1. Meredith Howes Prime & Subcontractor Relationship
UNCLASSIFIED
UNCLASSIFIED
Program Executive Office Special Operations Forces Support Activity (PEO SOFSA)
Trusted Experts for SOF Logistics
Meredith Howes Prime & Subcontractor Relationship
Contract Specialist
Special Operations Forces Support Activity

2. Agenda What is a subcontract? Why Subcontract?
Risks associated with Subcontracts
Flow-down Provisions
How to effectively oversight orders with subcontracts
Environment SOF works in (where it's dark),

3. Prime Contractor (LMCO)
What is a Subcontract
Any contract or Agreement to perform work or provide material in support of a Prime Contract (FAR Part )
Privity (Contractual Relationship) exists only between the Buyer and Seller
Privity DOES NOT exist between the Buyer and the Seller’s Subcontractors
Environment SOF works in (where it's dark),
US Government
Prime Contractor (LMCO)
Subcontractor
Privity
Privity

4. Why Would a Prime Subcontract?
Strategic Advantage/Alliance – (Teaming arrangements)
Enhances Capabilities
More Cost effective to customer
Facilitate entry into otherwise closed markets
Greater value to the customer (Government)
Government places requirements on the prime to sub out contracts to small disadvantaged businesses (socio-economic goals)
Environment SOF works in (where it's dark),

5. Subcontracting Risks – Government Perspective
No Privity with subcontractors
Lack of USG oversight
The need for added oversight responsibilities
Prime oversight is not necessarily in the Government’s best interest
Added risk of:
Cost overruns
Not meeting scheduled deliveries
Technical quality issues
Environment SOF works in (where it's dark),

6. Subcontracting Risks – Prime Perspective
Complex USG oversight
Prime responsible for quality and delivery to USG
Subs lack of timely reporting of costs on Cost reimbursable contracts
Primes performance assessment is dependent upon subcontractor performance
Prime Contractors need to ensure their proposed subcontractors are not debarred or suspended.
LMCO is required to receive consent to subcontract from the ACO prior to executing any purchase order.
Environment SOF works in (where it's dark),

7. “Flow-down” Provisions
Provisions in a subcontract are known as “flow-down” provisions
That is if they impose the same duties on the subcontractor that the Government imposed on the prime contractor in the prime contract.
Prime contractor responsible to "flow-down" subcontract clauses to the subcontractor.
There are Mandatory, Required and optional provisions, as designated by the FAR/DFARS/SOFARS that must be flowed down to the subcontractor.
Some small businesses may take issue or concern with provisions, but many are mandated by the FAR in accordance with the GLSS IDIQ.
Environment SOF works in (where it's dark),

8. Oversight on GLSS IDIQ
USG Oversight is provided by the Contracting Officer Representative
Monthly or Quarterly COR Reports are vital to ensuring that performance requirements are being met. Please contact your Contracting Officer to determine frequency required.
All issues or concerns with performance should be identified to the Contracting Officer as soon as possible. Alerting the Contracting Officer will allow documentation and consideration, if required, to correct performance issues.
It is imperative that the Prime is held accountable for issues on cost, schedule and performance.
Do not try to remedy concerns without notifying the contracting office, as this will not allow the USG to hold the prime contractor accountable.
Environment SOF works in (where it's dark),

9. Oversight on GLSS IDIQ
USG Oversight is provided by the Contracting Officer Representative
Monthly or Quarterly COR Reports are vital to ensuring that performance requirements are being met. Please contact your Contracting Officer to determine frequency required.
All issues or concerns with performance should be identified to the Contracting Officer as soon as possible. Alerting the Contracting Officer will allow documentation and consideration, if required, to correct performance issues.
It is imperative that the Prime is held accountable for issues on cost, schedule and performance.
Do not try to remedy concerns without notifying the contracting office, as this will not allow the USG to hold the prime contractor accountable.
Environment SOF works in (where it's dark),

10. Do’s and Don’ts THE USG DOES NOT DIRECT TASKS TO THE SUBCONTRACTOR
All communication should include the Prime contractor, even on technical issues relating to subcontractor work.
DO REDIRECT THE SUBCONTRACTOR TO THE PRIME
If the subcontractor contacts the USG regarding program concerns, they should be re-directed to the Prime in all situations. Please contact the contracting officer if it becomes a reoccurring issue.
DO NOT DIRECT REQUIRED SOURCES IN REQUIREMENTS
If the USG is directing a source for LMCO to use, there must be a pre-staffed/signed Sole Source Justification and Approval.
DO REVIEW SUB PROPOSALS TO ENSURE TECHNICAL SUFFICIENCY
The Contracting Officer is responsible to determine fair and reasonable pricing, but they are reliant on the PM/COR to ensure subcontractors are technically sufficient to perform.
Environment SOF works in (where it's dark),

11. Questions?