Rule Would Update FAR Policy on Small Business Subcontracting

The Department of Defense, General Services Administration, and National Aeronautics and Space Administration are proposing to amend Federal Acquisition Regulation policy on small business subcontracting. The rule implements a 2013 Small Business Administration final rule (¶70,425.501) addressing sections 1321 and 1322 of the Small Business Jobs Act of 2010 (PL 111-240). The SBA rule revised SBA 125.3 and implemented extensive changes aimed at increasing small business opportunities.

Calculating Subcontracting Credit

The proposed rule would implement a change in the method agencies use to receive small business subcontracting credit. Historically, the agency that awards the contract also receives the small business subcontracting credit. The proposed rule would change this model by allowing the funding agency to receive the small business credit. SBA implemented this change to address the concerns expressed by users of multi-agency contracts and government-wide acquisition contracts. The funding agencies would receive small business subcontracting credit for all contract vehicles, not just MACs and GWACs.

Summary Subcontract Reports

Also, the rule proposes to amend the clause at FAR 52.219-9, Small Business Subcontracting Plan, to change the requirement for a prime contractor to submit Summary Subcontract Reports for DoD and NASA contracts to annually rather than semi-annually, and delete the requirement for a prime contractor to submit a separate report to each DoD component for construction and related maintenance and repair contracts. A proposed Alternate IV to the clause would be used in contracts where a subcontracting plan will be required when a modification causes the contract to exceed the threshold for a subcontracting plan and there are subcontracting opportunities. A complete listing of the affected FAR provisions appears in the regulation table below. Comments referencing FAR Case 2014-003 are due August 10, 2015. For the text of the proposed rule, see ¶70,006.304.