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FPR Temp..Reg. 50

Attachment A

June 20, 1979

Federal Register/Vol. 44, No. 78/Friday, Apr. 20, 1979/Notices

All solicitations for negotiated contracts or negotiated amendments or modifications (including contracts. amendments, and modifications placed on a sole source basis) which (a) offers subcontracting possibilities. (b) are expected to exceed $500.000, or in the case of contracts for the construction of any public facility. $1.000.000, and (c) are required to include the clause entitled Utilization of Small Business Concerns and Small Business Concerns Owned and Controlled by Socially and Economically Disadvantaged

Individuals, shall include a provision
which requires the apparent successful
offeror, provided the offeror is not a
small business concern, to negotiate a
detailed subcontracting plan. The
provision is as follows:

Small Business and Small
Disadvantaged Business Subcontracting
Plan (Negotiated)

(a) The offeror acknowledges that it is. aware of the subcontracting plan requirements in this provision, and, if it is the apparent successful offeror. agrees to negotiate a plan which includes:

(1) Percentage goals (expressed in terms of percentage of total planned sybcontracting dollars) for the utilization as subcontractors of small business concerns and small business concerns owned and controlled by socially and economically disadvantaged individuals; (For the purposes of the subcontracting plan, the contractor shall include all purchases which contribute to the performance of the contract, including a proportionate share of products, services, etc. whose costs are normally allocated as indirect or overhead costs.)

(2) The name of an individual within the employ of the offeror who will administer the subcontracting program of the offeror and a description of the duties of such individual

(3) A description of the efforts the offeror will take to assure that small business concerns and small business concerns owned and controlled by socially and economically disadvantaged individuals will have an equitable opportunity to compete for subcontracts:

(4) Assurances that the offeror will include the clause entitled Utilization of Small Business Concerns and Small Business Concerns Owned and Controlled by Socially and Economically Disadvantaged Individuals in all subcontracts which

"Comments are invited regarding the desirability and potential impact of including, for the purpose of the subcontracung plan purchases where costs are normally allocated so indirect or overhead

offer further subcontracting
opportunities and to require all
subcontractors (except small business
concerns) who receive subcontracts in
excess of $500.000, or in the case of a
contract for the construction of any
public facility. $1.000.000, to adopt a
plan similar to the plan agreed to by the
offeror,

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(5) Assurances that the offeror will submit such periodic reports and cooperate in any studies or surveys as may be required by the contracting agency or the Small Business Administration in order to determine the extent of compliance by the offeror withthe subcontracting plan: and

(6) A recitation of the types of records
the offeror will maintain to demonstrate
procedures which have been adopted to
comply with the requirements and goals
set forth in the plan, including the
establishment of source lists of small
business concerns and small business
concerns owned and controlled by
socially and economically

disadvantaged individuals; and efforts
to identify and award subcontracts to
such small business concerns.

(b) The offeror understands that
(1) No contract will be awarded.
unless and until an acceptable plan is
negotiated with the contracting officer
and that an acceptable plan will be
incorporated into the contract as a
material part thereof

(2) An acceptable plan must, in the
determination of the contracting officer,
provide the maximum practicable
opportunity for small business concerns
and small business concerns owned and
controlled by socially and economically
disadvantaged persons to participate in
the performance of the contract

(3) If a subcontracting plan acceptable to the contracting officer is not negotiated within the time limits prescribed. the offeror shall be ineligible for an award. The contracting officer shall notify the contractor in writing of his reasons for determining a subcontracting plan to be unacceptable. Such notice shall be given early enough in the negotiation process to allow the contractor to modify the plan within the time limits prescribed

(4) Prior compliance of the offeror with other such subcontracting plans under previous contracts will be considered by the contracting officer in determining the responsibility of the offeror for award of the contract

(5) It is the offeror's responsibility to develop a satisfactory subcontracting plan with respect to both small business concerns and small business concerns owned and controlled by socially and economically disadvantaged individuals

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and that each such aspect of the
offeror's plan will be judged
Independently of the other.

(c) Subcontracting plans are not
required of small business concerns.
(d) The failure of any contractor or
subcontractor to comply in good faith
with (1) the clause entitled Utilization of
Small Business Concerns and Small
Business Concerns Owned and
Controlled by Socially and
Economically Disadvantaged
Individuals or (2) an approved plan
required by this Small Business and
Small Disadvantaged Business
Subcontracting Plan (Negotiated)
provision, will be a material breach of
such contract or subcontract

(e) Nothing contained in this provision supersedes the requirements of Defense Manpower Policy 4A or any successor policy.

