Understanding Small Business Subcontracting Plans - PowerPoint Presentation

Slide1

Understanding Small Business Subcontracting Plans

“SBA 1

st

First Wednesday Virtual Learning 2016”Slide2

Stephanie

Lewis

Size Specialist & Commercial Market Representative U.S. Small Business Administration Office of Government Contracting (817) 684-5303 stephanie.lewis@sba.gov

Presenter: Slide3

Hosts:

Dwight A. Johnson, Procurement Center Representative

SBA Office of Government Contracting, Area IV, Omaha

sbalearning@sba.gov (402) 221-7206Jan Kaiser, Procurement Center Representative

SBA

Office of Government Contracting, Area IV, Chicago

janis.kaiser@sba.gov

(312) 353-7442Slide4

Reminders:SBA approves joint ventures of 8(a) firms only. Do not ask any other small business JVs for evidence of SBA approval.

See the full lists of the 2016 6-digit NAICS codes designated for

EDWOSB and for WOSB set-asides under the WOSB Program at https://www.sba.gov/contracting/government-contracting-programs/women-owned-small-businesses. Size protests FAR Part 19.3 SBA staff FAR Part 19.4Certificates of Competency FAR Part 19.6 Subcontracting plans FAR Part 19.7

SBA Government Contracting Area Directors, Office of Government Contracting

(https://

www.sba.gov/content/pcr-area-directors

)Slide5

Questions answered during the final 10 minutes.

Technical problems? Contact the moderator with a note or call AT&T Connect Support at 1-888-796-6118.

Page numbers stated for those working of hard copies of the program

.We cover the “SBA Quick Reference” as time allows.Find your nearest Procurement Technical Assistance Center at http://www.aptac-us.orgWelcome to “SBA Virtual Learning 2016”Slide6

Check this link for past programs:

http://

www.aptac-us.org/for-contracting-officers- sba-webinar-library/Contracting officer resources: “How PTACs partner with federal agencies”: http://www.aptac-us.org/federal-partners/ Association of Procurement Technical Assistance Centers posts past “First Wednesday” programingSlide7

There are firms that offer fee for services to assist small businesses in a variety of ways. Registration in SAM, proposal preparations, certifications (not authorized by SBA) assistance in getting on GSA Federal Supply Schedules and so forth.

No government official should be promoting any individual business’ services or products as this implies endorsement of one firm over all others. The government has to remain impartial.  If you come across something that you think is great, encourage that firm to market itself, but do not market on their behalf. 

The government, through the Department of Defense established the

Procurement Technical Assistance Program (PTAP) who have centers throughout the country that do provide this and many other services – most of which are at no cost to a firm.”  CAUTION – Do not recommend fee for service firms for SAM registrationSlide8

FY 2016

 Topic

Presenters

SBA Area

1

October 7, 2015

8(a) Business Development

Jackquline Robinson-Burnette

HDQTRS

2

November 4, 2015

Women-Owned Small Business

Ken Silvia

III

3December 2, 2015SBA Surveillance Reviews 2016Valerie Coleman V 4January 6, 2016Consolidation/BundlingJan KaiserIV 5February 3, 2016SDVOSB Keith Waye I 6March 2, 2016Strategic SourcingTom KrusemarkIV 7April 6, 2016Market Research: Dynamic Small Bus Search Valerie ColemanV 8May 4, 2016HUBZones Mariana Pardo/Alison MuellerHDQTRS 9June 1, 2016SBA Size Standards David Gordon IV 10July 13, 2016Nonmanufacturer Rule Janice Nietes VI 11August 3, 2016Understanding SB Subcontracting PlansStephanie Lewis V

To be rescheduled

1102 FIRST WEDNESDAY VIRTUAL LEARNING SERIES 2016”

9:30 to 10:30 Central TimeSlide9

Self-service: Fill in your name on the certificate slide and save.

Phoning in only? Send an email immediately to the link at sbalearning@sba.gov to

verify

your participation. If you listen in groups, send emails of participants in an excel document. Post program email. This contains a time sensitive .wmv recording, a transcript of the program, along with another copy of the program PowerPoint.One Continuous Learning PointSlide10

In FY14, SBs received $91.7 billion in prime contracts (roughly 25% of $366.8 billion) and $75.0 billion in subcontracts (33.0% of $227.0 billion).

Maximizes small business participation at all performance tiersIncreasing importance on agency SCORECARD Final Rule issued July 14, 2016 “Small Business Subcontracting Improvements” effective Nov 1, 2016.

