[Federal Register Volume 59, Number 146 (Monday, August 1, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-18401]
[[Page Unknown]]
[Federal Register: August 1, 1994]
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GENERAL SERVICES ADMINISTRATION
48 CFR Parts 519 and 552
[APD 2800.12A, CHGE 55]
RIN 3090-AF06
General Services Administration Acquisition Regulation; Small
Business Subcontracting Program
AGENCY: Office of Acquisition Policy, GSA.
ACTION: Final rule.
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SUMMARY: The General Services Administration Acquisition Regulation
(GSAR) is amended to revise Subpart 519.7 of the General Services
Administration Acquisition Regulation. The revision incorporates a
class deviation from the FAR clause at 52.219-9, Small Business and
Small Disadvantaged Business Subcontracting Plan, and at 52.219-16,
Liquidated Damages--Small Business Subcontracting Plan. The General
Services Administration (GSA) has made a determination to deviate from
the FAR clause at 52.219-9 on a class basis by adding a requirement
that a goal be established for women-owned small business concerns when
an individual contract plan is involved, and by referring to women-
owned small business as well as small and small disadvantaged business
concerns throughout the clause. The class deviation to FAR 52.219-16
makes minor wording changes to make the language conform to the clause
as modified by the class deviation and to limit the provisions for
calculating the amount of damages to the goals for small and small
disadvantaged businesses as provided in the Small Business Act. The
revision also expresses GSA's expectation that offerors under GSA
procurements, in submitting required subcontracting plans, will do more
than merely restate minimum plan requirements. Subcontracting plans
should demonstrate creativity and innovation in small, small
disadvantaged, and women-owned small business concerns in
subcontracting opportunities and an understanding of the requirement
that these concerns be afforded the maximum practicable opportunity to
perform as subcontractors in the offeror's procurements. In certain
negotiated solicitations, the subcontracting plan will be negotiated
with price and any technical and management proposal required by the
solicitation. In sealed bid solicitations, target goals may be stated
by GSA in the solicitation. The revision also deletes various sections
in Subpart 519.7 because they concern nonregulatory material, makes
editorial changes in Subpart 519.8, and incorporates the class
deviations in Subpart 570.2.
EFFECTIVE DATE: August 1, 1994.
FOR FURTHER INFORMATION CONTACT:
Paul Linfield, Office of GSA Acquisition Policy, (202) 501-1224.
SUPPLEMENTARY INFORMATION:
A. Public Comments
A notice of proposed rulemaking was published in the Federal
Register on January 14, 1994 (59 FR 2345). Fifteen public comments and
comments received from GSA activities were considered in formulating
this final rule. Fourteen of the public comments viewed the proposed
rule favorably; three expressed concerns that demonstrated a need for
further clarification. The significant issues and concerns raised
during the comment period are summarized below.
Thirteen organizations recommended that offerors be required to
submit a detailed written summary of the projects on which the offeror
was responsible for meeting or exceeding minority/women business
enterprise subcontracting goals and that the contracting officer's
evaluation of the offeror's proposal be weighted based on the offeror's
subcontracting plan. Neither recommendation is incorporated in the
regulation issued today.
The provisions at GSAR 552.219-73 and 552.219-74 require a
description of the offeror's subcontracting strategies and significant
achievements. This requirement permits an offeror to describe occasions
where it met or exceeded subcontracting goals without any presumption
that only when the goals are met or exceeded is the achievement
significant. Subcontracting goals may not be achieved for reasons that
often are beyond the control of the offeror; e.g., changes in the
economy or excessive pricing. For this reason GSA believes
``significant achievements'' should consider more than whether
subcontracting goals were met.
The final rule also leaves to the discretion of the contracting
officer the determination of whether or not to use the subcontracting
plan as a weighted evaluation factor or subfactor. The type of
procurement and the number of large versus small business concerns
anticipated to compete for the award may influence that decision.
One comment suggested that for each project the GSA should set
aside an amount to aid the large business in offsetting the additional
cost in assisting small, small disadvantaged, and women-owned small
business concerns. This suggestion is not addressed in this regulation;
GSA is examining alternatives for future implementation that may
involve the use of incentives, however.
One organization stated that use of the subcontracting plan as an
evaluation factor or subfactor ``should not be weighted greater than
any other evaluation factor and should not be used to eliminate, by
itself, a contractor from a negotiated procurement.'' This concern is
not addressed in this regulation. However, contemporaneous with the
development of this regulation, the GSA developed internal guidance for
its contracting officers to assist them in carrying out their
responsibilities. This internal guidance will advise the contracting
officer to be flexible and not establish arbitrary criteria.
