[Code of Federal Regulations]

[Title 13, Volume 1]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 13CFR124.510]



[Page 399-400]

 

                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



[[Page 400]]



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 

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.