Acquisition Policy Flash! 21-03 - Office of Acquisition and Logistics (OAL)
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Acquisition Policy Flash! 21-03

What's Changed?

Class Deviation from the Federal Acquisition Regulation Regarding Limitations on Subcontracting for Small Business Concerns, CAAC Letter 2019-01, Supplement 1

Purpose: To issue a class deviation in accordance with Federal Acquisition Regulation (FAR) 1.404 to implement regulatory changes, as advised by the Civilian Agency Acquisition Council (CAAC) letter 2019-01, Supplement 1, issued July 2, 2020.

FAR Clauses Referenced: FAR part 52.

Effective Date: Immediately.

Background: Since the issuance of CAAC letter 2019-01, FAR Case 2014-002, Set-Asides under Multiple Award Contracts was issued as a final rule and became effective on March 30, 2020. FAR Case 2014-002 significantly changed FAR Part 19 and the clauses related to awards under FAR part 19. The purpose of this class deviation is to implement required updates to the limitations on subcontracting and the nonmanufacturer rule for all small businesses in the clauses relating to awards under FAR part 19 identified in the CAAC letter Supplement 1. Pending publication of the amendment to the FAR via FAR case 2016-011, Revision of Limitations on Subcontracting, this class deviation implements these updates.

In order to ensure compliance with the Veterans First Contracting Program, as revised and updated in Class Deviation from VA Acquisition Regulation Part 819—Small Business Programs and Part 852—Solicitation and Contract Clauses, issued on December 23, 2020, Attachment 4 to the FAR Class Deviation is not applicable to VA contracts. VA contracting officers are not authorized to use FAR Clause 52.219-27 for VA procurements.

Applicability: This notice applies to VA contracting activities.

Action Required: After applying the VA Rule of Two to actions in accordance with VAAR part 819 and when applicable, contracting officers shall comply with the attached class deviation to implement regulatory changes made by the Small Business Administration to limitations on subcontracting on set-asides and sole source contracts to small businesses.

Additional Information: Questions or concerns should be addressed to the Office of Acquisition and Logistics (003A), Procurement Policy and Warrant Management Service (003A2A) via email at or (202) 632-5288.