Accountability of prime to include sub-contractors on IDIQ

Recommend you read FAR 52.219-9 "Small Business Subcontracting Plan" & FAR 52.219-16 "Liquidated Damages - Subcontracting Plan" to see if those answer your question.

Can you elaborate on the distinction you seem to be drawing regarding "goal" and "requirement"?

Thanks for the recommendation, I'll check it out! 

The difference is that with a requirement, there are actual consequences a prime will see; whether it's not being considered for award, financial penalty, or bad feedback on their past performance scores. With a goal, there's no actual consequence.

JIR17 said:

Thanks for the recommendation, I'll check it out! 

The difference is that with a requirement, there are actual consequences a prime will see; whether it's not being considered for award, financial penalty, or bad feedback on their past performance scores. With a goal, there's no actual consequence.

I disagree - if a contractor does not show good faith in complying with the contract's subcontracting plan, there are consequences (breach & liquidated damages).

I'm not familiar with the requirements you mention.  I'm only aware of the statutory requirements outlined in FAR 19.702 (which are implemented contractually by the clauses I previously referenced)...(emphasis added below).

Quote

19.702 -- Statutory Requirements.

Any contractor receiving a contract with a value greater than the simplified acquisition threshold must agree in the contract that small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns will have the maximum practicable opportunity to participate in contract performance consistent with its efficient performance. It is further the policy of the United States that its prime contractors establish procedures to ensure the timely payment of amounts due pursuant to the terms of their subcontracts with small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns.

(a) Except as stated in paragraph (b) of this section, section 8(d) of the Small Business Act (15 U.S.C. 637(d)) imposes the following requirements regarding subcontracting with small businesses and small business subcontracting plans:

(1) In negotiated acquisitions, each solicitation of offers to perform a contract that is expected to exceed $700,000 ($1.5 million for construction) and that has subcontracting possibilities, shall require the apparently successful offeror to submit an acceptable subcontracting plan. If the apparently successful offeror fails to negotiate a subcontracting plan acceptable to the contracting officer within the time limit prescribed by the contracting officer, the offeror will be ineligible for award.

(2) In sealed bidding acquisitions, each invitation for bids to perform a contract that is expected to exceed $700,000 ($1.5 million for construction) and that has subcontracting possibilities, shall require the bidder selected for award to submit a subcontracting plan. If the selected bidder fails to submit a plan within the time limit prescribed by the contracting officer, the bidder will be ineligible for award.

(3) Each contract modification that causes the value of a contract without a subcontracting plan to exceed $700,000 ($1.5 million for construction), shall require the contractor to submit a subcontracting plan for the contract, if the contracting officer determines that subcontracting opportunities exist.

(b) Subcontracting plans (see subparagraphs (a)(1) and (2) of this section) are not required --

(1) From small business concerns;

(2) For personal services contracts;

(3) For contracts or contract modifications that will be performed entirely outside of the United States and its outlying areas; or

(4) For modifications that are within the scope of the contract and the contract does not contain the clause at 52.219-8, Utilization of Small Business Concerns. 

(c) As stated in 15 U.S.C. 637(d)(8), any contractor or subcontractor failing to comply in good faith with the requirements of the subcontracting plan is in material breach of its contract. Further, 15 U.S.C. 637(d)(4)(f) directs that a contractor’s failure to make a good faith effort to comply with the requirements of the subcontracting plan shall result in the imposition of liquidated damages.

(d) As authorized by 15 U.S.C. 637(d)(11), certain costs incurred by a mentor firm in providing developmental assistance to a protégé firm under the Department of Defense Pilot Mentor-Protégé Program, may be credited as if they were subcontract awards to a protégé firm for the purpose of determining whether the mentor firm attains the applicable goals under any subcontracting plan entered into with any executive agency. However, the mentor-protégé agreement must have been approved by the Director, Small Business Programs of the cognizant DoD military department or defense agency, before developmental assistance costs may be credited against subcontract goals. A list of approved agreements may be obtained at http://www.acq.osd.mil/osbp/mentor_protege/.

Why/how are those insufficient for your agency's needs?

The question in the initial post appeared to me to be how to require the prime to subcontract ("split their work share") versus self performing all the work in ID/IQ contract task orders .  Is that correct, JIR17?  

Or,  were you referring to "splitting" work in task orders that is subcontracted? 

What specifically do you mean by the term "work share"? 

