US Army: SDDCWorkshopMarch2005

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Surface Deployment andDistribution Command

Subcontracting Workshop

Small Business AdministrationSmall Business Administration

March 8, 2005March 8, 2005



Subcontracting ProgramSubcontracting Program

What’s New?What’s New?

eSRS – a web-based, electronic reporting systemthat will replace the SF-294 & SF-295

SBA’s new regulation on subcontractingaddressing “good-faith effort” (13 CFR 125.3)

Other pending regulations

– Indian tribes and Alaska Native Corporations (ANCs)

– Federal Acquisition Regulation, subpart 19.7



What Else is New?What Else is New?

An electronic 8(a) and SDB application is now

available at the following web site:

https://sba8a.symplicity.com/applicants/guide

Your suppliers may now apply for 8(a) and

SDB certification on-line with a much fasterturn-around than ever before.



Mandatory Subcontracting Goals Mandatory Subcontracting Goals(as clarified by Federal Register Notice(as clarified by Federal Register Notice

published on January 14, 2002) published on January 14, 2002)

Small Business (SB)

Small Disadvantaged Business (SDB)Women-Owned Small Business (WOSB)

HUBZone Small Business (HUBZone SB)Veteran-Owned Small Business (VOSB)

Service-disabled VOSB



Statutory Subcontracting GoalsStatutory Subcontracting Goals

Small Business Act: Section 15(g)Small Business Act: Section 15(g)

Small Business (SB) - negotiable

Small Disadvantaged Business (SDB) - 5%

Women-Owned Small Business (WOSB) - 5%

HUBZone Small Business - 3%

Veteran-Owned Small Business - negotiableService-Disabled Veteran-Owned SB - 3%



Determining the Need for a Plan Determining the Need for a Plan FAR 19.705 FAR 19.705-- 2 2

Dollar Threshold:

– contract or contract mod is expected to exceed

$500,000 ($1,000,000 for construction)Subcontracting possibilities:

– contract appears to offer subcontractingpossibilities



Determining the Need for a Plan Determining the Need for a Plan(continued)(continued)

Subcontracting plans are not required:– From small business concerns

– For personal services contracts

– For contracts or mods that will be performed

entirely outside of the U.S.

– For contracts that do not contain 52.219-8(e.g., contracts awarded prior to PL 95-507)



Types of PlansTypes of Plans

Individual Plan - FAR 19.704(a)

– requires a separate plan for each contract

Master Plan - FAR 19.704(b)

– contains no goals

Commercial Plan - FAR 19.704(d)

– usually company-wide and based on offeror’sfiscal year (not the Government’s fiscal year)



Responsibilities of the Responsibilities of the

Contracting OfficerContracting Officer

19.705-1: General Support19.705-2: Determining the Need for a Plan

19.705-3: Preparing the Solicitation

19.705-4: Reviewing the Subcontracting Plan

19.705-5: Awards involving Sub Plans

19.705-6: Post-award Responsibilities

19.705-7: Liquidated Damages



Responsibilities of the Responsibilities of the

Administrative Contracting Officer Administrative Contracting Officer

19.706:

Assist in evaluating subcontracting plans

Monitor evaluate, and document contractor

performance under the clause at 52.219-9 and any

subcontracting plan included in the contract

Support the contracting officer by furnishinginformation and notice, as appropriate



Elements of a Subcontracting Plan Elements of a Subcontracting PlanA subcontracting plan must contain goals

expressed in both dollars and percentages.Other required elements are set forth in the

FAR at subpart 19.704 and in the clause at52.219-9.

SBA provides a Fact Sheet on Subcontracting

that explains goals, flow-down, and reporting

requirements.



Subcontracting FlowSubcontracting Flow-- Down Down

A subcontracting plan must include a statementthat the prime contractor will require all

subcontractors (except small businesses) that

receive subcontracts in excess of $500,000($1 million in construction) to adopt a

subcontracting plan that complies with therequirements of FAR clause 52.219-9.



