Phone: (202) 296-5505 Email: [email protected]

New Call-to-action

  • Meet Our Clients
  • Careers at Winvale
  • Winvale in the News
  • Winvale in the Community
  • Winvale Culture
  • Winvale Client Testimonials
  • Winvale Team
  • Getting on a GSA Schedule
  • GSA Schedule Management
  • GSA Schedule Audit Support
  • Proposal and Grant Writing Support
  • Government Accounting Support
  • Mergers & Acquisitions Support
  • Channel Distribution for Public Sector
  • Current Winvale Partners
  • Government Contract Vehicles
  • Government Acquisition Support Services
  • Case Studies
  • Resource Library
  • TAA Compliant Countries
  • The Ultimate Guide to the GSA Schedule
  • View the Prospectus
  • Contractor Heat Maps
  • GSA Schedule Consolidation
  • COVID-19 Resources
  • GSA Schedule
  • Resources & Insight
  • Government Business Development

 Back to all posts

A Comprehensive Guide to Small Business Subcontracting Plans

By: Stephanie Hagan on September 20th, 2023

Print/Save as PDF

A Comprehensive Guide to Small Business Subcontracting Plans

GSA Schedule | Resources and Insight | 9 Min Read

It’s no secret the federal government prioritizes small business participation in federal contracts. In Fiscal Year (FY) 2019, the federal government awarded $162.9 billion in contract dollars to small businesses. How does the government accomplish this?

The federal government requires Other Than Small Businesses (OTSB) to create a “practicable opportunity” for small businesses to participate in federal procurement. One of the ways to accomplish this is through small business subcontracting .

A lot of our clients ask if they need to make a small business subcontracting plan as GSA Schedule contractors. The answer depends on a few factors, so let’s cover what a small business contracting plan is, if you need one, and how to create the different types of subcontracting plans. 

What is Subcontracting and What Does it Mean in Federal Contracting?

Small business subcontracting allows contractors to outsource a portion of their federal contracting dollars to small businesses. These small businesses do not work directly with the government, instead they work with the contractors to provide the federal government with products and services. Some government contracts require contractors to submit a small business subcontracting plan including GSA Schedule contracts. 

What is a Small Business Subcontracting Plan?

The purpose of the small business subcontracting plan is to ensure Other Than Small Businesses (OTSBs), any business that is not considered a small business, are setting aside part of the federal money they receive to subcontract to small businesses. The plan is essentially a projection of how you want to allocate your contract requirements between your company and small businesses.

A small business subcontracting plan helps you determine and meet your subcontracting goals because you have to set-aside a dollar estimate for small businesses before you begin working on your contract.

There are two types of plans: commercial and individual. We will go into further detail on these below.

How Do I Know if I Need a Subcontracting Plan?

If you have a federal contract over the Simplified Acquisition Threshold (SAT) of $750,000 and you are not a small business (qualifications explained in further detail below), then you will need a subcontracting plan.

It’s important to note some contracts and task orders will have their own set of requirements, but most other contracts will follow the Federal Acquisition Regulation (FAR) which states :

“Any contractor receiving a contract with a value greater than the Simplified Acquisition Threshold must agree in the contract that small business…concerns will have the maximum practicable opportunity to participate in contract performance consistent with its efficient performance.”

In other words, the federal government wants to ensure you are subcontracting whenever you can.

How Does the Government Define a Small Business?

How do you know what constitutes a small business in the U.S.? The Small Business Administration (SBA) has created a list of qualifications you have to meet to be considered a small business in the eyes of the government. You must:

  • Be organized for profit (non-profits will have to make a subcontracting plan).
  • Have a place of business in the U.S.
  • Operate primarily within the U.S. If you are not a U.S. company, you must have U.S. headquarters and make a significant contribution to the American economy through taxes or use of American products, materials, or labor.
  • Meet the numerical size standards as defined by the SBA using the Size Standards Tool . This is defined based on NAICS Codes . It’s important to note different contracts may have different NAICS, so you may be considered small on one contract and other than small on another, so you will need to fill out a subcontracting plan for any contract that you are considered an OTSB.

The SBA has created several programs to help small businesses win federal procurement dollars . There are five subcategories of small businesses associated with federal contracting:

  • Small Disadvantaged Business
  • Women-Owned Small Business (WOSB)
  • Veteran-Owned Small Business (VOSB)
  • Service-Disabled Veteran-Owned Small Business (SDVOSB)

What Are the Types of Subcontracting Plans?

If you have to submit a subcontracting plan for your GSA Schedule contract, there are two options: commercial and individual.

What is a Commercial Subcontracting Plan?

A commercial subcontracting plan is defined by the FAR as a plan that “covers the fiscal year and applies to the entire production of commercial items by either the entire company or a portion thereof (e.g., division, plant, or product line).”

What does this mean? Essentially, a commercial plan covers all federal contracts for that year. You don’t need to make a separate plan for each of your contracts if you have multiple. It’s also based on actual spend, so when you are planning out what you expect the value of your subcontracting to be, you’re going to base it off of what your spending was on subcontracting the previous year.

This plan covers most of your corporate expenses as well, not just the specific expenses within your contracting agreement. It’s renewed annually on October 30, and you can renegotiate your plan with new goals each year.

Commercial is the preferred plan for product manufacturers because this type of plan automatically includes indirect spending, including all of your corporate expenses (more detail on indirect vs. indirect spending below). It’s more difficult for product manufacturers to tie direct contract spending to subcontracting goals.

Constructing a Commercial Subcontracting Plan

The first thing you need to do to create your commercial subcontracting plan is report what period the plan is going to cover (the fiscal year), and what your expected sales are for that year. Please note you will report your company-wide sales, not just your federal contract sales.

