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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 May 31, 2016, 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; the application of the limitations on subcontracting to similarly situated entities, the application of the nonmanufacturer rule to kit assemblers; and the application of the limitations on subcontracting to construction contracts that also contain supplies and or services.