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Small Business Participation Plans


Small Business Participation Plans  

10 members have voted

  1. 1. Does the practice of incorporating small business participation plans into contracts (as described below) have either a 1) significant effect beyond the internal operating procedures of the agency or 2) have a significant cost or administrative impact on contractors or offerors?

    • Yes
      7
    • No
      3
  2. 2. Is the practice of incorporating small business participation plans into contracts (as described below) a FAR deviation as defined at FAR 1.401(f)?

    • Yes
      3
    • No
      7
  3. 3. Assuming the small business participation plan is incorporated into either Section H of the contract or the statement of work, is it legally enforceable?

    • Yes
      6
    • No
      4


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2 hours ago, PepeTheFrog said:

Have you ever confronted a small business or SADBU frog about this potential conflict with the Regulatory Flexibility Act or other statutes? If so, what do they say?

Yes. A whole room full of them. And contractor SBLOs. I presented them with the language of 41 USC 1707 and asked if they thought a policy of making small business participation plans binding had a 1) significant effect beyond the internal operating procedures of the agency or 2) have a significant cost or administrative impact on contractors or offerors. Contractor SBLO heads nodded yes, SADBU heads remained relatively still. Nobody said "no". A couple of the SADBUs argued that if you put the proposed small business participation in the statement of work as a technical requirement, instead of a clause in Section H, it was ok.

2 hours ago, PepeTheFrog said:

Have you ever brought this up to any frogs in Defense Pricing and Contracting (formerly DPAP)? If so, what do they say?

No, I haven't. 

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2 hours ago, joel hoffman said:

Pepe, what is the potential conflict with RFA of incorporating the Small business participation plan?

The rule in the DFARS doesn't address incorporating the plan as a contract requirement in contracts with small business concerns. The RFA analysis may not have considered this aspect.

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Guest Vern Edwards
13 minutes ago, joel hoffman said:

Vern, The  Notice in the Fed Register stated, for Large Businesses, the evaluated information is to be incorporated into the subcontracting plan for large businesses. I presume that is after evaluation of the subfactor.

I think that go/no rating of the extent of participation would be problematic.

The language states that the government will evaluate the extent of the planned participation, including the extent to which firms are identified, the relative extent of overall subcontracting, extent of commitment,  overall variety and complexity of the work,  overall share of total contract value, etc. it also says that enforceable commitments shall be weighted more heavily. 

These appear to be comparative evaluation criteria.

Don, please cite the Federal Register entry.

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19 hours ago, Don Mansfield said:

The rule in the DFARS doesn't address incorporating the plan as a contract requirement in contracts with small business concerns. The RFA analysis may not have considered this aspect.

1. The fed register notice did state that the information in the plan will be incorporated into the subcontracting plan ( large business) which is to be made part of the contract  Thus,   no conflict with 41 USC 1707. 

2. The fed reg notice also covers the actual prep, submission and evaluation of the plan. No conflict with the Statute. 

3. How about somebody advising what significant administration and cost impact is involved with incorporating the info in the plan into the subsequent contract with small business?  

[EDIT: small business participation includes self-performance by small business primes or SB joint venture members. The SB prime may include its own participation in contract performance.]

 

Edited by joel hoffman
[EDIT: small business participation includes self-performance by small business primes or SB joint venture members. The SB prime may include its own participation in contract performance.]
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2 hours ago, Vern Edwards said:

Don, please cite the Federal Register entry.

I did that way back on page 1.

 I provided a link.  (https://www.gpo.gov/fdsys/pkg/FR-1998-11-20/pdf/98-31039.pdf)

And it is described in the DFARS  at 215.304

 That was the Federal Register notice for the Interim rule with comment period The Final rule was adopted without change.

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1 hour ago, Vern Edwards said:

Is there any reason why an agency cannot comply with the DFARS requirement by evaluating the extent of participation on an acceptable/unacceptable basis?

No. The use of acceptable/unacceptable is expressly permitted in the DoD Source Selection Procedures. However, that's not the issue. The issue is whether adopting a policy of making the small business participation plan binding would trigger the rulemaking requirements of 41 USC 1707. Small businesses like Carl would probably say it does. He's probably had to miss a few rodeos because of the additional administrative burden.

