Research Topic

Small Business Subcontracting Plan (SBSP)


The federal government has detailed regulations requiring contractors to treat small businesses fairly and provide maximum opportunity for their participation in federal contract work (FAR 19.7 – The Small Business Subcontracting Program).

For certain federal contracts, the sponsor will require a Small Business Subcontracting Plan (SBSP). This plan outlines specific goals for subcontracting to various types of small businesses and details the process for reaching those goals and reporting progress. Types of small business include:

  • Small business
  • Veteran-owned small business
  • Service-disabled veteran-owned small business
  • HUBZone small business
  • Women-owned small business

Federal law requires a subcontracting plan if the value of contract exceeds a set dollar amount—currently $750,000. This amount is known as the “simplified acquisition threshold.1


For more details, visit...

 FAR 19.702 – Statutory Requirements

 FAR 52.219-8 – Utilization of Small Business Concerns

 FAR 52.219-9 – Small Business Subcontracting Plan


1The simplified acquisition threshold relevant to the SBSP is defined in the Federal Acquisition Regulations (FAR)

 How Do I...

...create a Small Business Subcontracting Plan (SBSP) when required by my contract?

  • Step 1: If the sponsor or SPA Award Negotiator notifies you that your contract needs a SBSP, review your contract to understand the reporting requirements (i.e. FAR 52.219-8 and 52.219-9). SPA will assist when it is time to report.
  • Step 2: Develop your SBSP. The Award Negotiator will obtain a SBSP template for you from the sponsor. For assistance completing the SBSP template, the department/PI should contact the Office of Procurement Diversity at
  • Step 3: Sign and submit your SBSP to the sponsor and send a final copy to the Award Negotiator at Sending the finalized SBSP will complete the award agreement and allow SPA to move forward with award execution.


SBSP Process Flow Chart




For assistance and/or questions in completing the SBSP:

Office of Procurement Diversity 

 Shauna Clayborn, Supplier Diversity Coordinator


For questions about expense tracking and reporting:

Sponsored Programs Administration (SPA)

 Charletta Little, Coordinator, Audit and Compliance



Why is the SBSP required?

To comply with federal law (FAR subpart 19.7), all federally sponsored contracts in excess of $750,000 require implementation of a subcontracting plan with established goals for expenditures to small businesses.

How do I find a certified small business?

Contact the Office of Procurement Diversity (OPD) at

Once awarded, who is responsible for tracking and managing small business subcontracting expenditures?

The PI/Department is responsible for managing and tracking expenditures as outlined in their SBSP. Accurate expenditures are necessary for future reporting obligations.

What if the PI fails to submit a SBSP within the time limit prescribed by the contracting officer?

If the PI fails to submit a plan, they may be ineligible for the award.

What if the PI does not meet the spend goals detailed in the SBSP?

The sponsor may determine that the PI and team have not made good faith efforts to procure small businesses. The University of Illinois could be held liable for fines and be required to return/refund the full amount of the contract.

It is important to formulate a realistic SBSP and execute its budgeting details. There are potential monetary penalties for not meeting goals (see FAR 19.702). Moreover, non-compliance issues, such as not meeting goals set in the SBSP are documented by federal agencies and could affect all future funding applicants at the University.

The fact that goods and services from a small business vendor may cost more is not considered by the government to be an acceptable excuse for not using them, unless the cost is prohibitive.

What if the original goals on the SBSP will not be met?

Contact the sponsor and work with them to submit a revised plan. Once complete, send the revised plan to your assigned Award Negotiator via

What if an amendment increases the award dollar amount?

In many cases, an amended plan will be required that includes prior and future supplier diversity goals.

Who completes the required Small Business Subcontracting Reports?

The SPA Audit and Compliance team, with assistance from the department/PI. Audit and Compliance compiles and submits a semi-annual Individual Subcontracting Report (ISR), due in April and October, as well as an annual Summary Subcontract Report (SSR), also due in October.

Where is the report data pulled from?

The data is pulled from a combination of Banner and department tracking systems.

What happens after the report is submitted?

SPA will receive an e-mail confirming whether the report is accepted or rejected. If accepted, the report is complete and requires no further action until the next reporting period. If rejected, SPA will contact the department for assistance in resolving the rejection.

What are some potential benefits of participating in the Small Business Subcontracting Program?
  • Quality goods and services to meet the needs of the University
  • Potential cost savings through competition
  • Support for small and local businesses
  • Creating jobs in the community
  • Ensuring fairness


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