The same organization also raised concerns with the use of the
term, ``aggressive,'' in GSAR 552.219-72, the phrase, ``consistent with
efficient contract performance,'' used in GSAR 552.219-73, and the
types of information the contracting officer will review and/or
consider in determining the acceptability of a subcontracting plan
(par. (c) of GSAR 552.219-73 and 552.219-74). The GSA agrees that the
term, ``aggressive,'' may be interpreted inappropriately, and has
substituted the more appropriate phrase, ``creative and innovative,''
in the final rule.
Additionally, the commenting organization believes the regulation
should contain examples of what constitutes ``consistent with efficient
contract performance.'' The GSA believes further clarification is
unnecessary as its regulation is consistent with policies and
expectations in Federal Acquisition Regulation (FAR) clauses 52.219-8,
Utilization of Small Business Concerns and Small Disadvantaged Business
Concerns, and 52.219-13, Utilization of Women-Owned Small Businesses.
Also, Pub. L. 95-507 does not require that prime contractors
subcontract a portion of the work, but instead expresses the policy and
expectation that small and small disadvantaged businesses are afforded
the maximum practicable opportunity to perform that portion of the work
that is subcontracted. Another statute expresses similar policy and
expectations for women-owned small businesses. These policies are
reflected in the FAR clauses 52.219-8 and 52.219-13 that use the
phrase, ``consistent with efficient contract performance.'' This
phrase, used in GSAR 552.219-73, has the same meaning as in the
established FAR clauses. The provision merely reinforces current
policies and expectations and is intended to assure that contractors
give serious consideration to small, small disadvantaged, and women-
owned small business concerns for the portion of work that is
subcontracted.
Three other issues raised by this organization were: (1) ``previous
goals and achievements of contractors in the same industry'' (GSAR
552.219-73(c)(2) and 552.219-74(c)(2)) do not take geographical
differences into consideration; (2) consideration of information solely
from ``local preference programs and other advocacy groups'' (GSAR
552.219-73(c)(3) and 552.219-74(c)(3)) will increase goals to
unrealistic and unobtainable levels; and (3) contracting officers, in
reviewing a contractor's description of its strategies and historical
performance in placing subcontracts (GSAR 552.219-73(c)(4) and 552.219-
74(c)(4)) may penalize a contractor that has not focused on
subcontracting programs in the past. The GSA agrees that geographical
differences are an important factor to consider. In its internal
guidance, previously alluded to, it recognizes geographical diversity
and the availability and location of potential contractors as a factor
that may be considered in establishing target goals or developing a
negotiation strategy.
The GSA agrees that reliance solely on ``local preference programs
and other advocacy groups'' would be inappropriate. Both the regulation
and the GSA internal guidance clearly establish that the contracting
officer's determination as to the acceptability of a subcontracting
plan requires the evaluation of multiple sources of information and not
the arbitrary application of specific factors or formulas.
The GSA also does not believe it is unreasonable to reward a
contractor who has focused on its subcontracting program in the past.
This regulation provides a basis to recognize their contributions in
furthering national policy. Two changes were made to subparagraph
(c)(4) in both GSAR 552.219-73 and 552.219-74; the phrase, ``when
applicable,'' was deleted. A sentence also was added to clarify that an
offeror could describe its strategies and historical performance in
terms of its commercial as well as its previous Government contracts.
This sentence was added to ensure that contractors that may not have
previously held a Government contract requiring a subcontracting plan
were not evaluated adversely.
One company submitted comments disagreeing with the proposed
regulation because the changes ``do not seem practical for Commercial
Products producers. . . .'' Specifically, this company stated that it
did not have the ability to source specific components of a particular
final product for a particular contracted item and, consequently, would
be unable to negotiate a subcontracting plan covering any particular
item that would be sold on that contract. A better approach, this
company suggests, ``would be to maintain or increase percentage goals
based on total company (offeror's) purchases from all suppliers.''
Commercial products subcontracting plans were developed to address
the issues this company raises. As contrasted with an individual
contract plan developed for a specific contract that has goals based on
a company's planned subcontracting and purchasing to support
performance of that specific contract, a commercial products
subcontracting plan describes subcontracting that relates to the
company's production generally; i.e., for both its commercial and non-
commercial products; rather than solely to the item purchased under the
Government contract.
The regulation issued today does not affect the ability of a
company to offer a commercial products plan, nor does it direct
offerors to particular sources for subcontracting. The GSA understands
that contractors may have long established sources for specific
components and the regulation does not suggest that these be altered.
To clarify this matter, a sentence was added to paragraph (a) in both
GSAR 552.219-73 and 552.219-74 that states that an offeror can satisfy
the GSA's expectations with a commercial products plan where the
offeror's commitment to providing maximum practicable subcontracting
opportunities to small, small disadvantaged, and women-owned small
business concerns is demonstrated through the subcontracting relating
to its production generally; i.e., for both its commercial and
Government business.
