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DoD Test Program for a Comprehensive Subcontracting Plan

Section 834 of Public Law 101-189, as amended (15 United States Code, 637 note), directed the Department of Defense (DoD) to establish a test program to determine whether the negotiation and administration of comprehensive subcontracting plans will reduce administrative burdens on the contractors while enhancing opportunities provided under DoD contracts for small business, small disadvantaged business, women-owned small business, Historically Underutilized Business Zone small business, veteran-owned small business, and service-disabled veteran-owned small business concerns.

Section 834 of Public Law 101-189, as amended (15 U.S.C. 637 note)

(https://www.law.cornell.edu/uscode/text/15/637)
(http://uscode.house.gov/browse/prelim@title15/chapter14&edition=prelim)

Test Program for Negotiation of Comprehensive Small Business Subcontracting Plan

Pub. L. 101–574, title IV, § 402, Nov. 15, 1990, 104 Stat. 2832, which suspended subsec. (d) of section 834 of Pub. L. 101–189, set out below, for the test program period specified in subsec. (e) of that section, was repealed by Pub. L. 113–291, div. A, title VIII, § 821(c)(2), Dec. 19, 2014, 128 Stat. 3434.

Pub. L. 101–189, div. A, title VIII, § 834, Nov. 29, 1989, 103 Stat. 1509, as amended by Pub. L. 102–484, div. A, title VIII, § 805, Oct. 23, 1992, 106 Stat. 2447; Pub. L. 103–355, title VII, § 7103, Oct. 13, 1994, 108 Stat. 3368; Pub. L. 104–106, div. A, title VIII, § 811, Feb. 10, 1996, 110 Stat. 394; Pub. L. 105–85, div. A, title VIII, § 822, Nov. 18, 1997, 111 Stat. 1840; Pub. L. 106–65, div. A, title VIII, § 817, Oct. 5, 1999, 113 Stat. 712; Pub. L. 106–398, § 1 [[div. A], title X, § 1087(g)(1)], Oct. 30, 2000, 114 Stat. 1654, 1654A–293; Pub. L. 108–375, div. A, title VIII, § 843, Oct. 28, 2004, 118 Stat. 2019; Pub. L. 111–383, div. A, title VIII, § 863(i), Jan. 7, 2011, 124 Stat. 4295; Pub. L. 112–81, div. A, title VIII, § 866, Dec. 31, 2011, 125 Stat. 1526; Pub. L. 112–239, div. A, title X, § 1076(a)(16), Jan. 2, 2013, 126 Stat. 1948; Pub. L. 113–291, div. A, § 821(a)–(c)(1), (d)–(f), Dec. 19, 2014, 128 Stat. 3433, 3434; Pub. L. 114–92, div. A, title VIII, § 872, Nov. 25, 2015, 129 Stat. 939; Pub. L. 114–328, div. A, title VIII, § 826, Dec. 23, 2016, 130 Stat. 2280, provided that:

“(a) Test Program.—

(1)   The Secretary of Defense shall establish a test program under which contracting activities in the military departments and the Defense Agencies are authorized to undertake one or more demonstration projects to determine whether the negotiation and administration of comprehensive subcontracting plans will reduce administrative burdens on contractors while enhancing opportunities provided under Department of Defense contracts for covered small business concerns. In selecting the contracting activities to undertake demonstration projects, the Secretary shall take such action as is necessary to ensure that a broad range of the supplies and services acquired by the Department of Defense are included in the test program.

“(2)  In developing the test program, the Secretary of Defense shall—

“(A)   consult with the Administrator of the Small Business Administration; and

“(B)   provide an opportunity for public comment on the test program.

“(b) Comprehensive Small Business Subcontracting Plan.—

(1)   In a demonstration project under the test program, the Secretary of a military department or head of a Defense Agency shall negotiate, monitor, and enforce compliance with a comprehensive subcontracting plan with a Department of Defense contractor described in paragraph (4).

“(2)  The comprehensive subcontracting plan of a contractor—

“(A)   shall apply to the entire business organization of the contractor or to one or more of the contractor’s divisions or operating elements, as specified in the subcontracting plan; and

“(B)   shall cover each Department of Defense contract that is entered into by the contractor and each subcontract that is entered into by the contractor as the subcontractor under a Department of Defense contract.