Subcontracting FlowSubcontracting Flow-- Down Down

( ( con’t con’t ) )

The FAR also requires prime contractors toflow down the “Best Effort” clause (FAR

52.219-8) for subcontracts over the Simplified

Acquisition Threshold (currently $100,000).

This particular requirement applies to small

businesses as well as to large businesses.



SBA’s Role in SubcontractingSBA’s Role in Subcontracting

Types of ReviewsTypes of Reviews

Pre-Award Subcontracting Plan Reviews

– SBA’s PCRs review subcontracting plans

prior to contract award (advisory)

Post-Award Compliance Reviews

– SBA’s CMRs monitor goal achievement

after contract award



What SBA Can and Cannot DoWhat SBA Can and Cannot Do

SBA Can:

– Conduct needs assessments and

compliance reviews

SBA Cannot:

– Prescribe the amount of subcontracting

– Require the prime contractor to use a

particular small business



Elements of a Compliance Review Elements of a Compliance Review

Validation of the SF-294 & SF-295

Five-Year Trend Analysis

Overall Evaluation of SB Program

Sampling of Contracts Containing Plans

Sampling of PO’s to Large Business

Follow-up on Prior SBA Recommendations

Follow-up on SBA Referrals



SBA’s RatingsSBA’s RatingsA - Outstanding ( formerly “Excellent”)

B - Highly Successful ( formerly “Good”)

C - AcceptableD - Marginal

F - Unacceptable



Liquidated Damages Liquidated Damages

When a contractor fails to make a good-

faith effort to comply with a subcontractingplan, Federal law mandates that liquidated

damages be paid to the Government.

The amount of damages shall be equal to

the actual dollar amount by which the

contractor failed to achieve each goal.



MOU between SBA and MOU between SBA and DoD DoD

In May 2003, the SBA and the Defense Contract

Management Agency (DCMA) signed a

Memorandum of Understanding (MOU).

The agreement outlines the procedures for jointcompliance reviews of contractors that have

contracts with both DOD and civilian agencies.

An attachment to the MOU provides the criteria

for rating the contractors.



SBA AwardsSBA Awards

For Small Businesses

– Prime Contractor-of-the-Year– Subcontractor-of-the-Year

For Large Businesses

– Award of Distinction

– Dwight D. Eisenhower Award

– Frances Perkins Vanguard Award



SBA Awards for Large BusinessesSBA Awards for Large Businesses

Award of Distinction

– Company receives an “Outstanding” on a compliance review;their CMR may then nominate them for this award.

Dwight D. Eisenhower Award– Company demonstrates overall excellence; they may now

nominate themselves (changed to self-nomination in 1999).

Frances Perkins Vanguard Award

– Company excels in utilization of women-owned small

business; self-nomination.



Former Reporting Requirements Former Reporting RequirementsSF-294 - Subcontracting Report for

Individual Contracts– semi-annual and upon contract completion

– cumulative from inception of the contract– not required for Commercial Products Plans

SF-295 - Summary Subcontract Report– annual for civilian agencies; semi-annual for DOD

– dollars are reported for only the current year



WebWeb-- Based SF Based SF-- 294 & SF 294 & SF-- 295 295

The system will be called the ElectronicSubcontract Reporting System, or “eSRS.”

We expect the eSRS to be up-and-running this

year, possibly before the end of the 3rd Quarter.

The web site will be www.esrs.gov.

All prime contractors of all Governmentagencies will be required to use this system.



WebWeb-- based Reporting (eSRS) based Reporting (eSRS)

The Government will no longer accept

paper SF-294s and 295s.The eSRS will be part of the Integrated

Acquisition Environment (IAE), whichincludes the CCR and FedBizOpps.

The systems within the IAE will “talk” to

each other, thereby allowing them to import

and export data as needed.




The system will calculate percentagesautomatically and provide an audit trailshowing who entered data or revised it.

It will interface with prime contractors’systems, so that (in most cases) primecontractors can simply download their data

into the eSRS, as opposed to keypunching itinto the system one report at a time.