The subcontracting requirements and goals, etc. in the contract clauses and the Statutes primarily pertain to work that includes "subcontracting possibilities". There is some language in the regulations that allows the government to encourage or perhaps persuade  the contractor to subcontract portions of the work, such as:

"19.702 -- Statutory Requirements.

Any contractor receiving a contract with a value greater than the simplified acquisition threshold must agree in the contract that small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns will have the maximum practicable opportunity to participate in contract performance consistent with its efficient performance."

If you are sole source negotiating a task order, the government may negotiate some degree of subcontracting in the overall work and, of course, within the subcontracted share of the work.

Joel, I was mentioning the first thing you said. Right now this contract doesn't seem to require the prime to actually assign any task orders with teaming partners on the IDIQ. I guess it would be more accurate to say that they won't sub contract out any of the task order's rather than split "work share".  We are not sole source negotiating. At the moment we are trying to decide if we want to find teaming partners, and the worry is that because the prime isn't being held accountable with a requirement (i'll have to look more into the FAR's everyone sent), that it might not even be worth are time as we might see any actual work. We've seen a lot of that going on with industry.

Also, Matt, I really appreciate highlighting and referencing this FAR. I'm gonna check them all out!

JIR17, thanks for the clarification.  

Since you mentioned "teaming partners" are you referring to a solicitation for a new ID/IQ contract or is this an existing contract? I'm not sure what role you want to play - "teaming" as a joint venture on a prospective contract? You couldn't team as a joint venture partner on task orders under an existing contract.  You could be a sub on an a task order, if the prime subs out your type of work.  

I remember that there was an earlier discussion thread in this Forum where an organization wanted to change the subcontracting requirement from a percentage of subcontracted dollars to a percentage of the total contract or task order dollar amount  I don't know if this has been adopted anywhere

This is a new IDIQ contract. Right now we have two goals. First off, we recently had an industry day and government released a request for whitepaper asking SB to recommend any incentives or ways to hold the prime accountable to including sub-contractors on task orders. I need to find previous contracts where FAR's were used to justify  why requirements to include small business should be added. The second goal is to decide on teaming partners, but without convincing government to add SB participation as a requirement to the prime, I dont know that it would even be worth our time, as the prime would have no reason to sub-contract out any of the task orders that they can do themselves.

It's frustrating when folks dribble out information describing the scenario, which essentially revises the original question or our perception of the question.  I know why lawyers resist answering broad or vague questions - the answer depends upon the specific facts. 

I spent some time trying to obtain clarification from you and Matthew's advice is based upon goals for work that is to be subcontracted, if any, not with respect to requiring certain amount of work to be subcontracted or incentivizing a prime to subcontract rather than self-perform the work.  

Now we discover that the government is seeking ideas from small business on how to incentivize subcontracting and/or how to "hold the prime accountable " for including subs in some way in task orders.  I don't know what you mean by "including subs in task orders" .  By subbing out a specified amount or type of work?  By proposing certain subs and then actually using those specific firms?

What is the government's performance goal or requirement with respect to subcontracting? If that is clear there should be ways to hold them accountable through substantiation during the proposal stage and during performance stage

Matthew Fleharty said:

I disagree - if a contractor does not show good faith in complying with the contract's subcontracting plan, there are consequences (breach & liquidated damages).

Showing good faith in this context is a very easy bar to clear. The same boilerplate in the subcontracting plan (look on SAM/other databases, attend industry trade shows, solicit in appropriate networks) will be used to determine good faith. Not hard to do. Also, very easy to explain why you didn't meet your goals ("They were goals, for the future, based on assumptions-- things changed"). Finally, consider that this only happens when the contracting officer actually takes the time to hold the prime contractor accountable. Don't hold your breath on that one.

The reality is that it is rare to actually trigger (this type of) liquidated damages. It's an effectively toothless provision.

PepeTheFrog said:

Showing good faith in this context is a very easy bar to clear. The same boilerplate in the subcontracting plan (look on SAM/other databases, attend industry trade shows, solicit in appropriate networks) will be used to determine good faith. Not hard to do. Also, very easy to explain why you didn't meet your goals ("They were goals, for the future, based on assumptions-- things changed"). Finally, consider that this only happens when the contracting officer actually takes the time to hold the prime contractor accountable. Don't hold your breath on that one.

The reality is that it is rare to actually trigger (this type of) liquidated damages. It's an effectively toothless provision.

Exactly, and that's the biggest problem. It almost doesn't seem worth it to spend the time and effort to go for this contract if they won't change to requirements. There isn't any work that the prime will be incapable for doing, it's just a lot of work. But they will more than likely just see that as a good thing, and why spread the wealth when you can have it all. I have only been in industry for a short period of time, but it seem's like this has been a growing problem over the years.

