19.704
Subcontracting plan requirements
FAR 19.704 mandates detailed subcontracting plans and robust reporting to ensure prime contractors provide real opportunities and accountability for small business participation.
Overview
FAR 19.704 details the mandatory elements that must be included in subcontracting plans required for certain federal contracts. The section outlines specific requirements for setting goals, reporting, recordkeeping, and ensuring equitable opportunities for various categories of small businesses. It also addresses the use of master and commercial plans, and the procedures for contracts with options or multiyear terms. The regulation aims to ensure that prime contractors provide meaningful subcontracting opportunities to small businesses and comply with federal reporting and oversight requirements.
Key Rules
- Subcontracting Plan Content
- Plans must set separate percentage goals and dollar amounts for various small business categories, describe supplies/services to be subcontracted, and explain methods for goal development and source identification.
- Reporting and Recordkeeping
- Contractors must submit periodic reports (ISR and SSR) via eSRS, maintain detailed records, and provide written explanations for unmet commitments.
- Assurances and Good Faith Efforts
- Contractors must assure inclusion of required FAR clauses in subcontracts, make good faith efforts to use small businesses named in proposals, and not restrict subcontractors from communicating with the contracting officer.
- Master and Commercial Plans
- Master plans (plant/division-wide) and commercial plans (for commercial products/services) have specific approval, update, and reporting requirements.
- Applicability for Multiyear/Option Contracts
- Plans must address the cumulative value of contracts and options, with separate goals/statements for each.
Responsibilities
- Contracting Officers: Review, approve, and monitor subcontracting plans and reports; ensure compliance with FAR requirements.
- Contractors: Develop, implement, and update subcontracting plans; submit required reports; maintain records; ensure equitable opportunities for small businesses; comply with payment and communication requirements.
- Agencies: Oversee contractor compliance, conduct studies/surveys, and enforce reporting obligations.
Practical Implications
- This section ensures transparency and accountability in subcontracting to small businesses, supporting federal socioeconomic goals.
- Contractors must be diligent in planning, documenting, and reporting their subcontracting activities, or risk noncompliance.
- Common pitfalls include incomplete plans, missed reporting deadlines, and failure to make good faith efforts or provide required assurances.