Formulation of a Federal
Small Business Subcontracting Plan
Instructions
Ordering with a SB Plan
Forms
Instructions
Overview
Federal contracts (or subcontracts that flow-down from federal contracts) for amounts of $500,000
or more are required to include a Small Business Subcontracting Plan
(SB Plan). “Subcontracting” in this case refers not only to
the services for which Case arranges via contracts or subcontracts to be done by our collaborators,
but it also and most especially refers to the goods and services that Case
purchases for its own use for its own award, i.e., equipment, lab supplies,
chemicals, office supplies, travel services, technical services, etc. It
is most likely through the direct purchase of goods and services by Case
that we will be able to meet acceptable goals in each
of the small business categories.
Because this SB Plan will eventually become a part of Case's federal contract or Case's subcontract with the recipient of the prime federal contract, it is very important for the principal investigator (PI),
i.e., the person who knows the project best, to estimate as accurately as possible
what expenditures can be made in the various required small business vendor
categories. There are potential monetary penalties for not meeting goals.
Moreover, non-compliance issues, such as not meeting goals set in the SB Plan, get documented by the federal agencies and will affect ALL future funding applicants at Case; so, the formulation of this SB Plan
does require some special care. AND – the fact that goods and services
from the small business vendors may cost more is not considered by the government to be an acceptable excuse
for not using them, unless the cost is prohibitive.
Formation of a Federal Small Business Subcontracting Plan
There are five steps to formulating a plan.
1. Call OSPA - or SOM, if you are from the Med School.
2. Make a budget.
3. Identify vendors.
4. Fill out the form, calculating percentages.
5. Write a justification.
Step 1, Calling the Office of Sponsored Projects Administration (OSPA) or the School of Medicine Research Office (SOM) first is important for two reasons. The first is that your OSPA / SOM contact will contact Purchasing to make sure that the Purchasing point person is expecting your call and knows that you need immediate help. The Purchasing staff is very busy too, and we will be asking them to drop everything to help you. Second, it is the OSPA / SOM officer who will actually negotiate the small business subcontracting plan with the federal agency small business officer. He/she therefore needs sufficient information both in the written justification and in background discussions to be able to successfully negotiate if the goals are questioned.
The difficulty with formulating small business subcontracting plans for research projects is that, because of the technical nature of the work, finding vendors to provide the required highly technical goods and services can be quite a challenge. Thus, sharing with your OSPA / SOM officer sufficient details about the project and the difficulty that may have been encountered in finding vendors is very important because he/she may need to know those details during negotiations.
Please understand that OSPA / SOM's function is not to do the plan for you. Only a person who has intimate technical knowledge of the project parameters can do a good job communicating with a Purchasing Buyer to identify suitable vendors as well as write a credible technical portion of the justification.
OSPA / SOM will explain how to do the plan as you may need more explanation, facilitate communication with Purchasing, troubleshoot and help solve problems and negotiate the Plan with the federal agency or prime contract subrecipient.
Step 2, making the budget, is the most crucial. You need
to list, with as much detail as possible, what types of goods and services
you will need to purchase.
Step 3, identifying vendors requires tapping into Case's extensive vendor database. You should call Laura Artwell, Director of Procurement and Distribution Services,
at 368-5026, as soon as you have your list of goods and services ready.
Laura will be notified by the OSPA officer assisting you to expect
your call. Laura or one
of her staff will use Purchasing’s Small Business Vendor Database
to identify which small business vendors can provide you with the services
and supplies you are likely to purchase in the various government-specified categories.
If you have problems getting in touch with Laura, please get back in touch with your contact in OSPA or; if you are Med School faculty or staff, call Cindy Case in the SOM Research Office, for assistance in getting in touch with Laura.
You should also be aware that, if necessary, you
may be directed to talk to more than one Buyer in Purchasing, as they have their
specialties.
You as the researcher
are best qualified to recognize a feasible vendor. If any doubts exist as to the suitability of a vendor, don't hesitate to call the vendor yourself and ask questions to verify the suitability of their product for
your project. Please remember that there are penalties for not meeting the goals of your small business subcontracting plan. Your estimates on this Plan are extremely important. The Plan becomes part of Case's contract with the federal agency or with the recipient of the prime federal contract.
If possible, you should spend some time on your own exploring the databases
at the URLs on the Purchasing website at http://www.cwru.edu/finadmin/matsupp/procurement/suplrdiv.html.
Here you can access directly multiple off-campus databases to search for possible vendors.
After you have contacted Purchasing, if you are still in need of vendors,
you may need to talk to Kathryn Hall (kathryn.hall@case.edu or 368- 8877), Director of Equal Opportunity and Diversity, who may also be able to assist you in finding appropriate vendors.