The company also suggested that subparagraph (c)(3) in GSAR
552.219-74 be removed. It believes that the plan and goals stated
should be the responsibility of the U.S. Small Business Administration
(SBA), be evaluated by the SBA, and not be evaluated by outside
advocacy groups. This suggestion was not adopted. While the SBA is
afforded an opportunity to review the subcontracting plan, determining
its acceptability remains a responsibility of the contracting officer.
Subparagraph (c)(3) merely informs potential offerors that the
contracting officer will consider, among other types of information,
information and potential sources obtained from the SBA and other
advocacy groups in determining whether the subcontracting plan is
reasonable and the goals realistic.
The SBA submitted comments supporting the proposed rule. It offered
several suggestions that were not incorporated in this final rule. The
SBA stated that it supported GSAR 552.219-74. It interpreted this
provision to require the subcontracting plan at the time of bid
submittal in sealed bidding. This interpretation is incorrect. The
requirement for the subcontracting plan with the initial offer applies
only in certain GSA negotiated procurements (GSAR 519.705-2). In sealed
bidding, the traditional practice of requiring the subcontracting plan
only from the apparent low bidder is continued.
The SBA also suggested adding a subparagraph (c)(5) to both GSAR
552.219-73 and 552.219-74 that would provide for obtaining comments and
recommendations from the SBA procurement center representative (SBA
PCR) prior to approval of the subcontracting plan. The GSA internal
guidance already provides procedures for obtaining the comments and
recommendations of the SBA PCR. The GSA does not believe adding the
suggested paragraph (c)(5) provides any benefit to potential offerors.
The SBA also expressed concern with the exception provided in GSAR
519.705-2 for not requiring the subcontracting plan with the initial
offer for those acquisitions offering minimal subcontracting
opportunities. It suggested substituting the word ``no'' for
``minimal.'' The GSA again believes the SBA has misinterpreted the
regulation. The GSA believes it would be unnecessarily burdensome to
require subcontracting plans from all offerors when the contracting
officer can determine from the nature of the procurement that
subcontracting opportunities will be minimal. Under such a
circumstance, using the subcontracting plan as a discriminating factor
or subfactor in evaluating proposals would not be beneficial. The
regulation cannot change the statutory requirement for the apparently
successful offeror to submit an acceptable subcontracting plan prior to
award.
B. Executive Order 12866
This rule was not submitted to the Office of Management and Budget
(OMB) for review because the rule is not a significant regulatory
action as defined in Executive Order 12866, Regulatory Planning and
Review, and, therefore, was not required to be submitted.
C. Regulatory Flexibility Act
Pursuant to the Regulatory Flexibility Act (5 U.S.C. 601 et seq.),
the GSA certifies that the proposed rule will not have significant
impact on a substantial number of small entities, since the revised
subcontracting plan requirements in the regulation do not apply to
small business concerns. Accordingly, a regulatory flexibility analysis
was not prepared.
D. Paperwork Reduction Act
The clause at 552.219-9, Small Business Subcontracting Plan,
contains an information collection requirement. The clause incorporates
into the GSAR an approved deviation to the FAR clause at 52.219-9 which
has been approved by OMB under Section 3504(h) of the Paperwork
Reduction Act and assigned OMB Control Number 9000-0006. The GSA
deviation which adds women-owned small business does not add to the
information collection requirements already provided for in the FAR.
FAR clause 52.219-13, Utilization of Women-Owned Small Businesses,
already encourages use of women-owned small businesses in
subcontracting and the Standard Form 295, Summary Subcontract Report,
already provides a vehicle for reporting on subcontracting with women-
owned small business.
The provision at 552.219-73 contains an information collection
requirement that has been approved by OMB under Section 3504(h) of the
Paperwork Reduction Act and assigned OMB Control Number 3090-0252. The
title of the information collection is ``GSAR 552.219-73 Preparation,
Submission, and Negotiation of Subcontracting Plans.'' The provision
requires all offerors, other than small business concerns, responding
to a negotiated solicitation to submit a subcontracting plan with their
respective offers so that a plan can be negotiated concurrently with
other parts of the proposal. The respondents are potential GSA
contractors. The contracting officer will use the information to
evaluate whether GSA's expectation that subcontracting opportunities
exist for small, small disadvantaged and women-owned small business is
reasonable under the circumstances; negotiate goals consistent with
statutory requirements and acquisition objectives; and expedite the
award process. The estimated annual burden for this additional
collection is 14,690 hours. This is based on an estimated burden per
response of 11.3 hours, a proposed frequency of one response per
respondent, and an estimated number of likely respondents of 1,300.
Any comments concerning the accuracy of the burden may be directed
to the Director, Office of GSA Acquisition Policy (VP), 18th & F Sts.,
NW., Room 4006, Washington, DC 20405 and to the Office of Information
and Regulatory Affairs of OMB, Attention Desk Officer for GSA,
Washington, DC 20503.
