Subcontracting and Electronic Subcontracting Reporting System (eSRS) for the Prime Contractor and the Contracting Officer Presenter: Karen PooleOffice of Small Business UtilizationGeneral Services Administration May 2012
“The basic building block of good team building is for a leader to promote the feeling that every human being is unique and adds value.” ~Unknown
SUBCONTRACTING ASSISTANCE PROGRAM Public Law 95-507 Amended Section 8(d) of the Small Business Act and created the foundation for the Subcontracting Assistance Program. It requires that all small businesses have the maximum practicable opportunity to participate in the performance of Federal agency contracts and subcontracts.
SUBCONTRACTING ASSISTANCE PROGRAM“Subcontracting is More than a Subcontracting Plan” • Federal Government awards billions of dollars in prime contracts for supplies and services to large or “other-than small” businesses. • Subcontracting Program is comprised of activities to ensure small businesses receive a fair and equitable opportunity to participate in requirements awarded by Federal agencies, including subcontracts resulting from award of prime contracts.
SUBCONTRACTING ASSISTANCE PROGRAM Small Business concerns are: Small business (SB) Veteran-owned Small Business (VOSB) Service-disabled Veteran-owned Small Business (SDVOSB) Historically Underutilized Business Zone Small Businesses (HUBZ) Small Disadvantaged Businesses (SDB) Woman-owned Small Businesses (WOSB)
SUBCONTRACTING ASSISTANCE PROGRAM FAR Subpart 19.7 – The Small Business Subcontracting Program outlines: • Statutory requirements • Eligibility requirements for participating in the program • Subcontracting Plan Requirements • Responsibilities of the contracting officer
SIZE STANDARDSFAR 19.102 • Government-wide • North American Industry Classification System Codes (NAICS) • Number of Employees OR • Annual Revenue/Sales SBA Office of Size Standards Phone: 202-205-6618, web site www.sba.gov/size or email SizeStandards@sba.gov
WHEN A PROCUREMENT NEED IS DETERMINED • Internal customer identifies procurement needs and discusses with the Contracting Officer. • Contracting Officer, Administrative Contracting Officer (ACO) or Program Manager conducts market research, with assistance of the Small Business Office as needed, to identify potential small business concerns who can perform the requirements. • If the procurement is not set-aside for small business, the CO must complete GSA Form 2689 “Small Business Analysis Record” and attach a written justification.
DETERMINING THE NEED FOR A SUBCONTRACTING PLANFAR 19.705-2 Determine prior to solicitation: • Could the prime contractor be other than small business? • Will the total contract value, including options, exceed $650,000 ($1,500,000 for construction)? • Are there possible subcontracting opportunities?
DETERMINING THE NEED FOR A SUBCONTRACTING PLAN During solicitation preparation: • Include Subcontracting Plan requirement in the solicitation, if applicable • Include a subcontracting plan template in the solicitation (available from your local Small Business Technical Advisor) • Include Subcontracting Plan as an evaluation factor, if applicable • Provide solicitation to Small Business Technical Advisor (SBTA) and • Procurement Center Representative (PCR) for review before issuing it • Solicitation developed stipulates that the prime contractor must meet designated subcontracting guidelines of FAR Part 19
SUBCONTRACTING PLANS ARE NOT REQUIRED IF:FAR 19.702(b) • From small business concerns • For personal services contracts • For contracts performed entirely outside the • United States • For previous contracts that do not contain clause 52.219-8
