Statler

H2H, thanks for your reply. The reason the 50% rule matters is that for business reasons we would like to award subcontracts to some of the members of the JV. And we also need to subcontract some to a large business outside of the JV. I think that both of those will count against the limitation on subcontracting.

Hello everyone, I was wondering if anyone has thoughts on this scenario: I know that small businesses can form a Joint Venture to be the prime contractor for small business set-asides, and the JV will still be considered small so long as all of the members are small (and subject to a few other limitations). FAR 9.601; 13 CFR 121.103. FAR provisions 19.508 and 52.219-14 require small business primes to self-perform at least 50% of the work (or put another way, limits the amount that can be subcontracted to 50%). So in this case, since the JV is the small business prime, the JV has to self-perform at least 50% of the work. Presumably the JV will act (i.e. self-perform) either through the efforts of its members or through employees hired by the JV through the financial contributions of the members. The JV can then enter into subcontracts for the rest of the work (up to 50%), including subcontracts with its own members (right?). And I assume that the subcontracts given to members of the JV are subject to the 50% rule since the JV is not performing them. My question is: at what point does work by a member become a subcontract? Specifically, if a member charges a fee (profit) for the work it performs for the JV, does it then become a subcontractor for purposes of the 50% limitation on subcontracting rule? I think that it must, otherwise there would be fee-on-fee, but interested in other opinions. Thanks in advance.