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If a large business concern is apparent low bidder for estimated requirements in excess of $500,000. he shall be notified that his subcontracting plan is due in 10 working days. If he does not submit his plan in this time, his bid shall be rejected as nonresponsive. When the contracting officer receives the subcontracting plan, he should determine whether it represents a good faith effort to subcontract with small business concerns to the maximum extent feasible. If the contracting officer questions the plan, he shall forward it to the Director, Office of Small and Disadvantaged Business Utilization (APS), Washington, D. C. 20405, for review, but be shall proceed to make award. Following award of the contract, the contractor shall be surveyed periodically to insure compliance with subcontracting plan.

Any questions on this matter should be referred to Mr. Joseph
Daragan at (557-3095).

2.II for

E. L. HARPER

Assistant Commissioner

Office of Personal Property

Enclosures

(This clause is to be .ncluded in solicitation not not

business that may

setaside for small

sult in contracts that offer subcontracting opportunities and are expected to exceed $500,000)

Small Business and Small Disadvantaged Business Subcontracting Program (Advertised)

(a) The offeror represents that it is aware:

(1) of the subcontracting plan requiremente in this provision and, if selected for award, it will submit within the time specified 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:

(i) 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 costs.)

(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;

(iii) A description of the efforts the offeror 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 Utilization 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 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.

(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 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 ten working days 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

(ii) the terms of any subcontracting plan required by the Small Business and Small Disadvantaged Business Subcontracting Plan (Advertised) provision, will be a material breach of the contract or subcontract.

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

Date

Reply to
Attn of

Subject:

AUG 2.1' 1979

TAB H

Komin Station. Was ington DC 20408

Office of Small and Disadvantaged Business Utilization (APS)

GSA Pricing Policy for Section 8(a) Contracts

To

Heads of Services, Staff Offices and Regional Administrators

The heads of Services and Staff Offices were informed in a memorandum,
dated June 14, 1979, that the GSA would develop a new 8(a) pricing
At that time, comments were requested from interested

agreement.
offices.

The enclosed policy, entitled "Award of Contracts Under the Section 8(a) Program", is forwarded for your immediate implementation. We are now taking steps through the Federal Procurement Regulations Directorate to have this policy implemented in the GSPR. You will be afforded an opportunity to comment at that time.

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