Small Business Participation Plans

Regarding question number 1: 

See, for instance,  Fed Register Volume 63 No. 224/Friday November 20, 1998 Pages 64427-64429, the Interim rule, which was adopted as finalized without change.  The rules under 215.314, including evaluating the extent of participation of small businesses and historically black colleges or universities and minority institutions in performance of the contract, were not expected to have a significant economic impact on substantial number of small entities within the meaning of the Regulatory Flexibility Impact Act, etc.  (https://www.gpo.gov/fdsys/pkg/FR-1998-11-20/pdf/98-31039.pdf)

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B. Regulatory Flexibility Act This interim rule is not expected to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because most of the changes merely conform the DFARS to the FAR rule in FAC 97–07

FAC 97-07, in part (at https://www.acquisition.gov/sites/default/files/archives/loose_leaf/fac97-07.pdf) included this:

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15.304 Evaluation factors and significant subfactors. 

(c)  The evaluation factors and significant subfactors that apply to an acquisition and their relative importance, are within the broad discretion of agency acquisition officials, subject to the following requirements: 

...(4) The extent of participation of small disadvantaged business concerns in performance of the contract shall be evaluated in unrestricted acquisitions expected to exceed $500,000 ($1,000,000 for construction) subject to certain limitations (see 19.201 and 19.1202).

Regarding questions 2 and 3: 

Nothing prohibits the KO from incorporating the Small Business Participation Plan into the contract -  to make it enforceable. In fact, 215.304 discusses evaluating the extent to which a firm identifies and commits to use small businesses, etc. in the performance of the contract: 

How would you make it enforceable, when an offeror/proposer identifies and commits to use small businesses and/or specific small businesses in the performance of the contract? 

Note that the offeror isn't necessarily required to identify or commit to specific firms in its plan. For that matter,  how do you make promises of good faith efforts to utilize small businesses under the Small Business Participation Plan mandatory? 

For instance, the Subcontracting Plan is supposed to be incorporated into and made a material part of the contract (See 19.705-5 (a)(4)).

The government may evaluate proposals as stated below and may structure the contract to  make the commitment enforceable:

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215.304 Evaluation factors and significant subfactors. (c)(i) 

...The contracting officer shall evaluate the extent to which offerors identify and commit to small business and historically black college or university and minority institution performance of the contract, whether as a joint venture, teaming arrangement, or subcontractor. (A) Evaluation factors may include— (1) The extent to which such firms are specifically identified in proposals; (2) The extent of commitment to use such firms (for example, enforceable commitments are to be weighted more heavily than non-enforceable ones); (3) The complexity and variety of the work small firms are to perform; (4) The realism of the proposal; (5) Past performance of the offerors in complying with requirements of the clauses at FAR 52.219–8, Utilization of Small, Small Disadvantaged and Women-Owned Small Business Concerns, and 52.219–9, Small, Small Disadvantaged and Women-Owned Small Business Subcontracting Plan; and (6) The extent of participation of such firms in terms of the value of the total acquisition.

To me, a meaningful  "commitment" involves more than flowery intentions stated in a plan.  I would evaluate mandatory commitment(s) much higher than unenforceable intentions.

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Does the practice of incorporating small business participation plans into contracts (as described below) have either a 1) significant effect beyond the internal operating procedures of the agency or 2) have a significant cost or administrative impact on contractors or offerors?

That question is vague because "significant effect" and "significant cost or administrative impact" are vague. Because the question is vague, it is foolish to answer it yes or no. At most, such an answer would be merely an expression of unsupported belief in the existence of uncertain states of affairs.

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Is the practice of incorporating small business participation plans into contracts (as described below) a FAR deviation as defined at FAR 1.401(f)?

If it is, then what about incorporation of any other part of an offeror's proposal?

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Assuming the small business participation plan is incorporated into either Section H of the contract or the statement of work, is it legally enforceable?

Regardless of the part of the contract into which the plan is incorporated, its enforceability would depend on its content and the way in which that content is expressed.

Vern Edwards said:

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Does the practice of incorporating small business participation plans into contracts (as described below) have either a 1) significant effect beyond the internal operating procedures of the agency or 2) have a significant cost or administrative impact on contractors or offerors?

That question is vague because "significant effect" and "significant cost or administrative impact" are vague. Because the question is vague, it is foolish to answer it yes or no. At most, such an answer would be merely an expression of unsupported belief in the existence of uncertain states of affairs.

Yes, the question is vague. However, I don’t think that it is “foolish to answer” it no.

As people are probably aware, Don has repeatedly challenged instances and questioned whether various government requirements are “legal” and authorized based upon OMB clearances, whether they have significant economic and administrative impact on industry beyond internal  agency procedures, etc., etc.  

In this instance, both the FAR committee and DoD publicized the proposed rules that are described in both FAR 15.304 and DFARS 215.304 (agency implementionnof the FAR rule).  The rules extend the consideration and evaluation of small business participation in the proposed contract to small business primes as well as to those firms who have otherwise been  required to develop small business subcontracting plans. The DFARS publication of the proposed rule included a statement that it wasn’t  considered to have significant administrative or economic impact on the small businesses that were newly required to develop and submit a small business participation plan.

If so, then I would argue that it can be deduced that the rule will not have a significant economic or administrative impact on those large businesses, which already are required to make good faith efforts to plan for and provide opportunities for the various categories of small and small disadvantaged businesses to participate in the contract performance.  It’s likely less impactful on the large businesses than it is on small business proposers. The SB firms weren’t previously required to submit evidence of efforts to provide opportunities for small and small disadvantaged businesses before award nor probably after award.

Considering the above,  I answered question number 1 “no”.

In observing my overall Army Command’s  level of implementation of the added requirement to consider small business participation for all offerors, whether large or small as well as evaluating past performance of all offerors in this area, whether large or small, it appeared  to be largely ignored. There are probably several reasons for this. 

The FAR and DFARS didn’t provide a cookbook for contracting officers and contract specialists to follow. 

It is challenging for anyone to evaluate past performance of small business primes in utilizing small and small disadvantaged business subcontractors. They haven’t been required to formally plan for or to report such information to the government. [EDIT: small business participation includes self-performance by small business primes or SB joint venture members.]

Program and project managers know even less about the subject than the 1102 community and don’t necessarily care about socioeconomic policy or procedures. 

Many in government acquisition are challenged in reading or thinking past the literal wording in the regulations. 

For instance,  years ago,   we updated the teaching material for the source selection aspects of the life cycle acquisition process for Design-Build Construction in our Proponent Based Training D-B  class to address evaluation of the separate small business participation and past performance for all offerors, large or small. In my opinion, the contracting instructors who were supposed to teach it didn’t get it. Thus, they mostly ignored it and didn’t explain it to the students. 

It would be interesting to learn to what extent the small business participation procedures are really addressed and used in the source selection process. 

In another thread in the WIFCON forum, it was evident to me that some of the regular contributors here have expressed distainment for Part 19 implementation of official government policy concerning small business contracting and subcontracting.

And, in this thread, it appears to me that Don Mansfield may be questioning whether the policy is authorized or legal and whether incorporating those aspects of an offerors proposal into the contract is enforceable. I was assuming that his was the first vote. I may be wrong. If so, I apologize.

Evaluating a plan makes sense. 

Making a performance plan a performance part of a contract is redundant  due to the fact that a subcontracting plan is already required.  Requirement of the performance plan is not lawful under the DFARS as the DFARS only requires submission of a performance plan to determine the acceptability of the subcontracting plan that is required by a clause to be provided.  It is a evaluation technique demanded by the DFARS not a contractual requirement demanded by the DFARS.  

A CO demanding that the performance plan be a part of contract performance is just plain crazy.  Makes me wonder what I would be in contractual violation of if I did not accomplish my subcontracting goals, the performance plan or the subcontracting plan.    Sheesh!

On 9/11/2018 at 8:23 AM, C Culham said:

Evaluating a plan makes sense. 

