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Hi All, My questions are about the small business (SB) subcontracting requirements for an "other than small business (OTSB)" first-tier construction subcontractor (sub). From all the reading I've done so far, I have a few assumptions and some questions. I really appreciate any help as I am trying to set some sort of company policy. Because of the recent change regarding "Credit for Lower Tier Small Business Subcontracting"; I am guessing Prime Contractors (PC) will start coming after subs to get help from subs to meet PCs SB goals. Now questions; 1) Small Business Subcontracting Plan (SBSP): A construction sub is required to submit a SBSP i) if it's total contract value exceeds $1.5m and ii) if it "offers further subcontracting opportunities". a) Who determines if my company offers further subcontracting opportunities? Is it the PC or Contracting Officer (CO) or someone else? b) Does offering further subcontracting opportunities mean having the potential of hiring a Sub-subcontractor (sub-sub) to perform a part of my company's contract? (Note: If so, almost all of my projects with a contract exceeding $1.5m would fall under this category. Because of the nature of our work, we almost always use a sub-sub, even if its subcontract value might be as small as let's say $50K for my $1.5M contract. Therefore, I'd have to submit a SBSP for almost every project I work at with a contract exceeding $1.5m. We could do it, but is it required?) 2) Assuming I am required to submit a SBSP because I might hire a sub-sub, when am I required to submit it? Prior to my company being awarded a subcontract (i.e. during the PC's bid process) by the PC or after execution of the subcontract or anytime I am asked to submit a SBSP? 3) Assuming my planned "total subcontracted dollars" is only 3% of my subcontract value (i.e., $50K), can I submit a SBSP with 0% goal in each category? 4) Who approves/rejects my SBSP? Can I be required to accept/adopt certain goals by PC (e.g. PC's own goals as submitted to the Government)? 5) Do my reports (ISR and SSR) go to the PC for review, not to the CO; unless I add CO's email address to the list of the parties to be notified of my report on eSRS; or CO is automatically notified by eSRS and reviews/comments/approves/rejects/monitors my reports? Please consider the recent LowerTier SB counting in your comments. I hope this tread will be a guide for any subcontractor getting into Federal projects. Thank you all very much in advance. -
I am an agency Small Business Program Manager and I discovered that some of our large business prime contractors have awarded small business subcontracts using NAICS Industry Sector 42 and take small business subcontracting credit. In addition, another large business prime contractor awarded ordering agreements specifically using 423840, “Industrial Supplies Merchant Wholesalers” to a number of small businesses (a bullpen of sorts) with orders placed through a centralized electronic catalog by several other large business prime contractors in our agency – a kind of mini-strategic sourcing approach (better volume pricing/better T&Cs/more small business credit/etc.). However, the footnote for this industry sector states, “(These NAICS codes shall not be used to classify Government acquisitions for supplies. They also shall not be used by Federal Government contractors when subcontracting for the acquisition for supplies. The applicable manufacturing NAICS code shall be used to classify acquisitions for supplies. A Wholesale Trade or Retail Trade business concern submitting an offer or a quote on a supply acquisition is categorized as a nonmanufacturer and deemed small if it has 500 or fewer employees and meets the requirements of 13 CFR 121.406.)” 13 CFR 121.406(e) states, “(f) These requirements do not apply to small business concern subcontractors.” Question 1: Am I safe to assume that the non-manufacturer rule also does not apply to a large business concern’s subcontractors? That is, the large business prime contractor can take small business credit when awarding subcontracts to small business wholesalers and resellers without having to address nonmanufacturer rule requirements? Normally, I would direct the prime contractor to identify the most applicable manufacturing code for a new requirement and go make award. However, some of these agreements cover hundreds of supply items and dozens of NAICS codes – with no dominate NAICS. The mix of supplies purchased also varies order to order, again with no one NAICS being truly dominate. Question 2: In this scenario, could I recommend to the prime contractor that they use a more broad code such as NAICS 339999, All Other Miscellaneous Manufacturing? This approach would also ease vendor concerns about having to update their SAM records with potentially multiple manufacturing codes. Question 3: Regarding existing subcontracted ordering agreements under Sector 42, can the prime modify the NAICS out of this sector? Cancelling existing agreements would be extremely disruptive to the industrial complex and I would rather have them repair the issues during the follow-on competitions. Any rules, regulations or other agency examples would also be helpful. Thanks...