Federal Acquisition Regulation; FAR Case 2005-040, Electronic Subcontracting Reporting System (eSRS), 34260-34271 [2010-14180]

Agencies

• General Services Administration
• National Aeronautics and Space Administration
• DEPARTMENT OF DEFENSE

[Federal Register Volume 75, Number 115 (Wednesday, June 16, 2010)]
[Rules and Regulations]
[Pages 34260-34271]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-14180]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1, 4, 19, 52, and 53

[FAC 2005-42; FAR Case 2005-040; Item II; Docket 2008-0001, Sequence 
26]
RIN 9000-AK95


Federal Acquisition Regulation; FAR Case 2005-040, Electronic 
Subcontracting Reporting System (eSRS)

AGENCIES: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) are issuing a final rule 
amending the Federal Acquisition Regulation (FAR) to require that 
contractors' small business subcontract reports be submitted using the 
Electronic Subcontracting Reporting System (eSRS), rather than Standard 
Form 294 - Subcontract Report for Individual Contracts and Standard 
Form 295 - Summary Subcontract Report.

DATES: Effective Date: July 16, 2010.

FOR FURTHER INFORMATION CONTACT: For clarification of content, contact 
Ms. Rhonda Cundiff, Procurement Analyst, at (202) 501-0044. For 
information pertaining to status or publication schedules, contact the 
Regulatory Secretariat at (202) 501-4755. Please cite FAC 2005-42, FAR 
Case 2005-040.

SUPPLEMENTARY INFORMATION:

A. Background

    The Councils published an interim rule in the Federal Register at 
73 FR 21779 on April 22, 2008, to implement in the FAR the use of the 
Electronic Subcontracting Reporting System (eSRS) to fulfill small 
business subcontracting reporting requirements. The eSRS is a web-based 
system under the umbrella of the Integrated Acquisition Environment. It 
replaces Standard Forms 294 and 295 as the mechanism for submitting 
reports required by the small business subcontracting program. The eSRS 
is intended to streamline the small business subcontracting program 
reporting process and provide the data to agencies in a manner that 
will enable them to more effectively manage the program.
    The interim rule also amended FAR subpart 19.7 and related clauses 
to clarify existing small business subcontracting program requirements.
    The FAR interim rule was not intended to change any of the 
requirements for the individual or summary subcontract reports. Its 
purpose was only to require submission of subcontract reports 
electronically, rather than in hardcopy.
    Nineteen commenters submitted comments on the interim rule. A 
discussion of those comments and the changes made to the rule as a 
result of those comments is provided below.
    The comments will be discussed in three overall categories. Those 
that pertain to the FAR rule itself, those that do not pertain to the 
FAR rule, and those that were submitted in response to the Councils' 
question in the Federal Register notice for the interim rule concerning 
whether the reporting period covered by a Summary Subcontract Report 
for a commercial subcontracting plan should remain the Government's 
fiscal year, or be the contractor's fiscal year.
    The comments submitted that did not pertain to the FAR rule itself 
covered such things as changes that need to be made to eSRS to ensure 
that the instructions in that electronic system are consistent with 
this FAR rule, changes that need to be made to electronic business 
systems that interface with eSRS, and changes that need to be made to 
regulations that supplement the FAR. These comments will be referred to 
the appropriate Government officials for their consideration. These 
comments will not be addressed individually in this

[[Page 34261]]

Federal Register notice, except when it is necessary to address them in 
order to clarify existing policy.

Comments pertaining to the FAR rule.