Please note that Purchasing and Kathryn Hall will also not do
the SB Plan for you. Their function is only to help you identify vendors.
It is important to try to find vendors in all small business
categories. It is becoming increasing difficult to argue for zero percent
goals in the various vendor categories, most especially in the HUBZone category.
If your project is highly technical, it may be that you will be able to
find vendors for only general items like general lab supplies, or office
supplies, or those travel arrangements that can be done via travel agents.
But you should also make a documentable reasonable effort to find vendors
for some of your more specialized types of supplies and services. "Documentable"
so that your OSPA representative can demonstrate, if necessary, to the
federal officer with whom he/she is negotiating that Case has exhausted all
present avenues available for finding suitable small business vendors in
all of the specified categories. In other words, save your notes as you
conduct your search so that you can tell OSPA whom you have called, how much
time you have spent, i.e., what efforts you have made to "make a good
faith effort" to shop for suitable small business vendors. Keep in
mind, as well, that as part of Case’s good faith effort to use small
business vendors whenever possible, throughout the life of the contract,
you should be on the lookout for small business vendors that can meet your
project’s needs.
Once the vendors you need are identified, you
will find the rest of the plan is easily formulated.
Step 4, filling out the form and calculating percentages, is easy after you have identified
vendors in the various categories because you have already determined how much you will be likely to
spend in each category and on each vendor.
OSPA provides a total of five files to help you in the formulation of the Small Business
Subcontracting Plans. One for NASA, four for NIH. These are downloadable below. All the files are MS Word files.
The first two files are basic Small Business Subcontracting
Plan templates, one for NASA, one for NIH. These have been customized with Case specific
information.
The NIH form is actually composed of three types of components contained in three separate files below: the basic Small Business
Subcontracting Plan form and two attachments, specifically, the justification
and an optional separate table to further clarify projected expenditures in the various business
classes.
The NASA template incorporates the justification into the basic template and does not include a table.
Both templates provide spaces for dollar amounts for the total contract.
In the NIH template, if the award specifies, spaces are provided to break out the base year and option
years. The NIH contract officer will tell you whether or not you need
to include option years. Most awards do not require it. You will note on both templates that there are six categories of vendors specified. On the NIH template, the target
goals, found on pg. 3 of the template, are suggested by the government. Plans that do not meet these
target goals must explain why with good justification. NASA has target goals also, but does not include them in the form. However, good justification for low percentages is equally important with a NASA Plan. If it is impossible to find a vendor to supply a highly technical good or service, one must explain in sufficient detail for a small business officer to effectively evaluate one's SB Plan.
The third and fourth files below are a NIH justification template, and a justification example which is specific for NIH but applicable to any agency. More discussion on these may be found in Step 5.
The fifth and sixth files are tables, which you may choose to use if you wish.
One file is an example of a table of the type you may wish to insert instead
of using the form provided on page 3 of the NIH SB Plan, though adding your
own table may be more convenient for you because you can just use your spreadsheet
to format it. It is up to you. If you decide to add a table instead of using
the government-provided grid on page 3 of the NIH form, just write “see
attached table” in the form’s table. In case you wish to add
your own table, but not one from your spread sheet, you may find it convenient to use the table template provided as a Word file to simply fill in. It is your choice. A nice touch is to simply insert the attachments into the SB Plan Word document; and they
will be paginated appropriately.
Keep in mind that some vendors can be counted in more than one category. For example, if a business is a small-business AND minority-owned AND women-owned, you can count the dollars you intend to spend on that vendor in ALL THREE categories on the form. Some minority-owned businesses are also federally certified small disadvantaged businesses. The specific certification held by a vendor is something to double-check with the vendor because sometimes the vendors don't provide complete information to Purchasing. If you learn that Purchasing's database does not correctly categorize a vendor, please notify them; so that the database can be corrected.
Note that, on pages 2 and 3 of the NIH form, only the percentages at paragraphs b and h
need to add up to 100%. Goals at c, d, e, f, and g are merely subsets of
the total small business goals in paragraph b of the NIH form. On the NASA form, large business is not listed as a percentage.
In formulating the SB Plan you need to also list any subcontracts. “Subcontracts”
in this sense means subcontracts that flow down funds from the Case prime
contract. These are usually large businesses (called “other than small
business” on the NIH form), but may not be. Be sure to ask your subcontractors if it is not obvious if they are a large or small business. If you are lucky enough to have located a small business as one of your subcontractors, be sure that it becomes registered in all the appropriate vendor categories in the Purchasing vendor database, so that the account will be properly credited. (See the Afterword below for more on this topic.)
Step 5, writing the justification, is very important if
you have not been able to meet the goals suggested by the government in either the NIH form or the NASA or other agency documentation. Please keep in mind that, as PI, your portion of the justification is very important.
