract modification of any value causes a contract’s value without a subcontracting plan to exceed the subcontracting plan threshold and other subcontracting opportunities exist. See also FAR 52.217 9.

Government’s Obligation: FAR 19.705-2, titled “Determining the need for a subcontracting plan,” requires a contracting officer to ascertain, for each offeror, whether subcontracting possibilities exist before directing the offeror to submit a small business subcontracting plan. See also limitations on subcontracting .

Challenging the CO’s decision to include small business subcontracting plan requirements in the  RFP  almost never wins in a protest. Instead, you may want to look for vague terms, our show that there are no viable sources. Providing a copy of a SAM report with your proposal could help companies choosing to file a protest. See information about  government contract bundling .

Government Contract Tips When Challenging FAR 52.219-9 Small Business Subcontracting Plan Requirements

Disputes arise when the government contract agencies may not tell you that your subcontracting plan did not meet the agency’s expectations. First, bidders may want to see whether or not subcontracting plans were supposed to be evaluated. In negotiated procurements, the solicitation will provide guidance as to what weight, if any, is given to FAR 52.219-9 Subcontracting Plans.

• Your goal when submitting a government proposal is to always see whether you can exceed the agency’s expectation as to the percentage for each subcategory.

Next, businesses who submit proposals for federal government contracts must understand that agencies are not required to discuss the contents of your Small Business Subcontracting Plan simply because it received a lower score than your competition.  More specifically, this issue comes up in meaningful discussions .  If your Subcontracting Plan was the tiebreaker between your company and the awardee, then maybe there could be an argument when filing a bid protest.

Does Your Plan Meet the Government’s Requirements? Do you Stand the Chance of Losing Your Contract Award?

If you are challenging FAR 52.219-9 small business subcontracting plan requirements in a bid protest to GAO or U.S. Court of Federal Claims, call our government contracts and  bid protest lawyers at 1-866-601-5518. FREE INITIAL CONSULTATION.

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How to create a budget for your business

January 16, 2024 | 7 minute read

If you want to increase the odds of having a successful small business, start by creating a budget. A budget is a powerful tool. It helps you understand how much money you have and what you’ve spent where — and provides clues about how much money you’ll need in the short and long term. It can also help shape key business decisions like whether to add staff and equipment or where to cut expenses to avoid cash flow issues .

A budget is critical, particularly at a time when companies are coping with rising costs. Seventy-nine percent of small business owners polled in Bank of America’s 2023 Small Business Owner Report said they are concerned about inflation and 68% said they are worried about commodity prices. Here’s how to create a budget and use it to make the best decisions today, tomorrow and in the future.

What is a business budget?

Simply put, a budget is a spending plan based on your business’ income and expenses. It shows your available capital, estimates spending and assists in predicting revenue. The information in your budget can help you plan your company’s next moves. A budget looks at activities for a specified time. Think of it as a tool to help you allocate resources toward the strategic priorities in your business plan.

What are the benefits of creating a business budget?

Budgeting enables you to allocate financial resources more effectively, track variances and make changes to your spending plan as needed. A budget provides a much-needed assist in maintaining daily operations, giving you the intel to deploy your cash more strategically so you don’t face a cash flow crunch. It can identify when you need to raise financing. Debt is a fact of life in many businesses. A budget can help you manage debts with controlled and planned financial activities.

A budget can also help you stay ready for the unexpected. Staying within your budget and creating a safety net for emergencies will give you a firmer financial foundation.

Types of business budgets

When it comes to business budgets, it’s not one and done. There are several types that may be helpful in your business.

Master budget

This type of budget uses inputs from financial statements, your cash forecast and your financial plan to create a single document you can use to keep your finger on the pulse of your business. Your management team can use it to plan the activities needed to reach business goals. Typically, small businesses use spreadsheets to create their master budgets or consider using budgeting software too, as it may help minimize mistakes.

Operating budget

This budget shows your projected revenue and expenses for a given period. Think of it as a profit and loss report , but for the future. The operating budget includes fixed and variable costs, as well as non-operating expenses. Capital expenditures are usually excluded from an operating budget. Each line item should be backed up with key details.

Fixed costs occur monthly.

Variable costs, like utilities , change depending on factors like usage.

Capital costs are one-time expenses, such as the purchase of a building.

The operating budget gives you a reality check on whether you’re spending according to plan. While this budget is often prepared at the start of each year, don’t set it and forget it. Update it throughout the year, be it monthly or quarterly, so you always know where your business stands.

Capital budget

Companies sometimes create a capital budget when they are looking to make a large purchase, such as a large piece of factory equipment or a new technology system that will require a substantial investment. This allows the finance team to determine the impact on cash flow and plan accordingly.

Cash budget or cash flow budget

This document will give you an estimate of how money comes in and goes out during a certain time horizon. You create a cash budget using the conclusions you draw from sales forecasts and production, and by estimating payables and receivables.

Labor budget

If you will hire employees , this type of budget is helpful in planning for the money you’ll need to meet payroll, not only for regular employees, but also for any temporary and seasonal staff.

Budgeting methods you can use

There’s more than one way to budget. Here are some common methods:

An incremental budget

This takes the current period’s budget or actual performance, uses it as a base and then adjusts it in incremental amounts to account for any increases in costs. Typically, when you put together an incremental budget, you use the rate of inflation as a guide for fine-tuning the amounts. One plus of budgeting this way is that it is relatively easy to do.

Zero-based budgeting

Here, you’re budgeting from scratch. You must scrutinize every expense or potential expense before deciding to add it to your budget. This helps you align your business goals with your expenses. Unlike other types of budgeting, it doesn’t focus on historical results. A zero-based budget is ideal when you’re looking to reduce expenses.

Activity-based budgeting

Actions speak louder than words. This type of budgeting looks at the inputs required to reach the targets or outputs set by the company. Say your business wants to achieve $5 million in revenue. First, you need to figure out the activities that need to happen to make that revenue a reality and then determine the costs of carrying out those activities.

