Heretalearn

It shouldn't unless it's a separate corporate/legal entity. A subsidiary can be (usually is) a separate corporate/legal entity.

There aren't any pat answers to your quandary (except the one Vern Edwards gave you in the first paragraph of his post #14)., Your details are a little sketchy and ambiguous in places for anyone to give you answers which would be much practical use to you. Presumably you have a subcontract with the contractor only, so all of your obligations and protections flow from the subcontract and are owed to the "Prime" Contractor. (I'm a little puzzled that you're being asked as a to counter-execute the "prime" contract modification, but I don't know that that's unheard of.) If you turn down the offer your employees won't be eligible for government-paid training. There's your business decision. Do you mean then they can't get the training, or that you can't get it paid for it? I'd be asking myself whether the "Prime" would still want to use my company if my employees don't get the training, and whether my subcontract would allow them to dispense with me for that reason. I'd also be asking myself whether the "offer" is a change to the original subcontract specifications for which, under the subcontract, I should be immune from unreimbursed costs. These are questions for a lawyer. Your other questions are mostly logistical. To whom you might write a check would depend upon to whom you could owe reimbursement. How you could conceivably collect from employees could well be covered by law, and you should have an attorney review at least that portion of it. Based on the details given, I don't see how options (by which I suppose you mean option periods) would enter into it.

That there are business risks at issue for you doesn't make the arrangement illegal. Is the "prime" seeking your input and counsel with regard to constructing the modification, and have you advised it of your concerns - or is the "prime" intending or attempting to impose it upon you unilaterally somehow once the prime and agency have negotiated the mod?

Why should you have to deal with them? Because "They got their hands on various audit reports and demand (you) issue contracts for various services identified in them"?

As should 52.222-43 or 44 (the Price Adjustment clauses) with their Part 22 prescriptions. Pay attention to the time frames.

Either works out to the detriment of (statutorily and regulatorily undefined) mid-sized businesses in my experience. Diversity favors small businesses with preferences, and strategic sourcing favors truly large businesses offering economy of scale.

Who will the check be made out to?

H2H, the triggers are similar, but not identical. (All emphasis below is added.) Limitation of Cost: "The Contractor shall notify the Contracting Officer in writing whenever it has reason to believe that (1) The costs the Contractor expects to incur under this contract in the next 60 days, when added to all costs previously incurred, will exceed 75 percent of the estimated cost specified in the Schedule; or (2) The total cost for the performance of this contract, exclusive of any fee will be either greater or substantially less than hand been previously estimated." Limitation of Funds: "The Contractor shall notify the contracting Officer in writing whenever it has reason to believe that the cost it expects to incur under this contract in the next 60 days, when added to all costs previously incurred, will exceed 75 of (1) the total amount so far allotted to the contract by the government..." The question was: "Does the FAR indicate that a Contractor-at its own risk-EXCEED funding limits on a CPFF contract?" It's pretty common for industry execs and managers to refer to cost and funding interchangeably. I'm not sure whether the OP really meant funding rather than cost, but I believe the answer in either case is that the Contractor does perform at its own risk when it exceeds either the estimated cost specified in the schedule or the total amount so far allocated to the contract. Limitation of Cost FAR 52.232.20(d): "Except as required by other provisions of this contract, specifically citing and stated to be an exception to this clause (1) The Government is not obligated to reimburse the Contractor for costs incurred in excess of (I) the estimated cost specified in the Schedule...(2) The Contractor is not obligated to continue performance under this contract... or otherwise incur costs in excess of the estimated cost specified in the Schedule, until the Contracting Officer (I) notifies the Contractor in writing that the estimated cost has been increased and (2) provides a revised estimated total cost of performing this contract..." Limitation of Funds FAR 52.232.22(B ): "...The Contractor agrees to perform, or have performed, work on the contract up to the point at which the total amount paid and payable by the Government under the contract approximates but does not exceed the total amount actually allotted by the Government to the contract... (e) If, after notification, additional funds are not allotted by the end of the period specified in the Schedule..., upon the Contractor's written request the Contracting officer will terminate this contract on that date... (f) Except as required by other provisions of this contract, specifically citing and stated to be an exception to this clause (1) The Government is not obligated to reimburse the Contractor for costs incurred in excess of the total amount allotted by the Government to this contract; and (2) The Contractor is not obligated to continue performance under this contract... or otherwise incur costs in excess of (I) The amount then allotted to the contract by the Government..."

Given the question, I would have thought the Limitation of Funds clause more pertinent than the Limitation of Cost clause. Maybe I misunderstood the questions.

In my experience such a plan would describe the responsibilities of the prime and each sub as they relate to each other, the distribution of work, the lines of authority (bearing in mind that the prime must be "in charge"), perhaps a past working relationships among the prime and the sub(s), the qualifications of the subs, the prime's past experience in managing subs, etc. The Government wants to know how the use of the subs will benefit the project, how it would all work smoothly, and if there's any prime/sub management experience or history that would help them be more comfortable that all will run as anticipated.

Post 17 is spot on as it pertains to the original quote. The rub is that prospective sellers who don't know how to "break in", don't know what they don't know. Unfortunately, even taking the time to give every cold-caller the information in post 17's last paragraph would, I'm willing to be, be time-prohibitive.

As an incumbent, using the question and answer process to strategically ensure that competitors are aware of "hidden" costs can sometimes be useful.

AmericanJan, you seem to be implying that the government is behaving coercively. If the government POC phrased this as a question (I.e, it's not holding the change order "hostage" for the free brackets), it just sounds like negotiation to me. However, if you're entitled to payment for the change to A and you're entitled to payment for the change to B, the real question is whether you see an benefit to giving away something you're entitled to payment for.

Bravo. Illustrates the relationship between legislatures and citizenry pretty well too.

Vern Edwards, you have an evil streak.