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Course # 27 Small Business and AT&L Better Buying Power Initiatives. Wendy Despres Associate Director, Policy Management DoD Office of Small Business Programs. Janice Buffler Associate Director, Subcontracting DoD Office of Small Business Programs. Agenda. Current Requirements

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Course # 27

Small Business and AT&L Better Buying Power Initiatives

Wendy Despres

Associate Director, Policy Management

DoD Office of Small Business Programs

Janice Buffler

Associate Director, Subcontracting

DoD Office of Small Business Programs


Current Requirements

On-going Initiatives

Subcontracting Plan Requirements

Subcontract Reporting Requirements

Evaluation of Small Business (SB) Participation in Source Selections

current requirements
Current Requirements
  • DoDD 5000.1, The Defense Acquisition System
    • Requires Acquisition Strategies to facilitate SB participation throughout a program’s life cycle through direct participation (prime contracts) or teaming with SB concerns
    • Forms the basis for SB Specialist to assist in acquisition planning
  • DoDD 4025.01, DoD Small Business Programs, contains duties of SB specialists related to acquisition planning
current requirements1
Current Requirements
  • DoDI 5000.2 further requires consideration of:
    • Technologies developed under the Small Business Innovative Research (SBIR) Program
    • A diversified range of large and small businesses
    • Opportunities to implement socio-economic programs
  • FAR/DFARS Part 7 also cover acquisition planning and consideration of SB concerns
current requirements2
Current Requirements
  • Understand Defense Acquisition Guidebook, Chapter 2 – Acquisition Program Baselines, Technology Development Strategies, and Acquisition Strategies
    • Paragraphs 2.2.10 and 2.3.10 cover SBIR program and small business participation
    • DoD OSBP is a reviewer of Technology Development Strategy and Acquisition Strategy documents requiring DoD level approval
current requirements3
Current Requirements
  • Acquisition strategy reviews look for :
    • Market research completed
    • If SBs will perform any prime contracts under program and why or why not
    • If SB participation is maximized through subcontracting
    • If SBIR technologies were considered/will be used in the program


  • USD(AT&L) memo, September 14, 2010, Better Buying Power: Guidance for Obtaining Greater Efficiency and Productivity in Defense Spending
    • Requires increasing small business role in defense market place competition and directs CAEs to institute on all competitive and non-competitive procurements emphasis on small business utilization through weighting factors in past performance and in fee construct
    • Directs DoD OSBP to review acquisition plans for services >$1 billion and to be members of the OSD Peer Reviews of services acquisitions
  • Senior Integration Group (SIG) established to implement efficiency initiatives – approved subcontracting initiatives 14 Dec 2010
  • President’s Interagency Task Force on Federal Contracting Opportunities for Small Businesses
    • Established April 2010
    • Report issued Jan 2011
    • Established Small Business Procurement Group in order to give White House and Co-Chairs of Task Force an opportunity to meet regularly with senior agency leadership and discuss the steps taken to increase small business contracting
  • Small Business Jobs Act, P.L. 111-240

The SBJA overlaps with SB Task Force and Dr. Carter’s efficiency initiatives (memos 14 Sep 10 and 3 Nov 10) on some subcontracting initiatives.

The SBJA overlaps with SB Task Force and Dr. Carter’s efficiency initiatives (memos 14 Sep 10 and 3 Nov 10) on some subcontracting initiatives.

Dr. Carter’s Efficiencies Initiatives – SB Utilization

Overlap: General areas

-Evaluation of Plans in source selection

-Review of regs/policies, develop best practices

-Past Performance evaluations for SB utilization (CPARS/PPIRS)

-Content and enforcement of subcontracting plans/contract requirements

  • Institute in all competitive and non-competitive procurement actions emphasis on small business utilization through weighting factors in past performance and in fee construct
  • 1. Source Selection and Incentive Fees evaluate small business utilization
  • 2. Draft Best Practices Guide for small business utilization
  • 3. Maximize CPARS feedback regarding SB utilization

Task Force


Jobs Bill

Task Force Recommendations for Subcontracting

  • 4. Strengthen subcontracting
  • a. Review regulations and policies on subcontracting to determine where improvements needed
  • b. Compliance reviews of PPIRS submissions should consider whether agency assessments of contractor performance provide useful performance information on prime contractors’ achievement of subcontracting plan goals that can be used for future source selections
  • c. SBA and IAE should improve eSRS to allow linking information with other govt-wide systems, such as PPIRS
  • d. SBA should update or issue new policies to address submission and review of subcontracting reporting to better capture subcontracting at all tiers
  • 10. Share best practices across the agencies to maximize successful strategies