Participative budgeting

There are more cooks in the kitchen with participative budgeting, which is often used by larger small businesses. Both middle management and lower levels of management share in the responsibility of putting together the budget. The budget begins with lower management then moves to middle managers before top management weighs in and signs off. An upside of this type of budgeting is that information is shared, and when management and staff are on the same page in terms of goals, they’re more likely to achieve those goals.

How to create a business budget

Creating a business budget takes several steps:

• Calculate your revenue . Include all your revenue streams, preferably over at least the last 12 months, to determine your monthly income. If your business is new, you can research what’s typical in your industry and use that as a guide to come up with estimates.
• Add up your fixed costs . Fixed costs are things like rent, payroll and debt repayment.
• Determine variable costs . In addition to utilities, these may include billable labor, materials, transaction fees and commissions.

Using a budget to make better decisions

If you make your budget a regular resource, you’ll be rewarded for your budgeting efforts. As you make spending decisions, consult your budget frequently and use it as a reality check. If you have budgeted for X amount and go beyond it, you’ll have some explaining to do, even if you’re only answering to yourself. Being disciplined can be challenging, but ultimately it will position your business for growth , both today and in the future.

Explore more

How to create a sales forecast

Understanding free cash flow

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IR-2024-125, April 29, 2024

WASHINGTON — The Internal Revenue Service today urged small businesses to take advantage of the many tax resources available through the Small Business and Self-Employed Tax Center on IRS.gov.

As part of National Small Business Week , April 28 to May 4, the IRS is highlighting tax benefits and resources to help small businesses. Spearheaded by the Small Business Administration, National Small Business Week has been celebrating the contributions small businesses make to America’s economy for over 60 years. The theme of this year’s celebration is Building on America’s Small Business Boom .

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48 CFR § 52.219-9 - Small Business Subcontracting Plan.

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As prescribed in 19.708(b) , insert the following clause:

(a) This clause does not apply to small business concerns.

(b) Definitions. As used in this clause—

Alaska Native Corporation (ANC) means any Regional Corporation, Village Corporation, Urban Corporation, or Group Corporation organized under the laws of the State of Alaska in accordance with the Alaska Native Claims Settlement Act , as amended ( 43 U.S.C. 1601 , et seq. ) and which is considered a minority and economically disadvantaged concern under the criteria at 43 U.S.C. 1626(e)(1) . This definition also includes ANC direct and indirect subsidiary corporations, joint ventures, and partnerships that meet the requirements of 43 U.S.C. 1626(e)(2) .

Commercial plan means a subcontracting plan (including goals) that covers the offeror's fiscal year and that applies to the entire production of commercial products and commercial services sold by either the entire company or a portion thereof ( e.g., division, plant, or product line).

Commercial product means a product that satisfies the definition of “commercial product” in Federal Acquisition Regulation (FAR) 2.101 .

Commercial service means a service that satisfies the definition of “commercial service” in FAR 2.101 .

Electronic Subcontracting Reporting System (eSRS) means the Governmentwide, electronic, web-based system for small business subcontracting program reporting. The eSRS is located at http://www.esrs.gov.

Indian tribe means any Indian tribe , band, group, pueblo, or community, including native villages and native groups (including corporations organized by Kenai, Juneau, Sitka, and Kodiak) as defined in the Alaska Native Claims Settlement Act ( 43 U.S.C. A. 1601 et seq. ), that is recognized by the Federal Government as eligible for services from the Bureau of Indian Affairs in accordance with 25 U.S.C. 1452(c) . This definition also includes Indian-owned economic enterprises that meet the requirements of 25 U.S.C. 1452(e) .

Individual subcontracting plan means a subcontracting plan that covers the entire contract period (including option periods), applies to a specific contract, and has goals that are based on the offeror's planned subcontracting in support of the specific contract, except that indirect costs incurred for common or joint purposes may be allocated on a prorated basis to the contract.

Master subcontracting plan means a subcontracting plan that contains all the required elements of an individual subcontracting plan , except goals, and may be incorporated into individual subcontracting plans, provided the master subcontracting plan has been approved.

Reduced payment means a payment that is for less than the amount agreed upon in a subcontract in accordance with its terms and conditions, for supplies and services for which the Government has paid the prime contractor.

Subcontract means 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 the contract or subcontract .

Total contract dollars means the final anticipated dollar value, including the dollar value of all options.

Untimely payment means a payment to a subcontractor that is more than 90 days past due under the terms and conditions of a subcontract for supplies and services for which the Government has paid the prime contractor.

(1) 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, small disadvantaged business, and women-owned small business concerns. If the Offeror is submitting an individual subcontracting plan , the plan must separately address subcontracting with small business, veteran-owned small business, service-disabled veteran -owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns, with a separate part for the basic contract and separate parts for each option (if any). The subcontracting plan shall be included in and made a part of the resultant contract. The subcontracting plan shall be negotiated within the time specified by the Contracting Officer. Failure to submit and negotiate the subcontracting plan shall make the Offeror ineligible for award of a contract.

(i) The Contractor may accept a subcontractor 's written representations of its size and socioeconomic status as a small business, small disadvantaged business, veteran-owned small business, service-disabled veteran -owned small business, or a women-owned small business if the subcontractor represents that the size and socioeconomic status representations with its offer are current, accurate, and complete as of the date of the offer for the subcontract .

(ii) The Contractor may accept a subcontractor 's representations of its size and socioeconomic status as a small business, small disadvantaged business, veteran-owned small business, service-disabled veteran -owned small business, or a women-owned small business in the System for Award Management (SAM) if—

(A) The subcontractor is registered in SAM ; and

(B) The subcontractor represents that the size and socioeconomic status representations made in SAM are current, accurate and complete as of the date of the offer for the subcontract .

(iii) The Contractor may not require the use of SAM for the purposes of representing size or socioeconomic status in connection with a subcontract .