List of Subjects in 48 CFR Parts 519 and 552
Government procurement.
Accordingly, 48 CFR Parts 519 and 552 are amended to read as
follows:
1. The authority citation for 48 CFR Parts 519 and 552 continues to
read as follows:
Authority: 40 U.S.C. 486(c).
PART 519--SMALL BUSINESS AND SMALL DISADVANTAGED BUSINESS CONCERNS
519.701, 519.702, 519.704 [Removed]
2. Sections 519.701, 519.702, and 519.704 are removed.
3. Section 519.705-2 is revised to read as follows:
519.705-2 Determining the need for a subcontracting plan.
The requirement at FAR 19.702(a)(1) for submission of a
subcontracting plan by only the apparently successful offeror does not
apply to GSA negotiated solicitations when the contract is expected to
exceed $500,000 ($1,000,000 for construction) and the contract will be
awarded on the basis of an evaluation of technical and/or management
proposals and cost or price proposals using source selection
procedures. Except for acquisitions--
(1) Of leasehold interests in real property using expedited
procedures,
(2) Of commercial products, or
(3) Offering minimal subcontracting opportunities
such acquisitions shall require submission of a subcontracting plan
with the initial offer by all offerors that are not small business
concerns.
519.705-4, 519.705-5, 519.705-6, 519.706, 519.706-70 [Removed]
4. Sections 519.705-4, 519.705-5, 519.705-6, 519.706, and 519.706-
70 are removed.
5. Section 519.708 is revised to read as follows:
519.708 Solicitation provisions and contract clauses.
(a) The contracting officer shall insert the clause at 552.219-9,
Small Business Subcontracting Plan, or its Alternate I in solicitations
and contracts instead of the FAR clause at 52.219-9 or its alternate.
(b) The contracting officer shall insert the clause at 552.219-16,
Liquidated Damages--Small Business Subcontracting Plan, in
solicitations and contracts instead of the FAR clause at 52.219-16.
(c) The contracting officer shall insert the provision at 552.219-
72, Notice to Offerors of Subcontracting Plan Requirements, on the
cover page of the solicitation if the solicitation includes the clause
at 552.219-9, Small Business Subcontracting Plan. The provision does
not apply to acquisitions of leasehold interests in real property using
expedited procedures.
(d) The contracting officer shall insert the provision at 552.219-
73, Preparation, Submission, and Negotiation of Subcontracting Plans,
in negotiated solicitations if the solicitation includes the clause at
552.219-9, Small Business Subcontracting Plan, and the contract will be
awarded on the basis of an evaluation of technical and/or management
proposals and cost or price proposals using source selection
procedures. The provision does not apply to:
(1) Acquisitions of leasehold interests in real property using
expedited procedures,
(2) Solicitations for commercial products, or
(3) Solicitations where, in the judgment of the contracting
officer, subcontracting opportunities are minimal.
(e) The contracting officer shall insert the provision at 552.219-
74, Goals for Subcontracting Plan, in sealed bid solicitations if the
solicitation includes the clause at 552.219-9, Small Business
Subcontracting Plan. The basic provision should be used when the
contracting officer is able to realistically establish target goals.
Alternate I should be used in sealed bid solicitations when the
contracting officer cannot establish realistic target goals and in
negotiated solicitations that include the clause at 552.219-9 but do
not include the provision at 552.219-73.
519.770, 519.770-1, 519.770-3 [Removed]
6. Sections 519.770, 519.770-1, and 519.770-3 are removed.
7. Section 519.803-70 is revised to read as follows:
519.803-70 Contracting officer evaluation of recommendations for 8(a)
set-asides.
If the Director of Small and Disadvantaged Business Utilization
(AU) or the SBTA recommends that a procurement be set aside for award
under the 8(a) program and the contracting officer disagrees, the
contracting officer shall discuss the matter with the official that
made the recommendation before making a decision. If the contracting
officer decides not to award the contract under the 8(a) program as
recommended, the reasons for the decision must be documented for the
record as required by FAR 19.202 and a copy of the documentation must
be forwarded to AU within 10 working days of the contracting officer's
decision.
PART 552--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
8. Sections 552.219-9 and 552.219-16 are added to read as follows:
552.219-9 Small business subcontracting plan.
As prescribed in 519.708(a), insert the following clause
SMALL BUSINESS SUBCONTRACTING PLAN (JUNE 1994)
(DEVIATION FAR 52.219-9)
(a) This clause does not apply to small business concerns.
(b) Commercial product, as used in this clause, means a product
in regular production that is sold in substantial quantities to the
general public and/or industry at established catalog or market
prices. It also means a product which, in the opinion of the
Contracting Officer, differs only insignificantly from the
Contractor's commercial product.
