(Editor’s Note. Subcontracting with the federal government can be quite profitable but the roles, rules and requirements of subcontractors can be uncertain. "Subcontractors" include any suppliers, distributors, vendors or firms that furnish supplies or services to prime contractors or other subcontractors. Sometime the federal procurement rules apply to subcontracts but other times they do not – relatively few subcontractors know the difference. These uncertainties are exaggerated by the fact many subcontracts are awarded in a "hurry up" context, where negotiations between the prime and subcontractor might be conducted by telephone, fax or email under rushed circumstances. Subcontractors are often saddled with uncertain contract terms because they feel they have to "take it or leave it." Given these pressures and the lucrative opportunities that exist both prime contractors and subcontractors need to understand the fundamentals of subcontracting. In this article we will provide a brief overview of the key procurement rules affecting subcontracts, the requirements for and type of flow-down clauses, the relations between prime contractor source selection and subcontracts and several contract administration issues. The following article is based upon an excellent article we found in the February 2003 edition of Briefing Papers written by Steven W. Feldman of the U.S. Army Engineering and Support Center. The author provides references, either regulations or case decisions, for virtually every assertion but we will avoid such extensive footnoting.)

{TAG_FORM_TITLE}