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                            52.219-14           Limitations on Subcontracting.
        
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FAC Number: 2024-03 Effective Date: 02/23/2024
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Subpart52.052.152.252.3
Section52.20052.20152.20252.20352.20452.20552.20652.20752.20852.20952.21052.21152.21252.21352.21452.21552.21652.21752.21852.21952.22052.22152.22252.22352.22452.22552.22652.22752.22852.22952.23052.23152.23252.23352.23452.23552.23652.23752.23852.23952.24052.24152.24252.24352.24452.24552.24652.24752.24852.24952.25052.25152.25252.253
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52.219-14 Limitations on Subcontracting.52.219-14           Limitations on Subcontracting.       As prescribed in 19.507(e), insert the following clause:          Limitations on             Subcontracting (Oct             2022)                                       (a)                    This clause does not apply to the unrestricted portion of a partial set-aside.                                          (b)                   *Definition.*                   *Similarly situated entity*, as used in this clause, means a first-tier subcontractor, including an independent contractor, that—                                                         (1)                          Has the same small business program status as that which qualified the prime contractor for the award (*e.g.*, for a small business set-aside contract, any small business concern, without regard to its socioeconomic status); and                                                            (2)                          Is considered small for the size standard under the North American Industry Classification System (NAICS) code the prime contractor assigned to the subcontract.                                                                             (c)                   *Applicability.* This clause applies only to—                                                         (1)                         Contracts that have been set aside for any of the small business concerns identified in  19.000(a)(3);                                                            (2)                         Part or parts of a multiple-award contract that have been set aside for any of the small business concerns identified in  19.000(a)(3);                                                            (3)                         Contracts that have been awarded on a sole-source basis in accordance with subparts  19.8,  19.13,  19.14, and  19.15;                                                            (4)                         Orders expected to exceed the simplified acquisition threshold and that are—                                                                           (i)                               Set aside for small business concerns under multiple-award contracts, as described in  8.405-5 and  16.505(b)(2)(i)(F); or                                                                              (ii)                               Issued directly to small business concerns under multiple-award contracts as described in  19.504(c)(1)(ii);                                                                                                           (5)                         Orders, regardless of dollar value, that are—                                                                           (i)                               Set aside in accordance with subparts  19.8,  19.13,  19.14, or  19.15 under multiple-award contracts, as described in  8.405-5 and  16.505(b)(2)(i)(F); or                                                                              (ii)                               Issued directly to concerns that qualify for the programs described in subparts  19.8,  19.13,  19.14, or  19.15 under multiple-award contracts, as described in  19.504(c)(1)(ii); and                                                                                                           (6)                         Contracts using the HUBZone price evaluation preference to award to a HUBZone small business concern unless the concern waived the evaluation preference.                                                                             (d)                   *Independent contractors.* An independent contractor shall be considered a subcontractor.                                          (e)                   *Limitations on subcontracting.* By submission of an offer and execution of a contract, the Contractor agrees that in performance of a contract assigned a North American Industry Classification System (NAICS) code for—                                                         (1)                         Services (except construction), it will not pay more than 50 percent of the amount paid by the Government for contract performance to subcontractors that are not similarly situated entities. Any work that a similarly situated entity further subcontracts will count towards the prime contractor's 50 percent subcontract amount that cannot be exceeded. When a contract includes both services and supplies, the 50 percent limitation shall apply only to the service portion of the contract;                                                            (2)                         Supplies (other than procurement from a nonmanufacturer of such supplies), it will not pay more than 50 percent of the amount paid by the Government for contract performance, excluding the cost of materials, to subcontractors that are not similarly situated entities. Any work that a similarly situated entity further subcontracts will count towards the prime contractor's 50 percent subcontract amount that cannot be exceeded. When a contract includes both supplies and services, the 50 percent limitation shall apply only to the supply portion of the contract;                                                            (3)                         General construction, it will not pay more than 85 percent of the amount paid by the Government for contract performance, excluding the cost of materials, to subcontractors that are not similarly situated entities. Any work that a similarly situated entity further subcontracts will count towards the prime contractor's 85 percent subcontract amount that cannot be exceeded; or                                                            (4)                         Construction by special trade contractors, it will not pay more than 75 percent of the amount paid by the Government for contract performance, excluding the cost of materials, to subcontractors that are not similarly situated entities. Any work that a similarly situated entity further subcontracts will count towards the prime contractor's 75 percent subcontract amount that cannot be exceeded.                                                                             (f)                    The Contractor shall comply with the limitations on subcontracting as follows:                                                         (1)                          For contracts, in accordance with paragraphs (c)(1), (2), (3) and (6) of this clause—                      [*Contracting Officer check as appropriate.*]                      □ By the end of the base term of the contract and then by the end of each subsequent option period; or                      □ By the end of the performance period for each order issued under the contract.                                                            (2)                          For orders, in accordance with paragraphs (c)(4) and (5) of this clause, by the end of the performance period for the order.                                                                             (g)                   A joint                      venture agrees that, in the performance of the contract,                      the applicable percentage specified in paragraph (e) of                      this clause will be performed by the aggregate of the joint                      venture                      participants.                                                         (1)                         In a joint                            venture comprised of a small business protégé and its                            mentor approved by the Small Business Administration,                            the small business protégé shall perform at least 40                            percent of the work performed by the joint venture.                            Work performed by the small business protégé in the                            joint venture must be more than administrative                            functions.                                                            (2)                         In an 8(a) joint                            venture, the 8(a) participant(s) shall perform at                            least 40 percent of the work performed by the joint                            venture. Work performed by the 8(a) participants in                            the joint venture must be more than administrative                            functions.                                                                    (End of clause)    **Parent topic:**  52.219 [Reserved]
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