Subcontract, as used in this clause, means any agreement (other
than one involving an employer-employee relationship) entered into
by a Federal Government prime Contractor or subcontractor calling
for supplies or services required for performance of the contract or
subcontract.
(c) The offeror, upon request by the Contracting Officer, shall
submit and negotiate a subcontracting plan, where applicable, which
separately addresses subcontracting with small business concerns,
with small disadvantaged business concerns, and with women-owned
small business concerns. If the offeror is submitting an individual
contact plan, the plan must separately address subcontracting with
small business concerns, with small disadvantaged business concerns,
and with women-owned small business concerns with a separate part
for the basic contract and separate parts for each option (if any).
The plan shall be included in and made a part of the resultant
contract. The subcontracting plan shall be negotiated within the
time specified by the Contracting Officer. Failure to submit and
negotiate the subcontracting plan shall make the offeror ineligible
for award of a contract.
(d) The offeror's subcontracting plan shall include the
following:
(1) Goals, expressed in terms of percentages of total planned
subcontracting dollars, for the use of small business concerns,
small disadvantaged business concerns and, if an individual contract
plan is involved, women-owned small business concerns as
subcontractors. 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.
(2) A statement of--
(i) Total dollars planned to be subcontracted;
(ii) Total dollars planned to be subcontracted to small business
concerns;
(iii) Total dollars planned to be subcontracted to small
disadvantaged business concerns; and
(iv) Total dollars planned to be subcontracted to women-owned
small business concerns, if an individual contract plan is involved.
(3) A description of the principal types of supplies and
services to be subcontracted, and an identification of the types
planned for subcontracting to (i) small business concerns, (ii)
small disadvantaged business concerns, and (iii) women-owned small
business concerns.
(4) A description of the method used to develop the
subcontracting goals in (1) above.
(5) A description of the method used to identify potential
sources for solicitation purposes (e.g., existing company source
lists, the Procurement Automated Source System (PASS) of the Small
Business Administration, the National Minority Purchasing Council
Vendor Information Service, the Research and Information Division of
the Minority Business Development Agency in the Department of
Commerce, or small, small disadvantaged, and women-owned small
business concerns trade associations).
(6) A statement as to whether or not the offeror included
indirect costs in establishing subcontracting goals, and a
description of the method used to determine the proportionate share
of indirect costs to be incurred with (i) small business concerns,
(ii) small disadvantaged business concerns, and if an individual
contract plan is involved, (iii) women-owned small business
concerns.
(7) The name of the individual employed by the offeror who will
administer the offeror's subcontracting program, and a description
of the duties of the individual.
(8) A description of the efforts the offeror will make to assure
that small business concerns, small disadvantaged business concerns,
and women-owned small business concerns have an equitable
opportunity to compete for subcontracts.
(9) Assurances that the offeror will include the clause in this
contract entitled Utilization of Small Business Concerns and Small
Disadvantaged Business Concerns in all subcontracts that offer
further subcontracting opportunities, and that the offeror will
require all subcontracts (except small business concerns) who
receive subcontracts in excess of $500,000 ($1,000,000 for
construction of any public facility), to adopt a plan similar to the
plan agreed to by the offeror.
(10) Assurances that the offeror will (i) cooperate in any
studies or surveys as may be required, (ii) submit periodic reports
in order to allow the Government to determine the extent of
compliance by the offeror with the subcontracting plan, (iii) submit
Standard Form (SF) 294, Subcontracting Report for Individual
Contracts, and/or SF 295, Summary Subcontract Report, in accordance
with the instructions on the forms, and (iv) ensure that its
subcontractors agree to submit Standard Forms 294 and 295.
(11) A recitation of the types of records the offeror will
maintain to demonstrate procedures that have been adopted to comply
with the requirements and goals in the plan, including establishing
source lists; and a description of its efforts to locate small,
small disadvantaged, and women-owned small business concerns and
award subcontracts to them. The records shall include at least the
following (on a plant-wide or company-wide basis, unless otherwise
indicated):
(i) Source lists, guides, and other data that identify small,
small disadvantaged, or women-owned small business concerns.
(ii) Organizations contacted in an attempt to locate sources
that are small, small disadvantaged, or women-owned small business
concerns.
(iii) Records on each subcontract solicitation resulting in an
award of more than $100,000, indicating (A) whether small business
concerns were solicited and if not, why not, (B) whether small
disadvantaged business concerns were solicited and if not, why not,
(C) whether women-owned small business concerns were solicited and
if not, why not, and (D) if applicable, the reason award was not
made to a small business concern.
(iv) Records of any outreach efforts to contact (A) trade
associations, (B) business development organizations, and (C)
conferences and trade fairs to locate small, small disadvantaged,
and women-owned small business sources.
