Individual Subcontracting Reports (ISRs)

As a reminder, Other Than Small Businesses (OTSB) {also known as large businesses eSRS Home Page(LB)} are required to submit their Individual Subcontract Reports via the Electronic Subcontract Reporting System (eSRS) by 30 April 2015 (prime contractors and applicable large business first tier subcontractors).  Throughout the course of my blog I have posted several articles on the reporting requirements, you can review the following posts for further guidance:

For addition information you can visit the eSRS site for training guides and sample reports.


Subcontracting With The AbilityOne Program

Ability OneWhile reviewing small business booths at the recent Northern Virginia / DC Society of American Military Engineers Small Business Conference on 25 February I was reminded of the role the AbilityOne Program can play in maintaining a diverse small business subcontracting program.  Procuring goods and services through the program is mutually beneficial to all parties as it provides:

  • Meaningful work to visually impaired and disabled persons. The AbilityOne Program is the single largest employer of blind or severely disabled persons.  The program employs approximately 40,000 individuals through a network of 600 community based non-profit agencies.
  • Competition in subcontracting. Prospective buyers are assured of fair and reasonable prices.
  • Prime contractors can receive credit towards their small business goals for using the AbilityOne Program. The Defense Logistics Agency is continuously looking for innovative ways for prime contractors to engage the AbilityOne Program.  In addition, contractors may also support the AbilityOne Program by purchasing office or cleaning supplies from AbilityOne-authorized commercial distributors.
  • Some Federal agencies give favorable credit to offerors that formally commit to using the AbilityOne Program in their small business subcontracting plans.

The AbilityOne Program offers a variety of services for agencies and contractors to engage, such as:

  • Administrative Contact Centers
  • Contract Management Services
  • Document Management
  • Grounds Maintenance
  • Laundry
  • Secure Document Destruction
  • Secure Mail/Digital Document
  • Supply Chain Management
  • Total Facilities Management

The AbilityOne Product Manufacturing and Development includes:

  • Aircraft, Vehicle, and Electrical Equipment and Supplies
  • Clothing, Textiles, and Individual Equipment (safety vests and equipment)
  • Food Processing, Packaging, and Distribution
  • Medical and Dental Supplies
  • Office Supplies and Furnishings

The AbilityOne Program offers tremendous opportunities for individuals with disabilities, tax payers, and contractors alike.  I hope this short article has shed a little light on a valuable program.  If you would like more information lookup their website, call (800) 999-5963, or email.

Foreign Affairs Security Training Center Project (FASTC)

Project Updatefireams_150_1

Contractors interested in pursuing the FASTC project, to be constructed at the Virginia National Guard Maneuver Training Center, Fort Pickett, VA, GSA has announced the availability of the Supplemental Draft Environment Impact Statement (EIS).  An electronic version of the statement and other valuable information related to the project can be viewed at:

Key project information available so far:

  • Solicitation documents were made available 5 Jan at
  • The SF 1442 posted indicates step 1 Request For Qualifications are due 4 Feb 2015, 12 PM EST. However this conflicts the 5 Feb 2015 date listed in other documents posted at FBO.
  • The Pre-proposal conference is scheduled for 21 January 2015 at 11:00 AM EST at The Strawbridge Building, Philadelphia, PA. Interested parties must email the Contracting Officer by cob 01/19/15 to confirm their attendance. Only prime contractors may attend this conference.
  • The Public Information Meeting regarding the EIS will held Monday, 26 January 2015 from 7-8 PM EST at the Blackstone Conference and Retreat Center, Blackstone, VA. There will be a 45 day review and comment period which runs from 9 Jan – 23 Feb 2015.  All comments are due by 23 Feb 2015.
  • RFIs for step one should be submitted to the Contracting Officer by 30 Jan 2015.  Responses will be posted to FBO via amendment(s).

FY 15 NDAA Analysis of Contracting Related Sections

Policy ManualFor a succinct summary and analysis of the Carl Levin and Howard P. ‘Buck’ McKeon National Defense Authorization Act for Fiscal Year 2015 (P. L. 113-291) visit Where in Federal Contracting’s NDAA pages at: The pages are well organized for readers to select and review the sections most relevant to their interests.