JIR17 said:

It almost doesn't seem worth it to spend the time and effort to go for this contract

JIR17: Now, PepeTheFrog understands your inquiry better. Forget about

JIR17 said:

working with government to hold the prime accountable

As a subcontractor, you do not have privity with the Government. Thinking about the Government as the protector and enforcer of your (subcontractor) rights is a fool's errand.

Instead, negotiate and sign binding teaming agreements that are enforceable under your state law, or the forum/venue chosen in the teaming agreement. This usually requires specific statements of work and details about work share, percentages, etc. This is an area of the law (teaming agreements) that differs by state. Pay the money for a good attorney's services. Otherwise, you will get smoked like a cheap cigar.

PepeTheFrog said:

negotiate and sign binding teaming agreements that are enforceable under your state law

I live in VA and from what i've looked up, its pretty hard to get anything solid that will be enforceable under our state law as teaming agreements have been ruled out as not being a "contract". Initially we we're going to just move on, but recently government came back and asked small business to submit white papers on how to hold the prime accountable..... flat out, the only way is through making it a requirement. So since they are asking for the feedback we think it's worth giving it to them, and if they don't take it we will likely just move on to the next opportunity. Luckily we're pretty busy so it will give us more resources for our other opportunities.

PepeTheFrog said:

JIR17: Now, PepeTheFrog understands your inquiry better. Forget about

As a subcontractor, you do not have privity with the Government. Thinking about the Government as the protector and enforcer of your (subcontractor) rights is a fool's errand.

Instead, negotiate and sign binding teaming agreements that are enforceable under your state law, or the forum/venue chosen in the teaming agreement. This usually requires specific statements of work and details about work share, percentages, etc. This is an area of the law (teaming agreements) that differs by state. Pay the money for a good attorney's services. Otherwise, you will get smoked like a cheap cigar.

JIR, I agree with ol' Froggy, here.  I thought the government intended to put teeth into the contract when you said that it was seeking ideas from the SB industry.  But Pepe and you returned me from idealism to the reality that I wouldn't bet my life on the government as a protector OR an enforcer of a sub's rights -even when they are clear and strongly stated.

It's a shame really. Well thank you both for clarifying that I really am not going to be able to rely on government if they dont make it a requirement for sub-contractors to be included in a % of sub $ or a % of the task orders. 

With that being said i'm going to have to make my case to the government on why they should change their mind and make this a requirement; something that they seem to POSSIBLY be open to. Using the information everyone here has given me, do you know of any resources I can use to find past examples where a contract has used a small business requirement to enforce sub-contracting on task orders? Any suggestions going forward would be appreciated!

JIR17,

The way the Government holds contractors accountable is through terms and conditions in the contract.  Short of a deviation to the required T&Cs I've already referred you to, I don't know where this so-called requirement with teeth is going to come from or what it would look like.  Maybe a small business office or expert knows better than I do - have you tried contacting the SBA?

That's on my to do list for the day. I think they will be the best resource. The requirement would have to come from the agency's decision to include the % of task orders that are sub-contracted, as a major factor of evaluation on the contract.

JIR17 said:

That's on my to do list for the day. I think they will be the best resource. The requirement would have to come from the agency's decision to include the % of task orders that are sub-contracted, as a major factor of evaluation on the contract.

How is that substantively different from the requirement of FAR 19.702(a)(1) which requires that "the apparently successful offeror to submit an acceptable subcontracting plan. If the apparently successful offeror fails to negotiate a subcontracting plan acceptable to the contracting officer within the time limit prescribed by the contracting officer, the offeror will be ineligible for award"?  Subcontracting plans include a % of dollars that are to be subcontracted to various small business concerns.  That plan, short of a deviation, is then governed by the clauses already provided and, therefore, only requires a good faith effort...maybe I'm missing something, but I don't know how that proposed requirement is substantively different.

If an agency wants/needs to motivate small business participation, they could use  a carrot rather than stick approach by incorporating FAR 52.219-10 "Incentive Subcontracting Program" (refer to FAR 19.708(c)(1)) into the contract.