Next, you’ll need to estimate the total dollar amount that will be subcontracted for each category of small business, including WOSB, SDVOSB, VOSB, small disadvantaged, and HubZone. The SBA has recommended percentages (outlined in image number 3) they want you to try to hit in your plan for each subcategory. However, when you’re reporting your subcontracting numbers, one small business can count for multiple categories.

Subcontracting graphic 1

As mentioned before, this plan is based on actual spend, not what you’re hoping to subcontract from what you’re receiving from the government. This projection is made from how you spent your subcontracting dollars last year.

What is an Individual Subcontracting Plan?

According to the FAR, an individual subcontracting plan “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.”

To sum it up, you will need an individual plan for each of your contracts. Unlike the commercial plan, the goals are based on what you expect to subcontract for the period of the entire contract, instead of your past performance from the previous fiscal year.

Constructing an Individual Subcontracting Plan

First, you need to estimate the value of each contract, including all option periods. As seen below, the plan is broken into base and option periods. Even if you don’t end up getting all these option periods, you will need to lay out what you predict to contract and what the value would be for the base and each option period.

subcontracting graphic 3

For example, if you have a $200 contract from the government (much smaller than any actual contract), you might expect $100 to be subcontracted. Of that $100, you might give $71 of that to OTSBs, and $29 to small businesses. In this plan, you’ll need to delineate how much you will allocate to each small business subcategory.

We provided an example below based on the SBA’s recommended percentages, but this is not what your contract will look like exactly. The percentages could be higher or lower based on what you and your Contracting Officer thinks your company can accomplish.

Subcontracting graphic 2

Once you figure out what you want to spend in your contract and what your spending goals are, you should know what is appropriate to report on your subcontracting plan. This is where direct and indirect subcontracting come in.

Direct vs Indirect Subcontracting

While commercial subcontracting plans don’t differentiate between direct or indirect subcontracting, it’s important for you to know the difference between the two, especially if you select an individual subcontracting plan.

Direct subcontracting is exactly what it sounds like--anything that is directly related to work performed under the contract. For example, if you’re contracted to provide plumbing services and you subcontract out to small businesses in Tampa and Atlanta, those will both count toward subcontracting goals as direct subcontracting.

Indirect subcontracting is anything that represents the costs of performing the business. For instance, you may need to hire an accounting firm to do your taxes. You can still count these toward your subcontracting goals, but they are considered non-controllable sources. You can include these costs in individual plans, but you need to state whether you intend to include them and how you will account for these costs. Remember these are automatically included in a commercial plan.

Reporting Your Subcontracting Plan

After you construct your plan, you will need to report its progress to the government on a fairly regular basis. For both commercial and individual plans you will need to fill out a Summary Subcontract Report (SSR) in the Electronic Subcontracting Reporting System (eSRS) .

In the SSR, you will report your subcontracting numbers by business type whether it’s a large or small business (including small business categories), and compare these numbers to the goals laid out in your plan.

If you’re not hitting your goals, you’ll need to show the federal government you are making a “good faith effort.” You can make notes in the remarks section of the report to demonstrate the lengths of your effort. The SSR report is due once a year by October 30.

If you created an individual plan, you will need to submit an additional report in the eSRS aptly named the Individual Subcontracting Report (ISR). These are due twice a year on April 30 and October 30. Just like the SSR, you’ll need to report how much money went toward subcontracting and compare it to your goals. Unlike the SSR, this report is cumulative and will automatically fill in the totals from all your contracts if you have multiple.

Developing and Meeting Your Subcontracting Goals

Plans are essential to success, but they only work well if they’re executed properly. After you create your subcontracting plan, you’ll want to work out how you can effectively meet your goals.

There are several resources available to help you conduct outreach activity and find small businesses who might want to subcontract with you. Some resources include:

  • Dynamic Business Search
  • National Women’s Business Council
  • Veteran Owned Business Directory
  • Minority Business Development Agency

As we all know, deadlines always seem to sneak up on us, so make sure you designate someone to act as an administrator for your contracting and subcontracting goals. This person can put structures in place to ensure your company is trying its best to hit all its goals. 

If you consistently miss your goals and cannot demonstrate to the government you are working in “good faith” to improve, you risk rejection or cancellation of your contract. You may also be responsible for the liquidated damages. So it’s important to stay on top of your goals and plan realistically.

Our consultants at Winvale are always here to help you with your GSA Schedule contract and subcontracting needs. If you have any further questions about subcontracting or want to learn more about how you can be a successful contractor, don’t hesitate to contact us .

For more information on small business subcontracting plans, check out our Lunch and Learn webinar . 

New call-to-action

About Stephanie Hagan

Stephanie Hagan is the Training and Communications Manager for Winvale. Stephanie grew up in Sarasota, Florida, and earned her Bachelor's of Arts in Journalism and Rhetoric/Communications from the University of Richmond.

small business subcontracting plan waiver

3951 Westerre Parkway, Suite 250 Richmond, VA 23233 Email: [email protected] Phone: (202) 296-5505 Fax: (202) 296-5506

Latest Blog Posts

small business subcontracting plan waiver

  • Remember me Not recommended on shared computers

Forgot your password?

  • Subcontracts & Subcontract Management

Subcontracting Plan waiver

creyes814

By creyes814 February 11, 2020 in Subcontracts & Subcontract Management

  • Start new topic

Recommended Posts

Is a subcontracting plan still required for a large business if the contractor performs 100% of the work? Is a waiver required if not? I couldn't find the answer in the FAR 19.704. 

Thank you.  

Link to comment

Share on other sites.

ji20874

The contracting officer need not require a subcontracting plan unless subcontracting opportunities exist.  See FAR 19.705-2(b).

