SBA Issues Final Subcontracting Rule A large prime contractor’s success or failure in meeting small-business subcontracting goals may be considered as a significant factor in the prime’s past-performance evaluation, but that is not mandatory under a new SBA rule. SBA’s final subcontracting rule, published in the Dec. 20 Federal Register, includes a road map for large primes and federal contracting officers to follow in determining whether primes are making good-faith efforts to comply with their small business subcontracting plans. But SBA declined to require the use of subcontracting performance as an evaluation factor. “SBA believes that this suggestion has merit, except that such approach cannot be made mandatory without providing specific guidance for measuring success in subcontracting, particularly when offerors on the same order or agreement operate under different types of subcontracting plans (commercial, individual or DoD Test Program),” the agency wrote in its analysis of the rule. SBA said it is working on establishing such guidance and will consider making mandatory evaluation factors in future revisions of subcontracting regulations. “We also note that in individual cases the evaluation factor may be simple to utilize without additional guidance, particularly in cases where all of the offerors operate under the same type of subcontracting plan,” the agency said. The rule sets out nine steps a prime can take to show it has made a good-faith effort to comply with its subcontracting plan: Breaking out contract work items into units that are “economically feasible” for small firms; “Conducting market research to identify small business subcontractors and suppliers through all reasonable means, such as performing on-line searches on SBA’s PRO-Net, posting Notices of Sources Sought and/or Requests for Proposal on SBA’s SUB-Net, and attending pre-bid conferences;” Seeking out small business subcontractors as early in the acquisition process as practicable to give them time to submit an offer for the subcontract; “Providing interested small businesses with adequate and timely information about the plans, specifications, and requirements for performance of the prime contract to assist them in submitting a timely offer for the subcontract;” “Negotiating in good faith with interested small businesses;” Directing small businesses that need additional assistance to SBA; Helping small firms to obtain “bonding, lines of credit, required insurance, necessary equipment, supplies, materials, or services;” Utilizing the available services of small business associations; local, state, and federal small business assistance offices; and other organizations; and Participating in a mentor-protégé program. In addition, the final rule says a prime may be considered to have made a good-faith effort even if it failed to achieve its subcontracting goal in one socio-economic category, but exceeded its goal by an equal or greater amount in one or more of the other categories. The rule also directs SBA’s commercial marketing representatives to conduct training for new prime contractors on how to comply with subcontracting requirements. The training program is called the Subcontracting Orientation and Assistance Review (SOAR). In comments on the proposed rule, several members of Congress said it appeared to require small prime contractors to submit subcontracting plans, while the law says they are not required to do so. SBA said, “It was never SBA’s intent to require small businesses to submit subcontracting plans or to impose new reporting requirements on them.” Other comments said small primes might be at a disadvantage in past-performance evaluations because they would have no subcontracting plan to evaluate. SBA added language saying that a small-business offeror should receive “full/exemplary’’ credit in each of the subcontracting categories. Small businesses received 35% of subcontract dollars in fiscal 2002, the latest available. SBA said it believes the new rule will increase that number.