What is Good Faith?
Maximum Practicable Opportunity
July 23, 2010
Rochelle Lowe (SAIC)
DoD Western Regional Council
Education Chair
OTSB Prime Contractor Responsibilities
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Maximum practicable subcontracting opportunities
provided to small businesses
Market research was conducted
Small businesses solicited early in the acquisition
process
Small businesses provided adequate and timely
information
Good faith negotiations
Was additional assistance needed from the SBA? Did
the prime direct the SB to the SBA?
Bonding, lines of credit, help with insurance, etc.
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OTSB Prime Contractor Responsibilities
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Were SB associations utilized
Participation in formal Mentor-Protégé programs
Submitting subcontracting plans that reflect MPO
Make good faith effort to achieve (1) dollars (2)
percentage goals and (3) other elements of
subcontracting plan
Timely reports
Cooperate in compliance reviews – including
documentation of actual achievement of goals AND
good faith efforts for other elements
Provide pre-award written notification to unsuccessful
SB (over $100k and preference existed)
Best practice – provide pre-award written notification
under $100k
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Why is it important?
FAR 19.701
“Failure to make a good faith effort to comply with the subcontracting
plan” means willful or intentional failure to perform in accordance
with the requirements of the subcontracting plan, or willful or
intentional action to frustrate the plan.
FAR 19.702
(c) As stated in 15 U.S.C. 637(d)(8), any contractor or subcontractor
failing to comply in good faith with the requirements of the
subcontracting plan is in material breach of its contract. Further,
15 U.S.C. 637(d)(4)(F) directs that a contractor’s failure to make a
good faith effort to comply with the requirements of the
subcontracting plan shall result in the imposition of liquidated
damages.
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GOOD FAITH
Evidence that a large business prime contractor
has made a good-faith effort to comply with its
subcontracting plan or other subcontracting
responsibilities includes supporting
documentation that:
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OTSB performed one or more of the actions described
on slides 2 and 3
OTSB fulfilled all the requirements of its subcontracting
plan
OTSB failed to meet the goals – but over-achieved the
goal(s) by an equal or greater amount in one or more of
the other categories
13 CFR 125.3
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Maximum Practicable Subcontracting Opportunities
1. Break out contract work items into
economically feasible units
2. Conducting market research to identify small
business subcontractors and suppliers
through all reasonable means
3. Soliciting SB early in acquisition process
4. Provide adequate bid time
5. Negotiate in good faith with interested SB’s
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Maximum Practicable Subcontracting Opportunities
6. Send SB’s to the SBA for additional
assistance
7. Assist SB’s with bonding, lines of credit, etc.
8. Utilize available services of SB associates,
local, state, and Federal SB assistance offices
9. Participate in formal M/P agreements with
one or more SB proteges that result in
developmental assistance to the proteges
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What is ITSP
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In making the determination of Good Faith where to start
The Subcontracting Plan
. . . willful or intentional failure to perform in accordance
with the requirements of the subcontracting plan, or
willful or intentional action to frustrate the plan.
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GOOD FAITH
Evidence that a large business prime contractor
has made a good-faith effort to comply with its
subcontracting plan or other subcontracting
responsibilities
13 CFR 125.3
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