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Found 4 results

  1. FAR 52.219-14, Limitations on Subcontracting (Dev. 2021-O0008) provides an exclusion from the 50% LOS calculation where it says: The following services may be excluded from the 50 percent limitation: (i) Other direct costs, to the extent they are not the principal purpose of the acquisition and small business concerns do not provide the service. Examples include airline travel, work performed by a transportation or disposal entity under a contract assigned the environmental remediation NAICS code 562910), cloud computing services, or mass media purchases. Would a contractor be allowed to exclude transportation and disposal entity costs under a SBSA contract for Hazardous Waste Removal and Disposal assigned NAICS code 562211, using definition (2): This U.S. industry comprises establishments primarily engaged in (1) operating treatment and/or disposal facilities for hazardous waste or (2) the combined activity of collecting and/or hauling of hazardous waste materials within a local area and operating treatment or disposal facilities for hazardous waste. Various other related services, including analysis, recycling, non-RCRA waste disposal, packaging, tracking, industrial cleaning, etc., are also included in performance work statement, but the largest cost of the contract is the disposal entity. Additionally, 86 FR 44233, received similar question: 12a. Additional SBA Rule—Hazardous Waste Industry Comment: Six respondents stated the hazardous waste industry should be excluded from the limitations on subcontracting as disposal facilities and transportation costs are prohibitively expensive for small businesses to own and operate. Therefore, small businesses subcontract out these services, which would cause them to exceed the limitations on subcontracting. Two respondents stated environmental remediation requires the purchase of significant materials, which is similar to construction. The respondents requested these materials be excluded from the limitations on subcontracting. Response: These changes are included in SBA's final rule at 13 CFR 125.6(a), published in the Federal Register on November 29, 2019 (84 FR 65647). SBA's rule updates the limitations on subcontracting. A new FAR case would have to be opened to implement the additional changes, which require public comment under 41 U.S.C. 1707 prior to implementation in the FAR. Therefore, the suggested changes are not incorporated in this final rule. These questions can after SBA at 84 FR 65647, already said the following: In the environmental remediation industry (NAICS 562910), a large part of the cost of the contract is tied to the transportation and disposal of hazardous, toxic, and radiological waste. According to some SBCs in this industry that have contacted SBA, given the fact that these services are highly regulated and capital intensive, these particular transportation services can generally be performed only by other than small business concerns. For example, all the disposal facilities in the United States are large businesses, and most railroads and shipping companies that transport hazardous waste are other than small business concerns. This rule proposed to exclude transportation and disposal services from the limitations on subcontracting compliance determination where small business concerns cannot provide the disposal or transportation services. (…) Based on the positive feedback from industry, the final rule at 125.6(a)(1) adopts the language that specifies that the above-mentioned industries are excluded from limitations on subcontracting compliance calculations. The regulatory text provides that direct costs may be excluded to the extent they are not the principal purpose of the acquisition and small business concerns do not provide the service, “such as” in the four identified industries (airline travel, work performed by a transportation or disposal entity under a contract assigned the environmental remediation NAICS code (562910), cloud computing services, or mass media purchases). The regulatory text is not meant to be inclusive. It allows a small business in another industry in a similar situation to the four identified to also demonstrate that certain direct costs should be excluded because they are not the principal purpose of the acquisition and small business concerns do not provide the services. It appears 86 FR 44233, says the Hazardous waste Industry was excluded, but the mention of environmental remediation NAICS is so specific, it does not seem clear if HW removal/disposal NAICS 562211, could also use it.
  2. Hi All, I'm currently working on setting up a Call Order under a multi-award BPA which was a total small business set-aside. For this current proposal, several of the vendors are planning to subcontract with Community Based Organizations (CBOs). Some examples of these are: Neighborhood organizations, associations, community councils Minority serving institutions Community colleges Community development corporations Local nonprofits serving community residents Faith-based organizations Volunteer-run organizations with deep ties in the community (some issue-based alliances and coalitions, such as health, housing, food access) One of the vendors has asked if dollars spent by these CBOs would count against the limitation on subcontracting rule that 51% of government money must be toward contract work performed by the prime. I'm trying to figure out if these CBOs might count as similarly situated entities, in this case small business concerns. If they are, dollars spent by a CBO would not count against the 51% per 52.219-14(a)1 since this is for services. While I believe all these CBOs would definitely meet the NAICS size standard, what's tripping me up is the definition of "Concern" in FAR Part 19: "Concern means any business entity organized for profit (even if its ownership is in the hands of a nonprofit entity) with a place of business located in the United States, etc..." The fact it mentions business entity organized for profit makes me think most of these would not qualify as small business concerns, i.e. I can't see a neighborhood association meeting that definition. On the other hand, I could potentially see a Community College qualifying and I'm altogether unsure about a nonprofit given the parenthetical caveat. Any guidance from the Wifcon community on this would be much appreciated. ReplyForward
  3. FAR 52.219-14 (c) (1) Limitations on Subcontracting - "Services (except) construction). At least 50% of the cost of the contract performance incurred for personnel shall be expended for employees of the concern. 13 CFR 125.6.(a)(1) : in the case of contract for services (except construction), it will not pay more than 50% of the amount paid by the government to it to firms that are not similarly situated. Any work that is a similarly situated subcontractor further subcontracts will count towards the 50% subcontract amount that cannot be exceeded." Does the cost of the contract performance incurred for personnel by subcontractors include the fee paid to subcontractors? Or is only based on direct labor and indirect loads? I'm not sure where to look for further clarification on this issue. Thank you for any insight.
  4. (Another) Limitation on Subcontracting Issue Again, a FFP HUBZone construction contract in NW Fla. Based on the latest FAR clause, the HUBZone must self-perform (or subcontract to other HUBZone entities) 50% of the work…even for construction. We bid with a plan to achieve this goal. Now the contract has a change order pending that will drastically reduce the scope of work that we (the prime) were going to self-perform and increases the scope of work to be performed by a key Subcontractor. Incorporating the change, it will be nearly impossible to satisfy the referenced FAR requirement for self-performance. Given this change, the only options I see are: A ) Try to negotiate out the implicating FAR clause associated with the change (I’m not sure the CO thinks they have the authority to do that), or B ) Bid additional people (cost) to sit on their butts and watch the work being done, until we achieve the goal. Any other ideas?
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