It has been a long time coming, but the Department of Defense, in conjunction with the GSA and NASA, are finally issuing a final rule amending the FAR guidance regarding limitations on subcontracting. In this post, we are going to explore just what these changes are and what they mean for government contractors such as yourself. The hope is this brief summary and analysis will provide you some insight as to just what the new rules do.
Continue readingTag Archives: Limitations on Subcontracting
Is the Revision to the FAR’s Limitations on Subcontracting Finally Nearing the Finish Line?
On June 30, 2016, a major new SBA regulation took effect, overhauling the limitations on subcontracting. The SBA’s new regulation, codified at 13 C.F.R. 125.6, replaced the “old” formulas for calculating compliance–like “cost of the contract incurred for personnel,” for service contracts, with new, easier-to-use formulas based on the amount paid by the government. And, in a major boon for small businesses, the SBA’s new regulation allowed small primes to count work performed by “similarly situated entities” toward the prime’s own self-performance.
But more than five years after the SBA regulation took effect, the FAR’s provisions governing the limitations on subcontracting still resemble Marty McFly: stuck in the past. The FAR Council still has not updated the FAR to conform with the SBA’s regulations and the underlying Congressional mandate, causing considerable confusion for contractors trying to figure out which rule to follow.
Now, though, we may finally (hopefully!) be nearing the finish line for this important and long-delayed FAR change.
Continue readingLimitations on Subcontracting: Compliance Presumed Unless Proposal Clearly Shows Otherwise
America’s criminal justice system is founded on the principle that a defendant is innocent until proven guilty. And when it comes to compliance with the limitations on subcontracting, a similar principle applies.
In a recent bid protest decision, the GAO confirmed that a small business’s proposal does not need to affirmatively demonstrate compliance with the “LoS.” Instead, compliance is presumed, unless the proposal “on its face” should lead the procuring agency to conclude that the small business will not comply.
Continue readingEvent: APTAC Limitations on Subcontracting Session
For small businesses and their teammates, few topics in government contracting are as confusing as the limitations on subcontracting for set-aside and socioeconomic sole source contracts. And if that isn’t stressful enough, the “LoS” is an area of heavy enforcement: get it wrong, and a contractor can face major penalties.
Wouldn’t it be nice if someone would explain the limitations on subcontracting in plain English? Well, if you’re a PTAC counselor, you’re in luck. On November 5, 2020, Koprince Law LLC Senior Partner Steven Koprince will present a session at the 2020 APTAC Fall Conference to help PTAC counselors and their clients understand and comply with this essential rule.
Joint Ventures and the Limitations on Subcontracting: SBA Provides Some Clarity
Joint ventures operating under the SBA’s regulations are subject to two work share restrictions: the limitations on subcontracting, which governs work share between the joint venture and its subcontractors) and the so-called “40 percent rule,” which governs work share between the joint venture partners.
It can be easy to get confused about how the rules work together. Fortunately, in a new rule published on October 16, SBA has provided some much-needed clarity.
Continue readingAlert: SBA Issues Final Rule on Consolidation of Mentor-Protégé Programs and Other Contracting Rules
As we discussed, in late 2019 the SBA issued a proposed rule that would make a number of significant changes to the Mentor/Protégé programs and other small business contracting rules. Well, the SBA will soon issue its final rule on these changes, so make sure you are aware of the new rules.
Continue readingEvent: Small Business Contracting Update & 2021 Preview
Fiscal Year 2020 is officially in the books. For small businesses in government contracting, it was a year of major changes–and many more changes are on their way in FY 2021.
On November 18, please join me (virtually) for “Small Business Contracting Update & 2021 Predictions,” sponsored by the National Contract Management Association, Boston Chapter. I’ll cover the biggest changes in FY 2020, from the HUBZone Program overhaul to WOSB certification to increases in the 8(a) Program economic thresholds. Then I’ll dust off my crystal ball and predict what’s on the way in FY 2021, including the long-awaited changes to the limitations on subcontracting and a revamping of the rules governing debriefings.
It’s easy to register: just click here. I hope to see you for this great pre-Thanksgiving event!