[Federal Register Volume 60, Number 131 (Monday, July 10, 1995)]
[Notices]
[Pages 35669-35671]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-16720]



      

  Federal Register / Vol. 60, No. 131 / Monday, July 10, 1995 / 
Notices  

[[Page 35669]]


DEPARTMENT OF DEFENSE


Test Program for Negotiation of Comprehensive Small Business 
Subcontracting Plans

AGENCY: Department of Defense (DoD).

ACTION: Notice of test program.

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SUMMARY: The Department of Defense is proposing to amend the Test 
Program for Negotiation of Comprehensive Small Business Subcontracting 
Plans.

DATES: Comments on the test plan should be submitted in writing at the 
address shown below on or before September 8, 1995 to be considered in 
finalization of the program.

ADDRESSES: Interested parties should submit written comments to: Office 
of Small and Disadvantaged Business Utilization, ATTN: Ms. Susan Haley, 
USD (A&T) SADBU, 3000 Defense Pentagon, Washington, DC 20301-3000. 
Telefax number (703) 693-7014.

FOR FURTHER INFORMATION CONTACT:
Ms. Susan Haley, (703) 697-9383.

SUPPLEMENTARY INFORMATION:

A. Background

    Under Section 834 of Pub. L. 101-189, as amended, the Department of 
Defense (DoD) established a test program to determine whether the use 
of comprehensive small business subcontracting plans would result in 
increased opportunities for small firms performing under Defense 
contracts. The initial test program covered a four-year period, 
beginning October 1, 1990.
    The period of the test program has been extended through September 
30, 1998, to implement Section 7103 of the Federal Acquisition 
Streamlining Act of 1994 (Pub. L. 103-355).
    With regard to eligibility criteria, the revised plan clarifies 
that the requirement for business concerns to annually receive $25 
million or more under DoD contracts applies at the corporate level. 
Eligibility criteria are further revised to require firms to have 
achieved a small disadvantaged business (SDB) subcontracting 
performance rate of 5 percent or more in order to participate, or to 
submit a special request for participation which would include a plan 
to achieve the 5 percent participation rate. All participants will be 
required to accept a 5 percent or higher SDB goal and must agree to 
comply with the provisions of Section 215.605 of the Defense Federal 
Acquisition Regulation Supplement regarding evaluation of small 
business (SB)/SDB participation in source selections.
    The revised plan reduces from quarterly to annually the requirement 
for the contracting officer (CO) to review the progress of 
participating contractors toward achievement of the SB, SDB and women-
owned small business goals as agreed upon in the comprehensive 
subcontracting plan. Submission of subcontracting reports (Standard 
Form (SF) 295) remains unchanged.
    The test plan is also amended to recognize revisions related to 
women-owned small business.
    The contracting activities under the military departments 
designated to participate remain unchanged. Defense agencies may 
nominate to the Director, Office of Small and Disadvantaged Business 
Utilization, Office of the Under Secretary of Defense (Acquisition and 
Technology) a contracting activity to participate in this program.
Susan Haley,
Office of Small and Disadvantaged Business Utilization.
    The revised test plan is as follows:
Test Program for Negotiation of Comprehensive Small Business 
Subcontracting Plans

I. Purpose

    This document implements section 834 of Public Law 101-189, the 
National Defense Authorization Act for Fiscal Years 1990 and 1991, as 
amended. The primary purpose of the Test Program (the Program) is to 
determine whether the negotiation and administration of comprehensive 
small business subcontracting plans will result in increased 
opportunities for small business concerns performing under Department 
of Defense (DoD) contracts.

II. Authority

    The Program is established pursuant to section 834 of the National 
Defense Authorization Act for Fiscal Years 1990 and 1991, as amended.

