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sjanke

Monitoring of Subcontractors

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The Project Officer on our contract has a tendency to make unannounced visits to one of our major subcontractors. We feel we should be given adequate notice to have someone accompany the project office on the visit. I have not been able to find any FAR's which allow or disallow this. Has anyone had any experience with this?

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What type of contract is this (service, supply, construction, etc.) and what type of pricing arrangement (firm fixed- price, cost reimbursement, etc.)?

Edited at 10:50 PM:

If you check out your Inspection clause (one of the 52.246-XX clauses), depending upon the type of contract, they will generally allow the government the right to inspect any of the work at any time, including the work of subs. For cost reimbursement contracts there are Work Oversight clauses that allow the government to oversee the work.

There are also Inspection requirements in construction contracts and some of the others that require the contractor to inspect its work and that of the subs. I would definitely request that the government coordinate its inspection visits of the subcontractor with the prime, as a courtesy to the prime, using the "no privity of contract with the subs" excuse plus there may be a possibility that the government agent might provide direction to the subcontractor outside the authority of the agent or that the contractor might be left out of the loop. If your contract has "partnering" or other similar procedures in it, this would be an appropriate topic to raise with the government.

Legally, the government may make surprise inspections. This may be likely if the government feels that the prime may "tip off" the sub to cover up or hide problems.

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I agree with Joel that it is bad policy for the Governemnt to visit a subcontractor without the knowledge and presence of the Prime Contractor. While the Government has the right of inspection, there is no privity of contract between the Governemtn and a subcontractor and the Government may not know the scope of the subcontractor's work effort.

I have had an instance where I subcontracted for the manufacture of a part that went into a larger assembly. My contract called for a grayish finish coart of paint. However, due to the assembly required, we subcontracted for the sub-assembly to be painted with primer only and decided that we would apply the final coat of paint at our facility. Perfectly legal and proper.

During a "surprise" Governmwent inspection done without our knowledge, the inspector rejectedc the parts saying they were not made in accordance with the Government specification (since they were not painted). Since they were made to our specification and the assembly was not complete, they should have passed. Needless to say, this caused a round with the Government about proper inspection, increased costs, etc. We eventually won an equitable adjustment from the Government for the costs involved in reinspecting the assembly.

So, while the Government does indeed have the right, it is a good idea to have the Prime contractor along. And bring a Contracts person to control the exuberance of the technical people in making suggestions.

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I agree with Joel that it is bad policy for the Governemnt to visit a subcontractor without the knowledge and presence of the Prime Contractor. While the Government has the right of inspection, there is no privity of contract between the Governemtn and a subcontractor and the Government may not know the scope of the subcontractor's work effort.

I have had an instance where I subcontracted for the manufacture of a part that went into a larger assembly. My contract called for a grayish finish coart of paint. However, due to the assembly required, we subcontracted for the sub-assembly to be painted with primer only and decided that we would apply the final coat of paint at our facility. Perfectly legal and proper.

During a "surprise" Governmwent inspection done without our knowledge, the inspector rejectedc the parts saying they were not made in accordance with the Government specification (since they were not painted). Since they were made to our specification and the assembly was not complete, they should have passed. Needless to say, this caused a round with the Government about proper inspection, increased costs, etc. We eventually won an equitable adjustment from the Government for the costs involved in reinspecting the assembly.

So, while the Government does indeed have the right, it is a good idea to have the Prime contractor along. And bring a Contracts person to control the exuberance of the technical people in making suggestions.

Great example, Loul.

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Guest carl r culham

Joel - I do not disagree with the posts in general. However what caught my eye was "Project Officer". As this term has many definitions in the Government I was wondering, if for instance, the PO was neither a designated inspector nor the COR/COTR and the contract had no reference to PO involvement would your answer change? Continuing on with this example lets say that the PO visits were not coordinated with the COR/COTR either, what would be the response? So two little twists to the orignal post where I would be interested in your response.

With no intent to set you up if either of the two situations were present that I have added I would question the validty of the PO visits within the context of the clauses you note even though each uses the term "the Government" in them.

