Subcontracting plan requirements
FAR 19.704 mandates detailed subcontracting plans and robust reporting to ensure small businesses receive meaningful subcontracting opportunities on qualifying federal contracts.
Overview
FAR 19.704 details the mandatory elements that must be included in subcontracting plans required for certain federal contracts. The regulation aims to ensure that prime contractors provide meaningful subcontracting opportunities to small businesses, including specific categories such as veteran-owned, service-disabled veteran-owned, HUBZone, small disadvantaged, and women-owned small businesses. The section outlines the required content of both individual and commercial subcontracting plans, reporting obligations, and the process for establishing and maintaining master plans.
Key Rules
- Subcontracting Plan Content
- Plans must set separate percentage goals and dollar amounts for each small business category, describe supplies/services to be subcontracted, explain goal development, and detail methods for identifying sources.
- Reporting and Recordkeeping
- Contractors must submit periodic reports (ISR and SSR) via eSRS, maintain records of compliance efforts, and provide written explanations for unmet commitments.
- Flowdown and Subcontractor Requirements
- Required clauses must be included in subcontracts, and certain subcontractors must also adopt compliant plans and reporting.
- Commercial and Master Plans
- Commercial plans are preferred for commercial items/services and have specific approval and reporting requirements; master plans can be used division-wide but must be updated and approved.
Responsibilities
- Contracting Officers: Review, approve, and monitor subcontracting plans and reports; ensure compliance with reporting and plan requirements.
- Contractors: Develop, implement, and update subcontracting plans; submit required reports; ensure flowdown of requirements; maintain records; and make good faith efforts to meet goals.
- Agencies: Oversee contractor compliance, review reports, and enforce corrective actions as needed.
Practical Implications
This section ensures that small businesses have fair opportunities in federal contracting by requiring detailed planning, reporting, and accountability from prime contractors. Noncompliance can result in rejected reports, increased oversight, or contractual remedies. Contractors must be diligent in plan preparation, recordkeeping, and timely reporting to avoid penalties and maintain eligibility for future awards.