Commercial Subcontracting Plan A Commercial Plan is a Subcontracting Plan that covers the Offeror’sfiscal year and applies to the organization’s entire production of commercial items sold. Unlike the Master Plan, Commercial plan does include goals, and is the preferred type of Subcontracting Plan for contractors furnishing commercial items.
What is a (D) commercial subcontracting plan?
(d) A commercial plan (as defined in 19.701) is the preferred type of subcontracting plan for contractors furnishing commercial items.
What is a small business subcontracting plan?
A small business subcontracting plan helps you determine and meet your subcontracting goals because you have to set-aside a dollar estimate for small businesses before you begin working on your contract. There are two types of plans: commercial and individual. We will go into further detail on these below.
What is the difference between a commercial and individual subcontracting plan?
To sum it up, you will need an individual plan for each of your contracts. Unlike the commercial plan, the goals are based on what you expect to subcontract for the period of the entire contract, instead of your past performance from the previous fiscal year.
Do I need to submit a subcontracting plan?
The requirement to submit a subcontracting plan does not apply to: A subcontracting plan that covers the company’s fiscal year and that applies to the entire production of commercial items sold by either the entire company or a portion thereof (i.e. division, plant, or product line).
When are subcontractor reports due?
What is a master plan?
How long does a master plan last?
Can a contractor subcontract another plan?
What dollar value is a subcontracting plan required?
$750,000Federal law requires a subcontracting plan if the value of contract exceeds a set dollar amount—currently $750,000.
What is a master subcontracting plan?
Master subcontracting plan means a subcontracting plan that contains all the required elements of an individual subcontracting plan, except goals, and may be incorporated into individual subcontracting plans, provided the master subcontracting plan has been approved.
What is the purpose of subcontracting?
Key Takeaways. Subcontracting refers to the practice of bringing in an outside company or individual to perform specific parts of a contract or project. In most cases, a company subcontracts another business to perform a task that cannot be handled internally.
Are subcontracting plans required for GSA orders?
Specifically for GSA contractors, if your business is considered an "Other than Small Business" under the primary NAICS Code as defined by GSA, and if your estimated GSA contract value exceeds $700,000 ($1.5 million for construction), then you are required to submit a subcontracting plan for the contract if the ...
What is included in a subcontracting plan?
What is an Individual Subcontracting Plan? According to the FAR, an individual subcontracting plan “covers the entire contract period (including option periods), applies to a specific contract, and has goals that are based on the offeror's planned subcontracting in support of the specific contract.”
What is the difference between a small business participation plan and a small business subcontracting plan?
Since the Small Business Participation Plan allows government agencies to contract directly with small businesses, the monetary goals are based on total value of a contract. The goals of a Small Business Subcontract are based on total dollars the prime contractor subcontracts out to the small-business operators.
What is the example of subcontracting?
An example might be a construction company that's been employed to build a house deciding to subcontract all the plumbing and electrical work out. In other words, they are paid for the entire job, and then they pay a plumber and an electrician to do specific parts of the job.
What is the disadvantage of subcontracting?
Choosing to be a subcontractor can mean a reliable source of work without seeking new clients or being employed by a company. However, it can come with some significant drawbacks — pay may be less reliable, taxes may be more complicated and you'll probably have less control over who you work with on a day-to-day basis.
What are the different types of subcontracting?
Different types of subcontractorsExcavation. Before a project can start, some general contractors will hire an excavation sub to prepare the site for building. ... Concrete. ... Framing. ... Roofing, siding, and sheet metal work. ... Plumbing. ... HVAC. ... Electrical. ... Carpentry.More items...•
Can the government direct a subcontractor?
Unlike prime contractors, subcontractors do not work directly with the government, but instead work for other contractors. Some government contracts require large companies to subcontract with a small business. This creates more opportunities for small businesses to get involved in federal contracting.
What is the simplified acquisition threshold for 2022?
$250,000While these rates are periodically adjusted for inflation, the thresholds remain unchanged going into 2022. Currently, the micro-purchase threshold is $10,000 and the simplified acquisition threshold is $250,000.
What is current simplified acquisition threshold?
The simplified acquisition threshold is set by the Federal Acquisition Regulation at 48 CFR Subpart 2.1 (Definitions) and in accordance with 41 U.S.C. 1908. As of the publication of this part, the simplified acquisition threshold is $150,000, but this threshold is periodically adjusted for inflation.
What is the simplified acquisition threshold for 2022?
$250,000While these rates are periodically adjusted for inflation, the thresholds remain unchanged going into 2022. Currently, the micro-purchase threshold is $10,000 and the simplified acquisition threshold is $250,000.
What is current simplified acquisition threshold?