(End of clause)

D. Incentive Subcontracting Programı DOD and CSA are requested to provide in the DAR and the FPR for the use of a contract clause as follows:

The following clause shall be used in all negotiated contracts for which a subcontracting plan is required, unless the contracting officer determines in writing that such clause would be inappropriate.

Locentive Subcontracting Program for
Small Business and Small
Disadvantaged Business (Negotiated)

(1) The contractor has established, in
his subcontracting plan, the following
goals for awards to small business and
small disadvantaged business concerns:
(5) percent of the total
planned subcontract amount of
to small business concerns.

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and

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-"percent of the total planed subcontract amount of Sto small business concerns owned and controlled by socially and economically disadvantaged individuals.

(2) To the extent that the contractor exceeds such subcontract goals in the performance of this contract, it will receive -percent (not to exceed 10 percent) of the dollar amount of such excesses; unless the contracting officer determines that such excess was not due to efforts by the contractor, i... subcontractor cost overruns or where the actual subcontract amount exceeds that estimated in the subcontract plan: or planned subcontracts which were not disclosed in the subcontract plan during contract negotiation.

Identified elsewhere in the contect

•Exact percentage to be inserted into the contrad document

June 20, 1079

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FPR Temp. Reg. 50
Attachment A

Federal Register/Vol. 44, No. 78/Friday, Apr. 20, 1979/Notices

(3) If the contract is a cost plus fixed fet type, the total of the fixed fee and the incentive payments made pursuant to this clause is subject to the limitations set forth in FPR 1-3.4055(c)(2) and DAR 3–405.6(c)(2).

(4) Determinations by the contracting officer under this paragraph may not be appealed under the provisions of the Disputes Clause.

E Small Business and Small Disbdvantaged Business Subcontracting (Advertised) DOD and CSA are requested to provide in Section 1-332 and Section 1, Part 7 of the DAR and Subparts 1-1.13 and 1-117 of the FFR as follows:

1. All solicitations for formally advertised contracts or amendments or modifications which (a) offat, subcontracting opportunities, (b) art expected to exceed $500,000, or in the case of contracts for the construction of any public facility. $1,000,000, and (c) are required to include the clause entitled Utilization of Small Business Concerns and Small Business Concerns Owned and Controlled by Socially and Economically Disadvantaged

Individuals, shall include a provision which requires the bidder selected to be awarded the contract to submit a detailed subcontracting plan (provided the bidder is not a small business concern). The provision is as follows: Small Business and Small Disadvantaged Business Subcontracting Program (Advertised)

(a) The offeror represents that it is

aware

(3) Of the subcontracting plan requirement in this provision and, if selected for award, it will submit within the time specihed by the contracting officer, a subcontracting plan that will afford the maximum practicable opportunity to participate in the performance of the contract to small and small disadvantaged business concerns and will include:

(1) Percentage goals (expressed in terms of percentage of total planned subcontracting dollars) for the

utilization as subcontractors of small business concerns and small business

concerns owned and controlled by socially and economically. disadvantaged individuals, (For the purposes of the subcontracting plan, the contractor shall include all purchases which contribute to the performance of the contract, including a proportionate share of products, services, etc. whose .costs are normally allocated as indirect or overhead costa.)"

•Comments are brised regarding the desirability and potential impact of including for the purposes

(ii) The name of an individual within the employ of the offeror who will administer the subcontracting program of the offeror and a description of the duties of such individual;

(ii) A description of the efforts the
offerar or bidder will take to assure that
small business concerns and small
business concerns owned and controlled
by socially and economically
disadvantaged individuals will have an
equitable opportunity to compete for
subcontracts;

(iv) Assurances that the bidder will
include the clause entitled Uulization of
Small Business Concerns and Small
Business Concerns Owned and
Controlled by Socially and
Economically Disadvantaged
Individuals in all contracts which offer
further subcontracting opportunities,
and that the bidder will require all
subcontractors (except small business
concerns) who receive subcontracts in
excess of $1,000,000 in the case of a
contract for the construction of any
public facility, or in excess of $500,000 in
the case of all other contracts, to adopt
a plan similar to the plan agreed to by
the bidder.