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25 minutes ago, joel hoffman said:

1. The fed register notice did state that the information in the plan will be incorporated into the subcontracting plan ( large business) which is to be made part of the contract  Thus,   no conflict with 41 USC 1707.

Is this what you are referring to?

Quote

When an evaluation includes the factor in paragraph (c)(i)(B)(1) of this section, the small businesses, historically black colleges or universities and minority institutions, and women-owned small businesses considered in the evaluation shall be listed in any subcontracting plan submitted pursuant to FAR 52.219–9 to facilitate compliance with 252.219– 7003(g).

 

26 minutes ago, joel hoffman said:

2. The fed reg notice also covers the actual prep, submission and evaluation of the plan. No conflict with the Statute.

Which statute?

27 minutes ago, joel hoffman said:

3. How about somebody advising what significant administration and cost impact is involved with incorporating the info in the plan into the subsequent contract with small business?

@C Culham What has your experience been?

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18 hours ago, Don Mansfield said:

 

19 hours ago, joel hoffman said:

1. The fed register notice did state that the information in the plan will be incorporated into the subcontracting plan ( large business) which is to be made part of the contract  Thus,   no conflict with 41 USC 1707.

Is this what you are referring to?

Quote

When an evaluation includes the factor in paragraph (c)(i)(B)(1) of this section, the small businesses, historically black colleges or universities and minority institutions, and women-owned small businesses considered in the evaluation shall be listed in any subcontracting plan submitted pursuant to FAR 52.219–9 to facilitate compliance with 252.219– 7003(g).

Joel: Yes.  I think that it is also mentioned in Part 19 or 219.  

19 hours ago, joel hoffman said:

2. The fed reg notice also covers the actual prep, submission and evaluation of the plan. No conflict with the Statute.

Which statute?

 

41 USC 1707.   Sorry. I was running late for lunch.  Yes, what I meant is that the prep, submission and evaluation of the small business participation plan was publicized per the requirements of 41 USC 1707.  Any administrative and cost burden for the rule making process for those activities would be associated with that process.

That leaves the question of what significant additional administrative or cost impact would likely result from the government incorporating the plan into a contract with other than a large business. Thus, no subcontracting plan involved.

The small business contractor would have to award and administer subcontracts for the work that it identified in its utilization plan regardless of its inclusion in the contract or not . 

If the contractor had proposed enforceable commitments to identified firms  in the plan, what is the significant additional burden due to it being in the contract?

If the contractor didn’t identify firms or include enforceable commitments , then what is the significant additional burden?

Contract clause 52.219-8 is already included in contracts with small businesses. So any activities associated with good faith compliance with the -8 clause should not be attributed to “incorporating” the small business utilization plan. 

I see the practical downside to the contractor as being expected to deliver what it proposed and supposedly priced to win the award. Bid shopping is thus discouraged. It would take a “bolden” contractor to complain that it’s impact was that it had to do what it Proposed to do. 

In my opinion, which may be wrong, the actual incorporation has little impact. The more significant impact is having to produce and submit the utilization plan with the contract proposal. That’s probably what people are most aggravated about. 

And - in my opinion, bid shopping is sleazy, so I don’t give a wit about the impact of reducing, impeding or preventing a prime from bid shopping. 

Carl...what is the significant additional administrative or cost burden after award due to the incorporation of a small business [Edit: “participation” not “utilization”] plan that was submitted with the proposal. By additional, I mean in comparison to otherwise required contractual duties and activities. 

[EDIT: small business participation includes self-performance by small business primes or SB joint venture members. The SB prime may include its own participation in contract performance.]

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17 minutes ago, joel hoffman said:

1. The fed register notice did state that the information in the plan will be incorporated into the subcontracting plan ( large business) which is to be made part of the contract  Thus,   no conflict with 41 USC 1707.

I don't think it says that exactly, but that's ok. If the subcontracting plan reflected what was in the small business participation plan, what would be the reason for incorporating the small business participation plan?

