Small government contractors competing on set-asides are in a unique position. Unlike in the commercial world (and on unrestricted government contracts), small primes in the set-aside arena routinely subcontract to larger and more powerful companies. Sometimes these large subcontractors aren’t used to being in a secondary role, and can make life difficult for their smaller primes.
Case in point: subcontractors sometimes balk at providing small government prime contractors with their direct labor, fringe benefit, General and Administrative, or other pricing information, preferring to simply offer a fixed-price lump sum. Even when the government is uninterested in such details, having a full breakdown can help ensure compliance with the FAR’s subcontracting limits. But as one prime contractor found out, when the government wants a pricing breakdown, failing to include a subcontractor’s information can be fatal.
One small contractor recently learned this lesson the hard way.