FAR 52.219-14 — Limitations on Subcontracting
Sets the percentage of work a small business prime must self-perform on a set-aside contract (currently 50% for services and supplies, with similar limits for construction).
When This Clause Applies
Applies to all small business set-aside contracts, including 8(a), HUBZone, SDVOSB, WOSB/EDWOSB set-asides above the simplified acquisition threshold.
What This Means for Contractors
Small business primes cannot 'pass through' the contract by subcontracting more than 50% of the contract amount to non-similarly-situated entities. The 'similarly situated entity' rule allows you to count work performed by other small businesses of the same category toward your self-performance requirement. Violations are False Claims Act-eligible.
Common Pitfalls
- 1Not tracking the percentage during performance and discovering a shortfall at close-out
- 2Treating 'similarly situated' too loosely — the sub must be the same small business category
- 3Including indirect costs in the calculation (only direct labor and direct material count)
- 4Failing to keep documentation supporting the self-performance percentage
Related Topics
Related Clauses
Notice of HUBZone Set-Aside or Sole Source Award
Restricts competition to HUBZone small business concerns. Includes provisions for HUBZone sole-source awards.
Notice of Total Small Business Set-Aside
Restricts competition to small business concerns for the specific NAICS code identified in the solicitation.
Notice of Service-Disabled Veteran-Owned Small Business Set-Aside
Restricts competition to Service-Disabled Veteran-Owned Small Businesses (SDVOSBs). Includes sole-source provisions.
Notice of Set-Aside for Women-Owned Small Business
Restricts competition to Economically Disadvantaged Women-Owned Small Business (EDWOSB) concerns in eligible industries. Companion clause 52.219-30 covers WOSB set-asides.
Continue Your Research
GSA Procurement Guide
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VA Procurement Guide
Veterans First Contracting Program — strongest SDVOSB/VOSB pipeline in the government.
NAICS 518210 — Data Processing, Hosting, and Related Services
Find federal contracts under NAICS 518210. Common agencies, set-asides, contract values.
NAICS 541330 — Engineering Services
Find federal contracts under NAICS 541330. Common agencies, set-asides, contract values.
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