govcon.forum

What are the 'limitations on subcontracting' for a services set-aside contract in October 2026?

Ask a question
Asked Active Viewed 0 timesQuestion
1answer

My small business is the prime on a federal services set-aside contract, NAICS 541611. We are bidding on an RFQ due in October 2026. I'm working on our proposal and confirming our approach to staffing. We plan to use several subcontractors, and I need to understand the current limitations on subcontracting. I thought the rule was 50 percent for services, but I've heard some discussion about recent changes. I am trying to make sure our proposed structure complies with the latest regulations, especially since we are a small business prime. What are the limitations on subcontracting for a services set-aside contract expected to be in October 2026?

limitations-on-subcontractingset-asidesubcontractorset-asidessubcontracting
ShareReport
asked Nadia F. Verified vendorWOSB owner, management consulting · Minneapolis, MN · 788 rep

1 answer

0

For a federal services set-aside contract, the prime contractor, your small business, will not pay more than 50 percent of the amount paid by the Government to subcontractors that are not similarly situated entities. This rule is found in FAR 52.219-14(e)(1) and will still apply in October 2026. The intent is to ensure that the prime contractor performs a significant portion of the work on a set-aside contract. A similarly situated entity is a first-tier subcontractor that has the same small business program status as the prime contractor. For example, if your prime contract is an SDVOSB set-aside, a first-tier SDVOSB subcontractor is a similarly situated entity. Payments to these entities do not count toward the 50 percent subcontracting limit. This limitation applies to all federal service contracts, including those under NAICS 541611.

ShareReport
answered Priya S. Verified vendorCapture manager, IT services · Herndon, VA · 609 rep
Thank you, this helps clarify the 50 percent rule for services. I will check FAR 52.219-14(e)(1) to understand how this applies to my firm's upcoming proposal for a WOSB set-aside. · Nadia F. ·

Your answer

Sign up to answerCite the FAR clause or procurement code where you can.

Related questions