On Oct. 5, the Small Business Administration (SBA) proposed a new rulemaking that would heighten the scrutiny on a contractor’s compliance with its small business subcontracting plan and impose additional duties on both the prime contractor and the contracting officer. The majority of these new provisions implement the AGC-opposed contracting reform provisions of the Small Business Jobs Act of 2010.
The proposed rule requires prime contractors to notify a contracting officer in writing whenever the prime contractor does not hire a subcontractor that was initially used when preparing a bid or proposal during contract performance. SBA is also proposing to amend its regulations to require a prime contractor to notify a contracting officer in writing whenever the prime contractor reduces payments to a subcontractor or when payments to a subcontractor are 90 days or more past due.
In addition, SBA is also proposing the following:
- Clarify that the contracting officer is responsible for monitoring and evaluating small business subcontracting plan performance
- Clarify which subcontracts must be included in subcontracting data reporting, which subcontracts should be excluded, and the way subcontracting data is reported
- Make other changes to update its subcontracting regulations, including changing subcontracting plan thresholds and referencing the electronic subcontracting reporting system (ESRS)
- Require the contracting officer to review subcontracting plan reports within 60 days of the report ending date
- Address how subcontracting plan requirements and credit towards subcontracting goals can be implemented in connection with Multi- agency, Federal Supply Schedule, Multiple Award Schedule and Government-wide Acquisition indefinite delivery, indefinite quantity (IDIQ) contracts