Any contractor receiving a contract for more than the simplified acquisition threshold must agree in the contract that small business, veteran-owned small businesses, service-disabled veteran-owned small business, HUBZone small business, small disadvantages business and women-owned small business concerns will have the maximum practicable opportunities to participate in contract performance consistent with its efficient performance.
Acquisitions above $650,000 ($1,500,000 for construction) awarded to companies other than small businesses shall require an approved subcontracting plan from the apparent successful offeror or bidder. The plan must be submitted and accepted before the contract may be awarded. Failure to carry out subcontracting obligations may result in adverse actions. If it is determined there are no subcontracting opportunities, the determination must be approved a level above the CO.
Subcontracting is one approach to obtaining past performance and business opportunities. The Federal government does not have a relationship with the subcontractors. However, the terms and conditions in the prime contract usually flow down to the subcontract.
Subcontracting plan requirements (FAR 19.704)
Subcontracting Plans are not required from small businesses, personal services contracts and contracts performed entirely outside the U.S. and outlying areas.
Subcontracting plans should be an evaluation factor
The Office of Small Business Programs (OSBP) shall review the apparent successful offer or subcontracting plan. Therefore the contracting Officer shall provide a copy to the OSBP
Type of Subcontracting Plan (FAR 19.7/52.219-9)
Subcontract means 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, contract modification, or subcontract.
Individual Contract Plan-means a subcontracting plan that covers the entire contract period (including option periods) applies to a specific contract, and has goals that are based on the offer or's planned subcontracting in support of the specific contract, except that indirect cost incurred for common or joint purposes may be allocated on a prorated basis to the contract.
Master Plan is subcontracting plans that contain all the required elements of an individual contract plan, except goals, and may be incorporated into individual contract plans, provided the master plan has been approved.
Commercial Plan-means a subcontracting plan (including goals) that covers the offeror's fiscal year and that applies to the entire productions of commercial items sold by either the entire company or portion thereof (e.g., division, planet, or product line).
Failure to make a good faith effort to comply with the subcontracting plan means willful or intentional failure to perform in accordance with the requirements of the subcontracting plan, or willful or intentional action to frustrate the plan.