MCAA-Backed Small Business Subcontracting Protections Added to SBA and FAR Regulations

July 26, 2016

The latest regulatory notice affecting the Federal Acquisition Regulations (FAR) provides 11 changes to the small business subcontracting plan procedures required of prime contractors on covered prime contracts ($1.5 million or more), the most significant of which is the subcontractor listing and payment protections.

The prime contractor must make demonstrable good faith efforts to use the same small business subcontractors they relied on in preparing and presenting their bid, proposal and small business utilization plan to the contracting agency for approval.

If the prime contractor fails to utilize the relied-upon small business subcontractors, the prime must provide a written explanation to the contracting agency within 30 days of contract completion. Failure to use the named subs can be the basis for future adverse prime contract performance evaluations and responsibility determinations.

The regulations also prohibit prime contractors from attempting to bar small business subcontractors from discussing subcontract plan compliance or prime contract payment problems with the contracting agency directly.

The regulations also require that prime contractors notify the contracting officer in writing if they pay a small business subcontractor a reduced amount or if payment is held more than 90 days after the prime has been paid.

And, any record of payment violations is to be recorded in the prime contractors’ past performance evaluation in the Federal Awardee Past Performance information System (FAPPIS).

MCAA testified in support of these provisions on May 23, 2013 before the House Small Business Committee. Read the testimony here.

Access the new regulations.

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