Is Your Subcontracting Plan in Compliance?

Subcontracting Plans: How Implementing Best Practices Now Can Save You Headaches Down the Road

As a federal contractor, there are already many areas where you must track your compliance with the rules and regulations carefully. One area increasingly receiving greater scrutiny from the government is prime contractors’ compliance with their small business subcontracting plan obligations.

Under the Small Business Act as amended in 1978, prime contractors must provide small businesses subcontracting opportunities for all contracts in excess of $150,000. And, for large businesses, formal subcontracting plans are required elements for most full and open contracts that are in excess of $650,000, or $1,500,000 in the case of construction contracts for public facilities.

When a subcontracting plan has been incorporated into a prime contract, the large business prime contractor is required to provide the “maximum practicable opportunity” for small businesses to participate in the contract performance as subcontractors.

The formal subcontracting plan must contain separate goals for small business participation, as well as small disadvantaged businesses under the various socioeconomic programs administered by the SBA. When developing the subcontracting plan, a contractor must first identify which plan type best fits its situation. If the contractor only wants to develop a plan specific to a single contract, then it should develop an Individual Subcontracting Plan to cover the entire contract period including options. The goals incorporated into the Individual Subcontracting Plan should be based on the offeror’s planned subcontracting in support of that specific contract.

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Source: JD Supra Business Advisor, Article written by Katie Flood, published on 6/13/2015


 For help with Government Contracting: contact your nearest Procurement Technical Assistance Center (PTAC). Funded through Cooperative Agreements between the U.S. Department of Defense and state and local governments/institutions, PTACs provide free and low-cost assistance in virtually all areas of government contracting.