FAR 44.101 defines a subcontractor as “Any supplier, distributor, vendor, or firm that furnishes supplies or services to, or for, a prime contractor or another subcontractor.”

As a prime contractor or a subcontractor with subcontractors you have certain responsibilities that will help to ensure an efficient and productive relationship that, in the end, provides the desired results (FAR 42.202)e)(2).

The selection of your subcontracting team member may be the result of direction from the prime contractor, management’s relationships, the availability of a specifically needed expertise, past performance or economic competition.  However, your subcontractor as identified by you, and you as the prime contractor to your subcontractor, will need to establish a strong relationship of respect and understanding.  You must be able to work as a cohesive team, to be able to provide the required results, on time and on budget.

If you and your subcontractors can’t work together in a professional manner consider finding a new team member. Don’t be shy about ensuring their capability to provide the desired results.  Here are a few things that must be done:

  • Perform background checks, verify their capabilities through personal references and past performance. Check through the Excluded Parties Listing System (EPLS) on the System for Award Management (SAM) at www.sam.gov, before asking them to become a team member and again before contract execution, to see that they have not been debarred or suspended from performing on government contracts.
  • Establish up-front expectations of contract work share, i.e., what is to be done, by who, by when, at what cost. Be exact, not vague.  Provide defined tasks through a Work Breakdown Structure (WBS).
  • Maintain strong communications before and after the solicitation is released, through negotiations during contract performance, and contract close-out. Keep in mind, communications includes actual conversations and not emails.
  • Even with a high level of trust between you and your subs executed a Non-Disclosure Agreement (NDA) to protect all parties involved.
  • Ensure your subcontractor has an appropriate infra-structure applicable to the solicitation/contract being sought to support their contract performance (i.e., accounting system, labor recording process, billing and reporting requirements, etc.).
  • Develop and maintain the one-team, long-term relationship for this solicitation and the ones to come.

In addition when writing your subcontract agreement do not just flow-down the clauses flowed to you from the prime.  All of the prime flow-downs do not apply to subcontract arrangements.  Imposing un-needed clauses requires additional efforts and costs money (See “A Study of the Applicability of Federal Acquisition Regulation Clauses to Subcontracts under Prime Defense and NASA Contracts” published by the National Defense Industrial Association at http://www.ndia.org).

Keep in mind that poor contract development leads to poor performance and poor results, which leads to costly disputes.  In that regard, establish a disputes resolution process.