36.501 Performance of work by the contractor
Source: FAR 36.501 on acquisition.gov
Contractors on large fixed-price construction contracts must perform a specified minimum percentage of work with their own forces, typically at least 12%, to ensure adequate oversight and project involvement.
Overview
FAR 36.501 establishes requirements for contractors to perform a minimum percentage of construction work with their own forces on larger projects. This ensures contractors maintain direct involvement and oversight, rather than subcontracting the majority of the work. The contracting officer sets the required percentage, typically not less than 12%, but may adjust it based on project complexity, customary subcontracting practices, or legal/agency requirements. Specialty trades like plumbing, heating, and electrical are generally excluded from this calculation. The section also mandates the inclusion of clause 52.236-1 in most fixed-price construction contracts over $2 million, with optional use for contracts at or below $2 million, except for certain small business and set-aside contracts.
(a) To assure adequate interest in and supervision of all work involved in larger projects, the contractor shall be required to perform a significant part of the contract work with its own forces. The contract shall express this requirement in terms of a percentage that reflects the minimum amount of work the contractor must perform with its own forces. This percentage is (1) as high as the contracting officer considers appropriate for the project, consistent with customary or necessary specialty subcontracting and the complexity and magnitude of the work, and (2) ordinarily not less than 12 percent unless a greater percentage is required by law or agency regulation. Specialties such as plumbing, heating, and electrical work are usually subcontracted, and should not normally be considered in establishing the amount of work required to be performed by the contractor.
(b) The contracting officer shall insert the clause at 52.236-1, Performance of Work by the Contractor, in solicitations and contracts, except those awarded pursuant to subparts 19.5, 19.8, 19.13, 19.14, or 19.15 when a fixed-price construction contract is contemplated and the contract amount is expected to exceed $2 million. The contracting officer may insert the clause in solicitations and contracts when a fixed-price construction contract is contemplated and the contract amount is expected to be $2 million or less.