Small Business Subcontracting Plans: 2026–2027 Guide

A small business subcontracting plan is a written commitment, made part of a federal contract, that sets out how a large prime contractor will give small businesses a fair chance at its subcontract work. It states dollar and percentage goals for small, HUBZone, women-owned, small disadvantaged, veteran-owned and service-disabled veteran-owned businesses, and it explains how the prime will find those firms, keep records and report results. The rules come from FAR 52.219-9 and the Small Business Act.

This guide is for contracts managers, compliance staff and small business liaison officers at prime contractors. It covers when a plan is required, what it must contain, the goals for fiscal years 2026 and 2027, and reporting in SAM.gov. It reflects the rules as of late October 2026.

Where the subcontracting plan rules live now

For years the small business subcontracting program sat in FAR subpart 19.7, with the threshold at 19.702 and plan requirements at 19.704. The Revolutionary FAR Overhaul rewrote Part 19, and agencies adopted the new text through class deviations in late 2025 and early 2026. In the overhauled Part 19, the threshold and exemptions are at 19.109, plan types and review are at 19.206, and post-award compliance is at 19.302. The Department of Defense adopted it through Class Deviation 2026-O0037, revised on July 24, 2026.

The clause number did not change. Your contract still uses 52.219-9, Small Business Subcontracting Plan, and 52.219-16, Liquidated Damages. The overhaul version of 52.219-9 was revised in February 2026 to move reporting to SAM.gov, and it allows more time to file than the older clause. Older contracts may still contain the earlier clause, so read the version in your contract before you rely on any date below.

One point of confusion: limitations on subcontracting is a different rule. It caps how much a small business prime may pass to other firms on a set-aside. A subcontracting plan applies to large primes.

When is a small business subcontracting plan required?

A subcontracting plan is required when all of these are true:

• The contract or modification is expected to exceed $900,000, or $2 million for construction of a public facility.
• The contract has subcontracting possibilities.
• The contractor is other than small under the contract’s size standard.

These thresholds rose on October 1, 2025, from $750,000 and $1.5 million, under a FAR inflation adjustment rule published August 27, 2025. Acquisition.gov lists the change in its October 1, 2025 threshold notice. They apply to solicitations and contracts issued on or after that date.

The apparently successful offeror, or the selected bidder in sealed bidding, must provide an acceptable plan by the contracting officer’s deadline or lose eligibility for award. A modification that pushes a contract over the threshold can also trigger a plan if the contracting officer finds subcontracting opportunities. The contracting officer may also require one if a size rerepresentation changes you from small to other than small.

Who is exempt

• Small business concerns.
• Personal services contracts.
• Contracts or modifications performed entirely outside the United States and its outlying areas.
• Contracts where the contracting officer finds no subcontracting possibilities. That finding needs a detailed rationale and approval above the contracting officer.

Commercial items get two breaks rather than an exemption. A prime selling commercial products or services may use a commercial plan, which the FAR calls the preferred type for that work. And subcontractors do not need their own plans when the prime contract was awarded under FAR Part 12, or when the subcontractor provides a commercial product or service under 52.244-6.

Flow-down to large subcontractors

Your plan must require large subcontractors to adopt their own plans when their subcontracts exceed the same threshold and offer further subcontracting possibilities.

What a subcontracting plan must include

The three plan types

• Individual plan. Covers one contract, including options, with separate goals for the base period and each option.
• Master plan. Contains every required element except goals and is approved on a plant or division basis. It lasts three years after approval. You attach contract-specific goals to it.
• Commercial plan. Covers your fiscal year and all commercial products and services sold by the company or a division. Once approved, agencies may not ask for another plan while it is in effect.

Required elements under 52.219-9(d)

Each plan must include:

• Separate goals for small business, VOSB, SDVOSB, HUBZone, SDB and WOSB subcontracting, in dollars and as a percentage of total planned subcontract dollars.
• The total dollars planned for subcontracting, and the dollars planned for each category.
• The principal types of supplies and services to be subcontracted, and which types you expect to buy from each category.
• How you developed the goals and how you will identify sources.
• Whether indirect costs are included in the goals and how you calculate their share.
• The name and duties of the person who runs your subcontracting program.
• Your efforts to give these firms an equitable chance to compete.
• Assurances that you will flow down 52.219-8 and require plans from large subcontractors.
• Assurances that you will file reports, cooperate with studies and keep the required records.
• A good faith commitment to use the small businesses you named or relied on in your proposal, and a written explanation within 30 days of completion if you do not.
• Assurances that you will pay small business subcontractors on time and tell the contracting officer about reduced or late payments.

