Parent bid as Offeror using unmentioned subsidiary to perform the work

[Steele24]

Can a Parent bid a Government contract as the Offeror /Prime and not mention performance will be executed by employees of one of its wholly owned subsidiaries (which legally is a separate company and should be treated as a subcontractor)? The Parent also represents the subsidiary employees as employees of the Parent and cites past performance work as the Parent's but does not mention the subsidiary anywhere in the proposal. Couldn't this fall under the False Claims Act by misrepresenting the performing legal entity for the PWS  by claiming employees and past projects as the Parent in the proposal? 

[joel hoffman]

On 1/17/2025 at 7:24 AM, Steele24 said:

Can a Parent bid a Government contract as the Offeror /Prime and not mention performance will be executed by employees of one of its wholly owned subsidiaries (which legally is a separate company and should be treated as a subcontractor)? The Parent also represents the subsidiary employees as employees of the Parent and cites past performance work as the Parent's but does not mention the subsidiary anywhere in the proposal. Couldn't this fall under the False Claims Act by misrepresenting the performing legal entity for the PWS  by claiming employees and past projects as the Parent in the proposal? 

Just received an email notification of this “new topic” today; the topic was posted last  month.

You said this is a “bid” but later state that  certain representations were made concerning who the employees work for and past performance by the prime “in the proposal”

Has the contract been awarded or was it in proposal evaluation stage when you asked the questions. If the latter, the government should have questioned the discrepancies if they were aware of them prior to award.

if this is a construction contract, it should include the contract clause Performance of Work by the Contractor. That clause  requires the prime contractor to manage the work with its own employees and to perform at least the specified minimum percentage of the work.

If this is a small business set-aside or a sole source contract, there should be a Limitation on Subcontracting clause that limits the amount of subcontracting. Those contracts also require the prime to control and manage the work. 

if A construction contract, the prime must identify each subcontractor and also must identify who the employees work for in the weekly payroll submissions. 

You should consult your legal counsel if you are with the Government agency.

If you are a third party, you can advise the Agency of the misrepresentations.

Specific answers would require more context to the situation and current status of the acquisition. 

[here_2_help]

On 1/17/2025 at 5:24 AM, Steele24 said:

Can a Parent bid a Government contract as the Offeror /Prime and not mention performance will be executed by employees of one of its wholly owned subsidiaries (which legally is a separate company and should be treated as a subcontractor)? The Parent also represents the subsidiary employees as employees of the Parent and cites past performance work as the Parent's but does not mention the subsidiary anywhere in the proposal. Couldn't this fall under the False Claims Act by misrepresenting the performing legal entity for the PWS  by claiming employees and past projects as the Parent in the proposal? 

I question the assumption that a wholly owned subsidiary is "a separate company [that] should be treated as a subcontractor." That is true only in very limited circumstances (see FAR 31.205-26(e) and (f)). In almost all cases, work performed by an affiliated entity under common control is a "make" not a "buy". See the definition at FAR 15.407-2(b).

[Neil Roberts]

On 1/17/2025 at 5:24 AM, Steele24 said:

Can a Parent bid a Government contract as the Offeror /Prime and not mention performance will be executed by employees of one of its wholly owned subsidiaries (which legally is a separate company and should be treated as a subcontractor)? The Parent also represents the subsidiary employees as employees of the Parent and cites past performance work as the Parent's but does not mention the subsidiary anywhere in the proposal. Couldn't this fall under the False Claims Act by misrepresenting the performing legal entity for the PWS  by claiming employees and past projects as the Parent in the proposal? 

@Steele24. See FAR 9.1 Responsible Prospective Contractors for some useful information relating to affiliates.

Edited March 6 by Neil Roberts
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[Neil Roberts]

@Steele24 is 52.215-6 included in the solicitation and or contract? If so, how was it answered?