(v) Records of internal guidance and encouragement provided to
buyers through (A) workshops, seminars, training, etc., and (B)
monitoring performance to evaluate compliance with the program's
requirements.
(vi) On a contract-by-contract basis, records to support award
data submitted by the offeror to the Government, including the name,
address, and business size of each subcontractor. Contractors having
company or division-wide annual plans need not comply with this
requirement.
(e) In order to effectively implement this plan to the extent
consistent with efficient contract performance, the Contractor shall
perform the following functions:
(1) Assist small, small disadvantaged, and women-owned small
business concerns by arranging solicitations, time for the
preparation of bids, quantities, specifications, and delivery
schedules so as to facilitate the participation by such concerns.
Where the Contractor's lists of potential small, small
disadvantaged, and women-owned small business subcontractors are
excessively long, reasonable efforts shall be made to give all such
small business concerns an opportunity to compete over a period of
time.
(2) Provide adequate and timely consideration of the
potentialities of small, small disadvantaged business, and women-
owned small business concerns in all ``make-or-buy'' decisions.
(3) Counsel and discuss subcontracting opportunities with
representatives of small, small disadvantaged, and women-owned small
business firms.
(4) Provide notice to subcontractors concerning penalties and
remedies for misrepresentations of business status as small business
or small disadvantaged business for the purpose of obtaining a
subcontract that is to be included as part or all of a goal
contained in the Contractor's subcontracting plan.
(f) A master subcontracting plan on a plant or division-wide
basis which contains all the elements required by (d) above, except
goals, may be incorporated by reference as a part of the
subcontracting plan required of the offeror by this clause;
provided, (1) the master plan has been approved, (2) the offeror
provides copies of the approved master plan and evidence of its
approval to the Contracting Officer, and (3) goals and any
deviations from the master plan deemed necessary by the Contracting
Officer to satisfy the requirements of this contract are set forth
in the individual subcontracting plan.
(g) (1) If a commercial product is offered, the subcontracting
plan required by this clause may relate to the offeror's production
generally, for both commercial and noncommercial products, rather
than solely to the Government contract. In these cases, the offeror
shall, with the concurrence of the Contracting Officer, submit one
company-wide or division-wide annual plan.
(2) The annual plan shall be reviewed for approval by the agency
awarding the offeror its first prime contract requiring a
subcontracting plan during the fiscal year, or by an agency
satisfactory to the Contracting Officer.
(3) The approved plan shall remain in effect during the
offeror's fiscal year for all of the offeror's commercial products.
(h) Prior compliance of the offeror with other such
subcontracting plans under previous contracts will be considered by
the Contracting Officer in determining the responsibility of the
offeror for award of the contract.
(i) The failure of the Contractor or subcontractor to comply in
good faith with (1) the clause of this contract entitled Utilization
of Small Business Concerns and Small Disadvantaged Business
Concerns, or (2) an approved plan required by this clause, shall be
a material breach of the contract.
(End Clause)
Alternate I (JUNE 1994)
When contracting by sealed bidding rather than negotiation,
substitute the following paragraph (c) for paragraph (c) of the
basic clause:
(c) The apparent low bidder, upon request by the Contracting
Officer, shall submit a subcontracting plan, where applicable, which
separately addresses subcontracting with small business concerns,
with small disadvantaged business concerns, and with women-owned
small business concerns. If the bidder is submitting an individual
contract plan, the plan must separately address subcontracting with
small business concerns, with small disadvantaged business concerns,
and with women-owned small business with a separate part for the
basic contract and separate parts for each option (if any). The plan
shall be included in and made a part of the resultant contract. The
subcontracting plan shall be submitted within the time specified by
the Contracting Officer. Failure to submit the subcontracting plan
shall make the bidder ineligible for the award of a contract.
552.119 Liquidated damages--small business subcontracting plan.
As prescribed in 519.708(b), insert the following clause:
LIQUIDATED DAMAGES--SMALL BUSINESS SUBCONTRACTING PLAN (JUNE 1994)
(DEVIATION FAR 52.219-16)
(a) Failure to make a good faith effort to comply with the
subcontracting plan, as used in this clause, means a willful or
intentional failure to perform in accordance with the requirements
of the subcontracting plan approved under the clause in this
contract entitled Small Business Subcontracting Plan, or willful or
intentional action to frustrate the plan.
(b) If, at contract completion, or in the case of a commercial
products plan, at the close of the fiscal year for which the plan is
applicable, the Contractor has failed to meet its subcontracting
goals and the Contracting Officer decides in accordance with
paragraph (c) of this clause that the Contractor failed to make a
good faith effort to comply with its subcontracting plan,
established in accordance with the clause in this contract entitled
Small Business Subcontracting Plan, the Contractor shall pay the
Government liquidated damages in an amount stated. The amount of
probable damages attributable to the Contractor's failure to comply,
shall be an amount equal to the actual dollar amount by which the
Contractor failed to achieve each subcontracting goal for small
business and/or small disadvantaged business or, in the case of a
commercial products plan, that portion of the dollar amount
allocable to Government contracts by which the Contractor failed to
achieve each subcontract goal.
