Small Business Subcontracting Plans (SBSP) have seen a recent uptick in compliance attention and audits. This increase includes focused attention on SBSPs as part of contractor purchasing system reviews (CPSR).
CPSRs involve review of at least thirty distinct elements, one of which is a contractor’s SBSP. Negotiated or sealed bidding acquisitions expected to exceed $700,000 require the submission of a subcontracting plan. While a host of circumstances exempt contractors from this requirement, a prime contractor subject to a CPSR and whose contracts exceed the threshold should focus on its SBSP.
FAR 52.219-9 (as prescribed in FAR 19.708(b)) contains a detailed listing of the required items and goals of a contractor’s SBSP. Typical findings include noncompliance with the following CPSR requirements:
- Subcontracting goals, including various permutations of total dollars and percentages of total subcontracting dollars attributable to each type of small business
- Description of the types of supplies and services to be subcontracted
- Methods used to develop the plan, subcontracting goals, and potential sources for solicitation
- Statement regarding the inclusion or exclusion of indirect costs in establishing subcontracting goals
- Names of key contractor individuals charged with subcontracting plan administration
- Descriptions of outreach to small business
- Other related documentation.
Compliance requires inclusion of all eleven elements found in FAR 52.219-9(d).
While building a fully compliant purchasing system or preparing for a potential CPSR, don’t neglect the subcontracting plan requirements. Heightened attention given to subcontracting plans recently underscores the old adage that “an ounce of prevention is worth a pound of cure.”