Jacques

As the GAO said in Columbia Research Corp. , B-202762, 61 Comp. Gen. 194, 82-1 CPD ¶ 8:

Quote This provision [Pub. L. 95-507, sec. 211] suggests that Congress intended to insure that small and small-disadvantaged businesses have a fair chance to compete for subcontracts when subcontracting opportunities would be made available by the prime contractor, not that firms have a right to subcontracts notwithstanding the prime contractor's intention not to subcontract.

That said, don't forget about the definition of "subcontract" appearing at FAR 19.701 or its definition at 13 CFR 125.3(a)(1).  Given how broad that definition is, if you get cost data that lists "materials," I would seriously consider asking for a subcontracting plan.

To avoid the type of silliness described in DoD IG Rpt DODIG-2018-086 , include in the contract file the determination described at FAR 19.705-2(c).

Neil Roberts

Neil Roberts

20 hours ago, creyes814 said: Is a subcontracting plan still required for a large business if the contractor performs 100% of the work? Is a waiver required if not? I couldn't find the answer in the FAR 19.704.  Thank you.  

Not clear if you are an inquiring contracting officer or prime contractor or subcontractor. I am not aware of a waiver process that is available for a prime contractor and not aware of an specific language in FAR 52.219-9 that excuses submittal if 52.219-9 is included in the government solicitation or contract. In the goals area, the prime could just indicate "not applicable" and explain why subcontracting is not contemplated, and indicate that the goal area will be revised in the event there is subcontracting.  The plan is subject to negotiation with the government. 

1 hour ago, Neil Roberts said: Not clear if you are an inquiring contracting officer or prime contractor or subcontractor. I am not aware of a waiver process that is available for a prime contractor and not aware of an specific language in FAR 52.219-9 that excuses submittal if 52.219-9 is included in the government solicitation or contract. In the goals area, the prime could just indicate "not applicable" and explain why subcontracting is not contemplated, and indicate that the goal area will be revised in the event there is subcontracting.  The plan is subject to negotiation with the government. 

FAR Subpart 19.7 does not include the word, "waive" or "waiver."  I assume @creyes814  was referring to the written determination referenced in FAR 19.705-2(c).  The prescription for the clause at FAR 52.219-9 appears at FAR 19.708(b)(1).  The clause is not prescribed if the contract does not "offer subcontracting possibilities."  This isn't a magical term of art.  If the prime won't be subcontracting out any of the work, the clause isn't prescribed.

FAR 19.708(b)(1)(iv) provides, "When...incorporating a subcontracting plan due to a modification as provided for in 19.702(a)(3), the contracting officer shall use the clause with its Alternate IV."  Maybe I'm reading too much into this, but this makes it sound like you wouldn't include the clause at 52.219-9 if, at the time you were making that decision, there was no requirement for a subcontracting plan.

While paragraph (c)(1) of the clause begins, "The Offeror, upon request by the Contracting Officer, shall submit and negotiate a subcontracting plan...," I still worry what including the clause would end up doing if the contractor had a commercial plan.  Wouldn't this risk folks interpreting the inclusion of the clause as amounting to a Government conclusion that the contract was a "covered contract" for the purposes of paragraph (g) of the clause?  Secondly, I don't know how the eSRS requirement at paragraph (l) of the clause would be handled.  Seems to me better to just not include the clause if there is no requirement for a subcontracting plan.

My response above is from a prime contractor viewpoint. I thought the original post was more likely from a prime contractor. Could be wrong. I do not have anything to offer a contracting officer in this situation other than what I think the contracting officer should expect from a prime contractor when FAR 52.219-9 is included. I think it is most difficult for either the contracting officer or the prime contractor to determine with finality that there are no subcontracting possibilities at the early stages where there are no discussions or negotiations. Failure to submit a plan could make the prime contractor non-responsive. So, to me it seems best practice to submit a plan with explanations rather than not submit one at all when FAR 52.219-9 is included as a requirement (unless the procurement is under the dollar threshold or clearly inapplicable, like to small business concerns).

  • 3 yr bob7947 locked this topic

Guest

  • Existing user? Sign In
  • Forum Archive
  • Top Posters
  • Online Users
  • Wifcon Home Page
  • Breaking News
  • Wifcon Contents Page
  • Small Business
  • Regulations
  • FAR Research
  • Quickit Guidance
  • Bona Fide Needs Rule
  • Main Protests Page
  • Protests By FAR Part & Subpart
  • Protests By Circular A-76
  • Protests by Issue
  • Protests by Rules of Legal Forum
  • Protest By Name
  • GAO Protests Statistics -- Since 1997
  • Contracting Legislation of the Current Congress
  • Public Laws & Citations
  • Analysis & Articles
  • Book Reviews
  • Publications Memorialized by Wifcon.com
  • All Activity
  • My Activity Streams
  • Unread Content
  • Content I Started
  • Manage Purchases
  • Personal Information
  • Alternative Contacts
  • Leaderboard
  • Create New...