Small Business Program Policies and Procedures Manual

Policy ManualIf your firm is a large business federal contractor does it have a small business program policy and procedures manual and an assigned small business liaison officer (SBLO)?

Two of my earlier posts dealt directly with the Establishment a Small Business Program and Small Business Utilization Surveillance and Reporting.  To continue the theme, this post deals directly with the content and benefits of a policy and procedures manual for a federal contractor’s small business program.  One of the central reasons for implementing a policy and procedures manual is to provide your federal contracting team with the guidance, knowledge and resources to lead and manage a successful program.  In addition, it can elevate your firm’s small business program from maintaining baseline compliance to a comprehensive small business program that establishes key performance indicators for those leading and working with your federal contracting team.  This is the first step in pursuit of being awarded the Dwight D. Eisenhower Award For Excellence – the SBA’s award for large prime contractors that have excelled in their utilization of small businesses as suppliers and subcontractors.

The main purpose of this post is to provide a few examples of the content that should be included in your firm’s manual and generate a few thoughts of what you think are relevant.  That said, this post is not a manual on the theory, structure, and format of drafting a policy and procedures manual.  (There are a number of great resources available to address those concerns.)  While many business share similar characteristics, such as business type, location, or market each firm is unique and must tailor the manual to fit its needs.

What should a policy and procedures manual for a small business program office contain?

  1. The CEO’s vision, intent, and policy letter articulating his or her intent. This will allow the team to operate effectively and efficiently with minimal supervision.
  2. The mission statement for the small business program.
  3. An organizational matrix and narrative outlining the small business team and its relationship to the company’s leadership and other departments. This is helpful because you may be asked to provide this during an audit.
  4. Federal subcontracting guidelines and definitions.
  5. A library of references, templates, and tools:
    1. Subcontracting plan templates for the various agencies
    2. Small business Self-certification forms
    3. Small business utilization tracking templates
    4. First tier large business subcontractor guidelines and notification letters
    5. Subcontracting plan review guidelines (to assist with the review of your first tier large business subcontractor subcontracting plans)
  6. A description of your firm’s ongoing small business outreach efforts. For example, what events, conferences, or functions centered on boosting small businesses does your firm participate in regularly.
  7. Guidelines for your firm’s participation in Mentor-Protégé Programs.
  8. Internal and external training programs on small business.


  1. The small business team will be able to operate more effectively and efficiently.
  2. Compliance efforts will be reduced.
  3. Streamlined integration with other departments.
  4. Potential gains in small business utilization.
  5. Stronger relationships with the small business community and potential long term strategic small business partners.



There are a number of styles and approaches available to help you develop a policies and procedures manual, but the first step along the journey is to identify what is needed.  The manual should be a living document that can mature as your company refines its processes.  In addition, through the process of drafting the manual you will identify and correct processes and procedures that need improvement.  I have drafted compliance guides for clients which turned out be an enlightening experience.  Particularly during the interview process, clients realize there are weaknesses in their program that can have a negative impact on their small business program.  When you are ready, you can tackle the completion of your firm’s federal contracting policies and procedures manual addressing the full spectrum of contracting matters.

Construction Project Team Partnering (Team Facilitation)


For the past 18 months I have been facilitating several project teams on medium and large complex healthcare construction projects in addition to providing other consulting services on projects around the country.  Over the next 12 months I will devote several posts on project team facilitation to share concepts, lessons learned, and resources for partnering.

In addition to writing about facilitation I will continue to post articles on government contracting with a special emphasis on compliance and small business topics.  Over the past year the top three articles are:

  • Standard Form 1413 Statement and Acknowledgement Form
  • Government Agency Small Business Mentor Protégé Programs
  • The Value of developing a FAR Matrix during proposal development

What is Facilitation

In my previous role as a military Inspector General and Joint Operations Planner, and consultant I have found facilitation very effective in helping military units and teams work through problems and increase efficiency, morale, and readiness.  Also, I carry some of my aircrew coordination training from the military in toolkit as a facilitator.  I believe the seven critical components of crew coordination carry over to project team facilitation, but four standout as particularly relevant based on my experience:Thunderbirds

  • Communication
  • Leadership
  • Adaptability/Flexibility
  • Situational Awareness

In general terms project team facilitation can be viewed as the process of an unbiased person helping a group identify, express, and solve problems, make decisions, and improve effectiveness.  Several key components of a group include how a group works together, the structure / composition of the team, and topic or subject the team is working on, i.e. the construction of a headquarters complex for the government client.

