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PhilBail

Private Company Subcontracting to Govt Agency

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 Has anyone seen any articles or are aware of what regulations govern a private company subcontracting to a Government agency?  For example, can a private company flow down contract clauses to a Government subcontractor?  My assumption is no however I'm looking for something to cite.

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Transactions in which private companies buy goods or services from government agencies are not covered by the Federal Acquisition Regulation, and I do not know of any other regulation that governs such transactions generally. I think that there have been cases in which private companies have purchased services from government agencies, but I don't have details and I don't know what regulations covered those transactions. It is unlikely that there would be any flowdown requirement in any such contract.

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I'm not an attorney, but it seems to me that there is at least a general policy that the government is not to compete with private industry when industry has the capability to provide the needed goods or services, so I think that in order for the government to sell to private parties, some specific authority is needed.  See, for example, 10 USC 2563.  I know this isn't an answer to your question about flowdown of clauses, but perhaps it gets you headed in a direction where you can find an answer.  I expect that the government is not likely to agree to flowdown of FAR clauses in any agreement to sell products or services to private industry, but if there was a particular term or condition that you felt was important to include, you could suggest it and see if they would agree or not.

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The only thing I've seen remotely related to the question is a DoD OIG report discussing a prime contractor's negotiation of (allegedly) excessive profits when it used a government entity as a subK in a public/private partnership.

http://www.dodig.mil/pubs/documents/DODIG-2016-045.pdf

 

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I was involved with this type transaction for a small amount of work at a government lab source under a large prime contract for end items. My recommendation was to protect the company from breach of contract claims by initially flowing everything that would be flowed to any subcontractor under the prime. The lab response indicated they could not comply with the requirements. This was followed by discussions with the Contracting Officer to waive the prime contract requirements for this work and/or provide the work to the company as Government furnished. I don't recall how it wound up between the two, but that was the process.

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Navy is correct.  Go to the NAVAIR website and enter the search query "commercial service agreements."  That should get you started.

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thanks for your help.  

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If you go that route, there are significant risk issues for a private company to weigh vs. the company standards purchase contract terms. I recall liability, warranty and intellectual property among those risk decisions to negotiate vs. the Government preferred agreement.

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