The simplified acquisition threshold is set by the Federal Acquisition Regulation at 48 CFR Subpart 2.1 (Definitions) and in accordance with 41 U.S.C. 1908. As of the publication of this part, the simplified acquisition threshold is $150,000, but this threshold is periodically adjusted for inflation.
When is a Subcontracting Plan required? - The Wifcon Forums and Blogs
In my experience such a plan would describe the responsibilities of the prime and each sub as they relate to each other, the distribution of work, the lines of authority (bearing in mind that the prime must be "in charge"), perhaps a past working relationships among the prime and the sub(s), the qualifications of the subs, the prime's past experience in managing subs, etc.
48 CFR § 19.704 - Subcontracting plan requirements.
(a) Each subcontracting plan required under 19.301-2(e) and 19.702(a)(1)(i), (ii), and (iii) shall include - (1) Separate percentage goals for using small business (including ANCs and Indian tribes), veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business (including ANCs and Indian tribes) and women-owned small business ...
219.704 Subcontracting plan requirements. | Acquisition.GOV
(1) In those subcontracting plans which specifically identify small businesses, prime contractors shall notify the administrative contracting officer of any substitutions of firms that are not small business firms, for the small business firms specifically identified in the subcontracting plan.
Model Small Business Subcontracting Plan - GSA
EXHIBIT 13 subcontracts. [Company XXX] will make every effort to ensure that small, HUBZone small, small disadvantaged, women-owned small, veteran-owned small, and service-disabled veteran-owned small business concerns will have an equitable opportunity to compete for subcontracts.
DoD SUBCONTRACTING PROGRAM The Basics of Subcontracting (Sept 2019)
DFARS 219.7 Class Deviations: 2018-O0007, 12/13/2017 2018-O0010, 1/9/2018 . FAR 52.219-9, Small Business Subcontracting Plan, and Alternate III
What is the purpose of a small business subcontracting plan?
The purpose of the small business subcontracting plan is to ensure Other Than Small Businesses (OTSB), any business that is not considered a small business, are setting aside part of the federal money they receive to subcontract to small businesses. The plan is essentially a projection of how you want to allocate your contract requirements between ...
What Are the Types of Subcontracting Plans?
If you have to submit a subcontracting plan for your GSA Schedule contract, there are two options you can choose from: commercial and individual.
How does a small business subcontract work?
Small business subcontracting allows contractors to outsource a portion of their federal contracting dollars to small businesses. These small businesses do not work directly with the government, instead they work with the contractors to provide ...
How much of a $200 contract should be subcontracted?
For example, if you have a $200 contract from the government (much smaller than any actual contract), you might expect $100 to be subcontracted. Of that $100, you might give $71 of that to OTSBs, and $29 to small businesses. In this plan, you’ll need to delineate how much you will allocate to each small business subcategory.
What are the two types of plans?
There are two types of plans: commercial and individual. We will go into further detail on these below.
How much money did the government give to small businesses in 2019?
In Fiscal Year (FY) 2019, the federal government awarded $132 billion in prime contract dollars to small businesses and awarded just over $90 billion in subcontracts to small businesses.
Which is the preferred plan for product manufacturers?
Commercial is the preferred plan for product manufacturers because this type of plan automatically includes indirect spending, including all of your corporate expenses (more detail on indirect vs. indirect spending below). It’s more difficult for product manufacturers to tie direct contract spending to subcontracting goals.
How much is a federal subcontractor required to maintain?
Federal contractors are required to maintain an acceptable subcontracting plan if they are an other than small business (including all subsidiaries and affiliates, both foreign and domestic) and the estimated dollar value of the base contract and all option periods exceeds, or is expected to exceed, $750,000.
Do contractors have to report subcontracting?
Contractors are required to report all subcontracting achievements through the eSRS . For instructions on how to use submit an eSRS report download the eSRS Reporting Guide (Updated 09/2020) training presentation!
What is subcontracting in construction?
Key Takeaways. Subcontracting refers to the practice of bringing in an outside company or individual to perform specific parts of a contract or project. In most cases, a company subcontracts another business to perform a task that cannot be handled internally. In the construction business, a general contractor typically organizes several ...
What Is Subcontracting?
Subcontracting is the practice of assigning, or outsourcing, part of the obligations and tasks under a contract to another party known as a subcontractor.
What is a general contractor?
In the construction business, a general contractor typically organizes several subcontractors that specialize in specific trades.
Why is subcontracting important?
Subcontracting is very useful in situations where the range of required capabilities for a project is too diverse to be carried out by a single general contractor. In such cases, subcontracting parts of the project that do not form the general contractor's core competencies may assist in keeping costs under control and mitigate overall project risk. It may even grant some defense in a vis major situation.
Is outsourcing a variable cost?
From a management point of view, outsourcing is a variable cost that occurs only when the work is needed whereas hiring full-time employees is a fixed cost that occurs whether the work is available or not. That is called operating leverage. It is high when the fixed cost structure is high and vice versa.