Because the  pitfall is the "good faith effort" aspect.  As Pepe mentioned, its pretty easy to jump over the hurdle and claim you made a good faith effort, based on very minimal evidence. If it is not a proposed requirement that will be evaluated, than its pretty much a useless condition. But if they are evaluated on it, than there is an actual repercussion for failing to comply, as it's a "requirement" and not a "goal"

JIR17 said:

Because the  pitfall is the "good faith effort" aspect.  As Pepe mentioned, its pretty easy to jump over the hurdle and claim you made a good faith effort, based on very minimal evidence. If it is not a proposed requirement that will be evaluated, than its pretty much a useless condition. But if they are evaluated on it, than there is an actual repercussion for failing to comply, as it's a "requirement" and not a "goal"

You miss my point - they are evaluated on it in the status quo, both prior to award (establishing an acceptable subcontracting plan and even evaluating their past performance related to achieving small business goals) and during performance (via compliance with the T&Cs as well as through CPARS), neither of which establishes the requirement you seek.  Your only way around the "good faith effort" language under the required FAR clauses is a deviation (see FAR Subpart 1.4).

Matthew, I think that one of us is missing the most basic point.  The prime could state that it will self-perform the task order. That is the concern that JIR 17 has been expressing.

Technically, unless specifically stated in the task order or base ID/IQ contract, there is no requirement for a prime contractor to subcontract ANY work on a task order.  As far as I know, the government's goals for subcontracting to the various SB subsets are still normally expressed as percentages of subcontracted dollars, not as a percentage of total task order dollars. I looked up DOD's prime contracting  and subcontracting goals and I didn't find specific subcontracting goals for a percentage of total contracted dollars.

JIR17,

Having worked for a prime for several years as the SB Plan administrator and the mentor-protege coordinator (we won one of the early Nunn-Perry Awards, if that means anything) ... let me tell you a basic fact. If you want work from a prime, you have to bring something to the party. You have to bring a capability, an expertise, local knowledge, past performance quals, key personnel quals, low-cost business model, or some other kind of competitive advantage. If you have something to offer the prime that the prime wants, then you will get work. If not, then the prime will self-perform or look elsewhere.

It's really that simple.

Hope this helps

On ‎11‎/‎30‎/‎2016 at 8:12 PM, joel hoffman said:

Matthew, I think that one of us is missing the most basic point.  The prime could state that it will self-perform the task order. That is the concern that JIR 17 has been expressing.

Technically, unless specifically stated in the task order or base ID/IQ contract, there is no requirement for a prime contractor to subcontract ANY work on a task order.  As far as I know, the government's goals for subcontracting to the various SB subsets are still normally expressed as percentages of subcontracted dollars, not as a percentage of total task order dollars. I looked up DOD's prime contracting  and subcontracting goals and I didn't find specific subcontracting goals for a percentage of total contracted dollars.

Joel,

I understand the concern - the way that subcontracting is specifically stated in the base contract is through the subcontracting plan.  Sure the plan has goals, not "requirements," but (a) the plan still has to be approved by the Contracting officer and (b) the Contractor has to make a good faith effort to follow it.  I know that Pepe has alleged that the good faith requirement is a low hurdle to jump, but I don't think that a Contractor could merely choose to self-perform any/all task orders and ignore the agreed to subcontracting plan.  It has teeth if agencies care about the subcontracting plan and proper contract administration.

I've still yet to see/hear of an alternative that would impose these so called "requirements."  What are they and where does their authority stem from?

But- does a subcontracting plan for an ID/IQ base or task order have to require the contractor to subcontract parts of the work?  Put differently , does the prime have to agree subcontract work on any and all task orders, if it can efficiently or more efficiently self perform all work itself on some types of tasks?

joel hoffman said:

But- does a subcontracting plan for an ID/IQ base or task order have to require the contractor to subcontract parts of the work?  Put differently , does the prime have to agree subcontract work on any and all task orders, if it can efficiently or more efficiently self perform all work itself on some types of tasks?

No, unless it's specifically stated as a "requirement" of the sub-contractor plan

Even "requirements" of the subcontracting plan only require a good faith effort by the Contractor (based on the clause that governs it).  Part of assessing whether or not the prime makes a good faith effort to meet those goals or requirements of the subcontracting plan includes, but is not limited to, examining how efficiently or more effectively it (or others) can perform the work.  More broadly, the subcontracting plan stipulates the efforts that the prime will take in order to comply with the goals/requirements - assessing the good faith effort comes down to reviewing (a) if the prime is meeting the subcontracting goals/requirements and if not (b) reviewing whether or not the prime is following the commitments/efforts to pursue small businesses as subcontractors detailed in the approved plan.

Matthew Fleharty said:

I know that Pepe has alleged that the good faith requirement is a low hurdle to jump, but I don't think that a Contractor could merely choose to self-perform any/all task orders and ignore the agreed to subcontracting plan.  It has teeth if agencies care about the subcontracting plan and proper contract administration.