Efficiencies Initiatives


Jobs Bill – Part II Subcontracting Integrity

  • Subcontracting Misrepresentations – strengthens enforcement and requires definitions of roles and assignment of responsibilities
  • Small Business Subcontracting Improvements -- addresses “bait-and-switch” issue
  • 1334. Payment of Subcontractors
  • 1347. Small Business Subcontracting Parity -- establishes statutory federal subcontracting goal of 3% for HUBZone Small Business
subcontracting plans
Subcontracting Plans
  • Regulatory Requirements
  • Overview of Subcontracting Plans
    • Types
    • Contents (highlights)
    • Pre-Award Responsibilities (Who does what?)
    • Post-Award Responsibilities (Who does what?)
  • Reporting Requirements
subcontracting plans2
Subcontracting Plans


  • Total Planned subcontract $
  • Goals (% and $) for each category based on total planned subcontract $
  • Indirect costs (included/not included) & method used to determine %
  • Descriptions
    • Principal types supplies/services subcontracted
    • Method used to develop goals
    • Method used to identify potential SB sources
    • Efforts to ensure SBs have equitable opportunity to compete for subcontracts
subcontracting plans3
Subcontracting Plans

Elements (cont.)

  • Company POC administering subcontracting & duties
  • Record Keeping: description / procedures / records
  • Flow-down FAR 52.219-8 and 9 & related DFARS clauses
  • Assurances
    • Cooperate in studies / surveys
    • Submit reports, as required
    • Submit subcontracting reports in Electronic Subcontracting Reporting System (eSRS) as required
    • Subcontractors submit subcontracting reports in eSRS as required
    • Provide its prime contract #, DUNS #, email address to all first-tier subs who also do same for their next-tier subs
subcontracting plans4
Subcontracting Plans
  • Master Subcontracting Plan
    • Can be developed on plant/division basis
    • Effective 3 yrs after Administering Contracting Officer approval (IAW DFARS)
    • Contains all elements of subcontracting plan (except goals)
    • Goals negotiated for each applicable contract
    • Approved master plan with goals becomes Individual Subcontracting Plan upon contract award
subcontracting plans5
Subcontracting Plans
  • Individual Subcontracting Plan
    • 1 plan – 1 contract
    • Goals (% and $ based on planned subcontracting)
    • Covers entire contract period
    • Requires Individual Subcontracting Reports (ISRs) and Summary Subcontracting Reports (SSRs) semiannually
subcontracting plans6
Subcontracting Plans
  • Commercial Subcontracting Plan
    • Preferred for contractors furnishing commercial items
    • Applies to entire production of commercial items sold by either entire company or a portion thereof (division, plant, or product line)
    • Based on contractor’s fiscal year
    • Annual plan (applies to all government contracts in effect)
    • Contains mandatory elements
    • Requires SSR annually
subcontracting plans7
Subcontracting Plans
  • DoD Comprehensive Subcontracting Plan Test Program (CSP)
    • Test program for negotiation of comprehensive subcontracting plan
    • May be for a division, plant, or corporation
    • Annual plan (applies to all DoD contracts in effect during FY)
    • Only DCMA is delegated authority to negotiate plan and perform surveillance review functions (with input from departments/agencies)
    • Requires SSR semiannually
subcontracting plans8
Subcontracting Plans
  • Reviewing the Subcontracting Plan
    • CO reviews for adequacy ensuring required information, goals and assurances are included
    • Ensure goals are attainable in relation to
      • Subcontracting opportunities available to contractor based on market research (efficient/economical performance of contract)
      • Pool of eligible subcontractors available
    • PCO/ACO evaluate past performance in subcontracting to Small Businesses
subcontracting plans9
Subcontracting Plans
  • Procuring/Awarding CO’s Responsibility
    • Pre-award
      • Consider contractor’s compliance with plans submitted on previous contracts as a factor in determining responsibility (CPARS and eSRS)
      • Give agency small business specialist and SBA Procurement Center Representative (PCR) opportunity to review plan
      • Ensure acceptable plan is incorporated into and made a material part of the contract
subcontracting plans10
Subcontracting Plans
  • Procuring/Awarding CO’s Responsibility
    • Post-award
      • Send SBA (Area Director, Office of Government Contracting & Procurement Center Representative) copy of contract
      • Initiate action to assess Liquidated Damages, when justified
      • Enforce terms of the contract (feedback from administering contracting officer)