23 minutes ago, joel hoffman said:

That leaves the question of what significant additional administrative or cost impact would likely result from the government incorporating the plan into a contract with other than a large business. Thus, no subcontracting plan involved.

It may also have an effect on large businesses, depending on what the contract required. For example, the contractor need only make a good faith effort to comply with the subcontracting plan under FAR 52.219-9. Some contracts require that the contractor actually achieve what was proposed in their small business participation plan, good faith effort notwithstanding.

32 minutes ago, joel hoffman said:

If the contractor had proposed enforceable commitments to identified firms  in the plan, what is the significant additional burden due to it being in the contract?

If the contractor didn’t identify firms or include enforceable commitments , then what is the significant additional burden?

I don't know. I can only speculate. When I asked contractors what they thought, they said it was a big deal. I'm hoping some join this thread to share their experience.

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Guest Vern Edwards
13 minutes ago, Don Mansfield said:

If the subcontracting plan reflected what was in the small business participation plan, what would be the reason for incorporating the small business participation plan?

I can find nothing in DFARS 215.304(c)(i) that says anything about a small business participation PLAN. The word PLAN is used only in connection with the small business subcontracting plan required by FAR 52.219-9. The regulation mentions "proposals" for small business participation, which are to be separate from the subcontracting plans required by FAR 52.219-9.

This thread is based on a false premise.

And Don, if you're going to refer to a Federal Register entry, you should cite the entry. Did I miss it?

 

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21 hours ago, Don Mansfield said:
22 hours ago, joel hoffman said:

1. The fed register notice did state that the information in the plan will be incorporated into the subcontracting plan ( large business) which is to be made part of the contract  Thus,   no conflict with 41 USC 1707.

I don't think it says that exactly, but that's ok. If the subcontracting plan reflected what was in the small business participation plan, what would be the reason for incorporating the small business participation plan?

22 hours ago, joel hoffman said:

That leaves the question of what significant additional administrative or cost impact would likely result from the government incorporating the plan into a contract with other than a large business. Thus, no subcontracting plan involved.

 It may also have an effect on large businesses, depending on what the contract required. For example, the contractor need only make a good faith effort to comply with the subcontracting plan under FAR 52.219-9. Some contracts require that the contractor actually achieve what was proposed in their small business participation plan, good faith effort notwithstanding.

22 hours ago, joel hoffman said:

If the contractor had proposed enforceable commitments to identified firms  in the plan, what is the significant additional burden due to it being in the contract?

If the contractor didn’t identify firms or include enforceable commitments , then what is the significant additional burden?

I don't know. I can only speculate. When I asked contractors what they thought, they said it was a big deal. I'm hoping some join this thread to share their experience.

Don,

1. The small business utilization[EDIT: participation] plan would only be separately incorporated in contracts without a small business subcontracting plan. It’s already necessary to incorporate it into the subcontracting plan. My point is that the industry had the opportunity to review and comment, per 41 USC 1707, on the requirement to incorporate it in the subcontracting plan. 

2. Whatever effect it may also have on large business to incorporate the utilization [participation] plan information was covered in the 20 Sep 1998  Interim publication of the proposed rule with request for comment. As I said, the public was properly notified of the proposed requirement to include it in the subcontracting plan. Therefore, 41 USC 1707 has been considered .

Im sorry that I can’t seem to get this point across. Your point is that the impacts of incorporating the utilization [edit: participation] plan in the contract haven’t been considered or allowed comment per 41 USC 1707. Well - they have - for those contracts that will have a subcontracting plan incorporated. 

3. That leaves the question with respect to incorporating it in contracts with small business primes. [EDIT: small business participation includes self-performance by small business primes or SB joint venture members. The SB prime may include its own participation in contract performance.]

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6 minutes ago, Vern Edwards said:

The regulation mentions "proposals" for small business participation, which are to be separate from the subcontracting plans required by FAR 52.219-9.

