Small Business Subcontracting Plan
Also known as: Subcontracting plan, small business subcontracting plan, subK plan
What you do here: As a large prime, commit to small-business subcontracting goals; as an SDVOSB, be the sub they need
At a Glance
- Who it's for
- Large-business primes above the threshold; SDVOSBs benefit as subcontractors
- What it does
- Sets and reports goals for subcontracting to small/SDVOSB firms
- Governing authority
- FAR Subpart 19.7 and clause FAR 52.219-9
- Threshold
- Required over ~$750K (~$1.5M for construction) with subcontracting possibilities
- Small-business exemption
- Small-business primes are not required to have a subcontracting plan
What It Is
A small business subcontracting plan is a document a large-business prime must adopt when it receives a contract expected to exceed the subcontracting-plan threshold and offering subcontracting possibilities. Under FAR Subpart 19.7 and clause FAR 52.219-9, the plan commits the prime to goals for the percentage of subcontract dollars it will award to small businesses and to each socioeconomic category — small disadvantaged, women-owned, HUBZone, and service-disabled veteran-owned small businesses. The prime then reports progress against those goals through the electronic Subcontracting Reporting System (eSRS) using the Individual Subcontract Report (ISR) and Summary Subcontract Report (SSR). Two points matter to an SDVOSB. First, small-business primes are exempt — if you win a set-aside as a small SDVOSB prime, you don't file a subcontracting plan. Second, these plans are a demand engine for SDVOSB subcontracts: large primes with SDVOSB goals actively look for certified SDVOSB subs to help them meet commitments the government scores them on. Understanding subcontracting plans helps an SDVOSB market itself into large-prime teams.
When You Use It
- When a large-business prime wins a contract over the subcontracting-plan threshold with subcontracting possibilities.
- When an SDVOSB wants to sell itself as a subcontractor to large primes chasing SDVOSB goals.
- During source selection, where an offeror's subcontracting plan and goals can be evaluated.
- In performance, where the prime reports subcontract achievements through eSRS (ISR/SSR).
Key Features
| Feature | What It Means |
|---|---|
| Threshold and possibilities | A plan is required when the award is expected to exceed the threshold (about $750K, higher for construction) and offers subcontracting opportunities. |
| Goals by category | The plan sets percentage goals for small business overall and for SDB, WOSB, HUBZone, and SDVOSB subcontracting specifically. |
| Small-business prime exemption | Small-business prime contractors are not required to submit or negotiate a subcontracting plan — a real advantage of holding small status. |
| eSRS reporting | The prime reports achievements via the Individual Subcontract Report and Summary Subcontract Report in the electronic Subcontracting Reporting System. |
| Good-faith effort | The prime must make a good-faith effort to meet its goals; failure to do so can carry consequences, including liquidated damages in some cases. |
The SDVOSB Angle
For most SDVOSBs the subcontracting plan is a *sales tool*, not a compliance burden — you're exempt as a small prime, but large primes are under real pressure to hit SDVOSB subcontracting goals the government grades them on. That pressure is your way onto big-contract teams: market your VetCert certification to primes with SDVOSB goals, get listed where they source (SBA's Dynamic Small Business Search and SubNet), and make it easy for them to count your work. When you do grow past small and prime large contracts yourself, you'll owe the plan — so learn how it works from the sub side first.
How to Set It Up
- If you're a small SDVOSB prime, confirm you're exempt — you don't file a subcontracting plan.
- If you're pursuing subcontracts, register in SAM.gov and SBA's Dynamic Small Business Search so primes can find you.
- Target large primes whose contracts carry SDVOSB subcontracting goals and market your VetCert status.
- If you become a large prime, build a plan with realistic SDVOSB goals and set up eSRS (ISR/SSR) reporting.
- Document good-faith efforts to meet each subcontracting goal throughout performance.
Watch Out For
- Small-business primes sometimes waste effort building a plan they're actually exempt from — check the threshold and your size first.
- Large primes that miss goals without a good-faith effort can face negative evaluations or liquidated damages.
- A subcontracting plan is not a set-aside — it's a goal-and-report mechanism, not a reservation of work for you.
- SDVOSB subcontract credit generally requires the sub to be a certified/self-represented SDVOSB — keep your status current.
Run the Numbers
Frequently Asked
Does an SDVOSB prime contractor need a subcontracting plan?
No. Small-business prime contractors — including SDVOSBs — are exempt from the small business subcontracting plan requirement under FAR Subpart 19.7. The plan requirement falls on large-business primes that receive contracts over the subcontracting-plan threshold with subcontracting possibilities. As a small SDVOSB prime you don't file a plan, though you may still voluntarily use small-business subcontractors.
How do subcontracting plans help SDVOSBs win work?
Large primes with subcontracting plans commit to goals for subcontracting to SDVOSBs, and the government scores their good-faith effort to meet those goals. That creates demand for certified SDVOSB subcontractors. By registering in SAM.gov and SBA's Dynamic Small Business Search, marketing your VetCert status, and getting on prime teams, an SDVOSB can win federal work as a subcontractor even without priming the contract.
What is the subcontracting plan threshold?
A subcontracting plan is generally required when a contract with a large-business prime is expected to exceed roughly $750,000 (about $1.5 million for construction) and offers subcontracting possibilities. These dollar figures are periodically adjusted for inflation, so confirm the current threshold in FAR 19.702 and the solicitation. Small-business primes are exempt regardless of contract size.
Primary Sources
- FAR Subpart 19.7 — The Small Business Subcontracting Program
- FAR 52.219-9 — Small Business Subcontracting Plan (clause)
- FAR 19.702 — Statutory requirements
Plain-English reference, not legal advice. Teaming, joint-venture, affiliation, and subcontracting rules are fact-specific and the SBA regulations and FAR are amended from time to time — always read the current 13 CFR and FAR text, confirm the requirements with the contracting officer and your SBA resources, and consult qualified counsel before structuring a joint venture, teaming agreement, or subcontract you intend to rely on.
Change log (1)
- LaunchedPublished the federal teaming, joint venture & subcontracting arrangements reference covering how an SDVOSB works with other firms on a set-aside — the prime contractor and subcontractor roles, the FAR Subpart 9.6 contractor team arrangement (teaming agreement), the SDVOSB joint venture (13 CFR § 128.402), the SBA mentor-protégé joint venture (13 CFR § 125.9), the similarly situated entity that counts a sub's work as self-performance (13 CFR § 125.6), the ostensible subcontractor rule (13 CFR § 121.103(h)), general affiliation (13 CFR § 121.103), the small business subcontracting plan (FAR Subpart 19.7 / 52.219-9), and flow-down clauses (FAR 52.212-5 / Subpart 44.2) — each with an at-a-glance quick-facts card, a when-you-use-it list, a key-features table, an SDVOSB-specific angle, a how-to-set-it-up checklist, watch-outs, FAQPage, Article, Dataset, and BreadcrumbList structured data, primary-source citations, and cross-links into the glossary, regulation explainers, how-to guides, set-aside comparisons, FAQ, clauses, forms, and the limitations-on-subcontracting, subcontracting-goal, set-aside eligibility, and size-standard calculators.