This week, AGCsubmitted comments on the U.S. Small Business Administration’s (SBA) proposed rule that would change the performance of work requirements small business general and specialty subcontractors must self-perform. The proposed rule would change the performance of work requirement to that of a limitation on subcontracting requirement—general small business contractors could not subcontract more than 85 percent of the amount paid on the contract; and specialty small business contractors could not subcontract more than 75 percent of the amount paid on the contract. The calculation of how much work is subcontracted would be based on the amount the prime contractor pays to subcontractors from the contract.
In its comments, AGC noted, among others, its concerns that such a rule would be difficult to adhere to because federal agencies may require modifications throughout the duration of the project. Such modifications can cause a contractor to require a subcontractor to perform more work than initially anticipated and, as a result, cause their subcontracting dollar to exceed the limitation. Such a situation would be caused by the federal agency owner, not the prime contractor.
For more information, please contact Jimmy Christianson at (703) 837-5325 orchristiansonj@agc.org. Return to Top