It is an established government contract rule that small businesses cannot have a large business perform more than 50% of the work on non-construction government contracts.  Congress and the SBA have been quite clear that they want bona fide small firms to benefit from the award of a contract and not act as a pass-through.  What about small businesses, though, that subcontract with other small businesses?  Up until now there has been substantial confusion over whether a small subcontracting with the same type of small counts against the 50% limit.  A proposed rule would eliminate the ambiguity and make it clear that, for example, a HUBZone small business can subcontract with another HUBZone small business and not have that subcontract count against the limitation on subcontracting rule.  The FAR Council issued the proposed rule December 4^th, with the comment period closing at COB today.   Upon finalization, the rule will allow small businesses to subcontract with other similarly situated small businesses without having those subcontracts count against limitation calculations.   Rather, the work would be counted as if it were performed by the prime contractor.  It is important to note that this rule change does NOT impact large businesses working with a small business on a set-aside contract.  Passing through more than 50% of the business on such a contract is outside the rules