Expiration of the Comprehensive Small Business Subcontracting Plan

I attended a briefing yesterday at our local NDIA Small Business meeting.   The briefing was conducted by Doug Smith from the Air Force’s Space, C2 and Surveillance Division. Doug gave a very comprehensive overview of the Space, C2 and Surveillance division, a good presentation. One thing that he touched on that was news to me and a relative surprise was relative to the Defense Department’s Comprehensive Small Business Subcontracting Plan. I was not in tune with this test program for some reason and certainly not in tune with the recent implications to both large and small businesses from the expiration of the program.

First a little background. In March of 1998, the DoD issued a memorandum modifying the DFARS to incorporate a “test program” for a comprehensive Small Business Subcontracting Plan. This action was a result of a DFARS Case 97-D323 which allowed Primes to submit and negotiate a plant, division or corporate wide subcontracting plan for each contract instead of a separate plan for the individual contract. The impact to small business was significant. Since a large prime may have many contracts, some of them for less technical tasks like janitorial, construction or materials supply, they could fill their small business procurement goals on these other contracts and some larger contracts of interest to small business would not get much traction. This “test program” was originally scheduled to last from October of 1990 thru December of 2000. The program was extended several times in the annual defense authorization bills. The most recent extension came in the Defense Reauthorization Act of 2012 that extended the test program thru December 31, 2014. What is significant is that the latest Defense Reauthorization Act did not extend the test program and it will expire on December 31, 2014 (a little over 3 months from now).

In a recent memo from Andre Gudger, the Director, Office of Small Business Programs, indicating that the DoD will begin to transition all contracts back to the requirements of FAR part 19.7.

The implications for large business are huge. If a prime participated in the test program, they will now have to re-submit a Small Business Subcontracting Plan for each contract, not a plant, division or companywide-plan. This means that each contract will need to be managed for small business participation.  

The implications for small business could also be huge. Small business concerns that did not get consideration on previous contracts (because the corporate comprehensive small business subcontracting goal was already met with materials and lesser jobs) will now be eligible for more important subcontracts. I would suggest re-opening discussions with primes that previously you have lost opportunities with. I would also suggest that you open discussions with the Small Business Liaisons (or other important contacts you may have) with other Primes that you would like to do business with. The opportunity is now.