...which are commonly referred to as Small Business Participation plans. 

https://www.army.mil/article/199388/participation_plans_offer_better_way_to_include_small_businesses 

https://smallbusiness.chron.com/difference-between-small-business-participation-plan-small-business-subcontract-72075.html

6 minutes ago, Vern Edwards said:

This thread is based on a false premise.

No, you just don't understand.

10 minutes ago, Vern Edwards said:

And Don, if you're going to refer to a Federal Register entry, you should cite the entry. Did I miss it?

I didn't cite a Federal Register entry--joel did and provided a link.

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18 minutes ago, Don Mansfield said:

...I didn't cite a Federal Register entry--joel did and provided a link.

And Don provided the Fed Register Entry in a quote of one of my early posts.

Vern, I added the link again, above a little while ago in response to your request to Don. Sorry, Vern, I was late for a luncheon appointment and didn’t have time to search for the post, copy it, go to page 2 and paste it into my response at the time.  You may have noticed the typos in my response because of my limitations with STUPID Siri or stupid voice text or stupid me...

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4 minutes ago, joel hoffman said:

1. The small business utilization plan would only be separately incorporated in contracts without a small business subcontracting plan. It’s already necessary to incorporate it into the subcontracting plan. My point is that the industry had the opportunity to review and comment, per 41 USC 1707, on the requirement to incorporate it in the subcontracting plan. 

That's not always happening in practice. Some contracts require compliance with the small business subcontracting plan pursuant to FAR 52.219-9 and a small business participation plan (which I think you are calling a small business utilization plan). Under FAR 52.219-9, the contractor has to make a good faith effort to comply with its subcontracting plan. On the other hand, the amounts proposed in the small business participation plan become contract requirements, good faith effort notwithstanding. The public had the opportunity to review and comment on the former, but not the latter. If agencies merely incorporated the amounts proposed in the small business participation plan in their subcontracting plans, there would be no issue regarding 41 USC 1707.

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Guest Vern Edwards
22 minutes ago, Don Mansfield said:

...which are commonly referred to as Small Business Participation plans. 

https://www.army.mil/article/199388/participation_plans_offer_better_way_to_include_small_businesses 

https://smallbusiness.chron.com/difference-between-small-business-participation-plan-small-business-subcontract-72075.html

No, you just don't understand.

I didn't cite a Federal Register entry--joel did and provided a link.

@Don Mansfield I understand perfectly, but "commonly referred to," what's that? Have you actually scoped the problem? Just because some agencies decide to call for a small business participation plan, that doesn't mean that there is a problem, much less a general problem. I know of no restriction on what agencies can ask for in proposals.

How about:

  • A personnel management plan?
  • A QA plan.
  • A safety plan.
  • A program or project management plan.
  • A disaster preparedness plan.
  • A system test plan. 

And so on.

The demand for plans of various kinds in proposals has been going on for decades, since long before you worked for the government. It's not wise, in my opinion, but as far as I know it's not illegal. 

And if you ask for a plan, and choose someone on the basis of the plan, why not make the plan contractually binding? Again, it's not wise, but it's not illegal.

As for evaluating small business participation on an acceptable/unacceptable basis, you and Joel have expressed reservations, but neither of you has made an argument about your cause for hesitation. I can find nothing to prohibit that practice. The National Science Foundation appears to have been evaluating that factor in that way for some time. See e.g., Frontline Healthcare Workers Safety Foundation, Ltd., B-402380, 2010 COD ¶ 91. I see nothing in DFARS that expressly prohibits such an evaluation of that factor.

It should be clear that DFARS does not require a "plan." All it requires is a proposal about participation. And why would it be illegal to include part of a proposal in a contract?

As I said, this thread is based on a false premise.

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Guest Vern Edwards
6 minutes ago, Don Mansfield said:

Which is what?

That the DFARS requires COs to obtain small business participation plans.

That asking for small business participation plans is improper.

That it is improper to incorporate them into contracts.

Those are the premises that underly your enquiry. Your poll is designed to see if others agree with you.

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Guest Vern Edwards
9 minutes ago, Don Mansfield said:

Is that a fact?

Is what a fact? That that's your premise and that that's the purpose of your poll? I believe those are facts. And I believe those premises are false.

