In the 1985 movie Mad Max Beyond Thunderdome, a symbiotic character was introduced that can be likened to the current government contracting economy. Master Blaster was a character comprised of Master, a tiny man who controlled the giant on which he sat, Blaster. Like a sparrow on the back of a rhinoceros, their symbiotic relationship ensured their survival and success. Well established in government contracting is the observation that small businesses tend to be agile and innovative while large corporations have the depth and breadth of resources to meet the government’s complex requirements. And often, small and large companies will bring their unique skill and competency together to achieve goals otherwise unobtainable without team effort.
Like the character Master Blaster, these symbiotic relationships are not always equal. The larger company typically serves the prime contractor role and the small business the subcontractor. Under government contracting regulations, the prime contractor maintains privity with the government client – meaning the small business subcontractor has no contractual relationship with the government. In some well documented cases, after an award – the large companies would self perform the work that was supposed to be performed by the small business, thereby excluding the small business from work and revenue that they earned through their participation on the team.
In 2010, Congress enacted the Small Business Jobs Act (P.L. 111-240) to rectify subcontracting concerns as well as other issues that mattered to small businesses. In November 2016, a new rule amended the Federal Acquisition Regulation clause 52.219-9, Small Business Subcontracting Plan, and went into effect. 52.219-9 now requires prime contractors to make good-faith efforts to use their proposed small-business subcontractors during a contract’s performance in a way that is consistent with the small business bid on the contract. If the prime contractor is unable to make this effort, the prime is required to explain in writing to the contracting officer the reasons why they are unable to do so.
The rule changes also came with teeth. Under subpart 19.704(a)(2), subcontractors now have privity of contract with the Government’s contracting officer on matters related to small business goaling; and contracting officers now have discretionary authority to require prime contractors to establish subcontracting goals both in terms of total subcontract dollars and in terms of total contract dollars. The contracting officer can also seek certain remedies including cancellation of the contract’s option years, as well as monetary penalties assessed to the prime contractor.
With these developments, small businesses are ensured their reward for their participation in government procurements. Though Blaster still has the strength, Master isn’t as feeble as before.