[Federal Register Volume 61, Number 148 (Wednesday, July 31, 1996)]
[Notices]
[Pages 39950-39953]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-19414]
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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 amending its Test Program for
Negotiation of Comprehensive Small Business Subcontracting Plans.
EFFECTIVE DATE: July 31, 1996.
FOR FURTHER INFORMATION CONTACT: Mr. Tim J. Foreman, Office of Small
and Disadvantaged Business Utilization, DUSD (I&CP) SADBU, 3061 Defense
Pentagon, Washington, DC 20301-3061, telephone (703) 697-9384, telefax
(703) 693-7014.
SUPPLEMENTARY INFORMATION:
A. Background
In accordance with Section 834 of Public Law 101-189, as amended,
the Department of Defense (DoD) established a Test Program for
Negotiation of Comprehensive Small Business Subcontracting Plans (the
Program) to determine whether the use of comprehensive subcontracting
plans
[[Page 39951]]
on a corporate, division, or plant-wide basis would increase
subcontracting opportunities for small business concerns. DoD is
amending the Program to implement the requirements of Section 811 of
the National Defense Authorization Act for Fiscal Year 1996 (Pub. L.
104-106). The amendments (1) expand the purpose of the Program to
include determination of whether the negotiation and administration of
comprehensive subcontracting plans will reduce administrative burdens
on contractors while enhancing subcontracting opportunities for small
business concerns and small business concerns owned and controlled by
socially and economically disadvantaged individuals; (2) revise
contractor eligibility criteria under the Program to permit
participation by large business concerns who, during the preceding
fiscal year, furnished DoD with supplies or services under at least
three DoD contracts having an aggregate value of at least $5,000,000;
(3) require that the Service Acquisition Executive within each military
department and defense agency designate at least three, but not more
than five, contracting activities to participate in the Program; and
(4) require that participating contracting activities cover a broad
range of supplies and negotiate not less than five comprehensive
subcontracting plans.
Tim J. Foreman,
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 Comprehensive Small Business
Subcontracting Plan Test Program (the Program) is to determine whether
the negotiation and administration of comprehensive small business
subcontracting plans will reduce administrative burdens on contractors
while enhancing subcontracting opportunities for small business
concerns and small business concerns owned and controlled by socially
and economically disadvantaged individuals 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 811(b)(3) of the National Defense
Authorization Act For Fiscal Year 1996, Public Law 104-106. Eligible
contractors are large business concerns at the major (total) corporate
level that, during the preceding fiscal year:
1. Were performing under at least three DoD contracts; furnished
supplies or services (including professional services) to DoD, engaged
in research and development for DoD, or performed construction for DoD;
and were paid $5,000,000 or more for such contract activities; and
2. Achieved a small disadvantaged business (SDB) subcontracting
participation rate of 5 percent or more during the preceding fiscal
year. However, this requirement does not apply to the eight original
contractors accepted into the Program. Additionally, a large business
with an SDB subcontracting participation rate of less than 5 percent
during the preceding fiscal year may request, through the designated
contracting activity, to participate in the Program if the firm submits
a detailed plan with milestones leading to attainment of at least a 5
percent SDB subcontracting participation rate by September 30, 1998.
C. Contractors selected for participation shall:
1. Be eligible in accordance with paragraph III(B);
2. 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 a
division or plant that historically reported through a higher level
division, but would meet the criteria of paragraph III(B)(2), shall be
permitted to participate in the Program if the lower level division,
plant or profit center can demonstrate a 5 percent or greater
subcontract performance level with SDB concerns;
3. Have reported to DoD on the SF 295 for the last fiscal year,
except as provided in paragraph III(C(2);
4. Accept an SDB goal for each fiscal year of not less than 5
percent, or an SDB goal that is in accordance with the milestone
established under paragraph III(B)(2);
5. Comply with the requirements of Defense Federal Acquisition
Regulation Supplement (DFARS) Section 215.605 for source selection
purposes;
6. Offer a broad range of subcontracting opportunities;
7. Voluntarily agree to participate; and
8. 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 11 elements set forth in paragraph (d) of the
clause at FAR 52.219-9, ``Small, Small Disadvantaged and Women-Owned
Small Business Subcontracting Plan.''
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 and small disadvantaged business concerns. 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 and small disadvantaged 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
[[Page 39952]]
meet the requirements of paragraphs III(B) and (C) shall designate at
least three but not more than five contracting activities to
participate in the Program. In selecting the contracting activities to
participate in the Program, the Service Acquisition Executive shall
ensure that the designated activities cover a broad range of supplies
and services.
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 (at least
five) 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 DoD a comprehensive subcontracting plan for each
selected contractor.
3. Distribute copies of the approved subcontracting plan in
accordance with paragraph VI(A).
4. Upon negotiation and acceptance of the comprehensive
subcontracting plan, 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 paragraph V(C)(4), direct 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 clause at FAR 52.219-9, and will delete the clauses at FAR 52.219-
10 and 52.219-16 and DFARS 252.219-7003 and 252.219-7005, as
appropriate.
6. Review annually, with the current administration activity, the
contractor's performance under the plan. Document the review findings
and distribute, in accordance with paragraph 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 paragraph VI(A).
D. Participating contractors:
1. Shall establish their comprehensive subcontracting plans on the
same corporate, division or plant-wide basis under which they submitted
the SF 295 during the preceding fiscal year, except that those
contractors that historically reported through a higher headquarters
can elect to participate as a separate (lower level) reporting profit
center, plant or division if the contractor achieved an SDB
subcontracting performance rate of 5 percent or greater in the
preceding fiscal year.
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 paragraph III(C)(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 FAR 52.219-9.
Participating contractors are prohibited from flowing down the
``Comprehensive'' subcontracting deviation provisions of DFARS 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 concerns.
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 meet
the requirements of Section 211 of Public Law 95-507.
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, Office of Small and Disadvantaged Business
Utilization, Office of the Deputy Under Secretary of Defense
(International and Commercial Programs), 3061 Defense Pentagon, Room
2A338, 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 SF 295
``Summary Subcontract Report'' in accordance with the instructions on
the back of the form on a semi-annual basis, except as noted below:
1. One copy of the SF 295 and attachments shall be submitted to
Director, Office of Small and Disadvantaged Business Utilization,
Office of the Deputy Under Secretary of Defense (International and
Commercial Programs), 3061 Defense Pentagon, Room 2A338, Washington, DC
20301-3061.
2. Participating contractors shall enter in Item 14 ``Remarks''
block the annual corporate, division or plant-wide small business,
small disadvantaged business and women-owned small business
[[Page 39953]]
percentage and corresponding dollar goals.
3. Participating contractors shall also enter separate in Item 14
the percentage and corresponding dollar goals for each of the two
selected industry categories (see paragraph IV(A)(2)).
4. Participating contractors shall also enter separately in Item 14
on a semi-annual 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. 96-19414 Filed 7-30-96; 8:45 am]
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