Attachment 2 -VA Notice of Limitations in Subcontracting.pdf

This is a VA Notice of Limitations on Subcontracting—Certificate of Compliance for Services and Construction, effective January 2023, establishing subcontracting requirements for offerors on VA contracts.

The clause requires contractors to certify compliance with specific subcontracting limitations based on contract type. For service contracts (excluding construction), contractors cannot pay more than 50% of government payments to non-certified small businesses. For general construction contracts, the limit is 85% of government payments to non-certified firms. For special trade construction contractors, the limit is 75% of government payments to non-certified firms. Work performed by similarly situated certified SDVOSB/VOSB subcontractors counts toward these percentage thresholds. Contractors must exclude certain costs—such as materials for construction contracts and indirect costs not constituting the principal acquisition purpose—from subcontracting calculations. The certification is subject to Title 18, United States Code, Section 1001, with false, fictitious, or fraudulent certifications potentially resulting in criminal, civil, or administrative penalties. Offerors must complete, sign, and return the certification with their bid, quotation, or proposal; the government will deem non-compliant responses ineligible for award. The VA may require contractors to provide documentation demonstrating compliance at any time during performance or upon completion, and failure to provide requested documents may result in remedial action. If the VA determines an SDVOSB/VOSB awardee did not act in good faith, the contractor may be subject to referral to the VA Suspension and Debarment Committee, fines under the Small Business Act, or prosecution.