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52.244-2 Consent for subcontracts over SAT (cumulative vs. transaction)

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Greetings:

I am seeking guidance from the community on this issue. Any assistance you can provide would be appreciated.

Background: The prime contract includes FAR 52.244-2 with para (d) modified as follows:

(d) If the Contractor has an approved purchasing system, the Contractor nevertheless shall obtain the Contracting Officer’s written consent before placing the following subcontracts:

Notwithstanding the language contained in paragraph ©, written consent from the Contracting Officer is required prior to entering any subcontract over the simplified acquisition threshold that was not originally proposed.

The prime has an approved purchasing system. A subcontract was included in the contract proposal at a value under the Simplified Acquisition Threshold ($140K). The resulting contract states in Section B that Subcontractor ABC is authorized to work under the contract. During execution of the contract, the need arises to modify the subcontract to add value in the amount of $15K resulting in a cumulative subcontract value of $155K.

Question: Does the prime need to obtain the Contracting Officer’s consent for the $15K mod? Some argue, “Yes, because the cumulative subcontract value would exceed the SAT,” and some argue, “No, because at no time would a particular subcontract, or modification to a subcontract for which consent is required, exceed the SAT.” Which interpretation, if either, is correct? Thank you for your time.

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No, consent is not required.

The clause requires consent if (a) the subcontract was not originally proposed, and ( B) the value of the subcontract is in excess of the SAP.

The subcontract in question was originally proposed. Therefore no subsequent consent is required, regardless of the dollar value of the modification.

Hope this helps.

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here_2_help,

Thank you for your response. I am curious about your last sentence, "... regardless of the dollar value of the modification." Where the mod was not part of the originally proposed subcontract, and if the mod itself were to exceed the SAT, would consent not be required for that mod? The basis for my question is my understanding that the term "subcontract" as used in the clause includes modifications. Thanks again.

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subs,

I agree that part 44, definitions, defines a modification to a subcontract as a separate subcontract. That definition is also included in the standard contract clause. So you have me there. (I think it's poor regulatory drafting to define a modification to a subcontract as being a subcontract, but what do I know?)

So if that's the definition of "subcontract" then your instant contract action -- the modification -- is what is being defined. The prior contract action -- the original subcontract award -- would be a separate subcontract. (Ugh!) Thus, if the instant modification "subcontract" is less than the SAT, no consent would be required, even if the modification brings the cumulative value of the two subcontracts (that are really one subcontract) over the SAT threshold.

If you or your team believes otherwise, you may well have an ambiguity ("capable of being subject to more than one reasonable interpretation") to resolve with your Contracting Officer.

Hope this helps.

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subs,

What do you think? Is a consent required for the $15K modification? It sounds like you feel consent is required.

I can give you my own opinion, based on the words in your original posting [i follow along with here_2_help]. A $15K modification is a subcontract under paragraph ( a ) of the clause at FAR 52.244-2, but it is not a subcontract over the SAT. If that is true, then you have the answer to your question. Do you agree with it?

For consent, according to your original posting, you need--

  • a subcontract;
  • over the SAT; and
  • not included in the original proposal.

You need all three -- "...written consent from the Contracting Officer is required prior to entering any subcontract over the simplified acquisition threshold that was not originally proposed."

It seems to me (and here_2_help, apparently) that you don't have the middle item -- I don't see anything in here about the cumulative value of anything being in the list.

But my opinion is irrelevant. If you disagree, or are unable to make a decision for whatever reason, just ask your contracting officer -- but I try to practice an approach of not asking a question unless I can stand the answer.

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@here_2_help

I agree with everything in your second post. Thanks for that.

@ji20874

My position has always been that consent for the 15K mod in the original post would not be required. The term "subcontract" as used in the clause includes modifications, and because the 15K mod (subcontract) does not exceed the SAT, no consent is required. I asked about here_2_help's response because it appeared not to consider the mod as a subcontract, but since that has been amended or clarified, we are all on the same page. If it appeared that I thought consent was required, that is probably because a debate about this scenario flares up from time to time around the office and I wanted to be fair in presenting the opposing view point when posting the question. Your last sentence also brings up a good point, and is part of the reason for my question. Many times the resolution is, "we don't know, so let's ask." I was hoping to make it so that we do know and therefore don't ask. Thanks again everyone for your time!

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