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Someone asked a similar a similar question a few years ago, and it got one somewhat cautious response. I'd like to ask it again more directly and see what anyone thinks. Over the years, I have seen numerous prime contractors' standard subcontract terms for commercial items, and many of them include 52.219-9, the requirement to have a small business subcontracting plan. I believe that a subcontracting plan is not required at all in subcontracts for commercial items. My opinion is based on the language in 52.219-9(j), which states: "Subcontracting plans are not required from subcontractors when the prime contract contains the clause at 52.212-5, Contract Terms and Conditions Required to Implement Statutes or Executive Orders-Commercial Items, or when the subcontractor provides a commercial item subject to the clause at 52.244-6, Subcontracts for Commercial Items, under a prime contract." Since all contracts should have one or the other of those clauses, a subcontractor providing a commercial item is not required to have a plan. Looking at it another way, the only subcontract required to have plan is under a non-commercial prime (which includes 52.244-6) and the subcontract is for non-commercial items. There are obviously a lot of people who think differently, because several large primes (who shall remain nameless) include 52.219-9 in their commercial item subcontract terms. Their reason is that FAR 19-704(a)(9) states that a subcontract plan shall include "... assurances that the offeror ... will require all subcontractors (except small business concerns) that receive subcontracts in excess of $750,000 ... to adopt a plan that complies with the requirements of the clause at 52.219-9, Small Business Subcontracting Plan." Also 52.219-9(d)(9), which states that an offeror's plan will include "Assurances that the Offeror ... will require all subcontractors (except small business concerns) that receive subcontracts in excess of the applicable threshold specified in FAR 19.702(a) on the date of subcontract award, with further subcontracting possibilities to adopt a subcontracting plan that complies with the requirements of this clause." Sure looks like conflicting instructions, but here are my thoughts: first, ignore the FAR text at 19-704. It doesn't go in a prime contract; only 52.219-9 does. Next, read 52.219-9(d)(9) and (j) together: (d)(9) says to require a plan of all subcontractors, but (j) narrows it by saying 'but not from subcontracts for commercial items.' So - is a subcontracting plan required from a commercial item subcontractor? -
Hi, We are a startup with a novel product in which the USG has great interest. We have been in talks with one prime contractor. We need revenue asap. Wondering if it would be a bad idea to approach its competitors with our product. Is that frowned upon or expected? Thanks!
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I believe this has been asked before but, need some clarity on the issue: We have a task order against a GWAC to a large business Client would like us to direct some upcoming work to a specific small business subcontractor under a separate line item on the contract. I do not believe there is anything in the FAR that specifically prohibits this or is there? If we were to go that route, what would be the mechanism to get this accomplished? If prime does not agree to the work being directed to the specific sub, is there anything the Government can do?
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Hello, I am having trouble justifying a response with a cited intelligible answer to the following situation: What limits a small business from subcontracting out a majority of the work to a large business for an acquisition under $150K? If I received a quote that outlines that the large business will do 99% of the work do I have anything to cite to throw them out? Procurement information: Under FAR Part 13 Dollar value is estimated below $150k Total set aside for small business FAR 52.219-14 was not included in the solicitation as the acquisition is estimated below $150k. FAR 52.219-6 was checked in the solicitation. -
Good Morning, This is my first post, we are a small IT firm and may have our first subcontract using CPFF where we are the Prime. I was wondering if there are standard forms we should be asking our sub for. This is what I know that I can ask for : 1. DCAA certified rates 2. Letter of both an approved purchasing/accounting systems. 3. Organization Conflit form 4. Reps and Certs - does anywhere have a template that covers everything - do we need one ? 5. Flowdown Clauses ? Any help would be appreciated and welcome since I am not sure what I need to have ready Jennifer Caruso
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Has anyone seen any articles or are aware of what regulations govern a private company subcontracting to a Government agency? For example, can a private company flow down contract clauses to a Government subcontractor? My assumption is no however I'm looking for something to cite.
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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...