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Thanks for all the input. I thought I could add some further clarification. The work being done by the subcontractor is in support of a firm fixed price line item in our contract with the government. We use the product we get from the supplier in production of the end product which the government buys from us. FAR 52.246-2 Inspection of Supplies - Fixed Price is in our contract with the government.

The complicating factor is US government property is used by the supplier in the production of the product, so the government project officer goes to the subcontractor to check on the status of the property.

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I have had an instance where I subcontracted for the manufacture of a part that went into a larger assembly. My contract called for a grayish finish coart of paint. However, due to the assembly required, we subcontracted for the sub-assembly to be painted with primer only and decided that we would apply the final coat of paint at our facility. Perfectly legal and proper.

During a "surprise" Governmwent inspection done without our knowledge, the inspector rejectedc the parts saying they were not made in accordance with the Government specification (since they were not painted). Since they were made to our specification and the assembly was not complete, they should have passed. Needless to say, this caused a round with the Government about proper inspection, increased costs, etc. We eventually won an equitable adjustment from the Government for the costs involved in reinspecting the assembly.

So, while the Government does indeed have the right, it is a good idea to have the Prime contractor along. And bring a Contracts person to control the exuberance of the technical people in making suggestions.

I do not agree that the government should always notify the prime in advance of an inspection of a sub. Nor is it necessary in principle to have a contracts person accompany an inspector. Unannounced inspections are legitimate unless they unduly delay the contract work or the contract provides otherwise. The problem in the above example was not the unannounced inspection, per se, but the inspector's error, which was exacerbated by his issuance of a notice of rejection to the sub instead of to the prime. If the inspector had been right it might have saved the prime some money.

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Joel - I do not disagree with the posts in general. However what caught my eye was "Project Officer". As this term has many definitions in the Government I was wondering, if for instance, the PO was neither a designated inspector nor the COR/COTR and the contract had no reference to PO involvement would your answer change? Continuing on with this example lets say that the PO visits were not coordinated with the COR/COTR either, what would be the response? So two little twists to the orignal post where I would be interested in your response.

With no intent to set you up if either of the two situations were present that I have added I would question the validty of the PO visits within the context of the clauses you note even though each uses the term "the Government" in them.

Carl, I don't know who the term "projects officer" refers to. On USACE contracts, we don't want other than authorized contract administration personnel, (KO's, ACO's, "contracts personnel", QA folks, etc.), leading any inspections of sites, prime or subcontractor facilities and we make that clear to government personnel involved in projects. Others are welcome to visit our sites and contractors but we will arrange for authorized/designated escorts to interact with contractor or subcontractor personnel. Construction sites and manufacturing facilities present safety hazards which must be managed. Unauthorized individuals shouldn't just wander in to work sites.

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Some further information on "Project Officer" in the context of our contract.

"Performance of the work hereunder shall be subject to the technical directions of the designated Project Officer for

this contract....., technical directions are directions to the Contractor, which fill in details, suggests possible lines of

inquiry, or otherwise completes the general scope of work set forth herein. These technical directions must be

within the general scope of work, and may not alter the scope of work or cause changes of such a nature as to justify

an adjustment in the stated contract pricelcost..........The Government Project Officer is not authorized to change any of the terms and conditions of this contract. Changes shall be made only by the Contracting Officer by properly written modification(s) to the contract....."

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Guest carl r culham

Thanks Joel and sjanke. Noting contract discussion regarding PO I agree with the thoughts passed along in this thread.

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Some further information on "Project Officer" in the context of our contract.

"Performance of the work hereunder shall be subject to the technical directions of the designated Project Officer for

this contract....., technical directions are directions to the Contractor, which fill in details, suggests possible lines of

inquiry, or otherwise completes the general scope of work set forth herein. These technical directions must be

within the general scope of work, and may not alter the scope of work or cause changes of such a nature as to justify

an adjustment in the stated contract pricelcost..........The Government Project Officer is not authorized to change any of the terms and conditions of this contract. Changes shall be made only by the Contracting Officer by properly written modification(s) to the contract....."