III. Program Requirements

    A. The Program shall be conducted from October 1, 1990, through 
September 30, 1998.
    B. The selection of contractors for participation in the Program 
shall be in accordance with section 834(b)(3). Large business concerns 
at the major (total) corporate level that, during the preceding fiscal 
year:
    1. Pursuant to at least five Department of Defense (DoD) contracts, 
furnished supplies or services (including professional services) to the 
DoD, engaged in research and development for the Department, or 
performed construction for the Department; and were paid $25,000,000 or 
more for such contract activities.
    2. (a) Achieved a small disadvantaged business (SDB) subcontracting 
participation rate of five percent or more during the preceding fiscal 
year 1994; or
    (b) Firms with an SDB subcontracting participation rate of less 
than five percent during the preceding fiscal year 1994 may request 
through the designated contracting activity to participate under the 
Comprehensive Subcontracting Test Program. Requesting firms shall 
submit a detailed plan with milestones leading to attainment of at 
least five percent SDB subcontracting participation rate by fiscal year 
1998. The provisions of paragraph B(2) do not apply to the eight 
original contractors accepted into the program.
    3. Shall accept a SDB goal for each fiscal year of not less than 
five percent, or a SDB goal that is in accordance with the milestone 
established in paragraph B(2)(b) above.
    4. Shall comply with the requirements of the Defense Federal 
Acquisition Regulation Supplement Subpart 215.605 for source selection 
purposes.
    C. For the purposes of the Program, to the extent practicable, 
contractors selected to participate shall establish their comprehensive 
subcontracting plans on the same corporate, division or plant-wide 
basis under which they submitted the Standard Form (SF) 295 during the 
preceding fiscal year except that in the case of a division or plant 
that historically reported through a higher level division, but would 
meet the criteria under B(2) above, shall be permitted to participate 
in the program if the division, plant or profit center can demonstrate 
a five percent or greater subcontract performance level with SDB 
concerns.
    D. Contractors selected for participation shall:
    1. Be eligible in accordance with III (B) and (C),
    2. Have reported to the DoD on the SF 295 for the last fiscal year, 
except as applicable under III(C) above,
    3. Offer a broad range of subcontracting opportunities,
    4. Voluntarily agree to participate, and
    5. Have at least one active contract that requires a subcontracting 
plan at the designated DoD buying activity responsible for negotiating 
the Comprehensive Subcontracting Plan.

IV. Elements of the Comprehensive Small Business Subcontracting Plan

    A. The comprehensive small business subcontracting plan shall 
address each of the eleven elements set forth in paragraph (d) of the 
clause at FAR 52.219-9, ``Small Business and Small Disadvantaged 
Business Subcontracting Plan.''

[[Page 35670]]

    1. The subcontracting plan, percentage and corresponding dollar 
goals for awards to small business, small disadvantaged business and 
women-owned small business concerns shall be developed by the 
contractor for its entire business operation in support of all DoD 
contracts regardless of dollar value.
    2. Participating contractors shall include separate specific goals 
and timetables for the awarding of subcontracts in two industry 
categories which have not historically been made available to small 
business, small disadvantaged business and women-owned small business. 
These industry categories will be recommended by the contractor and 
approved by the contracting officer. Subcontract awards made in support 
of the specific industry categories shall also count towards attainment 
of the overall small business, small disadvantaged business and women-
owned small business goals.
    3. The subcontracting plan shall set-forth the prime contractor's 
actions to publicize prospective subcontract opportunities for small 
business, small disadvantaged business and women-owned small business 
concerns.
    B. Subcontracting plans to be established under the Program shall 
be submitted each year by participating contractors to the designated 
contracting officer 45 days prior to the end of the Government's fiscal 
year (September 30). However, new contractors requesting participation 
under the Program shall submit subcontracting plans to the contracting 
officer as close as possible to September 30.

