Federal Contracting Made Easy's Podcast

3/4/2019 Limitations on subcontracting for prime contractors is an important topic. Especially now that the Code of Federal Regulations (CFR) and the Federal Acquisition Regulation (FAR) are NOT in agreement. Let's get into this topic in more detail, shall we? Background In January 2013, the 2013 National Defense Authorization Act (NDAA) became law. This Act made major changes to the limitations on subcontracting. The law changes the way the government determined compliance with the limitations on subcontracting for prime contractors. By the way, limitations on subcontracting applies to service and supply contracts. The old way was formula based upon “cost of personnel” and “Cost of Manufacturing”, to formulas based on the amount paid by the government. Most importantly the 2013 NDAA allowed small primes to claim performance credit for “similarly situated entities.” In essence, this would make it easier for a small prime contractor to meet his self performance requirement. A prime contractor could use the