    Comment: One commenter recommended revising FAR 19.704(a)(10)(v) 
and 19.704(a)(10)(vi) by replacing ``Government or Contractor 
official'' with ``Government official (for SSRs) and the Prime's 
Contracting official (for ISRs).'' The reason for the change is that 
the Government reviews all Summary Subcontract Reports (SSRs) submitted 
by prime contractors and subcontractors, and whoever awarded the 
contract/subcontract is responsible for acknowledging receipt of, or 
rejecting, the Individual Subcontract Report (ISR). The contractor, 
therefore, must provide both the Government official's and the prime's 
contracting official's e-mail address to be consistent with FAR 19.705-
6(h) and FAR 52.219-9(l)(1)(iii)(B) for ISRs, and (1)(2)(F) for SSRs.
    Response: The Councils concur that both e-mail addresses need to be 
provided to subcontractors with subcontracting plans since these 
subcontractors will be required to submit both an ISR and an SSR. The 
Councils further believe that the proposed revisions to FAR 19.704 will 
make this aspect of the rule clearer and have revised the language in 
the final rule accordingly. The contractor must provide the email 
address of the official responsible for acknowledging receipt of or 
rejecting the reports, to be consistent with FAR 19.705-6(h) and FAR 
52.219-9(l)(1)(iii)(B) for ISRs, and 52.219-9(l)(2)(F) for SSRs. 
Similar changes have been made to 52.219-9(d)(10)(v) and (vi).
    Comment: Two commenters recommended revising the second sentence in 
FAR 19.705-6(h) to provide examples of what constitutes a report not 
being adequately completed (i.e., errors, omissions, and incomplete 
data).
    Response: Concur. The Councils believe that adding a list of 
examples such as, ``errors, omissions, and incomplete data'', should 
help clarify what is meant by not adequately completed. FAR 19.705-6(h) 
has been revised accordingly in the final rule.
    Additionally, it should be noted that acknowledging receipt does 
not mean acceptance or approval of the report.
    Comment: One commenter questioned the need to clarify in FAR clause 
52.219-9 that ``subcontracting plans are not required from 
subcontractors when the prime contract contains the FAR clause at 
52.212-5, Contract Terms and Conditions Required to Implement Statutes 
or Executive Orders--Commercial Items''. The commenter believes that 
FAR clause 52.219-9 should be included in contracts for commercial 
items.
    Response: The clarification is consistent with FAR 52.212-5(e)(1) 
``Notwithstanding the requirements of the clauses in paragraphs (a), 
(b), (c), and (d) of this clause, the Contractor is not required to 
flow down any FAR clause, other than those in this paragraph (e)(1) in 
a subcontract for commercial items.'' The current FAR clause 52.212-
5(e)(1) includes FAR clause 52.219-8 but does not include clause 
52.219-9.
    Comment: One commenter proposes changing FAR 52.219-9(l)(1) in 
order to make it consistent with FAR 19.705-6, Postaward 
Responsibilities of the Contracting Officer, and to enforce the cut-off 
date for report submission. The commenter recommends changing FAR 
52.219-9(l)(1) from: ``(1) ISR. This report is not required for 
commercial plans. The report is required for each contract containing 
an individual subcontract plan and shall be submitted to the 
Administrative Contracting Officer (ACO) or Contracting Officer, if no 
ACO is assigned,'' to: ``(1) ISR. The report is required for each 
contract containing an individual subcontract plan and shall be 
submitted to the contracting officer who approved the subcontracting 
plan. Failure to submit or late submission of reports shall be a breach 
of contract and will be documented as past performance for future 
acquisitions.''
    Response: Partially concur. The Councils do not agree with adding 
the sentence concerning failure to submit or late submission of 
reports. Paragraph (k)(2) of FAR clause 52.219-9 already addresses the 
breach of contract issue when the contractor or subcontractor fails to 
comply in good faith with the approved subcontracting plan. Reporting 
is an element of the plan.
    Although the Councils have not adopted the changes that the 
commenter has recommended to the first two sentences in this paragraph 
of the interim rule, the Councils have revised the language in the 
final rule so that this paragraph does not address to whom the ISR is 
submitted. That issue is already adequately addressed in paragraph 
(l)(1)(iii) of FAR clause 52.219-9 and does not need to be addressed in 
paragraph (l)(1). Paragraph (l)(1)(iii) of FAR clause 52.219-9 is 
completely consistent with FAR 19.705-6(h).
    Comment: One commenter recommended revising the second sentence of 
FAR clause 52.219-9(l)(l) to read, ``The report is required for each 
contract containing an individual subcontracting plan and shall be 
submitted to the Contracting Officer from the Government agency who 
awarded the prime contract or as prescribed by agency regulations.'' 
The commenter stated that the rationale for this revision is to make 
this paragraph of the clause consistent with paragraphs (l)(1)(iii)(A) 
and (l)(2)(i)(F) of the clause. These paragraphs state that the 
authority to acknowledge receipt or reject ISRs resides with the 
Contracting Officer, and for SSRs resides with the Government agency 
awarding the prime contracts.
    Response: Nonconcur. The Councils believe it is not necessary for 
this sentence to address to whom the report is submitted. That issue is 
already adequately addressed in paragraph (l)(1)(iii) of FAR clause 
52.219-9 and does not need to be addressed in paragraph (l)(1) of the 
clause. Accordingly, this sentence has been revised in the final rule 
and now reads, ``The report is required for each contract containing an 
individual subcontract plan.''
    Comment: One commenter recommended revising FAR 52.219-
9(l)(2)(i)(F) to read, ``The authority to acknowledge or reject SSRs in 
eSRS including SSRs submitted by subcontractors with subcontracting 
plans, resides with the Government agency awarding prime contracts or 
as prescribed in agency regulations.'' The rationale the commenter 
provided for adding the words, ``or as prescribed in agency 
regulations,'' is that the DoD Comprehensive Subcontracting Plan (Test 
Program) covers all Military Service and Defense Agency contracts. The 
Defense Contract Management Agency has the responsibility to perform 
management and oversight of plans included in this program, as 
delegated by the Military Services and Defense Agencies. Therefore, the 
Government agency awarding the prime contract would not be the entity 
acknowledging or rejecting SSRs under the DoD Comprehensive 
Subcontracting (Test Program).
    Response: The Councils do not agree with adding the words, ``or as 
prescribed in agency regulations'' to this paragraph in the FAR clause. 
The Councils have, however, revised the language in the final rule to 
add the words, ``unless stated otherwise in this contract.'' This 
language will alert the contractor to the fact that although authority 
to acknowledge or reject SSRs resides with the Government agency 
awarding the contracts, that agency may delegate the authority to 
another agency, but if this occurs, the information on what

