# Class Deviation 2021-O0008
# Class Deviation 2021-O0008, Revision 1 - Limitations on Subcontracting for Small Business

Status: Active
Date Issued: Revision 1 (supersedes original issued September 10, 2021)
Signed By: John M. Tenaglia, Principal Director, Defense Pricing and Contracting
Scope: All DoD contracting officers subject to FAR 52.219-14, including those under USSOCOM, USTRANSCOM, USCYBERCOM, the military departments and defense agencies
Authority: Small Business Administration final rule issued November 29, 2019 (84 FR 65647); FAR Case 2017-019 final rule published September 23, 2022 (87 FR 58219), effective October 28, 2022

## Summary

This deviation requires DoD contracting officers to use the deviation version of FAR clause 52.219-14, Limitations on Subcontracting, in lieu of the standard FAR clause. The deviation incorporates SBA rule changes allowing certain exclusions from the 50 percent subcontracting limitation for services contracts, such as other direct costs and work performed outside the United States. It also incorporates FAR Case 2017-019 revisions addressing joint venture performance requirements for small business programs. The deviation remains in effect until incorporated into the FAR or rescinded.

## Required Contracting Officer Actions

1. Use the deviation clause 52.219-14, Limitations on Subcontracting (DEVIATION 2021-O0008), in lieu of FAR clause 52.219-14 in all applicable solicitations and contracts.
2. When using the clause, check the appropriate box in paragraph (f)(1) to specify whether the contractor must comply with the subcontracting limitations by the end of the base term and each option period or by the end of the performance period for each order.

## Affected Provisions and Clauses

### 52.219-14, Limitations on Subcontracting (Clause)
- Prescribed in: 19.507(e)
- Change type: REPLACED
- Action: Replace FAR clause 52.219-14 in its entirety with the deviation version prescribed at FAR 19.507(e)

## Notes

Exclusions from 50% limit: For services contracts, certain other direct costs (such as airline travel, cloud computing services, environmental remediation work and mass media purchases) and work performed outside the United States under the Foreign Assistance Act or by a required local contractor may be excluded from the 50 percent subcontracting limitation.

Joint venture performance: In joint ventures involving a small business protégé and its SBA-approved mentor, or in 8(a) joint ventures, the small business or 8(a) participant must perform at least 40 percent of the work performed by the joint venture, and that work must be more than administrative functions.

Effective date: This revision supersedes the original Class Deviation 2021-O0008 issued September 10, 2021 and is effective immediately upon issuance.

## Suggested Questions

You can ask your AI assistant:
- What actions do I need to take for this deviation?
- Does this deviation affect commercial acquisitions under Part 12?
- Which clauses need to be removed from my existing contracts?
- How does this deviation change 52.219-14 specifically?
- Are there any SAM registration implications?

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Source: https://part52.dev
Generated: 2026-03-20
Memorandum: https://www.acq.osd.mil/dpap/policy/policyvault/USA000277-23-DPC.pdf