The Small Business Administration has published a final rule stating that prime contractors with individual subcontracting plans may elect to receive credit for lower-tier subcontracts and must integrate the lower-tier subcontracting performance into their individual subcontracting plan goals.
SBA introduced the rule in accordance with the provisions of the fiscal year 2020 National Defense Authorization Act, per a Federal Register notice published Wednesday.
The notice dictates that section 870 of NDAA prohibits agencies from establishing tier-specific goals for contractors that use lower-tier credit.
Under the new rule, all prime contractors will have only one set of goals for first-tier and lower-tier subcontracting and should include in their subcontracting plans a written statement of the types of records they will keep to prove the subcontracting credit.
“In sum, the regulatory amendments implemented by this rule will not have a disparate impact on small businesses and will increase their opportunities to participate in Federal Government contracting as subcontractors without imposing any additional costs,” the notice reads.
The final rule will take effect on Nov. 13.