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I'm a Subcontracts Administrator and I have a situation in which I need advice. My company put together a proposal for the US Army COE, did not include myself on the team (which was a mistake), and entered into a "Teaming Agreement" with a small business. The proposal was submitted (firm fixed price)and we won.

Yesterday the Project Manager comes over to me and wants me to issue a $702K subcontract to this teaming partner, of course with me not knowing any details, I ask him "where's your other bids to show competition?" and there were none. My experience is in Time and Material contracts in which we are issued a Task Order under a certain contract and we bid out any procurement over $2500 to meet the FAR requirements.

I know this is confusing, but I guess my question is this, since this current contract is "firm fixed price" and the "teaming agreement" was submitted to the US Army AND they approved it, by awarding this contract to us, does this satisfy the requirement for full and open competition for this particular service (with the teaming partner)? I guess I'm really confused on how you can get around not bidding this service out. I've had to sit in front of a DCAA auditor many times in the past and I can just visualize them asking me, "can I see the other quotes for this procurement?". Just makes me nervous.

Any advise would be appreciated.

Thanks

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It sounds like your firm has a competitively-awarded firm-fixed-price contract, so you probably don't have to worry about DCAA auditors. FAR 44.302( a ) tell us such contracts do not trigger contractor purchasing system reviews. A company with an approved purchasing system probably has internal policies and practices that provide for efficiency and effectiveness in spending Government funds on subcontracts.

You don't mention whether ( i ) your firm has an approved purchasing system; or ( ii ) whether your proposed subcontract is firm-fixed-price. If the answer to ( i ) is yes, FAR 44.201-1( a ) suggests your proposed subcontract probably doesn't require the contracting officer's consent. But if the answer to ( i ) is no, and the answer to ( ii ) is yes, and the total value of your prime contract is less than $14 Million, FAR 44.202-1( b )( 2 )( i ) suggests you will require the contracting officer's consent for your proposed subcontract. If the answer to ( i ) is no and the answer to ( ii ) is no, FAR 44.202-1( b )( 1 ) suggests you will need the contracting officer's consent for your proposed subcontract. There are other permutations or combinations you can consider.

My point is that the competition requirements of FAR Parts 6 and 13 are generally aimed at prime contracts rather than subcontracts. Rules for subcontract competition are often a product of a firm's purchasing system processes. You don't tell us what FAR requirement you are satisfying when you "bid out any procurement over $2500" -- I am not aware of any FAR requirement for for subcontracts under competitively-awarded firm-fixed-price prime contracts. But a DCAA auditor doing a purchasing system review, a DCMA ACO reviewing a payment request on a cost-reimbursement or similar contract, or a contracting officer considering a consent to subcontract matter would be interested in a firm's approach to subcontract competition.

I hope this is helpful.

ji

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Guest Vern Edwards

The competition requirements of FAR Part 6 do not apply to contractors. Contractors are not required to get full and open competition when awarding subcontracts. If a contract includes the clause at FAR 52.244-5, Competition in Subcontracting (DEC 1996), then the contractor is required to award subcontracts "on a competitive basis to the maximum practical extent." Note that the word is "practical," not "practicable." See an English dictionary for the difference. That standard is not the same as "full and open competition." If the contract does not include that clause, then the contractor is not "required" to get any competition when awarding a subcontract.

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If your contract is truly firm-fixed price, the Government doesn't care what it costs you to perform the contact. All the cost risk is yours - including your cost of subcontracts.

The Government has no right to audit or review you books under a true FFP contract.

Further, there is no requirement for contracting officer consent to subcontracts, because the Subcontracts clause FAR 52.244-2 is not required in a firm-fixed price contract [see 44.204(a)(1)]. And the Competition in Contracting clause may not be required. [see 44.204©].

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