Question 1

Do SDVOSB set-aside requirements flow down to subcontractors?

Accepted Answer

SDVOSB set-aside requirements primarily apply to the prime contractor — subcontractors do not need to be SDVOSBs unless the prime's subcontracting plan includes SDVOSB subcontracting goals. However, large prime contractors on non-set-aside contracts must set SDVOSB subcontracting goals as part of their subcontracting plan. The limitations on subcontracting rule applies to the prime's overall performance, not individual subcontractor relationships.

Question 2

When must an SDVOSB prime have a subcontracting plan?

Accepted Answer

SDVOSB prime contractors that are classified as large businesses (have grown above the size standard) must submit a subcontracting plan for contracts over $750,000 ($1.5M for construction). Small SDVOSB firms are exempt from subcontracting plan requirements. The plan must include specific goals for small disadvantaged businesses, SDVOSBs, WOSBs, and HUBZone firms. Plans are evaluated as part of source selection and monitored during performance.

Question 3

What are the limitations on subcontracting for SDVOSB set-asides?

Accepted Answer

For SDVOSB set-aside contracts, the prime contractor must comply with limitations on subcontracting in FAR 52.219-14. For service contracts: the SDVOSB must perform at least 50% of the cost of personnel. For supply contracts: at least 50% of the cost of manufacturing. For construction: at least 15% of the cost of the contract. Similarly situated subcontractors (also SDVOSBs) count toward these requirements.

Question 4

What subcontracting requirements apply to SDVOSB set-aside contracts?

Accepted Answer

SDVOSB prime contractors must perform at least the percentage of work required by the limitations on subcontracting rule. For service contracts, at least 50% of the cost of personnel must be performed by the SDVOSB prime or its similarly situated subcontractors. For supply contracts, at least 50% of manufacturing cost must be performed in-house. Violating these rules constitutes a breach of contract and may result in penalties.

Do SDVOSB set-aside requirements flow down to subcontractors?

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