If your small business performs federal government contracts, chances are, you’ve already calculated your small business’s compliance with the applicable limitation on subcontracting (LoS) a time or two. But whether you’re new to the LoS equation–or you’ve long since mastered that math–knowing which costs you can exclude from your calculations is vital. Indeed, such can impact everything from the accuracy of a bidder’s regulatory compliance representations and certifications to a contractor’s critical contract performance and subcontracting decisions. In fact, under current SBA affiliation regulations, LoS compliance can even provide a defense to certain contract-specific findings of affiliation. But calculating LoS compliance and determining exactly which costs to include and exclude on a given contract is not always easy or straightforward. And that’s why we so frequently get this question and break down the answer in this article.
Continue readingTag Archives: Small Business Subcontracting
COFC: Ostensible Subcontractor Rule for General Construction Still Looks at all Circumstances
As frequent SmallGovCon readers know, the Small Business Administration’s ostensible subcontractor rule can be tricky to navigate. The rule requires contractors not to rely too heavily on a subcontractor in the performance of a contract set aside under an SBA socioeconomic program, but what constitutes relying too heavily can be confusing for small business contractors. Without a clear measure of how reliant is too reliant, businesses have to worry that they may be denied an award or even worse, lose one in a post-award protest. In a recent decision, Daniels Building Company, Inc. v. United States, 24-1787, 175 Fed. Cl. 767 (2025), the Court of Federal Claims (COFC) provided potentially helpful insight into what SBA’s Office of Hearings and Appeals (OHA) and the Court of Federal Claims will consider when determining whether a prime contractor is “unusually reliant” on its subcontractor.
Continue readingGAO: Small Business Teaming Agreement Must Follow Solicitation Guidelines
As we often tell people, language in a teaming agreement is important for a federal contract. But so is complying with the terms of a solicitation. A recent GAO decision hinged on a very specific portion of the language in a teaming agreement that was required as part of a solicitation. Because the contractor did not include the required language in a teaming agreement, it lost out on an award.
Continue readingFAR Update: Good Faith in Small Business Subcontracting
For many contracts, large businesses must establish and have the government approve a subcontracting plan that details the goals and efforts the large prime contractor will take to award subcontracts to various types of small businesses. Well, how does the government hold large businesses accountable for these goals? The FAR will soon have a final rule addressing good faith efforts to comply with a small business subcontracting plan.
Continue reading