There are two, of many, factors that can influence the successful outcome of facilitation I would like mention.  First, it is important to select a facilitator that fits the group and is acceptable to all members of a group or team.  Second, the group members should be open to the concept of facilitation and participate in the sessions.  Without them the facilitation effort to move the team to a fully functioning group could move slower than desired.

Benefits of Facilitation

The benefits of facilitation are numerous and often reflect the effort everyone (to include the facilitator) contributes to a successful outcome.  To claim any wins resulting from the facilitation effort it is necessary to develop reasonable metrics to monitor the team over time, otherwise it will be difficult to measure any progress.  That said, several benefits include:

  • More efficient / effective teams
  • Better communication between owner – contractor
  • Improved problem solving – the entire team owns problems
  • Conflicts are resolved at the lowest possible level and those that can’t be resolved are escalated in accordance with the team’s escalation matrix.

For some, a facilitator is just an added expense to the project, but based on my experience of having benefited from facilitation as a project manager and as facilitator the benefits gained far outweigh the direct cost.  Often schedule gains can be realized, trouble areas can be identified earlier, and costly delays can be mitigated.  These all lead to improved project delivery and can provide for a more enjoyable work environment for the whole team, owner and contractor.

Standard Form (SF) 1413 Statement and Acknowledgement Compliance Tips


On 30 August 2013 I wrote an article describing submission requirements and compliance considerations for SF 1413s.  Since that time I have assisted a number of clients completing SF 1413s (for all tiers) and the post has had over a 1000 views, so I thought it is time to provide several additional tips.  As I mentioned in August, the SF 1413 is used by all executive agencies for all applicable subcontractors at all tiers to acknowledge they are aware of the required clauses stipulated in Federal Acquisition Regulation (FAR) 52.222-11.  Unfortunately there is very little published guidance available to assist contractors in completing the form.  The good news is it isn’t a complex form and with a few helpful tips the process can be more easily understood.

Compliance Tips

In the example below “Prime Contractor, Inc.” is the prime contractor, “1st Tier Subcontractor” is a first tier subcontractor, and “XYZ Plumbing” is a second tier contractor under “1st Tier Subcontractor”.  As this example progresses, I will highlight how lower tier subs are added to the process.

  1.  The Prime Contractor always goes in block 4 and executes blocks 10a through 12.  The subcontractor, regardless of tier, signing and acknowledging intent to comply with the listed clauses “Part II – Acknowledgement of Subcontractor” goes in block 5.SF 1413_EXAMPLE_1st tier Sub - Part I Graphic
  2. The firm awarding the work to the Subcontractor in block 5 is listed in 7.a. – “Name of Awarding Firm”.  At this point in the process it is “Prime Contractor, Inc.
  3. Any lower tier subcontractors are added in block 14:SF 1413_EXAMPLE_1st tier Sub - Part II Graphic
  4. Lower tier subcontractors listed in block 14 must complete a SF 1413 Statement and Acknowledgement form.  It is with the lower tier subcontractors I see the most mistakes made.  The prime contractor remains listed in block 4, however the new lower tier subcontractor, XYZ Plumbing, is now list in block 5.  The subcontractor (1st Tier Subcontractor) awarding the contract to XYZ Plumbing is listed in block 7a:SF 1413_EXAMPLE_2nd tier sub part I_Graphic
  5. XYZ Plumbing completes blocks 15 – 17 and forwards the prime contractor to complete the process and submit to the contracting officer.  According to regulation, the SF 1413s are required to completed within 14 days of subcontract award.

SF 1413_EXAMPLE_2nd tier sub part II_Graphic


Several state level contracting offices, such as Arizona or Wisconsin, have published guidance on completing the form for their contracts.  In addition, the USACE Sacrmento District and the Fort Worth have published some guidance, but both documents are 12 and 14 years old, respectively.

