FAR 19.705-4—Reviewing the subcontracting plan.
Plain-English Summary
FAR 19.705-4 explains how the contracting officer must review a proposed subcontracting plan for adequacy before award. It covers the required content of the plan, how the review differs in sealed bidding versus negotiated acquisitions, and what factors the contracting officer must consider when judging whether the plan is realistic and acceptable. The section also ties the review to past subcontracting performance, available subcontracting opportunities, the contractor’s make-or-buy policies, the availability of small business subcontractors, and the need to coordinate with SBA and agency small business officials. In practice, this rule is meant to prevent paper-only plans and ensure subcontracting goals are achievable, supported by good-faith efforts, and consistent with the contractor’s actual performance capability and the Government’s acquisition needs. It also helps protect the Government from accepting unrealistically low goals designed to avoid compliance burdens or liquidated damages, while avoiding goals so high that they would raise costs or interfere with contract performance.
Key Rules
Review for adequacy
The contracting officer must review the subcontracting plan to make sure it includes the required information, goals, and assurances required by FAR 19.704. The review is not a formality; the plan must be complete and substantively adequate before it can be accepted.
No one-size-fits-all standard
There are no detailed universal standards that apply to every plan. The contracting officer must evaluate each plan in light of the specific acquisition, including the contractor’s history and the subcontracting opportunities in the particular procurement.
Sealed bid deficiency process
In sealed bidding, if the bidder’s plan omits any of the 15 required elements, the contracting officer must notify the bidder and request a revised plan by a set date. Failure to submit a compliant plan makes the bidder ineligible for award, and a responsive but noncompliant plan may also support a finding of nonresponsibility.
Negotiated plan acceptability
In negotiated acquisitions, the contracting officer must determine whether the plan is acceptable through negotiation of each required element. The goals should reflect what can reasonably be achieved through good-faith efforts to use small business and other socioeconomic small business concerns to the maximum practicable extent.
Watch for unrealistically low goals
The contracting officer must be alert to goals that are set too low to reduce the contractor’s risk of liquidated damages or the burden of documenting good-faith efforts. Goals should be realistic, attainable, and not artificially minimized.
Do not force higher goals unnecessarily
Goals should not be negotiated upward if doing so would significantly increase Government cost or seriously impede the acquisition objective. The Government seeks meaningful subcontracting participation, but not at the expense of mission needs or unreasonable cost growth.
Consider incentive subcontracting
An incentive subcontracting clause may be used when extra, unique contract effort such as technical assistance could significantly increase subcontract awards to small business and other covered small business categories. This is an optional tool to encourage greater subcontracting participation.
Use past performance and market data
The contracting officer should obtain information from the cognizant contract administration office and evaluate the offeror’s past subcontracting performance on similar work. The review should also consider subcontracting opportunities, the available pool of eligible subcontractors, and the contractor’s prior success in meeting goals.
Check consistency with pricing and make-or-buy
The proposed subcontracting goals must be consistent with the offeror’s certified cost or pricing data, or data other than certified cost or pricing data. The contracting officer must also review the make-or-buy policy or program to ensure it does not conflict with the proposed plan and remains in the Government’s interest.
Seek small business input
The contracting officer should advise the offeror of available sources of information on potential small business subcontractors and any known potential subcontractors. If the goals appear questionable, the contracting officer must stress that the information should be used to develop realistic and acceptable goals.
Coordinate with SBA and agency specialists
The contracting officer must obtain advice and recommendations from the SBA procurement center representative, or if none is assigned, follow the alternate process in FAR 19.402(a), and from the agency small business specialist. This coordination helps ensure the plan is reviewed with current small business policy and market insight.
Responsibilities
Contracting Officer
Review the subcontracting plan for completeness and adequacy; evaluate it in context of the specific acquisition; distinguish between sealed bid and negotiated procedures; assess realism of goals; check past performance, market availability, make-or-buy consistency, and pricing consistency; advise the offeror on sources of potential subcontractors; and obtain SBA and agency small business specialist input.
Bidder/Offeror
Submit a subcontracting plan that includes all required elements, goals, and assurances; revise the plan when deficiencies are identified in sealed bidding; propose realistic goals supported by the company’s actual subcontracting capability and market conditions; and use available information to develop acceptable goals.
Cognizant Contract Administration Office
Provide information available on the contractor’s past subcontracting performance and related records to support the contracting officer’s review of the proposed plan.
SBA Procurement Center Representative
Provide advice and recommendations on the subcontracting plan when assigned, helping the contracting officer assess adequacy and realism from a small business policy perspective.
Agency Small Business Specialist
Advise and recommend on the subcontracting plan, including the availability of small business subcontracting opportunities and the reasonableness of proposed goals.
