SBSP Frequently Asked Questions
Printable PDF of FAQs
The Office of Sponsored Programs has informed me I need to develop a Small Business Subcontracting Plan. What is that?
A Small Business Subcontracting Plan is part of the federal Small Business Subcontracting Program. The program is based on Public Law 95-507, which was passed in 1978 to ensure that prime contractors further the goals of increasing participation of small businesses in federal procurement. This law requires the implementation of a subcontracting plan with established goals for expenditures to small and small-disadvantaged businesses for all federally sponsored Contracts in excess of $750,000 ($1.5 million for construction). See Federal Acquisition Regulation (FAR) Subpart 19.7 for complete program requirements: https://www.acquisition.gov/far/subpart-19.7
How do I prepare the Small Business Subcontracting Plan?
Procurement Services will work with you and write the Plan. Follow the instructions in this FAQ and contact us. If your awarding agency requires the Plan be submitted on a special template, please let us know as soon as possible.
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What are the Small Business Subcontracting Plan Goals?
In general, formal goals are put in place to ensure small businesses concerns get their fair share of work with the federal government. Each federal agency sets an annual goal for participation in its contracts by various small business categories.
For example, here is a sample of the statutory goals established by federal executive agencies:
- 23% of prime contracts for Small Businesses;
- 5% of prime and subcontracts for Woman-Owned Small Businesses;
- 5% percent of prime contracts and subcontracts for Small Disadvantaged Businesses;
- 3% of prime contracts and subcontracts for HUBZone small businesses;
- 3% of prime and subcontracts for Veteran-Owned Small Businesses;
- 3% of prime and subcontracts for Service-Disabled Veteran-Owned Small Businesses
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I am not the prime contract holder with the federal agency. Why am I required to have a Plan?
In accordance with Federal Acquisition Rules (FAR), a subcontract in excess of $750,000 from another institution or company which has been awarded a Federal prime contract has the same requirement for a Small Business Subcontracting Plan. This situation is commonly referred to as the ‘flow-down’ provision.
I have performed work under a contract for quite some time and never had to have a Plan. Why am I now required to have one?
If your project has not previously exceeded the threshold, you may not have needed a Plan. Crossing the threshold triggers the federal requirement for a Small Business Subcontracting Plan. Currently, the threshold is $750,000 ($1.5 million for construction).
What are my next steps?
Send the appropriate outline worksheet, final Kuali Research (KR) budget, and the Statement of Work (SOW) to smallbusiness@colostate.edu as soon as possible, but at least 10 days prior to your deadline date. This inbox is monitored by multiple Procurement staff and utilizing it will ensure the quickest turn-around time for the preparation of your Plan.
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Do I need to follow a specific timeline when submitting materials to procurement?
Yes. We will need at least 10 business days to properly review your final budget and to ensure the development of the most competitive plan. A well-developed plan will give you better opportunity to receive the award and will ensure compliance after the project is awarded.
What does procurement need in addition to the final budget?
The budget helps us identify the amount of spend you have that is external to the university. We need to know the type of supplies and the vendors you intend to utilize. Your Plan will be prepared faster if you provide detailed information up front. Once we know the goods and services you will purchase and the vendors you intend to utilize, we will classify the suppliers by size (e.x. large or small business) and by any sub-classification that may apply (e.x. women-owned, minority-owned, veteran-owned).
We need to review all direct costs such as materials & supplies, equipment, travel (and we ask that you please break out the airfare portion of the travel budget separately), salaries & fringe, and tuition/fees (if any); however, salaries and benefits are excluded from Plan goals per 13CFR125.3(a)(1)(iii). Please also identify indirect costs.
Some of the project's Direct Costs are attributed to internal sources. Do I have to identify those?
Yes, all Direct Costs should be identified as to the source of supply. We will not base your Plan goals on any internal spending per 13CFR125.3(a)(1)(iii), but they should be identified.
If equipment is listed in my Plan (e.x., computers, a spectrometer, a laser system), how much detail do I need to provide?