The project officer is apparently an authorized representative of the contracting officer. His/her technical direction role is to "fill in details, suggest(s) possible lines of inquiry, or otherwise complete(s) the general scope of work set forth herein". If I were the prime, I'd request that the KO insist that the PO coordinate his/her visits with the prime contractor. The prime contractor, has a contractual resposibility to correctly perform the contract work and to enforce its subcontract with the subcontractor. It appears that the PO may be leaving the prime contractor out of the information loop. That is unprofessional and the PO should be providing technical direction through or at least in the presence of the entity that is responsibile for the quality and performance of the work. The prime would also have the opportunity to determine if it feels that the government intentionally or inadvertantly changed the work. The prime has the responsibility to notify the government of any direction that it considers to be a change. It may not have that opportunity if it doesn't witness the technical direction. Lots of facts are lost through translation from a sub to the prime to the government.

If this is a cost contract, the technical direction may well influence costs...

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The project officer is apparently an authorized representative of the contracting officer. His/her technical direction role is to "fill in details, suggest(s) possible lines of inquiry, or otherwise complete(s) the general scope of work set forth herein". If I were the prime, I'd request that the KO insist that the PO coordinate his/her visits with the prime contractor. The prime contractor, has a contractual resposibility to correctly perform the contract work and to enforce its subcontract with the subcontractor. It appears that the PO may be leaving the prime contractor out of the information loop. That is unprofessional and the PO should be providing technical direction through or at least in the presence of the entity that is responsibile for the quality and performance of the work. The prime would also have the opportunity to determine if it feels that the government intentionally or inadvertantly changed the work. The prime has the responsibility to notify the government of any direction that it considers to be a change. It may not have that opportunity if it doesn't witness the technical direction. Lots of facts are lost through translation from a sub to the prime to the government.

If this is a cost contract, the technical direction may well influence costs...

Joel:

You have given bad advice. sjanks said nothing to indicate that the project officer was giving improper technical direction. sjanks said: "The complicating factor is US government property is used by the supplier in the production of the product, so the government project officer goes to the subcontractor to check on the status of the property."

There is absolutely nothing unprofessional or otherwise wrong with the project officer going to the subcontractor to check the status of government property. Absent express terms to the contrary, the project officer is not contractually obligated to announce his or her visits to the subcontractor in advance or to wait for the prime to attend. According to the standard Government property clause, FAR 52.245-1, paragraph (g)(4):

The Contractor shall ensure Government access to subcontractor premises, and all Government property located at subcontractor premises, for the purpose of reviewing, inspecting and evaluating the subcontractor's property management plan, systems, procedures, records, and supporting documentation that pertains to Government property.

See also FAR 45.501 and 45.502. Government property administration might be performed by personnel assigned to the subcontractor independent of the prime contract. Unannounced property administration visits might be necessary to protect the government's interests.

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Joel:

You have given bad advice. sjanks said nothing to indicate that the project officer was giving improper technical direction. sjanks said: "The complicating factor is US government property is used by the supplier in the production of the product, so the government project officer goes to the subcontractor to check on the status of the property."

There is absolutely nothing unprofessional or otherwise wrong with the project officer going to the subcontractor to check the status of government property. Absent express terms to the contrary, the project officer is not contractually obligated to announce his or her visits to the subcontractor in advance or to wait for the prime to attend. According to the standard Government property clause, FAR 52.245-1, paragraph (g)(4):

See also FAR 45.501 and 45.502. Government property administration might be performed by personnel assigned to the subcontractor independent of the prime contract. Unannounced property administration visits might be necessary to protect the government's interests.

Vern, I agree with you if checking on the status of govt property and perhaps how to use it is the actual purpose of the PO's visit.I somehow missed the purpose of the visits and keyed in on the contract language indicating the role of the PO.

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What strikes me as odd is the use of a "technical direction" clause in a firm-fixed-price contract. Why would you need to provide for technical direction if the statement of work or specification is definite enough for fixed-pricing?