Making a performance plan a performance part of a contract is redundant  due to the fact that a subcontracting plan is already required.  Requirement of the performance plan is not lawful under the DFARS as the DFARS only requires submission of a performance plan to determine the acceptability of the subcontracting plan that is required by a clause to be provided.  It is a evaluation technique demanded by the DFARS not a contractual requirement demanded by the DFARS.  

A CO demanding that the performance plan be a part of contract performance is just plain crazy.  Makes me wonder what I would be in contractual violation of if I did not accomplish my subcontracting goals, the performance plan or the subcontracting plan.    Sheesh!

Carl, the plan for small business participation applies to all offerors including those not required to provide a subcontracting plan.  [EDIT: small business participation includes self-performance by small business primes or SB joint venture members. The SB prime may include its own participation in contract performance.]

It is a separate requirement and appears to go beyond the generic subcontracting plan by considering every offeror’s plan to actually identify and commit to using SB/SDB’s as well as considering their past performance (not an enforceable aspect of a proposal nor necessarily even part of a proposal, of course). The policy states that enforceable commitments should carry more weight in the evaluation.  There is a difference between “we intend to use Jo Blow as the refrigeration and air conditioning sub” and “we will use Joe Blow as...” or Joe Blow will be our R&A/C sub”. 

How do you make something “enforceable” without incorporating it into the contract?  

By the way, the separate subcontracting plan for large business primes is supposed to be incorporated into the contract, as I stated earlier.

 The use of contract requirements that require a contractor to use subs that it identified in its (negotiated) proposal isn’t a new concept.  See, for instance 52.244-4 “Subcontractors and Outside Associates and Consultants” (A-E Services)  For design-build construction contracts, we’ve used similarly worded clauses for nearly 30 years. These clauses do allow for approval of justifiable substitutions of those key personnel or key subs that it identified in its proposal..

Joel,

Rather than incorporating the entire small business participation plan into the contract, the Government could simply incorporate those aspects of the plan that drove the selection decision -- in your example, a special contract requirement could be written in the bilateral contract to capture the commitment:  "The Contractor agrees that all refrigeration and air conditioning work will be subcontracted to Joe Blow Inc."  Or, this could be captured in a unilateral contract award if the solicitation included a statement that the Government may incorporate any aspect of the offeror's proposal into the resulting contract.

joel hoffman said:

See, for instance,  Fed Register Volume 63 No. 224/Friday November 20, 1998 Pages 64427-64429, the Interim rule, which was adopted as finalized without change.  The rules under 215.314, including evaluating the extent of participation of small businesses and historically black colleges or universities and minority institutions in performance of the contract, were not expected to have a significant economic impact on substantial number of small entities within the meaning of the Regulatory Flexibility Impact Act, etc.  (https://www.gpo.gov/fdsys/pkg/FR-1998-11-20/pdf/98-31039.pdf)

joel,

There are a lot of acquisition rules that meet the standards for publication and comment (41 U.S.C. 1707) but do not meet the standards for having "a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act." As an avid reader of FAR/DFARS rules, I would say about half the time the entry under the "Regulatory Flexibility Act" section says that the rule will not have a significant economic impact on a substantial number of small entities..." The fact that such rules are published for comment suggests that the FAR Councils/DAR Council believed that they meet the standards at 41 U.S.C. 1707. Why else would they publish them?

Having said that, the questions posed don't relate to the evaluation of small business participation in source selection. They have to do with incorporation of the small business participation plan in the contract. This is not covered in the FAR or DFARS.

joel hoffman said:

How would you make it enforceable, when an offeror/proposer identifies and commits to use small businesses and/or specific small businesses in the performance of the contract?

An enforceable commitment could be a subcontract with a small business that was contingent on the prime winning the award. This could have more weight than a nonbinding teaming agreement with a small business, for example.

joel hoffman said:

Note that the offeror isn't necessarily required to identify or commit to specific firms in its plan. For that matter,  how do you make promises of good faith efforts to utilize small businesses under the Small Business Participation Plan mandatory?

What makes you think you have to?

Vern Edwards said:

That question is vague because "significant effect" and "significant cost or administrative impact" are vague. Because the question is vague, it is foolish to answer it yes or no.

How does one apply 41 U.S.C. 1707 without answering those questions?

On 9/11/2018 at 12:55 PM, Don Mansfield said:

Having said that, the questions posed don't relate to the evaluation of small business participation in source selection. They have to do with incorporation of the small business participation plan in the contract. This is not covered in the FAR or DFARS.

So,  what prohibits the government from incorporating it in the negotiated contract? FAR 1.102 (d) would seem to be applicable  and appropriate here if it isn’t covered or prohibited by FAR or DFARS or in violation of law or regulation and is in the best interest of the government. 

Are you saying that incorporating aspects of a proposal in a contract must first be publicized in compliance with 41 USC 1707 because the specific act of “incorporating” the otherwise validly required small business participation plan has a significant effect beyond the internal operating procedures of the Agencyand/or  has a significant cost or administrative impact on contractors or offerors?  

So, the poll questions here don’t pertain to the cost or administrative impacts involved for large and small business proposers to prepare and submit the small business participation plan.

It’s clear that those procedures and requirements were already publicized , comments considered and finalized years ago. 

I’m trying to understand what significant cost or administrative impact  it would have for the contractor to actually do what it said it would do in its proposal.  

Are you saying that the impact of incorporating a small business participation plan that identifies specific subs is that the contractor can propose something (and price it in its proposal) but then is not allowed to bid shop for subcontractors after award?  [EDIT: small business participation includes self-performance by small business primes or SB joint venture members. The SB prime may include its own participation in contract performance.]

Anti-bid shopping rules are not uncommon in federal, state or local public contracting.  Bid shopping is not in the public’s interest.  The buyer gains nothing from bid shopping and the subcontracting community suffers from it. 

[An example of bid shopping is where a prime obtained bids or proposals from a sub or subs during its proposal preparation. Then, after award, the prime went shopping for lower prices, and/or pressured the sub or multiple subs to lower their prices or be replaced by other firm(s) at lower prices. Primes often reveal the price-to-beat to others. It’s like reverse bidding/auctioning.  

[EDIT: small business participation includes self-performance by small business primes or SB joint venture members.]

joel hoffman said:

So,  what prohibits the government from incorporating it in the negotiated contract? FAR 1.102 (d) would seem to be applicable  and appropriate here if it isn’t covered or prohibited by FAR or DFARS or in violation of law or regulation and is in the best interest of the government. 

Are you saying that incorporating aspects of a proposal in a contract must first be publicized in compliance with 41 USC 1707 because the specific act of “incorporating” the otherwise validly required small business participation plan has a significant effect beyond the internal operating procedures of the Agencyand/or  has a significant cost or administrative impact on contractors or offerors?  I’m trying to understand what significant cost or administrative impact that would have.

joel,

I don't want to take a position in this thread until the poll is over. I just wanted to take a poll. You've added your logic and reasoning, which is better than just voting--thanks. I will answer your questions.

Vern Edwards said:

Because the question is vague, it is foolish to answer it yes or no.

You just had to go and ruin my sample. Now I will only get responses from people who don't care what you think. Thanks for that.

One last thought.  The government may incorporate all or part of the proposal into the contract (yes, agreed, ji20874).  

How did I get sucked into justifying that?  

Don clarified today that this forum poll and initial discussion was only about incorporating part of a proposal into the contract. I had thought that it was also about the process for requiring proposers to prepare and submit the information As I have explained, that is clearly authorized.

Game over.

Don Mansfield said:

How does one apply 41 U.S.C. 1707 without answering those questions?

@Don Mansfield  You can't. You must define "effect" and "significant," argue for the reasonableness of your definitions and then make a claim based on evidence.

What is the effect? What caused it? In what sense is the effect significant?

That's what you would have to do if you went to court to block a regulation or to the GAO to protest a solicitation that you claim has a significant effect.

The phrase "significant effect" appears frequently in statute. Here is how one circuit court of appeals addressed the question of "significant effect" as used in the National Environmental Policy Act, 42 U.S.C. § 4321.

