Subcontracting Plan Template & Guide
Every other-than-small business bidding on contracts above $750,000 needs a subcontracting plan. It is not optional — proposals without compliant plans are rejected as non-responsive. This guide covers the required structure, how to set realistic goals, and how to stay compliant through eSRS reporting.
Whether you are writing your first subcontracting plan or refining an existing one, this template will ensure you meet the requirements of FAR 19.704 and FAR 52.219-9.
Individual Subcontracting Plan Structure
FAR 52.219-9 specifies the minimum content of an individual subcontracting plan. The plan must be submitted as part of the proposal and is incorporated into the contract upon award. Each element below is required — omitting any one of them is grounds for rejection.
Goals (dollar and percentage)
Separate goals for each small business category: SB, SDB, WOSB, HUBZone, SDVOSB, and VOSB. Goals are expressed as both a dollar amount and a percentage of total planned subcontracting dollars.
Total subcontracting dollars
The total estimated dollar value of all planned subcontracts under this contract, which serves as the base for calculating goal percentages.
Description of principal supplies/services
A description of the principal types of supplies and services to be subcontracted, with an indication of which are to be subcontracted to small businesses.
Method for developing goals
An explanation of the methodology used to establish subcontracting goals, including market research, subcontractor identification, and historical data analysis.
Indirect costs in goals
A statement of whether indirect costs are included in the subcontracting goals. If included, explain the methodology for calculating the indirect cost component.
Program administrator
The name, title, and contact information of the individual responsible for administering the subcontracting plan and monitoring goal achievement.
Equitable opportunity procedures
A description of the efforts the contractor will make to ensure small businesses have an equitable opportunity to compete for subcontracts.
Outreach efforts
A description of the outreach activities planned, such as attending small business matchmaking events, using SBA's SubNet, and advertising subcontracting opportunities.
Compliance monitoring
A description of the internal procedures used to monitor compliance with the plan and report results, including flow-down requirements to subcontractors.
Good faith effort assurances
A statement committing the contractor to making good faith efforts to achieve the goals, with specific actions the contractor will take.
Goal Categories with Sample Percentages
The following table shows typical subcontracting goal ranges based on industry benchmarks. Actual goals should reflect your market research, subcontractor availability, and the specific contract requirements. Setting goals too high creates compliance risk; setting them too low signals lack of commitment and can hurt your proposal score.
Note: Subcategory goals (SDB, WOSB, HUBZone, SDVOSB, VOSB) are subsets of the overall small business goal, not additive. A $1M subcontract to a WOSB that is also an SDB counts toward SB, SDB, and WOSB goals simultaneously.
Good Faith Effort Documentation
Meeting your subcontracting goals is important, but the government evaluates good faith effort— the actions you take to try to meet your goals — even more closely than the numerical results. A contractor that falls short of its goals but can demonstrate extensive good faith efforts is in a much stronger position than one that meets its goals by accident.
Actions that demonstrate good faith effort include:
- Publishing subcontracting opportunities on SBA's SubNet and your company website
- Attending small business matchmaking events, PTAC conferences, and industry days
- Conducting outreach to small business trade associations and advocacy councils
- Maintaining a database of qualified small business subcontractors by capability area
- Breaking large requirements into smaller lots to enable small business participation
- Providing feedback to unsuccessful small business offerors on how to improve
- Flowing down subcontracting plan requirements to your first-tier subcontractors
- Designating a senior executive as the company's small business liaison officer
- Including subcontracting plan compliance in internal management reviews
Document every outreach activity, every solicitation you send to small businesses, and every award decision. This documentation is your defense if the contracting officer questions your good faith effort. Keep records of small businesses you solicited, their responses, and the basis for any decision not to award to a small business.
eSRS Reporting Walkthrough
The Electronic Subcontracting Reporting System (eSRS) at esrs.gov is where contractors submit their subcontracting reports. Two reports are required:
ISR — Individual Subcontract Report
- Covers a single contract
- Due semi-annually: April 30 and October 30
- Reports actual subcontract awards by category
- Submitted to the contracting officer for review
- Required for all contracts with subcontracting plans
SSR — Summary Subcontract Report
- Covers all contracts with a single agency
- Due annually: October 30
- Aggregates all subcontracting activity by agency
- Submitted to the agency's OSDBU
- Used by agencies to track government-wide goals
Each report requires the contractor to enter the dollar value of subcontracts awarded during the reporting period, broken out by each small business category. The system calculates percentages and compares them against the plan goals. The contracting officer reviews and either accepts or rejects the report, and may request additional information or corrective actions.
Late or missing eSRS reports are a common compliance failure. Set internal reminders well before the April 30 and October 30 deadlines, and assign a specific person to compile subcontracting data and submit reports. Many large contractors automate data collection from their procurement systems to ensure accuracy and timeliness.
Common Compliance Issues
Double-counting across categories
Counting a subcontract to a WOSB HUBZone firm toward the WOSB goal but not the HUBZone goal (or vice versa). Each subcontract should be counted in all applicable categories.
Counting pass-through costs
Including materials or ODCs passed through a small business subcontractor as subcontracting dollars when the small business does not add value to those costs. Only count the small business's value-added work.
Stale subcontractor data
Using outdated SBA certifications for subcontractors. A subcontractor's small business or set-aside status can change. Verify certifications at SAM.gov before counting toward goals.
Missing flow-down to subs
Failing to require first-tier subcontractors with subcontracts over $750K to submit their own subcontracting plans. This is a contractual requirement that is frequently missed.
Unrealistic goals
Setting goals that are too high to be achievable, then consistently falling short. Contracting officers track historical performance. Set goals you can reasonably meet, then exceed them.
Ignoring the plan after award
Treating the subcontracting plan as a proposal artifact rather than a contract requirement. The plan is incorporated by reference and is as binding as any other contract term.
Frequently Asked Questions
When is a subcontracting plan required?
A subcontracting plan is required for any contract exceeding $750,000 ($1.5 million for construction) that is awarded to an other-than-small business. Small businesses are exempt from subcontracting plan requirements. The plan must be submitted with the proposal and is evaluated as part of the source selection process. Contracts below these thresholds or contracts awarded to small businesses do not require subcontracting plans.
What is the difference between an individual and a commercial subcontracting plan?
An individual subcontracting plan covers a single contract and is the most common type. Goals and reporting are specific to that contract. A commercial subcontracting plan covers the contractor's entire commercial and government business and is available to companies that sell commercial products or services. Commercial plans are approved by the contractor's cognizant contracting officer and apply company-wide, avoiding the need for individual plans on each contract. Commercial plans must still include goals for all small business categories.
What happens if I fail to meet my subcontracting goals?
Failing to meet subcontracting goals does not automatically trigger penalties, but failing to make a good faith effort to meet them does. The contracting officer evaluates whether the contractor made good faith efforts based on actions taken, not just results. If the contracting officer determines that good faith effort was not made, the contractor may be assessed liquidated damages under FAR 52.219-16, calculated as the dollar amount of the shortfall. Repeated failures can also affect past performance evaluations and future award decisions.
What is eSRS and when are reports due?
eSRS (Electronic Subcontracting Reporting System) is the government's web-based system for collecting subcontracting reports. Contractors must submit two types of reports: the Individual Subcontract Report (ISR), which covers a single contract and is due semi-annually (by April 30 and October 30), and the Summary Subcontract Report (SSR), which covers all contracts with a specific agency and is due annually (by October 30). Reports must be submitted even if the contractor has no subcontracting activity to report during the period.
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