   Home

  • Mission and Vision
  • Members and Staff
  • Inspector General
  • AbilityOne Representatives (ABORs)
  • Commission Awards
  • Policy Declaration
  • Minimum Wage Actions
  • Commission Meetings
  • Congressional Budget Justification
  • Performance and Accountability

AbilityOne Program

  • Who Works with AbilityOne
  • Strategic Alliances
  • Veterans/Wounded Warriors
  • Quality Work Environment
  • AbilityOne is Green

AbilityOne Network

  • CNAs (NIB/SourceAmerica)
  • Nonprofit Agencies
  • AbilityOne Employees
  • Employment Opportunities

Procurement List

  • Procurement List Products
  • Search Products
  • How to Buy Products
  • Contractors: How to Purchase AbilityOne Products Required by a Federal Contract
  • Aircraft, Vehicular and Electrical Equipment and Supplies
  • Clothing, Textiles and Individual Equipment
  • Food Processing, Packaging and Distribution
  • Medical & Dental Supplies
  • Office Supplies and Furnishings
  • SKILCRAFT® Products
  • Procurement List Services
  • Search Services
  • How to Buy Services
  • Administrative
  • Contact Center Services
  • Contract Management Support (CMS) Services
  • Document Management
  • Fleet Management Services
  • Food Services
  • Grounds Maintenance
  • Healthcare Environmental
  • Hospitality
  • Secure Document Destruction
  • Secure Mail/Digital Document
  • Supply Chain Management and Warehouse
  • Total Facilities Management
  • Procurement List Additions
  • AbilityOne Catalog

Distributors

  • Independent Distributors
  • Distribution Networks
  • Base Supply Centers
  • Potential Distributors

Laws, Regulations and Policy

  • Javits Wagner O'Day Act
  • Code of Federal Regulations
  • Federal Acquisition Regulation
  • Commission Policy (New and Updated)
  • Policy Memoranda
  • Policy Archive
  • General Guidance
  • Federal Register Notices
  • Individual Eligibility Evaluation (IEE)
  • Procurement Guidebook

Below is a list of Frequently Asked Questions and responses. FAQs specific to Compliance can be found on the Compliance page.

1. What is the AbilityOne Program? 2. Is the AbilityOne Program a priority program? 3. Does AbilityOne have priority over all other sources? 4. What is the authority to contract under the AbilityOne Program? 5. When is it appropriate to award a contract under the AbilityOne Program? 6. What is the Procurement List? 7. Where can Federal customers find the Procurement List and what are some examples of available products and services? 8. How long does the Procurement List addition process take? 9. How do Federal customers order common-use products, such as office supplies, under the AbilityOne Program? 10. What are the benefits of contracting under the AbilityOne Program? 11. Does AbilityOne support Small Business? 12. Where do National Industries for the Blind and SourceAmerica ® (formerly NISH) derive their responsibilities under the AbilityOne Program? 13. Are Federal Government purchase card holders exempt from the mandatory source requirements of the AbilityOne Program for products? What if the purchase is at or below the micro-purchase threshold? 14. Is there a conflict between utilizing the Federal Strategic Sourcing Initiative (FSSI) Blanket Purchasing Agreements (BPAs) and purchasing from AbilityOne Base Supply Centers or AbilityOne Retail Stores? 15. When are prices for AbilityOne Program products and services changed? 16. How are protests, disputes and appeals handled under the Javits-Wagner-O’Day Act? 17. Can Federal employees recommend products and/or services for addition to the Procurement List? 18. Are AbilityOne Program participating nonprofit agencies registered in the Central Contractor Registration (CCR)? 19. How do Department of Defense prime contractors get credit for subcontracting with AbilityOne Program nonprofit agencies? 20. Can solicitations include clauses that encourage subcontracting with AbilityOne?

1. What is the AbilityOne Program?

The AbilityOne ® Program is among the nation's largest sources of employment for people who are blind or have significant disabilities. The Program is administered by the U.S. AbilityOne Commission, the operating name for the Committee for Purchase From People Who Are Blind or Severely Disabled. Through a national network of approximately 450 nonprofit agencies, the program provides the Federal Government products and services at fair market prices. The procurement of these products and services results in employment of approximately 40,000 individuals.

Back to top

2. Is the AbilityOne Program a priority program?

Yes, pursuant to the Javits-Wagner O'Day Act (41 U.S.C. §§ 8501-8506), the Competition in Contracting Act (41 U.S.C. 253) and implementing guidance in the Federal Acquisition Regulation (FAR), the AbilityOne Program has a priority. FAR 8.002, Priorities for Use of Government Supply Sources, prescribes the descending order of priority for supplies and services to satisfy agency requirements.

3. Does AbilityOne have priority over all other sources?

No. FAR 8.704 indicates that Federal Prison Industries (FPI) has priority over the AbilityOne Program for supplies (products) purchased. Contracting offices must obtain a formal waiver (FAR 8.604) from FPI before making any supply (product) purchases from AbilityOne participating nonprofit agencies.

4. What is the authority to contract under the AbilityOne Program?

Under the Competition in Contracting Act (CICA): AbilityOne procurements are considered “other than competitive” procurements under the Competition in Contracting Act (CICA), which authorizes certain exceptions to full and open competition. The implementing guidance is in FAR 6.302-5, which states that full and open competition need not be provided for when a statute expressly authorizes or requires that the acquisition be made through another agency or from a specified source. Qualified nonprofit agencies employing people who are blind or severely disabled are explicitly listed as an authorized application of this exception in accordance with the JWOD Act and FAR Subpart 8.7. DoD contracting activities should use 10 U.S.C. 2304 (c)(5) as the exception on award documents.

Under FAR 8.7: FAR Subpart 8.7 provides implementing guidance for the Javits-Wagner-O’Day Act (41 U.S.C. 46-48c). FAR 8.704, Purchase priorities, states that the Javits-Wagner-O’Day Act requires the Government to purchase supplies or services on the Procurement List, at prices established by the U.S. AbilityOne Commission, from AbilityOne participating nonprofit agencies if they are available within the period required.

Under the Code of Federal Regulations (CFR): Chapter 51 of Title 41 of the CFR provides the regulations specific to the Federal agency that oversees the AbilityOne Program, operating as the U.S. AbilityOne Commission. 41 CFR 51-5.2 states that nonprofit agencies designated by the Commission are mandatory sources of supply for all entities of the Government for commodities and services included on the Procurement List.