There is no single mandatory government form. If you are looking for a small business subcontracting plan template or sample, ask the contracting officer or the agency small business office which format they want, and build it around the elements above so nothing is missing.

Small business subcontracting goals for 2026 and 2027

The government-wide goals come from 15 U.S.C. 644(g). They are floors that apply every fiscal year:

• Small business: at least 23 percent of prime contract dollars.
• Small disadvantaged business (SDB): at least 5 percent of prime and subcontract dollars.
• Women-owned small business (WOSB): at least 5 percent.
• HUBZone small business: at least 3 percent.
• Service-disabled veteran-owned small business (SDVOSB): at least 5 percent. The FY2024 National Defense Authorization Act raised it from 3 percent.

Two recent changes matter. From FY2022 to FY2024, executive action set SDB targets above the statute, up to 13 percent in FY2024. For FY2025 the SDB goal returned to the 5 percent statutory level. The higher SDVOSB goal now applies every year. As of mid-2026 SBA had not posted FY2026 agency goals, so expect the statutory floors to carry into FY2027, which began October 1, 2026.

Government-wide goals are not your contract goals. Your negotiated plan sets goals for your contract or your company, as a share of your planned subcontract dollars. The contracting officer checks that they are realistic for the work, the pool of available small firms and your past results. The FAR tells the contracting officer to watch for goals set low to limit liquidated damages risk. Still, agencies count your HUBZone, WOSB, SDB and SDVOSB subcontract dollars toward their own goals, so expect pressure in the categories the government misses. In FY2025 those were WOSB and HUBZone, according to the Congressional Research Service.

Subcontract reporting in SAM.gov: the ISR and SSR

GSA retired the Electronic Subcontracting Reporting System, eSRS.gov, on February 20, 2026. Its retirement notice points to SAM.gov, where reporting now runs as Subcontracting Plan Reporting (SPR). An SBA memo dates the switch to February 24, 2026. The SAM.gov subcontracting reporting page has the current guidance.

Individual subcontract report (ISR)

The ISR is filed for each contract with an individual plan. It shows cumulative results on that contract against its goals. It is due twice a year, for the periods ending March 31 and September 30, plus a final report after the contract ends. You file a report even if you had no subcontracting activity. Commercial plans do not file ISRs.

Summary subcontract report (SSR)

The SSR is filed once a year for the government fiscal year ending September 30. Under an individual plan, it covers all subcontracting on that agency’s contracts, with indirect costs on a prorated basis. You file a separate SSR for each agency, and DoD takes one consolidated report. A commercial plan holder files one SSR, with all indirect costs, for every contract under the plan.

Due dates

The overhaul version of 52.219-9 gives 45 days after each period ends. That makes the ISRs due May 15 and November 14, and the SSR due November 14 for the year ended September 30. GSA’s guidance for primes gives the same dates. Older contracts with the earlier clause use 30 days, which means April 30 and October 30. The overhaul clause gives conflicting dates for commercial plan SSRs, 45 days in one paragraph and 30 days in another. File by the earlier date unless your contracting officer tells you otherwise.

The first SAM.gov cycle did not go smoothly. SBA extended the FY2026 mid-year ISR deadline twice, from May 15 to June 14 and then to July 14, 2026, while GSA fixed the system. For the FY2026 year-end ISR and SSR, watch SAM.gov announcements for any change to November 14.

Access and lower tiers

To file, a SAM.gov user needs the Entity Reporting domain, an Administrator or Data Entry role, and permission to manage subcontracting plan reports for your UEI. Report only awards to your immediate next tier. Large subcontractors with their own plans file their own ISRs, and the firm that awarded the subcontract reviews them. SAM.gov added ISR reporting for second-tier and lower subcontractors in 2026. You still cannot take credit for lower-tier awards under the FAR clause, except designated credit from an Alaska Native Corporation or Indian tribe. SBA’s rule at 13 CFR 125.3 lets a single-agency, single-contract plan elect lower-tier credit, so ask your contracting officer before you count any.

