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  • Question

    is a subcontracting plan required for R&D contracts that exceed the $700k services threshold?


    Answer

    Broad Agency Announcements (BAA’s) are utilized to increase innovation as indicated in FAR 35.016.  However, FAR 19.702 (3) (b) which lists exceptions to the requirement for small business subcontracting plans does not include BAA’s, and maximizing small business opportunities is Government policy IAW FAR 19.201 (a).

     

    FAR Part 19 Small Business Programs        Per Far 19.201 (a) General Policy

    “ It is the policy of the Government to provide maximum practicable opportunities in its acquisitions to small business, service-disabled veteran-owned small business, HUBZone small businesses, small disadvantages business, and women-owned small business concerns.”

    FAR PART 35 – Research and Development Contracting    Per FAR 35.016                                                               “‘Broad agency announcements (BAA’s) “may be used by agencies to fulfill their requirements for scientific study and experimentation directed toward advancing the state-of-the-art or increasing knowledge or understanding rather than focusing on a specific system or hardware solution.”

     

    FAR Part 19 Small Business Programs   Per FAR 19.702 Statutory Requirements

    “Any contractor receiving a contract with a value greater than the simplified acquisition threshold must agree in the contract that small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns will have the maximum practicable opportunity to participate in contract performance consistent with its efficient performance. It is further the policy of the United States that its prime contractors establish procedures to ensure the timely payment of amounts due pursuant to the terms of their subcontracts with small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns.”

          (a) Except as stated in paragraph (b) of this section, section 8(d) of the Small Business Act (15 U.S.C.637(d)) imposes the following requirements regarding subcontracting with’ small businesses and small business subcontracting plans:

               (1) In negotiated acquisitions, each solicitation of offers to perform a contract that is expected to exceed $700,000 ($1.5 million for construction) and that has subcontracting possibilities, shall require the apparently successful offeror to submit an acceptable subcontracting plan. If the apparently successful offeror fails to negotiate a subcontracting plan acceptable to the contracting officer within the time limit prescribed by the contracting officer, the offeror will be ineligible for award.

               (2) In sealed bidding acquisitions, each invitation for bids to perform a contract that is expected to exceed $700,000 ($1.5 million for construction) and that has subcontracting possibilities, shall require the bidder selected for award to submit a subcontracting plan. If the selected bidder fails to submit a plan within the time limit prescribed by the contracting officer, the bidder will be ineligible for award.

               (3) Each contract modification that causes the value of a contract without a subcontracting plan to exceed $700,000 ($1.5 million for construction), shall require the contractor to submit a subcontracting plan for the contract, if the contracting officer determines that subcontracting opportunities exist.

          (b) Subcontracting plans (see paragraphs (a)(1) and (2) of this section) are not required–

               (1) From small business concerns;

               (2) For personal services contracts;

               (3) For contracts or contract modifications that will be performed entirely outside of the United States and its outlying areas; or

               (4) For modifications that are within the scope of the contract and the contract does not contain the clause at 52.219-8, Utilization of Small Business Concerns.”

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