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In commercial prime contracts, paragraphs (b) and (c) of FAR 52.212-5 each have a series of clauses listed that will apply to the contract if checked by the Contracting Officer (KO). Paragraph (e)(1) contains a list of clauses that must be flowed down to subcontractors regardless of any of the requirements listed in the paragraphs above. On several occasions I’ve seen instances where the KO does not check off a clause in either paragraph (b) or (c) that is listed in e(1) and that seems like the clause should be in the prime contract. For example, I’ve seen service contracts where the KO checks off a number of clauses in (c) but does not check (c)(2) for the Service Contract Labor Standards clause. Because it’s a service contract over $2,500 it appears the SCLS should apply, and as I read (e)(1), I should flow it down to a subcontractor, but the KO doesn’t appear to have included it in the prime contract by checking off (c)(2). Another example is 52.203-13 Contractor Code of Business Ethics, which is in the check-off list of (b) but is also listed as a mandatory flow-down in (e)(1). I’ve seen contracts in excess of $5.5M that appear to meet all requirements for the inclusion of 52.203-13, but the KO does not check this clause under (b)(2). Paragraph (e)(1), however, makes it a required flow-down to subcontractors assuming the subcontract meets the prescriptive requirements (i.e., is over $5.5M, etc.). In both my examples, if the KO didn’t check off those two clauses, they don’t appear to apply to the prime contract (without regard to the Christian Doctrine), but (e)(1) says I have to flow them down. I’m trying to understand the logic behind paragraph (e)(1) in instances where the KO doesn’t put a check mark next to a clause in either paragraphs (b) or (c), but the clause is listed in (e)(1) and it appears the clause would apply to the prime contract and thus should be flowed down as appropriate? It could be that the KO simply made a mistake in failing to check a clause that should apply to the prime contract (I’ve certainly seen RFPs/contracts where the clause is included full-text but none of the clauses in (b) or (c) are checked, but here they’ve gone through the process of checking a number of the (b) and (c) clauses but missed two that certainly seem applicable at the prime level). So for those clauses listed in (e)(1), this methodology of requiring a check off above but mandating the clauses in (e)(1) be flowed down leaves a confusing situation if apparently applicable clauses aren’t checked. For folks experienced at building commercial subcontracts, do you just flow down all the clauses in (e)(1) as applicable even if the KO didn’t check off one that seems like it should apply? Thank you for any insight you can offer. -
Hello All, Recently DCAA finished it's audit of our 2008 Incurred Cost Submission. One of the findings we are taking issue with is for a subcontractor who apparently did not file (and has not filed to-date) an incurred cost submission of their own. DCAA affirms that it was our responsibility to make sure the subcontractor filed an ICS. I believe this was the only contract the subcontractor had for the year. This is leaving us with potentially millions in penalty. Does anyone have experience with this type of situation or similar? I am trying to research as much as possible to see what options we have at this point. Any and all feedback is helpful. Thanks!