Is there anything prohibiting a CO from imposing additional subcontracting restrictions in a contract?
Started by Krimz · Aug 1, 2024 · 5 replies
- KOriginal post
Krimz
Aug 1, 2024 · 1y ago
Morning Wifcon,
My agency's seen a spat of contract awards fall through after an awardee, who had no intention of self-performing any of the work, was unable to find a suitable subcontractor. We end up terminating and resoliciting. This is frustrating now only to our procurement staff, but to our customers as well.
FAR 52.219-14 limits the amount a small business can subcontract to other than similarly situated entities to 50% paid by the Government for contract performance, but it does not limit them to subcontracts to similarly situated entities.
Is there any way a CO can state, without breaking any regulation or law, the prime contractor must self-perform no less than 50% of the contract?
Any help is much appreciated.
- R
Retreadfed
Aug 1, 2024 · 1y ago
Are you talking about contracts in general or are you concerned only with contracts with small business concerns?
- V
Vern Edwards
Aug 2, 2024 · 1y ago
Krimz said:
Is there any way a CO can state, without breaking any regulation or law, the prime contractor must self-perform no less than 50% of the contract?
If the prime contract will include the clause at FAR 52.219-14, then any further limitation on subcontracting might be a FAR deviation. See FAR Subpart 1.4.
If the prime contract will not include FAR 52.214-19, then any restriction on subcontracting might be protested as "unduly restrictive of competition." In that case you may have to justify (1) the imposition of the limitation and (2) the extent of the limitation. Why the limitation? Why 50 percent? See, e.g., International Global Solution, LLC; Definitive InfoTech Services and Solutions, LLC, GAO decision B- 419956.20, November 18, 2021.
- K
Krimz
Aug 2, 2024 · 1y ago
Vern Edwards said:
If the prime contract will include the clause at FAR 52.219-14, then any further limitation on subcontracting might be a FAR deviation. See FAR Subpart 1.4.
If the prime contract will not include FAR 52.214-19, then any restriction on subcontracting might be protested as "unduly restrictive of competition." In that case you may have to justify (1) the imposition of the limitation and (2) the extent of the limitation. Why the limitation? Why 50 percent? See, e.g., International Global Solution, LLC; Definitive InfoTech Services and Solutions, LLC, GAO decision B- 419956.20, November 18, 2021.
Fantastic, thank you, Vern. This gives me a lot to think about.
- R
RJ_Walther
Aug 2, 2024 · 1y ago
If I could suggest a different tack, this sounds like something that could be considered prior to award in the responsibility determination. While FAR subpart 9.104-3(a) excepts situations where the prospective contractor "proposes to perform the contract be subcontracting", 9.104-4 gives you the option of determining subcontractor responsibility "when it is in the Government's interest to do so."
Of course now you're going to be dealing with SBA Certificates of Competency, but if the alternative is awarding a contract only to have it fail in performance this might be worth it.
- K
Krimz
Aug 22, 2024 · 1y ago
On 8/2/2024 at 2:13 PM, RJ_Walther said:
If I could suggest a different tack, this sounds like something that could be considered prior to award in the responsibility determination. While FAR subpart 9.104-3(a) excepts situations where the prospective contractor "proposes to perform the contract be subcontracting", 9.104-4 gives you the option of determining subcontractor responsibility "when it is in the Government's interest to do so."
Of course now you're going to be dealing with SBA Certificates of Competency, but if the alternative is awarding a contract only to have it fail in performance this might be worth it.
Great advice. Thank you.