Office of Federal Procurement Policy; Policy Letter on Subcontracting Plans for Companies Supplying Commercial Items

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Section 8(d) of the Small Business Act (15 U.S.C. 637(d) requires that each contract that exceeds $500,000 ($1 million in the case of construction), and that offers subcontracting opportunities, include a requirement that the apparent successful offeror negotiate a subcontracting plan which shall become a material part of the contract. These requirements have been implemented by prior OFPP Policy Letters and subsequent promulgation in the Federal Acquisition Regulation (FAR). Sections 8104 and 8203 of the Federal Acquisition Streamlining Act of 1994 (FASA), Public Law 103-355, establish a preference for the acquisition of commercial items. In establishing this preference, Congress expressed concern that implementing policies ease the burden of government-unique requirements for companies supplying commercial items. In response to this concern, the policy on subcontracting plans is being revised to reduce the burden of government-unique requirements on contractors that supply commercial items. This Policy Letter focuses on contracts and subcontracts for ``commercial items'' as defined in section 8001 of FASA. Annual commercial subcontracting plans that relate to a company's commerci