WHEN IS A SUBCONTRACTING PLAN REQUIRED TO BE SUBMITTED?FAR 19.702 • New contracts $650,000 or more ($1.5 million for construction). Include all options in determining contract value, whether exercised or not. • Annual Update (Commercial Plans) • Modifications that meet subcontracting threshold
TYPES OF SUBCONTRACTING PLANSFAR 19.701 • Commercial Plan: (company-wide) • Individual Plan: (contract specific) • Master Plan (when goals/dollars need to be submitted at a later time)
COMMERCIAL PLANFAR 19.701, FAR 19.704(d)& FAR 12 • Submitted and negotiated annually • Company fiscal year (12 month period) • Note: Leasing and construction do not offer commercial items
INDIVIDUAL PLANFAR 19.701 & FAR 19.704(c) • Covers the entire contract period (including options, with goals/dollars stated separately) • Specific to one contract • Goals 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 PLANFAR 19.701 & 19.704(b) • Contains all the required elements of an Individual Plan, except goals/dollars • Eventually evolves into an Individual Plan (when goals/dollars are added), provided the Master Plan has been approved Include other Agency Approval Document, if applicable
The Eleven Subcontracting Statutory Requirements FAR 19.704 • Identification Data • Type of Plan • Goals • Program Administrator • Equitable Opportunity • Assurances of Clause Inclusion and Flow Down • Reporting and Cooperation • Recordkeeping • Statutory Requirements • Description of Good Faith Effort • Signature Required
CONTRACTOR IDENTIFICATION DATACOMMERCIAL PLAN • Company Name and Address • Date Prepared • Description of Products/Services: general summary of commercial business to be covered by this plan for any government contract, awarded during the same fiscal year • Commercial Plan Period: (Insert dates of offeror’s Fiscal Year) • Estimated annual sales
CONTRACTOR IDENTIFICATION DATAINDIVIDUAL PLAN • Company Name and Address • Date Prepared • Description of Product/Service covered by this specific contract • Place of Performance/DUNS Number (under contract awarded) • Solicitation Number • Contract Number (if available) • Individual Plan/Contract Period (stated separately for base and each option period)Base: Date Of Award – ?? Years; Option 1: ________; Option 2: ________; Option 3: ___________; Option 4: ___________ (N/A for MAS) • Estimated Contract Value $______ (separate estimates for base & each option)
FISCAL YEAR 2010 & 2011 GSA WIDE SUBCONTRACTING GOALS • Goaling CategoryGoal • Small Business30 • Veteran-owned Small Business3 • Service-Disabled Veteran-owned small business3 • HUBZone Small Business 3 • Small Disadvantaged Business 5 • Women-owned Small Business 5
TOTAL DOLLARS AND PERCENTAGE GOALSFAR 19.704(a)(1) & (2) Separate Goals (percentage) for: Small Business Veteran Owned Small Business (VOSB) Service-Disabled Veteran-Owned Small Business (SDVOSB) Women-Owned Small Business (WOSB) Historically Underutilized Business Zone (HUBZ) Small Business Small Disadvantaged Business (SDB) including HBCU/MI, Hispanic Serving Institution, Tribal Colleges and Universities, 8(a) companies, Alaska Native Corporations (ANC’s)
GOALSFAR 19.704(a)(2) Subcontracting Amounts: Total Dollars planned to be subcontracted Total Dollars planned to be subcontracted to each business group • The dollar amounts planned for subcontracting to each of these categories must be expressed in the subcontracting plan as percentages of the total subcontracting dollars to both large and small businesses.
