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A recently posted NAVFAC solicitation for construction services under NAICS 237XXX as an EDWOSB set-aside identifies a 25% limitation on subcontracting. FAR 52.219-14 Limitations on Subcontracting confirms a 15% requirement for “General Construction” and a 25% requirement for “Construction by Special Trade Contractors”. Other agencies (USACE, VA) have concluded that “Special Trade Contractors” refers ONLY to NAICS 238XXX (I assume based on the Title of NAICS 238…“Specialty Trade Contractors”) and further conclude that 237XXX falls under “General Construction”. I plan to ask about this as an official question during the Q&A to the NAVFAC contracting office

QUESTION 1 - Does anyone on this forum know of any definitive reference (or ruling) for determining which NAICS would fall under “general construction” vs. “special trade construction” as it applies to all of the various limitations on subcontracting clauses.

QUESTION 2 - Can the CO, in ANY solicitation, supersede the FAR requirement(s) and impose a limitation on subcontracting higher than the FAR-required limitation. I ask because the FAR clause is not only incorporated by reference, but the 25% is explicitly stated in the solicitation.

Of course, no mention is made of the 2013 NADA and “similarly situated entity” discussions, but I’m not really addressing those at this time. Any help that the forum can offer here would be greatly appreciated as I’m sure the answer would apply to SDVOSB and 8(a) set-aside acquisitions as well.

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The NAICS code must be 237110, 120, or 130 -- I think those are the only NAICS codes approved for EDWOSB set-asides.

Is the 25% is established in the contract clause at FAR 52.236-1, Performance of Work by the Contractor? Or is it established by saying that under the contract clause at FAR 52.219-14, Limitations on Subcontracting, para. ( c )( 4 ) applies instead of para. ( c )( 3 )? Or is it established in some other way?

Anyway, you intend to ask a question of the contracting officer -- that's the right approach. You should carefully phrase your question so that the contracting officer can answer your real question. If the contracting officer confirms that the acquisition is covered by para. ( c )( 4 ) of the contract clause at FAR 52.219-14, is that an acceptable answer for you? Or will you protest the solicitation, saying that the acquisition is general construction covered by para. ( c )( 3 )? I raise this question, because my general rule is not to ask a question unless I can live with the answer, or at least to have thought a little about how I will deal with an answer.

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For EDWOSB set-asides, the limitation on subcontracting is stated at FAR 52.219-29( d ). FAR 52.219-14 is not for use in solicitations set aside for EDWOSBs.

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Thanks, Don, for the citation. That's what I was thinking about when I asked if the 25% was established by the clause at FAR 52.236-1, 52.219-14, or "some other way." Some other way has to be the right answer, because ohnoudidnt14's solicitation should not include either the 52.236-1 clause or the 52.219-14 clause. But it should include the 52.219-29 clause.

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You are absolutely correct that 52.219-29 is the correct reference for the EDWOSB, 52.219-14 is what I am used to seeing for SDVOSBs. The 15%/25% conditions are the same, however, for both...so I refer back to the original question. Is there something out there that confirms my position that NAICS 237XXX should fall under "General Construction" and only NAICS 238XXX is "Special Trade Contractors"?

To jj, FAR 52.236-1 is NOT included. I do plan to ask the question. I'm not sure about protesting if I don't like the answer, but if I can ask the question with "references" it may serve well to further my case.

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The clause at FAR 52.219-14 should not be used in SDVOSB set-asides, either. The appropriate clause there is FAR 52.219-27.

See http://www.bls.gov/iag/tgs/iag237.htm for a description of the 237xxx NAICS -- it clearly allows for speciality trade contractors within 237xxx. So based solely on that website, I cannot say that always <NAICS 237xxx = general construction> and <NAICS 238xxx = construction by special trade contractors>.

Perhaps your questions to the contracting officer might be--

- Since this acquisition is a EDWOSB set-aside, should the solicitation include the clause at FAR 52.219-29 instead of 52.219-14?

- What is the basis for the 25% limitation on subcontracting? Is it because the Government has affirmatively determined that the work qualifies as "construction by special trade contractors" rather than "general construction"?

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Oh, by the way, the 15%/25% rule that covers 8(a) contracts and small business set-asides and WOSBs and EDWOSBs IS NOT the same as the 15%/25% rule that covers SDVOSB and HUBZone set-asides.