Certified Payroll Compliance Tips

After a short break my next two articles will address certified payroll requirements and theCrane Hoist SF-1413 – Statement and Acknowledgement form.  Both have been areas of focus recently and the timing appears right to share my thoughts with the Federal contracting community at large.  This post will address three issues with certified payroll:

  1. When to start the submissions
  2. How to address gaps or breaks when work is not performed on site
  3. When to stop submissions


When prescribed in a contract (per FAR 22.407(a) the Payrolls and Basic Records clause is required in solicitations and contracts in excess of $2,000 for construction within the United States), Federal contractors are required to comply with Federal Acquisition Regulations (FAR) 52.222-8 – Payrolls and Basic Records.  This contract clause contains several requirements, but the essence of the clause as it relates to this post, stipulates that contractors accomplish the following:

  1. The Contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the Contracting Officer.  Paragraph 52.222-8(b) provides direction for the submission requirements.
  2. The records must be maintained for a period of three (3) years for all laborers and mechanics’ work at the site of work.

Beyond the guidance included in the FAR and provided by the Department of Labor Wage and Hour Division (WHD), specific instructions or procedures on how to address gaps in certified payroll submissions and when to stop collecting certified payroll the regulations are silent.  The rules simply state what is contained in the bullet #1 above.  In light of this, I advise clients, if they have not already done so, to develop a corporate policy and corresponding procedures for staff, project teams, and subcontractors to follow.

Policy and Procedures Recommendations (Underlined / Bold)

Current Federal Acquisition Regulations and Department of Labor instructions offer only general guidelines instructing contractors and subcontractors (all tiers) to submit certified payroll and a statement of compliance on Davis-Bacon and Davis-Bacon Related Acts covered contracts for the preceding work week.  This creates some ambiguity of how to address breaks in work by some subcontractors and when reporting is no longer required.

To provide standardized procedures for certified payroll we have issued the following guidance.  The intent is to provide a clear process to augment existing guidance.  Please refer to the instructions provided to our subcontractors for the submission of certified payroll:

  1. Submit reports and statement of compliance in a timely manner for all tiers.  The initial report and all subsequent reports are due the week following when work was performed on site.
  2. Submit “no work” performed reports for breaks in work if a sub has a short term break (for example less than three to four weeks) on the project.
  3. Submit a memo or letter stating “no work” to be performed for long term breaks (greater than four weeks) on this project.
  4. When a subcontractor or subsequent sub tier subcontractor is complete with their assigned work on the project, further reports are NOT required.  The last report will be marked as “final” to communicate their departure from the project site.  If they are called back then reporting would be required.


Federal Acquisition Regulations

Department of Labor Wage and Hour Division

Department of Labor Field Operations Handbook – Chapter 15

Naval Facilities Engineering Command Davis-Bacon Contractors Guide (20070815)

Department of Housing and Urban Development – Making Davis-Bacon Work (June 2006)

Mid-Year Individual Subcontract Reports

This is a quick reminder for Federal contractors holding a contract that includes a subcontracting plan.  This month the mid-year Individual Subcontract Reports (ISRs) are due for large businesses.  As with previous reports, ISRs are submitted via the Electronic Subcontract Reporting System (eSRS).  You can refer to another article I posted on May 21st 2013, highlighting Small Business Utilization Monitoring and Reporting requirements.

Quick Tips:

  • The ISR reporting period is 1 October 2013 – 31 March 2014 and the project team (or group responsible for managing reporting) should have collected and categorized all of the subcontract awards.
  • Collect and organize all of the subcontract award data (business name, award date, and amount) made during the period sorting by business type, OTSB, WOSB, SDVOSB, etc.  This can be accomplished using Excel, Access, some contract / project management databases, or paper and pencil.
  • Ensure the required self-certification forms, 8(a), and HUBZone certifications are collected and reviewed for accuracy.  Self-certifications are acceptable for: Small Businesses, Small Disadvantaged Businesses, Woman Owned Small Businesses, Veteran Owned Small Businesses, and Service Disabled Veteran Owned Small Businesses.
  • Ensure the correct subcontracting plan goals are entered into the ISR being submitted.
  • Enter the required data in the eSRS ISR reporting tool.  There are several useful step by step guides with detailed instructions (  Of note the ISR tool will calculate the participation rate percentages for you, although I prefer to calculate the small business (SB) participation rates prior to beginning the process.
  • If required, enter an appropriate remark explaining why goals have not been met.  Regardless if the goals are or are not being met, the team buying out the subcontracts should keep detailed notes on the bidding for each bid package.  This is very valuable information to use for remarks in the ISR in addition to any future contract work in the same region.
  • Even if a contractor did not have any subcontracting activity during the reporting period they are still required to submit a report.  See eSRS FAQs for details.