Am I wrong? If so, sort me out.

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1 minute ago, Vern Edwards said:

Is what a fact? That that's your premise and that that's the purpose of your poll? I believe those are facts.

Am I wrong? If so, sort me out.

No, those are not facts. Those are your conclusions. You don't know what my premise is or the purpose of my poll. You seem to think you do, though. 

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Guest Vern Edwards
44 minutes ago, Don Mansfield said:

No, those are not facts. Those are your conclusions. You don't know what my premise is or the purpose of my poll. You seem to think you do, though. 

Yes, I do think that. If I'm wrong it's up to you to straighten me out. If you don't want to do that, then you won't change my mind.

Now, at this point we're not getting anywhere. Yes it is. No it's not. Yes it is. That kind of thing is out of a Bugs Bunny cartoon. I'm perfectly willing for people to respond to your poll if that's all you want. I've already said what I think about that, and there's nothing to be gained by repeating myself.

The DFARS calls for proposals of small business participation. Calling them plans doesn't change what they are. That's just poor usage, which is common in our business. Proposals have OMB approval under the Paperwork Reduction Act, 9000-0037. I know of nothing that prohibits incorporating a proposal into a contract. I see no point in the poll, but if people want to respond to a vague question based on a false premise, that's their business.

Good night and good luck.

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1 hour ago, Vern Edwards said:

@Don Mansfield I understand perfectly, but "commonly referred to," what's that? Have you actually scoped the problem? Just because some agencies decide to call for a small business participation plan, that doesn't mean that there is a problem, much less a general problem. I know of no restriction on what agencies can ask for in proposals.

How about:

  • A personnel management plan?
  • A QA plan.
  • A safety plan.
  • A program or project management plan.
  • A disaster preparedness plan.
  • A system test plan. 

And so on.

The demand for plans of various kinds in proposals has been going on for decades, since long before you worked for the government. It's not wise, in my opinion, but as far as I know it's not illegal. 

And if you ask for a plan, and choose someone on the basis of the plan, why not make the plan contractually binding? Again, it's not wise, but it's not illegal.

As for evaluating small business participation on an acceptable/unacceptable basis, you and Joel have expressed reservations, but neither of you has made an argument about your cause for hesitation. I can find nothing to prohibit that practice. The National Science Foundation appears to have been evaluating that factor in that way for some time. See e.g., Frontline Healthcare Workers Safety Foundation, Ltd., B-402380, 2010 COD ¶ 91. I see nothing in DFARS that expressly prohibits such an evaluation of that factor.

It should be clear that DFARS does not require a "plan." All it requires is a proposal about participation. And why would it be illegal to include part of a proposal in a contract?

As I said, this thread is based on a false premise.

Vern, I did say that using go/no-go (acceptable/unacceptable) evaluation criteria would be problematic. This was because the DFARS language in 15.304 (c)(1) describing “examples of evaluation factors” (which has been moved to the  PGI at 15.304(c)(I)(A),  appears to use some comparative language. I doubt that these would rise to the level of individual “factors” in real source selection plans. They are evaluation criteria.  More sloppy wording. 

Under a “factor” for “the extent of commitment to use such firms” (those which are specifically identified?) it says “(for example, enforceable commitments are to be weighted more heavily than non-enforceable ones)”;

 “the complexity and variety of the work small firms are to perform”;

“the realism of the proposal”;

“the extent of participation of such firms in terms of the value of the total acquisition”;

“the extent to which such firms are specifically identified in proposals” (note the plural word  “proposals”, which may mean something or may just be sloppy).

 

The word “extent” refers to "the range over which something extends" in one definition of extent in Merriam Webster on-line Dictionary. 

 

So I said problematic -that it is open to question or debate.  Not categorically prohibited but it would seem to more naturally fit a comparative assessment. 

Furthermore, the whole thing is wishy washy because they are referred to as  “examples” per DFARS  and PGI 215.304 (c)(I)(a) says ”Evaluation factors may include-“

 

Does the National Science Foundation use the DFARS for its evaluation ?  Note that this is a DoD requirement.