[[Page 34262]]

Government entity has the authority will be contained in the contract 
itself.
    Comment: One commenter stated that paragraph (d)(10)(iii) of FAR 
clause 52.219-9, Small Business Subcontracting Plan, adds the 
requirement to report information for Historically Black Colleges and 
Universities and Minority Institutions (HBCU/MI); however, HBCU/MIs are 
not included elsewhere in the clause when the clause references the 
various programs (i.e., small business, HUBZones, etc.) and what should 
be contained in a subcontracting plan.
    Paragraphs (c), (d)(1) to (9), (d)(11), (e), and Alternates I and 
II, refer to the requirements of a subcontracting plan. Defense Federal 
Acquisition Regulation Supplement (DFARS) 226.370-8, Goals and 
incentives for subcontracting with HBCU/MIs, states that when reviewing 
subcontracting plans submitted under FAR clause 52.219-9, Small 
Business Subcontracting Plan, the contracting officer shall ensure the 
contractor included awards to HBCU/MIs in the Small Disadvantaged 
Business (SDB) goal. In addition, DFARS 219.704, Subcontracting plan 
requirements, states the SDB goal shall include subcontracts with HBCU/
MI, in addition to subcontracts with SDB concerns.
    There is a disconnect between what is required on the report for 
the Department of Defense, Coast Guard, and National Aeronautics and 
Space Administration and what is required in the subcontracting plan. 
Recommend either including or deleting HBCU/MI throughout the clause 
for consistency. If deleting from the FAR clause, consider including 
coverage in the DFARS.
    Response: The commenter states that the rule added the requirement 
to report information for HBCUs/MIs and suggests revising FAR clause 
52.219-9 to add HBCUs/MIs to the entities listed in the requirements 
for subcontracting plans, or remove the reference to HBCUs/MIs in the 
reporting requirements. The commenter states that either proposed 
change would make the language consistent with the other parts of the 
clause.
    The Councils do not concur. This rule did not add the requirement 
to report information for HBCUs/MIs. The language in FAR clause 52.219-
9(d)(10)(iii) concerning reporting subcontract awards to HBCUs/MIs was 
already in the FAR. The requirement was already in place for the 
Department of Defense, the Coast Guard, and the National Aeronautics 
and Space Administration. Standard Forms 294 and 295 both required 
these departments to report on awards to HBCUs/MIs.
    The purpose of this rule is only to require the use of eSRS rather 
than Standard Forms 294 and 295, it is not to change any of the 
requirements for subcontracting plans or subcontract reports.
    Comment: One commenter recommended modifying the second sentence in 
paragraph (l)(2)(iii) of FAR clause 52.219-9, Small Business 
Subcontracting Plan, to read, ``The report, which can be submitted into 
eSRS, shall include[hellip]''
    Response: Nonconcur. The Councils believe that the addition of this 
language is unnecessary and would lead to confusion. The Year-End 
Supplementary Report for Small Disadvantaged Businesses is a part of 
the SSR that is submitted at the close of each fiscal year. The SSR is 
submitted using eSRS. There is nothing in the FAR that provides for the 
Year-End Supplementary Report for Small Disadvantaged Businesses to be 
submitted in any way other than by using eSRS. If the words, ``which 
can be submitted into eSRS,'' were added to the second sentence in FAR 
clause 52.219-9(l)(2)(iii), it would suggest that there is some other 
means for submitting this information and there is not.
    Comment: One commenter recommended removing the last sentence of 
paragraph (b) of FAR clause 52.219-25, Small Disadvantaged Business 
Participation Program--Disadvantaged Status and Reporting, and 
replacing it with the following: ``If this contract contains an 
Individual Small Business Subcontracting Plan, reports shall be 
submitted with the final Individual Subcontract Report into eSRS at the 
completion of the contract.'' The commenter indicated that in this 
instance where the contractors will be using eSRS to submit the 
Individual Subcontract Report (ISR) it would be consistent to require 
the contractors to use eSRS to submit the Small Disadvantaged Business 
Participation Report. The commenter indicated that having the 
information submitted electronically would facilitate access to the 
information by multiple Government organizations.
    Response: Nonconcur. The Councils do not believe it is necessary to 
require that the Small Disadvantaged Business Participation Report be 
submitted using eSRS when it is submitted with the final ISR. It is 
already likely that in this instance contractors will use eSRS to 
submit the Small Disadvantaged Business Participation Report, since it 
is expected to be a less burdensome means of submitting that report for 
contractors who are also submitting an ISR. Further, not all 
contractors required to submit Small Disadvantaged Business 
Participation Reports will also be required to submit ISRs, so this 
revision would not result in uniform electronic submission of the Small 
Disadvantaged Business Participation Report. The benefits to the 
Government of having the reports submitted electronically are not as 
great if not all of the reports are required to be submitted in that 
manner. Therefore, the Councils do not believe that revising the 
language in the interim rule to require some contractors to submit the 
Small Disadvantaged Business Participation Report in a particular 
manner is warranted.
    Comment: One commenter has suggested revising paragraph 
(d)(10)(iii) of FAR clause 52.219-9 to include ``Alaska Native 
Corporations and Indian Tribes that are not Small Businesses'' and 
``Alaska Native Corporations and Indian Tribes that have not been 
certified by the Small Business Administration as Small Disadvantaged 
Businesses'' to be consistent with (d)(1)(i) of the clause.
    Response: The Councils acknowledge the commenter's concern that 
paragraph (d)(1)(i) of FAR clause 52.219-9 is inconsistent with 
paragraph (d)(10)(iii). The Councils have revised paragraph 
(d)(10)(iii) in the final rule to clarify that awards to Alaska Native 
Corporations and Indian Tribes shall be reported as awards to small 
business and small disadvantaged business concerns.
    Comment: One commenter stated that the first sentence in FAR 
19.704(a)(2) should be revised to read ``Submit a new commercial plan, 
30 working days before the end of the contractor's fiscal year, or 30 
days prior to the expiration of the current subcontracting plan to the 
contracting officer.''
    Response: The Councils do not concur. The commenter did not provide 
any rationale for making this change. FAR 19.704(a)(2) does not have to 
do with submitting commercial plans. The Councils believe the commenter 
means FAR 19.704(d)(2). The commercial subcontracting plan covers the 
contractor's fiscal year. Commercial plans, therefore, expire at the 
end of the contractor's fiscal year. Adding, ``or 30 days prior to the 
expiration of the current subcontracting plan'' would, therefore, be 
redundant.
    Comment: One commenter stated that FAR 19.705-2(e) states that a 
contract may have no more than one plan. This will not work for 20 year 
multiple award contracts. The commenter recommended having a new 
individual plan prior to each 5 year option to allow for other changes 
in addition to goals (including a change in the point of contact, or 
the items that are being