“(3)  Each comprehensive subcontracting plan of a contractor shall require that the contractor report to the Secretary of Defense on a semi-annual basis the following information:

“(A)  The amount of first-tier subcontract dollars awarded during the six-month period covered by the report to covered small business concerns, with the information set forth separately—

“(i)   by North American Industrial Classification System code;

“(ii)   by major defense acquisition program, as defined in section 2430(a) of title 10, United States Code;

“(iii)   by contract, if the contract is for the maintenance, overhaul, repair, servicing, rehabilitation, salvage, modernization, or modification of supplies, systems, or equipment and the total value of the contract, including options, exceeds $100,000,000; and

“(iv)   by military department.

“(B)   The total number of subcontracts active under the test program during the six-month period covered by the report that would have otherwise required a subcontracting plan under paragraph (4) or (5) of section 8(d) of the Small Business Act (15 U.S.C. 637(d)).

“(C)   Costs incurred in negotiating, complying with, and reporting on comprehensive subcontracting plans.

“(D)   Costs avoided by adoption of a comprehensive subcontracting plan.           

“(4)   A Department of Defense contractor referred to in paragraph (1) is, with respect to a comprehensive subcontracting plan negotiated in any fiscal year, a business concern that, during the immediately preceding fiscal year, furnished the Department of Defense with supplies or services (including professional services, research and development services, and construction services) pursuant to at least three Department of Defense contracts having an aggregate value of at least $100,000,000.

“(c) Waiver of Certain Small Business Act Subcontracting Plan Requirements.—A Department of Defense contractor is not required to negotiate or submit a subcontracting plan under paragraph (4) or (5) of section 8(d) of the Small Business Act (15 U.S.C. 637(d)) with respect to a Department of Defense contract if—

“(1)   the contractor has negotiated a comprehensive subcontracting plan under the test program that includes the matters specified in section 8(d)(6) of the Small Business Act (15 U.S.C. 637(d)(6));

“(2)   such matters have been determined acceptable by the Secretary of the military department or head of a Defense Agency negotiating such comprehensive subcontracting plan; and

“(3)   the comprehensive subcontracting plan applies to the contract.

“(d) Failure To Make a Good Faith Effort To Comply With a Comprehensive Subcontracting Plan.—

(1)   A contractor that has negotiated a comprehensive subcontracting plan under the test program shall be subject to section 8(d)(4)(F) of the Small Business Act (15 U.S.C. 637(d)(4)(F)) regarding the assessment of liquidated damages for failure to make a good faith effort to comply with its comprehensive subcontracting plan and the goals specified in that plan. In addition, any such failure shall be a factor considered as part of the evaluation of past performance of an offeror.

“(2)   Effective in fiscal year 2016 and each fiscal year thereafter in which the test program is in effect, the Secretary of Defense shall report to Congress on any negotiated comprehensive subcontracting plan that the Secretary determines did not meet the subcontracting goals negotiated in the plan for the prior fiscal year.

“(e) Test Program Period.—

The test program authorized by subsection (a) shall begin on October 1, 1990, unless Congress adopts a resolution disapproving the test program. The test program shall terminate on December 31, 2027.

“(f) Report.—

Not later than September 30, 2015, the Comptroller General of the United States shall submit a report on the results of the test program to the Committees on Armed Services and on Small Business of the House of Representatives and the Committees on Armed Services and on Small Business and Entrepreneurship of the Senate.

“(g) Definitions.—In this section, the term ‘covered small business concern’ includes each of the following:

“(1)   A small business concern, as that term is defined under section 3(a) of the Small Business Act (15 U.S.C. 632(a)).

“(2)   A small business concern owned and controlled by veterans, as that term is defined in section 3(q)(3) of such Act (15 U.S.C. 632(q)(3)).

“(3)   A small business concern owned and controlled by service-disabled veterans, as that term is defined in section 3(q)(2) of such Act (15 U.S.C. 632(q)(2)).

“(4)   A qualified HUBZone small business concern, as that term is defined under section 3(p)(5) of such Act (15 U.S.C. 632(p)(5)).

“(5)   A small business concern owned and controlled by socially and economically disadvantaged individuals, as that term is defined in section 8(d)(3)(C) of such Act (15 U.S.C. 637(d)(3)(C)).

“(6)   A small business concern owned and controlled by women, as that term is defined under section 3(n) of such Act (15 U.S.C. 632(n)).”