Tag Archives: Subcontracting

Subcontractor Price Proposals: A Cautionary Tale

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Subcontractors sometimes prefer to submit their cost or price proposals directly to the government, instead of submitting their cost or pricing information through the prime contractor.  In cases where a procuring agency allows it, such independent submissions can ease a subcontractor’s concerns about disclosing sensitive information to the prime contractor.

But when a subcontractor circumvents the prime contractor and independently submits its pricing, the prime contractor is unable to review the subcontractor’s proposal to ensure that it complies with the terms of the solicitation.  As demonstrated in a recent GAO bid protest decision, if the subcontractor’s proposal is non-compliant, the entire team may pay the price.

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Large Business Tossed Out For Low Subcontracting Goal

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A large business was tossed out of a government competition because the company’s small business subcontracting goal was substantially below the agency’s stated goal.

In a recent bid protest decision, the GAO held that the agency acted reasonably when it rated the large business as “unacceptable” for failing to propose a sufficiently high small business subcontracting goal.

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Limitations on Subcontracting: SBA Proposes Sweeping Changes

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The limitations on subcontracting would undergo sweeping changes under a recent SBA proposal.

On December 29, the SBA issued a proposed rule to enact the changes implemented by Congress in the National Defense Authorization Act of 2013–including a thorough re-write of the way that compliance with the subcontracting limits is calculated and enforced.

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GAO: Subcontracting Plan Requirement Applies Broadly

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When a Contracting Officer determines that subcontracting possibilities will exist under a qualifying unrestricted contract, subcontracting plans are required from all offerors other than small businesses–including entities that do not intend to issue any subcontracts.

In a recent bid protest decision, the GAO rejected a protester’s argument that the subcontracting plan requirement is to be determined on an “offeror by offeror” basis, and held that the requirement to provide a subcontracting plan is broadly applied.

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8(a) Subcontracting Limitations: Compliance Oversight Lacking

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Compliance with the limitations on subcontracting are not adequately being monitored by the contracting officers responsible for 8(a) contracts, according to a recent GAO report.

After reviewing a representative sample of ten 8(a) contracts, the GAO determined that contracting officers effectively monitored subcontracting limit compliance on two of those contracts.  In other cases, agency contracting officers failed to effectively monitor compliance, even in situations presenting a heightened risk of potential violations–such as where ineligible incumbents were serving as subcontractors.

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GAO: Agency Reasonably Considered Subcontractor’s Experience

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Absent an express prohibition in the solicitation, the experience of a proposed subcontractor may be considered by an agency in determining whether an offeror meets the solicitation’s experience requirements.

In a recent bid protest decision, the GAO confirmed that the experience of a proposed subcontractor could be considered in an agency’s evaluation because the solicitation did not prohibit the agency from considering the subcontractor’s experience.

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Davis-Bacon Act Fraud: Subcontractor’s Owner Sentenced

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Davis-Bacon Act fraud has resulted in a criminal sentence for the owner of a now-defunct construction subcontractor.

According to a Department of Justice press release, the subcontractor’s owner has been sentenced to four years of probation (including 18 months of home confinement) and ordered to pay $164,627 in restitution, after pleading guilty to charges of conspiracy to pay employees less than prevailing wages on a federal construction project in Boston.

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