48 C.F.R. § 9.405-2

9.405-2 Restrictions on subcontracting.

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(a) When a contractor debarred, suspended, proposed for debarment, or voluntarily excluded, is proposed as a subcontractor for any subcontract subject to Government consent (see subpart 44.2), contracting officers shall not consent to subcontracts with such contractors unless the agency head states in writing the compelling reasons for this approval action. (See 9.405 concerning declarations of ineligibility affecting subcontracting.)

(b) The Government suspends or debars contractors to protect the Government's interests. Contractors are prohibited from entering into any subcontract in excess of $45,000, other than a subcontract for a commercially available off-the-shelf item, with a contractor that has been debarred, suspended, proposed for debarment, or voluntarily excluded, unless there is a compelling reason to do so. If a contractor intends to enter into a subcontract in excess of $45,000, other than a subcontract for a commercially available off-the-shelf item, with a party that is debarred, suspended, proposed for debarment, or voluntarily excluded, as evidenced by the party's having an active exclusion record in SAM (see 9.404), a corporate officer or designee of the contractor is required by operation of the clause at 52.209-6, Protecting the Government's Interest when Subcontracting with Contractors Debarred, Suspended, Proposed for Debarment, or Voluntarily Excluded, to notify the contracting officer, in writing, before entering into such subcontract. For contracts for the acquisition of commercial products, the notification requirement applies only for first-tier subcontracts. For all other contracts, the notification requirement applies to subcontracts at any tier. The notice must provide the following:

(1) The name of the subcontractor;

(2) The contractor's knowledge of the reasons for the subcontractor having an active exclusion record in SAM;

(3) The compelling reason(s) for doing business with the subcontractor notwithstanding its having an active exclusion record in SAM; and

(4) The systems and procedures the contractor has established to ensure that it is fully protecting the Government's interests when dealing with such subcontractor in view of the specific basis for the party's debarment, suspension, proposed debarment, or voluntary exclusion.

(c) The contractor's compliance with the requirements of 52.209-6 will be reviewed during Contractor Purchasing System Reviews (see subpart 44.3).

[54 FR 19815, May 8, 1989, as amended at 56 FR 29127, June 25, 1991; 59 FR 67033, Dec. 28, 1994; 60 FR 33066, June 26, 1995; 60 FR 48237, Sept. 18, 1995; 68 FR 69251, Dec. 11, 2003; 69 FR 76349, Dec. 20, 2004; 71 FR 57366, Sept. 28, 2006; 75 FR 77740, Dec. 13, 2010; 76 FR 39238, July 5, 2011; 78 FR 37678, June 21, 2013; 80 FR 38296, July 2, 2015; 83 FR 48696, Sept. 26, 2018; 85 FR 27090, May 6, 2020; 86 FR 3678, Jan. 14, 2021; 86 FR 61021, Nov. 4, 2021; 90 FR 512, Jan. 3, 2025; 90 FR 41877, Aug. 27, 2025]

Notes of Decisions

Cited in 5 cases, 1989–2018 · leading case: Kaspersky Lab, Inc. v. U.S. Dep't of Homeland SEC. & Kirstjen M. Nielsen, 909 F.3d 446 (D.C. Cir. 2018).

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Kaspersky Lab, Inc. v. U.S. Dep't of Homeland SEC. & Kirstjen M. Nielsen, 909 F.3d 446 (D.C. Cir. 2018). “"); 48 C.F.R. § 9.405-2 ("[C]ontractors shall not enter into any subcontract in excess of $35,000, other than a subcontract for a commercially available off-the-shelf item, with a contractor that has been debarred.”

Phillips v. Mabus, 894 F. Supp. 2d 71 (D.D.C. 2012). “, 48 C.F.R. § 9.405-2 (subcontractors are impacted by debarments; once a contractor has been debarred, it is effectively prohibited from serving as a subcontractor on government contracts); see also Highview Eng'g v.”

Caddell Constr. Co. v. United States, 129 Fed. Cl. 383 (Fed. Cl. 2016). “" 48 C.F.R. § 9.405-2 (a) (2015). As such, a prime contractor, with written agency approval, can hire a subcontractor even if that subcontractor has been debarred, suspended, or proposed for debarment.”

Med. Devices of Fall River, Inc. v. United States, 19 Cl. Ct. 77 (Ct. Cl. 1989). “48 C.F.R. § 9.405-2 , Restrictions on Subcontracting, provides: "When a debarred or suspended contractor is proposed as a subcontractor for any subcontract subject to Government consent, approval shall not be given unless the acquiring agency’s head or a designee states in…”

Frequency Elec. v. US Dept Air Force (4th Cir. 1998). “See 48 C.F.R. § 9.405-2 . The record shows only one instance in which FEI received a prime contract, and this award followed certification that the government had a "compelling need" to make the award.”

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