Pursuant to Section 211 of Public law , Section 8(d) and FAR Subpart 19.7 Office of federal Procurement Policy, Letters 80-2 and 80-4
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1 COMMERCIAL PLAN SUBCONTRACTING PLAN FOR SMALL BUSINESS, HUBZONE SMALL BUSINESS, SMALL DISADVANTAGED BUSINESS, WOMEN-OWNED SMALL BUSINESS, VETERAN-OWNED SMALL BUSINESS AND SERVICE-DISABLED VETERAN-OWNED SMALL BUSINESS CONCERNS For the period Oct to until Sept SUBMITTED BY: Meggitt, (Orange County), Inc (Meggitt OC) MYFORD RD, IRVINE, CA DATE PREPARED: October 1, 2015 Pursuant to Section 211 of Public law , Section 8(d) and FAR Subpart 19.7 Office of federal Procurement Policy, Letters 80-2 and 80-4 APPLICABLE TO: All inquiries for CY 2016 DESCRIPTIONS OF PRODUCTS AND SERVICES: Vibration monitoring systems, sensing devices and accessories I. PURPOSE This commercial products plan hereinafter called the Plan is submitted in compliance with the policy of the United States Government that Small, HUBZone Small, Small Disadvantaged, Women-Owned Small, Veteran-Owned and Service-Disabled Veteran-Owned Small Business Concerns, Alaska Native and Indian Tribes (both not certified SBA and not small business) be given the maximum practicable opportunity to participate as subcontractors in the performance of contracts awarded by any Federal agency and in compliance with the requirements of above-mentioned Law, Policy and Regulations. The scope of this plan encompasses all operations at two Meggitt OC manufacturing sites, Irvine, CA and Sunnyvale, CA. The Irvine site is primarily a vibration monitoring and sensing device assembly operation with supporting administrative functions, while the Sunnyvale site produces micro-electronic modules from silicon base material. II. DEFINITION A. Small Business Concern (SB), HUBZone Small Business Concern (HZSB), Small Disadvantaged Business Concern (SDB), Women-Owned Small Business Concern (WOSB), Veteran-Owned Small Business Concern (VOSB) and Service-Disabled Veteran-Owned Small Business Concern (SDVOSB), Alaska Native and Indian Tribes not certified as small business, and Alaska Native and Indian Tribes which are not small business as defined in accordance with FAR B. The term subcontract shall mean any agreement (other than one involving an employeremployee relationship) entered into by Meggitt OC with a non-affiliated company or Meggitt Sensing Systems Myford Road, Irvine CA 92606, USA Meggitt (Orange County), Inc d/b/a Meggitt Sensing Systems Tel: +1 (949) Fax: +1 (949)
2 individual calling for the direct and indirect purchase of raw materials, components, supplies and/or services needed to support our operations. III. GOALS Methodology The targets established by Meggitt OC to meet SBA objectives include direct and indirect procurement categories. The methodology of spend allocation comes from reviewing the controllable and uncontrollable expense budgets for the calendar year, and then comparing to actual cost expenditures. Direct Material Direct categories include purchases of raw materials, components, and subassemblies. Indirect Material Indirect material includes supplies, services, packaging, furniture, facilities, maintenance, and other business categories to support our operations. Allocation for Small Business concerns The ratio that will be used to determine the allocation will be based upon total sales of products on the GSA Schedule to all sales of these products to all commercial customers, and then the GSA sales for the same period of time. Example: If GSA Sales amount to 10% of total commercial sales, then 10% of the Indirect Costs will be used to meet subcontracting goals and reporting. These goals were developed using such data as: projected purchases, types of commodities to be purchased, current approved supplier list, expected expansion or contraction of our SB, HZSB, SDB, WOSB, VOSB and SDVOSB, Alaska Native and Indian Tribe supplier base and historical performance, and strategic initiatives to meet operational objectives due to poor performing suppliers. The total annual dollars planned to be subcontracted for products and services to both large and small businesses is $50,947,436. Our goal is to award 38% of this amount ($19,360,026) to other than large businesses, with a ratio of approximately 62:38 direct. Projected spend in categories is identified below: Direct Spend Dollars % Allocation Project Direct Spend $ 50,947,436 Woman- Owned $ 4,075,795 8% Small Disadvantaged $ 3,056,846 6% Hub-Zone $ 2,547,372 5% Veteran Owned $ 2,802,109 6% Service Disabled $ 1,783,160 4% Small Business $ 5,094,744 10% Subtotal Small Business $ 19,360,026 38% Large Business $ 31,587,410 62% Total Dollars to be Subcontracted $ 50,947, % 2
3 2016- Indirect Spend Dollars % Allocation Projected Indirect Spend $ 6,500,000 Woman- Owned $ 82, % Small Disadvantaged $ 20, % Hub-Zone $ % Veteran Owned $ 38, % Service Disabled $ % Small Business $ 2,200, % Subtotal Small Business $ 2,340,000 36% Large Business $ 4,160,000 64% Total Dollars to be Subcontracted $ 6,500, % To increase market competitiveness and requests from strategic customers, Meggitt OC is tasked by the parent company (Meggitt PLC) to increase spending for material in Low Cost Countries (LCC s). The balance of subcategory class percentage targets are increasing. Challenging Meggitt- OC are the Alaska Native and Indian Tribe categories. SCM will be initiating a program to identify suppliers in each of these categories, but opportunities could be limited due to the emphasis of LCC s strategies. SBA suppliers will continue to be first source