(iv) In accordance with 13 CFR 121.411 , 126.900 , 127.700 , and 128.600 , a contractor acting in good faith is not liable for misrepresentations made by its subcontractors regarding the subcontractor 's size or socioeconomic status.

(d) The Offeror's subcontracting plan shall include the following:

(1) Separate goals, expressed in terms of total dollars subcontracted, and as a percentage of total planned subcontracting dollars, for the use of small business, veteran-owned small business, service-disabled veteran -owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns as subcontractors. For individual subcontracting plans, and if required by the Contracting Officer, goals shall also be expressed in terms of percentage of total contract dollars , in addition to the goals expressed as a percentage of total subcontract dollars. The Offeror shall include all subcontracts that contribute to contract performance, and may include a proportionate share of products and services that are normally allocated as indirect costs. In accordance with 43 U.S.C. 1626 —

(i) Subcontracts awarded to an ANC or Indian tribe shall be counted towards the subcontracting goals for small business and small disadvantaged business concerns, regardless of the size or Small Business Administration certification status of the ANC or Indian tribe ; and

(ii) Where one or more subcontractors are in the subcontract tier between the prime Contractor and the ANC or Indian tribe , the ANC or Indian tribe shall designate the appropriate Contractor(s) to count the subcontract towards its small business and small disadvantaged business subcontracting goals.

(A) In most cases, the appropriate Contractor is the Contractor that awarded the subcontract to the ANC or Indian tribe .

(B) If the ANC or Indian tribe designates more than one Contractor to count the subcontract toward its goals, the ANC or Indian tribe shall designate only a portion of the total subcontract award to each Contractor. The sum of the amounts designated to various Contractors cannot exceed the total value of the subcontract .

(C) The ANC or Indian tribe shall give a copy of the written designation to the Contracting Officer, the prime Contractor, and the subcontractors in between the prime Contractor and the ANC or Indian tribe within 30 days of the date of the subcontract award.

(D) If the Contracting Officer does not receive a copy of the ANC 's or the Indian tribe 's written designation within 30 days of the subcontract award, the Contractor that awarded the subcontract to the ANC or Indian tribe will be considered the designated Contractor.

(2) A statement of—

(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 , including all indirect costs except as described in paragraph (g) of this clause, to support the sales for a commercial plan ;

(ii) Total dollars planned to be subcontracted to small business concerns (including ANC and Indian tribes);

(iii) Total dollars planned to be subcontracted to veteran-owned small business concerns;

(iv) Total dollars planned to be subcontracted to service-disabled veteran -owned small business;

(v) Total dollars planned to be subcontracted to HUBZone small business concerns;

(vi) Total dollars planned to be subcontracted to small disadvantaged business concerns (including ANCs and Indian tribes); and

(vii) Total dollars planned to be subcontracted to women-owned small business concerns.

(3) A description of the principal types of supplies and services to be subcontracted, and an identification of the types planned for subcontracting to—

(i) Small business concerns;

(ii) Veteran-owned small business concerns;

(iii) Service-disabled veteran -owned small business concerns;

(iv) HUBZone small business concerns;

(v) Small disadvantaged business concerns; and

(vi) Women-owned small business concerns.

(4) A description of the method used to develop the subcontracting goals in paragraph (d)(1) of this clause.

(5) A description of the method used to identify potential sources for solicitation purposes (e.g., existing company source lists, SAM , veterans service organizations, the National Minority Purchasing Council Vendor Information Service, the Research and Information Division of the Minority Business Development Agency in the Department of Commerce , or small, HUBZone, small disadvantaged, and women-owned small business trade associations). A firm may rely on the information contained in SAM as an accurate representation of a concern's size and ownership characteristics for the purposes of maintaining a small, veteran-owned small, service-disabled veteran -owned small, HUBZone small, small disadvantaged, and women-owned small business source list. Use of SAM as its source list does not relieve a firm of its responsibilities (e.g., outreach, assistance, counseling, or publicizing subcontracting opportunities) in this clause.

(6) A statement as to whether or not the Offeror 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—

(i) Small business concerns (including ANC and Indian tribes);

(v) Small disadvantaged business concerns (including ANC and Indian tribes); and

(7) The name of the 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 assure 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 of this contract entitled “Utilization of Small Business Concerns” 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 the applicable threshold specified in FAR 19.702(a) on the date of subcontract award, with further subcontracting possibilities to adopt a subcontracting plan that complies with the requirements of this clause.

(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/or the Summary Subcontract Report (SSR), in accordance with paragraph (l) of this clause using the Electronic Subcontracting Reporting System (eSRS) at http://www.esrs.gov. The reports shall provide information on subcontract awards to small business concerns (including ANCs and Indian tribes that are not small businesses), veteran-owned small business concerns , service-disabled veteran -owned small business concerns , HUBZone small business concerns , small disadvantaged business concerns (including ANCs and Indian tribes that have not been certified by SBA as small disadvantaged businesses), women-owned small business concerns , and for NASA only, Historically Black Colleges and Universities and Minority Institutions. Reporting shall be in accordance with this clause, or as provided in agency regulations;

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

(vi) Provide its prime contract number, its unique entity identifier , and the email 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 email 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 that have been 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, service-disabled veteran -owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns and award subcontracts to them. The records shall include at least the following (on a plant-wide or company-wide basis, unless otherwise indicated):

(i) Source lists (e.g., SAM), guides, and other data that identify small business, veteran-owned small business, service-disabled veteran -owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns.

(ii) Organizations contacted in an attempt to locate sources that are small business, veteran-owned small business, service-disabled veteran -owned small business, HUBZone small business, small disadvantaged business, or women-owned small business concerns.

(iii) Records on each subcontract solicitation resulting in an award of more than the simplified acquisition threshold, as defined in FAR 2.101 on the date of subcontract award, indicating—

(A) Whether small business concerns were solicited and, if not, why not;

(B) Whether veteran-owned small business concerns were solicited and, if not, why not;

(C) Whether service-disabled veteran-owned small business concerns were solicited and, if not, why not;

(D) Whether HUBZone small business concerns were solicited and, if not, why not;

(E) Whether small disadvantaged business concerns were solicited and, if not, why not;

(F) Whether women-owned small business concerns were solicited and, if not, why not; and

(G) If applicable, the reason award was not made to a small business concern .

