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k&subk_mgr

How to handle SB Subk Plan requirement when no subcontracting allowed?

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My first post in the new forums -- it all looks good, by the way -- thanks, Bob! On to my question ...

We will be the recipient of an IDIQ from a Prime Contractor (we are the sub) -- the draft IDIQ subcontract contains the Small Business Subcontracting Plan flowdown from the prime (52.219-9). However, we are not permitted to subcontract any of our work to a lower tier subcontractor, per other terms of the subcontract. We will be doing all the work ourselves. My company does not have a Corporate Small Business Subcontracting Plan or a DOD Comprehensive Plan. The Prime will not remove the requirement from our subcontract (which, by the way, will be awarded as $0, with funding and scope coming through individual task orders -- so it is unknown at this time whether we will get $550K of work or not).

How do others handle a similar situation if the Prime cannot/will not remove the requirement? One person suggested submitting a "zero dollar" subcontracting plan if we hit the $550K threshold for submitting one -- it would be a plan but with no goals in it.

Hopefully I've given enough information for responses -- if not, fire away and tell me what else you need to know!

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The prime has two obligations under 52.219-9 with respect to subs. 1 - include the clause (52.219-9) in all subcontracts that offer further subcontracting opportunities, and 2 - require all subcontractors (except small business concerns) that receive subcontracts in excess of $550,000 with further subcontracting possibilities to adopt a subcontracting plan. Note that both requirements are conditioned on there being further subcontracting opportunities, which you apparently do not have. Note also that paragraph c of that clause says that the offeror shall submit and negotiate a subcontracting plan, where applicable.

It sounds like your prime does not have to include the clause in your subcontract. Even if it includes the clause, it does not have to require you to have a plan. If all it has done at this point is put the clause in your contract, but has not required you to submit a plan, you probably don't have a problem. If it tells you to submit a plan, you need to point out the above requirements and the fact that you are not permitted to subcontract anything. That would seem to make "further subcontracting opportunities" nonexistent.

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Thank you Ron! That all makes sense.

This is just the first time I've been unable to get a prime to back off the plan requirement when they are imposing no subcontracting on us as the sub. Usually it ends up in their boilerplate and once you point out the issue, they will remove it.

You're right though, they're not asking us to prepare and submit a plan, they just want to include it in the IDIQ. I think I will table my current negotiations on that item (I have bigger award fee negotiations to worry about!) and see what happens in the future.

If anyone has a differing opinion -- please let me know.

Vicki

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Thank you Ron! That all makes sense.

This is just the first time I've been unable to get a prime to back off the plan requirement when they are imposing no subcontracting on us as the sub. Usually it ends up in their boilerplate and once you point out the issue, they will remove it.

You're right though, they're not asking us to prepare and submit a plan, they just want to include it in the IDIQ. I think I will table my current negotiations on that item (I have bigger award fee negotiations to worry about!) and see what happens in the future.

If anyone has a differing opinion -- please let me know.

Vicki

Vicki, check the requirements for a subcontracting plan by subcontractors. While primes are required to develop a plan when the prime contract offers subcontracting opportunities, there is no such qualification for subcontractors. They must develop a plan whenever the subcontract meets the size standard and the subcontractor is not a small business. Sounds dumb, but the statute and regs require a subcontracting plan when there will be no further subcontracting by the subcontractor.

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I think all the arguing and such takes more effort than submitting a brief plan that states you aren't going to subcontract anything and why you aren't or can't. What about materials and equipment purchases or this this strictly for services?

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I think all the arguing and such takes more effort than submitting a brief plan that states you aren't going to subcontract anything and why you aren't or can't. What about materials and equipment purchases or this this strictly for services?

Thanks to both of you -- Joel, my manager is taking the same approach -- when/if we are asked to submit a plan, we will submit a generic plan saying we will not be / cannot subcontract.

It's services only -- no materials.

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Vicki, check the requirements for a subcontracting plan by subcontractors. While primes are required to develop a plan when the prime contract offers subcontracting opportunities, there is no such qualification for subcontractors. They must develop a plan whenever the subcontract meets the size standard and the subcontractor is not a small business. Sounds dumb, but the statute and regs require a subcontracting plan when there will be no further subcontracting by the subcontractor.

Why do you say the regs require this? 52.219-9(d)(9)says the subcontract plan must be included in "subcontracts that offer further subcontracting opportunities"

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