Handbook of Business Procedures

24.3.1. Individual Subcontracting Plan

A. Introduction

While all funded purchases are subject to regulations including socio-economic initiatives, federal law PL95-507 adds formal reporting and approval requirements involving The University of Texas at Austin’s principal investigator (PI). This law requires federal contracts in excess of $750,000 to have a subcontracting plan. The plan establishes a goal for purchases from Small Business (SB), and also breaks down this amount into goals for Small Disadvantaged Business (SDB), Women-Owned Small Business (WOSB), Veteran-Owned Small Business (VOSB), Service Disabled Veteran-Owned Small Business (SDVOSB) firms located in Historically Underutilized Business Zones (HUBZone), and Historically Black Colleges and Universities/Minority Institutions (HBCU/Ml). The subcontracting plan is submitted with the response to a federal solicitation, and is subject to approval by the federal agency. While the university has an approved Master Small Business Subcontracting Plan, each PI must work with the university’s small business liaison officer.

B. Submission Requirements

When principal investigators (PIs) compete for federal contracts in excess of $750,000, only the goals for that particular contract need be established and approved by the federal sponsor. This is achieved by completing and attaching Exhibit I – Individual Small Business Subcontracting Plan to the submitted proposal. The PI in consultation with the HUB/SB Program office will develop specific goals for Exhibit I, and the completed form will be included in the university's proposal submitted to the federal sponsor. The HUB/SB Program office has also provided a Small Business Plan Worksheet to help the PI calculate their small business subcontracting goals. PIs should use caution against being either too optimistic or too conservative with subcontracting goals. If goals are too low for SDB, WOSB and HUBZone, etc., the funding agency may reject the plan. If the goals are set too high, justifications may be needed if the goal is missed.  The Office of Sponsored Projects (OSP) can provide information about the federal agency's concerns and expectations for subcontracting plan goals.

1. Small Business Classifications

During the Vendor Registration process, the Historically Underutilized Business/Small Business Program Office (HUB/SB) classifies each vendor as Large, Small, Small Women-Owned, Small Disadvantaged, Small Veteran-Owned, Service Disabled Small Veteran-Owned, HUBZone, Historically Black Owned Colleges and Universities (HBCU) and Minority Institutions (MI),  Alaskan Native Corporation, or Indian Tribe.   Contact the HUB/SB program for assistance with finding small business vendor sources. Another resource is the federal Small Business Administration’s Dynamic Small Business Search, which can be used to determine the status/eligibility of potential subcontractors.

2. Small Business Reporting For Federal Contracts

If a contract requires a Small Business Subcontracting Plan, then the university HUB/SB Program Office has additional reporting duties once the contract is awarded. Federal electronic Individual Subcontracting Reports (ISR) and Summary Subcontracting Reports (SSR) of actual dollars spent in each small business category must be submitted by the HUB/SB Program Office to the federal agency twice a year. PIs are no longer required to submit these electronic reporting forms, ISR (Individual Subcontracting Report, formerly SF-294) and SSR (Summary Subcontracting Report, formerly SF-295), to federal reporting agencies.  Submission of these forms is the responsibility of the HUB/SB Program Office.  PIs are, however, required to cooperate in any studies or surveys that may be required; as well as provide assistance to the HUB/SB Program Office in the submission of any periodic reports which will allow the university to determine the extent of compliance with individual subcontracting plans.  PIs should be mindful that ISR and SSR reports are due twice a year according to the following schedule:

Note: If the university subcontracts more than $750,000 in federal contract funds to a large business or organization, then that large entity must also submit a subcontracting plan to the university. Then, the large business must submit periodic electronic ISR reports to the federal agency and provide electronic copies to The University of Texas at Austin.

3. Principal Investigator (PI) Responsibilities

The PI's responsibility starts with the proposal preparation. It is wise to use at least one subcontractor classified as SB, WOSB, SDB, etc., as it is easier to meet the goals with a large subcontract than by making many low dollar purchases from small businesses. It is helpful to seek research partners with the HBCUs and MIs, as a subcontract with a HCBU/MI also counts toward the small business goals for DOD and NASA awards.

Local and statewide institutions which qualify as HBCU are Jarvis Christian College, Paul Quinn College, Prairie View A&M College, Southwestern Christian College, Texas College, Texas Southern College, The University of Texas at El Paso, Wiley College, and Huston-Tillotson University.

MIs which might be considered are:  Coastal Bend College; Del Mar College; El Paso Community College; Howard County Junior College District; Laredo Community College; Mountain View College; Odessa College; Our Lady of the Lake University at San Antonio; Palo Alto College; San Antonio College; South Plains College; South Texas Community College; Southwest Texas Junior College; St. Mary's University; St Philip's College; Sul Ross State University; Texas Southmost College; The Universities of Texas at San Antonio, Rio Grande Valley, and El Paso; University of Saint Thomas; University of Incarnate Word; and University of Sacred Heart.

Once the contract is awarded, it is the PI's responsibility to help ensure the subcontract goals are met. When submitting a requisition for goods or services for the contract, suggest small vendors. In addition, search the Dynamic Small Business Registry, or ask the SBLO in the HUB/SB Program Office, or your departmental buyer to assist you with soliciting small firms.  It is the PIs responsibility to ensure that the buyers understand and support the goals of the subcontracting program.

If requested, the PI should provide assistance to the SBLO so the electronic ISR and SSR reports can be submitted accurately and on time.

4. Small Business Subcontract Plan Administrator Responsibilities        

• Assist PIs in determining goals.
• Conduct outreach activities, especially in finding small businesses for particular contracts.
• Develop monthly reports to determine status of small business usage.
• Develop workshops, seminars, and training programs.
• Coordinate quarterly meetings between Accounting and Financial Management, Purchasing, and HUB/SB programs in which objectives are discussed and promoted.
• Recruit small businesses to become certified as HUBZone, Women-owned, Veteran-owned, and Minority-owned small businesses.
• Meet with personnel of Historically Black Owned Colleges and Universities (HBCUs) and Minority Institutions (MIs) to disseminate information concerning The University of Texas at Austin’s small business program and cooperative research opportunities and to determine their areas of expertise.
• In conjunction with Accounting and Financial Management, prepare the ISR and SSR semi-annual and annual reports.
• Serve as small business point of contact for both in-house and outside customers.
• Assist small businesses in accessing The University of Texas at Austin’s procurement system.
• Monitor subcontracting plans to evaluate compliance with the subcontracting plan.
• Design incentive or recognition awards to employees for supporting small business program.
• Assist any vendor who requests information, guidance, or direction in the soliciting, bidding, and award of contracts.
• Assist vendors in working through the process of receiving payment for goods and services rendered, introducing them to buyers assigned to specific departments in which the vendors and departments have a mutual potential interest.
• Submit all competitive bids requirements in excess of $25,000 for posting on the Web.

The HUB/SB Office welcomes all vendors but especially small and minority businesses as another means of achieving competitive procurement in the public trust, consistent with applicable laws and regulations.

Questions about the university’s Master Subcontracting Plan or Individual Subcontracting Plans should be addressed to the contract administrator assigned to the college or department, or to the HUB/SB Program Office.

For additional information contact the HUB/SB Program Office.