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GSA schedule subcontracting plan and goals


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I cannot find a good source answering the following questions, so would be grateful for anyone's experience?

Contractor is filing a subcontracting plan for a application for a GSA schedule. Contractor is going to be large at the contract level, because contractor is large for the preponderant SIN. Contractor will be under the size standard for other SINs. 

Contractor is required to state a. a percentage of total dollars to be subcontracted b. a percentage of subcontracted dollars to go to small, etc. at the contract level.

 

1.  What should contractor use as the base for estimating total dollars on the subcontract: estimated dollars for all contracts or estimated dollars for SINs for which contractor will be large?

2. I believe contractor will have to report dollars subcontracted at the order level, per SBA changes post November 2017 - if eSRS is fixed so that's possible. Anyone know?

3. Will contractor's achievement of subcontracting goals be measured by percentage subcontracted overall or just by percentage of subcontracted dollars to small, etc, as was the case before November 2-17?

4 The new rule seems to allow COs to establish percentage goals (but not new subcontracting plans) on GSA orders, is that right? Are those for percentage subcontracted of total, or for percentage of subcontracted dollars? Will contractor be liable on its GSA contract for failure to meet the goals on an order, as the goals are not part of a subcontracting plan

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Prime contracts with FAR contract provisions would normally include FAR 52.219-9. This clause controls the Small Business Subcontracting Plan requirements. Is there something in this clause that you can specifically identify as your questions? FYI, Small Business Administration rules relating to such required Plans do not always get immediately incorporated into this clause.  

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yes, 52.219-9 is included in the GSA schedule contract. On a GSA contract, a contractor may be both small and large, depending on the NAICS for the SINs. A contractor is large or small at the contract level depending on the SIN assigned on award. If a contractor has sales in a large SIN, they will be assigned large at the contract level. Issues: a. they have to state a goal for percentage of total revenue they will subcontract. are they measured on that goal? if so,  is it the percentage of all contract revenue or only revenue in SINs where they are large?

Regs seem to say contractor must compute goal as a percentage of all dollars, see below, but it is an unusual situation, where the contractor is both small and large and leads to the illogical result that contractor is arguably required to subcontract on contract where contractor is small:

(d) The Offeror’s subcontracting plan shall include the following:

           (1) Separate goals, expressed in terms of total dollars subcontracted, and as a percentage of total planned subcontracting dollars, for the use of small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns as subcontractors. For individual subcontracting plans, and if required by the Contracting Officer, goals shall also be expressed in terms of percentage of total contract dollars, in addition to the goals expressed as a percentage of total subcontract dollars. The Offeror shall include all subcontracts that contribute to contract performance, and may include a proportionate share of products and services that are normally allocated as indirect costs. In accordance with 43 U.S.C. 1626:

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I have never dealt with the exact situation you present but I have lots of experience regarding subcontracting plans. I would expect the answer to be highly individualized to the specific contracting officer and specific contractor holding the GSA schedule. I would be surprised if it winds up there is one clear and unambiguous answer that applies to your question for all GSA schedule contract holders.

My rationale is as follows:
1. FAR 19.708(b) requires the contracting officer select the basic clause FAR 52.219-9 and any of its Alternates, depending on the situation.

2. Both the approach by FAR 52.219-9 and GSA Manual Section 519-7 seem to provide a wide range of discretion in Contracting Officer acceptance of the contractor submitted plan.

3. My view is that the preferred contractor plan is probably a commercial plan.  Per 52.219-9 (b), "Commercial plan means a subcontracting plan (including goals) that covers the offeror’s fiscal year and that applies to the entire production of commercial items sold by either the entire company or a portion thereof (e.g., division, plant, or product line)."

4. The contractor may choose to include or exclude the "other SIN's" in its subcontracting goals. It may argue that 52.219-9 does not apply to small business concerns and it is a small business for the "other SIN's." Perhaps those "other SIN's" actually are beneficial to include in the plan. The Contracting Officer may accept or not accept the proposed. My view is that FAR 52.219-9 is focused on a plan for all the contract work.     

Edited by Neil Roberts
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A commercial plan would definitely include the small business SINs and every other contract as well. What this contractor wants to do is exclude every contract for which it is technically large from the base for the subcontracting goals. That requires an individual plan.

Yes, the CO has a lot of discretion in establishing the base and the goals. The question is, if the contractor says it will subcontract "x" percent of its total revenues, what is it legally obligated to report as total revenues in eSRS. Or, if contractor says it will provide "x" percent of subcontracted dollars to small businesses, what is it obligated to report as subcontracted dollars, dollars subcontracted on large business SINs, or all dollars subcontracted on the GSA schedule?

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11 hours ago, contractor100 said:

The question is, if the contractor says it will subcontract "x" percent of its total revenues, what is it legally obligated to report as total revenues in eSRS. Or, if contractor says it will provide "x" percent of subcontracted dollars to small businesses, what is it obligated to report as subcontracted dollars, dollars subcontracted on large business SINs, or all dollars subcontracted on the GSA schedule?

I have no current working knowledge of eSRS requirements at this time. As to your question, The view that I alluded to previously is that there is only one contract and it is irrelevant how you classify the contractor's size relationship to SINs in order to exclude and limit the contractor's obligation with respect to certain SINs in the contract. Therefore, total revenues to me would mean all sales under the contract from all customers under all SINs. A different view could be had depending on whether the agreed to plan provided for exclusion of obligation and reporting for certain SINs.   

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