FAR Case: 52.219–14 for a period

FAR changes around set-asides and limitations on subcontracting seem to come and never go; they are proposed, agonized over, commented on, and seemingly never implemented. Here’s an interesting one from the proposed rule (read: not yet implemented) on set-asides under multiple-award contracts. This rule modifies the limitation on subcontracting clause, including the one used for IDIQs, to clarify its application either (1) across the base term of the contract and each subsequent option year or (2) at the end of the performance period for each order issued under the contract.

This will allow KOs to explicitly state that the prime on a set-aside IDIQ must self-perform 50% of work at the _base_ and _option period_ level of the underlying IDIQ. So, for the set-aside OASIS contracts, with a five-year base and one five option, primes may be allowed to subcontract out up to 50% of work calculated across the entire five-year option period.

This may not be a formal change in policy, but there’s a lot of confusion in both industry and government around how the limitation in subcontracting works on IDIQs. Many companies believe they must meet the 50% threshold at the order level or each year.

With the new clause, primes will have a clear understanding of exactly how the clause works, and likely more flexibility to subcontract.