Matthew Fleharty: No, it really does not have teeth. "Enforce the existing liquidated damages provisions of existing subcontracting plans" does not work how you imagine. It generally does not work at all.

Assume the contracting officer cares and makes the effort, which is a stretch to start.

Contracting officer: "Contractor, the plan said 20 percent but you only hit 5 percent. Give $2M [liquidated damages] back to the agency because that represents the percentage you failed to meet."

Program manager of contractor: "Things changed [detailed explanation]."

Contracting officer: "The fact remains that you missed by 15 percent, in dollar figures, $2M, which you owe in liquidated damages."

General counsel of contractor: "The test is good faith and we met it [detailed explanation, plus reference to the stated methods of soliciting subcontractors in the subcontracting plan]."

Contracting officer: "I don't buy it. This is why we have liquidated damages! Pay up!"

General counsel of contractor: "Do what you want, but remember that the standard is good faith. Good luck getting that $2M. We hope we can get to a friendly agreement, but if you pursue this matter, we will vigorously defend our rights, you will not get the liquidated damages, and you will lose time and money."

Matthew Fleharty, this is a problem (the liquidated damages provisions of subcontracting plans are toothless) that is an open secret. The same problems apply to the Comprehensive Subcontracting Plan, which also has liquidated damages, similar to Individual Subcontracting Plans. It is discussed by large contractors. It is discussed at the highest level of agencies. It is discussed by congress and staffers and lobbyists. Trust PepeTheFrog on this.

There is room for improving this situation, or solving this problem. But the solution is most assuredly not "Hold them to the subcontracting plan-- we already have liquidated damages provisions." Don't ask PepeTheFrog how PepeTheFrog knows this.

PepeTheFrog said:

There is room for improving this situation, or solving this problem. But the solution is most assuredly not "Hold them to the subcontracting plan-- we already have liquidated damages provisions." Don't ask PepeTheFrog how PepeTheFrog knows this.

All I've heard are complaints - I've yet to see a valid alternative proposed.  I keep reading about this thing called a "requirement," but I still have no idea what that means, what authority a PCO has to do impose such a "requirement" (short of an approved deviation), and why that would be an overall desirable outcome for a contracting arrangement (let's remember that small business considerations are not the primary purpose for contracting...fulfilling the requirement/Government's need is).

Also, that straw man characterization of yours is not how I would pursue liquidated damages and ignores my previous remarks.

Matthew Fleharty said:

I've still yet to see/hear of an alternative that would impose these so called "requirements."  What are they and where does their authority stem from?

I believe the OP wants small business participation as a RFP technical factor and as a contract requirement --a promise-- that offerors will be held to.

Matthew Fleharty said:

Jamaal Valentine said:

I believe the OP wants small business participation as a RFP technical factor and as a contract requirement --a promise-- that offerors will be held to.

On the dot. This is exactly what we're trying to achieve. I looked into a few of the FAR's posted in this thread, and some that I found. They look useful in putting together an argument for it so hopefully the government will hear us out.

Matthew Fleharty said:

Also, that straw man characterization of yours is not how I would pursue liquidated damages and ignores my previous remarks.

Matthew Fleharty: PepeTheFrog is interested in possible solutions.

Would you explain how you would pursue liquidated damages related to a small business subcontracting plan?

PepeTheFrog said:

Matthew Fleharty: PepeTheFrog is interested in possible solutions.

Would you explain how you would pursue liquidated damages related to a small business subcontracting plan?

Not by incessant whining that they didn't meet the goal % without any consideration of other factors which is what your scenario consists of.  If you'll refer to my previous post, the analysis of the good faith effort comes down to an examination of the subcontracting plan which includes actions that the prime commits to taking in achieving those small business goals.  If a prime fails to meet their goal a Contracting Officer should then review whether or not those actions stipulated in the subcontracting plan were taken to assess whether or not the prime actually made a good faith effort - the term may be nebulous in abstract, but it shouldn't be when there is an accompanying subcontracting plan.

Those goalposts moved so fast, all PepeTheFrog saw was a blur! 

Matthew Fleharty said:

good faith effort - the term may be nebulous in abstract, but it shouldn't be when there is an accompanying subcontracting plan.