      • Ensure that contract in FPDS indicates Subcontracting Plan is required
      • Acknowledge receipt of or reject ISRs and/or SSRs in eSRS
subcontracting plans11
Subcontracting Plans
  • Administering Contracting Officer’s Responsibility
    • Assist in:
      • Evaluating subcontracting plan prior to approval
      • Monitoring, evaluating and documenting contractor performance against subcontracting plan
    • Furnish documentation/information on contractor’s performance/compliance with plans under previous contracts (needs to be documented in CPARS)
subcontracting plans12
Subcontracting Plans
  • Assessment of performance/compliance against subcontracting plans includes:
    • Extent to which contractor is meeting goals in plan
    • Whether contractor’s efforts to ensure participation are in accordance with subcontracting plan
    • Whether contractor is requiring its subcontractors to adopt similar plans
    • Whether contractor is submitting ISRs and SSRs and reviewing ISRs submitted by its subcontractors
    • Whether contractor’s failure to comply resulted from a lack of “good faith effort”
    • Whether contractor met goals at contract completion (if not, why)
subcontracting plans13
Subcontracting Plans
  • Individual Subcontracting Reports (ISRs):
    • Awarding CO responsible for acknowledging receipt/rejecting ISRs submitted by prime contractor
      • Prime contractor responsibility for its lower-tier subcontractors
    • ISR contains 2 sections:
      • Goals ($ and %): Contractor inputs based on Subcontracting Plan
      • Actuals (inception of contract end of reporting period):
        • Contractor inputs $
        • System calculates % based on total actual subcontracting $
    • Failure to meet goals is not reason to reject ISR
      • Contractor must provide explanation and plan for corrective action
subcontracting plans14
Subcontracting Plans
  • SSRs for Individual Subcontract Plan:
    • Contractor submits consolidated SSR encompassing all subcontracting under prime contracts awarded by the departments/agencies and/or subcontracts awarded by DoD prime contractors, except construction,
      • Contractor submits to department/agency which administers majority of its subcontracting plans
    • For construction and related maintenance repair type contracts, contractor submits separate report to each department/ agency which awarded such contracts
    • SSR Agency Coordinator has responsibility to acknowledge receipt of or reject SSR
subcontracting plans15
Subcontracting Plans
  • SSRs for Commercial Subcontract Plan:
    • Contractor submits SSR encompassing all subcontracting under the commercial plan in effect during the government’s fiscal year
      • Includes federal government contracts AND non-federal government contracts
    • If performing work for more than one federal government agency, contractor must specify the percentage of total subcontracting $ attributable to each agency
    • Contractor indicates the federal agency or DoD department/agency contracting office that approved its Commercial Subcontracting Plan
      • Approver of Plan has responsibility to acknowledge receipt of or reject SSR
evaluation of sb participation
Evaluation of SB Participation
  • Acquisition strategies should achieve maximum practicable opportunity for SBs to be primes or subcontractors:
    • Market research must address SB participation at the prime and subcontract level
    • For unrestricted acquisitions source selection evaluation must include a separate factor for SB participation and past performance as it relates to SB utilization
    • Outline plan for measuring the achievement of socioeconomic goals and evaluating performance as it relates to SB utilization
evaluation of sb participation1
Evaluation of SB Participation
  • References
    • FAR 15.304(c)(3) and 5
      • Evaluate past performance for subcontracting
      • Include SB participation as an evaluation factor for solicitations involving bundling
    • DFARS 215.304(c)
      • SB participation shall be evaluated in best value source selections when a subcontracting plan is required
    • DFARS 215.305
      • Evaluate past performance regarding SB participation
evaluation of sb participation2
Evaluation of SB Participation
  • DFARS PGI 215.304 provides example evaluation criteria:
    • Extent to which SB firms are specifically identified in proposals
    • Extent of commitment to use such firms
    • Complexity and variety of work
    • Realism of the proposal
    • Past performance of complying with subcontracting requirements
    • Extent of participation of SB firms in terms of the value of the total acquisition
evaluation of sb participation3
Evaluation of SB Participation

What is the difference between FAR/DFARS Subpart 19.7 and DFARS 215.3?