  • Don’t procrastinate starting the reporting process and make sure time is left to review the data for accuracy and completeness.
  • If you have delegated the responsibility for data entry of the ISR, make sure you review the material before it is submitted.  Any errors will find their way back to you.
  • Mid-year Summary Subcontract Reports are not required any longer for DoD.


Federal Contracting Subcontractor Payment & Retainage Considerations

After working with a client recently I thought it appropriate to discuss withholding and AIA_Billingretainage considerations for Federal contractors.  Similar to many other facets of government contracting, it is wise to be fully aware of the Federal Acquisition Regulation clauses in your contract and their impact on your business decisions.  So one tool a contractor has to encourage a particular behavior is to withhold payment from a subcontractor.  However, there are a few rules to live by.

Under the Prompt Payment for Construction Contracts Clause (FAR 52.232-27) payment to subcontractors is required within seven (7) days of receipt of funds paid to the Contractor.  Under this clause “Subcontractor Payment Entitlement” the contractor may not request payment from the Government any amount withheld or retained under this clause.  However, this clause does not limit or restrict the right of a contractor or subcontractor at any tier to retain (without cause) payment for work performed without incurring any obligation to pay late payment interest penalty.  The amount (percentage) to be retained is not stipulated in this clause, it is negotiated in the subcontract.  This allows flexibility based on unique factors of each subcontract.

Should this tool become necessary, the general requirements for retainage & withholding payment include:

  1. Provide notice to the subcontractor specifying:
    1. The amount withheld;
    2. The specific causes for the withholding under the terms of the subcontract; and
    3. The remedial actions to be taken by the subcontractor in order to receive payment of the amounts withheld.
  2. Provide a copy of the subcontractor notification to the Contracting Officer.

Under extenuating circumstances the determination of the need for retainage, or withholding payment from a subcontractor may be discovered after making a request for payment to the Government, but before making payment to the subcontractor.  If it is determined that all or a portion of the payment due to the subcontractor is subject to withholding under these circumstances, the following must be complied with:

  1. Subcontractor Notice – Provide notice as soon as practicable upon ascertaining cause for withholding, but prior to due date for payment to subcontractor {FAR 52.232-27(g)}.
    1. The amount withheld;
    2. The specific causes for the withholding under the terms of the subcontract; and
    3. The remedial actions to be taken by the subcontractor in order to receive payment of the amounts withheld.
  2. Contracting Officer Notice – Provide notice to the Contracting Officer (copy of the subcontractor notification), as soon as practicable {FAR 52.232-27(e)(1)}
  3. Subcontractor Progress Payment Reduction – reduce the subcontractor’s progress payment by an amount not to exceed the amount specified in the notice of withholding furnished to the Contracting Officer and Subcontractor {FAR 52.232-27(e)(1)}.
  4. Subsequent Subcontractor Payment – Pay the subcontractor as soon as practicable after the correction of the identified subcontractor performance deficiency, and;
    1. Make payment within seven (7) days after correction of subcontractor MoneyChangingHands_webperformance deficiency (unless funds must be recovered from the government).
    2. Make payment within seven (7) days after funds are recovered from the government.
    3. Contractor to incur an obligation to pay interest for late payments in accordance with FAR 52.232-27(e)(4)(ii).
  5. Notice to the Contracting Officer, upon:
    1. Reduction of the amount of any subsequent certified application for payment.
    2. Payment to the subcontractor (withheld amounts and corresponding dates of withholding).
  6. Interest to Government – Provide interest payment to the government as stipulated by FAR 52.232-27(e)(6) for late payments.

As with many contractual issues it is always recommended to discuss withholdings and retainage with legal counsel for any questions or concerns.