The problem is not that the term is nebulous, but that the standard is easily met, especially given common language found in subcontracting plans. This renders the liquidated damages toothless. The contractor made a good faith effort to find small business subcontractors in the stated networks, databases, etc pursuant to the subcontracting plan, but the contractor determined that it was appropriate to use other sources, including itself. Or, the contractor did not find any capable small businesses even after following the terms of the subcontracting plan. That is a good faith effort, is it not?

Matthew Fleharty said:

a Contracting Officer should then review whether or not those actions stipulated in the subcontracting plan were taken

What actions would you stipulate in the subcontracting plan?

An interesting GAO bid protest decision that may be relevant to this discussion.

http://www.gao.gov/assets/670/668912.pdf

JIR17 said:

No, unless it's specifically stated as a "requirement" of the sub-contractor plan

Right.  All this talk of not meeting goals of the subcontracting plan.  There are no government defined goals for subtracting work vs self-performance. 

Without obtaining a deviation to the regulations or otherwise being able to impose a specific goal for the amount of work to subcontract in the solicitation,  I don't think that the government can impose a "requirement" to force a prime to subcontract work or to require that such goals be included in the subcontracting plan.  

The only DoD and other agency subcontracting goals that I found on-line were all based upon percentages of  work that is subcontracted.

EDIT. Okay, okay.  There could be a socioeconomic evaluation factor in a selection competition that might encourage a prime to subcontract rather than self-perform work.

PepeTheFrog said:

Those goalposts moved so fast, all PepeTheFrog saw was a blur!

You're clearly hopping past posts then Pepe...refer to the one prior to your scenario and I stated " assessing the good faith effort comes down to reviewing (a) if the prime is meeting the subcontracting goals/requirements and if not (b) reviewing whether or not the prime is following the commitments/efforts to pursue small businesses as subcontractors detailed in the approved plan."  That seems to be consistent with my following post which states "the analysis of the good faith effort comes down to an examination of the subcontracting plan which includes actions that the prime commits to taking in achieving those small business goals.  If a prime fails to meet their goal a Contracting Officer should then review whether or not those actions stipulated in the subcontracting plan were taken to assess whether or not the prime actually made a good faith effort."

PepeTheFrog said:

What actions would you stipulate in the subcontracting plan?

There is no one right answer to this question.  As I'm sure you're aware, all requirements vary to some degree, but some broad examples could include:

• Designate a company official to administer/monitor small business subcontracting
• Specify procedures for consideration of subcontractors that maximize opportunities for small business participation
• Maintenance of subcontractor selection records demonstrating compliance
• Outreach or liaison efforts to seek small businesses

Depending on the requirement, the prime, and the small business opportunities potentially available (informed by market research) those requirements would be more specific (and should in order to enforce it properly when it comes to the "good faith effort" test).  For example, the prime could commit in the subcontracting plan to hosting annual or semi-annual outreach efforts for small businesses.  If a prime then chose not to or forgot to hold those outreach efforts and failed to meet their goals, one could make an argument that, based on the commitments in the subcontracting plan, the prime did not make a good faith effort.

PepeTheFrog said:

The problem is not that the term is nebulous, but that the standard is easily met, especially given common language found in subcontracting plans.

Just because the plans are written poorly/nebulously and then approved by COs does not mean that they cannot be written with more appropriate specifics that then give the clauses teeth when it comes to the "good faith effort" standard.  Let's not forget, the overarching requirement is "maximum practicable opportunity to participate in contract performance consistent with its efficient performance" (FAR 19.702).

Matthew Fleharty said:

Depending on the requirement, the prime, and the small business opportunities potentially available (informed by market research) those requirements would be more specific (and should in order to enforce it properly when it comes to the "good faith effort" test).  For example, the prime could commit in the subcontracting plan to hosting annual or semi-annual outreach efforts for small businesses.  If a prime then chose not to or forgot to hold those outreach efforts and failed to meet their goals, one could make an argument that, based on the commitments in the subcontracting plan, the prime did not make a good faith effort.

Just because the plans are written poorly/nebulously and then approved by COs does not mean that they cannot be written with more appropriate specifics that then give the clauses teeth when it comes to the "good faith effort" standard.  Let's not forget, the overarching requirement is "maximum practicable opportunity to participate in contract performance consistent with its efficient performance" (FAR 19.702).

As somebody who has been hired to write initial SB plans for prime contractors, I have to say Mr. Fleharty seems to be missing some important observations that others have made.

