AbilityOne Tweaks Fees and Subs: Bureaucracy Gets a Makeover
Published Date: 4/30/2026
Proposed Rule
Summary
The AbilityOne Program is updating its rules to make sure central nonprofit agencies get written permission before charging fees and to make subcontracting easier and less complicated. These changes help nonprofits work smoother and faster while following the law. If you’re involved with AbilityOne, get ready to share your thoughts by June 1, 2026!
Analyzed Economic Effects
7 provisions identified: 4 benefits, 1 costs, 2 mixed.
Fee base excludes subcontracted work
Program fees must be calculated based on the dollar value of nonprofit agency sales to the Federal Government, but the calculation must exclude the value or costs of any subcontracted part of the commodity or service unless the Committee allows it. The Commission reiterates the fee ceiling remains set by the Committee; the rule background notes the current program fee ceiling has been 3.75% since 2020.
Subcontracting must protect employment goals
The rule clarifies that subcontracting is allowed only when it complements employment prospects or career development for individuals who are blind or have significant disabilities, or when it meets niche or specialized contract needs; subcontracting may not be used to avoid the statutory 75% direct labor hour ratio requirement. The change is meant to ensure subcontracting does not diminish the Program's employment mission.
New de minimis subcontracting thresholds
The proposal creates de minimis thresholds that limit when NPAs must notify or get Commission approval: subcontracting to for-profit entities above 10% of the government order value for products or above 25% of direct labor hours for services requires Commission notification and approval. Subcontracting below those levels generally requires only notification, and ad hoc nonroutine subcontracting below those levels is exempt from notification and approval.
Authorized NPA subcontractors keep mandatory rights
The proposed rule affirms that when an authorized NPA serves as a subcontractor, it retains the same Program mandatory-source rights and obligations as any other authorized source; it may not be replaced without coordinating with the CNA and the Commission. This preserves the NPA's position as a required source under the Procurement List when it is directed to serve as a subcontractor.
CNAs must sign cooperative agreements
The rule would require central nonprofit agencies (CNAs) to enter into a cooperative agreement with the AbilityOne Commission, governed by 31 U.S.C. chapter 63 and 2 CFR part 200, before they may collect program fees. The regulation also states the program fee is an allowable expense included in the Fair Market Price and the final federal contract price.
Limits on fee collection after CNA termination
The proposed rule prohibits a CNA from collecting program fees if its designation is severed or its cooperative agreement with the Commission expires, but it allows collection of fees that accrued before the termination or expiration. This means CNAs cannot start collecting new fees after losing designation or after an agreement ends, though pre‑existing accrued fees remain collectible.
CNAs may charge fees when acting as prime
The proposed rule allows a CNA that serves as the prime contractor to collect a program fee from a nonprofit agency subcontractor when the NPA is the authorized source for a Procurement List requirement, unless the CNA's administrative or indirect costs were already negotiated into the contract price. In other cases where the CNA performs substantial contract management, the CNA is expected to capture costs through normal contract negotiations rather than a separate fee.
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Key Dates
Department and Agencies
Related Federal Register Documents
2026-09746 — Procurement List; Additions
The government is adding new products to a special list that only nonprofit groups employing people who are blind or severely disabled can supply. This change starts on May 31, 2026, and helps these nonprofits get more business while making sure federal agencies buy from the right sources. No extra paperwork or costs are expected for small businesses or agencies.
2026-09610 — Procurement List; Proposed Additions and Deletions
The government wants to add some tasty salt-free spice blends to the list of products made by nonprofits that help people who are blind or severely disabled. At the same time, they plan to stop using a grounds maintenance service at a Navy base in California that was provided by one of these nonprofits. If you have thoughts, speak up by June 13, 2026, before these changes take effect and impact Defense Department buying.
2026-09611 — Procurement List; Deletions
The government is removing some products and services from the special Procurement List that supports people who are blind or severely disabled. Starting June 13, 2026, these items won’t be bought through the usual nonprofit agencies, but this change won’t cause big problems for small businesses or the government budget. It’s a smooth update to keep things running efficiently while still supporting good causes.
2026-08393 — Procurement List; Deletions
The government is removing some straps and combat ID kits from the special list that supports workers who are blind or severely disabled. Starting May 30, 2026, these items won’t be bought through the usual nonprofit agencies, but this change won’t cause big problems for small businesses. It’s a smooth update to keep things running right without extra costs or paperwork.
2026-08394 — Procurement List; Proposed Additions and Deletions
The government plans to add lawn care services at a Miami NOAA lab to be done by Goodwill Industries of South Florida, while removing custodial services at a Menlo Park USGS campus currently done by Hope Services. These changes support nonprofits that employ people who are blind or severely disabled. Comments on these updates are open until May 30, 2026, so speak up if you have thoughts!
2026-07879 — Procurement List; Additions and Deletions
The government is removing several safety and helicopter landing kits from the special list that supports nonprofits employing people who are blind or severely disabled. This change takes effect on May 24, 2026, and means these products won’t be bought through that program anymore. The update won’t cause extra costs or paperwork and might open doors for other small businesses to supply these items.
Previous / Next Documents
Previous: 2026-08387 — Cost Standards and Procedures; Purchasing and Property Management
The Legal Services Corporation is updating its rules on how grant money can be spent and how property should be managed. These changes make the rules clearer, cut down on paperwork, and boost accountability for organizations receiving federal funds. If you’re involved with LSC grants, get ready to follow the new guidelines and send your feedback by June 29, 2026!
Next: 2026-08406 — HOME Investment Partnerships Program: Further Program Updates and Streamlining
HUD is updating the HOME Investment Partnerships Program to make it simpler and more flexible, especially for green building projects and scattered site manufactured housing rentals. These changes affect local housing groups that get federal money to build or fix affordable homes. Public comments are open until June 1, 2026, so folks can share their thoughts before the new rules take effect.