(v) Assurances that the bidder will
submit such periodic reports and
cooperate in any studies or surveys as
may be required by the contracting
agency or the Small Business
Administration in order to determine the
extent of compliance by the bidder with
the subcontracting plan: and

(vi) A recitation of the types of
records the successful bidder will
maintain to demonstrate procedures
which bave been adopterd to comply
with the requirements and goals set.
forth in the plan, including the
establishment of source lists of small
business concerns and small business
concerns owned and controlled by
socially and economically
disadvantaged individuals; and efforts
to identify and award subcontracts to
such small business concerns.

(2) Of the clause entitled Utilization of
Small Business Concerns and Small
Business Concerns Owned and
Controlled by Socially and
Economically Disadvantaged
Individuals in the contract

(b) If the contracting officer believes
that the subcontracting plan submitted
pursuant to this Section does not reflect
the best effort by the bidder to award
subcontracts to small and small
disadvantage firms to the fullest extent
consistent with the efficient
performance of the contract he shall

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notify the agency's director of the Office of Small and Disadvantaged Business Utilization who shall in turn notify the Small Business Administration and request a review of the plan pursuant to Section 8(d) (10) and (11) of the Small Business Act. Such request for an SBA review shall not delay award of the contract Prior compliance of the offeror with other such subcontracting plans under previous contracts will be considered by the contracting officer in determining the responsibility of the bidder for award of the contract

(c) The bidder understands that (1) It agrees to carry out the government's policy to provide the maximum practicable opportunity for small business concerns and small business concerns owned and controlled by socially and economically disadvantaged individuals to participate in the performance of the contract, consistent with its efficient performance.

(2) If it does not submit a subcontracting plan within the time limits prescribed by the contracting agency, it will be ineligible to be awarded the contract

(3) Prior compliance of the bidder with other such subcontracting plans under previous contracts will be considered by the contracting officer in determining the responsibility of the offeror for award of the contract

(4) It is the contractor's responsibility to develop a subcontracting plan with respect to both small business concerns and small business concerns owned and controlled by socially and economically disadvantaged individuals.

(d) Subcontracting plans are not *required of small business concerns.

(e) The failure of any contractor or subcontractor to comply in good faith with (i) the clause entitled Utilization of Small Business Concerns and Small Business Concerns Owned and Controlled by Socially and Economically Disadvantaged Individuals, or (i) the terms of any subcontracting plan required by this Small Business and Small Disadvantaged Business Subcontracting Plan (Advertised) provision, will be a material breach of the contract or subcontract

(1) Nothing contained in this provision supersedes the requirements of Defense Manpower Policy 4A or any successor policy.

2. The contracting officer may, in a letter accompanying the solicitation or otherwise, inform the offeror of the goal the Government contemplates for subcontracting to both small business concerns and small business concerns.

rk Temp. Reg. Attachment A

50

June 20, 1979

Federal Register/Vol. 44, No. 78/Friday, Apr. 20, 1979/Notices owned and controlled by socially and economically disadvantaged

individuals. Any such letter shall state
that the goals are informational only
and not legally binding.

F.Small Business and Small Disadvantaged Business Subcontracting (Commercial Products, and Make-orBuy) DOD and CSA are requested to. provide in the DAR and the FFR as

1. Commerical Products. If the prime contract is for a commerical product (defined below), the required subcontracting plan may relate to the company's production of the item generally (both for the Government contract and for regular commercial, sale) rather than solely to the item being procured under the government contract In such cases, the tractor shall be required to submit me company-wide, ameal plan to be reviewed for approval. by the first agency with which he enters into a prime contract (which requires a subcontracting plan) during the fiscal year. The approved plan will remain in effect for the entire fiscal year.

Commerical products are defined as products in regular production sold in substantial quantities to the general public and/or industry at established market or catalog prices.

2 Make or Buy. In negotiating subcontracting plans, the contracting officer shall take into account a prime contractor's stated inability to subcontract due to an existing "make-orbuy policy. A "make-or-buy" policy. concerns the zmajor subsystems, assembles, and components which the contractor manufactures, develops, or assemblies in bis own facilities, and those which it obtains elsewhere by

contract

FTB Dom. 79-1.2201 Filed 6-22-52 2:43 am)

BELING CODE 3110-01-20

1

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Federal Register / Vol. 44. No. 118 / Monday, June 18. 1979 / Notices

Office of Federal Procurement Policy

Subcontracting Under Federal
Contracts

AGENCY: Office of Federal Procurement
Policy, Office of Management and
Budget.