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The question here seems to be why is the PO going to the subcontractor? if it is strictly and inspection of supplies or audit of Government Property, I would agree that the Government has the right to go unannounced. However, I did not get that impression.

I do not believe that the Government has the right to go to a Prtime's subcontractor to have technical discussions or program reviews without the knowledge of the Prime Contractor. And if I was the Prime Contractor without the Prime being present. I understand the point of view from current feds that the Government has all sorts of "rights," but from practicle knbowledge, they also have the habit of directing subcontractors in ways that they have no business doing.

So, even tjhough the Government has the right to visit a sub on certain occassions, since there is a Prime, in my view, unless there is a specific reason not to, the best way is to coordinate any visit with the Prime. It keeps everyone in the know and loop and prevemnts future misunderstandings and mix-ups.

just my 2 cents.

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I do not believe that the Government has the right to go to a Prtime's subcontractor to have technical discussions or program reviews without the knowledge of the Prime Contractor.

Okay, but who said anything about technical discussions and program reviews?

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Furrther "fuel for the fire". The Project Officer seems to have something against this particular supplier, one of two used by us on the Contract, both provide the same raw material to us. We want to have one of our reps accompany the PO to the supplier, but event the Contracting Officer is suggesting they can do this. I have been unable to find any FAR covering this.

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Whoa - the PO gets his/her contractual TCOR authority from the KO. The KO can direct the PO to coordinate with the prime. Why is the KO "suggesting" rather than directing?

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She's being diplomatic.

it appears that she needs to quit being diplomatic, meet privately with the PO and lay down her rules. Either coordinate with the prime or she will remove his/her right to visit the site as the technical COR.

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it appears that she needs to quit being diplomatic, meet privately with the PO and lay down her rules. Either coordinate with the prime or she will remove his/her right to visit the site as the technical COR.

Joel,

You need to quit popping off and think things through. The notion that a CO can "direct" a project officer is more than a little naive. A CO has contractual authority, but may have little if any organizational authority. What's the alternative to diplomacy and persuasion? Force? In many cases a project officer will have more organizational go power than a CO. A "project officer"might be an SES or a colonel.

Get off your soapbox and try giving some helpful advice.

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I have reviewed the FAR's referenced in previous comments(copied below) and cannot find anything that specificially states a government representative can visit the prime contractor's subcontractor without first notifying the prime contractor. Or conversely, I can find nothing that states the government representative does not have to notify the prime contractor prior to visiting the subcontractor. It seems to be an area that is not properly defined.

It would just seem to be a matter of professional courtesy to inform the prime contractor.

* * *

FAR 53.245-1 (g)(4):

4) The Contractor shall ensure Government access to subcontractor premises, and all Government property located at subcontractor premises, for the purposes of reviewing, inspecting and evaluating the subcontractor?s property management plan, systems, procedures, records, and supporting documentation that pertains to Government property.

45.501 Prime contractor alternate locations.

The property administrator assigned to the prime contract may request support property administration from another contract administration office, for purposes of evaluating prime contractor management of property located at subcontractors and alternate locations.

45.502 Subcontractor locations.

(a) For property located at a subcontractor, FAR 52.245-1(g) requires that the prime contractor allow support property administration. Should the prime contractor fail to comply with FAR 52.245-1(g), the property administrator assigned to the prime contractor shall immediately refer the matter to the contracting officer.

(:lol: The prime property administrator shall accept the findings of the delegated support property administrator and advise the prime contractor of any deficiencies within the subcontractor?s property management system.

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I have reviewed the FAR's referenced in previous comments(copied below) and cannot find anything that specificially states a government representative can visit the prime contractor's subcontractor without first notifying the prime contractor. Or conversely, I can find nothing that states the government representative does not have to notify the prime contractor prior to visiting the subcontractor. It seems to be an area that is not properly defined.

It would just seem to be a matter of professional courtesy to inform the prime contractor.

* * *

FAR 53.245-1 (g)(4):

4) The Contractor shall ensure Government access to subcontractor premises, and all Government property located at subcontractor premises, for the purposes of reviewing, inspecting and evaluating the subcontractor?s property management plan, systems, procedures, records, and supporting documentation that pertains to Government property.

