Small Business Subcontracting Plans

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This page is intended to provide guidance on the preparation and reporting required for such plans, and to set out the responsibilities of the various parties involved in their preparation and submission.

The Small Business Subcontracting Program was designed to ensure that prime contractors further the goals of increasing participation of small businesses in federal procurement. A small business subcontracting plan (SBSP) is required on federal contracts that contain FAR 52.219-9 and/or DFARS 219.7 that are expected to total an estimated cost of $750,000 ($1.5 million for construction), for the entire period of performance. A small business subcontracting plan is also required of any subrecipient whose total dollar subcontract amount is expected to exceed total costs of $750,000 for the entire period of performance. Certain percentages of the direct cost expenditures must be spent with suppliers in small business categories.

The small business supplier categories and the federal prime contract percentage goals are:

Small Business Enterprise (SMB or SBE) – 23%
Small Disadvantaged Business (SDB) – 5%
Woman-owned Small Business (WOSB or WBE) – 5%
Historically Underutilized Business Zone (HUBZone) – 3%
Veteran-owned Small Business (VOSB) – 3%
Service-disabled Veteran-owned Small Business (SDVOSB) – 3%

Note: SDB, WBE, HUBZone, VOSB, and SDVOSB goals are subsets of SMB and are counted and reported in multiple categories, as appropriate.

Any non-personnel (non-salaried) supplies or services required for performance of the contract are legitimate expenses to consider for a subcontracting plan. The principal products/services subject to the purposes of a small business subcontracting plan include direct costs such as: lab supplies, lab equipment, travel, printing, and livery services that may be sponsored by the contract. Any work included in your budget which will be formally subcontracted (i.e., a portion of the scope of work is contracted out to a subrecipient via a subcontract) to another entity, may also be included in the plan to use a small business.

A sample form for a small business subcontracting plan is usually incorporated as an attachment link to a federal contract solicitation (RFP).

A small business subcontracting plan is generally required to be submitted with the proposal, and it is subject to negotiation during the negotiation phase of a proposal. Federal agencies have established subcontracting goals and generally include them with each RFP; the goals are also often set out in the sample form for a subcontracting plan. At the time of the proposal, it is generally sufficient to prepare the subcontracting plan for the total cost of a multi-year proposal.

Jump to

Responsibilities of University Parties I MaineStreet and MainStreet Marketplace Supplier Search Options I How to Prepare a Plan I SBSP Related FAQ I Other Resources

Responsibilities of University Parties

Please view the tabs below to understand how the responsibilities related to Small Business Subcontracting Plans are split and shared across different entities within the University:

Prepare small business subcontracting plans, consulting with Procurement Services for suppliers as needed, and submit to ORA for final review and authorization/signature
Prepare and submit required reports through eSRS (send to ORA for review/approval 10 days prior to submission): visit the site for guidelines and information
Maintain a list of vendors used to create the Small Business Subcontracting Plan, and update the list as needed
Monitor plan performance and make adjustments as necessary to achieve the plan goals
Cooperate in compliance reviews or audit situations
Work with Procurement Services when a contract has been awarded that has a small business subcontracting plan.
If FAR Clause 52.232-40 is an award term and condition, then staff shall work with UMS Procurement during PO creation to take measures to ensure that UMaine pays small business subcontractors on an accelerated timetable to the maximum extent practicable, and upon receipt of accelerated payments from the Government.

Review and authorize/sign final plan submitted with proposal
Accept awards on behalf of the University

If FAR Clause 52.232-40 is an award term and condition, then UMS Procurement shall take measures to ensure that UMaine pays small business subcontractors on an accelerated timetable to the maximum extent practicable, and upon receipt of accelerated payments from the Government, as per PO creation as noted above in PI and Departmental responsibilities.

MaineStreet and MaineStreet Marketplace Supplier Search Options

MaineStreet and MaineStreet Marketplace can be used to assist in the identification of small business suppliers for inclusion and use under the small business subcontracting plan:

Instructions for identifying suppliers in MaineStreet Marketplace with a specific diversity classification
Instructions for viewing all active MaineStreet Marketplace vendors with designated diversity class codes to satisfy the small business subcontracting plan requirements (Note: Enter the date 01/01/1900 the first time running this query).

How To Prepare A Plan

Please view this sample Small Business and Small Disadvantaged Business Subcontracting Plan Form. Please note: some sponsoring agencies have specific forms that may vary from this format. Please contact the sponsoring agency for further guidance on their preferred form.

