Federal Acquisition Regulation (FAR) Subpart 19.7

Federal Acquisition Regulation (FAR) Subpart 19.7 — The Small Business Subcontracting Program (Practical Guide for Federal RFP Teams)

FAR Subpart 19.7 is the part of the Federal Acquisition Regulation that governs small business subcontracting obligations for prime contractors on U.S. federal contracts. If your organization is other than small for the NAICS assigned to the requirement, FAR 19.7 is the rulebook that determines when a subcontracting plan is required, what it must contain, how it is reviewed, how it is reported in eSRS, and what happens when you don’t make a good faith effort.

For bid and proposal teams, FAR 19.7 is not “nice-to-have compliance.” It directly impacts award eligibility, post-award contract administration, and past performance. In negotiated acquisitions and sealed bidding, solicitations above the FAR threshold and with subcontracting possibilities can require a subcontracting plan, and failure to submit or negotiate an acceptable plan within the contracting officer’s timeline can make an offeror ineligible for award.

When FAR 19.7 triggers a subcontracting plan (and when it doesn’t)

A subcontracting plan requirement generally applies when:

• The requirement is expected to exceed $900,000 (or $2 million for construction) and has subcontracting possibilities.
• A contract modification pushes a previously plan-less contract over the same threshold and subcontracting opportunities exist.
• For certain multiple-award setups with more than one NAICS, the plan requirement is evaluated against the portion(s) where the offeror is other than small.

Subcontracting plans are not required in some common scenarios, including:

• When the prime is a small business.
• Personal services contracts.
• Performance entirely outside the United States and its outlying areas.
• Certain within-scope modifications when the contract does not include the small business utilization clause.

Key definitions proposal teams should know (because solicitations assume them)

FAR 19.7 defines the plan types you’ll see in RFP instructions:

• Individual subcontracting plan: contract-specific, covers the full contract period (including options) and bases goals on planned subcontracting for that contract.
• Master subcontracting plan: contains required elements except goals and can be incorporated into individual plans once approved.
• Commercial plan: covers a contractor’s fiscal year and applies broadly to commercial products/services sold by all or part of the company (often preferred for commercial items when applicable).

What a compliant subcontracting plan must include (FAR 19.704 checklist)

At minimum, your plan should be structured to clearly show:

• Separate percentage goals for small business categories (SB, VOSB, SDVOSB, HUBZone, SDB, WOSB).
• Total dollars planned for subcontracting and how goals were calculated.
• A description of principal supplies/services to be subcontracted and the types of subcontractors expected.
• The method used to identify potential small business sources (market research approach).
• The name/title of the plan administrator (who owns execution).
• A description of outreach efforts to ensure equitable opportunity.
• A clear statement of reporting and recordkeeping methods, aligned to eSRS submission requirements.
• Assurances and flowdowns where applicable (including how you will manage lower-tier participation when relevant).

Post-award reality: eSRS reporting, monitoring, and enforcement

Once awarded, subcontracting compliance becomes measurable. FAR assigns contracting officers post-award responsibilities that include ensuring subcontracting reports are submitted into eSRS within specified timelines and reviewing those reports promptly. If performance indicates the contractor did not make a good faith effort to comply with the subcontracting plan, FAR provides for written notice, potential past performance impacts, and liquidated damages under the appropriate clause framework.

Proposal-ready template: Subcontracting Plan Outline (copy/paste structure)

Use this outline to draft a plan that maps cleanly to FAR expectations:

1. Contract Identification

   • Solicitation/contract number, NAICS, period of performance, total contract dollars, total planned subcontract dollars

2. Plan Type

   • Individual / Master (incorporated) / Commercial (if applicable) with justification

3. Subcontracting Goals Table

   • Category-wise goals as % of total subcontract dollars (and optional % of total contract dollars if required)

4. Scope of Subcontracting

   • What will be subcontracted (trade packages, services, materials, specialty scopes)

5. Methodology

   • How goals were developed (historic spend, available market, work package sizing, geographic considerations)

6. Small Business Sourcing Plan

   • Databases, outreach events, partner networks, capability matching approach

7. Administration and Controls

   • Named administrator, internal review cadence, sourcing approvals, subcontract award documentation

8. Reporting (eSRS)

   • ISR/SSR approach, reporting calendar, data owners, reconciliation method

9. Good Faith Execution Plan

   • Actions taken when goals lag (re-bundling scopes, adding second-tier opportunities, targeted outreach)

10. Records Retention

• What records will be maintained and where (quotes solicited, awards made, outreach logs, payment evidence)

Fast internal compliance checklist (bid teams + contracts teams)

• Confirm whether you are other than small for the NAICS.
• Confirm requirement exceeds $900,000 / $2M construction and has subcontracting opportunities.
• Choose the correct plan type: individual vs commercial vs master incorporation.
• Build goals that you can defend with a clear methodology.
• Assign a plan administrator before submission and align with your delivery org.
• Set a reporting calendar and owners for eSRS data integrity.
• Ensure subcontract payment processes support “timely payment” expectations.
• Treat “good faith effort” as an execution discipline, not just a narrative in the plan.

Sources

• https://www.acquisition.gov/far/subpart-19.7
• https://www.acquisition.gov/far/19.701
• https://www.acquisition.gov/far/19.702
• https://www.acquisition.gov/far/19.703
• https://www.acquisition.gov/far/19.704
• https://www.acquisition.gov/far/19.705-6
• https://www.acquisition.gov/far/19.705-7
• https://www.acquisition.gov/far/19.707
• https://www.acquisition.gov/far/52.219-8
• https://www.acquisition.gov/far/52.219-9
• https://www.acquisition.gov/far/52.219-16
• https://www.esrs.gov/