Lesson 5 Subcontracting Requirements During Solicitation and Award

Lesson 5: Subcontracting Requirements During Solicitation and Award 5 -1

Terminal Learning Objective During the Solicitation and Award phase of an acquisition, assist the acquisition team in clearly describing subcontracting requirements of the solicitation, evaluating small business participation and past performance, assessing small business subcontracting plans, and negotiating any subcontracting issues with offerors. Subcontracting 5 -2

Contracting Process for Acquisitions Pre-Solicitation Initial Planning/Form the Team Market Research Solicitation-Award Solicitation - Award Solicitation (RFQ, IFB, RFP) Post-Award Monitor Performance Evaluation Deliverables Define Requirements (PWS, SOW, SOO) Negotiation Acquisition Business Strategy Award Subcontracting Payments Closeouts

Enabling Learning Objectives • Review the solicitation to ensure appropriate subcontracting language, clauses, and evaluation criteria are incorporated. • Develop solicitation language, clauses, and evaluation criteria for a given acquisition. • Support the acquisition team in evaluating small business participation requirements during the source selection process and in assessing the small business subcontracting plan. • Assist the Contracting Officer with developing a negotiation objective for subcontracting with offerors. Subcontracting 5 -4

Section H: Special Contract Requirements • Submit periodic reports on small business utilization in addition to Electronic Subcontracting Reporting System (e. SRS) reports. • Address any other requirements related to small business participation. Subcontracting 5 -5

Section I: Contract Clauses • • • FAR 52. 219 -8, Utilization of Small Business Concerns FAR 52. 219 -9, Small Business Subcontracting Plan FAR 52. 219 -16, Liquidated Damages—Subcontracting Plan FAR 52. 219 -10, Incentive Subcontracting Program DFARS 252. 219 -7003, Small Business Subcontracting Plan (Do. D Contracts) • DFARS 252. 219 -7004, Small Business Subcontracting Plan (Test Program) FAR = Federal Acquisition Regulation DFARS = Defense Federal Acquisition Regulation Supplement Subcontracting 5 -6

Section J: Attachments Small Business Participation Requirements Small Business Subcontracting Reporting Incentive Subcontracting Element Subcontracting PWS/ SOO/ SOW CDRL Award Fee Plan 5 -7

Section L: Instructions, Conditions, and Notices Small Business Subcontracting Plan Section L • Who must submit? • What must be submitted? • Will become part of contract Small Business Participation Commitment Document Past Performance Information Subcontracting 5 -8

Section M: Evaluation Factors for Award Small Business Subcontracting Plan Section M • What will be assessed and evaluated? • How will it be assessed and evaluated? Small Business Participation Commitment Document Past Performance Information Subcontracting 5 -9

5. 1: Review the Uniform Contract Format (UCF) Solicitation Sections SBPs need to be familiar with the solicitation sections that contain subcontracting provisions and clauses Subcontracting 5 -10

Activity 5. 1: Review the Uniform Contract Format (UCF) Solicitation Sections (cont’d. ) Use FAR 15. 204 to review the sections of the UCF and identify the section in which each solicitation excerpt belongs. Subcontracting 5 -11

5. 2: Solicitation Review for Subcontracting Matters When reviewing solicitations that are not set-asides, SBPs need to ensure small business participation is maximized using subcontracting. Subcontracting 5 -12

Activity 5. 2: Solicitation Review 1. Determine who will review Sections H, I, J, L, and M. 2. Use the Solicitation Review Checklist for Subcontracting Matters to review the appropriate section(s). 3. For each item in the checklist, mark “Yes, ” “No, ” or “Not Applicable” (NA). For “No” items, write a recommendation in the Notes column. 4. As a team, prepare a 10 -minute presentation on your findings. Subcontracting 5 -13

Activity 5. 2 Rubric You will use the activity rubric, which identifies desired behaviors, to rate your performance. Desired Behaviors • Use the Solicitation Review Checklist for Subcontracting Matters to review and analyze a solicitation. • If the solicitation does not comply with all checklist items, recommend ways to improve the solicitation. • Collaborate effectively with your team to consolidate your recommendations. Subcontracting 5 -14

5. 3: Develop Solicitation Language, Clauses, and Evaluation Criteria SBPs should proactively seek to draft the parts of the solicitation related to small business. Subontracting 5 -15

Activity 5. 3: Develop Solicitation Language, Clauses, and Evaluation Criteria For the given scenario, draft the small business subcontracting parts of sections H, L, and M of the solicitation. Subcontracting 5 -16