(c) Before the Contracting Officer makes a final decision that
the Contractor has failed to make such good faith effort, the
Contracting Officer shall give the Contractor written notice
specifying the failure and permitting the Contractor to demonstrate
what good faith efforts have been made. Failure to respond to the
notice may be taken as an admission that no valid explanation
exists. If, after consideration of all the pertinent data, the
Contracting Officer finds that the Contractor failed to make a good
faith effort to comply with the subcontracting plan, the Contracting
Officer shall issue a final decision to that effect and require that
the Contractor pay the Government liquidated damages as provided in
paragraph (b) of this clause.
(d) With respect to commercial products plans; i.e., company-
wide or division-wide subcontracting plans approved under paragraph
(g) of the clause in this contract entitled Small Business
Subcontracting Plan, the Contracting Officer of the agency that
originally approved the plan will exercise the functions of the
Contracting Officer under this clause on behalf of all agencies that
awarded contracts covered by that commercial products plan.
(e) The Contractor shall have the right of appeal, under the
clause in this contract entitled Disputes, from any final decision
of the Contracting Officer.
(f) Liquidated damages shall be in addition to any other
remedies that the Government may have.
(End of Clause)
9. Section 552.219-72 is revised to read as follows:
552.219-72 Notice to offerors of subcontracting plan requirements.
As prescribed in 519.708(c), insert the following provision:
NOTICE TO OFFERORS OF SUBCONTRACTING PLAN REQUIREMENTS (JUNE 1994)
The General Services Administration (GSA) is committed to
assuring that maximum practicable opportunity is provided to small,
small disadvantaged, and women-owned small business concerns to
participate in the performance of this contract consistent with its
efficient performance. GSA expects any subcontracting plan submitted
pursuant to 552.219-9, Small Business Subcontracting Plan, to
reflect this commitment. Consequently, an offeror, other than a
small business concern, before being awarded a contract exceeding
$500,000 ($1,000,000 for construction) will be required to
demonstrate that its subcontracting plan represents a creative and
innovative program for involving small, small disadvantaged, and
women-owned small business concerns as subcontractors in the
performance of this contract.
(End of Provision)
10. Section 552.219-73 is revised to read as follows:
552.219-73 Preparation, submission, and negotiation of subcontracting
plans.
As prescribed in 519.708(d), insert the following provision:
PREPARATION, SUBMISSION, AND NEGOTIATION OF SUBCONTRACTING PLANS (JUNE
1994)
(a) An offeror, other than a small business concern, submitting
an offer that exceeds $500,000 ($1,000,000 for construction) shall
submit a subcontracting plan with its initial offer. The
subcontracting plan will be negotiated concurrently with price and
any required technical and management proposals, unless the offeror
submits a previously-approved commercial products plan. Maximum
practicable utilization of small, small disadvantaged, and women-
owned small business concerns as subcontractors is a matter of
national interest with both social and economic benefits. It is the
General Services Administration's (GSA's) expectation that an
offeror's subcontracting plan will reflect a commitment to assuring
that small, small disadvantaged, and women-owned small business
concerns are provided the maximum practicable opportunity,
consistent with efficient contract performance, to participate as
subcontractors in the performance of the resulting contract. An
offeror submitting a commercial products plan can reflect this
commitment through subcontracting opportunities it provides that
relate to the offeror's production generally; i.e., for both its
commercial and Government business.
(b) GSA believes that this potential contract provides
significant opportunities for the use of small, small disadvantaged,
and women-owned small business concerns as subcontractors.
Consequently, in addressing the eleven elements described in
552.219-9(d) of the clause in this contract entitled Small Business
Subcontracting Plan, the offeror shall demonstrate that its
subcontracting plan represents a creative and innovative program for
involving small, small disadvantaged, and women-owned small business
concerns in performing the contract. The subcontracting plan shall
include a description of the offeror's subcontracting strategies
used in any previous contracts, significant achievements, and how
this plan will build upon those earlier achievements. Additionally,
the offeror shall demonstrate through its plan that it understands
the small business subcontracting program's objectives, GSA's
expectations, and is committed to taking those actions necessary to
meet these goals or objectives.
