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HUBZONE Subcontracting
By Anonymous on Wednesday, May 29, 2002 - 09:41 am:

I have a construction project that has been set aside only for HUBZONE qualified firms. Is there any restriction against the HUBZONE qualified contractor subcontracting to a large business as long as it does not exceed 85%?

By joel hoffman on Wednesday, May 29, 2002 - 09:52 am:


Is the clause Limitation on Subcontracting, 52.219-14, in the solicitiation?

If not, is the clause Performance of Work by the Contractor, 52.236-1, in the solicitiation?

One or the other should be in the solicitation, and should describe what percentage of work the prime contractor must self-perform with its own forces or organization. The definition of "work" varies slightly between the two clauses. happy sails! joel hoffman

By cmercy on Wednesday, May 29, 2002 - 11:55 am:

See also 52.219-3 (c) (3) and (4),

By anoncon on Wednesday, May 29, 2002 - 03:08 pm:


If I remember correctly from my construction contracting days, the hubzone personnel can consist of force hire such as union hall personnel, etc, does that sound right? Regards

By joel hoffman on Wednesday, May 29, 2002 - 04:21 pm:

Yes, as long as they are directly employed by the firm seeking credit for self-performed work. They don't have to be "permanent employees" of the firm to count. happy sails! joel

By anoncon on Wednesday, May 29, 2002 - 07:29 pm:

Thanks Joel:

So maybe the mind really isn't the first thing to go. I would assume that if 52.219-14 is in the contract, that pretty well answers anonymous's question.If 52.236-1 is in the contract, then whatever the CO puts in there is what the Hubzone must meet, subject to later possible change. The Hubzone might want to look at what you and I discussed. Hope that helps anonymous. Regards

By joel hoffman on Wednesday, May 29, 2002 - 11:47 pm:

Actually, I didn't realize that the separate Hubzone clause (52.219-3) repeats what is already stated in the "Limitations on Subcontracting" clause (52.219-14), which is prescribed for use in contracts set-aside for small business. Thanks for pointing that out, "C".

I knew that 52.236-1 wasn't the right clause, but sometimes front end writers mess up and put the wrong clauses in the contract. happy sails!

By cmercy on Thursday, May 30, 2002 - 03:09 pm:

There is an interestin question lurking here ....can a construction HZ meet the 35% employee residency rule if it uses a union hall for hiring? And as a total aside,will unions go along with this?

By joel hoffman on Thursday, May 30, 2002 - 05:36 pm:

"C", Since hubzone construction companies are small business, it is more likely that they will be non-union, although it depends upon the area. In the Southeast, unions are concentrated in metro areas, like Atlanta. At any rate, assuming that the project is located in a hubzone, most trade labor will probably be local, union or not.

Non-locals are referred to as "Travellers." As I understand, with the shortage of skilled craft labor, most travellers are going for large projects, which pay incentives.

That's my perspective. It may be different in other areas. happy sails! joel

By anoncon on Thursday, May 30, 2002 - 08:14 pm:

Aye and there's the rub,Joel:

I dealt with a hubzone small construction company in the NE and you are correct about the "travelers" and the shortage of trade labor.
What I found was that the fact, at least from the CO's perspective, the travelers, which stayed in hotels, and the local union halls received direction from the hubzone location on site (i.e. meetings, safety, quality, et. al)under the force hire and control and qualified under the subject FAR clause 52-219-3.

Of course the CO was a forward thinker outside of the box and the hubzone contractor was a damn fine General contractor who was not trying to take advantage of a system but wanted to grow. There are still some out there-Regards

By cmercy on Friday, May 31, 2002 - 04:22 pm:

13CFR 126.103 defines an employee as "....a person employed on a full time (or full time equilevent) permanent basis". So the HZ construction firm has two tests to meet.....(ie GC); first that 15% of contract costs incurred for personal shall be for the firms employees and second,that 35% of those employees reside in a hubzone. Now if we rely on the CFR cite another way to put this seems to be that fifteen per cent of personnel costs incurred must be for full time permannet employees of the HZ company. Which is why I questioned the union hall issue....first are they considered permanent employees of the GC and if todays union halls work the same way they did when I was in one,how does the union drag only HZ residents for the contract work?