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Subcontracting Changes Effective November 2016

Tuesday, July 26, 2016  
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Subcontracting Changes Effective November 2016


On July 14th, the FAR Council, which oversees federal acquisition regulations, issued a final rule, at long last implementing key subcontracting priorities for WIPP. The biggest win for WOSBs in the new rule is implementation of the “if you use us, list us” requirement for prime contractors to make a good faith effort to utilize small subcontractors listed in a subcontracting plan. WIPP has advocated for many years on this change, and member Jennifer Bisceglie testified in support of this change in October 2011. These changes are effective on November 1st.  


The rule also requires a prime contractor to assign NAICS codes to individual subcontracts and to notify the contracting officer if it cannot utilize a small subcontractor listed in the bid or proposal. Subcontractors are also empowered to discuss payment and utilization issues directly with a contractor officer.


The rule also:

  • Empowers contracting officers to establish subcontracting goals at the order level for IDIQ 
  • Requires a prime contractor to provide the socio-economic status of the subcontractor in the notification to unsuccessful offerors for 
  • Requires prime contractors with subcontracting plans on task and delivery order contracts to report order level subcontract data starting in November 
  • Provides discretion for contracting officers to require a subcontracting plan when a small business re-represents its size as other-than-
  • Allows agencies to receive small business subcontracting 
  • Authorizes contracting officers to calculate subcontracting goals in total contract dollars in addition to the current required goals based on total subcontract 
  • Requires a prime contractor to submit a subcontracting plan if a modification to a contract will cause the contract to exceed the current subcontracting plan threshold ($
  • Requires a prime contractor to resubmit a corrected subcontracting report within 30 days of a contracting officer rejecting the report.  

This final rule represents a big win for WOSB contractors as it includes long-awaited small business protections. While it may take some time for the FAR Council to finalize the new SBA regulations to increase WOSB subcontracting, these two rules will provide strength and flexibility to subcontracting regulations.


This FAR rule takes effect on November 1, 2016. If you have any questions, please reach out to Lin Stuart at


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