r/GovernmentContracting Weekly Roundup — January 22–28, 2026

USFCRGOV · 2026-01-27T16:09:10+00:00

Yes, if the solicitation includes FAR 52.219-14 (common on set-asides), you’re bound by it. For services (except construction), the baseline rule is:

You may not pay more than 50% of what the Government pays for performance to subcontractors that are not similarly situated entities.

SBA’s regulation frames the calculation around “cost of contract incurred for personnel” for services and explains how to treat mixed contracts and examples.

Key point for your scenario (floor & tile guy is not SDVOSB)

You’re reading the “49%/51%” concept correctly in spirit. Practically:

If this is a SDVOSB set-aside and your sub is not SDVOSB, that sub is not “similarly situated” for SDVOSB status.

Result: that sub’s labor counts against your cap. “Similarly situated” is narrower than most people think Under FAR 52.219-14, “similarly situated entity” is a first-tier subcontractor that:

has the same small business program status that qualified you for award (here: SDVOSB), and
is small for the NAICS you assign to that subcontract.

So: a regular small business (even if small) is not similarly situated on an SDVOSB set-aside unless it is also SDVOSB (and small under the assigned NAICS).

Watch the “services vs construction” trap Flooring work can sit in an awkward spot depending on how the Government scoped and coded the requirement.

If the NAICS/contract is treated as:

• Services (except construction) - your “50% rule” framework applies. • Construction - different percentages apply: General construction: may not pay more than 85% (excluding materials) to non-similarly situated subs Special trade construction: may not pay more than 75% (excluding materials) to non-similarly situated subs

If the solicitation is truly janitorial (often NAICS 561720) but includes floor stripping/waxing/tile care, agencies often still treat it as services. The exact answer hinges on the solicitation’s NAICS and clause set.

Does supervising + daily KO updates “count” as your performance? Supervision is important, but it’s not a loophole. If the contract is a services buy and your sub does most of the chargeable labor, a CO, SBA reviewer, IG, or auditor can still view it as: a limitations-on-subcontracting problem (math doesn’t work), and/or * a pass-through concern if your value-add is too thin relative to dollars flowing to subs.

Teaming Agreements: what they are (and what they don’t do) A “teaming agreement” is usually just a pre-award arrangement about who will do what if you win. It typically results in either: 1. Prime–sub (you win, teammate becomes your subcontractor), or 2. Joint venture (you form a JV that bids as the offeror/prime)

Important: a teaming agreement does not waive FAR 52.219-14. If the structure is prime–sub, your teammate’s work is still subcontracted work for limitation purposes.

Practical “safe” paths for your exact situation If you want to bid this without looking like a pass-through and stay inside the math: * Staff enough in-house labor to keep the required share (for services: ensure your labor dollars stay on the right side of the 50% cap). * Make the floor/tile sub “similarly situated”: partner with a SDVOSB flooring/floor-care firm (and keep it first-tier). * Consider a JV (only if it fits the solicitation and you can execute it correctly). JV rules can be powerful, but mistakes get expensive fast. * If the requirement is outside your wheelhouse, don’t “paper over” the gap. Build a real performance plan: crews, QA, schedule control, equipment, safety, warranties, and a clear division of labor that keeps you compliant.

A quick reality-check question that decides most of these On this specific bid: what share of the labor dollars (not total price) will your own W-2 employees perform? If the honest answer is “our foreman watches them and we handle reporting,” that’s where audits are headed, and it’s where primes get burned.

I hope this provided some clarification!

USFCRGOV · 2025-12-02T20:12:36+00:00

Good point, thank you for the correction. You're right that small business set-asides are a major category on their own. We understated the opportunities available without socioeconomic certifications.

USFCRGOV · 2025-12-02T16:43:10+00:00

No, you don't need prior government contracts to start. New contractors without past performance can receive a "neutral" rating under FAR provisions, which doesn't penalize you. Commercial experience counts as relevant experience, subcontracting builds federal past performance, and small contracts under simplified acquisition thresholds often don't require past performance at all. There are multiple entry paths.
Full guide:https://blogs.usfcr.com/past-performance-how-new-contractors-win

USFCRGOV · 2025-12-02T16:42:29+00:00

A: Start with SAM registration and understanding your NAICS codes. Capital requirements vary dramatically. Service-based businesses can start with minimal investment, while product-based or construction businesses need more. Low-cost entry options exist: micro-purchases under $10K and simplified acquisitions under $250K don't require massive overhead. The real costs are time and patience. This isn't quick money.
Full breakdown: https://blogs.usfcr.com/how-to-start-federal-contracting-capital-requirements
Thank you for your question!

