Small-Business Set-Asides – Limits on Subcontracting

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If a contract is a small business set-aside, the small business must perform a certain percentage of the work themselves – Federal Acquisitions limit how much of the work can be subcontracted.

FAR 52.219-14

Specifically:

(1) Services  (except construction): at least 50% of the cost of contract performance incurred for personnel.

(2) Supplies (other than from a non-manufacturer): at least 50% of the cost of manufacturing the supplies, not including the cost of materials.

(3) General Construction: at least 15% of the cost of the contract with its own employees, not including the cost of materials.

(4) Construction, Special Trades: at least 25% of the cost of the contract with its own employees, not including the cost of materials .

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