V. Procedures

    A. The Service Acquisition Executive within each Military 
Department and Defense Agency having contractors that meet the 
requirements of III(B) shall designate one contracting activity to 
participate in the Program.
    B. The designated contracting activity will accomplish the 
following:
    1. With the coordination of the Director, Office of Small and 
Disadvantaged Business Utilization for their military Department or 
Defense Agency, select as many eligible prime contractors for 
participation under the Program as deemed appropriate.
    2. Establish a ``Comprehensive Small Business Subcontracting Plan'' 
negotiating team(s) composed as follows:
    a. A contracting officer(s) who will be responsible for negotiation 
and approval of the comprehensive subcontracting plan(s) as well as the 
responsibilities at FAR 19.705.
    b. The contracting activity's Small and Disadvantaged Business 
Utilization Specialist.
    c. The Small and Disadvantaged Business Utilization Specialist of 
the cognizant contract administration activity that administers the 
preponderance of the selected prime contractor's contracts and/or the 
appropriate individual who will administer contractor performance under 
the test in accordance with FAR 19.706 and the provisions herein.
    d. Production specialist, price analyst and other functional 
specialists as appropriate.
    C. The designated contracting officer shall:
    1. Solicit proposed comprehensive subcontracting plans from 
selected contractor(s) as soon as possible and by July 1, annually 
thereafter.
    2. By October 1, and annually thereafter, review, negotiate and 
approve on behalf of the DoD a comprehensive subcontracting plan for 
each selected contractor.
    3. Distribute copies of the approved subcontracting plan in 
accordance with VI(A) below.
    4. Upon negotiation and acceptance of the comprehensive 
subcontracting plan, the contracting officer shall obtain from the 
contractor:
    a. A listing of all active DoD contracts that contain individual 
subcontracting plans required by section 211 of Public Law 95-507.
    b. The listing shall include the following:
    i. Contract number.
    ii. Name and address of the contracting activity.
    iii. Contracting officer's name and phone number.
    5. Upon receipt of the information provided by the participating 
contractor under 4 above, the contracting officer shall notify the 
designated administrative contracting officer to issue a comprehensive 
change order, which modifies all of the contractor's active DoD 
contracts that include subcontracting plans. The modification will 
substitute the contractor's approved comprehensive subcontracting plan 
for the individual plans, will substitute the clause at DFARS 252.219-
7004 for the clauses at FAR 52.219-9, and 52.219-16, respectively, and 
will delete the clauses at FAR 52.219-10 and DFARS 252.219-7003 and 
252.219-7005, as appropriate.
    6. Review annually, with the contract administration activity, 
contractor's performance under the plan. Document the review findings 
and distribute, in accordance with VI(A), within 45 days of the end of 
the fiscal year.
    7. By November 15 of the year after acceptance and annually 
thereafter, determine whether the contractor has met its comprehensive 
subcontracting goals. If the goals have not been met, determine whether 
there is any indication that the contractor failed to make a good faith 
effort and take appropriate action.
    8. By December 15, 1998, prepare and submit a report on each 
participating contractor's performance which details the results of the 
Program. The report must compare the contractor's performance under the 
Program with its performance for the three fiscal years prior to 
acceptance into the program. The report distribution will be in 
accordance with VI(A) below.
    D. Participating contractors:
    1. To the extent practicable, shall establish their comprehensive 
subcontracting plans on the same corporate, division or plant-wide 
basis under which they submitted the Standard Form (SF) 295 during 
fiscal year 1994, except those contractors that historically reported 
through a higher headquarters however as a separate reporting profit 
center, plant or division the contractor achieved an SDB subcontracting 
performance rate of five percent or greater in fiscal year 1994.
    2. Upon negotiation of an acceptable comprehensive subcontracting 
plan shall be exempt from individual contract by contract reporting 
requirements for DoD contracts unless otherwise required in accordance 
with (III)(B)(5).
    3. Shall continue individual contract reporting on non-DoD 
contracts.
    4. Shall comply with the flow-down provisions of section 211 of 
Public Law 95-507. Large business concerns receiving a DoD subcontract 
in excess of $500,000 ($1,000,000 for construction) are required to 
adopt a plan similar to that mandated by the clause at 52.219-9. 
Participating contractors are prohibited from flowing down the 
``Comprehensive'' subcontracting deviations provisions of 252.219-7004. 
Accordingly, large business subcontractors to the participating 
contractors shall be required to establish individual subcontracting 
plans with specific goals for awards to small business, small 
disadvantaged business and women-owned small business.
    5. Upon expulsion from the Program or Program termination on 
September 30, 1998, shall negotiate and establish individual 
subcontracting plans on all future DoD contracts that otherwise meets 
the requirements of section 211 of Public Law 95-507.

[[Page 35671]]


VI. Monitoring and Reporting of Comprehensive Subcontracting Plans and 
Goals

    A. Upon negotiation and acceptance of comprehensive subcontracting 
plans and goals the designated activity shall immediately forward one 
copy of the plan to each of the following:
    1. Director, Small and Disadvantaged Business Utilization, Office 
of the Under Secretary of Defense (Acquisition and Technology), Room 
2A338, The Pentagon, Washington, DC 20301-3061.
    2. Director, Small and Disadvantaged Business Utilization, for the 
Military Department or Defense Agency of the activity that negotiated 
and accepted the comprehensive subcontracting plan.
    3. The cognizant contract administration office.
    B. Each participating contractor shall complete the Standard Form 
(SF) 295 ``Summary Subcontract Report'' in accordance with the 
instructions on the back of the form on a quarterly basis, except as 
noted below:
    1. Participating contractors shall be exempt from completing items 
17 and 18 under ``Subcontract Goal Achievement.''
    2. Participating contractors shall enter in item 16 ``Remarks'' 
block the annual corporate, division or plant-wide small business, 
small disadvantaged business and women-owned small business percentage 
and corresponding dollar goals.
    3. Participating contractors shall also enter separately in item 14 
the percentage and corresponding dollar goals for each of the two 
selected industry category (see section IV(A)(2)).
    4. Participating contractors shall also enter separately in item 14 
on a quarterly cumulative basis the percentage and corresponding dollar 
amount of subcontract awards made in each of the two selected industry 
categories.
    5. Participating contractors shall be exempt from the completion of 
SF 294 ``Subcontract Report For Individual Contracts'' for DoD 
contracts during their participation in the Program.

[FR Doc. 95-16720 Filed 7-7-95; 8:45 am]
BILLING CODE 5000-04-M