Overview
FAR Subpart 36.5 prescribes the specific provisions and clauses required for federal solicitations and contracts involving construction, dismantling, demolition, or the removal of improvements. It establishes a standardized framework for managing the unique risks of construction, such as site conditions, safety, self-performance requirements, and project scheduling.
Key Rules
- Self-Performance Requirement: For large projects (typically over $2 million), contractors are required to perform a significant portion of the work—ordinarily at least 12%—with their own organization to ensure adequate supervision and interest.
- Threshold for Mandatory Clauses: Most standard construction clauses (e.g., Differing Site Conditions, Superintendence, Cleaning Up) are mandatory for fixed-price contracts exceeding the Simplified Acquisition Threshold (SAT), though Contracting Officers (COs) have the discretion to include them in smaller contracts.
- Differing Site Conditions: This subpart mandates clauses that protect both parties when subsurface or latent physical conditions at the site differ materially from those indicated in the contract.
- Accident Prevention: High-stakes safety requirements are mandatory for construction and demolition. If a project is hazardous or of long duration, the CO must use Alternate I of the Accident Prevention clause.
- Schedules and Progress: For projects exceeding the SAT and 60 days in duration, contractors must provide a progress schedule to ensure the government can monitor the timeline effectively.
- Small Business Exceptions: The mandatory "Performance of Work by the Contractor" clause (52.236-1) is generally excluded from contracts awarded under specific small business programs (e.g., 8(a), HUBZone, Service-Disabled Veteran-Owned Small Business) as those programs have their own internal subcontracting limitations.
Responsibilities
- Contracting Officer (CO):
- Determining the appropriate percentage of work the contractor must perform personally (not less than 12%).
- Selecting and inserting the correct clauses based on contract type (Fixed-Price vs. Cost-Reimbursement) and dollar value.
- Deciding whether to furnish government utilities to the contractor.
- Notifying OSHA or other officials if a contractor fails to correct serious or imminent safety dangers.
- Contractor:
- Supervising the work personally or through an approved representative.
- Obtaining all necessary permits and complying with applicable laws/regulations.
- Protecting existing vegetation, structures, and utilities.
- Maintaining the site in a clean and safe condition.
- Performing site investigations prior to bidding to verify conditions.
- Technical Representatives:
- Advising the CO on safety precautions for service contracts performed at government facilities.
Practical Implications
- Risk Mitigation via Site Visits: Because the "Site Investigation and Conditions Affecting the Work" clause is standard, contractors who fail to participate in organized site visits (FAR 52.236-27) do so at their own peril. They may be barred from later claiming "differing site conditions" for issues that were discoverable during a pre-proposal inspection.
- Subcontracting Strategy: The 12% self-performance rule prevents a general contractor from acting as a mere "broker" on large projects. Firms must ensure they have the internal labor capacity to meet this threshold before bidding on projects over $2 million.
- Safety Compliance: The requirement for COs to report serious safety violations to OSHA creates a high-stakes environment for safety management. A safety failure doesn't just risk a "cure notice"; it can lead to immediate federal regulatory intervention.
- Documentation Management: Under the "Specifications and Drawings" clause, contractors must be prepared to provide "as-built" or record drawings. Failure to account for the administrative cost of producing these (especially if Alternates I or II are used) can erode profit margins at the end of a project.