Importance of the Subcontracting ProgramSlide11

FAR 52.219-8 (over SAT)

Utilization of Small Business ConcernsFAR 52.219-9 (“Other than Small”)

Small Business Subcontracting Plan

Contract or modification over $700,000 ($1.5 million for construction)“Maximum Practicable Opportunity”“Good Faith Effort”Subcontracting PlansSlide12

Modification (MOD)

Is a subcontracting plan

required?

(FAR19.702(a)(1) & (2)) Contractor is “Other Than Small Business” (OTSB)

For the Contract?

For the Modification?

Contract>$700K

and

MOD>$700K

Yes

Yes;

however,

it is not necessary to obtain another subcontracting plan for a modification exceeding the applicable threshold if the contract already includes a subcontracting plan.

The

original plan must be modified to adjust the goals to account for the new effort

. FAR 19.705-2(e)Contract>$700K and MOD<$700KYesNoContract<$700K, MOD<$700K, and C+M>$700KNo Yes, per 13 CFR 125.3(d)(8) – & FAR proposed ruleContract<$700K, MOD>$700KNoYesSlide13

Breaking out contract work items into economically feasible units, as appropriate, to facilitate small business participation;

Conducting market research to identify small business subcontractors and suppliers through all reasonable means, such as performing online searches via SAM, posting opportunities on SBA's SUB-Net, participating in Business Matchmaking events, and attending pre-bid conferences;Soliciting small business concerns as early in the acquisition process as practicable to allow them sufficient time to submit a timely offer for the subcontract;Providing interested small businesses with adequate and timely information

about the plans, specifications, and requirements for performance of the prime contract to assist them in submitting a timely offer for the subcontract;Assisting interested small businesses in obtaining bonding, lines of credit, required insurance, necessary equipment, supplies, materials, or services;Utilizing the available services of small business associations; local, state, and Federal small business assistance offices; and other organizations; andParticipating in a formal mentor-protégé program with one or more small-business protégés that results in developmental assistance to the protégés.Maximum Practicable OpportunitySlide14

Small BusinessesNo Subcontracting Opportunities Exist

Approved one level above the CO, placed in contract filePerformed Exclusively Outside the United States

S

ubcontracting Plan Not RequiredSlide15

Any agreement (other than one involving an employer-employee relationship) entered into by a Government prime contractor or subcontractor calling for supplies and/or services required for performance of the contract or subcontract (including modifications

).First Tier OnlySubcontractSlide16

A goal without a plan is just a wish.

Antoine de Saint-ExuperyTypes of Subcontracting plansSlide17

Plan for a specific contract

1 contract = 1 planCovers entire contract period, including separate goals for each option period

Contains

required plan elementsChoose whether or not to include indirect costs incurred for common or joint purposes (allocated on a prorated basis)ISR is used to determine whether goals are metIndividual Subcontracting PlanSlide18

Plant or division wide basis

Boiler plate planEffective for 3 years after approved

Goals

negotiated for each contract (and rationale)Master plan + goals are married and become an individual plan effective for the life of the contractISR is used to determine whether goals are metMaster PlanSlide19

19

Preferred type for “commercial items” (FAR 2.101)

Annual plan ba

sed on Contractor’s fiscal yearApplies to the entire production of commercial items on a corporate, plant, division, or product line basisCovers all subcontracting (govt. and commercial)Contains required elements (FAR 19.704)Plan and SSR include indirect costsSSR used to determine whether goals are met

Remains

in effect during the contractor's fiscal year for all Federal government contracts in effect during that period

Commercial Subcontracting PlanSlide20

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 providing a commercial item.

Commercial PlansSlide21

DoD

Test Program, DFARS 219.702Annual plan for all DOD subcontractingGovernment fiscal yearCorporate, plant, or division basis

DCMA

administers programContains required elements (FAR 19.704) Has additional elementsSubmit SSR annually (used to determine whether goals are met)Comprehensive Subcontracting Plan (DoD contracts only)Slide22

A contract may have no more than one subcontracting planCO’s discretion, require a plan if the contractor’s size changes from SB to LB at time of recertification

RulesSlide23

Individual & Master PlansContracting Officer

Commercial Subcontracting PlansFirst Approval – CO for first federal contractSubsequent Annual Approvals - CO responsible for the uncompleted contract with the latest completion date. Contractor provides a copy of the approved plan to each

CO responsible

for an ongoing contract that is subject to the planDoD Comprehensive Subcontracting PlansNegotiate with DCMA annuallyHow are plans reviewed?Slide24

Established as total dollars subcontracted and as a percentage of total subcontract dollars.