[[Page 34263]]

subcontracted and the concerns that will receive the subcontracts, 
etc.)
    Response: The Councils do not concur. The FAR language means that a 
contract may have no more than one plan at any given time. There should 
not be one plan that covers the contract at time of award and then 
additional plans covering work that is added to the contract after 
award.
    A contracting officer may negotiate changes to the subcontracting 
plan whenever they are necessary. The FAR does not prohibit having the 
plan change during the course of the contract, it merely prohibits 
having more than one plan apply to the contract at a time.
    Comment: One commenter indicated that the contracting officer is 
responsible for action on Individual Subcontract Reports and Summary 
Subcontract Reports (SSRs) in eSRS. The current General Services 
Administration, Office of Small Business Utilization, Agency 
Coordinator, has been delegated this function for SSRs in lieu of the 
contracting officer. The commenter wants the contracting officer that 
awards a commercial subcontracting plan to review SSRs for compliance. 
However, the commenter believes it is better to have a central point 
rather than each regional office responsible for accepting/rejecting 
the data which is sent to Congress.
    Response: The Councils note the comment. The commenter did not 
provide any particular recommendations. It is necessary to have the 
contracting officer that approved the commercial subcontracting plan 
acknowledge receipt of, or reject, the SSR because that individual is 
responsible for the contractor complying with that subcontracting plan, 
and submitting the SSR is a requirement under the plan. Contracting 
officers, however, may delegate duties, as provided in agency 
procedures. Further, eSRS is the central point for collecting the data 
which is provided to Congress. Government personnel other than the 
individual that acknowledged receipt of the SSR can review the data in 
eSRS.

Comment that does not pertain to the FAR rule but which is being 
addressed in order to clarify existing policy.

