Subcontracting Under Government Contracts

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Subcontracting Under Government Contracts

  • Is a subcontractor the best option for specialized skills? 
  • Which prime contract clauses should be included in my subcontract? 
  • Are the subcontract agreement terms and conditions fair? Am I protected? 
  • Would a Master Subcontract Agreement (MSA) be more effective and efficient? 

BOOST LLC is here to provide expert guidance and assistance every step of the way!  Whether you need help with partnering strategies, drafting and reviewing agreements, compliance with federal and agency regulations, or processes and procedures… BOOST Contract consultants have the experience and know-how you need and can trust! We get shit done!

How to Properly Procure Subcontractors 

Government subcontracting refers to the process where a primary contractor (the “prime”) hires secondary contractors (the “subcontractors”) to perform part of the work required under a federal government contract. Subcontractors typically handle specialized or niche tasks that the prime contractor may not have the resources, expertise, or capabilities to perform on their own, or they are used for surge capacity when the contractor’s and subcontractor’s skills are aligned. The subcontractor is paid by the prime contractor and, in turn, is accountable to the prime contractor for the performance of the tasks they’ve been assigned. 

As part of the subcontracting process, there are several key steps: 

  1. What is the work? Review and understand prime contract requirements. 
  2. What are the gaps in capabilities? Assess potential subcontractors based on project requirements. 
  3. What federal and agency regulations apply to the requirement? Ensure compliance with all applicable regulations and statutes. 
  4. How to build and finalize the team? Issue solicitations, evaluate proposals, negotiate terms and conditions. 
  5. Are we ready to start work? Review final documents and execute subcontract agreements. 
  6. Is the work getting done? Monitor performance, pay invoices, modify the subcontract as necessary. 
  7. Are we there yet? Upon completion of subcontract, ensure closeout is conducted. 

For prime contractors, subcontracting can manage their resources more effectively by delegating specific tasks to partners who are better equipped to handle them.   

For subcontractors, this can be a gateway for businesses opportunities to gain experience and access large-scale government contracts they might not otherwise be able to obtain directly. 

Your Compliance Requirements for Procuring Subcontracts 

When engaging in government contracting, procuring subcontracts involves strict compliance requirements. As a prime contractor, ensuring that your subcontracting processes meet legal, regulatory, and contractual obligations is essential to avoid penalties, delays, and potential debarment from future contracts.  

  1. Compliance with Federal Acquisition Regulation (FAR). When procuring subcontracts, contractors must adhere to several FAR clauses, such as:
  • FAR Part 44 – Subcontracting Policies and Procedures: Establishes the policies regarding subcontracting, including the necessity of written approval before subcontracting significant portions of a contract. 
  • FAR Part 52 – Clauses and Provisions: Specific clauses that must be included in subcontracts, such as labor standards, dispute resolution procedures, and payment terms. 
  • Small Business Subcontracting Plan (FAR 19): This plan (if applicable) sets goals for subcontracting with small businesses, including women-owned, minority-owned, and veteran-owned businesses. 
  1. Flow-down Clauses and Provisions. Many contract clauses must be “flowed down” from the prime contract to the subcontractor. This means that the requirements of the government contract, particularly compliance-related provisions, must be passed on to the subcontractor in writing. Some common flow-down clauses include:
  • Equal Employment Opportunity (EEO) requirements (FAR 52.222-26) 
  • Labor Standards (FAR 52.222-41, including Davis-Bacon Act and Service Contract Labor Standards) 
  • Non-discrimination (FAR 52.222-21) 
  • Contractor Code of Business Ethics and Conduct (FAR 52.203-13) 

Failure to include these mandatory clauses in subcontracts can result in non-compliance with federal law, impacting the prime contractor’s ability to fulfill government requirements. 

  1. Debarment and Suspension Checks. Before awarding any subcontracts, the prime contractor must perform a debarment check to confirm that the subcontractor is not on the List of Parties Excluded from Federal Procurement and Non-procurement Programs, as maintained by the System for Award Management (SAM) and is eligible to work with the federal government. Hiring debarred or suspended subcontractors can result in significant penalties for the prime contractor.
  2. Security and Data Protection Compliance. For contracts that involve sensitive or classified information, contractors must ensure their subcontractors comply with security and data protection regulations, including FISMA (Federal Information Security Modernization Act), NIST (National Institute of Standards and Technology) guidelines, and any specific agency requirements related to cybersecurity and confidentiality. Subcontractors must often undergo security clearances if the work involves handling classified or Controlled Unclassified Information (CUI).