SBSDBWOSBHUBZONEVOSB

SDVOSB

A CO may also establish goals as a percentage of total contract dollarsOption years broken out separatelyGoalsSlide25

Prime contractor decides the appropriate NAICS code/size standardDescribes

the principal purpose of the subcontract Puts it on the subcontractSize Slide26

Primes must collect written size certifications from subcontractors, or use SAM

Goal CategoriesSmall Business – self-certifyingSDB – self-certifyingWOSB – self-certifying HUBZone – SBA certifiedVOSB – self-certifyingSDVOSB – self-certifying

* ANCs and Indian Tribes are counted as SB & SDB

* NIB/NISH counted toward SB (DoD Only)Who can a prime count?Slide27

Internally generated costs, such as salaries and

wagesEmployee insurance; other employee benefitsPayments for petty cashDepreciation, interestIncome taxes, property taxesLease payments,

B

ank fees, fines, claims, and duesOriginal Equipment Manufacturer relationships during warranty periods (negotiated up front with product)Utilities such as electricity, water, sewer, and other services purchased from a municipality or solely authorized by the municipality to provide those services in a particular geographical region Philanthropic contributionsExcluded from subcontractingSlide28

Total subcontracting $100,000 Small Business $30,000 30%SDB $ 8,000 26.7%

8a $ 3,000 10%WOSB $ 0 0%EDWOSB $ 1,500 5%Foreign $ 9,000 30%HUBZone $ 3,500 11.7%VOSB $ 2,000 6.7%SDV $ 3,000 10%

TEST YOURSELF:Slide29

29

Total subcontracting

$

100,000 100%Small Business $30,000 30%SDB $ 11,000 11%WOSB $ 1,500 1.5%HUBZone $ 3,500 3.5%VOSB $ 5,000 5%SDV $ 3,000 3%

CORRECT METHODSlide30

Minimum goals/floorsStatutory goalsAgency subcontracting goals

Realistic goalsHow do we know what realistic goals are?

Are goals acceptable? Slide31

REASONABLE LEVELexpend good faith efforts

to the maximum practicable extentSHOULDN’T LOW BALL GOALSTo minimize exposure to liquidated damages To avoid the administrative burden of substantiating good faith efforts.

SHOULDN’T NEGOTIATE UPWARD

If a higher goal will significantly increase the Government’s cost or seriously impede the attainment of acquisition objectives.GOALSSlide32

No detailed standards apply to every subcontracting plan. Goals should be attainableConsider circumstances:

Previous involvement of SBs in similar acquisitionsAvailability of SBs in socio-economic groupsContractor’s own past performanceReasonableness of the goalsMethods the contractor intends to use to meet the goals

GOALSSlide33

A subcontracting plan must include: Goals based on total planned subcontracting dollars expressed as a

%Options expressed separatelyOptional (indiv plans only): ALSO as % of total contract value

Total dollars to be subcontracted Types of supplies/services to be subcontracted Method used to develop goals Method used to identify potential SBs Indirect costs included/not includedFAR 19.704Mandatory Plan ElementsSlide34

Name of individual administering the planEfforts

to ensure SB have equitable opportunity to competeAssurances that required clauses and provisions will flow down to subcontractorsAssurances that reporting will be done

Recordkeeping

proceduresFAR 19.704Mandatory Plan ElementsSlide35

PCRs review the solicitation and the subcontracting planSubmit advisory recommendations

PCR Advisory RecommendationsSlide36

REPORTINGSlide37

Assess whether the prime contractor made a good faith effort to comply with its SB Subcontracting PlanAssess the prime contractor’s written explanation concerning the prime contractor’s failure to use a small business concern in the performance of the contract in the same scope, amount, and quality used in preparing and submitting the bid/proposal

Post Award Responsibility of CO FAR 19.705-6 (proposed rule)Slide38

www.esrs.govISR: Semi annual (March 31 and Sept 30)

30 days after reporting period30 days after contract completed (FINAL)Due even if no subcontracting has occurredOption Year Goals: rolled in as options are exercisedSSR:Annual (end Sept 30)30 days after reporting period

ISR and SSRs Slide39

www.esrs.govCMRs have superuser

accessApproved by: Contracting Officers or higher tier prime contractorAccept or Reject within 60 daysReject – errors, omissions, or incomplete data

provide

explanation to contractorReview Goals and Remarks

39

ISR ReportingSlide40

Commercial Plans:

Approved by CO who approved the commercial planOne SSR - includes % of dollars attributable to each agency