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“Whether there may be a significant effect on the environment requires consideration of two broad factors: ‘context and intensity.’ ” Nat'l Parks & Conservation Ass'n, 241 F.3d at 731 (quoting 40 C.F.R. § 1508.27). A number of factors should be considered in evaluating intensity, including, “[t]he degree to which the proposed action affects public health or safety,” “[t]he degree to which the effects on the quality of the human environment are likely to be highly controversial,” “[t]he degree to which the possible effects on the human environment are highly uncertain or involve unique or unknown risks,” “[t]he degree to which the action may establish a precedent for future actions with significant effects or represents a decision in principle about a future consideration,” “[w]hether the action is related to other actions with individually insignificant but cumulatively significant impacts,” and “[t]he degree to which the action may adversely affect an endangered or threatened species or its habitat.” 40 C.F.R. § 1508.27(b)(2), (4), (5), (6), (7), (9). An action may be “significant” if one of these factors is met. Ocean Advocates v. U.S. Army Corps of Eng'rs, 361 F.3d 1108, 1125 (9th Cir.2004); see also Nat'l Parks & Conservation Ass'n, 241 F.3d at 731 (either degree of uncertainty or controversy “may be sufficient to require preparation of an EIS in appropriate circumstances.”).

Ctr. for Biological Diversity v. Nat'l Highway Traffic Safety Admin., 538 F.3d 1172, 1220 (9th Cir. 2008)

Moreover, to a thinking person, the question about significant effect will turn in some measure on the nature of the "plan." Such a plan might be no more than a one or two page summary of planned participation, with some company names and brief references to SOW tasks. Then again, such a plan might be ten pages or longer. Who knows. "Significant effect"? But the thread OP provides no description of the plan on which the question is based.

The first question posed in this thread can do nothing more than elicit unsupported expressions of on-the-spot belief from most people, who probably have not thought things through. That's fine, if that's all you want, but that's why, in my judgment, it would be foolish to take a yes or no stance based on the scenario. This "poll" does not call for critical thinking, just gut reaction. I understand that about person-in-the-street political polls, but why do you want that from professionals?

Don Mansfield said:

You just had to go and ruin my sample. Now I will only get responses from people who don't care what you think. Thanks for that.

@Don Mansfield Statistically speaking, what random "sample" size did you expect? What sample size do you need? The pool of people who don't care what I think ought to be large enough to draw from.

However, people who answer yes or no may not do much thinking, one way or another.

This is an interesting question because PepeTheFrog has seen presentation slides and heard presentations from DOD federal frogs who say incorporating the small business participation plan is a "best practice." In other words, they evangelize the entire DOD contracting workforce to do this. They are adamant that this is a good idea and everyone should do it. These evangelizing DOD federal frogs are typically the small business or SADBU specialists (frogs that mostly deal with the DD2579 and meeting with small businesses, for instance), not contracting officers.

@Don Mansfield Have you ever confronted a small business or SADBU frog about this potential conflict with the Regulatory Flexibility Act or other statutes? If so, what do they say?

Have you ever brought this up to any frogs in Defense Pricing and Contracting (formerly DPAP)? If so, what do they say?

PepeTheFrog said:

This is an interesting question because PepeTheFrog has seen presentation slides and heard presentations from DOD federal frogs who say incorporating the small business participation plan is a "best practice." In other words, they evangelize the entire DOD contracting workforce to do this. They are adamant that this is a good idea and everyone should do it. These evangelizing DOD federal frogs are typically the small business or SADBU specialists (frogs that mostly deal with the DD2579 and meeting with small businesses, for instance), not contracting officers.

@Don Mansfield Have you ever confronted a small business or SADBU frog about this potential conflict with the Regulatory Flexibility Act or other statutes? If so, what do they say?

Have you ever brought this up to any frogs in Defense Pricing and Contracting (formerly DPAP)? If so, what do they say?

Pepe, what is the potential conflict with RFA of incorporating the Small business participation plan? Keep in mind that the requirement for the plan itself was properly publicized, comments sought, received and finalized...

[EDIT: small business participation includes self-performance by small business primes or SB joint venture members. The SB prime may include its own participation in contract performance.]

On ‎9‎/‎11‎/‎2018 at 6:33 AM, joel hoffman said:

Carl, the plan for small business subcontracting participation applies to all offerors including those not required to provide a subcontracting plan.

Joel - Exactly why the DoD want to place a performance plan in a contract is rubbish.   I am a small business,  if 52.219-9 is in a solicitation that I am responding to its very language says the clause is not applicable to my company but the DoD wants to evaluate my use of small businesses, okay that is fine.   But then wants to go one step further and incorporate my performance plan in my contract even when the subcontracting plan is not required?

I say go back to the original clauses of the FAR make CO's stand up and enforce the whole of them ( have you read FAR 52.219-16) and utilize what is given to CO's to enforce plans for large businesses.  

The "best practice" of DoD on this issue is administrative foolishness!

joel hoffman,

PepeTheFrog does not know. It seems to be something Don Mansfield is interested in.

C Culham said:

Joel - Exactly why the DoD want to place a performance plan in a contract is rubbish.   I am a small business,  if 52.219-9 is in a solicitation that I am responding to its very language says the clause is not applicable to my company but the DoD wants to evaluate my use of small businesses, okay that is fine.   But then wants to go one step further and incorporate my performance plan in my contract even when the subcontracting plan is not required?

I say go back to the original clauses of the FAR make CO's stand up and enforce the whole of them ( have you read FAR 52.219-16) and utilize what is given to CO's to enforce plans for large businesses.  

The "best practice" of DoD on this issue is administrative foolishness!

Carl, 52.219-16 and 52.219-9 are inapplicable to small business primes. 

For small businesses, DoD is only supposed to evaluate the extent of small business participation as an evaluation factor or subfactor, not a Subcontracting Plan. 

For large business that information is supposed to be incorporated into their subcontracting plan, which is supposed to be incorporated into the contract. 

Are you being required to submit a Subcontracting Plan? 

I hope not.   

Edit:  What information are they requiring you to submit for the source selection competition to evaluate the extent of planned small business participation? 

[EDIT: small business participation includes self-performance by small business primes or SB joint venture members. The SB prime may include its own participation in contract performance.]

Is there any reason why an agency cannot comply with the DFARS requirement by evaluating the extent of participation on an acceptable/unacceptable basis? No plan would be required---just a list of proposed participants keyed to SOW tasks. Percentages of participation could be based on subcontract proposal prices. The acceptability threshold for participation could be stated as a percentage of total contract value. That amount could be based on a determination by the CO based on a recommendation by the SADBUS.

Could proposed participation could be incorporated into the contract with a special clause containing a table that lists small business participants keyed to SOW task numbers? The clause could read:

The Contractor promises to include the following small business firms as participants in its performance of this contract. Table column headings:

PARTICIPANT      SOW TASK(S) IN WHICH PARTICIPATION OCCURS     ESTIMATED SUBCONTRACT VALUE

The clause could go on to say that actual participation within +/- X percent of the estimated subcontract value would be acceptable.

Vern Edwards said:

The first question posed in this thread can do nothing more than elicit unsupported expressions of on-the-spot belief from most people, who probably have not thought things through. That's fine, if that's all you want, but that's why, in my judgment, it would be foolish to take a yes or no stance based on the scenario.

Fine, but that's not what you wrote. You said that answering was foolish because the question contained the vague terms "significant effect" and "significant cost or administrative impact".

On 9/10/2018 at 10:34 PM, Vern Edwards said:

That question is vague because "significant effect" and "significant cost or administrative impact" are vague. Because the question is vague, it is foolish to answer it yes or no.

Don Mansfield said:

Fine, but that's not what you wrote. You said that answering was foolish because the question contained the vague terms "significant effect" and "significant cost or administrative impact".

That's not what I wrote. What I wrote was that answering the question yes or no would be foolish because the phrases "significant effect" and "significant cost or administrative impact" are vague.

On 9/11/2018 at 7:34 AM, Vern Edwards said:

That question is vague because "significant effect" and "significant cost or administrative impact" are vague. Because the question is vague, it is foolish to answer it yes or no.

You could have defined them for the purposes of the poll or provided a scenario in which you described an effect and impact.

@Don Mansfield

You mentioned "sample".

What is your population?

What did you hope to learn about that population?

What is the population size?

What sample size did you hope to get?

Do you think the sample would have been randomly selected?

Vern Edwards said:

Is there any reason why an agency cannot comply with the DFARS requirement by evaluating the extent of participation on an acceptable/unacceptable basis? No plan would be required---just a list of proposed participants keyed to SOW tasks. Percentages of participation could be based on subcontract proposal prices.

Could proposed participation could be incorporated into the contract with a special clause listing small business participants keyed to SOW task numbers?

Vern, The  Notice in the Fed Register stated, for Large Businesses, the evaluated information is to be incorporated into the subcontracting plan for large businesses. I presume that is after evaluation of the subfactor.

I think that go/no rating of the extent of participation would be problematic.

The language states that the government will evaluate the extent of the planned participation, including the extent to which firms are identified, the relative extent of overall subcontracting, extent of commitment,  overall variety and complexity of the work,  overall share of total contract value, etc. it also says that enforceable commitments shall be weighted more heavily. 

These appear to be comparative evaluation criteria.

PepeTheFrog said:

Have you ever confronted a small business or SADBU frog about this potential conflict with the Regulatory Flexibility Act or other statutes? If so, what do they say?

Yes. A whole room full of them. And contractor SBLOs. I presented them with the language of 41 USC 1707 and asked if they thought a policy of making small business participation plans binding had a 1) significant effect beyond the internal operating procedures of the agency or 2) have a significant cost or administrative impact on contractors or offerors. Contractor SBLO heads nodded yes, SADBU heads remained relatively still. Nobody said "no". A couple of the SADBUs argued that if you put the proposed small business participation in the statement of work as a technical requirement, instead of a clause in Section H, it was ok.

PepeTheFrog said:

Have you ever brought this up to any frogs in Defense Pricing and Contracting (formerly DPAP)? If so, what do they say?

No, I haven't.

joel hoffman said:

Pepe, what is the potential conflict with RFA of incorporating the Small business participation plan?

The rule in the DFARS doesn't address incorporating the plan as a contract requirement in contracts with small business concerns. The RFA analysis may not have considered this aspect.

joel hoffman said:

Vern, The  Notice in the Fed Register stated, for Large Businesses, the evaluated information is to be incorporated into the subcontracting plan for large businesses. I presume that is after evaluation of the subfactor.

I think that go/no rating of the extent of participation would be problematic.

The language states that the government will evaluate the extent of the planned participation, including the extent to which firms are identified, the relative extent of overall subcontracting, extent of commitment,  overall variety and complexity of the work,  overall share of total contract value, etc. it also says that enforceable commitments shall be weighted more heavily. 

These appear to be comparative evaluation criteria.

Don, please cite the Federal Register entry.

Don Mansfield said:

The rule in the DFARS doesn't address incorporating the plan as a contract requirement in contracts with small business concerns. The RFA analysis may not have considered this aspect.

1. The fed register notice did state that the information in the plan will be incorporated into the subcontracting plan ( large business) which is to be made part of the contract  Thus,   no conflict with 41 USC 1707. 

2. The fed reg notice also covers the actual prep, submission and evaluation of the plan. No conflict with the Statute. 

3. How about somebody advising what significant administration and cost impact is involved with incorporating the info in the plan into the subsequent contract with small business?  

[EDIT: small business participation includes self-performance by small business primes or SB joint venture members. The SB prime may include its own participation in contract performance.]

Vern Edwards said:

Don, please cite the Federal Register entry.

I did that way back on page 1.

 I provided a link.  (https://www.gpo.gov/fdsys/pkg/FR-1998-11-20/pdf/98-31039.pdf)

And it is described in the DFARS  at 215.304

 That was the Federal Register notice for the Interim rule with comment period The Final rule was adopted without change.

Vern Edwards said:

Is there any reason why an agency cannot comply with the DFARS requirement by evaluating the extent of participation on an acceptable/unacceptable basis?

No. The use of acceptable/unacceptable is expressly permitted in the DoD Source Selection Procedures. However, that's not the issue. The issue is whether adopting a policy of making the small business participation plan binding would trigger the rulemaking requirements of 41 USC 1707. Small businesses like Carl would probably say it does. He's probably had to miss a few rodeos because of the additional administrative burden.

joel hoffman said:

1. The fed register notice did state that the information in the plan will be incorporated into the subcontracting plan ( large business) which is to be made part of the contract  Thus,   no conflict with 41 USC 1707.

Is this what you are referring to?

Quote

When an evaluation includes the factor in paragraph (c)(i)(B)(1) of this section, the small businesses, historically black colleges or universities and minority institutions, and women-owned small businesses considered in the evaluation shall be listed in any subcontracting plan submitted pursuant to FAR 52.219–9 to facilitate compliance with 252.219– 7003(g).

joel hoffman said:

2. The fed reg notice also covers the actual prep, submission and evaluation of the plan. No conflict with the Statute.

Which statute?

joel hoffman said:

3. How about somebody advising what significant administration and cost impact is involved with incorporating the info in the plan into the subsequent contract with small business?

@C Culham What has your experience been?

Don Mansfield said:

joel hoffman said:

1. The fed register notice did state that the information in the plan will be incorporated into the subcontracting plan ( large business) which is to be made part of the contract  Thus,   no conflict with 41 USC 1707.

Is this what you are referring to?

Quote

When an evaluation includes the factor in paragraph (c)(i)(B)(1) of this section, the small businesses, historically black colleges or universities and minority institutions, and women-owned small businesses considered in the evaluation shall be listed in any subcontracting plan submitted pursuant to FAR 52.219–9 to facilitate compliance with 252.219– 7003(g).

Joel: Yes.  I think that it is also mentioned in Part 19 or 219.  

joel hoffman said:

2. The fed reg notice also covers the actual prep, submission and evaluation of the plan. No conflict with the Statute.

Which statute?

41 USC 1707.   Sorry. I was running late for lunch.  Yes, what I meant is that the prep, submission and evaluation of the small business participation plan was publicized per the requirements of 41 USC 1707.  Any administrative and cost burden for the rule making process for those activities would be associated with that process.

That leaves the question of what significant additional administrative or cost impact would likely result from the government incorporating the plan into a contract with other than a large business. Thus, no subcontracting plan involved.

The small business contractor would have to award and administer subcontracts for the work that it identified in its utilization plan regardless of its inclusion in the contract or not . 

If the contractor had proposed enforceable commitments to identified firms  in the plan, what is the significant additional burden due to it being in the contract?

If the contractor didn’t identify firms or include enforceable commitments , then what is the significant additional burden?

Contract clause 52.219-8 is already included in contracts with small businesses. So any activities associated with good faith compliance with the -8 clause should not be attributed to “incorporating” the small business utilization plan. 

I see the practical downside to the contractor as being expected to deliver what it proposed and supposedly priced to win the award. Bid shopping is thus discouraged. It would take a “bolden” contractor to complain that it’s impact was that it had to do what it Proposed to do. 

In my opinion, which may be wrong, the actual incorporation has little impact. The more significant impact is having to produce and submit the utilization plan with the contract proposal. That’s probably what people are most aggravated about. 

And - in my opinion, bid shopping is sleazy, so I don’t give a wit about the impact of reducing, impeding or preventing a prime from bid shopping. 

Carl...what is the significant additional administrative or cost burden after award due to the incorporation of a small business [Edit: “participation” not “utilization”] plan that was submitted with the proposal. By additional, I mean in comparison to otherwise required contractual duties and activities. 

[EDIT: small business participation includes self-performance by small business primes or SB joint venture members. The SB prime may include its own participation in contract performance.]

joel hoffman said:

1. The fed register notice did state that the information in the plan will be incorporated into the subcontracting plan ( large business) which is to be made part of the contract  Thus,   no conflict with 41 USC 1707.

I don't think it says that exactly, but that's ok. If the subcontracting plan reflected what was in the small business participation plan, what would be the reason for incorporating the small business participation plan?

joel hoffman said:

That leaves the question of what significant additional administrative or cost impact would likely result from the government incorporating the plan into a contract with other than a large business. Thus, no subcontracting plan involved.

It may also have an effect on large businesses, depending on what the contract required. For example, the contractor need only make a good faith effort to comply with the subcontracting plan under FAR 52.219-9. Some contracts require that the contractor actually achieve what was proposed in their small business participation plan, good faith effort notwithstanding.

joel hoffman said:

If the contractor had proposed enforceable commitments to identified firms  in the plan, what is the significant additional burden due to it being in the contract?

If the contractor didn’t identify firms or include enforceable commitments , then what is the significant additional burden?

I don't know. I can only speculate. When I asked contractors what they thought, they said it was a big deal. I'm hoping some join this thread to share their experience.

Don Mansfield said:

If the subcontracting plan reflected what was in the small business participation plan, what would be the reason for incorporating the small business participation plan?

I can find nothing in DFARS 215.304(c)(i) that says anything about a small business participation PLAN. The word PLAN is used only in connection with the small business subcontracting plan required by FAR 52.219-9. The regulation mentions "proposals" for small business participation, which are to be separate from the subcontracting plans required by FAR 52.219-9.

This thread is based on a false premise.

And Don, if you're going to refer to a Federal Register entry, you should cite the entry. Did I miss it?

Don Mansfield said:

joel hoffman said:

1. The fed register notice did state that the information in the plan will be incorporated into the subcontracting plan ( large business) which is to be made part of the contract  Thus,   no conflict with 41 USC 1707.

I don't think it says that exactly, but that's ok. If the subcontracting plan reflected what was in the small business participation plan, what would be the reason for incorporating the small business participation plan?

joel hoffman said:

That leaves the question of what significant additional administrative or cost impact would likely result from the government incorporating the plan into a contract with other than a large business. Thus, no subcontracting plan involved.

 It may also have an effect on large businesses, depending on what the contract required. For example, the contractor need only make a good faith effort to comply with the subcontracting plan under FAR 52.219-9. Some contracts require that the contractor actually achieve what was proposed in their small business participation plan, good faith effort notwithstanding.

joel hoffman said:

If the contractor had proposed enforceable commitments to identified firms  in the plan, what is the significant additional burden due to it being in the contract?

If the contractor didn’t identify firms or include enforceable commitments , then what is the significant additional burden?

I don't know. I can only speculate. When I asked contractors what they thought, they said it was a big deal. I'm hoping some join this thread to share their experience.

Don,

1. The small business utilization[EDIT: participation] plan would only be separately incorporated in contracts without a small business subcontracting plan. It’s already necessary to incorporate it into the subcontracting plan. My point is that the industry had the opportunity to review and comment, per 41 USC 1707, on the requirement to incorporate it in the subcontracting plan. 

2. Whatever effect it may also have on large business to incorporate the utilization [participation] plan information was covered in the 20 Sep 1998  Interim publication of the proposed rule with request for comment. As I said, the public was properly notified of the proposed requirement to include it in the subcontracting plan. Therefore, 41 USC 1707 has been considered .

Im sorry that I can’t seem to get this point across. Your point is that the impacts of incorporating the utilization [edit: participation] plan in the contract haven’t been considered or allowed comment per 41 USC 1707. Well - they have - for those contracts that will have a subcontracting plan incorporated. 

3. That leaves the question with respect to incorporating it in contracts with small business primes. [EDIT: small business participation includes self-performance by small business primes or SB joint venture members. The SB prime may include its own participation in contract performance.]

Vern Edwards said:

The regulation mentions "proposals" for small business participation, which are to be separate from the subcontracting plans required by FAR 52.219-9.

...which are commonly referred to as Small Business Participation plans. 

https://www.army.mil/article/199388/participation_plans_offer_better_way_to_include_small_businesses 

https://smallbusiness.chron.com/difference-between-small-business-participation-plan-small-business-subcontract-72075.html

Vern Edwards said:

This thread is based on a false premise.

No, you just don't understand.

Vern Edwards said:

And Don, if you're going to refer to a Federal Register entry, you should cite the entry. Did I miss it?

I didn't cite a Federal Register entry--joel did and provided a link.

Don Mansfield said:

...I didn't cite a Federal Register entry--joel did and provided a link.

And Don provided the Fed Register Entry in a quote of one of my early posts.

Vern, I added the link again, above a little while ago in response to your request to Don. Sorry, Vern, I was late for a luncheon appointment and didn’t have time to search for the post, copy it, go to page 2 and paste it into my response at the time.  You may have noticed the typos in my response because of my limitations with STUPID Siri or stupid voice text or stupid me...

joel hoffman said:

1. The small business utilization plan would only be separately incorporated in contracts without a small business subcontracting plan. It’s already necessary to incorporate it into the subcontracting plan. My point is that the industry had the opportunity to review and comment, per 41 USC 1707, on the requirement to incorporate it in the subcontracting plan.

That's not always happening in practice. Some contracts require compliance with the small business subcontracting plan pursuant to FAR 52.219-9 and a small business participation plan (which I think you are calling a small business utilization plan). Under FAR 52.219-9, the contractor has to make a good faith effort to comply with its subcontracting plan. On the other hand, the amounts proposed in the small business participation plan become contract requirements, good faith effort notwithstanding. The public had the opportunity to review and comment on the former, but not the latter. If agencies merely incorporated the amounts proposed in the small business participation plan in their subcontracting plans, there would be no issue regarding 41 USC 1707.

Don Mansfield said:

...which are commonly referred to as Small Business Participation plans. 

https://www.army.mil/article/199388/participation_plans_offer_better_way_to_include_small_businesses 

https://smallbusiness.chron.com/difference-between-small-business-participation-plan-small-business-subcontract-72075.html

No, you just don't understand.

I didn't cite a Federal Register entry--joel did and provided a link.

@Don Mansfield I understand perfectly, but "commonly referred to," what's that? Have you actually scoped the problem? Just because some agencies decide to call for a small business participation plan, that doesn't mean that there is a problem, much less a general problem. I know of no restriction on what agencies can ask for in proposals_._

How about:

• A personnel management plan?
• A QA plan.
• A safety plan.
• A program or project management plan.
• A disaster preparedness plan.
• A system test plan.

And so on.

The demand for plans of various kinds in proposals has been going on for decades, since long before you worked for the government. It's not wise, in my opinion, but as far as I know it's not illegal. 

And if you ask for a plan, and choose someone on the basis of the plan, why not make the plan contractually binding? Again, it's not wise, but it's not illegal.

As for evaluating small business participation on an acceptable/unacceptable basis, you and Joel have expressed reservations, but neither of you has made an argument about your cause for hesitation. I can find nothing to prohibit that practice. The National Science Foundation appears to have been evaluating that factor in that way for some time. See e.g., Frontline Healthcare Workers Safety Foundation, Ltd., B-402380, 2010 COD ¶ 91. I see nothing in DFARS that expressly prohibits such an evaluation of that factor.

It should be clear that DFARS does not require a "plan." All it requires is a proposal about participation. And why would it be illegal to include part of a proposal in a contract?

As I said, this thread is based on a false premise.

Vern Edwards said:

As I said, this thread is based on a false premise.

Which is what?

Don Mansfield said:

Which is what?

That the DFARS requires COs to obtain small business participation plans.

That asking for small business participation plans is improper.

That it is improper to incorporate them into contracts.

Those are the premises that underly your enquiry. Your poll is designed to see if others agree with you.

Just now, Vern Edwards said:

That asking for small business participation plans is improper and that it is improper to incorporate them into contracts. That's the premise that underlies your enquiry. Your poll is designed to see if others agree with you.

Is that a fact?

Don Mansfield said:

Is that a fact?

Is what a fact? That that's your premise and that that's the purpose of your poll? I believe those are facts. And I believe those premises are false.

Am I wrong? If so, sort me out.

Vern Edwards said:

Is what a fact? That that's your premise and that that's the purpose of your poll? I believe those are facts.