Activity 5. 3 Rubric You will use the activity rubric, which identifies desired behaviors, to rate your performance. Desired Behaviors • Carefully analyze the given scenario. • Include the appropriate information for each section. • Draft language that is easily understood by potential offerors. Subcontracting 5 -17

SBP Role in Source Selection (Evaluation) Assist with: • Evaluating small business participation (using the Small Business Participation Commitment Document [SBPCD]) • Evaluating small business past performance • Assessing proposed small business subcontracting plans Subcontracting 5 -18

Evaluating SBPCD The SBPCD is evaluated as : • A separate small business participation evaluation factor (preferred method) • A subfactor under the technical factor • A consideration within the evaluation of a technical subfactor Subcontracting 5 -19

SBPCD Considerations Identify specific small business subcontractors. Identify what subcontractors will provide. Provide enforceable commitments. Is the amount of subcontracting realistic? Subcontracting 5 -20

Preparation for Tomorrow Read the RFP Sections L, & M excerpts to prepare for graded activity 5. 4 Evaluation of Small Business Participation Commit Documents 4 -35

5. 4: Evaluation of SBPCDs An SBPCD should be required: • If the solicitation contains the clause at 52. 219 -9 and it is a competitive, negotiated acquisition other than lowest price technically acceptable (LPTA), or if it is a consolidated or bundled contract • For all offerors, including small businesses Subcontracting 5 -22

Activity 5. 4: Evaluation of SBPCDs Evaluate two SBPCD submissions in accordance with (IAW) the Section M evaluation criteria: • ABC Company • ETD Company Subcontracting 5 -23

Activity 5. 4 Key Points • Select evaluation criteria that are appropriate for the acquisition. • Make Sections L and M as specific as possible so that ratings are less subjective and variable. • Small business subcontracting plans should not be used to evaluate small business participation because they are not required of all offerors—they are assessed as acceptable or should be negotiated. • SBPCDs ask for more in-depth information than small business subcontracting plans. Subcontracting 5 -24

Activity 5. 4 Key Points (cont’d. ) • Define the structure of the SBPCD in the solicitation and set an MQR if appropriate. • Incorporate small business participation requirements into the contract so that they are legally enforceable. • For solicitations involving consolidation or bundling, structure the evaluation criteria to give offers from small businesses the highest ratings. • Solicitations differ in their criteria, so carefully follow the criteria. Subcontracting 5 -25

Small Business Past Performance Evaluating past performance of complying with clauses at FAR 52. 219 -8, Utilization of Small Business Concerns and FAR 52. 219 -9 Small Business Subcontracting Plan Small Business Participation Evaluation Factor SBP may provide rating Subcontracting Past Performance Evaluation Factor SBP may contribute to overall rating 5 -26

Small Business Past Performance: Why Evaluate? Will the offeror satisfy its commitment to maximizing small business participation in its contracts? Subcontracting 5 -27

Small Business Past Performance: What To Evaluate Prior use of small businesses? Types and complexity of work? History of prompt payment? Compliance with reporting requirements? Meeting subcontracting goals? Compliance with small business subcontracting plan overall? Subcontracting 5 -28

Small Business Past Performance: Sources of Information DCMA Subcontracting SBA PCR ACO Databases 5 -29

Databases with Subcontracting Information e. SRS FSRS CPARS Requirement to report subcontracting Contract greater than $700 K ($1. 5 M for construction) Subcontracts greater than For contracts $30 K meeting thresholds IAW Do. D class Deviation 2013 O 0018 Type of Data Dollar amount and percentage of subcontract awards to small businesses and socioeconomic category businesses Name of subcontractor, amount of subcontract, date of subcontract award, and description of products or services provided by subcontractor Subcontracting Adjectival rating and comments on how well contractor met subcontracting plan requirements and other small business participation requirements 5 -30

5. 5: Evaluation of Small Business Past Performance SBPs participate in source selections to evaluate an offeror’s past performance in complying with FAR 52. 219 -8, Utilization of Small Business Concerns and 52. 219 -9 Small Business Subcontracting Plan. Subcontracting 5 -31

Activity 5. 5: Evaluation of Small Business Past Performance 1. Evaluate an offeror’s small business past performance data on subcontracting using the Section M evaluation criteria. 2. Document your findings and assign a rating on the worksheet. Subcontracting 5 -32