TOTAL DOLLARS AND PERCENTAGE GOALS INDIVIDUAL PLAN Dollar figures below are only examples to show the actual GSA target percentage goals
TOTAL DOLLARS AND PERCENTAGE GOALS COMMERCIAL PLAN 1. Estimated TOTAL dollars planned to be subcontracted; i.e. to all types of business concerns: Annual Commercial Expenditures: $_12,000,000__________= 100% subcontracted 2. Planned subcontracting to large business concerns (those classified as other than small): Annual Commercial Expenditures: $__8,400,000__________ = _70_ % of TOTAL above 3. Planned subcontracting to ALL small business concerns (including ANCs & Indian tribes, VOSB, SDVOSB, HUBZone small, SDB (including ANCs & Indian tribes), and WOSB): Annual Commercial Expenditures: $__3,600,000__________ = _30_ % of TOTAL 4. Planned subcontracting to veteran-owned small business concerns (which includes service-disabled veteran- owned small business): Annual Commercial Expenditures: $____360,000_________ = _3_ % of TOTAL 5. Planned subcontracting to service-disabled veteran-owned small business concerns (also a subset of total VOSB and cannot be higher than VOSB above): Annual Commercial Expenditures: $_____360,000______ = _3_ % of TOTAL 6. Planned subcontracting to HUBZone small business concerns: Annual Commercial Expenditures: $_____360,000____ = _3_ % of TOTAL 7. Planned subcontracting to small disadvantaged business concerns (including ANCs & Indian tribes): Annual Commercial Expenditures: $______600,000_____ __= _5_ % of TOTAL 8. Planned subcontracting to women-owned small business concerns: Annual Commercial Expenditures: $_____600,000_____ = _5_ % of TOTAL
DESCRIPTION OF METHOD USED TO DEVELOP SUBCONTRACTING GOALSFAR 19.704(4) Statement that contractor has reviewed his prior subcontracting efforts, or previous history on similar contracts.
DESCRIPTION OF METHOD USED TO IDENTIFY POTENTIAL SOURCESFAR 19.704(5) & FAR 52.219(d)(5) Examples: • Attended conferences and networking sessions • Used existing suppliers • Researched minority directories • Central Contractor Register (CCR) at: www.ccr.govGSA e-Library web site at: www.gsaelibrary.gov
INDIRECT COSTSFAR 19.704(a)(6) • Provide a statement as to whether or not theofferor included indirect costs in establishing subcontracting goals, and • Provide a description of the method used to determine the proportionate share of indirect costs to be incurred with all small business concerns.
EXAMPLES OF INDIRECT COSTSFAR 19.704(a)(6) • Landscaping Janitorial Printing • Graphics Advertising Signage • Business Cards Promotion Items Photography • Telephone Education Training • Travel Agency Office Supplies Office • Equipment • Office Furniture Courier Service Security Service • Temporary Service Consulting Audit services • Food service Cleaning/Laundry Freight • Office repairs Legal services Conference/Trade • shows • Equipment rental
NAME OF PROGRAM ADMINISTRATOR AND DUTIESFAR 19.704(a)(7) & 52.219-9(e) Description of Possible Duties • Developing and promoting company policy that demonstrates the company’s support for awarding contracts to SB, VOSB, SDVOSB, HZSB, SDB, and WOSB, concerns. • Ensuring that subcontract procurements are structured to permit the maximum possible participation • Preparing and submitting ISR and SSR Reports • Coordinating the company’s activities during compliance reviews by Federal agencies
EQUITABLE OPPORTUNITY FAR 19.704(a)(8) Provide a description of the efforts the offeror will make to ensure that small business, have an equitable opportunity to compete for subcontracts. • Outreach events to locate sources • Internal efforts to guide and encourage purchasing personnel to subcontract with small business concerns
ASSURANCES THAT THE OFFEROR WILL INCLUDE CLAUSE FLOWDOWN FAR 19.704(a)(9) • FAR Clause 52.219-8, Utilization of Small Business Concerns • FAR Clause 52.219-9, Small Business Subcontracting Plan
CONTINUED THE OFFEROR WILL: FAR 19.704(a)(10) • (iii) Submit the Individual Subcontract Report (ISR), and the Summary Subcontract Report (SSR) using the Electronic Subcontracting Reporting System (eSRS) (http://www.esrs.gov), following the instructions in the eSRS; • (iv) Ensure that its subcontractors with subcontracting plans agree to submit the ISR and/or the SSR using the eSRS;
CONTINUED THE OFFEROR WILL: FAR 19.704(a)(10) • (v) Provide its prime contract number and its DUNS number and the e-mail address of the Government or Contractor official responsible for acknowledging or rejecting the reports, to all first-tier subcontractors with subcontracting plans so they can enter this information into the eSRS when submitting their reports; and
CONTINUED THE OFFEROR WILL: FAR 19.704(a)(10) • (vi) Require that each subcontractor with a subcontracting plan provide the prime contract number and its own DUNS number, and the e-mail address of the Government or Contractor official responsible for acknowledging or rejecting the reports, to its subcontractors with subcontracting plans.