evaluation of sb participation4
Evaluation of SB Participation
  • Review and evaluation of the subcontracting Plan and the SB participation factor are separate:
    • Subcontracting plan is evaluated against requirements of FAR 52.219-9 included in the solicitation
    • SB participation is evaluated against the criteria contained in the solicitation (e.g. Sections L and M)
  • But both:
    • Consider past performance on prior plans and contracts and rely on current market research
    • Utilize input from ACO, SB Specialists, and SBA
    • Must show the same total subcontracted dollars and subcontracted dollars to SB (note goals will be different if evaluation was based on total value of the acquisition)
evaluation of sb participation5
Evaluation of SB Participation
  • Reporting required
    • ISR (SF 294), SSR
    • Additional reporting may be needed when SB subcontracting is based on TCV (be reasonable)
    • Don’t forget about SB primes – they don’t report in eSRS:
      • Small Business Act prohibits requiring a small business to submit a subcontracting plan or report in eSRS
    • The Government must ensure that SB participation proposed by a SB and included in the contract is monitored for compliance so separate reporting requirements are required that must be tailored for small businesses and are not overly burdensome
evaluation of sb participation6
Evaluation of SB Participation
  • Contract
    • Incentives should include SB participation
    • Contractors must be held accountable for SB participation performance -- what happens if contract requirements are not met
    • Consent to Subcontract – if specific small business subcontractors are indentified in proposals they should be listed in the contract and the prime contractor should be required to notify the Contracting Officer if a change needs to be made so that the Contracting Officer can assess the impact to SB participation and negotiate the change before granting approval
evaluation of sb participation7
Evaluation of SB Participation
  • For SB participation evaluation to be effective, the Government must:
    • Ensure eSRS reports are completed
    • Ensure all other reports required for SB participation are completed
    • Utilize the Contractor Performance Assessment Reporting System (CPARS) – SB specialists assists technical and contracting personnel
evaluation of sb participation8
Evaluation of SB Participation
  • Small Business Specialists should:
    • Participate in acquisition planning
    • Ensure that SB participation is an evaluation factor in best value source selection as required by DFARS 215.304
    • Advise and assist with monitoring of performance related to SB subcontracting plan and SB participation requirements of the contract
    • Become knowledgeable on CPARS SB Utilization Evaluation and advise contracting activity and COTR
evaluation of sb participation9
Evaluation of SB Participation
  • A complete source selection will:
    • Highlight how the evaluation of the subcontracting plan (FAR 19.7) will differ from the evaluation of SB participation
    • Explain how offers from SB prime contractors must be structured and how they will be evaluated
    • State that SB participation evaluation applies to Comprehensive Subcontracting Plan participants
evaluation of sb participation10
Evaluation of SB Participation
  • A complete source selection evaluation will:
    • State SB targets for the contract as a baseline
      • For each socioeconomic category
      • State if based on total contract value (TCV)
        • Define TCV
        • If based on TCV, explain how percentages and dollars should be stated in subcontracting plan (FAR 19.7)
evaluation of sb participation11
Evaluation of SB Participation
  • A complete source selection evaluation will:
    • Give large business offerors a higher evaluation rating for exceeding the RFP targets provided the other information shows the targets proposed are reasonable and realistic
    • Require offerors to:
      • List subcontractors and principal supplies or services to be provided
      • Describe complexity of supplies and services to be provided
evaluation of sb participation12
Evaluation of SB Participation
  • A complete source selection evaluation will:
    • Examine binding/enforceable subcontracting agreements if documentation is provided
    • Evaluate past performance as it relates to small business participation in addition to the overall past performance evaluation (DFARS 215.305)
    • Review eSRS reports (ISRs/SSRs or SF 294s)
evaluation of sb participation13
Evaluation of SB Participation
  • A complete source selection evaluation will:
    • State the basis for award
      • Describe how offerors will be rated
      • Describe how SB offerors will be rated
    • Include contract language to prevent “bait and switch” (consent to subcontract)
    • VERY IMPORTANT!! – The SB participation evaluation factor should be a factor (not subfactor) with meaningful weight

Current DoD policy and regulations require consideration of SB concerns during acquisition planning

It is important to involve Small Business Specialist and SBA early in the acquisition process

Subcontracting plans are mandatory for certain acquisitions and have 11 elements

Awarding Contracting Officer reviews ISRs

SSR Agency Coordinator reviews SSRs (Contracting Officer who approved Commercial Subcontract Plan)

In addition, DoD regulation requires SB participation to be evaluated in best value source selection when the value >$650,000


  • For a copy of the SB task force report:

  • For DoD Directives and Instructions

  • For Dr. Carter’s efficiencies memo:

  • For Small Business Jobs Act: