Large prime contractors operating under individual subcontracting plans would receive credit for small businesses performing at any subcontracting tier, according to a proposed rule issued yesterday by the SBA.
The proposed rule also requires large primes to assign a NAICS code and size standard to “solicitations” for subcontracts–a notion that may come as a surprise to prime contractors, many of whom do not typically issue formal subcontract solicitations.
A large business was tossed out of a government competition because the company’s small business subcontracting goal was substantially below the agency’s stated goal.
In a recent bid protest decision, the GAO held that the agency acted reasonably when it rated the large business as “unacceptable” for failing to propose a sufficiently high small business subcontracting goal.
A large prime contractor’s “consistent failure” to meet its small business and socioeconomic subcontracting goals on prior projects resulted in a lower past performance score–and led to the prime’s elimination from the competition.
In a recent bid protest decision, the GAO held that the agency properly eliminated a prospective prime contractor from the competition in part because the large business had not met its subcontracting goals on three recent contracts.
A large incumbent contractor was properly assigned a mere “satisfactory confidence” past performance rating because the large business failed to meet its small business subcontracting goals under four of the five contracts it submitted for evaluation.
In a recent bid protest decision, the GAO upheld the agency’s assignment of a satisfactory confidence score to the large incumbent–despite the incumbent’s strong performance in many areas–because of the incumbent’s failure to satisfy its subcontracting goals.
Large businesses’ subcontracting plans would be subject to stricter compliance standards under a SBA proposed rule introduced December 29.
The intent of the new regulations is to compel prime contractors to make good faith efforts to comply with their subcontracting plans by implementing reporting mechanisms and harsher penalties for fraudulent actions or actions made in bad faith. Small businesses subcontractors are likely to agree that these are positive changes.
When a Contracting Officer determines that subcontracting possibilities will exist under a qualifying unrestricted contract, subcontracting plans are required from all offerors other than small businesses–including entities that do not intend to issue any subcontracts.
In a recent bid protest decision, the GAO rejected a protester’s argument that the subcontracting plan requirement is to be determined on an “offeror by offeror” basis, and held that the requirement to provide a subcontracting plan is broadly applied.
A large business was appropriately awarded a “Marginal” score for small business participation based on the large business’s history of failing to meet its small business subcontracting goals.
In a recent bid protest decision, the GAO held that the procuring agency properly assigned the large business a low score based on the large business’s history of unmet subcontracting goals, even though the large business apparently pledged to subcontract a significant amount of work to small businesses under the solicitation in question.