The ostensible subcontractor rule can be challenging, because there is no magic formula for compliance. When a protester raises an ostensible subcontractor rule allegation, the SBA evaluates all aspects of the prime/subcontractor relationship to see whether the ostensible subcontractor rule was violated. If the SBA concludes that the small prime contractor is unduly reliant on it subcontractor, and/or the subcontractor will perform the primary and vital portions of the contract, it will find the prime affiliated with its subcontractor.
Although there is no single recipe for ostensible subcontractor rule success, it can be useful to examine SBA Office of Hearings and Appeals cases to see exactly what sort of prime/sub relationships SBA OHA deems problematic–and which pass muster. Today’s post is in the latter category: a recent SBA OHA decision finding that the ostensible subcontractor rule had not been violated.
What did the prime and subcontractor in that case do right?
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