does not apply to a plan submitted pursuant to paragraph (f.) of this provision.

(d) 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 bidder for award of the contract.

(4) It is the bidder'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 and that each such aspect of the plan will be judged independently of the other.

(e) 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) 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.

(f) If a commercial product (defined below) is offered, the required subcontracting plan may relate to the company's or division's production generally (both for commercial and noncommercial products) rather than solely to the item being procured under the Government contract. In such cases, the Contractor shall be required to submit one company-wide, annual plan to be reviewed for approval by the first agency with which it enters into a prime contract (which requires a subcontracting plan) during the fiscal year, or by another agency satisfactory to the Contracting Officer. The approved plan will remain in effect for the company's entire fiscal year for all of the company's or division's commercial products.

The term "commercial products" means products in regular production sold in substantial quantities to the general public and/or industry at established market or catalog prices. A product which, in the opinion of the Contracting Officer, differs only insignificantly from the Contractor's commercial product may be regarded for the

purpose of this clause as a commercial product.

§ 3-1.710-4 Responsibilities of the contracting officer.

(a) The contracting officer shall afford SBA's resident Procurement Center Representative (PCR) an opportunity to review any solicitation expected to result in a contract exceeding $500,000 ($1 million for construction of a public facility) prior to release to the public. The PCR should be allowed a period of one to five work days for the review of the solicitation, depending upon the circumstances and complexity of the individual procurement.

(b) The contracting officer is responsible for becoming familiar with the solicitation provisions in § 3-1.710-3 (b) and (c) so that he/she develops a working knowledge of the requirements in the provisions and follows the procedures indicated in them. The following information in this section must be used in conjuction with that in the provisions.

(c) The following review guidance is provided to contracting officers to assist in making determinations as to the acceptability of a small business and small disadvantaged business subcontracting plan submitted by an apparent successful offeror. This guidance is not intended to be all inclusive. Other factors may warrant consideration depending upon the particular circumstances of the proposed procurement. In making determinations concerning the acceptability of proposed subcontracting plans, the contracting officer shall take the following actions:

(1) Obtain and review information from all appropriate sources, including the prospective contractor, contract officials, the small and disadvantaged business utilization specialist (SADBUS), and SBA's PCR, concerning the apparent successful offeror's historical performance and achievements in placing subcontracts for the same or similar products or services with small business and small disadvantaged business subcontractors. If this information is not available for a specific product or service, the offeror's past performance and achieve

ments in the placement of total subcontract awards to small business and small disadvantaged business subcontractors shall be examined.

(2) To the extent available, the contracting officer shall request from the apparent successful offeror the names and locations of principal proposed small business and small disadvantaged business subcontractors, including the type of product or service and the dollar value to be awarded to each. This information will be used only to assist the contracting officer in making a determination as to the acceptability of the proposed percentage and dollar subcontracting goals. The offeror will not be contractually bound to award subcontracts to the designated subcontractors, nor will the names of the subcontractors be included in any subsequently approved plan.

(3) Evaluate the anticipated potential for subcontracting to small business and small disadvantaged business considering the "make-or-buy" policies or programs of the apparent successful offeror, the nature of the products or services to be subcontracted, and the known availability of small business and small disadvantaged business concerns in the geographical area where the work will be performed. The small and disadvantaged business utilization specialist and the Small Business Administration's PCR should be consulted to determine the availability of small and small disadvantaged business concerns.

(4) Obtain advice and recommendations of the small and disadvantaged business utilization specialist concerning the acceptability of the proposed plan.

(i) If the contracting officer determines that the subcontracting plan submitted reflects the best effort by the offeror to award subcontracts to small and small disadvantaged firms, but the small and disadvantaged business utilization specialist disagrees with the contracting officer's determination, a final determination shall be made by the principal official responsible for procurement. The SADBUS shall submit this final determination to the Director of the Office of Small and Disadvantaged Business Utiliza

tion with the appropriate supporting documentation.

(ii) If the contracting officer and the small and disadvantaged business utilization specialist determine that the subcontracting plan submitted pursuant to a formally advertised procurement does not reflect the best effort by the bidder to award subcontracts to small and small disadvantaged firms to the fullest extent consistent with the efficient performance of the contract, the contracting officer shall immediately notify the 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. The request for SBA review shall not delay award of the contract to the low bidder.

