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Michael11

CO approval needed for FFP subk under 150k?

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Our T&M TO contains FAR 52.244.-2 subcontracts. We are contemplating adding a subcontractor for a very small effort, likely less than $50k. We were initially considering adding a consultant to contribute to the work (and invoice on a labor hour basis) but the scope has evolved a bit and a subcontract is the better route. A consultant would have, according to the contract, required written approval. However, my reading of the Subcontracts clause is that written approval would not be needed for a FFP subk under the SAT. Am I correct? We already indicated to the CO our intent to utilize the consultant, but since we no longer will be going that route I want to proceed accordingly and let the CO know what has changed (but it doesn't seem we actually need written approval any longer). Thanks!

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The answer to your question depends largely on what agency awarded the prime contract. If your prime contract was awarded by a civilian agency other than NASA of the Coast Guard, you will need consent if the subcontract will exceed 5% of the value of the contract even if the subcontract does not exceed the SAT unless you have an approved purchasing system. If you have an approved purchasing system, consent would not be required unless the contracting officer identified the subcontract in paragraph (d) of 52.244-2.

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Thank you for your response. It is a non NASA or Coast Guard civilian agency but the subk will neither exceed the SAT nor 5% of the TO value. We don't have an approved purchasing system but I don't see anything that would require consent from the CO based on the language in 52.244-2 since its so small. We've already sort of initiated the request (for the consultant) but since it will now be such a small ffp subk I want to be transparent as we are no longer pursuing the consultant agreement but rather the subcontract.

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Michael11,

You make a distinction between a hiring a direct consultant and issuing a subcontract. I would be interested in the logic behind that distinction, if you would care to share it.

Thanks

H2H

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We initially thought we were going to utilize just one individual in a consulting role due to this person's subject matter expertise. A role which wouldn't assist in the completion of deliverables but rather providing guidance and oversight in their respective field. But that evolved into the need for several employees (of this company) to take the lead in and assist in the completion of key TO tasks. Had we used the stuck to the initial plan, while it would have still gone through a company, by definition of the TO, it would have been consistent for us to refer to it as a "consultant" agreement to utilize this person. I know this probably is still not clear or logical.

So let me try to rephrase my initial question. The Subcontracts clause does not, in my reading, require CO approval for this piddly "subcontract" we are contemplating. Since approval is not "required" do you go ahead and execute this subk all on your own and wait until the CO sees the backup come through on an invoice. This doesn't seem like overly transparent though is compliant. Or do you say hey, we are doing this even though we don't need approval but just wanted to let you know and get your blessing anyway? Or do you go full bore and get the approval even though you know it's not actually needed.

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Michael11,

I don't have a good answer to your questions. However, I'm interested in how companies distinguish between procurements from vendors, awards of subcontracts, and use of consultants. As you may know, consultants are subject to unique allowability provisions (31.205-33). In my experience, companies see more success vis-a-vis government oversight when they have robust policy guidance that helps employees make the distinction, since the FAR is not very helpful in that regard.

H2H

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