For each federal contract $650,000 and over, the Federal Acquisition Regulation (FAR) clause 52.219-9 requires Harvard to develop a Subcontracting Plan for use of Small and Small Disadvantaged Businesses. FAR part 19 defines subcontracting as any procurement vehicle used to pay for or obtain goods or services from anywhere outside the institution. In other words, the government does not distinguish between subcontracts for commercial goods and services and those for collaborative or programmatic effort – they are all subcontracts under the FAR.
When these plans are required, prime contractors, such as Harvard, agree to purchase a percentage of the supplies and services required for the performance of the contract from small and minority businesses. Some Federal agencies set specific goals. Most rely on the prime contractor to make a “good faith effort.” The Subcontracting Plan specifies which items / commodities will be purchased from small and minority businesses, the total dollars to be spent each with small and minority businesses, and the percentage of total dollars budgeted for supplies and services that these purchases represent.
When required, the Subcontracting Plan is submitted by the Principal Investigator/Grants Manager to the appropriate SPA office along with the research proposal and budget. Once the award has been made, the Subcontracting Plan becomes part of the contract and the Principal Investigator is expected to meet the goals set in the Plan.