The new Limitation on Subcontracting (LOS) rules became effective on June 30, 2016.  As is usually the case in the realm of small business contracting, there will be a lag time until the FAR “catches up” with the new SBA regulations.  However, these new rules are based on statute, which governs both the SBA and the FAR regulations.  Therefore, contractors should expect agencies and the SBA to follow the new rules, even though the FAR has not yet been updated.   The current FAR clause governing LOS may be found at FAR 52.219-14.  It has not yet been updated to incorporate the new LOS calculations as articulated in the SBA’s new rules.  For example, the language of the FAR still states that it only applies to small business and 8(a) set-aside contracts, even though the new rule now applies to all small business and socioeconomic set-asides.  The language also states that the calculation will be based on “cost of contract performance incurred for personnel,” rather than total contract value, and does not provide for the utilization of SSE subcontractors.  We strongly urge contractors to seek clarification from their contracting officers that the new LOS calculations apply, even if a solicitation incorporates FAR 52.219-14, which has not yet been updated.