Small Business Contracting Plan (FAR 52.219-9 [Apr 2008])

[OSZContractor]

To what extend are the subject clauses applicable to a foreign Prime Contractor performing outside the U.S.A. but having an U.S. Subcontractor? Can this clause be flowed down in its entirety to the U.S. subcontractor and waiving the applicability for the Prime Contract? It should be the logic consequence because the Prime Contractor is subject to its national law.

What is your legal understanding regarding this subject matter?

Kind regards,

Jean-Michel Jost

[Guest Vern Edwards]

The clause at FAR 52.219-9 applies to all contractors, including foreign contractors, unless the contract work, including all subcontracted work, will be performed entirely outside of the United States and its outlying areas. See Federal Acquisition Regulation 19.708.

I have said to you once already that if you are going to contract with the United States government you had better seek professional advice.

[general_correspondence]

Vern do you mean "legal advise"

My advice to the guy from France or wherever, you accepted the FAR clauses, so what's up? If you want to know what they are and how they apply seems to me you should have an idea as you accepted them to begin with.

[general_correspondence]

foreign businesses are exempt from submiting subcontracting plans

[Navy_Contracting_4]

foreign businesses are exempt from submiting subcontracting plans

general_correspondence,

Why do you say foreign businesses are exempt from submitting subcontracting plans? The law, at 15 USC 637(d)(2), implemented at FAR 19.702, says the "clause . . . shall be included in all contracts let by any Federal agency except any contract which--

(A) does not exceed the simplified acqusition threshold;

( including all subcontracts under such contracts will be performed entirely of [the US]; or

(C ) is for services which are personal in nature."

Is there an exemption for foreign businesses somewhere else in statute?

[Guest Vern Edwards]

general_correspondent:

What is a "foreign business"? Is a business that is owned entirely by citizens of another country, but working in a facility in the United States, a foreign business? Is a business owned by American citizens, but working in a facility in another country, a foreign business? What determines the "foreignness" of a business? Nationality of ownership, location of establishment, location of performance, some combination of the above? Is the term defined in statute or regulation? Is the definition generally applicable, or only applicable in some cases? Please cite a statute or regulation in support of your answer.

Let me help you: The term "foreign business" appears only once in the FAR System, in FAR 19.001, in "foreign business entity," which appears in the definition of "concern," and which says that a foreign business is "any entity located outside the United States and its outlying areas," whatever that means

As best as I have been able to determine, the term appears only once in Title 13 of CFR, the SBA's regulations, which do not define it and do not mention it in the context of subcontracting plans.

[general_correspondence]

Vern, it seems (I think) you have answered your own question at the same time arguing with my response. My guidance was given from my companies policies, nothing more seems to be available in the thousands of pages in SBA, FAR, and CFR. Have you found a cite, or statute? There are several means I have done identifying a foreign business, and I would argue that all of them should be considered before making a determination - Incorporated - DUNS - Taxes - parent holding (percantage). Take for example, Shell, or BP. If the contracting office, accounting, taxes, currency, etc, are to the DUNS number of the U.S. affiliate, and the U.S. affiliate is a subsidiary incorparted in the U.S, under a State in the U.S. then you are NOT doing business with a foreign company.

[Don Mansfield]

foreign businesses are exempt from submiting subcontracting plans

Prove it.

[general_correspondence]

disprove it.

[Don Mansfield]

Ok. Read FAR 19.702:

(a) Except as stated in paragraph b of this section, Section 8(d) of the Small Business Act (15 U.S.C. 637(d)) imposes the following requirements regarding subcontracting with small businesses and small business subcontracting plans:

(1) In negotiated acquisitions, each solicitation of offers to perform a contract or contract modification, that individually is expected to exceed $550,000 ($1,000,000 for construction) and that has subcontracting possibilities, shall require the apparently successful offeror to submit an acceptable subcontracting plan. If the apparently successful offeror fails to negotiate a subcontracting plan acceptable to the contracting officer within the time limit prescribed by the contracting officer, the offeror will be ineligible for award.

(2) In sealed bidding acquisitions, each invitation for bids to perform a contract or contract modification, that individually is expected to exceed $550,000 ($1,000,000 for construction) and that has subcontracting possibilities, shall require the bidder selected for award to submit a subcontracting plan. If the selected bidder fails to submit a plan within the time limit prescribed by the contracting officer, the bidder will be ineligible for award.

b Subcontracting plans (see paragraphs (a)(1) and (2) of this section) are not required?

(1) From small business concerns;

(2) For personal services contracts;

(3) For contracts or contract modifications that will be performed entirely outside of the United States and its outlying areas; or

(4) For modifications to contracts within the general scope of the contract that do not contain the clause at 52.219-8, Utilization of Small Business Concerns (or equivalent prior clauses; e.g., contracts awarded before the enactment of Public Law 95-507).

No exception for "foreign businesses" (whatever that means). Want more proof?