45.501 Prime contractor alternate locations.

The property administrator assigned to the prime contract may request support property administration from another contract administration office, for purposes of evaluating prime contractor management of property located at subcontractors and alternate locations.

45.502 Subcontractor locations.

(a) For property located at a subcontractor, FAR 52.245-1(g) requires that the prime contractor allow support property administration. Should the prime contractor fail to comply with FAR 52.245-1(g), the property administrator assigned to the prime contractor shall immediately refer the matter to the contracting officer.

(:lol: The prime property administrator shall accept the findings of the delegated support property administrator and advise the prime contractor of any deficiencies within the subcontractor?s property management system.

At the risk of being admonished again, please read these two paragraphs carefully:

45.502 Subcontractor locations.

(a) For property located at a subcontractor, FAR 52.245-1(g) requires that the prime contractor allow support property administration. Should the prime contractor fail to comply with FAR 52.245-1(g), the property administrator assigned to the prime contractor shall immediately refer the matter to the contracting officer.

FAR 53.245-1 (g)(4):

4) The Contractor shall ensure Government access to subcontractor premises, and all Government property located at subcontractor premises, for the purposes of reviewing, inspecting and evaluating the subcontractor?s property management plan, systems, procedures, records, and supporting documentation that pertains to Government property.

Can this be read that the prime must take necessary action to allow government access to the subcontractors' locations? It doesn't say "allow unrestricted access" anywhere. I would think that, as part of the access arrangement, the prime could stipulate that, as a matter of courtesy, the government representative must (should? shall?, has to?) coordinate with the prime contractor. There isn't anything secret about what the guy is going to go look at - its property administration, after all.

I doubt that the PO going to make a visit for property administration purposes is a Colonel or an SES. If so, I want that job! And - I would certainly hope that the KO is more than a procurement clerk. The KO's in our organization set down the rules for the COR's and the ACO is subject to their authority. The authorities for all ACO's and COR's on specific contracts flow from the KO. If the KO feels that the COR is exceeding their authority, the KO is empowered to take necessary corrective active. That is where my perspective comes from. And the PCO's from AMC that were assigned to our Chem-Demil Contracts (USACE was the ACO) were just as authoritative as our PCO's.

Apparently, the KO in this case is different , either by organizational authority or by personality, than the ones we have and those I've dealt with in our work with other organizations.

If nothing else, can't you discuss this with the KO and see what she/he can do about it more than merely a suggestion to the PO to coordinate and cooperate? If you are trying to establish your position via letter writing, citing FAR, etc., it won't get you very far. In your discussions, I suggest reiterating the trouble or potential problems that it is causing. Then, if that doesn't get you anywhere, you might try suggesting that the two clauses above don't give the PO unconditional access to the subcontractor's premises. Keep trying the personal communications route, then drop the (tack) hammer after all else fails...

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45.502 Subcontractor locations.

(a) For property located at a subcontractor, FAR 52.245-1(g) requires that the prime contractor allow support property administration. Should the prime contractor fail to comply with FAR 52.245-1(g), the property administrator assigned to the prime contractor shall immediately refer the matter to the contracting officer.

FAR 53.245-1 (g)(4):

4) The Contractor shall ensure Government access to subcontractor premises, and all Government property located at subcontractor premises, for the purposes of reviewing, inspecting and evaluating the subcontractor?s property management plan, systems, procedures, records, and supporting documentation that pertains to Government property.

Can this be read that the prime must take necessary action to allow government access to the subcontractors' locations? It doesn't say "allow unrestricted access" anywhere. I would think that, as part of the access arrangement, the prime could stipulate that, as a matter of courtesy, the government representative must (should? shall?, has to?) coordinate with the prime contractor. There isn't anything secret about what the guy is going to go look at - its property administration, after all.

