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Subcontracting for Prime Contractors

Section
Managing My GSA Contract
Topic
Contract Management

The federal government prioritizes small business participation in our buying programs. The Small Business Subcontracting Program requires non-small businesses with a contract valued at $750,000 or more to consider working with small businesses.

Eligibility

Businesses considered “Other Than Small Business” that hold a contract valued at $750,000 or more are obligated to participate. Small businesses are not required to have a small business subcontracting plan.

What is "Other Than Small Business?"

"Other Than Small Business" (OTSB) includes all businesses that are not small businesses. This includes large businesses, state and local governments, non-profit organizations, public utilities, educational institutions, and foreign-owned firms that receive federal contracts if any portion of the contract is to be performed in the United States. 

How is the $750,000 threshold determined?

At the time your contract is awarded, your GSA Contracting Officer will estimate the value of the contract. This contract value is to include any possible option periods. If the contract is valued at or above $750,000, you are required to participate in the Small Business Subcontracting Program.

Requirements

The program requires OTSBs to ensure that small businesses receive the maximum practicable opportunity to participate in contract performance. The Small Business Subcontracting Plan and reports documenting subcontracting achievements help contractors and COs ensure compliance.

Small Business Subcontracting Plan:

GSA contractors are offered the choice of an Individual Subcontracting Plan or a Commercial Subcontracting Plan:

  • Individual Plan:
    • NOT recommended for GSA contractors
    • Must be negotiated for each contract awarded; if multiple contracts awarded, a separate plan must be negotiated for each
    • Based on subcontracting activity for that specific contract only
    • Negotiated at the time of award for the entire contract period of performance (may or may not include option periods)
    • Based on the supplies/services provided, may limit the amount of progress shown toward subcontracting goal requirements
  • Commercial Plan:
    • The preferred type of plan for contractors selling commercial items
    • Based on company-wide subcontracting activity (both commercial and government-related)
    • Negotiated annually based upon the company’s fiscal year
    • Satisfies plan requirements for all government contracts—only one plan is required regardless of the number of contracts held
    • In general, permits greater progress toward meeting subcontracting goal requirements

Progress Reports:

All reports must be submitted via the Electronic Subcontracting Reporting System. See details of progress report plans below:

  • Summary Subcontracting Report (SSR):
    • Submitted annually following the end of the government fiscal year by October 30th
    • Shows subcontracting awards (subcontracting costs incurred by the contractor) during the fiscal year involved
    • Required for both Individual and Commercial plan holders
    • For Commercial plan holders, shows all company-wide subcontracting costs
    • For Individual plan holders, shows subcontracting costs incurred in performance of the specific contract only. If multiple contracts are awarded by the same agency, the report shows subcontracting costs incurred in performance of all contracts for that agency
  • Individual Subcontracting Report (ISR):
    • Required of Individual plan holders only
    • Submitted semi-annually by April 30th and October 30th
    • Shows subcontracting costs incurred under the specific contract
    • Is a cumulative report, showing all costs incurred since inception of the contract

Certifications

There is no formal process for becoming certified as a small business. The Small Business Administration (SBA) is the authority on business sizes, classifications, and size standards. A company is responsible for self-certifying as a small business. This is typically accomplished by registering in the System for Award Management (SAM) – and indicating the proper business size and category. Currently, the only socioeconomic category requiring formal SBA certification is for "Historically Underutilized Business Zone Small Business Concerns" (HUBZone).

Certification Resources

Locating Subcontractors

Below are several resources for OTSBs looking to partner with small businesses: 

Other Resources

  • SBA Commercial Marketing Representatives (CMR) can assist you with questions about the Subcontracting Program, as well as help you locate sources. 
  • APEX Accelerators are staffed by individuals who are knowledgeable of procurement issues and can help you locate local sources. They also run local events involving small businesses.