VA Notice of Limitations on Subcontracting.pdf

This is a VA Notice of Limitations on Subcontracting - Certificate of Compliance for Supplies and Products (November 2022), which serves as a template clause for federal contract solicitations.

The clause establishes subcontracting limitations for VA contracts involving supplies and products. For non-manufacturer supply or product contracts, contractors cannot pay more than 50% of government payments to non-VIP-listed subcontractors, with VIP-listed subcontractor work counting toward the 50% limit; material costs are excluded from subcontracting calculations. For nonmanufacturer contracts, contractors must supply products from domestic small business manufacturers or processors unless the SBA has issued a waiver under 13 CFR 121.406(b)(5). Offerors must certify their status as either a manufacturer or nonmanufacturer and complete applicable representations including employee thresholds (500 employees or 150 for IT Value Added Resellers), primary engagement in retail or wholesale trade, ownership/possession of items, and supply of small business-manufactured products (or at least 50% of estimated contract value for multiple-item acquisitions). The clause includes penalties for non-compliance, including referral to the VA Suspension and Debarment Committee, fines under section 16(g) of the Small Business Act, and prosecution for false certification under 18 U.S.C. Section 1001. Contractors must provide documentation upon request to demonstrate compliance, and failure to provide requested evidence may result in remedial action. The formal certification must be signed and submitted with the offeror's bid, quotation, or proposal; offers without this certification will be deemed ineligible for award.