New rules for limitations on
subcontracting now in effect
A long-awaited final rule revising and standardizing the limitations on subcontracting for small business federal contractors went into effect on Sept. 10, aligning Federal Acquisition Regulation (FAR) language for the limitations more closely with Small Business Administration regulations.
The FAR Council issued the final rule on Aug. 11. It is intended to clear up confusion about how the limitations will be defined and applied.
The government’s longstanding limitations on subcontracting rules generally have been applied to prevent small vendors from becoming used to pass through set-aside contract dollars to large companies. The rules generally require that small business prime contractors perform a specific percentage of the work and limit the amount of work that can be subcontracted.
The National Defense Authorization Act for fiscal 2013 created an exception allowing work subcontracted to “similarly situated entities” to count...more....
