Question 1

How do limitations on subcontracting apply to specialty trade contractors?

Accepted Answer

Specialty trade contractors (e.g., electrical, plumbing, HVAC, masonry) must perform at least 25% of the contract cost with their own workforce. General construction contractors must perform at least 15% of the cost with their own forces. These are lower thresholds than the 50% rule for services, reflecting the standard industry practice of coordinating multiple specialty subcontractors.

Question 2

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 3

What is the primary industry exception to limitations on subcontracting?

Accepted Answer

The primary industry exception applies when a business operates in a specialty trade industry (e.g., electrical, plumbing, HVAC) or a primary industry where it is standard practice to subcontract. In these cases, the prime may subcontract more work than the standard 50% requirement, provided the prime performs the work its business type normally performs. This exception is documented in SBA regulations and must be well-supported.

How do limitations on subcontracting apply to specialty trade contractors?

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