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52.215-23 Pass Through Charge


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Hello. I work for a small business and we are considering responding to a large dollar-value RFP as a Prime Contractor. The RFP has the clause 52.215-23 Limitations on Pass-Through Charges (OCT 2009). My reading of this clause is that we would still be complaint if we subcontracted more than 70% of the work as long as we added value, by doing things like "processing orders of parts or services, maintaining inventory, reducing delivery lead times, managing multiple sources for contract requirements, coordinating deliveries, performing quality assurance functions". In other's opinions, is my interpretation correct?

In addition to the above question, the clause uses Alternate I. Does this mean that if we include our proposed subcontractors, which in total will exceed 70% of the contract value, in our proposal and we are awarded the prime contract, that the Contracting Officer has determined that the subcontracting costs are not a pass through? I realize that is what it says but that seems too easy and to conflict with the government's Small Business initiatives.

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