Under the Defense Federal Acquisition Regulation System (DFARS) Procedures, Guidance, and Information (PGI): The PGI at 207.105 states that written acquisition plans should include consideration of the AbilityOne Program.

5. When is it appropriate to award a contract under the AbilityOne Program?

At what point in the process is a contract awarded for an AbilityOne project? A contract can be awarded (orders can be placed) at any point after the effective date of the Procurement List addition. This date is listed in the final Federal Register notice and is also on the notice of addition that is sent to the Contracting Activity.

6. What is the Procurement List?

The U.S. AbilityOne Commission maintains a Procurement List of products and services which have been placed in the AbilityOne Program, as referenced in FAR 8.002 and Subpart 8.7. Federal agencies must purchase supplies or services on the Procurement List, at prices established by the U.S. AbilityOne Commission, from designated nonprofit agencies as long as those supplies and services are available within the period required.

7. Where can Federal customers find the Procurement List and what are some examples of available products and services?

The complete Procurement List is available to view and download on the website of the U.S. AbilityOne Commission, which is www.abilityone.gov. Many AbilityOne common-use products included on the Procurement List are also clearly identified in the print and electronic catalogs of AbilityOne-authorized Federal and commercial distributors, such as GSA Advantage!™ ( www.gsaadvantage.gov ), GSA Global Supply ( www.gsaglobalsupply.gsa.gov ), FedMall , and www.abilityone.com .

Current product lines include aircraft and vehicular equipment and supplies, clothing, textiles and individual equipment, food processing, packaging and distribution, hardware and equipment, office products (e.g. pens, binder clips, paper products, etc.), environmentally friendly and recycled products (e.g. biodegradable disposable cutlery), military-specific products (such as chemical protective over garments and cold weather infantry kits) and medical supplies (such as catheters and surgical masks). Services include contract 26 AbilityOne Procurement Guide for the Department of Defense Chapter 4: Frequently Asked Questions 27 management support (close-out), custodial, administrative services, contact centers, document management services, fleet management, food service, full facility management, grounds maintenance, healthcare environmental/hospital services, laundry services, secure mail/digital document services, and supply chain management. A list of AbilityOne Capabilities is provided in Chapter 3.

8. How long does the Procurement List addition process take?

The time it takes to complete the Procurement List addition process can vary depending on several factors that may need to be considered before adding a product or service to the Procurement List. Once a product or service is identified for possible addition, the process can take between six and twelve months to finalize. This includes submission to the Commission, whose process takes 85–120 days, including analysis, decision and public notice and comment via Federal Register notices.

9. How do Federal customers order common-use products, such as office supplies, under the AbilityOne Program?

The AbilityOne Program has partnered with the General Services Administration (GSA) to incorporate AbilityOne products into the Federal Supply Schedules requirements for commercial distributors of office supplies, cleaning products and many other commonly used items. Many AbilityOne products are available electronically through catalogs of AbilityOne-authorized Federal commercial distributors here , GSA Advantage!™ at www.gsaadvantage.gov , GSA Global Supply at www.gsaglobalsupply.gsa.gov , FedMall , and www.abilityone.com .

10. What are the benefits of contracting under the AbilityOne Program?

Contracts under the AbilityOne Program offer Federal customers high quality products available through a variety of distributors at reasonable prices and delivered when needed. AbilityOne service contracts offer a stable workforce dedicated to quality and customer satisfaction. The provisions of the program enable a long-term supplier relationship, eliminating the need to re-compete the contract. Finally, contracting with the AbilityOne Program allows people who are blind or have other significant disabilities an opportunity to gain meaningful employment, lead more independent lives, reduce dependence on government social programs and become taxpayers.

11. Does AbilityOne support Small Business?

Yes. AbilityOne nonprofit agencies subcontract and partner with small businesses. The program has initiatives underway to increase collaborative opportunities with small business. A survey of our nonprofit agencies — representing 48% of the Program’s largest agencies — found that among that group, 25% of subcontract dollars or $217M was awarded to small businesses. Additionally, approximately 250 small businesses are part of the AbilityOne Program’s commercial distribution network.

12. Where do National Industries for the Blind and SourceAmerica derive their responsibilities under the AbilityOne Program?

The Javits-Wagner-O’Day Act (41 U.S.C. 46-48c) authorizes the U.S. AbilityOne Commission to designate one or more “central nonprofit agencies” (CNAs) to assist community-based nonprofit agencies serving people who are blind or have other severe disabilities participating in the AbilityOne Program. The Commission has designated National Industries for the Blind (NIB) and SourceAmerica to fulfill CNA responsibilities as listed in 41 CFR Part 51-3. These responsibilities include evaluating nonprofit agency capabilities, providing nonprofit agencies with technical assistance and allocating government orders among them. NIB and SourceAmerica also provide their associated agencies with many other services, including: assistance in complying with the Javits-Wagner-O’Day Act and Federal contract provisions. The CNAs also provide training and regulatory assistance; communications and public relations materials; information technology support; engineering, financial and technical assistance.

13. Are Federal Government purchase card holders exempt from the mandatory source requirements of the AbilityOne Program for products? What if the purchase is at or below the micro-purchase threshold?

No. The statutory requirement to buy AbilityOne products is universal and applies to any dollar amount. Government purchase card holders are — like all other Federal employees — required to buy AbilityOne products provided by designated nonprofit agencies through one of the many distribution channels. Federal personnel should not use their purchase cards to buy items that are essentially the same as AbilityOne products at local commercial businesses unless the products required are not available through the AbilityOne Program. Purchase card holders can obtain AbilityOne products from Base Supply Centers and AbilityOne Retail Stores located on military installations and in Federal buildings, as well as through various Internet and catalog distribution channels. For more information, visit www.abilityone.gov .