In the former rule, the 15%/25% work has to be done by employees of the contracted firm. In the latter rule, the 15%/25% work can be done by employees of the contracted firm or other SDVOSBs or HUBZone firms, respectively.

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As I have understood it over the years, “Construction by Special Trade Contractors” in 52.219-14 was intended to apply to a single trade project, such as electrical or mechanical installation/construction or sewer line or water line installations that would predominantly be performed one company as the contractor in the outside world - with perhaps some ancillary work by minor subs. I will have to look back in my files to see if Congress defined that term in the original legislation that implemented the clause.

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Consider this.....

http://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf

And this footnote.....

13. NAICS code 238990 – Building and Property Specialty Trade Services: If a procurement requires the use of multiple specialty trade contractors (i.e., plumbing, painting, plastering, carpentry, etc.), and no specialty trade accounts for 50% or more of the value of the procurement, all such specialty trade contractors activities are considered a single activity and classified as Building and Property Specialty Trade Services.

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And consider this from the Census Bureau who is responsible for the NAICS system.

https://www.census.gov/cgi-bin/sssd/naics/naicsrch?chart_code=23&search=2012 NAICS Search

2012 NAICS Definition

T = Canadian, Mexican, and United States industries are comparable. Sector 23 -- ConstructionT 237 Heavy and Civil Engineering ConstructionT

The Heavy and Civil Engineering Construction subsector comprises establishments whose primary activity is the construction of entire engineering projects (e.g., highways and dams), and specialty trade contractors, whose primary activity is the production of a specific component for such projects. Specialty trade contractors in Heavy and Civil Engineering Construction generally are performing activities that are specific to heavy and civil engineering construction projects and are not normally performed on buildings. The work performed may include new work, additions, alterations, or maintenance and repairs.

Specialty trade activities are classified in this subsector if the skills and equipment present are specific to heavy or civil engineering construction projects. For example, specialized equipment is needed to paint lines on highways. This equipment is not normally used in building applications so the activity is classified in this subsector. Traffic signal installation, while specific to highways, uses much of the same skills and equipment that are needed for electrical work in building projects and is therefore classified in Subsector 238, Specialty Trade Contractors.

Construction projects involving water resources (e.g., dredging and land drainage) and projects involving open space improvement (e.g., parks and trails) are included in this subsector. Establishments whose primary activity is the subdivision of land into individual building lots usually perform various additional site-improvement activities (e.g., road building and utility line installation) and are included in this subsector.

Establishments in this subsector are classified based on the types of structures that they construct. This classification reflects variations in the requirements of the underlying production processes.

2012 NAICS Definition

T = Canadian, Mexican, and United States industries are comparable.

Sector 23 -- ConstructionT 238 Specialty Trade ContractorsT

The Specialty Trade Contractors subsector comprises establishments whose primary activity is performing specific activities (e.g., pouring concrete, site preparation, plumbing, painting, and electrical work) involved in building construction or other activities that are similar for all types of construction, but that are not responsible for the entire project. The work performed may include new work, additions, alterations, maintenance, and repairs. The production work performed by establishments in this subsector is usually subcontracted from establishments of the general contractor type or for-sale builders, but especially in remodeling and repair construction, work also may be done directly for the owner of the property. Specialty trade contractors usually perform most of their work at the construction site, although they may have shops where they perform prefabrication and other work. Establishments primarily engaged in preparing sites for new construction are also included in this subsector.

There are substantial differences in types of equipment, work force skills, and other inputs required by specialty trade contractors. Establishments in this subsector are classified based on the underlying production function for the specialty trade in which they specialize. Throughout the Specialty Trade Contractors subsector, establishments commonly provide both the parts and labor required to complete work. For example, electrical contractors supply the current-carrying and noncurrent-carrying wiring devices that are required to install a circuit. Plumbing, heating, and air-conditioning contractors also supply the parts required to complete a contract.

Establishments that specialize in activities primarily related to heavy and civil engineering construction that are not normally performed on buildings, such as the painting of lines on highways are classified in Subsector 237, Heavy and Civil Engineering Construction.

Establishments that are primarily engaged in selling construction materials are classified in Sector 42, Wholesale Trade, or Sector 44-45, Retail Trade, based on the characteristics of the selling unit.

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