(iv) Records of any outreach efforts to contact—

(A) Trade associations;

(B) Business development organizations;

(C) Conferences and trade fairs to locate small, HUBZone small, small disadvantaged, service-disabled veteran -owned, and women-owned small business sources; and

(D) Veterans service organizations.

(v) Records of internal guidance and encouragement provided to buyers through—

(A) Workshops, seminars, training, etc.; and

(B) Monitoring performance to evaluate compliance with the program's requirements.

(vi) On a contract-by-contract basis, records to support award data submitted by the offeror to the Government, including the name, address, and business size of each subcontractor . Contractors having commercial plans need not comply with this requirement.

(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 it 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. The 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 subcontract ; 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 (d)(12) of this clause. This written explanation must 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 .

(15) Assurances that the offeror will pay its small business subcontractors on time and in accordance with the terms and conditions of the underlying subcontract , and notify the contracting officer when the prime contractor makes either a reduced or an untimely payment to a small business subcontractor (see 52.242 –5).

(e) In order to effectively implement this plan to the extent consistent with efficient contract performance, the Contractor shall perform the following functions:

(1) Assist small business, veteran-owned small business, service-disabled veteran -owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns by arranging solicitations, time for the preparation of bids, quantities, specifications, and delivery schedules so as to facilitate the participation by such concerns. Where the Contractor's lists of potential small business, veteran-owned small business, service-disabled veteran -owned small business, HUBZone small business, small disadvantaged business, and women-owned small business subcontractors are excessively long, reasonable effort shall be made to give all such small business concerns an opportunity to compete over a period of time.

(2) Provide adequate and timely consideration of the potentialities of small business, veteran-owned small business, service-disabled veteran -owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns in all “make-or-buy” decisions.

(3) Counsel and discuss subcontracting opportunities with representatives of small business, veteran-owned small business, service-disabled veteran -owned small business, HUBZone small business, small disadvantaged business, and women-owned small business firms.

(4) Confirm that a subcontractor representing itself as a HUBZone small business concern is certified by SBA as a HUBZone small business concern by accessing SAM or by accessing the Dynamic Small Business Search (DSBS) at https://web.sba.gov/pro-net/search/dsp_dsbs.cfm.

(5) Provide notice to subcontractors concerning penalties and remedies for misrepresentations of business status as small, veteran-owned small business, HUBZone small, small disadvantaged, or women-owned small business for the purpose of obtaining a subcontract that is to be included as part or all of a goal contained in the Contractor's subcontracting plan.

(6) For all competitive subcontracts over the simplified acquisition threshold, as defined in FAR 2.101 on the date of subcontract award, in which a small business concern received a small business preference, upon determination of the successful subcontract offeror, prior to award of the subcontract the Contractor must inform each unsuccessful small business subcontract offeror in writing of the name and location of the apparent successful offeror and if the successful subcontract offeror is a small business, veteran-owned small business, service-disabled veteran -owned small business, HUBZone small business, small disadvantaged business, or women-owned small business concern .

(7) Assign each subcontract the NAICS code and corresponding size standard that best describes the principal purpose of the subcontract .

(f) A master subcontracting plan on a plant or division-wide basis that contains all the elements required by paragraph (d) of this clause , except goals, may be incorporated by reference as a part of the subcontracting plan required of the Offeror by this clause; provided—

(1) The master subcontracting plan has been approved;

(2) The Offeror ensures that the master subcontracting plan is updated as necessary and provides copies of the approved master subcontracting plan , including evidence of its approval, to the Contracting Officer; and

(3) Goals and any deviations from the master subcontracting plan deemed necessary by the Contracting Officer to satisfy the requirements of this contract are set forth in the individual subcontracting plan .

(g) A commercial plan is the preferred type of subcontracting plan for contractors furnishing commercial products and commercial services. The commercial plan shall relate to the offeror's planned subcontracting generally, for both commercial and Government business, rather than solely to the Government contract. Once the Contractor's commercial plan has been approved, the Government will 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 . A Contractor with a commercial plan shall comply with the reporting requirements stated in paragraph (d)(10) of this clause by submitting one SSR in eSRS for all contracts covered by its commercial plan . 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. This report shall be acknowledged or rejected in eSRS by the Contracting Officer who approved the plan. This report shall be submitted within 30 days after the end of the Government's fiscal year.

(h) Prior compliance of the offeror with other such subcontracting plans under previous contracts will be considered by the Contracting Officer in determining the responsibility of the offeror for award of the contract.

(i) A contract may have no more than one subcontracting plan. When a contract modification exceeds the subcontracting plan threshold in FAR 19.702(a) , or an option is exercised, the goals of the existing subcontracting plan shall be amended to reflect any new subcontracting opportunities. When the goals in a subcontracting plan are amended, these goal changes do not apply retroactively.

(j) Subcontracting plans are not required from subcontractors when the prime contract contains the clause at FAR 52.212 –5, Contract Terms and Conditions Required to Implement Statutes or Executive Orders— Commercial Products and Commercial Services, or when the subcontractor provides a commercial product or commercial service subject to the clause at FAR 52.244 –6, Subcontracts for Commercial Products and Commercial Services, under a prime contract.

(k) 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,” or (2) an approved plan required by this clause, shall be a material breach of the contract and may be considered in any past performance evaluation of the Contractor.

(l) The Contractor shall submit ISRs and SSRs using the web-based eSRS at http://www.esrs.gov. Purchases from a corporation, company, or subdivision that is an affiliate of the Contractor or subcontractor are not included in these reports. Subcontract awards by affiliates shall be treated as subcontract awards by the Contractor. Subcontract award data reported by the Contractor and subcontractors shall be limited to awards made to their immediate next-tier subcontractors . Credit cannot be taken for awards made to lower tier subcontractors , unless the Contractor or subcontractor has been designated to receive a small business or small disadvantaged business credit from an ANC or Indian tribe . Only subcontracts involving performance in the United States or its outlying areas should be included in these reports with the exception of subcontracts under a contract awarded by the State Department or any other agency that has statutory or regulatory authority to require subcontracting plans for subcontracts performed outside the United States and its outlying areas.

