The Office of Federal Procurement Policy (OFPP) recently released a memo to agency Chief Acquisition Officers (CAOs) providing pre-award and post-award “reminders and considerations” for Contracting Officers (COs) to encourage small business subcontracting and to hold prime contractors accountable to their proposed use of small business subcontracts.
As suggested by the terms “reminders and considerations,” these are not new policies, but rather existing mechanisms that are inconsistently used or enforced:
Pre-award
- Work collaboratively with small business specialists to determine opportunities for subcontracting.
- Evaluate an offeror’s performance in meeting its past small business subcontracting plan goals to predict the likelihood of achieving goals on the new subcontracting plan.
- Consider subcontracting incentive strategies to help strengthen the supplier base.
- Consider broadened use of small business participation evaluation factors (SBPEFs) or significant subfactors.
- Challenge zero or virtually-zero goals (i.e., goals equaling a mere fraction of one percent).
- Consider the value of reflecting an offeror’s promised use of small business subcontractors in the contract.
- Strengthen the small business supplier base for research and development by considering a preference for Small Business Innovation Research/Small Business Technology Transfer (SBIR/STTR) subcontractors.
- Improve agency procurement forecasts.
Post-award
- Monitor submission of subcontracting plan reports, review any discrepancies with the plan, and ensure good faith compliance.
- Evaluate contractor achievement against the small business subcontracting plan and document the evaluation in the Contractor Performance Assessment Reporting System (CPARS).
- Take note of ongoing policy actions that can help small business subcontractors compete as prime contractors.
The collaboration between USAID’s Office of Acquisition and Assistance (OAA) and the Office of Small and Disadvantaged Business Utilization (OSDBU) has been productive in meeting agency goals. Nonetheless, the number of small and small, disadvantaged firms seeking USAID and other federal contracts has decreased in recent years. This may be attributed to the economic impact of COVID-19, the cost and risk of doing business with the federal government, and the relatively high threshold for entry into the market. The memorandum recognizes the value of subcontracting as a gateway for many small and small, disadvantaged firms into the federal marketplace.
Prime contractors – and prime recipients – can also take their own initiative to increase small business subcontracting by establishing strategic alliances with firms that provide proven expertise for larger, often bundled contracts. Recruitment, engineering, logistics, training, ME&L are typical services provided by small businesses. Establishing a relationship between a prime and a small business can assure responsiveness and a collaboration that supports both firms. Organizations working primarily under Cooperative Agreements in which 2 CFR 200 “encourages” small business subcontracting should consider expanding their small business engagement, especially if they consider competing for a contract.