 

 I used the term “small business participation plan” because it was in the title of the thread plus I didn’t want to write “extent of participation of small businesses in the performance of the contract” every time.  I hate to type - especially on a smart screen. Sorry anyway.

I am rarely near a computer screen these days. 🙄

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5 minutes ago, Vern Edwards said:

Yes, I do think I do. If I'm wrong it's up to you to tell us what your premises are. If you don't want to do that, then you won't change my mind

Is that how it works? Your assertions are true unless I prove them false? Quod grātīs asseritur, grātīs negātur

BTW, "proposals" are not covered under OMB Control No. 9000-0037. The OMB clearance is for "Presolicitation Notice and Response." See https://www.gpo.gov/fdsys/pkg/FR-2017-08-23/pdf/2017-17830.pdf#page=1 

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2 hours ago, Vern Edwards said:

Have you actually scoped the problem? Just because some agencies decide to call for a small business participation plan, that doesn't mean that there is a problem, much less a general problem.

What's your point? I didn't say there was a problem.

2 hours ago, Vern Edwards said:

How about:

  • A personnel management plan?
  • A QA plan.
  • A safety plan.
  • A program or project management plan.
  • A disaster preparedness plan.
  • A system test plan. 

And so on.

What about them? Nobody is arguing that it's illegal to incorporate things in proposals in the contract. The issue is whether a policy of binding offerors, including small business offerors, to their proposed small business participation should be subject to requirements of 41 USC 1707. Incorporation of a plan is just a technique. Some activities use clauses, others put requirements in the statement of work.

2 hours ago, Vern Edwards said:

As for evaluating small business participation on an acceptable/unacceptable basis, you and Joel have expressed reservations, but neither of you has made an argument about your cause for hesitation.

No, I didn't. I said the DoD Source Selection Guide expressly permits it. I have no reservations.

2 hours ago, Vern Edwards said:

The DFARS calls for proposals of small business participation. Calling them plans doesn't change what they are. That's just poor usage, which is common in our business.

I don't see your point. To comply with DFARS 215.304, it has become common practice by DoD activities to request "small business participation plans." When they request them, they receive them. There's a lexicon that exists outside of the regulations. Agencies and their contractors use words and terms that they both understand, despite these terms not being used in the regulations. Sometimes these words and terms end up in regulations.

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Guest Vern Edwards
10 hours ago, Don Mansfield said:

BTW, "proposals" are not covered under OMB Control No. 9000-0037.

All I know is that according to FAR 1.106, OMB Control No. 9000-0037 covers FAR Subpart 15.2, Solicitation and Receipt of Proposals and Information. If the FAR is in error, or if I have misread it, then I do not know of any control number for proposals.

10 hours ago, Don Mansfield said:

Is that how it works? Your assertions are true unless I prove them false?

My assertions are true for me, and for anyone who agrees with me, until you prove to me and those others that they're wrong.

My point: DFARS 215.304(c)(i) requires DOD agencies to evaluate proposed small business participation. In order to do that, agencies must ask prospective offerors to propose small business participation, which requires offerors to prepare and submit information, call it what you will, "plans" or whatever.

The regulations says, in part:

Quote

The contracting officer shall evaluate the extent to which offerors identify and commit to small business performance of the contract, whether as a joint venture, teaming arrangement, or subcontractor.

Once an agency has chosen a contractor in part because of its proposed small business participation, it makes perfectly sound business sense for them to bind the awardee to its proposal. To do otherwise makes the "proposal" and the evaluation a sham. I think a judge might laugh at the suggestion that something that an offeror committed to do should not be included in the contract.

The rule in DFARS 215.304(c)(i) was published, and while it is badly written and is not explicit in terms of incorporating proposed participation into resultant contracts, it seems to me that the implications are clear. Whether the policy has, in fact, a significant effect and impact on companies is anybody's guess and likely depends on specifics that you did not provide.

In my opinion, a yes or no answer to your first and third questions would be foolish. More information is needed and some assumptions must be made or given and shared with all prospective respondents.

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