(1) ISR. This report is not required for commercial plans. The report is required for each contract containing an individual subcontracting plan .

(i) The report 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 the Contracting Officer rejects an ISR, the Contractor shall submit a corrected report within 30 days of receiving the notice of ISR rejection.

(A) When a subcontracting plan contains separate goals for the basic contract and each option, as prescribed by FAR 19.704(c) , the dollar goal inserted on this report shall be the sum of the base period through the current option; for example, for a report submitted after the second option is exercised, the dollar goal would be the sum of the goals for the basic contract, the first option, and the second option.

(B) If a subcontracting plan has been added to the contract pursuant to 19.702(a)(1)(iii) or 19.301 –2(e), the Contractor's achievements must be reported in the ISR on a cumulative basis from the date of incorporation of the subcontracting plan into the contract.

(iii) When a subcontracting plan includes indirect costs in the goals, these costs must be included in this report.

(iv) The authority to acknowledge receipt or reject the ISR resides—

(A) In the case of the prime Contractor, with the Contracting Officer; and

(B) In the case of a subcontract with a subcontracting plan, with the entity that awarded the subcontract .

(i) Reports submitted under individual subcontracting plans.

(A) This report encompasses all subcontracting under prime contracts and subcontracts with an executive agency , regardless of the dollar value of the subcontracts . This report also includes indirect costs on a prorated basis when the indirect costs are excluded from the subcontracting goals.

(B) The report may be submitted on a corporate, company or subdivision (e.g. plant or division operating as a separate profit center) basis, unless otherwise directed by the agency .

(C) If the Contractor or a subcontractor is performing work for more than one executive agency , a separate report shall be submitted to each executive agency covering only that agency 's contracts, provided at least one of that agency 's contracts is over the applicable threshold specified in FAR 19.702(a) , and the contract contains a subcontracting plan. For DoD, a consolidated report shall be submitted for all contracts awarded by military departments/agencies and/or subcontracts awarded by DoD prime contractors.

(D) The report shall be submitted annually by October 30 for the twelve month period ending September 30. When a Contracting Officer rejects an SSR, the Contractor shall submit a revised report within 30 days of receiving the notice of SSR rejection.

(E) Subcontract awards that are related to work for more than one executive agency shall be appropriately allocated.

(F) The authority to acknowledge or reject SSRs in eSRS, including SSRs submitted by subcontractors with subcontracting plans, resides with the Government agency awarding the prime contracts unless stated otherwise in the contract.

(ii) Reports submitted under a commercial plan.

(A) The report shall include all subcontract awards under the commercial plan in effect during the Government's fiscal year and all indirect costs.

(B) The report shall be submitted annually, within thirty days after the end of the Government's fiscal year.

(C) If a Contractor has a commercial plan and is performing work for more than one executive agency , the Contractor shall specify the percentage of dollars attributable to each agency .

(D) The authority to acknowledge or reject SSRs for commercial plans resides with the Contracting Officer who approved the commercial plan .

Alternate I (NOV 2016). As prescribed in 19.708(b)(1)(i) , substitute the following paragraph (c)(1) for paragraph (c)(1) of the basic clause:

(1) The apparent low bidder, upon request by the Contracting Officer, shall submit 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, small disadvantaged business, and women-owned small business concerns. If the bidder is submitting an individual subcontracting plan , the plan must separately address subcontracting with small business, veteran-owned small business, service-disabled veteran -owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns, with a separate part for the basic contract and separate parts for each option (if any). The plan shall be included in and made a part of the resultant contract. The subcontracting plan shall be submitted within the time specified by the Contracting Officer. Failure to submit the subcontracting plan shall make the bidder ineligible for the award of a contract.

Alternate II (NOV 2016). As prescribed in 19.708(b)(1)(ii) , substitute the following paragraph (c)(1) for paragraph (c)(1) of the basic clause:

(1) Proposals submitted in response to this solicitation shall include a subcontracting plan that separately addresses subcontracting with small business, veteran-owned small business, service-disabled veteran -owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns. If the Offeror is submitting an individual subcontracting plan , the plan must separately address subcontracting with small business, veteran-owned small business, service-disabled veteran -owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns, with a separate part for the basic contract and separate parts for each option (if any). The plan shall be included in and made a part of the resultant contract. The subcontracting plan shall be negotiated within the time specified by the Contracting Officer. Failure to submit and negotiate a subcontracting plan shall make the Offeror ineligible for award of a contract.

Alternate III (JUN 2020). As prescribed in 19.708(b)(1)(iii) , substitute the following paragraphs (d)(10) and (l) for paragraphs (d)(10) and (l) in the basic clause:

(iii) Submit Standard Form (SF) 294 Subcontracting Report for Individual Contract in accordance with paragraph (l) of this clause. Submit the Summary Subcontract Report (SSR), in accordance with paragraph (l) of this clause using the Electronic Subcontracting Reporting System (eSRS) at http://www.esrs.gov. The reports shall provide information on subcontract awards to small business concerns (including ANCs and Indian tribes that are not small businesses), veteran-owned small business concerns , service-disabled veteran -owned small business concerns , HUBZone small business concerns , small disadvantaged business concerns (including ANCs and Indian tribes that have not been certified by the Small Business Administration as small disadvantaged businesses), women-owned small business concerns, and for NASA only, Historically Black Colleges and Universities and Minority Institutions. Reporting shall be in accordance with this clause, or as provided in agency regulations; and

(iv) Ensure that its subcontractors with subcontracting plans agree to submit the SF 294 in accordance with paragraph (l) of this clause. Ensure that its subcontractors with subcontracting plans agree to submit the SSR in accordance with paragraph (l) of this clause using the eSRS.