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I wasn’t sure where to post this question, but thought this was a good place to start. First, let me describe our situation. · We are a small business with a CPFF contract · All staff members are at the Client site · Contract requires Client approval of all new personnel (sometimes done via resume review – sometimes direct interview of candidate) · All positions require a security clearance and fairly unique skills (i.e., difficult to fill positions) · Contract includes a Consent to Subcontract clause · We have several large business subcontractors · We have had difficulty filling several positions and our large biz subs have failed also Since we (and our subs) cannot fill open positions, we have considered using a staffing agency. A typical headhunter fee is 20% of the first year salary. Paying $20K for a $100K employee is not affordable – much less when you multiply that times 4 or 5 positions. Several staffing companies have offered an alternative approach which they assure us they do for other government contractors. They will employ the candidate for 6-9 months at a certain rate after which the candidate comes to work for our company. During that 6-9 month period, the company earns their fee through the hourly rate – meaning the fee is absorbed as a direct cost, not indirect. The problem is that the new hire is not our employee. Our invoices clearly indicate each employee by name and employer (with appropriate indirects and fees), so the individual’s employer would be clearly visible to the client. We have no desire to do anything underhanded or deceptive - we just need a way to fill these positions. Headhunters have huge databases and recruiting methods that even our large business subs cannot duplicate. So, the question is – can we use a staffing agency in our situation, and if so, how? An obvious answer is to add them as a subcontractor. But that is a process that takes a significant amount of time and effort (and is discouraged by our client – especially approaching the end of the fiscal year). The staffing agencies say they “do this often” with other companies without being considered a subcontractor. They use a Professional Services Agreement (PSA) or Master Services Agreement (MSA) rather than a full-blown subcontract. But I suspect they are filling positions that may be internal company positions or roles on Fixed Price contracts or other contracts that do not require subcontracting consent. There are employees and subcons. Is there a third category that can be utilized in the environment I describe above?
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Hey everyone! Background: I'm fairly new to the contracting world and working in a recently-large prime contractor in the healthcare sector. I've been helping prepare ourselves for our first bid season as a Large contractor and now under the pressure of compliance with FAR 52,219-8 & -9, etc. For a while I was under the impression that our small business subcontracting goals were to subcontract out roughly 30% of the total contract dollars to smalls...I am recently been corrected (and now it I see my mistake everywhere) that we are only under an obligation that 30% of our dollars subcontracted must go to smalls. First off, my new understanding is correct, right? Goals are in terms of total subcontracting dollars? (Ie. $1,000,000 contract, $100,000 subcontracted, $30,000 to smalls). Second, do any of you have any general practice tips as far as what percentages of TOTAL dollars should be subcontracted? I know that is extremely tough to even ballpark given the various subject matter and scope of Prime contracts...but wasn't sure if there was sort of a "floor" that you want to avoid, for example, subbing less than 10% of your total dollars out if you want to keep the SBA away. Thanks for your time! Like I said, I'm new to this whole thing (as is my company) so any help is appreciated. nebraska
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Hi, We have a multiple award IDIQ that we will be preparing a solicitation under (someone told me these arent called RFTOPs anymore, is this true?). Our technical team would like the prime to partner with a certain specific organization as a sub. This organization would likely be eligible for sole sourcing according to the the FAR or our assistance guidelines if we were contracting with them directly. I suggested we do that, but the technical team feels that the management burden of dealing with this sub would be too much for their office to handle. I just wanted to get some opinions on whether this is possible or if there is a specific way to structure this that would make it feasible. Instinctually, I feel that this violates the Fair Opportunity procedures and the rules of competition. The only thing in the FAR that was remotely on point that I could find was FAR 44.203 (B )(3) does not allow any subcontracts that obligate the CO to deal directly with the contractor. Any guidance would be greatly appreciated.
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Good Day All: I have two questions both of which are related to subcontracting. I am inquiring about when a subcontracting plan is required. Is it necessary for a subcontracting plan to be included if Offeror is taking credit for other entity's projects (ie. relevant experience project) or will meaningful relationship letters will suffice? Also for a small business set aside where the small business is the prime contractor what are the requirement for the subcontracting plan?
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Can a solicitation prohibit a prime from subcontracting the work? Specific example: an agency needs to have a contractor "backup" government data on an IT services contract. In the solicitation, can the agency put language restricting the "backup" to the prime, meaning the prime contractor MUST do this themselves, and not utilize a subcontractor? The agency's concern: if a prime is allowed to make a subcontractor do the backup, if the prime and the sub get into a dispute, and then the sub refuses to give the backup data to the government agency, then the agency has no privity of contract with the sub. So the agency would have no contractual leverage to force the sub to cooperate. A colleague of mine believes such a prohibition in the solicitation would be viewed as overly restrictive and cannot be done. I disagree. I believe the agency's concern is reasonable. The concerns are a reasonable basis for the restriction. Thoughts?
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Our SBA just notified us that: "If the contract is modified and the dollar value goes up or down the subcontracting plan goals need to be renegotiate to reflect the dollar change and the percentages that may be effected do the change. This will also be reflected in the eSRS reports." This doesn't make sense to me. My interpretation of FAR 19.705-2 and 19.702 leads me to believe that it must meet a certain dollar threshold and subcontract opportunites must exist. That means we would be negotiating the SB goal dollars on a $3k mod. Background on our contract, $232M CPIF. Am I missing something or is the SBA right?
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I am trying to confirm who gets credit for the subcontracting goaling achievements on contracts - the funding or the procuring agency. In FPDS it is spelled out that the funding agency receives the socioeconomic credit for the prime contract small business award. I do not see similar documentation in eSRS.gov, nor in the SBA scorecard methodology. Does anyone know of any official policy documentation that confirms that the funding agency receives the subcontracting credit?