SBA has been designated the System Steward.The eSRS will offer an on-line Help tool and

most likely a Help Desk fully staffed during

the months when prime contractors are

submitting their reports.



Lower Lower--Tier ReportingTier ReportingThe eSRS will be designed to capture dollars

at lower tiers. However, it may not bepossible to accomplish this with commercial

plans.For prime contractors to receive credit

towards their subcontracting goals, thiswould also require a change to the Federal

Acquisition Regulation (FAR).



WebWeb-- based Reporting ( based Reporting ( eSRSeSRS ) )

SBA’s Commercial Market Representatives

(CMRs) and their counterparts at DCMA

and GSA will advise you when the eSRS is

available for your use.Further information and training

announcements will be provided to you inthe near future.



29

Special Reporting RequirementsSpecial Reporting RequirementsThe “Summary Subcontract Report”

submitted at the end of each year has toinclude a breakout of subcontract awards

to SDBs by 3-digit NAICS code.This will now be submitted in the eSRS at

the end of each year with a menu item onthe data input screen for this purpose.



Special Reporting RequirementSpecial Reporting Requirement

The “Small Disadvantaged Business Participation

Report” (formerly the Optional Form 312) is

required at contract completion for contracts

containing the FAR clause at 52.219-25.This will now be submitted in the eSRS at

contract completion for contracts that containthis requirement.





New Certification Regulations New Certification Regulations

13 CFR 121.410 and 121.41113 CFR 121.410 and 121.411

Until May 2004, if a subcontract was $10,000 orless, the size standard was 500 employees

If the subcontract was over $10,000, the size

standard was determined by the NAICS code of the product or service being provided on thesubcontract.

In May 2004, SBA eliminated this $10,000distinction; from now on, the NAICS code of thesubcontract will determine the size standard,

regardless of the dollar amount.



SDB RecertificationSDB RecertificationSDB certification normally expires after

3 years (8(a) firms have longer)If an SDB applies for recertification

before its certification expires, SBA willallow you to continue to count the firm asan SDB until its application for

recertification has been processed.This is an interim policy pending

publication of a formal regulation.



SBA’s Resources to Help Small SBA’s Resources to Help Small

Businesses Obtain Subcontracts Businesses Obtain Subcontracts

Commercial Market

Representatives (CMRs).

Subcontracting OpportunitiesDirectory

SUB-Net -- Electronic

Bulletin Board for

Subcontracting Opportunities



Recent Enhancements to SUB Recent Enhancements to SUB-- Net NetYou are now able to specify the type of small

business you are seeking (SDB, HUBZone,Woman, Veteran, etc., or “All of the Above”)

Small businesses are now able to searchgeographically by state, in addition to the

existing search features such as NAICS code

and description.















How do I Get to SUB How do I Get to SUB-- Net? Net? From the SBA Home Page, click on “Hot

Items” near the top left-hand corner of thescreen and page down until you see SUB-

Net; or From the CCR Home Page, click on

FedBizOpps near the bottom, then drag

the horizontal scroll bar to the far right

and click on the SUB-Net hyperlink.



Resources to Help Large Businesses Resources to Help Large Businesses

Identify Small Businesses Identify Small Businesses

SBA’s CMRs

The CCR

SUB-Net: A web site for

prime contractors to post

subcontracting opportunities





SBLO HandbookSBLO Handbook

Covers laws, regulations, procedures, forms, andFrequently Asked Questions.

Currently being updated and expanded. (You have

an Advance Copy dated January 2005.)

Can be distributed electronically or in hard copy.

Will be added to SBA’s web site when it iscompleted.



SBA’s Key Internet AddressesSBA’s Key Internet Addresses SBA’s Home Page: www.sba.gov

(includes a link to SUB- Net ) Government Contracting:

www.sba.gov/GC

SDB: www.sba.gov/sdb

HUBZone: www.sba.gov/hubzone

Women: www.womenbiz.gov

– Also www.women-21.gov

Vets: www.sba.gov/VETS/

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