Finding and verifying small business subcontractors

Start with SBA’s Small Business Search (SBS), which replaced the Dynamic Small Business Search in 2025, and with entity records in SAM.gov. A firm may use SAM as a source list, but that does not replace outreach.

What you may rely on depends on the category:

• Small business and SDB: You may accept the subcontractor’s written representation with its offer, or its representation in SAM if it confirms that entry is current. You may not require a firm to register in SAM just to represent its size.
• HUBZone: Confirm SBA certification in SAM or SBS. This applies under both the old and new clause.
• WOSB, VOSB and SDVOSB: Under the overhaul clause, the firm must be certified by SBA to count in that category. The older clause let primes accept a self-representation, so check which version your contract has.

A prime acting in good faith is not liable for a subcontractor’s misrepresentation, unless it had reason to question it. Keep the evidence in each subcontract file.

Counting indirect spend toward subcontracting goals

Many primes miss goals because they look only at direct work on the contract. The 52.219-9 plan may include a proportionate share of products and services normally charged as indirect costs. The plan must say whether it does, and how the share is calculated. Under SBA’s rule, an individual plan must include indirect costs when the contract exceeds $7.5 million, and the SSR includes prorated indirect costs either way. A commercial plan must include all indirect costs, apart from excluded items such as salaries and benefits, lease payments, taxes, bank fees and municipal utilities.

That makes routine purchases count. MRO supplies, safety gear, janitorial products, office supplies and IT equipment bought from a certified small business can count toward your goals, if your plan includes indirect costs. Purchases from your own affiliates do not count.

Hubzone Depot is an SBA-certified HUBZone and WOSB supplier. It is also a WBENC-certified Women’s Business Enterprise. One dollar spent with it can count toward small business, HUBZone and WOSB goals, where your plan allows. It supplies MRO, safety, janitorial, office and IT products through a marketplace that works inside SAP Ariba, Coupa, Oracle, Workday and 28 more procurement systems. It sources anything else through Spotbuy.

Good faith efforts and what happens if you miss goals

Missing a goal is not by itself a failure of good faith. At the end of the base period or any option, the contracting officer looks at your whole effort. Signs of good faith include:

• Breaking work into units small firms can bid on.
• Market research in SAM and SBS, notices on SBA’s SubNet, and matchmaking events.
• Soliciting small firms early and giving them plans and specifications in time.
• Negotiating in good faith and referring firms to SBA for help.
• Exceeding one category by at least as much as you missed another.

Signs of bad faith include no market research, no named program administrator, missed or unacceptable ISRs and SSRs, poor records, late payment of small subcontractors, and falsified award data.

If the contracting officer finds you failed to make a good faith effort, that is a material breach. You get written notice and at least 15 working days to respond. A final decision can require liquidated damages under 52.219-16 equal to the dollar amount by which you missed each goal. The failure can also go into past performance evaluations, and past compliance is a factor in future responsibility decisions.

Small business subcontracting plan checklist

• Confirm the contract value against the $900,000 or $2 million threshold, including options.
• Confirm which version of 52.219-9 is in your contract and note its due dates.
• Choose an individual, master or commercial plan.
• Set goals for all six categories from real spend data, including indirect costs where allowed.
• Name a program administrator and give that person SAM.gov reporting access.
• Verify every subcontractor’s status, and save the evidence.
• Flow down 52.219-8 and require plans from large subcontractors over the threshold.
• File ISRs and SSRs in SAM.gov on time, and fix rejected or flagged reports within 30 days.
• Document outreach, solicitations and reasons small firms were not selected.

Work with a HUBZone and WOSB supplier

If your plan includes indirect costs, the fastest gains often come from spend you already have. Hubzone Depot lets your buyers keep ordering MRO, safety, janitorial, office and IT products from inside the procurement system they use. It sends spend statements by contract and period, with its UEI and certifications, to support your SAM.gov subcontract reports. To see how it fits your plan, work with a HUBZone and WOSB supplier.