(5) The contracting officer may accept the terms of an overall or "master" company subcontracting plan if it is incorporated by reference into a specific subcontracting plan submitted by the apparent successful offeror for a specific contract, if:

(i) The master plan contains all the elements required by the statute;

(ii) Subcontracting goals for small and small disadvantaged firms are specifically set forth in each contract or modification over the statutory thresholds;

(iii) Any changes to the plan deemed necessary and required by the contracting officer in areas other than goals are specifically set forth in the contract or modification;

(iv) The contracting officer has copies of the entire plan; and

(v) The resident Procurement Center Representative of the Small Business Administration has had an opportunity to comment on the master plan.

(d) For negotiated procurements, the contracting officer is responsible for negotiating subcontracting goals at a level which represents a good faith, aggressive, and comprehensive effort of the apparent successful offeror to use to the maximum practicable extent small and small disadvantaged subcontractors after appropriate consideration of their price, technical capability, and other pertinent factors.

No goals will be negotiated upwards if it is apparent that higher goals will result in significant increased costs to the Government or will seriously impede procurement objectives. An acceptable plan is one which satisfies the requirements stated in the provision entitled "Small Business and Small Disadvantaged Business Subcontracting Plan (Negotiated)" in § 3-1.7103(b).

(1) In negotiating subcontracting plans, the contracting officer shall take into account a prime contractor's existing "make-or-buy” policy or program. A "make-or-buy" policy or program concerns the major subsystems, assemblies, and components which the contractor manufactures, develops, or assembles in its own facilities, and those which it obtains elsewhere by contract. Consideration of a contractor's "make-or-buy" policy or program is necessary to ensure that the programs are not in conflict, and the best interests of the Government are obtained. Furthermore, where the contract work involves products or services which are not generally available in the commercial marketplace or are particularly specialized and the contractor has current capacity to perform the work, the contracting officer may recognize the reduced likelihood of subcontracting opportunities.

(2) The contracting officer shall advise the apparent successful offeror of the availability of sources of information for potential small business and small disadvantaged business subcontractors when the proposed goals are questionable. The contracting officer should insist that one or more sources of information be used and potential small business and small disadvantaged

business subcontracting sources be considered to ensure developmemt of realistic and acceptable goals.

(3) If a subcontracting plan is not obtained, the contracting officer must document the contract file to substantiate the reasons why the plan was not obtained.

the principal official responsible for procurement, and prior to award, the complete procurement package, including the subcontracting plan, shall be made available by the contracting officer of the PCR for review purposes. The PCR should be allowed a period of one to five working days to review the package, depending upon the circumstances and complexity of the individual procurement. The PCR may submit written recommendations, which shall be advisory in nature, to the contracting officer. The contracting officer shall provide the PCR a copy of the final negotiated subcontracting plan. In the case of a formally advertised procurement, the contracting officer shall furnish the PCR with a copy of the subcontracting plan upon execution of the contract.

(e) The contracting officer is responsible for monitoring, documenting, and evaluating the contractor's performance in achieving the objectives of the small business and small disadvantaged business subcontracting plans, and for advising the principal official responsible for procurement of the performance, as appropriate. The contracting officer shall pay particular attention to:

(1) The extent to which the contractor's goals for small businss and small disadvantaged business participation are being met;

(2) Whether the contractor's efforts to assure participation are in accordance with the efforts described in the subcontracting plan; and

(3) Whether the contractor is requiring its subcontractors to submit and carry out similiar subcontracting plans.

Standard Form 294, Subcontracting Report for Individual Contracts, is to be used to monitor the contractor's progress.

(f) The contracting officer shall promptly negotiate appropriate revisions to agreed subcontracting percentage and dollar goals if any subsequent modifications to the contract will have a major impact on the original planned volume or type of subcontracting effort. If agreement cannot be reached, the matter will be resolved under the disputes clause of the con

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tract. However, it is not necessary for the contracting officer to obtain a new subcontracting plan if a modification over $500,000 ($1 million for construction) is made to a contract already containing a plan. The modification may incorporate the existing plan by reference. However, the modification must either contain separate goals for the new effort or revise the original goals.

(g) The failure of any contractor or subcontractor to comply in good faith with the clause "Utilization of Small Business Concerns and Small Business Concerns Owned and Controlled by Socially and Economically Disadvantaged Individuals" or the approved subcontracting plan will be considered a material breach of the contract or subcontract.

(1) If a breach has occurred in the prime contract, the contracting officer shall review the available facts to determine what remedy is in the best interest of the Government. Remedies may include termination of the contract pursuant to the termination for default clause, reduction in contract price, negotiation of a revised subcontracting plan to correct deficiencies, or other measures the contracting officer may deem appropriate.

