A company that receives a federal contract valued at $700,000 (or $1.5 million for the construction of a public facility) is required by FAR § 52.219-9 to develop a small business subcontracting plan. This requirement applies not only to the prime contractor, but also to any large subcontractor whose subcontract will exceed the $700,000/$1.5 million threshold and intends to further subcontract out its work. The purpose of the subcontracting plan is to maximize the participation of small businesses in subcontracting opportunities under those contracts.

Among other things, a subcontracting plan generally describes the types of small businesses the contractor will utilize (e.g., VOSB, WOSB, HubZone), the supplies and services the contractor intends to purchase from those small business subcontractors, a description of how the contractor intends to find eligible small businesses and ensure they have an opportunity to compete for the work, and an explanation detailing how the contractor formulated its subcontracting goals. A contractor can prepare an individual subcontracting plan or a commercial subcontracting plan (the preferred type of subcontracting plan for contractors furnishing commercial items).

A contractor is required to submit a Summary Subcontract Report (SSR) using the Electronic Subcontracting Reporting System at http://www.esrs.gov. The SSR provides information on subcontract awards made to small businesses by the contractor. If a contractor is performing work for more than one federal agency, a separate report is submitted to each federal agency covering only subcontracting accomplishments for that agency’s contracts.

Under a deviation issued by the Department of Defense (DoD) on Aug. 15, 2016, contractors will now be allowed to submit their SSRs annually rather than the current biannual requirement. The deviation also changes the reporting requirements for DoD contracts. Instead of the current requirement to submit a separate report for each DoD component for construction and related maintenance and repair contracts, a consolidated SSR will be submitted for all contracts awarded by military departments/agencies and/or all subcontracts awarded by DoD prime contractors.

The deviation is effective immediately.