(l) The Contractor shall submit a SF 294. The Contractor shall submit SSRs using the web-based eSRS at http://www.esrs.gov. Purchases from a corporation, company, or subdivision that is an affiliate of the Contractor or subcontractor are not included in these reports. Subcontract awards by affiliates shall be treated as subcontract awards by the Contractor. Subcontract award data reported by the Contractor and subcontractors shall be limited to awards made to their immediate next-tier subcontractors . Credit cannot be taken for awards made to lower tier subcontractors , unless the Contractor or subcontractor has been designated to receive a small business or small disadvantaged business credit from an ANC or Indian tribe . Only subcontracts involving performance in the U.S. or its outlying areas should be included in these reports with the exception of subcontracts under a contract awarded by the State Department or any other agency that has statutory or regulatory authority to require subcontracting plans for subcontracts performed outside the United States and its outlying areas.

(1) SF 294. This report is not required for commercial plans. The report is required for each contract containing an individual subcontracting plan . For Contractors the report shall be submitted to the Contracting Officer, or as specified elsewhere in this contract. In the case of a subcontract with a subcontracting plan, the report shall be submitted to the entity that awarded the subcontract .

(i) The report 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 a report, the Contractor shall submit a revised report within 30 days of receiving the notice of report rejection.

(B) If a subcontracting plan has been added to the contract pursuant to 19.702(a)(1)(iii) or 19.301 –2(e), the Contractor's achievements must be reported in the report on a cumulative basis from the date of incorporation of the subcontracting plan into the contract.

(2) SSR . (i) Reports submitted under individual subcontracting plans .

(B) The report may be submitted on a corporate, company or subdivision (e.g., plant or division operating as a separate profit center) basis, unless otherwise directed by the agency .

(C) If the Contractor and/or a subcontractor is performing work for more than one executive agency , a separate report shall be submitted to each executive agency covering only that agency 's contracts, provided at least one of that agency 's contracts is over the applicable threshold specified in FAR 19.702(a) , and the contract and contains a subcontracting plan. For DoD, a consolidated report shall be submitted for all contracts awarded by military departments/agencies and/or subcontracts awarded by DoD prime contractors.

(D) The report shall be submitted annually by October 30, for the twelve month period ending September 30. When a Contracting Officer rejects an SSR, the Contractor is required to submit a revised SSR within 30 days of receiving the notice of report rejection.

(F) The authority to acknowledge or reject SSRs in the eSRS, including SSRs submitted by subcontractors with subcontracting plans, resides with the Government agency awarding the prime contracts unless stated otherwise in the contract.

(ii) Reports submitted under a commercial plan .

(B) The report shall be submitted annually, within 30 days after the end of the Government's fiscal year.

Alternate IV (SEP 2023). As prescribed in 19.708(b)(1)(iv) , substitute the following paragraphs (c) and (d) for paragraphs (c) and (d) of the basic clause:

(1) The Contractor, 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, small disadvantaged business, and women-owned small business concerns. If the Contractor is submitting an individual subcontracting plan , the plan shall separately address subcontracting with small business, veteran-owned small business, service-disabled veteran -owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns, with a separate part for the basic contract and separate parts for each option (if any). The subcontracting plan shall be incorporated into the contract. The subcontracting plan shall be negotiated within the time specified by the Contracting Officer. The subcontracting plan does not apply retroactively.

(i) The prime Contractor may accept a subcontractor 's written representations of its size and socioeconomic status as a small business, small disadvantaged business, veteran-owned small business, service-disabled veteran -owned small business, or a women-owned small business if the subcontractor represents that the size and socioeconomic status representations with its offer are current, accurate, and complete as of the date of the offer for the subcontract .

(d) The Contractor's subcontracting plan shall include the following:

(1) Separate goals, expressed in terms of total dollars subcontracted and as a percentage of total planned subcontracting dollars, for the use of small business, veteran-owned small business, service-disabled veteran -owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns as subcontractors. For individual subcontracting plans, and if required by the Contracting Officer, goals shall also be expressed in terms of percentage of total contract dollars , in addition to the goals expressed as a percentage of total subcontract dollars. The Contractor shall include all subcontracts that contribute to contract performance, and may include a proportionate share of products and services that are normally allocated as indirect costs. In accordance with 43 U.S.C. 1626 —

(C) The ANC or Indian tribe shall give a copy of the written designation to the Contracting Officer, the Contractor, and the subcontractors in between the prime Contractor and the ANC or Indian tribe within 30 days of the date of the subcontract award.

(i) Total dollars planned to be subcontracted for an individual subcontracting plan ; or the Contractor'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;

(5) A description of the method used to identify potential sources for solicitation purposes (e.g., existing company source lists, SAM , veterans service organizations, the National Minority Purchasing Council Vendor Information Service, the Research and Information Division of the Minority Business Development Agency in the Department of Commerce , or small, HUBZone, small disadvantaged, and women-owned small business trade associations). The Contractor may rely on the information contained in SAM as an accurate representation of a concern's size and ownership characteristics for the purposes of maintaining a small, veteran-owned small, service-disabled veteran -owned small, HUBZone small, small disadvantaged, and women-owned small business source list. Use of SAM as its source list does not relieve a firm of its responsibilities (e.g., outreach, assistance, counseling, or publicizing subcontracting opportunities) in this clause.

(6) A statement as to whether or not the Contractor 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—

(7) The name of the individual employed by the Contractor who will administer the Contractor's subcontracting program, and a description of the duties of the individual .

(8) A description of the efforts the Contractor will make to assure 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 Contractor will include the clause of this contract entitled “Utilization of Small Business Concerns” in all subcontracts that offer further subcontracting opportunities, and that the Contractor will require all subcontractors (except small business concerns) that receive subcontracts in excess of the applicable threshold specified in FAR 19.702(a) on the date of subcontract award, with further subcontracting possibilities to adopt a subcontracting plan that complies with the requirements of this clause.