Compliance requirements for procuring subcontracts in government contracting are extensive and vital to ensuring the integrity and legality of the contracting process.  

BOOST’s Role in Helping GovCons With Federal Contracts 

From assistance with writing, reviewing, and negotiating, to soliciting, administering and closing out subcontracts under federal government contracts, BOOST helps GovCons comply with all applicable requirements. Subcontractor related services may include: 

  • Mandatory flowdown clauses – Need advice or a compliance matrix?  
  • Non-Disclosure Agreement (NDA), Teaming Agreement (TA), Subcontract Agreement (SubK), Independent Consultant Agreement (ICA) or Master Subcontract Agreement (MSA)- If it’s a contractual agreement- we can help draft, review, negotiate, and definitize. 
  • From drafting from scratch to assessing and improving existing policies and procedures, we’ve got you covered. 
  • Subcontractor and vendor evaluations 
  • Documentation and reporting assistance 

By providing expertise, strategic insight, and operational support, BOOST consultants enable GovCons to successfully secure and manage federal contracts and subcontracts while maximizing profitability, ensuring compliance, and minimizing risk. 

What Makes BOOST a Reliable Partner for the Government Contracts and Subcontracts Process? 

Navigating the complex world of government contracts and subcontracts can be challenging, but with the right partner, small and large businesses alike can effectively tap into the lucrative opportunities it offers. So, what makes a reliable partner in the government contracts and subcontracts process? Let’s break it down. 

  1. Expert Knowledge of Government Regulations. Government contracts come with a maze of rules and regulations. From the Federal Acquisition Regulation (FAR) to DFARS (Defense Federal Acquisition Regulation Supplement) and specific agency requirements, these rules dictate everything from pricing to performance standards. A reliable partner stays on top of these evolving regulations, ensuring that all steps in the subcontracts process—from bidding to delivery—are compliant. BOOST focuses solely on GovCons and has the expertise to handle the complexities of compliance, saving you time and preventing costly errors.
  2. Clear and Transparent Communication. A reliable partner ensures that all parties involved in the government contract—be they the prime contractor, subcontractors, or government officials—are kept in the loop at every stage. BOOST consultants maintain clear, transparent communication, providing updates, addressing concerns, and ensuring that everyone is aligned with the project’s goals.
  3. Flexibility and Adaptability. Government projects can evolve, requiring a partner who can be flexible and adaptable. Changes in scope, new priorities, or unexpected challenges require an agile partner who can pivot quickly without sacrificing quality or performance. BOOST is solution-oriented and can adapt to unforeseen circumstances, ensuring that the subcontracting process progresses smoothly despite any hurdles.

Whether you’re a prime contractor or a small business looking to subcontract, BOOST can make all the difference in successfully navigating the government contracting landscape. 

Reach out to Our Consultants With Government Contract Questions 

By offering expertise, innovation, and a commitment to excellence, BOOST stands as a trusted ally in the often complex and high-stakes world of government contracting and subcontracting. Whether you’re a prime contractor or a small business looking to subcontract, BOOST consultants can make all the difference in successfully navigating the government contracting landscape. 

In addition, we offer pricing, HR, recruiting, accounting, and other back-office support. 

Let BOOST bring the specialized knowledge, strategic insight, and hands-on support you need to successfully compete for, manage, and execute federal contracts! 

About The Author, Shawn Laird Sr. Contracts Consultant 

With over 13 years of experience in the federal government contracting arena, including as a former government Contracting Officer, Shawn has the unique insight of understanding contracts from both the government and contractor perspective. She is highly experienced in researching, interpreting, and implementing Federal Acquisition Regulation (FAR) and supplemental regulation for compliance requirements.  She has not only written evaluation criteria and instructions but has first-hand knowledge of government solicitation, evaluation and administration processes and procedures. As a consultant at BOOST, Shawn excels at presenting complex information in an easy-to-digest format, assisting clients in making informed decisions quickly, and mitigating business risks by analyzing potential impacts and avoiding unfavorable terms.  She has developed and presented numerous compliance training initiatives of different complexities for a variety of clients. With an M.S. in Organizational Management, she brings a unique perspective to assist small and large businesses to negotiate strategically and navigate change in the complex work environments of the GovCon world.  

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