Decide prime, subcontractor, or teammate

After this lesson you should be able to tell a prime from a subcontractor, tell a materials supplier from a firm that will perform part of the work, and decide whether your company can perform a notice as prime, should team, or should not bid. AsherGate does not match vendors and does not submit a bid.

A prime contractor contracts with the Government for the work in the solicitation. The prime is responsible for seeing that the contract is performed, including work it subcontracts. A subcontractor does not hold that agency contract. 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, and a subcontract as a contract, including a purchase order, to furnish those supplies or services.

Beginners still need a practical split inside that definition. A materials supplier furnishes goods the prime will use or deliver. A performing subcontractor does a named portion of the contract work, such as installation or welding. Both can be subcontractors under FAR 44.101. The difference matters when you check capability and when a limitations-on-subcontracting clause counts workshare. Buying steel from a mill is not the same as handing the entire installation to another firm.

FAR 9.601 defines a contractor team arrangement in two ways: two or more companies form a partnership or joint venture to act as a potential prime, or a potential prime agrees with one or more other companies to have them act as its subcontractors under a specified Government contract or program. FAR 9.603 says the Government will recognize such arrangements if they are identified and company relationships are fully disclosed in an offer, or, if formed later, before the arrangement becomes effective.

FAR 9.104-1 says a prospective contractor must, among other standards, be able to meet the delivery or performance schedule, have a satisfactory performance record, and have the necessary organization, experience, skills, equipment, and facilities, or the ability to obtain them, including through subcontractors. FAR 9.104-4 generally makes the prospective prime responsible for determining the responsibility of its prospective subcontractors. The contracting officer may still require written evidence of a proposed subcontractor’s responsibility, and may determine that responsibility directly when it is in the Government’s interest.

FAR 15.305(a)(2) says the solicitation shall describe how past performance will be evaluated. The evaluation should take into account past performance of subcontractors that will perform major or critical aspects of the requirement when that information is relevant. An offeror with no relevant past performance may not be evaluated favorably or unfavorably on past performance. Copy those rules from the files. Do not assume a partner’s past work will count unless the solicitation says it will.

On many small-business set-asides, FAR 19.505 and the clause at FAR 52.219-14 also limit how much work a prime may pay to subcontractors that are not similarly situated entities. Those limits apply only when the clause and 19.505 apply. They are not a general rule for every unrestricted buy.

Keep this as a side note. FAR 52.219-14 applies to listed set-asides, certain sole-source awards, certain set-aside orders, and HUBZone preference awards unless the concern waived the preference. It does not apply to the unrestricted portion of a partial set-aside. For services except construction, the prime generally may not pay more than 50 percent of the amount paid by the Government for contract performance to subcontractors that are not similarly situated. For supplies other than a nonmanufacturer buy, the 50 percent cap excludes the cost of materials. General construction uses 85 percent excluding materials. Special-trade construction uses 75 percent excluding materials. A similarly situated first-tier subcontractor that further subcontracts has that further work counted against the prime’s cap. Independent contractors count as subcontractors. Joint-venture participants may aggregate their own performance, with extra 40 percent rules for listed mentor-protégé and 8(a) joint ventures. The nonmanufacturer rule in FAR 19.505(c) is a separate supplier test. Read the clause in the files rather than memorizing these figures from training.

Using the Brambleford story below, AG-TEAM-26-0318 requires 22 stainless hatch assemblies with certified field welds. Brambleford can fabricate the hatches. It cannot perform the welds.

Name Brambleford as planned prime only if a responsible welder will be a performing subcontractor, the teaming relationship can be disclosed in the offer as FAR 9.603 requires, and any limitations-on-subcontracting clause in the files still lets Brambleford perform its share. Store the RFQ in an AsherGate draft. Do not submit a bid.