Using computers as the example, you would (at a minimum) list the following details in your final budget:
- the hardware and all peripheries to be purchased
- the software to be purchased
- maintenance or other related purchases
Apply this level of detail to any equipment you are building or equipment purchase shown in your plan.
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I don't know which vendors I am going to buy from. What do I do?
Procurement will work with you to determine the best way to construct the Plan in this situation. We will help you find possible vendors that are small business concerns. Of course, depending on the dollar amount spent with a vendor, University Procurement Rules may require competition.
How do I know if the vendor I plan to utilize is a small business concern?
Business size standards are defined by the Small Business Administration (SBA). Generally, your vendor can tell you their status. The university follows the federal guidelines and allows most vendors to ‘self-certify’ their business size and classification. The vendor’s classification is listed in their vendor profile in Kuali and they will be verified by the Assistant Supplier Diversity Program Manager in SAM.gov in the process of developing your Plan.
How can I find a small business concern?
Procurement will help you identify vendors. You can also refer to the SBA’s Dynamic Small Business Search Database or request access to Supplier.Io’s vendor Explorer Tool from the Assistant Supplier Diversity Program Manager.
Who should be the Plan's "Department Administrator"?
The Plan requires that someone be listed as Department Administrator. That person should be knowledgeable about the budget and the day-to-day operations of the project; it is often the fiscal officer on the account. The Department Administrator will be the department’s primary point of contact for procurement staff and they will be required to review the plan as well as the Principal Investigator (PI).
What are the PI's and the Department Administrator's responsibilities after there is a Plan in place?
Developing your Plan is only the beginning. Once your contract has been awarded, you are responsible for managing subcontracting spend according to the Plan to meet the goals. You must also keep procurement informed of any changes, modifications, or extensions.
What is Procurement responsible for after a Plan is in place?
Procurement is responsible for tracking project expenditures and filing bi-annual reports with the federal government. These reports reflect your performance in meeting the Plan goals. During the required post-award reporting periods, the Department Administrator will be electronically copied on all filings. We will be in periodic contact with the Department Administrator regarding Plan performance, but we are always available to talk with you about any questions or concerns you may have about your plan.
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Who is responsible for notifying Procurement when a contract has been awarded and is subject to a Plan?
The Office of Sponsored Programs is responsible for notifying Procurement when the contract has been awarded, extended, or otherwise modified and is subject to a Small Business Subcontracting Plan.
When are the required reporting periods for the Plan and who does the reporting?
Reports are due April 30 and October 30. These reports show the most recent Small Business Subcontracting Plan goals and dollar amounts that have been spent. Required reports are Individual Subcontract Reports (ISR) for each contract/Plan and Summary Subcontract Reports (SSR) for each federal agency to show all contract spending under current contracts with that agency.
Procurement is responsible for filing required reporting. We will gather raw data about your spend from a variety of sources, including Kuali, Procurement Card queries, and Travel Card queries. We will translate the data into the proper form and submit the reports.
Who will see the reporting? Who can I talk with if I have questions about reporting?
Reports are sent to the awarding agency’s Contracting Officer (CO), the awarding agency, and the Small Business Administration (SBA). Procurement will schedule periodic meetings to review current reporting and your performance. We are always available to talk with you if you have questions or concerns.
What happens if I do not meet the goals detailed in my Plan?
It is important to formulate a realistic Small Business Subcontracting Plan and execute its budgeted details. Upon award, the Plan becomes a part of your project’s contractual obligations. It is considered a ‘deliverable’ under the terms of the contract. Every reasonable effort must be made in good faith to perform according to the contracted Plan. The University could suffer monetary penalties for not meeting Plan goals.
Moreover, non-compliance issues, such as not meeting goals set in the Plan, are documented by federal agencies, and could affect the University’s competitive position for future awards.
The fact that goods and services from a small business vendor may cost more is not considered by the government to be an acceptable excuse for not using them, unless the cost is prohibitive.
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Whom should I contact if I have other questions regarding my Plan?
Send all Small Business Subcontracting Plan inquiries to smallbusiness@colostate.edu.