14. Is there a conflict between utilizing the Federal Strategic Sourcing Initiative (FSSI) Blanket Purchasing Agreements (BPAs) and purchasing from AbilityOne Base Supply Centers or AbilityOne Retail Stores?

No. All of these sources are required to provide office and general supplies in accordance with statute and the Procurement List. Thus, when you purchase office supplies from any of these channels, you are able to fulfill your requirements and to comply with the Javits-Wagner-O’Day Act. AbilityOne Base Supply Centers and Retail Stores are on installations or in Federal buildings to expediently provide products to Federal customers. Items are stocked and immediately available for pick-up or delivery. 28 AbilityOne Procurement Guide for the Department of Defense Chapter 4: Frequently Asked Questions 29

15. When are prices for AbilityOne Program products and services changed?

Prices for AbilityOne products and services are usually changed in conjunction with the contract period. The preferred method for establishing base prices is by negotiation between the producing nonprofit agency and the contracting activity with the assistance of NIB or SourceAmerica. The method of determining future prices will be a part of those negotiations.

16. How are protests, disputes and appeals handled under the Javits-Wagner-O’Day Act?

Issues related to daily contract performance should be resolved at the contracting activity and nonprofit working levels wherever possible. NIB and SourceAmerica are available and recommended as sources to facilitate the resolution. Any contractual protest before or after award, or any contractual dispute or appeal is the responsibility of the Contracting Officer as guided by the Contracts Disputes Act, unless the provisions are in conflict with the Javits-Wagner-O’Day Act or regulations. Any AbilityOne price or price related dispute must be resolved through the Commission’s Impasse Resolution Process, and should be brought to the attention of the Commission staff.

17. Can Federal employees recommend products and/or services for addition to the Procurement List?

Yes. The Code of Federal Regulations (41 CFR Part 51- 5.1(a)) encourages acquisition and procurement professionals to recommend products and services for procurement by the government from nonprofit agencies under the AbilityOne Program. Recommendations should be sent to the U.S. AbilityOne Commission, NIB or SourceAmerica.

18. Are AbilityOne Program participating nonprofit agencies registered in the Central Contractor Registration (CCR)?

Yes, all AbilityOne-participating nonprofit agencies are registered in the CCR, a central repository of all companies and agencies currently performing, or seeking to perform, business with the Federal Government.

19. How do Department of Defense prime contractors get credit for subcontracting with AbilityOne Program nonprofit agencies?

Department of Defense (DoD) prime contractors are allowed to receive credit toward their small business subcontracting goals if they subcontract with qualified nonprofit agencies participating in the AbilityOne Program. This authority can be found at 10 US Code 2410d.

20. Can solicitations include clauses that encourage subcontracting with AbilityOne?

Subcontracting Clause: Air Force Example "4.11.2 AbilityOne Participation

a) Contractor shall deliver an AbilityOne Participation Report annually on all task orders within 30 days after basic contract anniversary date. The information provided will be used to assess prime Contractor capability to successfully include AbilityOne. CDRL A003, Management Plan DI-MGMT-80004A PR: FD2060-22-32378 PWS REVISION: 0 20.

b) It is the intent of the Government to have the Contractor utilize AbilityOne to the maximum extent possible during the performance of work under this PWS. Contractor must include AbilityOne utilization in their proposal. The Government reserves the right to identify specific AbilityOne requirement performance as part of RFOPs. The Government requests that the Contractor meet or exceed an AbilityOne usage of 3% of the cost of the contract either in personnel employed and/or materials purchased. The AbilityOne proposal provided by the offeror under FAR 52.208-9 will be evaluated on a comparative basis among all offerors. An offeror that proposes or demonstrates a higher percentage, complexity level, and variety of participation by AbilityOne qualified nonprofit agencies as subcontractors beyond those items for which AbilityOne entities are the mandatory source generally will receive a higher rating on this factor during the source selection process."

Subcontracting Clause: NASA Example

"At least 10% of the total labor dollars obligated against the MLSS II contract shall be utilized for services provided by AbilityOne nonprofit agencies that employ people who are blind or have significant disabilities and are affiliated with SourceAmerica or National Industries for the Blind (NIB) under the AbilityOne Program. Please communicate through [email protected]. The contractor understands and acknowledges that this requirement is a material part of the contract and will use its best efforts to obtain or surpass the 10% goal. Failure to meet this requirement may, at the contracting officer’s discretion, result in an impact to their performance evaluation ratings documented within the annual Contractor Performance Assessment Reporting System (CPARS) submission as a result of the contractor’s failure to meet minimum mandatory requirements.

Annually, on the anniversary of the contract effective date, the contractor shall provide written notification to the contracting officer identifying the percentage of the total dollars obligated under the AbilityOne Program per PWS section for the preceding 12 months. The notification shall identify best efforts made toward achieving the AbilityOne requirement during the preceding 12 months and if applicable, any rationale for failure to meet the requirement. The contractor shall immediately notify the contracting officer if an AbilityOne source is unable to provide the supplies or services by the time required, or if the quality of supplies or services provided by the AbilityOne source is unsatisfactory."

Freedom of Information Act | No FEAR | Office of Special Counsel

(800) 999-5963 | [email protected] | Privacy Policy | Site Map  ©2024 U.S. AbilityOne Commission all rights reserved.

The U.S. AbilityOne Commission is committed to maintaining a website that is accessible to all visitors, and encourages public comments and suggestions for improvements.

