FAR 52.236-1—Performance of Work by the Contractor.
Plain-English Summary
FAR 52.236-1, Performance of Work by the Contractor, is a construction clause that requires the prime contractor to self-perform a specified minimum percentage of the total contract work using its own organization and on the site. The clause also addresses how the required percentage is selected at award, tying it to the complexity and magnitude of the project and the amount of specialty subcontracting that is customary or necessary for the work. It further allows the required percentage to be reduced later by supplemental agreement if the contractor requests a reduction during performance and the contracting officer determines the change would benefit the Government. In practice, this clause is meant to ensure the prime contractor remains substantively engaged in the project, prevents excessive pass-through performance, and gives the Government a tool to preserve accountability, control, and quality on construction contracts. It matters both at award and during performance because the percentage requirement can affect teaming strategy, subcontracting plans, staffing, and whether the contractor is compliant with the contract’s self-performance obligation.
Key Rules
Minimum self-performance required
The contractor must perform, on the site and with its own organization, at least the stated percentage of the total amount of work under the contract. The exact percentage is inserted in the clause and becomes a binding contract requirement.
Percentage set for the project
The required percentage is not fixed by the clause itself; it must be selected consistent with the complexity and magnitude of the work and the amount of specialty subcontracting that is customary or necessary. This means the contracting officer must tailor the requirement to the specific construction effort.
Work must be on-site and in-house
The clause requires performance both on the site and with the contractor’s own organization. Work performed entirely by subcontractors, or work not actually performed at the project site when site performance is required, generally does not count toward the contractor’s required share.
Reduction only by supplemental agreement
The required percentage may be reduced only through a supplemental agreement to the contract. A unilateral change is not enough; the contractor must request the reduction and the contracting officer must agree that the reduction benefits the Government.
Government-benefit determination required
The contracting officer may approve a reduction only if it is determined to be to the advantage of the Government. This gives the Government discretion to deny requests that would weaken accountability, increase risk, or otherwise not serve the Government’s interests.
Responsibilities
Contracting Officer
Insert the appropriate self-performance percentage in the clause at award, using the project’s complexity, magnitude, and customary specialty subcontracting needs as the guide. During performance, evaluate any contractor request to reduce the percentage and approve it only by supplemental agreement when the reduction is advantageous to the Government.
Contractor
Perform at least the required percentage of the total contract work on-site and with its own organization. Monitor subcontracting and self-performance levels throughout the job, and if a reduction is needed, formally request it and support why the change would benefit the Government.
Subcontractors
Perform only the work assigned under subcontract and understand that their work generally does not count toward the prime contractor’s required self-performance share. Their role is relevant because excessive subcontracting can cause the prime to fall below the required percentage.
Agency/Project Team
Support the contracting officer in setting a realistic percentage that reflects the nature of the construction work and the need for specialty trades. During performance, help monitor whether the contractor’s staffing and subcontracting approach remains consistent with the clause.
Practical Implications
This clause directly affects how a prime contractor structures its bid, staffing plan, and subcontracting strategy on construction projects. Contractors should confirm early whether the inserted percentage is achievable with their own labor and management resources.
A common pitfall is assuming that all subcontracted work can be offset by general oversight or project management. The clause focuses on actual work performed by the contractor’s own organization, not just supervision or coordination.
Because the percentage can be reduced only by supplemental agreement, contractors should not wait until they are already out of compliance before raising the issue. Any request should be made early, with a clear business and performance justification.
Contracting officers should be careful to set a percentage that is realistic for the project. If the requirement is too high for a job that legitimately needs specialty subcontractors, it can create unnecessary performance problems and disputes.
During performance, both sides should track self-performance and subcontracting carefully. Poor recordkeeping can make it difficult to prove compliance or justify a requested reduction, especially on complex construction contracts.
Official Regulatory Text
As prescribed in 36.501 (b) , insert the following clause: [ Complete the clause by inserting the appropriate percentage consistent with the complexity and magnitude of the work and customary or necessary specialty subcontracting (see 36.501 (a)). ] Performance of Work by the Contractor (Apr 1984) The Contractor shall perform on the site, and with its own organization, work equivalent to at least _______ [ insert the appropriate number in words followed by numerals in parentheses ] percent of the total amount of work to be performed under the contract. This percentage may be reduced by a supplemental agreement to this contract if, during performing the work, the Contractor requests a reduction and the Contracting Officer determines that the reduction would be to the advantage of the Government. (End of clause)