Overview
This section details the mandatory duties of the Contracting Officer (CO) throughout the acquisition lifecycle to ensure large business contractors provide maximum practicable subcontracting opportunities to small business concerns. It covers the entire process from determining the initial need for a subcontracting plan and negotiating realistic goals to monitoring post-award compliance and assessing liquidated damages for a lack of "good faith effort."
Key Rules
- Thresholds and Determinations: The CO must require a subcontracting plan if the contract value exceeds the thresholds in FAR 19.702(a), unless the CO determines in writing (with higher-level approval) that no subcontracting possibilities exist.
- The "One Plan" Rule: A contract may only have one subcontracting plan; however, for Indefinite-Delivery/Indefinite-Quantity (IDIQ) contracts, COs may establish specific subcontracting goals for individual task or delivery orders.
- SBA Consultation: COs must provide the SBA Procurement Center Representative (PCR) a reasonable period to review solicitations and the proposed subcontracting plans before award to provide advisory findings.
- Evaluation Criteria: When reviewing a plan, the CO must ensure goals are attainable and consistent with the offeror’s cost or pricing data, make-or-buy program, and past performance.
- Post-Award Monitoring: COs are responsible for reviewing Individual Subcontracting Reports (ISRs) and Summary Subcontracting Reports (SSRs) in the Electronic Subcontracting Reporting System (eSRS) within 60 days of the report ending date.
- Good Faith Effort and Liquidated Damages: Failure to meet goals is not a breach in itself, but failure to make a "good faith effort" is. If a CO determines a contractor failed to act in good faith (based on the "totality of actions"), they must assess liquidated damages equal to the actual dollar shortfall of the goals.
Practical Implications
- Administrative Oversight: COs must proactively manage the eSRS process; acknowledging or rejecting reports is a critical compliance function that cannot be ignored without risking the integrity of the agency's small business program.
- Negotiation Strategy: COs must balance the "integrity of the competitive process" with the need for aggressive goals, ensuring that contractors do not submit "unreasonably low goals" simply to minimize their exposure to liquidated damages or administrative burdens.
- Documentation Necessity: Any determination that subcontracting is not possible or that a contractor has failed to make a good faith effort requires a heavy burden of proof and specific documentation in the contract file to withstand potential disputes or SBA appeals.