selection for development, qualification, and production of all DoD and government applications that are not commercial/cots (Commercial Off the Shelf). Meggitt OC has classified these parts utilizing ITAR guidelines to ensure SCM does not outsource material specific to DoD/government applications. During 2016, Meggitt OC will leverage the Meggitt OC Global Procurement suppliers to further increase opportunities of spend within SBA businesses. By broadening the search outside of the Orange, Riverside, and Los Angeles Counties, the opportunity to locate viable suppliers in these categories that meets Meggitt OC objective increases. Additionally, Meggitt OC will continue to use tools such as SAM's Dynamic Small Business Search as more suppliers are identified with the capabilities required for our products. Products & Services The principal products and services that Meggitt OC anticipates to be subcontracted and identification of the type of business concern which may be utilized are as follows: 3
4 Product or Service Site LB SB HZSB WOSB VOSB SDSB (Service Disabled) SDVSB (Small Disadvantage) Accelerometer OC X Capacitors OC X X X X X X X Resistors OC X X X X X X X Cables OC X X X X X I.C.'s OC X X X X X X Indicators OC X X X X Fuel Flow Transmitter OC X X X X X X X Fuel Probe OC X X X X X X X Oil Quantity Transmitter OC X X X X X X Pressure Transmitter OC X X X X X X X Signal Conditioner OC X X X X X X X Ultra Violet/Infra-Red Detector OC X X X X X X Hardware Wire OC X X X X Silicon Semi-Cond OC X X Machining OC X X X X X X Contract Labor OC X X X X The products and service categories were developed to align with the procurement categories and commodities of the Supply Chain Management teams. Each product or service is a standard commodity within the manufacturing industry, and the buyer purchasing activities are centralized around strategies of the specific commodity. The areas to be subcontracted to small, HUBZone small, small disadvantaged, veteranowned, service-disabled veteran-owned and women-owned small business concerns were determined by considering the complexity and level of service requirements required and balancing cost for consideration of Best Value awards. Compare and contrast Silicon Semi- Conductor and Machine Shop. The complexity and service levels required for this product category would exceed the definitions set forth for a small business, more of a corporate architecture such as a wholly owned subsidiary, whereas machine shops are typical of the SBA structure being enterprising entrepreneurs. Capability Assessment The development of goals, solicitation mailing lists and the identification of type business concern were based on: 1. Meggitt Orange County mailing lists 2. Small Business Administration s SAM website 3. National Minority Purchasing Council Vendor Information Service 4
5 4. Office of Minority Business Data Center in the Department of Commerce 5. Participation in trade fairs and industry meetings 6. Advertisement in industry and local publications 7. Department of Veterans Affairs 8. Office of Small and Disadvantaged Business Utilization (OSDBU) 9. Associations and councils of above mentioned business concerns 10. GSA s Schedules e-library 11. Vendigital Supplier Website (Meggitt source) The capabilities of small, Hubzone small, small disadvantaged, women-owned, veteranowned and service-disabled veteran-owned small business concerns are determined using the same methodology as all subcontractors. Once a subcontractor is identified, the Supply Chain Management team visits the subcontractor to complete a supplier assessment on capabilities, asameditations, quality management systems, as well as continuous improvement programs. IV. SUBCONTRACTING PLAN ADMINISTRATION A. The administration of this Plan will be under the direction of (hereinafter called the Administrator ): NAME: Nikhol Dieu TITLE: Sr. Manager of Supply Chain ADDRESS: Myford Road Irvine, CA TELEPHONE NO. (949) CELL (949) Nikhol.Dieu@meggitt.com B. The duties of the Administrator are, among others: 1. To develop policies and procedures to assure success of the Plan. 2. To keep a current plan acceptable to the Federal Government. 3. To establish and maintain a data base and records in support of the Plan pursuant to the requirements PL To search diligently for qualified small, HUBZone small, small disadvantaged, women-owned small and veteran-owned small business concerns through: a) The SAM Dynamic Small Business Search, publications of the Office of Minority Business Data Center in the Department of Commerce and the Office of Minority Small Business and Capital Ownership Development in the SBA 5
6 b) Associations and councils of above mentioned concerns c) Federal Executive Boards d) Participation in trade fairs and industry meetings e) Advertisement in industry and local publications 5. To prepare and submit Summary Subcontract Report, in accordance with instructions on the forms, and ensure that its subcontractor s submit ISR s and SSR s when applicable. 6. Maintain liaison and cooperation with SBA, DCMC, and other agencies of the Federal Government to find and utilize qualified business concerns defined in Article II. 7. To conduct training sessions and support activities for assisting buyers in finding and qualifying the business concerns defined in Article II. 8. To provide required records and reports to include source lists, guides, and other data or organizations that identify the various small business concerns as identified herein and cooperate in any authorized studies or surveys by SBA, DCMC, or the Federal Procuring Agency. 