(2) In determining the proper remedy, the contracting officer shall consider:

(i) The reasons attributed to the failure to comply in good faith,

(ii) The Government's need for the contract deliverables, and

(iii) The impact a proposed remedy may have on existing small and disadvantaged business subcontractors.

If the failure to comply in good faith cannot be settled by agreement, the contracting officer shall issue a decision pursuant to the disputes clause of the contract.

(3) If, upon contract completion, the contractor has not complied in good faith with the subcontracting plan, the contracting officer shall document the noncompliance in writing and inIclude the reasons. A copy of this documentation shall be provided to the Director of the Office of Small and Disadvantaged Business Utilization.

In addition to other responsibilities indicated in the preceding section, the SADBUS is responsible for:

(a) Notifying the SBA regarding the award of contracts or modifications that contain subcontracting plans. The notification shall contain the contractor's name and address, place of performance, dollar amount, performance period, description of contract item or items, and name and address of the contracting officer. A copy of the award document is sufficient for these purposes. The notification shall be sent to the Assistant Regional Administrator for Regional Programs in the SBA region where contract performance is to occur.

(b) Summarizing and reporting to the Director, Office of Small and Disadvantaged Business Utilization, on a quarterly basis, all prime contracts $500,000 and over ($1 million for construction) using the following reporting format:

(1) Name of the OPDIV and program office;

(2) Number and dollar amount of contracts requiring subcontracting plan;

(3) Number of contracts with subcontracting plans;

(4) Number of contracts without subcontracting plans;

(5) Small and disadvantaged business subcontracting goals; and

(6) Statements citing reasons why small and disadvantaged business subcontracting plans were not included in the contracts.

§ 3-1.710-6 Responsibilities of the SBA's resident Procurement Center Representative.

(a) The Small Business Administration's resident Procurement Center Representative (PCR) is authorized to:

(1) Assist procuring activities and contractors in complying with their responsibilities with regard to subcontracting plans;

(2) Review any solicitation for any contract which is to include the clause "Utilization of Small Business Concerns and Small Business Concerns Owned and Controlled by Socially and

and

(1) Review all requirement packages ($1 million for construction $500,000 for other procurements, including modifications) prior to solicitation to insure that appropriate subcontracting provisions are included in the RFP or IFB;

(2) Review subcontracting plans submitted by apparent successful offerors to determine if small and small disadvantaged businesses are afforded the maximum practicable opportunity to participate as subcontractors;

(3) Recommend to the contracting officer needed changes to subcontracting plans found to be unacceptable; and

(4) Report the number of plans reviewed and the number found to be unacceptable to the small and disadvantaged business utilization specialist and the Director, Office of Small and Disadvantaged Business Utilization.

(c) Neither the PCR nor SBA is authorized to prescribe the extent to which any contractor or subcontractor shall subcontract, specify concerns to which subcontracts shall be awarded, or exercise any authority relative to the administration of individual prime contracts or subcontracts.

§ 3-1.710-7 Commercial products.

(a) If the prime contract is for a commercial product, 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 con

tract. In such cases, the contractor shall be required to submit one company-wide, annual plan to be reviewed for approval by the first agency with which it 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 and is applicable to all deliveries made under contracts entered into during the contractor's fiscal year, even though these deliveries are made in a succeeding fiscal year. The contractor shall submit a new plan to the first agency with which it enters into a contract (over the statutory threshold) during a succeeding fiscal year. The new plan shall apply to all deliveries made under contracts entered into during the succeeding fiscal year, no matter when the deliveries are made.

(b) Contracting officers receiving company-wide plans submitted under paragraph (f) of the solicitation provisions in § 3-1.710-3 (b) and (c) shall forward copies of the plans and approvals to the Small Business Administration, 1441 L Street, N.W., Washington, D.C., Attention: AAPA, and to the Director, Office of Small and Disadvantaged Business Utilization.

§ 3-1.713 Contracts with the Small Business Administration.

§ 3-1.713-1 Authority.

The signing of the contract document may be accepted as SBA's certification that SBA is competent to perform a specific HHS requirement.

§ 3-1.713-2 Policy.

Brochures of 8(a) firms which have been interviewed by the Office of Small and Disadvantaged Business Utilization are fowarded to each SADBUS. These brochures are to be reviewed by the SADBUS to match HHS requirements with the capabilities of these firms. The SADBUS will make the capabilities of these firms known to program personnel and will obtain other information, as needed, by contacting OSDBU or the Small Business Administration.