(10) Assurances that the Contractor will—

(ii) Submit periodic reports so that the Government can determine the extent of compliance by the Contractor with the subcontracting plan;

(iii) After November 30, 2017, include subcontracting data for each order when reporting subcontracting achievements for an indefinite-delivery, indefinite-quantity contract with an individual subcontracting plan where the contract is intended for use by multiple agencies;

(vi) Provide its prime contract number, its unique entity identifier , and the email address of the Contractor'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

(11) 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 Contractor's efforts to locate small business, veteran-owned small business, service-disabled veteran -owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns and award subcontracts to them. The records shall include at least the following (on a plant-wide or company-wide basis, unless otherwise indicated):

(vi) On a contract-by-contract basis, records to support award data submitted by the Contractor to the Government, including the name, address, and business size of each subcontractor . Contractors having commercial plans need not comply with this requirement.

(12) Assurances that the Contractor 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 it used in preparing the proposal for the modification, in the same or greater scope, amount, and quality used in preparing and submitting the modification proposal. Responding to a request for a quote does not constitute use in preparing a proposal. The Contractor used a small business concern in preparing the proposal for a modification if—

(i) The Contractor identifies the small business concern as a subcontractor in the proposal or associated small business subcontracting plan, to furnish certain supplies or perform a portion of the subcontract ; or

(ii) The Contractor used the small business concern 's pricing or cost information or technical expertise in preparing the 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 when the modification is executed.

(14) Assurances that the Contractor will not prohibit a subcontractor from discussing with the contracting officer any material matter pertaining to the payment to or utilization of a subcontractor .

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FAC Number: 2024-04 Effective Date: 05/01/2024

19.202-1 Encouraging small business participation in acquisitions.

Small business concerns shall be afforded an equitable opportunity to compete for all contracts that they can perform to the extent consistent with the Government’s interest. When applicable, the contracting officer shall take the following actions:

(a) Divide proposed acquisitions of supplies and services (except construction ) into reasonably small lots (not less than economic production runs) to permit offers on quantities less than the total requirement.

(b) Plan acquisitions such that, if practicable, more than one small business concern may perform the work, if the work exceeds the amount for which a surety may be guaranteed by SBA against loss under 15 U.S.C.694b .

(c) Ensure that delivery schedules are established on a realistic basis that will encourage small business participation to the extent consistent with the actual requirements of the Government.

(d) Encourage prime contractors to subcontract with small business concerns (see subpart  19.7 ).

(1) Provide a copy of the proposed acquisition package and other reasonably obtainable information related to the acquisition to the SBA PCR (or, if a PCR is not assigned, see 19.402 (a)) at least 30 days prior to the issuance of the solicitation if—

(i) The proposed acquisition is for supplies or services currently being provided by a small business and the proposed acquisition is of a quantity or estimated dollar value, the magnitude of which makes it unlikely that small businesses can compete for the prime contract;

(ii) The proposed acquisition is for construction and seeks to package or consolidate discrete construction projects and the magnitude of this consolidation makes it unlikely that small businesses can compete for the prime contract;

(iii) The proposed acquisition is for a consolidated or bundled requirement. (See 7.107-5 (a) for mandatory 30- day notice requirement to incumbent small business concerns .) The contracting officer shall provide all information relative to the justification for the consolidation or bundling , including the acquisition plan or strategy, and if the acquisition involves substantial bundling , the information identified in 7.107-4 . The contracting officer shall also provide the same information to the agency Office of Small and Disadvantaged Business Utilization : or

(iv) The acquisition will be reviewed at the PCR's discretion.

(2) For acquisitions described in paragraph (e)(1)(i) through (iii) of this section, provide a statement explaining why the—

(i) Proposed acquisition cannot be divided into reasonably small lots (not less than economic production runs) to permit offers on quantities less than the total requirement;

(ii) Delivery schedules cannot be established on a realistic basis that will encourage small business participation to the extent consistent with the actual requirements of the Government;

(iii) Proposed acquisition cannot be structured so as to make it likely that small businesses can compete for the prime contract;

(iv) Consolidated construction project cannot be acquired as separate discrete projects; or

(v) Consolidation or bundling is necessary and justified.

(3) Process the 30- day notification concurrently with other processing steps required prior to the issuance of the solicitation .

(4) If the contracting officer rejects the SBA PCR’s recommendation made in accordance with 19.402 (c)(2), document the basis for the rejection and notify the SBA PCR in accordance with 19.502-8.

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Australian federal budget 2024: what we know so far and what to expect

Treasurer Jim Chalmers has promised more cost-of-living relief in his 14 May budget as well as spending for students and health

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On 14 May the treasurer, Jim Chalmers, will deliver his second full-year budget.

Chalmers has promised more cost-of-living relief in a budget that he says tackles inflation but sets Australia’s economy up for growth – neither scorched-earth nor a free-for-all of spending .

A second surplus is within reach, but that’s just speculation. Here’s what we know already about what is in the budget.

Tax cuts and cost of living

The biggest element of the cost-of-living relief in the budget is the changes to stage-three tax cuts, a $359bn 10-year tax cut package announced by Labor in January and legislated in February with opposition support.

The package means all Australian taxpayers (earning over the tax-free threshold of $18,200) get a tax cut, doubling the benefit for an average income earner compared with the Coalition’s original stage three proposal.

Labor says 84% of taxpayers are better off under its proposal, although those earning more than $146,486 would have received more under the Coalition’s model.

There will be other cost-of-living measures the government claims won’t add to inflation, which might point towards extending energy price relief .

Jim Chalmers has poured cold water on the Economic Inclusion Advisory Committee’s call for jobseeker to rise to 90% of the age pension, although he and the finance minister, Katy Gallagher, have seemed more open on increasing rent assistance. Chalmers has confirmed there will be “additional steps” on poverty reduction and “new initiatives for housing”.

