FAR Council publishes final rule on good-faith efforts

News - Published Nov 24, 2021

The Federal Acquisition Regulation (FAR) Council published a final rule on September 10, 2021 clarifying how contracting officers should evaluate a "good faith effort" (GFE) made by a prime contractor to comply with a small business contracting plan on federal projects.

Small business subcontracting plans are required from primes when a federal contract exceeds $750,000, or $1.5 million for construction, and contains subcontracting possibilities. Primes must then demonstrate how they mean to include small businesses (SBEs), veteran-owned small businesses (VOSBs), service-disabled veteran-owned small businesses (SDVOSBs), HUBZone small businesses, small disadvantaged businesses (SDBs), and women-owned small businesses (WOSBs).

The new final rule from FAR adopts existing Small Business Administration (SBA) guidance on what specific actions constitute a GFE, including but not limited to: conducting market research, soliciting small businesses as early as possible, breaking out work items, and negotiating in good faith. While these standards were part of existing SBA practice, the FAR rule consolidates the information into a single rule.

In evaluating the impact of its new rule, the FAR Council states that the rule provides "consistent and uniform examples to identify and hold large prime contractors accountable for failing to make a good faith effort to comply with their subcontracting plans."

Read the rule at https://www.govinfo.gov/content/pkg/FR-2021-08-11/pdf/2021-16366.pdf.