Space in the justification templates have been left for you to add your project-specific justification.
As a rule, zero percentages in any category are not acceptable. Sometimes
because of the very technical nature of research, zero or low percentages are unavoidable.
You must make every effort to find vendors for every category even if they
are not the least expensive source. BUT if you cannot, you need to provide a clear explanation as to why,
in your justification. If your percentage in a given category in miniscule,
you need to justify it. Keep in mind though, that miniscule, however small, is far better
than zero because it shows a good-faith effort. If you have a specific large business vendor from whom you
must purchase a particular item, explain why with some technical detail. Your justification should
be concise, but provide sufficient technical detail to allow the federal
Small Business Officer to fairly evaluate your plan.
The third file found below is the NIH justification template, a separate form. It is already partially written in that it already includes Case specific information, i.e., Case’s efforts
as an institution. It provides a section for you to add specifics pertaining
to your project. Please note the highlighted yellow areas in the justification
template where you should enter the appropriate information and delete the
explanatory comments in the NIH template in the final copy. Whereas the NASA justification template is included in the NASA template, under "Attachment". The PI must fill in "(a)" on the NASA form. Both the NASA and NIH forms are a Word files, so the PI's portion is easily inserted.
The fourth file is an real life example of a good justification with identifiers removed. Your justification needn't be as long, unless necessary; but what you should note is the style and attention to detail. It is a good example to note regardless of what agency is requiring your Plan. The same rules apply regarding how to write a justification.
When you have the draft plan completed, email it to your OSPA (or SOM) officer for review. After the plan is complete, the OSPA (or SOM) officer
will print, sign and send it off. The PIs signature is not required on these forms, only the institutional representative.
An important note re. orders on an account with a SB Plan:
Regarding purchases through the Case Purchasing Office (not applicable to CCLCM),
it
is very important that you and those on your staff who order supplies and
services be aware that projects funded by contracts that include federal
Small Business Subcontracting Plans need to be treated differently when
placing orders.
Ordering under these accounts must be different than your other accounts
because of the federal Small Business Subcontracting Plan. Because Case
must send semiannual reports (SF294s and SF295s) to the applicable federal agency
reporting its progress in adhering to the Small Business Subcontracting
Plan (Qwen Nash in Case's Purchasing Department will do this.), Purchasing needs to be able
to track your purchases properly.
All orders on this contract's account should be assigned requisition and
purchase order numbers.
You cannot use the Pcard for these purchases, or order through the online Fisher catalogue, because Fisher is a large business. Even if the catalogue states that Fisher buys the product from a small business,
Case will track it as a
large business purchase. Purchases made
with the Pcard will be tracked as
large business in the Case database,
whether or not your Pcard purchases were made from small businesses. You
need to use the online purchase request system even if the request is for
less than $1500. On all orders, you need to add the comment in the comments
section: "Small Business Req’d"; so that the Buyers will
know (1) not to reject the order if it is under $1500, (2) to specifically
target small businesses in the various subcategories, and (3) to adhere
to your request to purchase from a specific vendor you have identified.
Regarding (3), also add the comment: "must purchase from specified
vendor", if indeed this vendor is one you identified to meet the needs
of your plan.
Regarding the vendors you identified when creating the Plan, you must remember
now to use all of them or vendors in equivalent categories. You also must
be vigilant when you receive an order to make sure the Case Buyer ordered
it from the vendor you specified. If it wasn't and that vendor was one of
the vendors you know you have to use, send the merchandise back and call
Purchasing. The Buyers are hardworking but very busy people, and like all
of us, occasionally may make a mistake.
But your staff needs to understand
that ultimately the responsibility lies with them to make sure these purchases
are correctly made. Also --very important--
if you identify a small business
vendor that will meet your needs in any of the categories and specify it, make sure that that vendor is registered beforehand with Purchasing as a
small business as well as in all/any of the various small business subcategories
that apply to it. Otherwise the Case database will not credit your account
properly which will unfavorably skew the reporting in the SF294/295s.
Be sure to notify Procurement management immediately if there is a concern
about a buyer not following correct procedures when ordering contract-related orders.
Forms
(as MS Word docs)
NASA
Case Small Business NASA Subcontracting Plan Template - customized with Case info & includes justification template
NIH
Case Small Business NIH Subcontracting Plan Template - customized with
Case info & also sometimes accepted by agencies other than NIH
Case Small Business Subcontracting Plan Justification Example (NIH)
Case
Small Business Subcontracting Plan Justification Template (NIH)
Case
Small Business Subcontracting Plan Table Example (NIH)
Case
Small Business Subcontracting Plan Table Template (NIH)
Last updated
March 7, 2006