    Comment: One commenter believes there is a need to accommodate 
changing small business size status in eSRS. The commenter stresses the 
need to ensure that the Federal Procurement Data System-Next Generation 
(FPDS-NG), eSRS, and agency contract systems are properly updated in 
order to ascertain whether a subcontracting plan is required, in the 
event that a company's size changes from large to small or vice versa, 
during contract performance.
    Response: Non-concur. Although it is essential that the Central 
Contractor Registration, the Online Representations and Certifications 
Application and FPDS-NG reflect the current size status of the prime 
contractor, size status is no longer a consideration, in determining 
the need for a subcontracting plan, after contract award. The 
requirement for a subcontracting plan resides in the prime contract, 
and is contingent, among other things, on the size status of the prime 
contractor at the time of award. If the prime contractor was small at 
the time of award, there would have been no contractual requirement for 
a subcontracting plan. Even if the size status of the prime contractor 
were to change during contract performance, e.g., as a result of 
growth, a novation agreement, or a non-novated merger acquisition, the 
terms and conditions of the prime contract regarding the subcontracting 
plan will not change.
    Likewise, if the prime contract was awarded to a business that was 
other than small and the terms and conditions of the prime contract 
included a requirement for a subcontracting plan, then this requirement 
for a subcontracting plan will remain unchanged for the life of the 
contract, regardless of whether the size status of the prime contractor 
changes.
    Comments on whether the reporting period covered by a SSR for a 
Commercial Subcontracting Plan should remain the Government's fiscal 
year or be the contractor's fiscal year.
    The purpose of the interim rule was to require that small business 
subcontract reports be submitted using the eSRS, rather than Standard 
Form 294 and Standard Form (SF) 295. The FAR interim rule was not 
intended to change any of the requirements for the individual or 
summary subcontract reports.
    The interim rule retained the requirement that a commercial 
subcontracting plan cover the contractor's fiscal year but the time 
period covered by the year-end SSR submitted for that subcontracting 
plan covers the Government's fiscal year. It also retained the 
requirement that the year-end SSR for a commercial subcontracting plan 
be submitted 30 days after the end of the Government's fiscal year.
    As stated above, the interim rule retained the FAR requirement 
(reflected in the SF 295) that the SSR must cover subcontracting done 
during the Government's fiscal year.
    However, the eSRS, which many agencies and contractors were already 
using, was deployed with instructions that informed the contractor that 
the year-end SSR for a commercial subcontracting plan should reflect 
subcontracting performed during the contractor's fiscal year. The eSRS 
instructions indicated that all other SSRs, those not tied to a 
commercial subcontracting plan, should cover the Government's fiscal 
year.
    Since there was a discrepancy between the FAR and the instructions 
in eSRS itself, the Federal Register notice for the interim rule 
specifically solicited public comment on this issue.
    The comments received in response to the question on what period 
the year-end SSR for a commercial plan should cover, the Government's 
fiscal year or the contractor's fiscal year, requires a review of the 
policy on commercial subcontracting plans and the year-end SSRs that 
are submitted for these plans.
    The Federal Register notice for the interim rule stated that, ``the 
Councils may consider adding further coverage in the FAR to mirror the 
instructions that are currently in SFs 294 and 295''. The following 
sentence had been in SFs 294 and 295: ``Only subcontracts involving 
performance in the U.S. or its outlying areas should be included in 
these reports''. This sentence has been revised and added to FAR clause 
52.219-9 to state ``Only subcontracts involving performance in the 
United States or its outlying areas should be included in these reports 
with the exception of subcontracts under a contract awarded by the 
State Department or any other agency that has statutory or regulatory 
authority to require subcontracting plans for subcontracts performed 
outside the United States and its outlying areas.''
    Additionally, changes have been made to FAR parts 4, 19, and 53, 
and a new Alternate III added to FAR clause 52.219-9 to recognize that 
there is a circumstance under which contractors will need to use SF 
294, rather than eSRS, to submit an ISR. If a contract is not reported 
in the FPDS because reporting it in that system may disclose 
information that would compromise national security, the contractor 
will use SF 294 to submit an ISR on that contract rather than 
submitting an ISR in eSRS.
    This is not a significant regulatory action and, therefore, was not 
subject to review under Section 6(b) of Executive Order 12866, 
Regulatory Planning and Review, dated September 30, 1993. This rule is 
not a major rule under 5 U.S.C 804.

[[Page 34264]]

B. Regulatory Flexibility Act

    The Department of Defense, the General Services Administration, and 
the National Aeronautics and Space Administration certify that this 
final rule will not have a significant economic impact on a substantial 
number of small entities within the meaning of the Regulatory 
Flexibility Act, 5 U.S.C. 601, et seq., because the rule does not 
impose any new reporting, recordkeeping or other compliance 
requirements and the existing requirements pertain only to other than 
small businesses. The rule only requires that reports that were 
previously submitted in hardcopy now be submitted electronically.

C. Paperwork Reduction Act

    The Paperwork Reduction Act (Pub. L. 104-13) applies because this 
final rule contains information collection requirements. Accordingly, 
the FAR Secretariat has forwarded a request for approval of a revision 
to the information collection requirements concerning OMB Control 
Number 9000-0006, Subcontracting Plans/Subcontracting Reporting for 
Individual Contracts, and OMB Control Number 9000-0007, Summary 
Subcontract Report, to the Office of Management and Budget under 44 
U.S.C. chapter 35, et seq. Public comments concerning this request will 
be invited through a subsequent Federal Register notice.

List of Subjects in 48 CFR Parts 4, 19, 52, and 53

    Government procurement.

    Dated: June 2, 2010.
Edward Loeb,
Acting Director, Acquisition Policy Division.