Am I wrong? If so, sort me out.

No, those are not facts. Those are your conclusions. You don't know what my premise is or the purpose of my poll. You seem to think you do, though.

Don Mansfield said:

No, those are not facts. Those are your conclusions. You don't know what my premise is or the purpose of my poll. You seem to think you do, though.

Yes, I do think that. If I'm wrong it's up to you to straighten me out. If you don't want to do that, then you won't change my mind.

Now, at this point we're not getting anywhere. Yes it is. No it's not. Yes it is. That kind of thing is out of a Bugs Bunny cartoon. I'm perfectly willing for people to respond to your poll if that's all you want. I've already said what I think about that, and there's nothing to be gained by repeating myself.

The DFARS calls for proposals of small business participation. Calling them plans doesn't change what they are. That's just poor usage, which is common in our business. Proposals have OMB approval under the Paperwork Reduction Act, 9000-0037. I know of nothing that prohibits incorporating a proposal into a contract. I see no point in the poll, but if people want to respond to a vague question based on a false premise, that's their business.

Good night and good luck.

Vern Edwards said:

@Don Mansfield I understand perfectly, but "commonly referred to," what's that? Have you actually scoped the problem? Just because some agencies decide to call for a small business participation plan, that doesn't mean that there is a problem, much less a general problem. I know of no restriction on what agencies can ask for in proposals_._

How about:

• A personnel management plan?
• A QA plan.
• A safety plan.
• A program or project management plan.
• A disaster preparedness plan.
• A system test plan.

 

And so on.

The demand for plans of various kinds in proposals has been going on for decades, since long before you worked for the government. It's not wise, in my opinion, but as far as I know it's not illegal. 

And if you ask for a plan, and choose someone on the basis of the plan, why not make the plan contractually binding? Again, it's not wise, but it's not illegal.

As for evaluating small business participation on an acceptable/unacceptable basis, you and Joel have expressed reservations, but neither of you has made an argument about your cause for hesitation. I can find nothing to prohibit that practice. The National Science Foundation appears to have been evaluating that factor in that way for some time. See e.g., Frontline Healthcare Workers Safety Foundation, Ltd., B-402380, 2010 COD ¶ 91. I see nothing in DFARS that expressly prohibits such an evaluation of that factor.

It should be clear that DFARS does not require a "plan." All it requires is a proposal about participation. And why would it be illegal to include part of a proposal in a contract?

As I said, this thread is based on a false premise.

Vern, I did say that using go/no-go (acceptable/unacceptable) evaluation criteria would be problematic. This was because the DFARS language in 15.304 (c)(1) describing “examples of evaluation factors” (which has been moved to the  PGI at 15.304(c)(I)(A),  appears to use some comparative language. I doubt that these would rise to the level of individual “factors” in real source selection plans. They are evaluation criteria.  More sloppy wording. 

Under a “factor” for “the extent of commitment to use such firms” (those which are specifically identified?) it says “(for example, enforceable commitments are to be weighted more heavily than non-enforceable ones)”;

 “the complexity and variety of the work small firms are to perform”;

“the realism of the proposal”;

“the extent of participation of such firms in terms of the value of the total acquisition”;

“the extent to which such firms are specifically identified in proposals” (note the plural word  “proposals”, which may mean something or may just be sloppy).

The word “extent” refers to "the range over which something extends" in one definition of extent in Merriam Webster on-line Dictionary. 

So I said problematic -that it is open to question or debate.  Not categorically prohibited but it would seem to more naturally fit a comparative assessment. 

Furthermore, the whole thing is wishy washy because they are referred to as  “examples” per DFARS  and PGI 215.304 (c)(I)(a) says ”Evaluation factors may include-“

Does the National Science Foundation use the DFARS for its evaluation ?  Note that this is a DoD requirement.

 I used the term “small business participation plan” because it was in the title of the thread plus I didn’t want to write “extent of participation of small businesses in the performance of the contract” every time.  I hate to type - especially on a smart screen. Sorry anyway.

I am rarely near a computer screen these days. 🙄

Vern Edwards said:

Yes, I do think I do. If I'm wrong it's up to you to tell us what your premises are. If you don't want to do that, then you won't change my mind

Is that how it works? Your assertions are true unless I prove them false? Quod grātīs asseritur, grātīs negātur

BTW, "proposals" are not covered under OMB Control No. 9000-0037. The OMB clearance is for "Presolicitation Notice and Response." See https://www.gpo.gov/fdsys/pkg/FR-2017-08-23/pdf/2017-17830.pdf#page=1

Vern Edwards said:

Have you actually scoped the problem? Just because some agencies decide to call for a small business participation plan, that doesn't mean that there is a problem, much less a general problem.

What's your point? I didn't say there was a problem.

Vern Edwards said:

How about:

• A personnel management plan?
• A QA plan.
• A safety plan.
• A program or project management plan.
• A disaster preparedness plan.
• A system test plan.

 

And so on.

What about them? Nobody is arguing that it's illegal to incorporate things in proposals in the contract. The issue is whether a policy of binding offerors, including small business offerors, to their proposed small business participation should be subject to requirements of 41 USC 1707. Incorporation of a plan is just a technique. Some activities use clauses, others put requirements in the statement of work.

Vern Edwards said:

As for evaluating small business participation on an acceptable/unacceptable basis, you and Joel have expressed reservations, but neither of you has made an argument about your cause for hesitation.

No, I didn't. I said the DoD Source Selection Guide expressly permits it. I have no reservations.

Vern Edwards said:

The DFARS calls for proposals of small business participation. Calling them plans doesn't change what they are. That's just poor usage, which is common in our business.

I don't see your point. To comply with DFARS 215.304, it has become common practice by DoD activities to request "small business participation plans." When they request them, they receive them. There's a lexicon that exists outside of the regulations. Agencies and their contractors use words and terms that they both understand, despite these terms not being used in the regulations. Sometimes these words and terms end up in regulations.

Don Mansfield said:

BTW, "proposals" are not covered under OMB Control No. 9000-0037.

All I know is that according to FAR 1.106, OMB Control No. 9000-0037 covers FAR Subpart 15.2, Solicitation and Receipt of Proposals and Information. If the FAR is in error, or if I have misread it, then I do not know of any control number for proposals.

Don Mansfield said:

Is that how it works? Your assertions are true unless I prove them false?

My assertions are true for me, and for anyone who agrees with me, until you prove to me and those others that they're wrong.

My point: DFARS 215.304(c)(i) requires DOD agencies to evaluate proposed small business participation. In order to do that, agencies must ask prospective offerors to propose small business participation, which requires offerors to prepare and submit information, call it what you will, "plans" or whatever.

The regulations says, in part:

Quote

The contracting officer shall evaluate the extent to which offerors identify and commit to small business performance of the contract, whether as a joint venture, teaming arrangement, or subcontractor.

Once an agency has chosen a contractor in part because of its proposed small business participation, it makes perfectly sound business sense for them to bind the awardee to its proposal. To do otherwise makes the "proposal" and the evaluation a sham. I think a judge might laugh at the suggestion that something that an offeror committed to do should not be included in the contract.

The rule in DFARS 215.304(c)(i) was published, and while it is badly written and is not explicit in terms of incorporating proposed participation into resultant contracts, it seems to me that the implications are clear. Whether the policy has, in fact, a significant effect and impact on companies is anybody's guess and likely depends on specifics that you did not provide.

In my opinion, a yes or no answer to your first and third questions would be foolish. More information is needed and some assumptions must be made or given and shared with all prospective respondents.

joel hoffman said:

Vern, I did say that using go/no-go (acceptable/unacceptable) evaluation criteria would be problematic. This was because the DFARS language in 15.304 (c)(1) describing “examples of evaluation factors” (which has been moved to the  PGI at 15.304(c)(I)(A),  appears to use some comparative language. I doubt that these would rise to the level of individual “factors” in real source selection plans. They are evaluation criteria.  More sloppy wording.

@joel hoffman

Are you saying that there is a distinction between evaluation "factors" and evaluation "criteria"? If so, what is the distinction?