Individual Plans

Approved By Agency RepresentativeSeparate report to each agency covering only that agency’s contracts (that has a subcontracting plan)Content:All subcontracting under prime contracts and subcontracts with the awarding agency, regardless of the dollar value of the subcontracts.May be submitted on a corporate, company or subdivision For DoD a consolidated report shall be submitted (except for construction, a separate report shall be submitted for each DoD component)SSR ReportingSlide41

MONITORING

POST AWARDSlide42

SBA

Subcontracting Orientation and Assistance Review (SOAR)Performance Review (Desk Review)Program Compliance Review

Follow-up Review

DCMA (MOU)Program Compliance ReviewAgency ReviewsSurveillance ReviewPost Award MonitoringSlide43

ExceptionalVery GoodSatisfactoryMarginal

Corrective Action PlanUnsatisfactoryCannot substantiate its claimed achievementsCorrective Action PlanLIQUIDATED DAMAGES considered by CO

upon written

recommendation from CMR willful or intentional failure to perform in accordance with the requirements of the subcontracting plan or willful/intentional action to frustrate the plan.SBA reviews Slide44

Agency

funding the order “may” establish SB subcontracting goals for individual orders, BPAs or BOAs.Submit SB subcontracting reports for individual orders to the

CO on

an annual basis.Agency funding the order shall receive credit towards its SB subcontracting goals. More than one agency may not receive credit towards its subcontracting goals for a particular subcontract.Orders under IDIQ contracts (task or delivery order contracts, GWACs, MACs, and FSS)Slide45

Implements

NDAA of 2014In individual subcontracting plans, the

contractor may receive credit for small business concerns performing as first tier subcontractors or subcontractors at

any lower tierProposed Rule 80 FR 60300 (10/06/15), Comment period closed 12/07/2015Draft Final Rule in reviewCredit for Lower Tier SubcontractingSlide46

Prime contractors must incorporate the subcontracting plan goals of their lower tier

OTSB subcontractors in their individual subcontracting plans. Lower tier

OTSB subcontractors

must have their own individual subcontracting plans if the subcontract is at or above the subcontracting plan threshold, and are required to meet their subcontracting plan goals. Credit for Lower Tier SubcontractingSlide47

The actual subcontracting dollars are only reported once for the same award to avoid double counting the dollars, notwithstanding the fact that a small business subcontract may be reported under more than one subcontracting plan

.Credit for Lower Tier SubcontractingSlide48

”SBA Quick Reference

: Whom

to Contact for What in SBA Government Contracting”Slide49

Dynamic Small Business

SearchSlide50

SBA size regulations 13 CFR Part 121

HUBZone regulations 13 CFR 126.616

SBA Certificate of Competency 13 CFR 125.5

Service-disabled veteran 13 CFR 125.15(b)8(a) and SDB regulations 13 CFR 124.513

Small disadvantaged business 13 CFR 124.1002(f)

WOSB Program 13 CFR 127

SBA Prime Contracting 13 CFR 125.2

SBA Subcontracting 13 CFR 125.3

Summary of CFR regulationsSlide51

A. SBA Government Contracting Area Offices

B. SBA Procurement Center Representatives (PCRs) C. SBA Commercial Market Representatives (CMRs)

D. SBA District Offices

E. SBA HeadquartersFIVE TYPES OF SBA CONTACTS & OFFICESSlide52

Six SBA Government Contracting

Areas at hyperlink: https

://www.sba.gov/content/pcr-directorySlide53

53

1. Size protests (with recertification) FAR 19.302

13 CFR 121.1001

13 CFR 121.1010

2. Locating nearest SBA staffer FAR 19.4

3. Certificate of Competency FAR 19.6

13 CFR 125.5

4. COC Limitations on Subcontracting Compliance

FAR 19.601

13 CFR 125.6(f)

5.

Receiving copies subcontracting plans

FAR 19.705-6

A. SBA Quick Reference - SBA Area OfficesSlide54

FAR 19.402  Small Business Administration procurement center representatives.

(a)(1) The SBA may assign one or more procurement center representatives to any contracting activity or contract administration office to carry out SBA policies and programs…

(2) If a SBA procurement center representative is not assigned to the procuring activity or contract administration office, contact the SBA Office of Government Contracting Area Office…..

(b) Upon their request and subject to applicable acquisition and security regulations, contracting officers shall give SBA procurement center representatives….access to all reasonably obtainable contract….

