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DoD, GSA, and NASA are proposing to amend the Federal Acquisition Regulation (FAR) to implement Small Business Administration (SBA) changes to the limitations on subcontracting in SBA’s final rules published on November 29, 2019, and October 16, 2020, which implemented sections of the National Defense Authorization Acts (NDAA) for fiscal years 2016 and 2017, and the Recovery Improvements for Small Entities After Disaster Act of 2015 (RISE Act).

Generally this rule will clarify matters related to the limitations on subcontracting for small businesses. Changes will be made in areas such as: exclusions of other direct costs from the limitations on subcontracting for services; similarly situated entities and the treatment of independent contractors; applicability of the Nonmanufacturer rule to 541519 when using the Information Technology Value Added Reseller (ITVAR) exception; the multiple item rule; mixed contracts; and CO discretion to ask for compliance information.