Activity 5. 5 Rubric You will use the activity rubric, which identifies desired behaviors, to rate your performance. Desired Behaviors • Evaluate past performance information on small business subcontracting of offerors, focusing on the evaluation factors in the solicitation. • Provide a clear and complete explanation for your findings. • Document your findings with supporting rationale. Subcontracting 5 -33

Small Business Subcontracting Plans SBPs: • Assess whether the small business subcontracting plan is acceptable. • Give recommendations for improvements to the Contracting Officer for use in negotiations. Small Business Subcontracting Plan • NOTE: SBA PCR also should review the small business subcontracting plan. Subcontracting 5 -34

Small Business Subcontracting Plan Considerations Contains 15 required elements? Realistic goals? Goals consistent with efficient contract performance? Steps to demonstrate good-faith effort identified? FAR 19. 704 (d) actions? Subcontracting 5 -35

5. 6: Assessing the Small Business Subcontracting Plan Small business subcontracting plan required if: ü Acquisition exceeds $700 K ($1. 5 M for construction). ü Offeror is NOT a small business. ü Acquisition is NOT for personal services. ü Work will be performed inside the United States and its outlying areas. ü Subcontracting possibilities exist. Subcontracting 5 -36

Activity 5. 6: Assessing the Small Business Subcontracting Plan Determine if the small business subcontracting plan is acceptable using a checklist. If it is not, make recommendations for making it acceptable. Subcontracting 5 -37

Activity 5. 6 Key Points (1 of 3) • A small business subcontracting plan is required for negotiated and sealed bidding acquisitions over $700 K (1. 5 M for construction). • Subcontracting plans are determined to be acceptable or unacceptable, and an award cannot be made if the plan is unacceptable. • A subcontracting plan has required elements to make it acceptable. • An SPBCD is only required for certain Department of Defense (Do. D) acquisitions or bundled contracts. • The SBPCD subcontracting dollars should be consistent with those in the subcontracting plan. • An SBPCD is assigned a rating and is part of proposal evaluation. Subcontracting 5 -38

Activity 5. 6 Key Points (2 of 3) • Subcontracting plans are required only from other than small businesses, while SBPCDs are required from all businesses. • Frequent mistakes include: – – – Subcontracting Math errors and inconsistent numbers Not supporting numbers with specific information (like names of firms) Not showing maximum effort to subcontract to small businesses Not addressing all 15 elements Not including separate goals and statements for option years Not making affirmative statements of assurance 5 -39

Activity 5. 6 Key Points (3 of 3) • The checklist allows you to assess: – The 15 required elements – The realism of the goals – Steps to demonstrate good-faith effort • Companies may submit commercial or Do. D comprehensive plans to satisfy the small business subcontracting plan requirement. • Contracting Officers often rely on SBPs to review small business subcontracting plans. • Typically, they are reviewed first by the Contracting Officer, and then by the SBP, and finally by the PCR. Subcontracting 5 -40

Negotiation SBPs may help develop negotiation objectives for the small business subcontracting plan. Subcontracting 5 -41

Negotiating Subcontracting Plan (FAR 19. 705 -4(c)) 15 Elements Good-faith effort Minimize exposure Maximum practicable Administrative burden Cost Incentives Attain objectives See FAR 19. 702 (a)(i) Subcontracting 5 -42

Make It Contractually Binding Small Business Subcontracting Plan Small Business Participation Requirements Enforceable Subcontracting Commitments Subcontracting 5 -43

Post-Award Notification (FAR 19. 705 -6) The Procuring Contracting Officer is responsible for: • 1. Notifying the SBA of the award by sending a copy of the award document to the Area Director, Office of Government Contracting, in the SBA area office where the contract will be performed • 2. Forwarding a copy of each commercial plan and any associated approvals to the Area Director, Office of Government Contracting, in the SBA area office where the contractor’s headquarters is located • 3. Giving to the SBA procurement center representative (or, if a procurement center representative is not assigned, see 19. 402(a)) a copy of: • a. Any small business subcontracting plan submitted in response to a sealed bid solicitation • b. The final negotiated small business subcontracting plan that was incorporated into a negotiated contract or contract modification • 4. Forwarding a copy of each plan, or a determination that there is no requirement for a small business subcontracting plan, to the cognizant contract administration office Subcontracting 5 -44

Lesson Summary Develop subcontracting requirements of the solicitation. Subcontracting Evaluate small business participation and past performance. Assess small business subcontracting plans. 5 -45

Action Planning • Identify one key insight from this lesson. • Identify one thing you will do differently on the job. • Discuss with your accountability partner. Subcontracting 5 -46