Vern Edwards said:

@joel hoffman

Are you saying that there is a distinction between evaluation "factors" and evaluation "criteria"? If so, what is the distinction?

Yes, there is a distinction. Factors are the high level, key discriminators which represent those specific characteristics that are tied to the significant RFP requirements. FAR 15.304(a) discusses factors and subfactors.  The Army Source Selection Supplement to the DoD Source Selection Procedures provides guidance to "Identify key discriminators to be evaluated" and "define the discriminators as evaluation factors and subfactors and their relative order of importance."

"Factors" should be limited in number for various reasons, such as reducing complexity, not diminishing the importance of any one KEY aspect of the evaluation, the fact that the relative importance of each factor in comparison to the others must determined and stated in the evaluation plan and RFP. Similarly, the relative importance of subfactors under a factor must also be determined and stated.

I probably erred in calling the multiple aspects of small business participation that the DFARS described as "factors" as "evaluation criteria".   They don't rise to the level of factors or even subfactors.  If they were factors or subfactors,  they would have to be somehow weighted or stated in terms of relative importance to other factors or subfactors under the factor level. For me, that would be overkill. 

In addition, the overall evaluation of the small business participation might well be designated no higher than as a subfactor under some related factor. 

The individual aspects could be classified as "elements",  per the Army Source selection jargon (see below). They are simply various aspects of a factor or subfactor that the DoD wants to be evaluated.

Evaluation criteria would be developed to describe what and how they are to be evaluated. 

Sorry for being "sloppy"!

FAR 15.304 says in part:

Quote

(a) The award decision is based on evaluation factors and significant subfactors that are tailored to the acquisition.

(b) Evaluation factors and significant subfactors must—

(1) Represent the key areas of importance and emphasis to be considered in the source selection decision; and

(2) Support meaningful comparison and discrimination between and among competing proposals.

(c) The evaluation factors and significant subfactors that apply to an acquisition and their relative importance, are within the broad discretion of agency acquisition officials,

DoD Source Selection Procedures:

Quote

Evaluation factors and subfactors represent those specific characteristics that are tied to significant RFP requirements.  They are the uniform baseline against which each offeror’s proposal is evaluated allowing the Government to make a determination of acceptability.  The evaluation factors and subfactors shall be set forth in the solicitation in enough depth to communicate what will be evaluated.  The evaluation factors and subfactors shall be the primary determinant of the detailed information requested in the solicitation’s instructions to offerors.

Army Source Selection Supplement:

Quote

Identify key discriminators to be evaluated ... 

Define the discriminators as evaluation factors and subfactors and their relative order of importance..

...The standard Army naming convention for the various levels is: Evaluation Factor – Subfactor – and Element.  Figure 2-4 illustrates a sample evaluation factor structure.  More evaluation factors are often a net negative.  Use caution when subdividing factors into multiple levels of subfactors since they further diminish the importance of any one aspect of the factor and introduces unnecessary complexity into the source selection process.  This can also lead to closely rated proposals with little discrimination among competitors and no distinction among criteria that drive performance and criteria that have no real impact.

GOTTA go - I have to be at church to oversee the fire suppression system testing and inspection.....

@Don Mansfield @joel hoffman

Sorry for the confusion my comment about being a small business was rhetorical to provide an example.   While I am a small business I have never had a prime contract with a Fed agency but have been a sub to a Fed prime.  

Back to the issue and attempt to answer questions from just a viewer.

First I haven't missed a rodeo, I am volunteering at the best one in North America right now, always in the second full week of September, The Pendleton Round-Up.  You all should come once to this week long community event that is now in its 108th year.

To RFA and the overall concern I for one can not think of a contractual requirement that does not carry administrative burden.  This extended thread is a perfect example.

In a hope to be concise DoD's best practice is a duplication of what is already required of a large business contractor with regard to submission and compliance with a subcontracting plan.  My view is that DoD has failed at doing good administration of this element of a contract requirement (sub plan administration), when applicable, and so they invented the ideal of putting a performance plan into contracts as well.  Yahoo!  But my questions are then has small business participation improved, and if not how many contractors have been defaulted at the worst or at the least had some type of sanction placed on them for failing to meet the plan?    Or even had there performance evaluation reflect same?  Overall what it accomplishing that is not already in the contract.

As to small business and the requirement for a performance plan should they receive contract award  I ask what has been accomplished as the prime is already in the hands of a small business.  Yahoo!  Goals accomplished at the get go.

Now I am going to go "Let'er Buck!"

C Culham said:

@Don Mansfield @joel hoffman

Sorry for the contractor    my comment about being a small business was rhetorical to provide an example.   While I am a small business I have never had a prime contract with a Fed agency but have been a sub to a Fed prime.  

Back to the issue and attempt to answer questions from just a viewer.

First I haven't missed a rodeo, I am volunteering at the best one in North America right now, always in the second full week of September, The Pendleton Round-Up.  You all should come once to this week long community event that is now in its 108th year.

To RFA and the overall concern I for one can not think of a contractual requirement that does not carry administrative burden.  This extended thread is a perfect example.

In a hope to be concise DoD's best practice is a duplication of what is already required of a large business contractor with regard to submission and compliance with a subcontracting plan.  My view is that DoD has failed at doing good administration of this element of a contract requirement (sub plan administration), when applicable, and so they invented the ideal of putting a performance plan into contracts as well.  Yahoo!  But my questions are then has small business participation improved, and if not how many contractors have been defaulted at the worst or at the least had some type of sanction placed on them for failing to meet the plan?    Or even had there performance evaluation reflect same?  Overall what it accomplishing that is not already in the contract.

As to small business and the requirement for a performance plan should they receive contract award  I ask what has been accomplished as the prime is already in the hands of a small business.  Yahoo!  Goals accomplished at the get go.

Now I am going to go "Let'er Buck!"

 Forgive me for using voice texting while being transported to an appointment .

Carl, actually the small business participation evaluation extends beyond the small business subcontracting plan requirements for large business contractors. 

 Thank you, Don for the link that you provided to army training concerning evaluation of small business participation.

The presentation clearly pointed out that small business participation also would include involvement of the small business prime contractor or joint venture member of a joint venture etc. and performance of the contract. 

To me, this is actually an incentive for a small business proposer to self perform work and to get credit for it in the evaluation of this aspect of their proposal.

I am editing my input to this thread to indicate that self performed work is also considered to be “small business participation”.

C Culham said:

But my questions are then has small business participation improved, and if not how many contractors have been defaulted at the worst or at the least had some type of sanction placed on them for failing to meet the plan?

Great question, C Culham.

All that is required is "good faith" effort to comply with the plan. Because of that standard, the small business subcontracting plans don't have much "teeth" to enforce them or penalize the contractor for non-compliance.

FAR 19.701 states "“Failure to make a good faith effort to comply with the subcontracting plan,” means willful or intentional failure to perform in accordance with the requirements of the subcontracting plan, or willful or intentional action to frustrate the plan."

FAR 19.702(c) states the statutory requirement of imposing liquidated damages: "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."

It is extremely rare (how many times has it ever happened?) for a contractor to get successfully slapped with liquidated damages for failure to make a good faith effort to comply with the subcontracting plan. Many of these plans include boilerplate language about activities that will qualify as good faith efforts. The contractor has to engage in those activities, but the contractor doesn't necessarily have to meet the concrete, percentage goals.

Related question:

The WIFCON Home Page publishes news of interest to contracting professionals. Many of those news pieces are links to Department of Justice press releases, announcing such things as indictments, sentencing, and settlement agreements. Going back to the beginning of 2018, what percentage of DOJ press releases have been related to small business/socioeconomic status fraud?

I don't know if it's easy or hard for Bob to answer that question. But my completely subjective perception is that it's been a fairly high proportion of the total.

H2H:

It is not possible to get a complete listing of all actions because not all justice organizations are reporting.  I complained years ago asking for central reporting and DOJ did improve its reporting.  That took a couple of years.  However, I don't know how many justice organizations still don't report.  