Does a subcontractor have to pay Social Security?
If this happens, the primary contractor will be required to pay Social Security tax and benefits.
Can a subcontractor claim Medicare?
These expenses have to be ordinary and necessary for the operation of a self-employed business. This means that a subcontractor would not be able to claim a deduction on an expense they would normally make without the business.
What is a subcontracting plan?
The subcontracting plan is a document that is typically incorporated into your contract with your customer.
What is a commercial plan?
A Commercial Plan is a Subcontracting Plan that covers the Offeror’sfiscal year and applies to the organization’s entire production of commercial items sold. Unlike the Master Plan, Commercial plan does include goals, and is the preferred type of Subcontracting Plan for contractors furnishing commercial items.
What is a master plan?
A Master Plan is a general Subcontracting Plan that does not refer to a specific project or contract. It describes the contractor’s (non-specific) Small Business Subcontracting Plans and includes all the elements of the Individual Subcontracting Plan EXCEPT goals.
How long does a master subcontracting plan last?
Master subcontracting plans shall be effective for a 3-year period after approval by the contracting officer; however, it is incumbent upon contractors to maintain and update master subcontracting plans. Changes required to update master subcontracting plans are not effective until approved by the contracting officer.
When are subcontractor reports due?
Reports are due 30 days after the close of each reporting period, unless otherwise directed by the contracting officer. Reports are required when due, regardless of whether there has been any subcontracting activity since the inception of the contract or the previous reporting period.
What is a small business concern?
An offeror used a small business concern in preparing the bid or proposal if -. (i) The offeror identifies the small business concern as a subcontractor in the bid or proposal or associated small business subcontracting plan , to furnish certain supplies or perform a portion of the contract; or.
Can a contractor subcontract another plan?
Once a contractor's commercial plan has been approved, the Government shall not require another subcontracting plan from the same contractor while the plan remains in effect, as long as the product or service being provided by the contractor continues to meet the definition of a commercial item. The contractor shall -.
How long can a contractor use a commercial plan?
Once approved by a government contracting officer, the contractor may use the commercial plan for any federal government contract during the 12 month period covered by the plan.
When does a contractor's commercial plan remain in effect?
Remains in effect during the Contractor’s fiscal year for all Government contracts in effect during that period. Once a Contractor’s commercial plan has been approved, the Government shall not require another subcontracting plan from the same Contractor while the plan remains ineffect, as long as the product or service being provided continues to meet the definition of a commercial item.
When to submit a new commercial plan?
Submit a new commercial plan, 30 working days before the end of the Contractor’s fiscal year (i.e., plan expiration date)
When does SSR cover subcontracting?
While the commercial plan covers your company’s fiscal year, the SSR covers all subcontracting done during the government’s fiscal year (October 1 through September 30)
Fara Fasat
Someone asked a similar a similar question a few years ago, and it got one somewhat cautious response. I'd like to ask it again more directly and see what anyone thinks.
Vern Edwards
So - is a subcontracting plan required from a commercial item subcontractor?
joel hoffman
Not by the government. I believe that a prime can require a subcontracting plan for a commercial subcontract . Not sure that it would make sense to though.
General.Zhukov
Interests:Deception & surprise, combined arms maneuver to encircle and destroy the enemy, T-34-85 Soviet Medium Tanks.
joel hoffman
Interesting. In my experience, some of the prominent, big Federal (Defense) contractors with extensive cost reimbursement contract share of their business would “OutFAR” us. We would try to back them off of their extreme interpretations, especially when they would apply their logic or mindset to certain aspects of FFP contracts.
Neil Roberts
Interests:Providing comments and references for educational purposes. No legal advice is given or intended.
Fara Fasat
Good to know the experts think the answer is no. Too bad some of our largest and (allegedly) most experienced aerospace and defense contractors think the answer is yes.
When are subcontractor reports due?
Reports are due 30 days after the close of each reporting period, unless otherwise directed by the contracting officer. Reports are required when due, regardless of whether there has been any subcontracting activity since the inception of the contract or the previous reporting period.
What is a master plan?
A master plan, when incorporated in an individual plan, shall apply to that contract throughout the life of the contract. (c) For multiyear contracts or contracts containing options, the cumulative value of the basic contract and all options is considered in determining whether a subcontracting plan is necessary.
How long does a master plan last?
Master plans shall be effective for a 3-year period after approval by the contracting officer; however, it is incumbent upon contractors to maintain and update master plans. Changes required to update master plans are not effective until approved by the contracting officer.
Can a contractor subcontract another plan?
Once a contractor’s commercial plan has been approved, the Government shall not require another subcontracting plan from the same contractor while the plan remains in effect, as long as the product or service being provided by the contractor continues to meet the definition of a commercial item. The contractor shall-.
