Limitations on Subcontracting.pdf

This is a VA Notice of Limitations on Subcontracting—Certificate of Compliance for Services and Construction, issued as a deviation in January 2023.

The document establishes subcontracting limitations that contractors must comply with if awarded a VA contract. For services contracts (excluding construction), contractors cannot pay more than 50% of the government-paid amount to firms that are not certified Small Disadvantaged Veteran-Owned Small Businesses (SDVOSBs) or certified Veteran-Owned Small Businesses (VOSBs) listed in the SBA certification database. Work performed by similarly situated certified SDVOSB/VOSB subcontractors counts toward the 50% limitation. For general construction contracts, the limitation increases to 85% of the government-paid amount to non-certified firms, with cost of materials excluded from subcontracting calculations. For special trade construction contractors, the limitation is 75%. The clause acknowledges that false or fraudulent certifications may result in criminal, civil, or administrative penalties, including prosecution and referral to the VA Suspension and Debarment Committee or fines under the Small Business Act. Contractors must cooperate with VA document requests to verify compliance, and the contracting officer may require compliance demonstrations at any time during contract performance. Offerors must complete, sign, and submit the certification with their bid, quotation, or proposal; failure to do so renders the response ineligible for evaluation and award.