I know during 2018 I've posted press releases of indictments, pleas, sentencing, claims, and jury decisions involving the 8(a), SBA small business, DOT's DBE, and veterans programs.  There was at least one subcontracting case under a grant too.  I didn't remember anything on the WOSB program so I checked and couldn't find anything.

I do add cases involving federal medical programs sometimes.

C Culham said:

As to small business and the requirement for a performance plan should they receive contract award  I ask what has been accomplished as the prime is already in the hands of a small business.

Carl, small businesses should not be required to submit a plan for a set aside procurement because the extent of small business utilization evaluation factor is only applicable to contracts that require the use of the clause at FAR 52.219-9.  Thus, the factor would only come into play in full and open competitions.

Vern Edwards said:

My assertions are true for me, and for anyone who agrees with me, until you prove to me and those others that they're wrong.

Fine, but I think you're presenting your assertions as if they were facts. That's what Merriam-Webster defines as dogmatism.

Quote

Definition of dogmatism

1: the expression of an opinion or belief as if it were a fact : positiveness in assertion of opinion especially when unwarranted or arrogant

As far as the use of commit at DFARS 215.304(c)(i), I think that could be evaluated by requesting evidence of commitment to include small business concerns in performance. Such evidence could be subcontracts contingent on contract award, joint venture agreements, and teaming agreements. I think your interpretation of "commit" as used in DFARS 215.304(c)(i) is too narrow.

It’s important to  distinguish between evaluating extent of small business participation in the proposal for small business and large business offerors for source selection purposes and, for large business primes, compliance after award with the subcontracting  plan requirements of the contract. 

52.219-8  Utilization of small business concerns applies to essentially all primes above the simplified acquisition limits, with certain exceptions. It’s the Apple Pie and Mom clause.  

52.219-9 Small business subcontracting plan does not apply to small business primes and has a dollar threshold for applicability.

52.219-16 Liquidated damages - subcontracting plan  applies to those contracts containing a subcontracting plan pursuant to 52.219 -9.

PepeTheFrog said:

It is extremely rare (how many times has it ever happened?) for a contractor to get successfully slapped with liquidated damages for failure to make a good faith effort to comply with the subcontracting plan.

I looked for evidence a few years ago for a presentation on the subject. I couldn't find anything. All I have is a third-hand anecdote of NAVFAC assessing liquidated damages.

Retreadfed said:

Carl, small businesses should not be required to submit a plan for a set aside procurement because the extent of small business utilization evaluation factor is only applicable to contracts that require the use of the clause at FAR 52.219-9.  Thus, the factor would only come into play in full and open competitions.

I think Carl is referring to the small business participation plan that a small business would have to submit in a full and open competition.

Don Mansfield said:

As far as the use of commit at DFARS 215.304(c)(i), I think that could be evaluated by requesting evidence of commitment to include small business concerns in performance. Such evidence could be subcontracts contingent on contract award, joint venture agreements, and teaming agreements. I think your interpretation of "commit" as used in DFARS 215.304(c)(i) is too narrow.

Is that a fact?

I think all you need as evidence of a commitment is the statement: I promise to do it, and a signature.

Don Mansfield said:

I think Carl is referring to the small business participation plan that a small business would have to submit in a full and open competition.

That may be.  However, it is good for everyone to understand what the requirement is.  This discussion brings up a good point.  If a procurement is conducted using full and open competition and the winner is not a small business, and the "utilization plan" is included in the small business subcontracting plan, that large business only has to make a good faith effort to comply with the combined plan.  On the other hand, if a small business wins and does not have to submit a small business subcontracting plan, the "utilization plan" could be incorporated into the contract without the good faith requirement.  This seems potentially to place a heavier burden  on small businesses than large businesses.  To that extent, this would seem to have a significant impact on small business concerns.  If this has been happening, I am somewhat surprised that small businesses and the SBA have not been howling.

@Retreadfed

Retreadfed said:

If a procurement is conducted using full and open competition and the winner is not a small business, and the "utilization plan" is included in the small business subcontracting plan, that large business only has to make a good faith effort to comply with the combined plan.

Here is the actual text of the DFARS rule:

Quote

215.304  Evaluation factors and significant subfactors.

      (c)(i)  In acquisitions that require use of the clause at FAR 52.219-9, Small Business Subcontracting Plan, other than those based on the lowest price technically acceptable source selection process (see FAR 15.101-2), the extent of participation of small businesses to include service-disabled veteran-owned small business concerns, HUBZone small business concerns, small disadvantaged business concerns, and women-owned small business concerns in performance of the contract shall be addressed in source selection. The contracting officer shall evaluate the extent to which offerors identify and commit to small business performance of the contract, whether as a joint venture, teaming arrangement, or subcontractor.

                    (A)  See PGI 215.304(c)(i)(A) (DFARS/PGI view) for examples of evaluation factors.

                    (B)  Proposals addressing the extent of small business performance shall be separate from subcontracting plans submitted pursuant to the clause at FAR 52.219-9 and shall be structured to allow for consideration of offers from small businesses.

                    (C)  When an evaluation assesses the extent that small businesses are specifically identified in proposals, the small businesses considered in the evaluation shall be listed in any subcontracting plan submitted pursuant to FAR 52.219-9 to facilitate compliance with 252.219-7003(e).

Emphasis added.

I read subparagraph (B) as indicating that the proposal (read, promises) to be elicited about small business participation/performance is to be separate from the small business subcontracting plan and is separately enforceable as such. However, subparagraph (C) requires that the two plans be coordinated. Separate but coordinated promises.

If I'm reading it right, and I think I am in fact, the problem you identified should not occur. The contract with the selectee, if large, will contain coordinated but separate promises: (1) the small business participation/performance promise and (2) the small business subcontracting promise. If the selectee is small its contract will contain only the promises about small business participation/performance.

Contractually saavy COs (Do they exist?) will understand this and see to it that the large business's participation/performance proposal and its subcontracting plan language read appropriately.

I'm not defending the DOD policy or its implementing regulation, but they are not beyond comprehension by competent COs.

Regulations are not tutorials, and COs have to bring something to their work other than complaints about how screwed up the regs are. They have to be able to make sense of things.

Vern Edwards said:

When an evaluation assesses the extent that small businesses are specifically identified in proposals, the small businesses considered in the evaluation shall be listed in any subcontracting plan submitted pursuant to FAR 52.219-9

This appears to require more than coordination between two "plans."  As you have mentioned, the DFARS does not require the submission of "utilization plans" only a statement of the extent to which small businesses will be utilized in performance of the contract.  However, Don asserts that some components are including these statements in resulting contracts.  As the quoted language indicates, if the contractor is required to provide a small business subcontracting plan, any small business concerns listed in the utilization statement "shall" be included in the subcontracting plan.  Thus, there is mandatory overlap between the two in this circumstance.  Further, I do not see anything in the DFARS that would prohibit a component from including the utilization statement in the subcontracting plan.  It only says that the two are to be submitted separately.  This inclusion may or may not be happening.  I have to admit that I do not have insight into how these requirements are being implemented in practice.

Retreadfed said:

This appears to require more than coordination between two "plans"... Thus, there is mandatory overlap between the two in this circumstance.

Retread, I guess I wasn't clear. That's what I meant by "coordinated promises." I apologize for being obscure.

Retreadfed said:

However, Don asserts that some components are including these statements in resulting contracts.

I think that's what is supposed to happen. If you ask someone for a proposal, and if, according to FAR 2.101, proposal is another word for offer, then you want the offer, when accepted, to be binding.

This policy has been with us throughout the current century. To the best of my knowledge it has not been particularly controversial or troublesome.

On 9/13/2018 at 3:43 PM, Vern Edwards said:

Retread, I guess I wasn't clear. That's what I meant by "coordinated promises." I apologize for being obscure.

I think that's what is supposed to happen. If you ask someone for a proposal, and if, according to FAR 2.101, proposal is another word for offer, then you want the offer, when accepted, to be binding.

This policy has been with us throughout the current century. To the best of my knowledge it has not been particularly controversial or troublesome.

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