B. SBA Quick Reference SBA Procurement Center Representatives (PCRs)Slide55

1. SBA PCR coordination records FAR 19..501(b)   

13 CFR 125.2

2. Small business set-aside appeals FAR 19.505

13 CFR 125.2(b)(7)3. HUBZone set-aside appeals FAR 19.1305 FAR 19.1306 13 CFR 126.614. SDVOSB set-aside appeal FAR 19.1405 FAR 19.1406 13 CFR 125.225. Reporting bundling to SBA (MATOCs) FAR 19.202-1(e)(1) 13 CFR 125.26. SBA subcontracting plan reviews-copies FAR 19.705-5(3)

13 CFR 125.2(b)(6)(iii)

FAR 19.705-6(c)

13 CFR 125.2(b)(6)(iii)(C)

7. SBA subcontracting program review FAR 19.707(4)

13 CFR 125.2(b)(6)(iii)(C)

8. Small business TFD FAR 49.402-3 (e)(4))

(Termination for default)

9. Surveillance review of agency contracting

B. SBA Quick Reference SBA PCRs, cont.Slide56

Agency

Form

Title

1

Commerce

CD 570

Small business set-aside review

2

Defense

2579

Small business coordination record

3

Energy

4220.2

Small Business Review form

4GSA2689Small Business Analysis Record 5HHS653Small business review form6Homeland Security700-22Small business review form7Interior1886Acquisition screening and review form8LaborDL1-2004Small Business Procurement Determination.9NASANF 1787Small business review sheet10StateDS-1910Small Business Clearance Form11

Transportation

4250

Small Business Program Review Form

12

USDA

AD-1205

Small Business Program – Procurement Review

13

VA

2268

Procurement Request Review For Small Business…

Small business coordination forms sent to SBA PCRsSlide57

19.705-6 Postaward responsibilities of the contracting officer. …:

Notifying the SBA of the award by sending a copy of the award document to the Area Director, Office of Government Contracting, in the SBA area office where the contract will be performed.

(c)

Giving to the SBA procurement center representative….a copy of— (1) Any subcontracting plan submitted in response to a sealed bid solicitation; and (2) The final negotiated subcontracting plan that was incorporated into a negotiated contract or contract modification. (d) Notifying the SBA procurement center representative…. of the opportunity to review subcontracting plans in connection with contract modifications. Document that you have provided SBA Area Directors with copies of subcontracting plansSlide58

Prime contractor portfolio management 13 CFR 125.3

Reviews of subcontracting plan holders 13 CFR 125.3

Matchmaking 13 CFR 125.3

SBA SUB-Net link at:

http://www.sba.gov/content/sub-net

SBA Subcontracting Opportunities Directory link at:

http://www.sba.gov/subcontracting-directory

“SBLO Handbook” link at:

http://www.sba.gov/content/small-business-liaison-officer-

handbook

C. SBA Quick Reference - SBA Commercial Market Representatives (CMRs) link at: (

https://www.sba.gov/content/cmr-directory

)Slide59

59

Link to district offices at:

http://www.sba.gov/about-offices-list/3

D. SBA Quick Reference – SBA Regional and District OfficesSlide60

To locate SBA 8(a)

business development servicing

office, check Dynamic Small Business Search at the link:

http://dsbs.sba.gov/dsbs/search/dsp_dsbs.cfm and then local resources at the link http://www.sba.gov/tools/local-assistance/districtoffices

D. SBA Quick Reference - SBA District Offices, cont.Slide61

1. HUBZone status protests FAR 19.306 

13 CFR 126.801

2. NAICS code appeal FAR 19.30 3

13 CFR 121.11033. Non-manufacturer rule waivers FAR 19.102(f)(1)-(7) 13 CFR 121.12044. SDVOSB status protest FAR 19.307 13 CFR 125.23

5. WOSB Program status protest FAR 19.308/13 CFR 1275.600

E. SBA Quick Reference - SBA Headquarters

61Slide62

FAR 19.102 (f ):

No class waiver to NMR? Check out an individual waiver*Slide63

B. A

waiver for a set-aside is not needed when:

1. One small business manufacturer: * Small business set-aside2. Small business manufacturer, brand specific of any dollar size with FAR 6 justification: * Small business set-aside3. Large business, brand specific (or brand equivalent) requirement $25,000 or less with FAR 6:

* Small business set-aside

C. GSA schedule

: Use the closest code listed on the schedule. Then same as above if no class waiver.

D. Exception to “NMR” if procurement $25,000 or less

.

(FAR 19.102 (f)(7)(B))

A.

If you find no class waivers, an SBA

individual waiver to the Nonmanufacturer Rule (NMR) may help you to achieve small business goals if*:Slide64

NMR Program Office

The preferred and most expeditious method for asking questions and submitting waiver requests is by e-mail to

nmrwaivers@sba.gov

Slide65

“SBA 1

st

First Wednesday Virtual Learning 2016”