The following series of directions directly correlate to this sample form and may be of assistance in helping gather the required information in most situations:

Required Information

Offeror: University of Maine System acting through the University of Maine

Address: 5717 Corbett Hall, Orono, Maine 04469-5717

Solicitation/Subcontract Number: Enter as applicable

Estimated Cost or Contract Price (including options): $[include full proposal or award amount]

Period of Performance (including option years): From: [Start Date] To: [End Date]

Type of Plan – select individual plan
Goals
- A. The total dollar amount for subcontracting is all dollars that will be paid to outside (non‐University) parties. This number includes large business dollars. This number serves as the baseline for the calculation of all other percentages that follow.
- B. Small business percentage (SB): calculate this as the fraction of applicable line item costs actually intended for small business suppliers, divided by the total in 2A.
- C. Veteran owned small business percentage (VOSB): Calculate this as the fraction of applicable line item costs actually intended for small disadvantaged business suppliers, divided by the total in 2A.
- D. Service‐disabled veteran‐owned small business percentage (SDVOB): Calculate this as the fraction of applicable line item costs actually intended for service‐disabled veteran‐owned small business suppliers, divided by the total in 2A.
- E. HUBZone small business percentage: calculate this as the fraction of applicable line item costs actually intended for HUBZone small business suppliers, divided by the total in 2A.
- F. Small disadvantaged business percentage (SDB): Calculate this as the fraction of applicable line item costs actually intended for small disadvantaged business suppliers, divided by the total in 2A.
- G. Woman‐owned small business percentage (WOSB): Calculate this as the fraction of applicable line item costs actually intended for woman‐owned small business suppliers, divided by the total in 2A.
  - Note: Federal Prime Contract Goals are:
    - SB = 23%
    - SDB = 5%
    - WOSB = 5%
    - HUBZone = 3%
    - VOSB = 3%
    - SDVOB = 3%
Include known suppliers and their applicable small business designations
Include explanation of how you identified small business concerns/suppliers, source lists, and how you determined the value for each.
List the sources used to identify suppliers.
Check applicable box for indirect costs and explain methodology to determine proportionate share to be allocated as subcontracts to SB, VSOB, SDVOSB, HSB, SDB, and WOSB if applicable.
Include any other duties in I.
Require subcontractors (other than small business concerns) that receive subcontracts in excess of $750,000 ($1.5 million for construction of a public facility) to adopt a subcontracting plan that complies with the requirements of the Small Business Subcontracting Plan clause.
- Include any additional efforts in C
View information for the departmental/financial administrator to submit your Subcontract Reports
Include on a division-wide (departmental) basis what you will do to maintain records in your department.
Enter Christopher Boynton, Director of Office of Research Administration, the date, and phone number 207-581-1484. For forms that require an address, use: 5717 Corbett Hall, Orono, ME 04469-5717

SBSP Related FAQ

Please utilize the following drop-down menu to view answers to FAQ related to Small Business Contracting Plans:

The Small Business Subcontracting Program was designed to ensure that prime contractors further the goals of increasing participation of small businesses in federal procurement. Per Federal Acquisition Regulation (FAR) Subpart 19.7, any contractor receiving a contract over $750,000 ($1.5 million for construction) must agree in the contract that 1) small business, 2) veteran-owned small business (VOSB), 3) service-disabled veteran-owned small business (SVOSB), 4) Historically Underutilized Business (HUBZone) small business, 5) small disadvantaged business (SDB) and 6) women-owned small business (WOSB) concerns will have the maximum practicable opportunity to participate in contract performance.

A small business subcontracting plan is generally required to be submitted with the proposal, and is subject to scrutiny during the negotiation phase of an award. Each Federal agency has established subcontracting goals and generally include them with the specific RFP; the goals are also often set out in the sample form for a subcontracting plan. At the time of the proposal, it is usually sufficient to prepare the subcontracting plan for the total cost of a multi-year proposal.

Yes. A small business subcontracting plan is also required of any subrecipient whose total dollar subcontract amount is expected to exceed total costs of $750,000 for the entire period of performance.

The most common small business subcontracting plan used by the University to date is an Individual Plan.

Individual Plan: This 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. If the offeror is submitting an individual plan, the plan must separately address subcontracting with small business, VOSB, SDVOSB, HUBZones, SDB and WOSB concerns with a separate part for the basic contract and separate parts for each option (if any). The plan shall be included in and made a part of the resultant contract.

Master Plan: A master plan contains all the elements required by the clause at 52.219-9, “Small Business Subcontracting Plan,” except goals and may be incorporated into individual contracts, provided the master plan has been approved. Contractors may establish a master plan, on a plant or division-wide basis. Master plans shall be effective for a three-year period after approval by the administrative contracting officer; however, it is incumbent upon contractors to maintain and update master plans.

This is something that the University is looking into for future use.

A business may self-certify as a small business on the System of Awards (SAM) database.