Practical Implications
A subcontracting plan can be rejected even if it looks complete on paper if the goals are not realistic or are inconsistent with the contractor’s past performance and the available subcontracting market.
In sealed bidding, missing required elements is a serious defect: the bidder must fix the plan by the deadline or lose eligibility for award.
Contracting officers should not accept artificially low goals just because they are easy to administer; low goals can undermine the statutory subcontracting program and may signal noncompliance risk.
Contractors should be prepared to justify goals with data, prior performance, make-or-buy decisions, and actual subcontracting opportunities in the relevant market.
Coordination with SBA and agency small business staff is not optional best practice; it is part of building a defensible, informed acceptability determination.
Official Regulatory Text
The contracting officer shall review the subcontracting plan for adequacy, ensuring that the required information, goals, and assurances are included (see 19.704 ). (a) No detailed standards apply to every subcontracting plan. Instead, the contracting officer shall consider each plan in terms of the circumstances of the particular acquisition, including- (1) Previous involvement of small business concerns as prime contractors or subcontractors in similar acquisitions; (2) Proven methods of involving small business concerns as subcontractors in similar acquisitions; and (3) The relative success of methods the contractor intends to use to meet the goals and requirements of the plan, as evidenced by records maintained by contractors. (b) If, under a sealed bid solicitation, a bidder submits a plan that does not cover each of the 15 required elements (see 19.704 ), the contracting officer shall advise the bidder of the deficiency and request submission of a revised plan by a specific date. If the bidder does not submit a plan that incorporates the required elements within the time allotted, the bidder shall be ineligible for award. If the plan, although responsive, evidences the bidder’s intention not to comply with its obligations under the clause at 52.219-8 , Utilization of Small Business Concerns, the contracting officer may find the bidder nonresponsible. (c) In negotiated acquisitions, the contracting officer shall determine whether the plan is acceptable based on the negotiation of each of the 15 elements of the plan (see 19.704 ). Subcontracting goals should be set at a level that the parties reasonably expect can result from the offeror expending good faith efforts to use small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business subcontractors to the maximum practicable extent. The contracting officer shall take particular care to ensure that the offeror has not submitted unreasonably low goals to minimize exposure to liquidated damages and to avoid the administrative burden of substantiating good faith efforts. Additionally, particular attention should be paid to the identification of steps that, if taken, would be considered a good faith effort (see 19.705-7 ). No goal should be negotiated upward if it is apparent that a higher goal will significantly increase the Government’s cost or seriously impede the attainment of acquisition objectives. An incentive subcontracting clause (see 52.219-10 , Incentive Subcontracting Program), may be used when additional and unique contract effort, such as providing technical assistance, could significantly increase subcontract awards to small business, small disadvantaged business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, or women-owned small business concerns. (d) In determining the acceptability of a proposed subcontracting plan, the contracting officer should take the following actions: (1) Obtain information available from the cognizant contract administration office, as provided for in 19.706 (a), and evaluate the offeror’s past performance in awarding subcontracts for the same or similar products or services to small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns. If information is not available on a specific type of product or service, evaluate the offeror’s overall past performance and consider the performance of other contractors on similar efforts. (2) In accordance with 15 U.S.C. 637(d)(4)(F)(iii) , ensure that the goals offered are attainable in relation to- (i) The subcontracting opportunities available to the contractor, commensurate with the efficient and economical performance of the contract; (ii) The pool of eligible subcontractors available to fulfill the subcontracting opportunities; and (iii) The actual performance of such contractor in fulfilling the subcontracting goals specified in prior plans. (3) Ensure that the subcontracting goals are consistent with the offeror’s certified cost or pricing data or data other than certified cost or pricing data. (4) Evaluate the offeror’s make-or-buy policy or program to ensure that it does not conflict with the offeror’s proposed subcontracting plan and is in the Government’s interest. If the contract involves products or services that are particularly specialized or not generally available in the commercial market, consider the offeror’s current capacity to perform the work and the possibility of reduced subcontracting opportunities. (5) Evaluate subcontracting potential, considering the offeror’s make-or-buy policies or programs, the nature of the supplies or services to be subcontracted, the known availability of small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns in the geographical area where the work will be performed, and the potential contractor’s long-standing contractual relationship with its suppliers. (6) Advise the offeror of available sources of information on potential small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business subcontractors, as well as any specific concerns known to be potential subcontractors. If the offeror’s proposed goals are questionable, the contracting officer must emphasize that the information should be used to develop realistic and acceptable goals. (7) Obtain advice and recommendations from the SBA procurement center representative (or, if a procurement center representative is not assigned, see 19.402 (a)) and the agency small business specialist.