(c) In determining the acceptability of any subcontracting plan,
the Contracting Officer will--
(1) Review the plan to verify that the offeror has demonstrated
an understanding of the small business subcontracting program's
objectives and GSA's expectations with respect to the program and
has included all the information, goals, and assurances required by
552.219-9;
(2) Consider previous goals and achievements of contractors in
the same industry;
(3) Consider information and potential sources obtained from
agencies administering national and local preference programs and
other advocacy groups in evaluating whether the goals stated in the
plan adequately reflect the anticipated potential for subcontracting
to small, small disadvantaged, and women-owned small business
concerns; and
(4) Review the offeror's description of its strategies,
historical performance and significant achievements in placing
subcontracts for the same or similar products or services with
small, small disadvantaged, and women-owned small business concerns.
the offeror's description can apply to commercial as well as
previous Government contracts.
(d) Failure to submit an acceptable subcontracting plan and/or
correct deficiencies in a plan within the time specified by the
Contracting Officer shall make the offeror ineligible for award.
(End of Provision)
11. Section 552.219-74 is added to read as follows:
552.219-74 Goals for Subcontracting Plan.
As prescribed in 519.708(e), insert the following provision:
GOALS FOR SUBCONTRACTING PLAN (JUNE 1994)
(a) Maximum practicable utilization of small, small
disadvantaged, and women-owned small business concerns as
subcontractors is a matter of national interest with both social and
economic benefits.
(1) The General Services Administration's (GSA's) commitment to
ensuring that maximum practicable opportunity is provided to small,
small disadvantaged, and women-owned small business concerns to
participate as subcontractors in the performance of this contract,
consistent with its efficient performance, must be reflected in the
offeror's subcontracting plan submitted pursuant to the clause of
this contract at 552.219-9, Small Business Subcontracting Plan.
(2) In addressing the eleven elements described at 552.219-9(d),
the offeror shall demonstrate that its subcontracting plan
represents a creative and innovative program for involving small,
small disadvantaged, and women-owned small business concerns in
performing this contract. An offeror submitting a commercial
products plan can demonstrate its commitment in providing maximum
practicable opportunities through subcontracting opportunities it
provides to small, small disadvantaged, and women-owned small
business concerns that relate to the offeror's production generally;
i.e., for both its commercial and Government business.
(3) The subcontracting plan shall include a description of the
offeror's subcontracting strategies used in previous contracts and
significant achievements, with an explanation of how this plan will
build upon those earlier achievements. Additionally, the offeror
shall demonstrate through its plan that it understands the small
business subcontracting program's objectives, GSA's expectations,
and is committed to taking those actions necessary to meet these
goals or objectives.
(b) GSA believes that this contract provides significant
opportunities for the use of small, small disadvantaged, and women-
owned small business concerns as subcontractors. Accordingly, it is
anticipated that an acceptable subcontracting plan will contain at
least the following goals:
Small Business________percent
Small Disadvantaged Business ________percent
Women-Owned Small Business ________percent
Note: Target goals are expressed as a percentage of planned
subcontracting dollars.
(c) In determining the acceptability of any subcontracting plan,
the Contracting Officer will--
(1) Review the plan to verify that the offeror has demonstrated
an understanding of the small business subcontracting program's
objectives and GSA's expectations with respect to the programs and
has included all the information, goals, and assurances required by
552.219-9;
(2) Consider previous goals and achievements of contractors in
the same industry;
(3) Consider information and potential sources obtained from
agencies administering national and local preference programs and
other advocacy groups in evaluating whether the goals stated in the
plan adequately reflect the anticipated potential for subcontracting
to small, small disadvantaged, and women-owned small business
concerns; and
(4) Review the offeror's description of its strategies,
historical performance and significant achievements in placing
subcontracts for the same or similar products or services with
small, small disadvantaged, and women-owned small business concerns.
The offeror's description can apply to commercial as well as
previous Government contracts.
(d) Failure to submit an acceptable subcontracting plan and/or
contract deficiencies in a plan within the time specified by the
Contracting Officer shall make the offeror ineligible for award.
(End of Provision)
Alternate I (JUNE 1994)
The Contracting Officer, as prescribed in 519.708(e), shall
delete paragraph (b) of the basic provision and redesignate
paragraphs (c) and (d) as paragraphs (b) and (c).
PART 570--ACQUISITION OF LEASEHOLD INTERESTS IN REAL PROPERTY
12. Section 570.203 is amended by revising paragraph (a)(8)(vi) to
read as follows:
570.203 Solicitation for offers (SFO).
(a) * * *
(8) * * *
(vi) All solicitations and contracts which exceed $500,000 must
include the deviations to FAR clauses 52.219-9, Small Business and
Small Disadvantaged Business Subcontracting Plan, and 52.219-16,
Liquidated Damages--Small Business Subcontracting Plan (see 519.708 (a)
and (b)).
* * * * *
Dated: July 19, 1994.
Arthur E. Ronkovich,
Acting Associate Administrator for Acquisition Policy.
[FR Doc. 94-18401 Filed 7-29-94; 8:45 am]
BILLING CODE 6820-61-M
