Limitations on subcontracting
Also called: LOS, FAR 52.219-14, 13 CFR 125.6, performance of work requirement, self-performance requirement, similarly situated entity
Limitations on subcontracting are the rules that require a small business awarded a set-aside or sole source contract to perform a minimum share of the work itself (or with similarly situated small subcontractors) rather than passing it through to others.
The SBA rule is 13 CFR 125.6 and the clause is FAR 52.219-14; both set the share by contract type (services, supplies, general construction, specialty trade) as a portion of the amount paid by the government, and both let work done by a similarly situated entity (a sub with the same small business status) count toward the prime's share. The rule applies to set-asides, 8(a), HUBZone, SDVOSB and WOSB awards, and to orders set aside under multiple award contracts.
What to check: which contract type governs (mixed contracts follow the type with the greatest dollar value), how the share is calculated for your contract, whether your intended subs are similarly situated, and whether a joint venture structure makes more sense than a prime-sub team. The clause is a certification; violation carries penalties under 15 U.S.C. 645(d) and can mean termination.
What it is not: a subcontracting plan, which is the opposite obligation placed on large primes to use small businesses.
See also: Set-aside, Teaming agreement, Joint venture (JV), Subcontracting plan
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