8(a) Program: Participant Terminated for Not Paying Subcontractor

An 8(a) Program participant was terminated from the 8(a) Program for failing to pay a subcontractor.

According to the SBA, the non-payment reflected poorly on the 8(a) company’s character–and “good character” is a prerequisite for 8(a) Program participation.

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FAR & DFARS Have 27 Distinct Definitions of “Subcontract”

The FAR and DFARS have 27 distinct definitions of the term “subcontract,” according to an acquisition reform panel.

In its first report, the Section 809 Panel urges policymakers to adopt a consolidated definition of the term “subcontract,” as well as a common definition of “subcontractor,” a term that has 21 distinct definitions in the FAR and DFARS.

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NHO Prime Gets “Experience” Weakness Despite Experienced Affiliate

An agency was allowed to assign a Native Hawaiian-owned prime contractor a weakness for its experience because the NHO prime lacked relevant experience–even though the prime’s proposal indicated that it would rely in part on the resources of an experienced NHO sister company.

A recent GAO bid decision demonstrates that while a procuring agency is entitled to consider the experience and past performance of a prime contractor’s affiliates under certain circumstances, the agency is not precluded from considering the prime’s own experience (or lack thereof).

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Agency Insists On Subcontract With OEM; GAO Agrees

Subcontracting is a way of life for many federal government contractors; however, the identification and selection of such subcontractors is usually left up to the reasonable discretion of the prime contractor. So what happens when a solicitation prescribes that a particular subcontractor be retained, but that subcontractor won’t assist in bid preparation efforts?

Well, in one recent case, the prospective prime contractor was out of luck.

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GAO Won’t Evaluate Subcontractor’s Small Business Status

GAO ordinarily will not hear any argument that is based on a company’s small business status, even if the alleged large company is only a proposed subcontractor.

In a recent decision, GAO declined to hear a protester’s argument that the awardee’s supposedly-small subcontractors were affiliated with other entities, holding that such a determination is reserved solely for the SBA.

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ASBCA: No Valid Subcontractor Claim Against Government

I sometimes suggest that a government subcontract include a so-called “pass-through” dispute resolution provision, in which the prime contractor agrees to sponsor its subcontractor’s claims against the government.  A recent Armed Services Board of Contract Appeals case demonstrates why pass-through provisions can be so important.

In its decision, the ASBCA held that a subcontractor lacked a valid claim against the government–and therefore, had no ability to pursue relief at the ASBCA.

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GAO: Agency Reasonably Adjusted Sub’s Unsubstantiated Costs

Under a solicitation for a cost-reimbursable contract, an offeror’s proposed costs are not controlling, because the government is on the hook for the contractor’s actual and allowable incurred costs. Before making an award decision, the government must consider whether the proposed costs should be upwardly adjusted.

A recent GAO bid protest decision highlights the need for offerors bidding on cost-reimbursable work to make sure that their proposed costs are realistic and substantiated—including the proposed costs of major subcontractors.

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