Deviation 52.219-14_Limitations.pdf
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- N3220526R6019
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This document is a federal acquisition regulation (FAR) clause 52.219-14 addressing Limitations on Subcontracting for small businesses, with a deviation issued in February 2023. The clause applies to contracts set aside for small business concerns, including sole-source awards, multiple-award contract orders, and contracts using HUBZone price evaluation preferences. Key limitations include restrictions on the percentage of contract value that can be subcontracted, with specific rules for different types of services and work:
For services (except construction), contractors cannot pay more than 50 percent of the contract amount to subcontractors that are not similarly situated entities. The clause provides detailed exclusions for direct costs, work performed outside the United States, and certain industry-specific considerations. Similar percentage limitations exist for supplies (50 percent), general construction (85 percent), and construction by special trade contractors (75 percent). The document emphasizes that subcontractors must have the same small business program status as the prime contractor and be considered small under the assigned North American Industry Classification System (NAICS) code.
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52.219-14 Limitations on Subcontracting (DEVIATION 2021-00008)
Use the following clause in lieu of the Federal Acquisition Regulation (FAR) clause 52.219-14, as prescribed at FAR 19.507(e):
LIMITATIONS ON SUBCONTRACTING (FEB 2023) (DEVIATION 2021-00008)
(a) This clause does not apply to the unrestricted portion of a partial set-aside.
(b) Definition. Similarly situated entity, as used in this clause, means a first-tier subcontractor, including an independent contractor, that-
(1) Has the same small business program status as that which qualified the prime contractor for the award (e.g., for a small business set-aside contract, any small business concern, without regard to its socioeconomic status); and
(2) Is considered small for the size standard under the North American Industry Classification System (NAICS) code the prime contractor assigned to the subcontract.
(c) Applicability. This clause applies only to---
(1) Contracts that have been set aside for any of the small business concerns identified in 19.000(a)(3);
(2) Part or parts of a multiple-award contract that have been set aside for any of the small business concerns identified in 19.000(a)(3);
(3) Contracts that have been awarded on a sole-source basis in accordance with subparts 19.8, 19.13, 19.14, and 19.15;
( 4) Orders expected to exceed the simplified acquisition threshold and that are---
(i) Set aside for small business concerns under multiple-award contracts, as described in 8.405-5 and 16.505(b)(2)(i)(F); or
(ii) Issued directly to small business concerns under multiple-award contracts as described in 19.504(c)(l)(ii);
( 5) Orders, regardless of dollar value, that are---
(i) Set aside in accordance with subparts 19.8, 19.13, 19.14, or 19.15 under multiple award contracts, as described in 8.405-5 and 16.505(b)(2)(i)(F); or
(ii) Issued directly to concerns that qualify for the programs described in subparts 19.8, 19.13, 19.14, or 19.15 under multiple-award contracts, as described in 19.504(c)(l)(ii); and
( 6) Contracts using the HUB Zone price evaluation preference to award to a HUB Zone small business concern unless the concern waived the evaluation preference.
File details come from the government source that posted it. Updated .