1. Sure, the prime could commit to host a quarterly or monthly SB outreach effort, but there is no objective means of measuring how effective those efforts are. If the contractor simply puts a notice on its website, "Outreach opportunity on some date and time" that does nothing to ensure that the right small businesses show up--but it might be sufficient to prove a good faith effort. You can't use how many SBs actually show up as a measure of effectiveness because that is (to a very large extent) not in the prime's control. It would be like holding a CO responsible for failing to obtain competition after advertising in FedBizOpps.

2. What makes an SB plan "good" versus "window dressing" has very little to do with efforts to reach SBs. Everybody -- and I mean everybody -- knows to list the usual outreach efforts, the usual industry days, the websites of SB-focused groups. And primes do send people to the usual events! (And then charge the government for doing so.) The people show up and they have booths and they have swag to give away. They take names and business cards, and they hand out brochures about the company and the have detailed instructions as to how to get on the approved vendor list. And it's all for show -- unless the prime finds a SB it wants to do business with. And if the prime doesn't and it doesn't subcontract to any SBs, it can still point to its attendance as evidence of a good faith effort. (And to be clear: It was a good faith effort!)

3. What matters is the stuff nobody reads. The organizational roles and responsibilities, the policies and procedures, the incentives given to PMs if they subcontract to the right categories. The meat of the SB plan is not the external outreach efforts; the meat is how the contractor organizes itself to work toward the goals, how much budget and manpower it allocates to the efforts. If you can't clearly see who has the responsibility for SBLO on an org chart, then you can be confident the contractor is just going through the motions.

Anyway, PepeTheFrog is right. It's a trivial matter to show good faith efforts and there is no way I can think of to *make* a contractor work harder than it wants to in this area, short of making actual SB subcontracting amounts an evaluation factor in (a) award fee determinations, or (b) future source selection decisions.

joel hoffman said:

does a subcontracting plan for an ID/IQ base or task order have to require the contractor to subcontract parts of the work?

That's exactly what I mean by trying to get a "requirement" put in. Right now there is no requirement to submit a sub-contracting plan at the moment, which means there's no real accountability for the prime to subtract work on any task orders. You can't just rely on FAR to back you up, because not every FAR applies to every contract. The agency just has a goal of including X amount of small business on the project, and this specific agency hasn't seemed to really emphasize any importance of hitting it in the past.

JIR17 said:

That's exactly what I mean by trying to get a "requirement" put in. Right now there is no requirement to submit a sub-contracting plan at the moment, which means there's no real accountability for the prime to subtract work on any task orders. You can't just rely on FAR to back you up, because not every FAR applies to every contract. The agency just has a goal of including X amount of small business on the project, and this specific agency hasn't seemed to really emphasize any importance of hitting it in the past.

If a large business is awarded an ID/IQ contract, it would have to submit a subcontracting before award (19.702) which the government is supposed to review, negotiate if necessary and approve.  Small business primes do not have to submit a subcontracting plan. 

Even with a subcontracting plan, as I've repeatedly said, there is no requirement to sub any work, unless the organization goes beyond the FAR to somehow require a prime to sub ontract work.  One way to attempt to do that is to evaluate the extent of subcontracting that contractor would commit to ,  tying that into how it will commit to use or team with SB subs. Even then, that wouldn't guarantee work for your firm.  The best opportunity might be gained through a teaming agreement with a prime, where the solicitation also encourages and incentivizes such agreements, incorporates the proposed relationship into the contract, and then evaluates conformance e and performance. 

From my experience, it would be a pipe dream to expect all of that to work for government contracting, given the general level of competence that I've observed in more than one agency and through participation in this forum from its inception.  Look at the low numbers of WIFCON "members" who are even actively participating in the various forum discussions.  Effective contract administration by the government that goes deeper than technical conformance of the productor service isn't anything that I would risk betting on, especially for service contracts and particularly for anything out of the ordinary or beyond the minimum requirements. 

When the very top contracting leadership in a major organization doesn't even know what a "betterment" is (a specific proposal feature that both meets and exceeds the minimum solicitation requirement and is incorporated into the resulting contract) and how it fits in the order of precedence, even when plainly defined in the contract, you know you are in for trouble.

H2H,

You seem to be putting a lot of words into my mouth.  At no point did I advocate holding the prime responsible for the number of attendees or imposing a "requirement" (still have no idea what this would mean) beyond the good faith effort standard.  What I took exception to were Pepe's remarks that the good faith effort was completely nebulous - I'll grant it can be, if the subcontracting plan is written poorly/broadly and contract administration is poor; however, the good faith effort standard can be made less nebulous by including specific standards and/or actions for the prime to take that are consistent with the FAR requirement to provide maximum practicable opportunity to participate in contract performance consistent with its efficient performance.  How is that missing the mark?  I'm trying to provide advice on how to make the current FAR construct/requirements work better rather than throwing up my hands (as it seems many would do in this case) and accepting that this is a completely futile situation...maybe I'm misguided in trying, but I'd rather try and fail than do otherwise.

