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Contractural Threshold


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Yes, contractural threshold - of which there are many.

This specific threshold deals with a threshold whose excess will prevent a contractor from using primarily non-employees to deliver.  Under the threshold, a contractor may use a subcontractor or consultant entirely instead of using their own employees.  At one time I understood the threshold to be $150,000. 

The specific questions for conversations are:

  1. What is the current threshold?
  2. Does the threshold apply to a single year or the total contract value?
  3. If there is a FAR Clause which determines this?  (So I can keep up with it if it changes)

Most of you probably have easy answers to the above as applies in most cases.  Not asking about remote circumstances which will scarcely be encountered by a small contractor.

Thanks in advance, Corduroy Frog

 

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Guest PepeTheFrog

Frog Lives Matter.

Is this something different from the limitations on subcontracting clause(s)?

E.g. FAR 52.219-14, Limitations on Subcontracting. That clause applies to set-asides above the simplified acquisition threshold. For that and other contract clauses, look for the "prescription clause" at the beginning, which points you to the section of the FAR describing when it should be inserted into a contract.

As far as PepeTheFrog knows, "contractural" is a medical term or another word for "contractual." 

What does "contractural" mean to you, @Corduroy Frog?  Why not use contractual?

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You mention "simplified acquisition threshold."  That might be what I'm asking about.  I did read the FAR clause which assures that the contractor performance must exceed 50% if "above" the threshold.

Also learned that I may have misspelled "contractual".

Appreciate your response, but from where I am in my knowledge base, none of the three questions have been answered. 

The specific questions for conversations are:

  1. What is the current threshold?
  2. Does the threshold apply to a single year or the total contract value?
  3. If there is a FAR Clause which determines this?  (So I can keep up with it if it changes)

Can you help with any of these?

 

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Guest Vern Edwards
18 minutes ago, Corduroy Frog said:

Also learned that I may have misspelled "contractual".

May have? May have? Did you check a dictionary?

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Guest Vern Edwards
24 minutes ago, Corduroy Frog said:

So far, the forum is 0-2 in answering any questions.  I thought this was the purpose of this site.

Maybe that's because we don't understand what you're talking about.

Quote the language of the threshold statement.

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Sorry, Vern, I don't have it because right now we are being approached verbally.  I think when the threshold statement becomes available, it will be extremely revelant, and may answer some of the questions.  I'll quote it when I see it - or maybe it will be in the form of a FAR clause.

Thanks, Corduroy Frog

 

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Guest PepeTheFrog

 

3 hours ago, Corduroy Frog said:

I thought this was the purpose of this site

What can PepeTheFrog do for you? For now, PepeTheFrog will be re-reading your posts a few more times, much more carefully, to better understand your complex mind. 

Give PepeTheFrog a few more hours. PepeTheFrog is going to call several respected colleagues and get them to think about your questions and clarifications. After that, you will have a detailed synthesis of what the best minds in contracting think about your remarks. 

Whatever you do, do not try to distinguish between (a) your internal thoughts, (b) conversational remarks, and (c) written questions for an Internet forum. That would only muddy the pond water. James Joyce, William Faulkner...these authors have nothing on you. Your stream of consciousness is a national treasure. Do you have a literary agent? PepeTheFrog is interested in helping you get very, very rich. 

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On 5/29/2018 at 10:46 PM, Corduroy Frog said:

This specific threshold deals with a threshold whose excess will prevent a contractor from using primarily non-employees to deliver.  Under the threshold, a contractor may use a subcontractor or consultant entirely instead of using their own employees. At one time I understood the threshold to be $150,000. 

I believe the $ threshold you mention is related to small business set-asides, as described in 19.508(e).  I've always read it to be limited to each individual order/call/contract, but I know that's been debated with regard to options on those vehicles.

Is this another way of asking "at what point can a prime contract become a complete pass-through"?

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1 hour ago, REA'n Maker said:

I've always read it to be limited to each individual order/call/contract, but I know that's been debated with regard to options on those vehicles.

A proposed rule at 81 FR 88086 was published for comment on 12/6/2016 that would add a new language at 19.505 regarding performance of work requirements that address subcontracting limitations and the non-manufacturer rule.  A final rule has not yet been published and it could change, or it might not even become part of a final rule.  This is what is states regarding the compliance period.  Also, changes to implement this were proposed to the clause 52.219-14, Limitations on Subcontracting, as well as the other set-aside clauses that include subcontracting limitations. 

"(b) Compliance period. A small business contractor is required to comply with the limitation on subcontracting—

(1) For a contract that has been set aside, by the end of the base term and then by the end of each subsequent option period. However, the contracting officer may instead require the contractor to comply with the limitation on subcontracting by the end of the performance period for each order issued under the contract; and

(2) For an order set aside under a contract as described in 8.405–5 and 16.505(b)(2)(i)(F), by the end of the performance period for the order."

 

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Take a look at FAR 52.219-14 Limitations on Subcontracting, and the clause prescription; "The contracting officer shall insert the clause at 52-219-14, Limitations on Subcontracting, in solicitations and contracts for supplies, services, and construction if any portion of the requirement is to be set aside for small business and the contract amount is expected to exceed $150,000."  This may answer your questions.

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