Subcontracting Plan
A required document in large business proposals that establishes percentage goals for subcontracting to small and disadvantaged businesses under FAR 52.219-9.
A subcontracting plan is a compliance document large businesses must submit with proposals for contracts expected to exceed $750,000 (
.5 million for construction). It sets percentage goals for subcontracting to small and socioeconomic categories, describes how those goals will be achieved, and establishes accountability for small business participation throughout contract performance.When a Plan Is Required
FAR 52.219-9 triggers the requirement for large business offerors on contracts above the applicable threshold. Small businesses are exempt. The plan is not required on contracts set aside entirely for small business, contracts below the threshold, or contracts covered by a class deviation. Check the solicitation clauses carefully to confirm whether a plan is required before writing one.
Required Contents
A complete plan must include percentage and dollar goals for total small business, small disadvantaged business, women-owned, veteran-owned, service-disabled veteran-owned, and HUBZone subcontracting. It must also identify the person responsible for administering the plan, describe the methods used to identify small business subcontractors, provide contact information for relevant small business advocacy organizations, and outline record-keeping and reporting procedures.
Setting Goals That Are Competitive and Achievable
Goals should reflect your actual teaming strategy. Setting targets you cannot meet creates compliance problems, negative CPARS past performance entries, and potential financial penalties. However, evaluators may score higher goals favorably when small business participation is a weighted evaluation factor. Coordinate with your small business liaison officer to identify the goals that are both achievable and competitive for this specific procurement.
Reporting Obligations
Contractors with approved plans must submit the Individual Subcontract Report (ISR) and Summary Subcontract Report (SSR) through the Electronic Subcontracting Reporting System (eSRS) on a semi-annual and annual basis. Missing reports or demonstrating a pattern of failing plan goals without documented good-faith effort can affect both current contract administration and future proposal evaluations.
Frequently asked questions
What are typical subcontracting plan percentage goals?
Federal agency-wide goals typically include 23% for total small business, 5% for small disadvantaged businesses, 5% for women-owned, 3% for HUBZone, and 3% for SDVOSB. Individual contract goals may differ based on the work type, industry, and the pool of available small business subcontractors.
What happens if you fail to meet subcontracting plan goals?
The government distinguishes between documented good-faith effort that fell short and simply disregarding plan commitments. Agencies can withhold payment percentages and record negative CPARS entries for contractors who fail to make good-faith efforts. Repeated failures create lasting past performance consequences.