RECORDKEEPINGFAR 19.704(a)(11) & 52.219-9(d)(11) • Description of the Types of Records
STATUTORY REQUIREMENTSFAR 19.702 • Ensure indication of compliance with all: • Maximum practicable opportunity; • Timely payment; • Failing to comply in good faith; • Failure to make a good faith effort shall result in the imposition of liquidated damages
GOOD FAITH EFFORTFAR 19.705-5(a)(5) and U.S.C. 637(d)(4)(F) Maximum practicable utilization of SB, SDB, HUBZone, WOSB, VOSB and SDVOSB concerns as subcontractors in Government contracts is a matter of national interest with both social and economic benefits. When a contractor fails to make a good faith effort to comply with a subcontracting plan, these objectives are not achieved, and the above regulations directs that liquidated damages shall be paid by the contractor.
ALL PLANS MUST BE SIGNED AND DATED BY A COMPANY OFFICIAL Plans must be signed and dated by a company official who, at a minimum, is a higher level than the Plan Administrator. This ensures company “buy-in” of Plan contents and administration of those contents.
“Teamwork is the ability to work together toward a common vision. The ability to direct individual accomplishments toward organizational objectives. It is the fuel that allows common people to attain uncommon results.” • ~Andrew Carnegie
CHECKLIST FOR REVIEW OF SUBCONTRACTING PLAN • Guides you through the plan to ensure that each of the eleven required elements have been included • Where the CO, Small Business Technical Advisor, and the Small Business Administration review/sign • Note: The checklist does not currently have a form number (formerly GSA Form 3584). Watch for Acquisition Letters and GSAM Updates
EVALUATING THE SUBCONTRACTING PLAN Subcontracting Plans & Goals Should: • Be realistic and achievable • Provide a challenge (and build upon prior achievements) • Include positive goals • Reflect best faith efforts & maximum practicable opportunities
EVALUATING THE SUBCONTRACTING PLAN UPON RECEIPT OF A SUBCONTRACTING PLAN, CO MUST REVIEW TO ENSURE ADEQUACY AND THAT IT MEETS THE REQUIREMENTS OF FAR AND GSAM (SEE CLAUSE 52.219-9) Ensure goals and dollar amounts are calculated correctly Find that Small Business Concerns are included in all applicable categories (allowed to double & triple count $$) Require an Offeror to justify or explain why their proposed goals are lower than the agency goals or the government-wide goals. If you cannot negotiate higher goals due to a unique situation, the plan should state how this reflects their best faith effort and what their challenges reside.
CONTINUED EVALUATING THE SUBCONTRACTING PLAN • Also consider past subcontracting history and goal attainment --overall compliance & efforts should be considered, not merely whether goals were met • Obtain SBTA review, advice & recommendations • Obtain SBA’s Procurement Center Representative (PCR) review and concurrence • Ensure the CO finds the Subcontracting Plan acceptable and incorporates it into and makes it a material part of the contract.
SUBCONTRACTING PLAN IS A MATERIAL PART OF THE CONTRACT • Subcontracting Plans must be: • Approved prior to award • Made a material part of the contract at the time of award • Failure to submit an acceptable Subcontracting Plan to CO makes the offerorineligible for award. • File APPROVED plan with Checklist (formerly called GSA Form 3584) under Tab 23(b)
DETERMINED THAT NO SUBCONTRACTING POSSIBILITIES EXIST?FAR 19.705-2(c) • Must be approved at a level above the contracting officer and placed in the contract file.