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Are there any restrictions on the contract type that I issue to a subcontractor? My prime contract is a CPFF for services. We are bringing on a very small business (KO approved subcontractor) and I know they do not have an approved accounting system. I have searched around and have seen that an "approved" accounting system is not actually required but more of an indicator that the contractor is responsible.

The subcontractor has only performed on T&M contracts in the past and would like to stick with that. Do I have any restrictions on issuing them a T&M subcontract? Does FAR 16.1 apply or is that just used for government to prime?

Thank you!

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VinceS,

You wrote that your prime contract is CPFF. If so, then it probably contains the clause at FAR 52.244-2, Subcontracts. This clause generally requires the prime to provide advance notification and to seek consent to subcontract from the contracting officer prior to awarding a T&M subcontract.

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VinceS,

FYI, the clause expressly prohibits two types of subcontracts:

(g) No subcontract or modification thereof placed under this contract shall provide for payment on a cost-plus-a-percentage-of-cost basis, and any fee payable under cost-reimbursement type subcontracts shall not exceed the fee limitations in FAR 15.404-4©(4)(i).
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