15 USC 657s - Limitations on subcontracting

U.S Code last checked for updates: Feb 21, 2025

§ 657s.

Limitations on subcontracting

(a)

In general

If awarded a contract under section 637(a), 637(m), 644(a), 657a, or 657f of this title, a covered small business concern—

(1)

in the case of a contract for services, may not expend on subcontractors more than 50 percent of the amount paid to the concern under the contract;

(2)

in the case of a contract for supplies (other than from a regular dealer in such supplies), may not expend on subcontractors more than 50 percent of the amount, less the cost of materials, paid to the concern under the contract;

(3)

in the case of a contract described in paragraphs (1) and (2)—

(A)

shall determine for which category, services (as described in paragraph (1)) or supplies (as described in paragraph (2)), the greatest percentage of the contract is awarded;

(B)

shall determine the amount awarded under the contract for that category of services or supplies; and

(C)

may not expend on subcontractors, with respect to the amount determined under subparagraph (B), more than 50 percent of that amount; and

(4)

in the case of a contract which is principally for supplies from a regular dealer in such supplies, and which is not a contract principally for services or construction, shall supply the product of a domestic small business manufacturer or processor, unless a waiver of such requirement is granted—

(A)

by the Administrator, after reviewing a determination by the applicable contracting officer that no small business manufacturer or processor can reasonably be expected to offer a product meeting the specifications (including period for performance) required by the contract; or

(B)

by the Administrator for a product (or class of products), after determining that no small business manufacturer or processor is available to participate in the Federal procurement market.

(b)

Similarly situated entities

(c)

Modifications of percentages

(d)

Other contracts

(1)

In general

(2)

Uniformity

(3)

Construction projects

(e)

Definitions

In this section, the following definitions apply:

(1)

Covered small business concern

The term “covered small business concern” means a business concern that—

(A)

with respect to a contract awarded under section 637(a) of this title, is a small business concern eligible to receive contracts under that section;

(B)

with respect to a contract awarded under section 637(m) of this title—

(i)

is a small business concern owned and controlled by women (as defined in that section); or

(ii)

is a small business concern owned and controlled by women (as defined in that section) that is not less than 51 percent owned by 1 or more women who are economically disadvantaged (and such ownership is determined without regard to any community property law);

(C)

with respect to a contract awarded under section 644(a) of this title, is a small business concern;

(D)

with respect to a contract awarded under section 657a of this title, is a qualified HUBZone small business concern; or

(E)

with respect to a contract awarded under section 657f of this title, is a small business concern owned and controlled by service-disabled veterans.

(2)

Similarly situated entity

The term “similarly situated entity” means a subcontractor that—

(A)

if a subcontractor for a small business concern, is a small business concern;

(B)

if a subcontractor for a small business concern eligible to receive contracts under section 637(a) of this title, is such a concern;

(C)

if a subcontractor for a small business concern owned and controlled by women (as defined in section 637(m) of this title), is such a concern;

(D)

if a subcontractor for a small business concern owned and controlled by women (as defined in section 637(m) of this title) that is not less than 51 percent owned by 1 or more women who are economically disadvantaged (and such ownership is determined without regard to any community property law), is such a concern;

(E)

if a subcontractor for a qualified HUBZone small business concern, is such a concern; or

(F)

if a subcontractor for a small business concern owned and controlled by service-disabled veterans, is such a concern.

(Pub. L. 85–536, § 2[46], as added Pub. L. 112–239, div. A, title XVI, § 1651, Jan. 2, 2013, 126 Stat. 2079; amended Pub. L. 114–92, div. A, title VIII, § 864(b), Nov. 25, 2015, 129 Stat. 927.)

cite as: 15 USC 657s