The Small Business Administration published a final subcontracting rule on December 23, 2016, with an effective date of January 23, 2017. Its central boundary is the plan, not simply the size of a supplier. Other-than-small prime contractors with individual subcontracting plans can receive credit toward small-business goals for qualifying reported awards at lower tiers. [2016-30874]

An individual plan concerns a specific contract. The October 6, 2015 proposal contrasts that arrangement with commercial plans covering a firm’s fiscal-year commercial production and comprehensive plans using broader organizational reporting. It excludes those two categories from lower-tier credit. The final explanation confirms the exclusion: commercial and comprehensive plans cover more than one government contract, rather than the single-contract scope required here. [2015-25234][2016-30874]

Within an individual plan, the final provisions establish separate first-tier and lower-tier goals. The prime reports its direct subcontracting performance. Other contractors that must maintain plans report their own first-tier performance, which supplies the qualifying lower-tier information. The prime remains responsible for the accuracy of government reporting. A lower position in the chain does not remove the applicable reporting obligation. [2016-30874]

The proposal’s warning against double and triple counting explains why adding all tiers indiscriminately would misread the mechanism. This is credit for goal performance, not a loan or guaranteed contract award. Proposal and final rule are successive records in one SBA proceeding; the proposal supplies context, while the final provisions control. Their publication establishes the accounting framework, not a measured increase in small-business sales. [2015-25234][2016-30874]

Source documents

  1. Credit for Lower Tier Small Business Subcontractinghttps://www.govinfo.gov/content/pkg/FR-2016-12-23/html/2016-30874.htm
  2. Credit for Lower Tier Small Business Subcontractinghttps://www.govinfo.gov/content/pkg/FR-2015-10-06/html/2015-25234.htm