# SBA Plans Subcontracting Rule Changes

The Small Business Administration plans to draft revisions to its limitations-on-subcontracting rule, 13 CFR 125.6, by April 1, 2027. The proposed work is expected to address thresholds, oversight, reporting, and pass-through arrangements. The source cites 2024 awards as examples: a $95.3 million 8(a) construction award, of which $73.6 million reportedly went to a large corporation, and an approximately $8.8 million 8(a) management consulting award, of which $8.5 million reportedly went to a large consulting firm. These examples underscore the rule’s significance for small-business set-asides, but do not establish that either award violated the rule.

- Small-business prime contractors and their subcontractors should review current 13 CFR 125.6 obligations and workshare arrangements; the planned drafting date is not an effective date or a contractor compliance deadline.
- The SBA’s stated focus on tighter oversight, reporting, and pass-through loopholes could lead to changed self-performance expectations. Contractors can use relevant industry data and participate in the forthcoming rulemaking to inform revisions by industry and contract type.
- Procurement teams should account for subcontracting-limit risks when structuring small-business set-asides and evaluating proposed subcontractor roles.

**Jurisdictions:** federal
**Industries:** Construction & Infrastructure, Professional Services
**Topics:** Regulatory Compliance
**Published:** October 05, 2026

### Government Entities
- Small Business Administration (SBA)
- Small Business Administration Office of Inspector General (SBA OIG)

### Sources
- [SBA Targets the Limitations on Subcontracting | Schwabe, Williamson & Wyatt PC - JDSupra](https://www.jdsupra.com/legalnews/sba-targets-the-limitations-on-7120427) - JDSupra