0
Accordingly, the interim rule published in the Federal Register at 73 
FR 21779 on April 22, 2008, is adopted as a final rule with the 
following changes:
0
1. The authority citation for 48 CFR parts 1, 4, 19, 52, and 53 
continues to read as follows:

    Authority:  40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 4--ADMINSTRATIVE MATTERS

0
2. Amend section 4.606 by adding paragraph (c)(5) to read as follows:


4.606  Reporting Data.

* * * * *
    (c) * * *
    (5) Actions that, pursuant to other authority, will not be entered 
in FPDS (e.g., reporting of the information would compromise national 
security).
* * * * *

PART 19--SMALL BUSINESS PROGRAMS

0
3. Amend section 19.704 by adding paragraphs (a)(10)(iii)(A) and 
(a)(10)(iii)(B), and revising paragraphs (a)(10)(v) and (a)(10)(vi) to 
read as follows:


19.704  Subcontracting plan requirements.

    (a) * * *
    (10) * * *
    (iii) * * *
    (A) The ISR shall be submitted semi-annually during contract 
performance for the periods ending March 31 and September 30. A report 
is also required for each contract within 30 days of contract 
completion. Reports are due 30 days after the close of each reporting 
period, unless otherwise directed by the contracting officer. Reports 
are required when due, regardless of whether there has been any 
subcontracting activity since the inception of the contract or the 
previous reporting period.
    (B) The SSR shall be submitted as follows: For DoD and NASA, the 
report shall be submitted semi-annually for the six months ending March 
31 and the twelve months ending September 30. For civilian agencies, 
except NASA, it shall be submitted annually for the twelve-month period 
ending September 30. Reports are due 30 days after the close of each 
reporting period.
* * * * *
    (v) Provide its prime contract number, its DUNS number, and the e-
mail address of the offeror's official responsible for acknowledging 
receipt of or rejecting the ISRs to all first-tier subcontractors with 
subcontracting plans so they can enter this information into the eSRS 
when submitting their ISRs; and
    (vi) Require that each subcontractor with a subcontracting plan 
provide the prime contract number, its own DUNS number, and the e-mail 
address of the subcontractor's official responsible for acknowledging 
receipt of or rejecting the ISRs, to its subcontractors with 
subcontracting plans.
* * * * *


19.705-6  [Amended]

0
4. Amend section 19.705-6 by removing from the third sentence in 
paragraph (h) ``completed'' and adding ``completed, for instance, if 
there are errors, omissions, or incomplete data'' in its place.
0
5. Amend section 19.708 by revising paragraph (b)(1), and removing from 
paragraph (b)(2) ``Alternate I or II.'' and adding ``Alternate I, II, 
or III.'' in its place.
    The revised text reads as follows:


19.708  Contract clauses.

* * * * *
    (b)(1) Insert the clause at 52.219-9, Small Business Subcontracting 
Plan, in solicitations and contracts that offer subcontracting 
possibilities, are expected to exceed $550,000 ($1,000,000 for 
construction of any public facility), and are required to include the 
clause at 52.219-8, Utilization of Small Business Concerns, unless the 
acquisition is set aside or is to be accomplished under the 8(a) 
program. When--
    (i) Contracting by sealed bidding rather than by negotiation, the 
contracting officer shall use the clause with its Alternate I.
    (ii) Contracting by negotiation, and subcontracting plans are 
required with initial proposals as provided for in 19.705-2(d), the 
contracting officer shall use the clause with its Alternate II.
    (iii) The contract action will not be reported in the Federal 
Procurement Data System pursuant to 4.606(c)(5), the contracting 
officer shall use the clause with its Alternate III.
* * * * *

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
6. Amend section 52.212-5 by revising the date of the clause; removing 
from paragraph (b)(11)(i) ``(Apr 2008)'' and adding ``(JUL 2010)'' in 
its place; and adding paragraph (b)(11)(iv) to read as follows:


52.212-5  Contract Terms and Conditions Required to Implement Statutes 
or Executive Orders--Commercial Items.

* * * * *
    CONTRACT TERMS AND CONDITIONS REQUIRED TO IMPLEMENT STATUTES OR 
EXECUTIVE ORDERS--COMMERCIAL ITEMS (JUL 2010)
* * * * *
    (b) * * *
    (11) * * *
    ----(iv) Alternate III ([JUL 2010) of 52.219-9.
* * * * *
0
7. Amend section 52.219-9 by--
0
a. Revising the date of the clause, and paragraphs (d)(10)(iii), 
(d)(10)(v), and (d)(10)(vi);
0
b. Adding a sentence to the end of paragraph (l) introductory text.
0
c. Removing from paragraph (l)(1) introductory text ``and shall be 
submitted to the Administrative Contracting Officer (ACO) or 
Contracting Officer, if no ACO is assigned'';
0
d. Removing from paragraph (l)(2)(i)(F) ``prime contracts.'' and adding 
``prime contracts unless stated otherwise in the contract.'' in its 
place;

[[Page 34265]]

0
e. Revising the introductory text of Alternate I and II, respectively; 
and
0
f. Adding Alternate III.
    The revised and added text reads as follows:


52.219-9  Small Business Subcontracting Plan.