Other steps for checking include:

Check the Small Business Administration (SBA) Dynamic Small Business Search (DSBS) to search for companies/vendors/suppliers with various small business designations
Check the Vendor Information Pages (VIP) for Veteran companies
Check the Women’s Business Enterprise National Council (WBENC)
Check the National Minority Business Council (NMBC)
Check the Procurement Services Vendor/Supplier Search (requires Single Sign-On) to search University of Maine System Marketplace for companies/vendors/suppliers that have small business designations
Run a query (UMS_VENDORS_MM_CLASS) (Single Sign-On required) to view a listing of University diversity designated vendors to satisfy the small business subcontracting plan requirements

Your goals development should take into account:

Historical data and previous spend history
Projected forecast based upon current year’s data
Projected goals based on experience, business forecasts, & commitment to improvement, etc.

You will need to liaise with procurement or discuss previous specific purchases with your financial administrator to get an idea of what is realistic. Be prepared to justify in detail the goals proposed at the award/negotiation stage with the sponsor. For example, for certain specific pieces of equipment that are only made by large companies, a sole source justification is done per Procurement process guidance. It would be therefore, difficult to justify even 1% target under this budget category for a small disadvantaged business when you know that this is required.

Products and services from small business suppliers may be priced higher than what might be obtained through a large-business or university strategic contract. This, however, is not an acceptable explanation for not purchasing through a small business enterprise unless the cost difference is significant. Remember that when the PI commits to the spending goals and supplier sources identified in the small business plan, the spend should be placed with those suppliers, or suppliers within the same small business category or categories, regardless of possible savings elsewhere.

Any potential or actual conflict of interest (COI) with suppliers must be identified, and the University’s COI policy and procedures must be followed.

52.219-9(d)(11) describes “the types of records that will be maintained concerning procedures that have been adopted to comply with the requirements and goals in the plan”, including:

Source lists that identify small business types
Organizations contacted in an attempt to locate sources
Records with FAR-specified information on each subcontract solicitation resulting in an award of more than $150,000
Records of any outreach efforts
Records of internal guidance and encouragement provided to buyers

The requirement is to prepare and submit annual reports through the Electronic Subcontracting Reporting System: eSRS. This Internet-based tool streamlines the process of reporting on subcontracting plans and provides Federal agencies with access to analytical data on subcontracting performance and accomplishments.

Reports are required when due, regardless of whether there has been any subcontracting activity since the inception of the contract or since the previous report.

Submit all individual subcontracting reports (ISR) to ORA 10 days in advance of the submission deadline for review and approval.
Submit all Individual Subcontracting Reports (ISR) within 30 days of the close of each reporting period.
Check specific reporting periods with the Federal Agency – (generally semi-annual/annual)
Save a copy of the final submitted report on file and send a copy to ORA.

After the small business subcontracting plan is accepted by the sponsor, the expectation is that the goals will be met. Therefore, it will be necessary to explain in writing the reason spending could not occur during a federal reporting period and describe what efforts will be made to purchase from that business in the future. The PI must notify the sponsor of these circumstances.

If spend will not occur at all with the business, explain the reason why in writing and document the name of an alternate small business to provide the goods or services. If another small business cannot be used, document why, and the name of the large business from which the goods or services will be purchased. The PI must then contact the Sponsor to explain the situation.

Whenever a request to alter the contract is to be submitted, you should contact ORA to determine if a modified Small Business Subcontracting Plan is required. This could include adding an additional phase, extending the date, or increasing the contract dollar amount.

University of Maine could be held liable for fines.

Per FAR 19.702, legislation enacted in 1989 outlines financial penalties, referred to as “liquidated damages” for the prime contractor in the amount of the actual cash value for any shortfall not realized per Small Business Administration small/disadvantaged business subcontracting plan goals.

It is important to formulate a realistic small business subcontracting plan and execute its budgeting details. As indicated above, there are potential monetary penalties for not meeting goals. Moreover, non-compliance issues, such as not meeting goals set in the Small Business Subcontracting Plan, are documented by federal agencies and could affect all future funding applicants at the University.

The PI and department are responsible for managing and tracking spending on your small business subcontracting plan. Failure to meet the subcontracting goals may also negatively affect future funding prospects for other University of Maine applicants.

Depending on what stage of the process you are in, please contact the following for assistance:

Office of Research Administration
- Plan Review and Submission – Proposal administrator
- Justification and Negotiation – Award Reviewer
- General Inquiries – Email umgrants@maine.edu and reference the PARS number
Procurement
- Notify Procurement when sourcing vendors that you have a small business subcontracting plan. RFP v RFB (we cannot necessarily go with the lowest value bid).
- For general inquiries, email sourcing@maine.edu