Contract clauses
FAR 19.708 mandates the inclusion of specific clauses to ensure small business participation in federal contracts, with requirements varying by contract type, value, and location.
Overview
FAR 19.708 outlines the mandatory and optional contract clauses that must be included in solicitations and contracts to support the Small Business Subcontracting Program. It specifies when to insert clauses related to the utilization of small business concerns, requirements for subcontracting plans, liquidated damages for noncompliance, and incentive programs for exceeding small business subcontracting goals. The section provides detailed instructions for contracting officers on clause selection based on contract value, type, location, and acquisition method, ensuring compliance with small business participation requirements.
Key Rules
- Utilization of Small Business Concerns (52.219-8)
- Must be included in contracts exceeding the simplified acquisition threshold, except for personal services contracts or contracts performed entirely outside the U.S. and its outlying areas.
- Small Business Subcontracting Plan (52.219-9)
- Required for contracts with subcontracting possibilities exceeding $750,000 ($1.5 million for construction), unless set aside or under the 8(a) program. Specific alternates apply based on acquisition method and reporting requirements.
- Liquidated Damages—Subcontracting Plan (52.219-16)
- Inserted in all contracts containing the Small Business Subcontracting Plan clause or its alternates.
- Incentive Subcontracting Program (52.219-10)
- Optional for negotiated contracts with required subcontracting plans, allowing for monetary incentives to increase small business participation, with flexibility in incentive structure.
Responsibilities
- Contracting Officers: Ensure proper clauses and alternates are included based on contract type, value, and location; determine when incentives are appropriate; monitor compliance.
- Contractors: Comply with all clause requirements, develop and implement subcontracting plans, and meet small business participation goals.
- Agencies: Oversee clause implementation and monitor contractor performance regarding small business subcontracting.
Practical Implications
This section ensures that small business participation is embedded in federal contracting through enforceable clauses. Contractors must be vigilant in understanding which clauses apply and in fulfilling their obligations, as noncompliance can result in penalties. Common pitfalls include failing to include the correct clause or alternate, misunderstanding thresholds, or neglecting to develop a compliant subcontracting plan.