* * * * *
    SMALL BUSINESS SUBCONTRACTING PLAN (JUL 2010)
* * * * *
    (d) * * *
    (10) * * *
    (iii) Submit the Individual Subcontract Report (ISR) and/or the 
Summary Subcontract Report (SSR), in accordance with paragraph (l) of 
this clause using the Electronic Subcontracting Reporting System (eSRS) 
at https://www.esrs.gov. The reports shall provide information on 
subcontract awards to small business concerns (including ANCs and 
Indian tribes that are not small businesses), veteran-owned small 
business concerns, service-disabled veteran-owned small business 
concerns, HUBZone small business concerns, small disadvantaged business 
concerns (including ANCs and Indian tribes that have not been certified 
by the Small Business Administration as small disadvantaged 
businesses), women-owned small business concerns, and Historically 
Black Colleges and Universities and Minority Institutions. Reporting 
shall be in accordance with this clause, or as provided in agency 
regulations;
* * * * *
    (v) Provide its prime contract number, its DUNS number, and the e-
mail address of the offeror's official responsible for acknowledging 
receipt of or rejecting the ISRs, to all first-tier subcontractors with 
subcontracting plans so they can enter this information into the eSRS 
when submitting their ISRs; and
    (vi) Require that each subcontractor with a subcontracting plan 
provide the prime contract number, its own DUNS number, and the e-mail 
address of the subcontractor's official responsible for acknowledging 
receipt of or rejecting the ISRs, to its subcontractors with 
subcontracting plans.
* * * * *
    (l) * * * Only subcontracts involving performance in the United 
States or its outlying areas should be included in these reports with 
the exception of subcontracts under a contract awarded by the State 
Department or any other agency that has statutory or regulatory 
authority to require subcontracting plans for subcontracts performed 
outside the United States and its outlying areas.
* * * * *
    Alternate I (Oct 2001). As prescribed in 19.708(b)(1)(i), 
substitute the following paragraph (c) for paragraph (c) of the basic 
clause:
* * * * *
    Alternate II (Oct 2001). As prescribed in 19.708(b)(1)(ii), 
substitute the following paragraph (c) for paragraph (c) of the basic 
clause:
* * * * *
    Alternate III (JUL 2010). As prescribed in 19.708(b)(1)(iii), 
substitute the following paragraphs (d)(10) and (l) for paragraphs 
(d)(10) and (l) in the basic clause;
    (d)(10) Assurances that the offeror will--
    (i) Cooperate in any studies or surveys as may be required;
    (ii) Submit periodic reports so that the Government can determine 
the extent of compliance by the offeror with the subcontracting plan;
    (iii) Submit Standard Form (SF) 294 Subcontracting Report for 
Individual Contract in accordance with paragraph (l) of this clause. 
Submit the Summary Subcontract Report (SSR), in accordance with 
paragraph (l) of this clause using the Electronic Subcontracting 
Reporting System (eSRS) at https://www.esrs.gov. The reports shall 
provide information on subcontract awards to small business concerns 
(including ANCs and Indian tribes that are not small businesses), 
veteran-owned small business concerns, service-disabled veteran-owned 
small business concerns, HUBZone small business concerns, small 
disadvantaged business concerns (including ANCs and Indian tribes that 
have not been certified by the Small Business Administration as small 
disadvantaged businesses), women-owned small business concerns, and 
Historically Black Colleges and Universities and Minority Institutions. 
Reporting shall be in accordance with this clause, or as provided in 
agency regulations; and
    (iv) Ensure that its subcontractors with subcontracting plans agree 
to submit the SF 294 in accordance with paragraph (l) of this clause. 
Ensure that its subcontractors with subcontracting plans agree to 
submit the SSR in accordance with paragraph (l) of this clause using 
the eSRS.
    (l) The Contractor shall submit a SF 294. The Contractor shall 
submit SSRs using the web-based eSRS at https://www.esrs.gov. Purchases 
from a corporation, company, or subdivision that is an affiliate of the 
prime Contractor or subcontractor are not included in these reports. 
Subcontract award data reported by prime Contractors and subcontractors 
shall be limited to awards made to their immediate next-tier 
subcontractors. Credit cannot be taken for awards made to lower tier 
subcontractors, unless the Contractor or subcontractor has been 
designated to receive a small business or small disadvantaged business 
credit from an ANC or Indian tribe. Only subcontracts involving 
performance in the U.S. or its outlying areas should be included in 
these reports with the exception of subcontracts under a contract 
awarded by the State Department or any other agency that has statutory 
or regulatory authority to require subcontracting plans for 
subcontracts performed outside the United States and its outlying 
areas.
    (1) SF 294. This report is not required for commercial plans. The 
report is required for each contract containing an individual 
subcontract plan. For prime contractors the report shall be submitted 
to the contracting officer, or as specified elsewhere in this contract. 
In the case of a subcontract with a subcontracting plan, the report 
shall be submitted to the entity that awarded the subcontract.
    (i) The report shall be submitted semi-annually during contract 
performance for the periods ending March 31 and September 30. A report 
is also required for each contract within 30 days of contract 
completion. Reports are due 30 days after the close of each reporting 
period, unless otherwise directed by the Contracting Officer. Reports 
are required when due, regardless of whether there has been any 
subcontracting activity since the inception of the contract or the 
previous reporting period.
    (ii) When a subcontracting plan contains separate goals for the 
basic contract and each option, as prescribed by FAR 19.704(c), the 
dollar goal inserted on this report shall be the sum of the base period 
through the current option; for example, for a report submitted after 
the second option is exercised, the dollar goal would be the sum of the 
goals for the basic contract, the first option, and the second option.
    (2) SSR. (i) Reports submitted under individual contract plans--
    (A) This report encompasses all subcontracting under prime 
contracts and subcontracts with the awarding agency, regardless of the 
dollar value of the subcontracts.
    (B) The report may be submitted on a corporate, company or 
subdivision (e.g. plant or division operating as a separate profit 
center) basis, unless otherwise directed by the agency.
    (C) If a prime Contractor and/or subcontractor is performing work 
for more than one executive agency, a