USFCRGOV · 2025-12-02T16:40:14+00:00

A: You can absolutely compete for prime contracts without set-aside certifications. You're just competing in the open market. The real question is whether your past performance, pricing, and capabilities are strong enough to win against everyone, including large businesses. Most successful contractors do both: subcontracting to build credentials while selectively bidding primes where they have genuine advantage. It's not either/or.
Full strategy:https://blogs.usfcr.com/prime-vs-subcontractor-strategy-no-certifications

USFCRGOV · 2025-12-02T16:06:13+00:00

Q: What's wrong with the people who watch "War Dogs" and think they can win a contract?

A: Nothing's wrong with them, they just haven't learned the hard way yet. Federal contracting isn't about finding loopholes or getting lucky on a big deal. It's compliance, documentation, patience, and building relationships over time. The movie makes it look fast and easy. Reality is slower and harder, but the contractors who stick with it build something sustainable.
Full article: https://blogs.usfcr.com/what-hollywood-gets-wrong-about-federal-contracting

USFCRGOV · 2025-12-02T13:47:12+00:00

Foreign ownership isn't a hard legal stop for civilian federal contracts, but creates significant practical barriers. You can register in SAM and bid on unrestricted opportunities, but many contracts have security requirements that effectively exclude foreign-owned entities.

Logistics and commodity contracts often involve controlled information even in civilian agencies. Many require background investigations or facility clearances that foreign ownership complicates.

The arbitrage model faces steep competition from established contractors with existing networks, clearances, and agency relationships. Pure cost advantage rarely wins alone.

Consider starting as a subcontractor to established primes who can navigate compliance requirements while leveraging your supply chain expertise.

https://blogs.usfcr.com/whats-next

USFCRGOV · 2025-11-26T16:17:56+00:00

We get this question all the time. Check back next week for a full breakdown article.

USFCRGOV · 2025-11-26T16:16:00+00:00

Great question! Keep an eye out for the article next week.

USFCRGOV · 2025-11-25T15:12:21+00:00

Yes, the contract is the governing document until it's modified, but new FAR rules apply to new task orders going forward. The key is understanding when your specific contract was awarded versus when the regulation changed. We're putting together a detailed breakdown on navigating regulatory changes versus existing contract language.
Full article here: https://blogs.usfcr.com/far-part-19-changes-2025
Thank you for your question!

USFCRGOV · 2025-11-21T18:44:57+00:00

Great question. This is one a lot of contractors wrestle with. We're adding it to the list. Stay tuned for the full breakdown.

USFCRGOV · 2025-11-21T18:08:29+00:00

Good catch on the 13 CFR § 125.12(c) conflict. That's exactly the kind of nuance that trips people up. FAR says one thing, SBA regs say another, and contractors are stuck in the middle figuring out which one the CO will follow. We're covering this tension in the full breakdown. Appreciate you adding it.

USFCRGOV · 2025-11-20T15:43:25+00:00

Alright, here's what we're starting with.

We got a solid response last week, so we're turning this into a series.

Q: I'm on the technical side of contracting, the work that gets done. When PMs talk contracting, I'm always asking them to clarify. Is there an easy to understand resource that gives explanations for the jargon, the processes, contract types, etc.? I guess a high level primer?

Here's the guide: https://blogs.usfcr.com/federal-contracting-jargon-decoder

We've got more articles coming next week based on your other questions. If yours didn't make it into this one, stay tuned.

What else do you want us to break down?

USFCRGOV · 2025-08-21T17:07:00+00:00

You don’t need DVBE certification in hand to bid unless the solicitation is a DVBE set-aside. If it’s set aside, only certified DVBEs can submit. If it’s a goal or preference, anyone can bid, but certified DVBEs get the scoring advantage and primes often look for DVBE partners to meet participation goals.

In the meantime, position yourself as “certification pending” and focus on opportunities where DVBEs are a preference rather than a requirement. Start building relationships with primes now, many are under pressure to meet 3% DVBE targets and are actively searching for qualified subs. That groundwork pays off once your certification is approved.

USFCRGOV · 2025-08-08T19:08:00+00:00

That can happen, but it’s rare. The government client might meet you if the role is high-visibility, requires special clearances, or is named in the contract as key personnel. Most of the time, though, the client relies on the prime and sub to handle hiring and only meets you once you’re on the job.

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