Limitations on Subcontracting
The rule capping how much of a set-aside contract a prime may pass to non-similarly-situated subcontractors.
The limitations on subcontracting cap the share of a set-aside award that the prime may subcontract to firms that are not 'similarly situated.' For services and supplies, the prime may not pay more than 50% of the amount paid by the government to firms that are not similarly situated entities; for general construction the cap is 85%, and for specialty trade construction 75%. Work performed by a similarly situated subcontractor (e.g., another SDVOSB on an SDVOSB set-aside) does not count against the limit. Violations can lead to penalties and loss of the award.
Primary Sources
Last updated Update cadence: Quarterly, plus on regulatory changes
Change log (1)
- LaunchedPublished the glossary covering 48 federal contracting terms with DefinedTerm structured data, primary-source citations, and cross-links into the NAICS, PSC, agency, vehicle, and FAQ pages.