[Code of Federal Regulations]
[Title 13, Volume 1]
[Revised as of January 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 13CFR124.510]

[Page 322-323]
 
                TITLE 13--BUSINESS CREDIT AND ASSISTANCE
 
                CHAPTER I--SMALL BUSINESS ADMINISTRATION
 
PART 124--8(A) BUSINESS DEVELOPMENT/SMALL DISADVANTAGED BUSINESS STATUS DETERMINATIONS--Table of Contents
 
                  Subpart A--8(a) Business Development
 
Sec. 124.510  What percentage of work must a Participant perform on an 8(a) contract?

    (a) To assist the business development of Participants in the 8(a) 
BD program, an 8(a) contractor must perform certain percentages of work 
with its own employees. These percentages and the requirements relating 
to them are the same as those established for small business set-aside 
prime contractors, and are set forth in Sec. 125.6 of this title.
    (b) A Participant must certify in its offer that it will meet the 
applicable percentage of work requirement. SBA will determine whether 
the firm will be in compliance as of the date of award of the contract 
for both sealed bid and negotiated procurements.
    (c) Indefinite quantity contracts. (1) In order to ensure that the 
required percentage of costs on an indefinite quantity 8(a) award is 
performed by the Participant, the Participant must demonstrate 
semiannually that it has performed the required percentage to that date. 
For a service or supply contract, this does not mean that the 
Participant must perform 50 percent of the applicable costs for each 
task order with its own force, or that a Participant must have performed 
50 percent of the applicable costs at any point in time during the 
contract's life. Rather, the Participant must perform 50 percent of the 
applicable costs for the combined total of all task orders issued to 
date at six month intervals.

    Example to paragraph (c)(1). Two task orders are issued under an 
8(a) indefinite quantity service contract during the first six months of 
the contract. If $100,000 in personnel costs are incurred on the first 
task order, 90% of those costs ($90,000) are incurred for performance by 
the Participant's own work force, and the second task order also 
requires $100,000 in personnel costs, the Participant would have to 
perform only 10 percent of the personnel costs on the second task order 
because it would still have performed 50% of the total personnel costs 
at the end of the six-month period ($100,000 out of $200,000).

    (2) Where there is a guaranteed minimum condition in an indefinite 
quantity 8(a) award, the required performance of work percentage need 
not be met on task orders issued during the first six months of the 
contract. In such a case, however, the percentage of work that a 
Participant may further contract to other concerns during the first six 
months of the contract may not exceed 50 percent of the total guaranteed 
minimum dollar value to be provided by the contract. Once the guaranteed 
minimum amount is met, the general rule for indefinite quantity

[[Page 323]]

contracts set forth in paragraph (c)(1) of this section applies.

    Example to paragraph (c)(2). Where a contract guarantees a minimum 
of $100,000 in professional services and the first task order is for 
$60,000 in such services, the Participant may perform as little as 
$10,000 of the personnel costs for that order. In such a case, however, 
the Participant must perform all of the next task order(s) up to $40,000 
to ensure that it performs 50% of the $100,000 guaranteed minimum 
($10,000 + $40,000 = $50,000 or 50% of the $100,000).

    (3) The applicable SBA District Director may waive the provisions in 
paragraphs (c)(1) and (c)(2) of this section requiring a Participant to 
meet the applicable performance of work requirement at the end of any 
six-month period where he or she makes a written determination that 
larger amounts of subcontracting are essential during certain stages of 
performance, provided that there are written assurances from both the 
Participant and the procuring activity that the contract will ultimately 
comply with the requirements of this section. Where SBA authorizes a 
Participant to exceed the subcontracting limitations and the Participant 
does not ultimately comply with the performance of work requirements by 
the end of the contract, SBA will not grant future waivers for the 
Participant.