There is nothing to stop a prime from trying to place a clause in a contract requiring advance notice of a visit. In the absence of such a clause, I don't think a prime can impose such a demand. Many subs have their own relationships with the government and may not object to such visits. Of course, the government must not impede the performance of a contractor or subcontractor. There may be valid reasons for the government to want to make an unannounced visit to check on the use of government property and to prevent abuse or misuse. A sub need not allow a government representative into its plant unless there is a clause in the subcontract that requires it to do so. If a sub refuses to admit the government's representative, the government would have to ask the prime to enforce the subcontract, relying on the contractor's obligation under Government Property clause. On the other hand, some subs are primes in their own right, and have resident government personnel all over the place with routine access to make unannounced inspections.

I doubt that the PO going to make a visit for property administration purposes is a Colonel or an SES. If so, I want that job! And - I would certainly hope that the KO is more than a procurement clerk. The KO's in our organization set down the rules for the COR's and the ACO is subject to their authority. The authorities for all ACO's and COR's on specific contracts flow from the KO. If the KO feels that the COR is exceeding their authority, the KO is empowered to take necessary corrective active. That is where my perspective comes from. And the PCO's from AMC that were assigned to our Chem-Demil Contracts (USACE was the ACO) were just as authoritative as our PCO's.

Apparently, the KO in this case is different , either by organizational authority or by personality, than the ones we have and those I've dealt with in our work with other organizations.

There are more things in heaven and earth, Joel, than are dreamt of in your philosophy. You tend to rely too much on your own experience with the Corps of Engineers. There is a lot of contracting going on out there with which you have had no experience, and in a lot of offices your notion of the almighty CO bears little connection with reality. Don't extrapolate too much from what you have seen.

I'm not saying that unannounced visits to subs are necessarily a good idea. My point is that such visits might make sense and are not necessarily "unprofessional," which is the word that you used.

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Sjanke, I sense that you are looking for a smoking gun in the form of a regulation or contract language that will require the government to coordinate with you. From your earlier post, you seem to indicate that there is a real problem between the PO and one of your subs, whom I assume isn't towhether the sub has or doesn't have an open door policy, anyway. Most contracts don't prescribe a solution to every behavioral problem by people. There needs to be a way to informally deal with such situations.

My advice is to continue to discuss the specific problems that the PO is causing between the sub and your firm with the KO before taking up letter writing, citing contract terms and regulations. If you and the sub are on the same page, I suggest explaining that you are obligated to provide "reasonable access" to the subs plant and that you feel that reasonable includes advance notice to the prime and to the sub as a courtesy, unless there is a good reason that this cant be accommodated.

In my organization - yes, I feel that my organization is a pretty good one, overall - the Corporate policy is that we are to offer a formal "Partnering" process with each of our contractors, in order to open up communication channels, in order to help each party understand the others' goals, needs and concerns in order to succeed in contract execution. We've found a lot of success in resolving small problems before they get out of hand - as well as some failures - through the Partnering process. Partnering isn't intended to ignore, change or otherwise avoid contract requirements, but to find ways within the contract and the rules to resolve problems or to find mutually satisfactory solutions, procedures, etc., where the contract doesn't provide the black and white answer.

I'm sorry if you have tried this and the KO doesn't have the personal or organizational ability to help you. I don't know that from the little info you provided. In the event that all else fails, I suppose you could write the formal letter expressing your concens about whatever problems the current relationship and procedures are causing and that you feel that reasonable access to the subcontractor's facility includes coordination through the prime, unless there is a valid reason where that cant' be accommodated. Perhaps one more try might work...

Vern, please refrain from continuing your personal, condescending attacks on me because my background isn't the same as yours. The last time I checked the Forum rules, they don't restrict discussion to anyone in particular. And I thought that personal attacks were in violation of the spirit, if not rule number one, of the Forum. My advice here is to Sjanke, not to you. You don't have any idea of what my overall background, inside and outside of the Federal government, is with other organizations, other governments, contracts, the public or contractors that I've dealt with over my career as a contract administrator, engineer, ACO, source selection leader, claims advisor/negotiator, designer, planner or consultant to government, private clients and contractors.

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