Legal news and notes for small government contractors

Published by koprince mccall pottroff llc  |  edited by shane j. mccall, gao: subcontracting plan required by solicitation must be in proposal.

It’s a basic tenet of government contracting that a contractor must comply with the requirements of an agency solicitation. Those are the rules of the game. But in practice, there can be some tricky calls. For instance, what if a solicitation includes a requirement that appears to conflict with the FAR? Does an offeror still have to comply?

A recent GAO decision explored this situation in the context of a solicitation’s requirement for subcontracting plans.

The decision in  Land Shark Shredding, LLC , B-415908 (March 29, 2018) concerned a solicitation from the VA for document shredding services. The RFQ was set aside for veteran-owned small businesses. The RFQ included three evaluation factors: technical, price, and past performance.

As part of the technical factor, the RFQ required vendors submit a subcontracting plan.  Under the subcontracting plan, vendors were to:

Provide proposed team, including all subcontractors and the duties which will be performed by the pertinent individuals. This information will enable the [contracting officer] to assess the contractor’s compliance with the limitations on subcontracting or percentage of work performance requirement.

The RFQ advised vendors that “[f]ailure to provide the information requested in the evaluation criteria may result in being found non-responsive.” The CO, in response to an inquiry about why it did not receive the award, told Land Shark Shredding, LLC that its quotation was nonresponsive, in large part because it did not provide a subcontracting plan.

Land Shark argued that, because it is a small business, and small businesses are not required to submit small business subcontracting plans, it should not have been found at fault for not submitting a subcontracting plan. The Solicitation included  FAR 52.219-9, Small Business Subcontracting Plan , which the GAO agreed by its terms states that “[t]his clause does not apply to small business concerns.”

GAO held that the RFQ’s evaluation subfactor required the submission of a subcontracting plan, and the RFQ stated this would help the VA “assess the contractor’s compliance with the limitations on subcontracting or percentage of work performance requirement. Therefore, “it is clear that the RFQ required vendors to submit a subcontracting plan, not a small business subcontracting plan pursuant to the inapplicable FAR and VAAR clauses.”

In addition, Land Shark argued that it had informed the agency as part of its proposal that “use of subcontractors on the contract remained undecided, which served as its subcontracting plan” or, alternatively, that it might perform the work without subcontractors.

GAO didn’t buy that argument, holding that “Land Shark’s indecision about whether it will perform the work itself or employ a subcontractor to fulfill the requirements does not provide the information requested by the RFQ, and did not provide sufficient information to allow the VA to assess compliance with the limitations on subcontracting requirement.”

GAO also noted that, to the extent Land Shark was protesting that the subcontracting plan requirement itself was unnecessary for the procurement, this was an untimely challenge to the terms of the solicitation.

Viewed through the GAO’s eyes, it seems like a simple decision that when a solicitation calls for a subcontracting plan, a contractor must submit one. However, from the contractor’s perspective, (a) the solicitation was asking for something that was not required under the FAR and (b) the contractor attempted to honestly state in its proposal that it did not know if it would use subcontractors. After all, this was a paper shredding contract, probably on the less complicated end of the universe of government contracts.

GAO, as usual, stuck to the rules of the game: if it’s required in the solicitation, it better be in the proposal. As GAO noted, if you don’t think the solicitation requirements are reasonable, that is a pre-award challenge.

Questions about this post? Or need help with a government contracting legal issue? Email us or give us a call at 785-200-8919 .

Looking for the latest government contracting legal news? Sign up for our free monthly newsletter , and follow us on LinkedIn , Twitter and Facebook .

Related Content

  • Subcontracting Plans, Full and Open Competition, and Your Small Business
  • GAO Bid Protest Attorney Services
  • Federal Court Upholds Agency's 40% Small Business Subcontracting Goal
  • Subcontracting Plan Discrepancy Proves Costly To EAGLE II Offeror
  • Reminder: Large Primes Must Assign NAICS Codes To Subcontracts
  • 2017 NDAA Strengthens Subcontracting Plan Enforcement

IMAGES

  1. FREE 18+ Sample Small Business Plan Templates in PDF

    small business subcontracting plan waiver

  2. Sba Small Business Subcontracting Plan

    small business subcontracting plan waiver

  3. Small Business Subcontracting Plan Template

    small business subcontracting plan waiver

  4. A Comprehensive Guide to Small Business Subcontracting Plans

    small business subcontracting plan waiver

  5. Small Business Subcontracting Plan Template

    small business subcontracting plan waiver

  6. What Is A Small Business Subcontracting Plan

    small business subcontracting plan waiver

VIDEO

  1. Income from Business Profession 2

  2. Navigating the Transition from Employee to Business Owner A Guide to Tax Season

  3. Successfully Navigating Subcontracting as a Small Business at SBC 2023

  4. Returns can be added cost to the small business

  5. How to Start a Tax Overage Business

  6. How To Get Government Contracts

COMMENTS

  1. 19.705-2 Determining the need for a subcontracting plan

    In determining when subcontracting plans should be required, as well as when and with whom plans should be negotiated, the contracting officer must consider the integrity of the competitive process, the goal of affording maximum practicable opportunity for small business, veteran-owned small business, service-disabled veteran-owned small busines...

  2. Prime and subcontracting

    In this plan, which follows the requirements of FAR 52.219-9, the prime contractor sets goals for what it plans to subcontract to small businesses, small disadvantaged businesses, women-owned small businesses, HUBZone small businesses, veteran-owned small businesses, and service-disabled veteran-owned small businesses.

  3. FAR Council Publishes Three Final Rules Aimed at Boosting Small

    Specifically, the final rules 1) provide examples of what constitutes a good faith effort to comply with a small business subcontracting plan, 2) revise the limitations on subcontracting under FAR 19.505, Limitations on Subcontracting and Nonmanufacturer Rule and 3) allow SBA procurement center representatives to review any proposed acquisition ...