ACTION: Changes to notice appearing in
Federal Register on April 20, 1979.

Changes to April 20, 1979, Federal
Register Notice

By its notice in the April 20, 1979, Federal Register, the Office of Federal Procurement Policy set forth changes to be made in the Federal Procurement Regulation and the Defense Acquisition Regulation in partial implementation of Section 211 of Public Law 95-507. This is to inform you of the following changes in that notice:

1. Under the heading "Subcontracting. Utilization of Small Business and Smali Disadvantaged Business concerns (over $10,000)" the notice set forth a clause to be used in all contracts over $10,000 with stated exceptions. Paragraph (d) of that clause read:

Subcontractors shall provide a notarized statement to the contractor certifying their status as either a small business concern or a small business concern owned and controlled by socially and economically disadvantaged individuals.

In order to conform with the precise language of the statute, paragraph (d) should be changed to read.

Contractors acting in good faith may rely on written representations by their subcontractors as either a small business concern or a small business concern owned and controlled by socially and economically disadvantaged individuals.

2. Under the heading "Incentive Subcontracting Progam for Small Business and Small Disadvantaged Business (Negotiated)," the notice indicates that "determinations by the contracting officer under this paragraph may not be appealed under the Disputes Clause." This sentence is hereby deleted.

The prime contractor may appeal the contacting officer's steteruntnation of the dollars the prime contractor will receive under the terms of the incentive clause. However, he may not appeal the precise percentage inserted in the contract as the rate the Government agrees to pay with regard to "excess" subcontracting. These changes are effective immediately.

James D. Curia.

Acting Administrator.

[ Doc PB-10rs Find 6-13-58 BUJ BILLING CODE 3116-01-0

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FEDERAL PROCUREMENT REGULATIONS TEMPORARY REGULATION 50 PRESCRIBED NEW CLAUSES AND PROCEDURES WHICH IMPLEMENT THE REQUIREMENTS OF SECTION 211 OF P.L. 95-507. EFFECTIVE IMMEDIATELY, ALL OUTSTANDING UNOPENED IFBS AND RFPS THAT HAVE NOT CLOSED THAT SHOULD CONTAIN, BUT DO NOT, THE SUBCONTRACTING PROVISIONS AS REQUIRED BY TEMPORARY REGULATION 50 SHALL BE AMENDED TO INCLUDE THOSE PROVISIONS. FURTHER,

ALL FUTURE SOLICITATIONS SHALL INCLUDE THE SUBCONTRACTING PROVISIONS REQUIRED BY TEMPORARY REGULATION 50.

THE NOVEMBER 5, 1979, LETTER FROM THE OFFICE OF SMALL AND DISADVANBUSINESS UTILIZATION ENCLOSED AN OFPP SUPPLEMENT TO THE REGULATIONS IN TEMPORARY REGULATION 50. THE GUIDANCE CITED IN THIS OFPP ISSUANCE

SHOULD BE USED BY GSA CONTRACTING PERSONNEL TO IMPLEMENT THE SUB

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REFERENCE IS MADE TO THE PRIORITY MESSAGE OF NOVEMBER 30, 1979, FROM
THE ASSISTANT ADMINISTRATOR FOR ACQUISITION POLICY ON IMPLEMENTING
THE REQUIREMENTS OF SECTION 211 OF P.L. 95-507.

THE OFFP SUPPLEMENT, REFERENCED THEREIN TO BE USED AS GUIDANCE,
SHOULD BE USED ONLY, REPEAT ONLY, WITH REGARD TO THE PART ENTITLED,
INSTRUCTIONS TO CONTRACTING OFFICERS, AND THEN ONLY TO THE EXTENT
CONSISTENT WITH THE CLAUSES IN FPR TEMPORARY REGULATION 50. UNDER
NO, REPEAT NO, CIRCUMSTANCES SHOULD EITHER THE CLAUSES OR THE FORMS
CONTAINED IN THE OFPP SUPPLEMENT BE USED PENDING FURTHER NOTICE.

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