FAR 19.705-5—Awards involving subcontracting plans.
Plain-English Summary
FAR 19.705-5 explains the contracting officer’s duties when awarding a contract that requires a subcontracting plan. It covers five core topics: checking the contractor’s past compliance with subcontracting plans, confirming that a required plan was actually submitted, giving the SBA procurement center representative an opportunity to review the proposed contract and plan, determining any fee tied to a subcontracting incentive, and making sure an acceptable plan is incorporated into the contract as a material term. It also addresses letter contracts and other undefinitized instruments, requiring at least a preliminary basic plan and a final negotiated plan within 90 days after award or before definitization, whichever comes first. In practice, this section is about ensuring subcontracting plan requirements are not treated as a paperwork afterthought; they are part of the award decision, the contract file, and the enforceable contract terms. It also protects the government’s small business subcontracting policy by making sure plans are reviewed, accepted, and tracked before award or, for undefinitized actions, promptly after award.
Key Rules
Past compliance matters
The contracting officer must consider the contractor’s performance under prior subcontracting plans as part of the responsibility determination. Poor compliance history can affect whether the contractor is viewed as responsible for award purposes.
Plan must be submitted
If a subcontracting plan is required, the contracting officer must verify that the contractor actually submitted one. Award should not proceed as though the requirement were satisfied by promise or intent alone.
SBA review opportunity
The contracting officer must notify the SBA procurement center representative, or follow the alternate procedure in 19.402(a) if no representative is assigned, and provide enough time for review and advisory comments. However, the SBA representative’s failure to respond in time cannot delay award.
Incentive fee must be determined
If the contract uses an incentive tied to subcontracting performance, the contracting officer must determine any fee that may be payable. This ensures the incentive is defined and administratively workable before award.
Acceptable plan becomes contract term
The contracting officer must ensure the final subcontracting plan is acceptable and incorporated into the contract as a material part of the agreement. That makes compliance with the plan enforceable, not merely aspirational.
Undefinitized actions need a preliminary plan
Letter contracts and similar undefinitized instruments that would otherwise require a subcontracting plan must include at least a preliminary basic plan addressing the requirements of 19.704. The final plan must be negotiated within 90 days after award or before definitization, whichever occurs first.
Responsibilities
Contracting Officer
Verify that a required subcontracting plan was submitted, evaluate the contractor’s prior compliance with subcontracting plans as part of responsibility, notify the SBA procurement center representative in time for review, determine any subcontracting incentive fee, ensure the plan is acceptable, and incorporate it into the contract as a material term. For letter contracts and similar undefinitized instruments, require a preliminary basic plan and ensure the final plan is negotiated on time.
Contractor
Submit a subcontracting plan when required, provide supporting documentation as needed for review, and negotiate and finalize the plan for undefinitized instruments within the required timeframe. The contractor must also be prepared for its prior subcontracting performance to be considered in the award decision.
SBA Procurement Center Representative
Review the proposed contract, including the subcontracting plan and supporting documentation, and provide advisory recommendations to the contracting officer when time permits. The representative’s review is advisory, and lack of response does not stop award.
Agency/Contracting Activity
Support the contracting officer’s compliance with subcontracting plan procedures, including routing notices and maintaining the contract file so the required plan and any related incentive terms are properly documented and incorporated.
Practical Implications
This section makes subcontracting plans an award-stage compliance issue, not just a post-award administration task. Contracting officers should not assume a plan can be fixed later if it was required before award.
A common pitfall is failing to give the SBA representative enough lead time for review. The rule does not let the representative block award by silence, but the contracting officer still must provide a reasonable opportunity to comment.
Another frequent mistake is treating the subcontracting plan as separate from the contract. Once accepted, it must be incorporated and treated as a material contract term, which means noncompliance can have contractual consequences.
For letter contracts and other undefinitized actions, the preliminary plan requirement is easy to overlook. The 90-day deadline or earlier definitization date must be tracked carefully to avoid missing the final-plan negotiation requirement.
Past performance on subcontracting plans can affect responsibility determinations, so contractors with weak compliance histories should expect closer scrutiny and should be ready to explain corrective actions and controls.
Official Regulatory Text
(a) In making an award that requires a subcontracting plan, the contracting officer shall be responsible for the following: (1) Consider the contractor’s compliance with the subcontracting plans submitted on previous contracts as a factor in determining contractor responsibility. (2) Assure that a subcontracting plan was submitted when required. (3) Notify the SBA procurement center representative (or, if a procurement center representative is not assigned, see 19.402 (a)) of the opportunity to review the proposed contract (including the plan and supporting documentation). The notice shall be issued in sufficient time to provide the representative a reasonable time to review the material and submit advisory recommendations to the contracting officer. Failure of the representative to respond in a reasonable period of time shall not delay contract award. (4) Determine any fee that may be payable if an incentive is used in conjunction with the subcontracting plan. (5) Ensure that an acceptable plan is incorporated into and made a material part of the contract. (b) Letter contracts and similar undefinitized instruments, which would otherwise meet the requirements of 19.702 (a)(1)(i) and (ii), shall contain at least a preliminary basic plan addressing the requirements of 19.704 and in such cases require the negotiation of the final plan within 90 days after award or before definitization, whichever occurs first.