  4. Set-aside procurement

    The federal government prefers to contract with small businesses whenever possible. Contracting officials can use set-aside and sole-source contracts to help their agencies meet their small business contracting goals. How you should offer a contract will depend largely on two factors:

  5. Nonmanufacturer rule

    SBA may issue a class waiver when no small business manufacturer has submitted, performed, or been awarded an offer on a solicitation for a class of products within the previous two years. Anyone can request a class waiver. The request should include the relevant NAICS code and other identifying information about the product.

  6. PDF GAO-20-464, SMALL BUSINESS SUBCONTRACTING: Oversight of Contractor

    Small business subcontracting plans, which are required by the Small Business Act, 15 U.S.C. § 637(d), establish goals for small business subcontracting and describe how the contractor plans to achieve those goals. The Small Business Administration establishes small business size standards on an industry-by-industry basis. Federal Acquisition

  7. A Comprehensive Guide to Small Business Subcontracting Plans

    A small business subcontracting plan helps you determine and meet your subcontracting goals because you have to set-aside a dollar estimate for small businesses before you begin working on your contract. There are two types of plans: commercial and individual. We will go into further detail on these below.

  8. SMALL BUSINESS SUBCONTRACTING PLAN (sample)

    SMALL BUSINESS SUBCONTRACTING PLAN (sample) [COMPANY XXX] (For informational purposes only. The following outline meets the minimum requirements as imposed by Section 8(d) of the Small Business Act, and meets the minimum requirements of the Federal Acquisition Regulation (FAR) Subpart 19.7. This model plan is intended to be used as a guideline.

  9. Small Business Subcontracting Plans

    Small businesses Contracts under the prescribed dollar amounts Prime contracts not offering subcontracting possibilities Contracts to be performed entirely outside the United States Commercial vs. Individual Plans VA Subcontracting Goals

  10. Subcontracting Plan waiver

    This provision [Pub. L. 95-507, sec. 211] suggests that Congress intended to insure that small and small-disadvantaged businesses have a fair chance to compete for subcontracts when subcontracting opportunities would be made available by the prime contractor, not that firms have a right to subcontracts notwithstanding the prime contractor's inte...

  11. PDF Office of The Under Secretary of Defense

    SUBJECT: Department of Defense Small Business Subcontracting Requirements As recommended by Department of Defense (DoD) Inspector General (IG) report, DODIG-2022-069, "Audit of Department of Defense Small Business Subcontracting Requirements," dated March 7, 2022, this memorandum reminds the Contracting Workforce of

  12. PDF DOE Subcontracting Guidance

    subcontracting plan, e.g., goals for each small business category. (4) The FAR 19.7 specifies that the solicitation for applicable procurements should contain certain subcontracting clauses: • Utilization of Small Business Concerns (FAR 52.219-8) • Small Business Subcontracting Plan (FAR 52.219-9) • Liquidated Damages (FAR 52-219-16)

  13. The FAR's Limitations on Subcontracting and IDIQ Contracts

    Keep in mind, though, that even if the SBA grants a waiver from the limitations on subcontracting for one six-month period, the 8(a) contractor is still required to meet the subcontracting limits for other six-month periods and for the contract as a whole. Update: A new SBA regulation has superseded the rule discussed in this post.

  14. FAQs

    Does AbilityOne support Small Business? 12. Where do National Industries for the Blind and SourceAmerica ® (formerly NISH) derive their responsibilities under the AbilityOne Program? 13. Are Federal Government purchase card holders exempt from the mandatory source requirements of the AbilityOne Program for products?

  15. 19.505 Limitations on subcontracting and nonmanufacturer rule

    (a) Applicability. (1) This section applies to small business set-asides above the simplified acquisition threshold and orders issued directly to a small business in accordance with 19.504(c)(1)(ii) above the simplified acquisition threshold. (2) This section applies, regardless of dollar value, to the following awards under subparts 19.8, 19.13, 19.14, and 19.15:

  16. PDF SMALL BUSINESS COMPLIANCE GUIDE:

    July 2020. U.S. Small Business Administration. A handbook for small businesses and Federal officials interested in learning about the SBA's size program and affiliation rules. Administration pursuant to the National Defense Authorization Act of Fiscal Year 2013 (NDAA), Pub. L. 112-239, § 1681(c). The NDAA requires that SBA publish this ...

  17. Part 819

    (3) In furtherance of 38 U.S.C. 8127(a)(4), contractors shall submit subcontracting plan reports to OSDBU as set forth in clause 852.219-70, VA Small Business Subcontracting Plan Minimum Requirements. Unless otherwise directed by OSDBU, VA Form 0896A, Report of Subcontracts to Small and Veteran Owned Business, shall be used to submit the ...

  18. GAO: Subcontracting Plan Required by Solicitation Must be in Proposal

    The Solicitation included FAR 52.219-9, Small Business Subcontracting Plan, which the GAO agreed by its terms states that " [t]his clause does not apply to small business concerns.". GAO held that the RFQ's evaluation subfactor required the submission of a subcontracting plan, and the RFQ stated this would help the VA "assess the ...

  19. PDF FY2024 Goaling Guidelines

    In addition, SBA also negotiates a small business subcontracting goal based on recent achievement levels. Before the beginning of the fiscal year, SBA provides agencies with a proposed goal, and agencies respond ... respective goal along with a proposed corrective action plan. 9. Consolidated Appropriations Act of 2014:

  20. 52.219-9 Small Business Subcontracting Plan.

    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 contrac...