Office of Small & Disadvantaged Business Utilization
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The Department of Veterans Affairs (VA) initiated an enhanced subcontracting review process in calendar year 2010. This process includes the collection of additional information from prime contractors and subcontractors. OSDBU analyzes the data and generates a report for VA senior leadership and acquisition leadership. The information provided helps VA determine why discrepancies exist between subcontracting plan goals and actual subcontracting accomplishments achieved. We assist Contracting Officers by providing information that is utilized to determine when prime contractors have or have not made a good faith effort to achieve the goals established in approved subcontracting plans.
Subcontracting opportunities in VA contracts for Small Businesses (especially Service-Disabled Veteran-Owned Small Businesses and Veteran-Owned Small Businesses) are a vital part of VA’s overall small business participation program. VA Secretary Shinseki has raised the bar regarding VA’s achievements in subcontracting.
Contractors receiving a contract for more than the Simplified Acquisition Threshold shall agree in the contract that Service-Disabled Veteran-Owned Small Business, Veteran-Owned Small Business, Small Business, HUBZone Small Business, Small Disadvantaged Business, and Women-Owned Small Business concerns shall have the maximum practicable opportunity to participate in contract performance consistent with its efficient performance.
Prime contractors establish procedures to ensure the timely payment of amounts due pursuant to the terms of their subcontracts with Veteran-Owned Small Business, Veteran-Owned Small Business, Small Business, HUBZone Small Business, Small Disadvantaged Business, and Women-Owned Small Business. In negotiated acquisitions expected to exceed $700,000 ($1,500,000 for construction) and that has subcontracting possibilities, the apparently successful non-Small Business offeror must submit an acceptable subcontracting plan.
We recommend that prime contractors utilize the Small Business Administration’s Sub-Net database as part of their efforts to locate quality subcontractors that will help them achieve their subcontracting goals. Small businesses can review this web site to identify opportunities in their areas of expertise. While the web site is designed primarily as a place for large businesses to post solicitations and notices, it can also be used by Federal agencies, state and local Governments, non-profit organizations, colleges and universities, and even Small Businesses for the same purpose. The new web site will shift the traditional marketing strategy from the shotgun approach to one that is more focused and sophisticated. Instead of marketing blindly to hundreds of prime contractors, with no certainty that any given company has a need for their product or service, Small Businesses can use their limited resources to identify concrete, tangible opportunities and then bid on them.
Frequently Asked Questions
1. What is the definition of a subcontracting plan and what are the types?
There are three (3) types of subcontracting plans:
- Commercial Plan: A subcontracting plan (including goals) that covers the offeror’s fiscal year and that applies to the entire production of commercial items sold by either the entire company or a portion thereof (e.g., division, plant, or product line).
- Individual Contract Plan: A plan that covers the entire contract period (including option periods), applies to a specific contract, and has goals that are based on the offeror’s planned subcontracting in support of the specific contract, except that indirect costs incurred for common or joint purposes may be allocated on a prorated basis to the contract.
- Master Plans: A subcontracting plan that contains all the required elements of an individual contract plan, except goals, and may be incorporated into an individual contract plan, provided the master plan has been approved.
A master subcontracting plan contains the repetitive policy and administrative information required for subcontracting plans. Contractors may establish master plans on a plant or division-wide basis. The master plan shall be effective for a three year period after approval by the contracting officer; however, it is incumbent upon contractors to maintain and update master plans. The master plan does not include goals; therefore, when it is presented by a prime contractor, the contracting officer must negotiate separate dollar and percentage goals for Service-Disabled Veteran-Owned Small Business, Veteran-Owned Small Business, Small Business, Small Disadvantaged Business, Women-Owned Small Business, and HUBZone Small Business concerns participation. A listing of the items and services to be subcontracted under the plan; and descriptions of the method use to develop the goals, to develop subcontracting source lists and to allocate the overhead to the subcontracting plan must also be obtained. The Contracting Officer may negotiate any deviations from the master plans that are necessary to tailor it for a specific contract.
When a master plan is accepted, the contracting officer must also obtain a copy of the lead agency contracting officer’s approval of the master plan. (A lead agency is the first Federal agency to award a contract to a vendor in a given fiscal year). After goals are negotiated and combined with the master plan to form a total plan, it becomes an “individual” subcontracting plan. Once incorporated into the individual contract, the plan is valid for the life of that contract.
2. When is a Subcontracting Plan required?
A subcontracting plan is required from (Large) business, when the dollar amount including options exceeds $650,000 ($1.5 Million for Construction), and subcontracting opportunities exist. A subcontracting plan must be obtained from the apparent successful offeror prior to contract award, whether sealed bidding or negotiation awards the contract.
3. When are Subcontracting Plans not required?
Subcontracting Plans are not required for:
- From Small Business concerns;
- For personal services contracts;
- For contracts or contract modifications when performed outside the United States; and
- When subcontracting opportunities do not exist.
4. What if it is determined that no subcontracting opportunities exist?
If it is determined that there are no subcontracting possibilities, the determination must be approved at a level above the contracting officer and placed in the contract file and a copy submitted to the Executive Director, Office of Small and Disadvantaged Business Utilization (OSDBU).
5. What if I have a Procurement Center Representative (PCR) assigned to my facility, would he/she review the subcontracting plan?
While most VA facilities work directly with VA OSDBU for subcontracting plan reviews, some do have PCR s assigned. In such cases, the PCR will review and recommend approval to the contracting officer. Once that subcontracting plan has been reviewed and approved, a copy of the approved subcontracting plan is submitted to the Office of Small and Disadvantaged Business Utilization (00SB).
6. What if there is no Procurement Center Representative located at my facility, who would review the subcontracting plan?
If there is not PCR assigned to your facility, the subcontracting plan is submitted directly to the Office of Small and Disadvantaged Business Utilization for review and recommendations.
7. What if the prime contractor has Commercial Subcontracting Plan approved by another Federal Agency, and the prime is being awarded a contract by a VA facility?
The prime contractor is responsible for submitting to a copy of the approved subcontracting plan to the VA contracting officer. The VA contracting officer will then ensure that VA OSDBU receives a copy.