9. To retain and monitor subcontractor s plan for compliance with such plans. V. PLAN TO ASSURE SUBCONTRACTING OPPORTUNITIES A. The efforts to assure equitable opportunity to the business concerns defined in Article II are primarily spelled out in the Administrator s duties above and include records of individual buyer s contribution to the success of this plan and the use of these records in the buyer s performance reviews. Outreach efforts will include offering the firms managerial, technical, relaxation of deadlines, production and quality control assistance when appropriate. B. At the request of any small business concern defined herein, Meggitt OC will provide technical assistance pursuant with the awarded contract. C. Follow-on orders will be placed with the previous small business concern or bids solicited from additional small businesses as defined herein. VI. FLOW DOWN OF SUBCONTRACTING CLAUSES AND SECOND TIER SUBCONTRACTING PLAN REQUIREMENTS A. Meggitt OC Corporation typically manufactures standard commercial off-the-shelf and special products purchased by commercial and government customers. Meggitt OC agrees to include the clause at FAR , Utilization of Small Business Concerns in all subcontracts that offer further subcontracting opportunities and will further require all subcontractors (except SB concerns) who receive subcontracts in excess of $650,000, ($1,500,000 for construction) to adopt a plan that complies with the requirements of the clause at FAR , Small Business Subcontracting Plan. 6
7 VII. REPORTING AND COOPERATION FAR (a)(10) and clause (d)(10) require assurances that the offeror will do the following: Meggitt OC agrees to: (10)(i) Cooperate in any studies or surveys as may be required; (ii) Submit periodic reports so that the Government can determine the extent of compliance by the offeror with the subcontracting plan; (iii) Submit the Individual Subcontract Report (ISR), and the Summary Subcontract Report (SSR) using the Electronic Subcontracting Reporting System (esrs) ( following the instructions in the esrs; (iv) Ensure that its subcontractors with subcontracting plans agree to submit the ISR and/or the SSR using the esrs; (v) Provide its prime contract number and its DUNS number and the address of the Government or Contractor official responsible for acknowledging or rejecting the reports, to all first-tier subcontractors with subcontracting plans so they can enter this information into the esrs when submitting their reports; and (vi) Require that each subcontractor with a subcontracting plan provide the prime contract number and its own DUNS number, and the address of the Government or Contractor official responsible for acknowledging or rejecting the reports, to its subcontractors with subcontracting plans. Reports are to be submitted within 30 days after the close of each calendar period as indicated in the following chart:. Calendar Period Report Due Date Due to SSR 9/30 VIII. RECORD KEEPING A. Meggitt OC will maintain records of qualified small, HUBZone small, small disadvantaged, women-owned small or veteran-owned small business concern suppliers and potential suppliers referred to buyers. B. Each subcontract solicitation that may result in an award of more than $150,000 will note if small, HUBZone small, small disadvantaged, women-owned small or veteran-owned small business concerns were solicited. If applicable, the reason the award was not made to a small, HUBZone small, small disadvantaged, women-owned small or veteran-owned small business concern will be noted. C. Meggitt OC will maintain records of any outreach efforts to locate small business sources as defined herein through 1. Trade associations 2. Business development organizations 3. Conferences and trade fairs 7
8 D. Records will be kept of internal guidance and encouragement provided to buyers through seminars, training, etc. E. Meggitt OC will monitor performance to evaluate compliance with the program s requirements. F. Other records will include meetings of minority purchasing council activities, educational activities attended or conducted, trade shows attended, approved supplier lists received from cooperating corporations and purchasing councils, records of buyer efforts to qualify above mentioned types of business concerns and records in support of internal procurement procedures adopted for the promulgation and support of this plan. IX. TIMELY PAYMENTS TO SUBCONTRACTORS Meggitt OC uses procedures to ensure timely payments of amounts due pursuant to the terms of its subcontracts with small business concerns as required in FAR (a). Meggitt OC subcontract payment terms are typically Net 30, 45, 60 or 90 days. After receipt of goods, the invoice is input into the Meggitt OC Accounts Payable (AP) system, and the system calculates 30, 45, 60 or 90 days from receipt per the negotiated terms. An aging report is run each week before Meggitt OC issues checks to referenced suppliers. X. DESCRIPTION OF GOOD FAITH EFFORT Through the record keeping effort as described in Article VIII, Meggitt OC will demonstrate compliance with a good faith effort to achieve the subcontracting goals listed in this small business subcontracting plan. Meggitt OC understands that this subcontracting plan will be made a material part of the contract and that the submission of the SSR will be made a line item deliverable in the contract. XI. SIGNATURES REQUIRED: This subcontracting plan was SUBMITTED by: Signature: Typed Name: Nikhol Dieu Title: Sr. Manager of Supply Chain Date:
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