Education, skills and Hecs

The government will wipe $3bn from student debts by indexing Hecs and Help debts to the lower of the consumer price index or the wage price index, backdated to June 2023.

The government will also pay student teachers, nurses, midwives and social workers $320 a week during their mandatory work placements , starting from July 2025. These two measures are aspects of the government’s response to the Universities Accord, but there will be more in the budget.

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The government has announced $90.6m to boost the number of skilled workers in the construction and housing sector, creating 15,000 fee-free Tafe places and 5,000 places for pre-apprenticeships.

School funding will also rise as the federal government negotiates with the states to cover the 5% funding gap, most recently offering to lift its share of funding from 20% to 22.5%. This is estimated to cost $6bn over five years, although Chalmers has been coy about whether estimates will be reflected in the budget or only be added after education and health agreements are finalised.

There is no question childcare workers will be receiving a pay rise in this budget – the only questions are how much and how it will be distributed. With the industry in crisis due to staffing shortages, which have been exacerbated by staff leaving to work in aged care after that sector’s pay rise win , the government is expected to make wage increases for childcare workers a centre piece of the budget.

But it’s unclear whether the government will pull the trigger on scrapping the activity test, which sets a subsidy rate based on employment. It has indicated it wants to get rid of the measure as part of its plan to make childcare in Australia “universal”, though it’s not clear whether it will happen in this budget.

Health and aged care

Public hospitals are expected to get more funding, as the federal government works to finalise a new five-year agreement with the states to start in mid-2025. The commonwealth has reportedly offered to lift funding by an extra $4bn in 2025-26 and $13bn over the whole five years.

The government is also increasing funding for its medical research future fund over 13 years, with $1.1bn for existing projects plus $150m million to investigate rarely survived cancers, and $150m towards reducing inequalities in the health system. A further $500m will go to other research schemes.

The government is also yet to outline its response to March’s aged care taskforce report , which suggested new ways to pay for the system – including asking Australians with more wealth to pay more for the cost of their care.

The health minister, Mark Butler, also announced $49.1m would go toward offering longer consultations of 45 minutes or longer for endometriosis sufferers.

Among a total of $15.4bn in “unavoidable spending” to continue programs from the previous government is money set aside for palliative care, cancer supports, public health chronic conditions, and alcohol and other drug treatments.

Defence and foreign affairs

The budget will confirm that Australia’s defence spending will increase from 2.1% of Australia’s economic output next financial year to 2.4% by 2033-34, driven by a range of big-spending projects including the Aukus nuclear-powered submarines.

There will be some cuts to programs, however, with the government announcing last month that it would free up about $73bn over 10 years by cutting, delaying or changing the scope of some defence projects.

Even after these cuts are taken into account, the government says it has committed a net increase of $50.3bn for defence over the next 10 years. This includes a net increase of $5.7bn over the immediate four-year budget cycle.

This immediate funding includes $1bn over the next four years for long-range strike, targeting and autonomous systems.

In foreign affairs, the government has promised $492m for the Asian Development Fund’s 2025-28 pledging round, to “help respond to the needs of the region and deliver transformative development projects across the Indo-Pacific”.

Infrastructure

So far, western Sydney is the biggest winner in infrastructure after the minister, Catherine King, announced $1.9bn in funding for 14 road and transport projects. Those include road upgrades, planning projects and extra money for a business case to extend the train line into the city’s south-west.

Cyclists will also get a boost with $100m being set aside to build and upgrade bicycle and walking lines in cities and regional centres.

Canberra will also get a $50m injection to extend its light rail line from the northern suburbs past Parliament House and into the city’s south.

The nation’s capital are getting a good deal because $249.7m has also been announced for Australian Institute of Sport as the 2032 Brisbane Olympics inches closer.

The quarter of a billion-dollar sum will go towards refreshing the ageing site with new accommodation, an all-weather sports dome and a new training centre.

Beyond Canberra, road safety data from the states and territories will also be better harmonised with a $21m funding announcement to set up a national data hub.

Future Made in Australia

The government has announced funding for a range of projects under its Future Made in Australia policy, which aims to directly support Australian industry and innovation, particularly in green energy. These commitments include:

$1bn for the Solar Sunshot production of solar panels in the Hunter

$1bn to PsiQuantum to build the world’s first fault tolerant quantum computer in Brisbane

$840m for Arafura’s rare earth metals production in the Northern Territory

An export agreement to sell armoured vehicles made by the German defence manufacturer Rheinmetall

$566m over 10 years for GeoScience Australia to map what is under Australia’s soil and seabed

$400m in new loans to Alpha HPA for Australia’s first high-purity alumina processing facility in Queensland; and

$185m to Renascor Resources to fast-track the development of stage one of its Siviour Graphite Project in South Australia; and

$100m to speed up environmental approvals, including assistance for business.

Gender equality

The government has committed $925m for the leaving violence payment, a payment of $5,000 to help meet the costs of leaving a relationship. The existing trial will be extended and the new permanent program available from mid-2025.

The government has also said that parents will receive 12% superannuation – or about $106 a week – on their publicly funded paid parental leave from July 2025, full costings for which will be in the budget.

Indigenous affairs

The government has not foreshadowed any new major spending commitments in the Indigenous affairs space, but the budget will contain details and funding for several large programs in that portfolio that were recently unveiled.

The Closing The Gap commitments from February, including a $700m remote jobs program, and March’s announcement of a $4bn remote housing program for the Northern Territory, are expected to be the major components of the Indigenous affairs portfolio. Most of the new commitments in Indigenous affairs are typically contained in February’s Closing The Gap document rather than the May budget.

Attorney General’s Department

The government has pledged $161.3m to establish the national firearms register , and $11m for an app alerting Australians in real time if somebody tries to use their data to commit fraud.

The government will invest $166.4m to implement reforms to Australia’s anti-money laundering and counter-terrorism financing regime.

• Australian budget 2024
• Australian politics
• Australian economy
• Jim Chalmers (Australian politician)
• Cost of living crisis
• Labor party

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