[[Page 34266]]

separate report shall be submitted to each executive agency covering 
only that agency's contracts, provided at least one of that agency's 
contracts is over $550,000 (over $1,000,000 for construction of a 
public facility) and contains a subcontracting plan. For DoD, a 
consolidated report shall be submitted for all contracts awarded by 
military departments/agencies and/or subcontracts awarded by DoD prime 
Contractors. However, for construction and related maintenance and 
repair, a separate report shall be submitted for each DoD component.
    (D) For DoD and NASA, the report shall be submitted semi-annually 
for the six months ending March 31 and the twelve months ending 
September 30. For civilian agencies, except NASA, it shall be submitted 
annually for the twelve-month period ending September 30. Reports are 
due 30 days after the close of each reporting period.
    (E) Subcontract awards that are related to work for more than one 
executive agency shall be appropriately allocated.
    (F) The authority to acknowledge or reject SSRs in the eSRS, 
including SSRs submitted by subcontractors with subcontracting plans, 
resides with the Government agency awarding the prime contracts unless 
stated otherwise in the contract.
    (ii) Reports submitted under a commercial plan--
    (A) The report shall include all subcontract awards under the 
commercial plan in effect during the Government's fiscal year.
    (B) The report shall be submitted annually, within thirty days 
after the end of the Government's fiscal year.
    (C) If a Contractor has a commercial plan and is performing work 
for more than one executive agency, the Contractor shall specify the 
percentage of dollars attributable to each agency from which contracts 
for commercial items were received.
    (D) The authority to acknowledge or reject SSRs for commercial 
plans resides with the Contracting Officer who approved the commercial 
plan.
    (iii) All reports submitted at the close of each fiscal year (both 
individual and commercial plans) shall include a Year-End Supplementary 
Report for Small Disadvantaged Businesses. The report shall include 
subcontract awards, in whole dollars, to small disadvantaged business 
concerns by North American Industry Classification System (NAICS) 
Industry Subsector. If the data are not available when the year-end SSR 
is submitted, the prime Contractor and/or subcontractor shall submit 
the Year-End Supplementary Report for Small Disadvantaged Businesses 
within 90 days of submitting the year-end SSR. For a commercial plan, 
the Contractor may obtain from each of its subcontractors a predominant 
NAICS Industry Subsector and report all awards to that subcontractor 
under its predominant NAICS Industry Subsector.

PART 53--FORMS

0
8. Revise section 53.219 to read as follows:


53.219  Small Business Programs.

    (a) The following form may be used in reporting small disadvantaged 
business contracting data: OF 312 (10/00), Small Disadvantaged Business 
Participation Report. (See subpart 19.12.)
    (b) The following standard form is prescribed for use in reporting 
small business (including Alaska Native Corporations and Indian 
tribes), veteran-owned small business, service-disabled veteran-owned 
small business, HUBZone small business, small disadvantaged business 
(including Alaska Native Corporations and Indian tribes) and women-
owned small business subcontracting data, as specified in part 19: SF 
294, (Rev. 1/2010) Subcontracting Report for Individual Contracts. SF 
294 is authorized for local reproduction.
0
9. Add section 53.301-294 to read as follows:


53.301-294  Subcontracting Report for Individual Contracts.

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[FR Doc. 2010-14180 Filed 6-15-10; 8:45 am]
BILLING CODE 6820-EP-C