Overcoming Government Contractor Release of Claims Hurdles

Government Small Business Subcontracting Plan Requirements & ProposalsIt is common practice in federal government proposal writing process for you to submit small business subcontracting plan requirements or, in the most recent cases, small business participation plans. The question is how do you write one that withstands bid protest scrutiny or gets higher scores than your competition?

Many businesses wonder if this is even legal due to the fact that government subcontracting plan requirements were originally intended for large businesses that are bidding on unrestricted government contract proposals.

The short answer is that even if there is a legal argument to be made, it must be made in the form of a bid protest before bid closing and not during the proposal writing process. The argument against the government’s small business subcontracting plan requirements may likely fail simply because agencies have vast discretion when planning their procurements.

When developing your approach on how to write a proposal, the realistic answer is that you will have to comply with the RFP requirements and limitation on subcontracting rules when writing your proposal regardless of arguments you may have. Companies submitting government bids should show a good faith effort to find subcontractor candidates to meet the solicitation requirements. See also information about affiliation and similarly situated businesses. 

Important Considerations for Your Small Business Government Subcontracting Plan Requirements

When the government requires you to submit a Small Business Subcontracting Plan or Small Business Participation Plan (most recent solicitation practice) you want to develop a strategy that beats your competition.

If you have named companies that you have done business with in the past and can develop a commitment to perform parts of the upcoming bid, then you want to name them in the proposal.

To meet small business subcontracting plan requirements, you also want to describe what work they will actually be performing and what percentage of the contracting dollars will be applied to your overall goal.

Another strategy to help your government RFP proposal response is to propose goals in higher numbers that what the government wants to see. However, you do not want to submit unrealistic goals.

For example, if the government seeks 8% for HUBZone Companies, you want to shoot for a higher number in your proposal.  The reason why you want to develop this bdding strategy is that your competition could submit higher numbers and, therefore get a higher evaluation score.

This can also create an opportunity for the government to trade for the “best value” consideration of your competition.

When you comply with government subcontracting plan requirements in your proposal for federal contracts, you want to always develop strategies and realistic offers that your competition may not.

You must always comply with the solicitation terms and study the evaluation criteria: However, you want to demonstrate in your government subcontracting plan requirements, or small business participation bid, how you will actually solicit subcontractor or otherwise attempt to meet the goals. One way is to advertise on your website for subcontracting opportunities.

When you write government proposals, you always want to be aware of your obligations to meet the limitations in subcontracting rules. This issue usually surfaces when companies use small business subcontracting plan requirements to pass through a substantial amount of work.

  • Applying the limitation on subcontracting rule, you may want to expressly state your role in overseeing government subcontractors and you may also want to specifically identify what percentage of work each subcontractor will be doing.
  • You want to propose more than a simple statement that you will be responsible for 51% of labor cost.

There have been bid protests where the agency concluded that it the proposal showed no real evidence that the bidder could self-perform its share of the required labor. The bidder lost the protest.

Neglecting Small Business Subcontracting Plan Requirements: Challenges to the agency’s small business government subcontracting plan requirements in the solicitation will most likely fail: A common practice when deciding how to write a proposal is to understand that the agency will still have to report small business dollars to you as the prime contractor.

However, this does not excuse the proposal requirement for you to pass on work to other small businesses unless the solicitation expressly tells you that small businesses are exempt from doing so.

Without the advice of legal counsel at the bidding stage, you do not want to assume and include statements that since you are a small business then you are not required to submit a participation plan.

Your proposal will more than likely be thrown out as noncompliant or as taking exception to the proposal requirements. The only exception to this line of thinking would be if the solicitation expressly states that small business can meet the requirements due to their existing status.

Final Thought: Government contract proposals are demanding more commitment to small businesses by injecting government subcontracting plan requirements into the solicitation. As a result, and even for small businesses bidding on federal projects, you want to comply with the express RFP requirements. It is also better to propose higher goals that what the government is asking for.

  • Consider submitting named subcontractors versus a simple promise to comply.
  • You never want to leave this opportunity open for your competition.

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For help with analysis or challenging small business subcontracting plan requirements, contact a government contracts attorney or call Watson at 1-866-601-5518. We offer a FREE Initial Consultation.

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