JIR17 said:

That's exactly what I mean by trying to get a "requirement" put in. Right now there is no requirement to submit a sub-contracting plan at the moment, which means there's no real accountability for the prime to subtract work on any task orders.

What does this even mean?  The FAR has specific requirements for when a subcontracting plan is required and when it isn't.  Are you advocating that in situations where a subcontracting plan is not required by FAR 19.702 there should be?  Do you even know if the clauses I provided you previously are in the subject contract you're concerned with?

JIR17 said:

You can't just rely on FAR to back you up, because not every FAR applies to every contract.

What does this mean?

Correct me if i'm wrong, but when a contracting officer takes a contract, they go down the list of FAR's and omit pieces that are irrelevant to the contract. For example, if a small business is the prime, the FAR that is requiring a sub-contracting plan, is no longer relevant.

joel hoffman said:

The best opportunity might be gained through a teaming agreement with a prime, where the solicitation also encourages and incentivizes such agreements, incorporates the proposed relationship into the contract, and then evaluates conformance e and performance.

This is great advice. Thank you!

JIR17 said:

This is great advice. Thank you!

Remember also that I think such is a pipe dream, and considering your opinion of the agency.

JIR17 said:

Correct me if i'm wrong, but when a contracting officer takes a contract, they go down the list of FAR's and omit pieces that are irrelevant to the contract. For example, if a small business is the prime, the FAR that is requiring a sub-contracting plan, is no longer relevant.

The contract is governed by the terms and conditions which includes the FAR clauses, but Contracting Officers have a responsibility/requirement to ensure "all requirements of law, executive orders, regulations, and all other applicable procedures...have been met" (FAR 1.602-1(a)).  In other words, a CO does not get to cherry pick the statutory and FAR requirements as they see fit - but clauses that are not applicable or required are not included.  In the example you mention, the FAR does not require a subcontracting plan for small business concerns (see FAR 19.702(b)(1)) so the resulting clauses are not required - why would they need to be?

Matthew Fleharty said:

H2H,

You seem to be putting a lot of words into my mouth.  At no point did I advocate holding the prime responsible for the number of attendees or imposing a "requirement" (still have no idea what this would mean) beyond the good faith effort standard.  What I took exception to were Pepe's remarks that the good faith effort was completely nebulous - I'll grant it can be, if the subcontracting plan is written poorly/broadly and contract administration is poor; however, the good faith effort standard can be made less nebulous by including specific standards and/or actions for the prime to take that are consistent with the FAR requirement to provide maximum practicable opportunity to participate in contract performance consistent with its efficient performance.  How is that missing the mark?  I'm trying to provide advice on how to make the current FAR construct/requirements work better rather than throwing up my hands (as it seems many would do in this case) and accepting that this is a completely futile situation...maybe I'm misguided in trying, but I'd rather try and fail than do otherwise.

Nope. Here's your quote:

For example, the prime could commit in the subcontracting plan to hosting annual or semi-annual outreach efforts for small businesses.  If a prime then chose not to or forgot to hold those outreach efforts and failed to meet their goals, one could make an argument that, based on the commitments in the subcontracting plan, the prime did not make a good faith effort.

I was explaining why that would accomplish nothing. Which others, including PepeTheFrog, have also tried to explain to you.Then I tried to explain how a CO might actually evaluate the expected efficacy of a contractor's SB plan (which almost none of them actually do; instead, they run a checklist to see if the plan has all the required elements and then file it). And then I suggested two concrete ways of holding a contractor accountable.

I'm not here for an argument, and I'm not saying the SB contracting plans are a waste of paper. But you seem to be arguing for the sake of arguing. That doesn't interest me.

I'm not here for one either H2H (which is why I've also tried to propose ways to make the current construct work better), but that quote of mine that you reposted is not synonymous with your scenario in point 1.  Read the two one after another...my example deals with them outright not holding the events - yours takes issue with the number of attendees (a point I didn't bring up). 

You and I are on the same page with respect to your comments in paragraph 3 - (see my first and second bullet).  We've even both stated that to encourage proactive behavior by the prime, one should consider the use of incentives.  So if you want to characterize me as missing the issues, go ahead, but I think our positions are more closely aligned that you're indicating.