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SBLO Workshop 2006

Subcontracting Program What's New? (Besides the eSRS). New Rule on Alaskan Native Corporations and Indian Tribes: the Final Rule (FAR regulation) is expected before the end of the yearIt will allow you to count ANCs

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SBLO Workshop 2006

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    1. SBLO Workshop 2006 U.S. Small Business Administration Office of Government Contracting

    2. Subcontracting Program What’s New? (Besides the eSRS) New Rule on Alaskan Native Corporations and Indian Tribes: the Final Rule (FAR regulation) is expected before the end of the year It will allow you to count ANCs & Indian tribes towards your SB and SDB goals, even if they are not SB and even if they are not certified by SBA as SDBs The rule applies across the Government, to both DoD and civilian agencies

    3. Statutory Subcontracting Goals Small Business Act: Section 15(g) Small Business (SB) - negotiable Small Disadvantaged Business (SDB) - 5% Women-Owned Small Business (WOSB) - 5% HUBZone Small Business - 3% Veteran-Owned Small Business - negotiable Service-Disabled Veteran-Owned SB - 3% These are Congressionally mandated goals that must be established on a Government-wide basis. Individual agencies may have higher or lower goals. It is the responsibility of the SBA to ensure that the overall goal for the entire Government, for each socio-economic category, is not less than that set forth in Section 15(g) of the Small Business Act, as shown on this slide. These are Congressionally mandated goals that must be established on a Government-wide basis. Individual agencies may have higher or lower goals. It is the responsibility of the SBA to ensure that the overall goal for the entire Government, for each socio-economic category, is not less than that set forth in Section 15(g) of the Small Business Act, as shown on this slide.

    4. Determining the Need for a Subcontracting Plan Dollar Threshold: contract or contract mod is expected to exceed $500,000 ($1,000,000 for construction) $500,000 will increase to $550,000 in near future Subcontracting possibilities: contract appears to offer subcontracting possibilities

    5. Determining the Need for a Plan (continued) Subcontracting plans are not required: From small business concerns For personal services contracts For contracts or mods that will be performed entirely outside of the U.S. For contracts that do not contain 52.219-8 (e.g., contracts awarded prior to PL 95-507)

    6. Elements of a Subcontracting Plan A subcontracting plan must contain goals expressed in both dollars and percentages. Other required elements are set forth in the FAR at subpart 19.704 and in the clause at 52.219-9. SBA provides a Fact Sheet on Subcontracting that explains goals, flow-down, and reporting requirements.

    7. Small Business Status Until May 2004, if a subcontract was $10,000 or less, the size standard was 500 employees; In May 2004, SBA eliminated this $10,000 distinction; from now on, the NAICS code of the subcontract will determine the size standard, regardless of the dollar amount. 13 CFR 121.410 & 121.411; also see 121.404(a), (e), and (g)

    8. Self-Certifications Section 8(d) of the Small Business Act allows prime contractors acting in good-faith to obtain “written representations” – i.e., self-certifications – from their subcontractors and suppliers. This rule applies to suppliers claiming status as a small business or women-owned, veteran-owned, or service-disabled veteran-owned small business (see next slide).

    9. SDB and HUBZone Certifications All subcontractors and suppliers claiming SDB or HUBZone status must be certified by SBA; The prime contractor is required to verify these certifications by means of the Central Contractor Registration (CCR) (www.ccr.gov).

    10. Subcontracting Flow-Down A subcontracting plan must include a statement that the prime contractor will require all subcontractors (except small businesses) that receive subcontracts in excess of $500,000 ($1 million in construction) to adopt a subcontracting plan that complies with the requirements of FAR clause 52.219-9.

    11. SBA’s Role in Subcontracting Types of Reviews Pre-Award Subcontracting Plan Reviews SBA’s PCRs review subcontracting plans prior to contract award (advisory) Post-Award Compliance Reviews SBA’s CMRs monitor goal achievement after contract award

    12. What SBA Can and Cannot Do SBA Can: Conduct needs assessments and compliance reviews SBA Cannot: Prescribe the amount of subcontracting Require the prime contractor to use a particular small business

    13. Elements of a Compliance Review Validation of the SF-294 & SF-295 Five-Year Trend Analysis Overall Evaluation of SB Program Sampling of Contracts Containing Plans Sampling of PO’s to Large Business Follow-up on Prior SBA Recommendations Follow-up on SBA Referrals

    14. SBA’s Ratings A - Outstanding ( formerly “Excellent”) B - Highly Successful ( formerly “Good”) C - Acceptable D - Marginal F - Unacceptable

    15. Liquidated Damages When a contractor fails to make a good-faith effort to comply with a subcontracting plan, Federal law mandates that liquidated damages be paid to the Government. The amount of damages shall be equal to the actual dollar amount by which the contractor failed to achieve each goal.

    16. New Regulations on Subcontracting Proposal to Define Good-Faith Effort Represents a substantial rewrite of SBA’s subcontracting regulation (13 CFR 125.3). Updates and clarifies the role of the CMR. Introduces the concept of SOAR reviews. Provides specific examples of good-faith efforts by large & small prime contractors. The Final Rule was published on Dec. 20, 2004. Effective Date, as amended, is March 14, 2005.

    17. MOU between SBA and DoD In May 2003, the SBA and the Defense Contract Management Agency (DCMA) signed a Memorandum of Understanding (MOU). The agreement outlines the procedures for joint compliance reviews of contractors that have contracts with both DOD and civilian agencies. An attachment to the MOU provides the criteria for rating the contractors.

    18. SBA Awards For Small Businesses Prime Contractor-of-the-Year Subcontractor-of-the-Year For Large Businesses Award of Distinction Dwight D. Eisenhower Award Frances Perkins Vanguard Award

    19. SBA’s Resources to Help Small Businesses Obtain Subcontracts Commercial Market Representatives (CMRs). Subcontracting Opportunities Directory SUB-Net -- Electronic Bulletin Board for Subcontracting Opportunities

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