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FAR and DFARS › FAR Part 52: Solicitation Provisions and Contract Clauses › Subpart 52.2

FAR 52.226-5 Restrictions on Subcontracting Outside Disaster or Emergency Area.

The codified text (eCFR, as of 2026-10-02). Under the Revolutionary FAR Overhaul ↗, agencies follow class deviations with new text for many parts while the formal rules go through the Federal Register: check the solicitation and your contract's clauses, which rule.

In plain English

This clause limits how much work a contractor may subcontract outside a designated disaster or emergency set-aside area. It sets minimum percentages of contract performance that must be done by the contractor's own employees or by employees of businesses located in that area, depending on the type of contract. It matters because a contractor must track and meet these limits to stay compliant.

Applies to: Contractors performing contracts set aside for a disaster or emergency area

What it requires

  • For services (except construction), expend at least 50 percent of the cost of contract performance incurred for personnel on employees of the Contractor or employees of other businesses residing or primarily doing business in the set-aside area
  • For supplies (other than procurement from a nonmanufacturer), have the Contractor or employees of other businesses residing or primarily doing business in the set-aside area perform work for at least 50 percent of the cost of manufacturing the supplies, not including the cost of materials
  • For general construction, perform at least 15 percent of the cost of the contract, not including the cost of materials, with its own employees or employees of other businesses residing or primarily doing business in the set-aside area
  • For construction by special trade Contractors, perform at least 25 percent of the cost of the contract, not including the cost of materials, with its own employees or employees of other businesses residing or primarily doing business in the set-aside area

Key terms: cost of the contract · cost of contract performance incurred for personnel · cost of manufacturing · cost of materials · personnel

Written by AI from this section's text. A guide, not legal advice: the text below rules.

The text

As prescribed in 26.206(c), insert the following clause:

Restrictions on Subcontracting Outside Disaster or Emergency Area (NOV 2007)

(a) Definitions. The definitions of the following terms used in this clause are found in the Small Business Administration regulations at 13 CFR 125.6(e): cost of the contract, cost of contract performance incurred for personnel, cost of manufacturing, cost of materials, personnel, and subcontracting.

(b) The Contractor agrees that in performance of the contract in the case of a contract for—

(1) Services (except construction). At least 50 percent of the cost of contract performance incurred for personnel shall be expended for employees of the Contractor or employees of other businesses residing or primarily doing business in the clause at FAR 52.226—4, Notice of Disaster or Emergency Area Set-Aside;

(2) Supplies (other than procurement from a nonmanufacturer of such supplies). The Contractor or employees of other businesses residing or primarily doing business in the set-aside area shall perform work for at least 50 percent of the cost of manufacturing the supplies, not including the cost of materials;

(3) General construction. The Contractor will perform at least 15 percent of the cost of the contract, not including the cost of materials, with its own employees or employees of other businesses residing or primarily doing business in the set-aside area; or

(4) Construction by special trade Contractors. The Contractor will perform at least 25 percent of the cost of the contract, not including the cost of materials, with its own employees or employees of other businesses residing or primarily doing business in the set-aside area.

(End of clause)

Sections it refers to

  • 26.206 Solicitation provision and contract clauses.
  • 52.226 [Reserved]

Sections that refer to it

  • 26.206 Solicitation provision and contract clauses.
  • 52.212-5 Contract Terms and Conditions Required To Implement Statutes or Executive Orders—Commercial Products and Commercial Services.

← 52.226-4 Notice of Disaster or Emergency Area Set-Aside. · 52.226-6 Promoting Excess Food Donation to Nonprofit Organizations. →

Rule changes for FAR Part 52

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.

FAR 52.226-5 Restrictions on Subcontracting Outside Disaster or Emergency Area · SpendQuery