FAR Part 44 Flashcards
Subcontracting Policies and Procedures
Part 44 - Subcontracting Policies and Procedures
Overview of FAR Part 44 -
Subcontracting Policies and Procedures
- Purpose: Establishes policies and procedures for managing
subcontracts under federal contracts (FAR 44.000). - Key Sections:
44.1 General
44.2 Consent to Subcontracts
44.3 Contractors’ Purchasing Systems Reviews
44.4 Subcontracts for Commercial Items and Commercial Components
Part 44 - Subcontracting Policies and Procedures
Subpart 44.1 - General
Purpose: Provides general policies for subcontracting under federal
contracts (FAR 44.101).
Key Features:
- Defines the responsibilities of prime contractors in managing subcontracts (FAR
44.102). - Emphasizes the need for prime contractors to ensure subcontractor compliance with contract requirements (FAR 44.103).
Part 44 - Subcontracting Policies and Procedures
Subpart 44.2 - Consent to Subcontracts
- Purpose: Establishes the procedures for obtaining consent to
subcontracts (FAR 44.201). - Key Features:
- Requirements for when prime contractors must obtain consent from the contracting officer to enter into subcontracts (FAR 44.202).
- Procedures for submitting requests for consent, including necessary documentation and justifications (FAR 44.203).
Part 44 - Subcontracting Policies and Procedures
Subpart 44.3 - Contractors’ Purchasing Systems Reviews
- Purpose: Provides guidelines for reviewing contractors’ purchasing
systems (FAR 44.301). - Key Features:
- Criteria for evaluating the effectiveness of contractors’ purchasing systems (FAR
44.302). - Procedures for conducting purchasing system reviews and addressing deficiencies (FAR 44.303).
Part 44 - Subcontracting Policies and Procedures
Subpart 44.4 - Subcontracts for Commercial Items and Commercial Components
- Purpose: Establishes policies for subcontracts involving commercial items and components (FAR 44.401).
- Key Features:
Guidelines for applying commercial item procurement policies to subcontracts (FAR 44.402).
- Requirements for ensuring that subcontracts for commercial items comply with federal acquisition regulations (FAR 44.403).
Consent to Subcontracts
The requirement for consent to subcontract depends on the contractor’s purchasing system.
Approved purchasing system
Consent is only required for
a subcontract identified by the contracting officer ni the subcontracts clause of the contract.
No approved purchasing system
Consent is required for all subcontracts.
Considerations for Consent to Subcontract
Is the decision to subcontract consistent with the contractor’s
approved make-or-buy program, fi any?
Is the subcontract for
special test equipment, equipment, or real property that is available from government sources?
Has the contractor
complied with the prime contract requirements regarding small business subcontracting and purchase from nonprofit agencies
Was adequate price competition obtained or
its absence properly justified?
Did the contractor adequately assess and dispose of subcontractors’ alternate proposals, fi offered?
Has the contractor
performed adequate cost or price analysis or price
comparisons and obtained
certified cost or pricing data and data other than certified
cost or pricing data
Is the proposed
subcontract type
appropriate for the risks involved and consistent
with current policy
Has adequate consideration been
obtained for any proposed subcontract that will involve
the use of government-
provided equipment and real property?
Has the contractor
adequately and reasonably translated
prime contract technical
requirements into subcontract
requirements?
Does the prime contractor
comply with applicable cost accounting
standards for awarding the subcontract
Is the proposed
subcontractor in the System for Award Management Exclusions?
Considerations for Consent to Subcontract
Careful consideration is necessary when:
- The prime contractor’s purchasing system or performance is inadequate
- Close working relationships or ownership affiliations between the prime and subcontractor may preclude free competition or result in higher prices
- Subcontracts are proposed for award on a non-
competitive basis, at prices that appear unreasonable, or at prices higher than those offered to the government in comparable circumstances - Subcontracts are proposed on a cost-reimbursement, time-and-materials, or labor-hour basis
Notification Requirements
Under cost-reimbursement contracts, the contractor is required by statute to notify the contracting officer:
DoD, Coast Guard, NASA
Before award of any cost-plus-
fixed fee subcontract, or any fixed-price subcontract that
exceeds the greater of the simplified acquisition threshold or
5% of the total estimated cost
Other agencies
Before award of any cost-plus- fixed-fee subcontract, or any
fixed-price subcontract that
exceeds the simplified acquisition threshold or 5% of the total
estimated cost
Contractor’s Purchasing Systems Reviews
The objective of the CPSR is to evaluate the efficiency an effectiveness with which the contractor spends government funds and I complies with government policy when subcontracting.
The ACO shall determine the need for a CPSR based on, but not limited to, the past performance of the contractor, and the volume, complexity and dollar value of the subcontracts.
Once an initial determination has been made, at least every
three years the ACO shall determine whether a CPSR is
necessary. fI necessary, the cognizant contract administration office will conduct a review.
The cognizant ACO is responsible for
granting, withholding, or withdrawing approval of a contractor’s purchasing system.
The ACO shall approve a purchasing system only after determining that the contractor’s purchasing policies and practices are efficient and provide adequate protection of the government’s interests.
Subcontracts for Commercial Items
Contractors and subcontractors at all tiers shall be required to incorporate commercial items or
nondevelopmental items as components of items delivered to the government to the maximum
extent practicable.
FAR PART 44. SUBCONTRACTING
POLICIES AND PROCEDURES
A. CONSENT TO SUBCONTRACTS (FAR
44.2)
If the contractor has an approved purchasing system, consent is required for subcontracts specifically identified by the contracting officer in the subcontracts clause of the contract.
If the contractor does not
have an approved purchasing system, consent to subcontract is required for cost-reimbursement, time-and-materials, labor-hour, or letter contracts.
In addition, consent is required for fixed-price subcontracts that exceed (1) for the Department of Defense, the Coast Guard, and NASA, the greater of the simplified acquisition threshold or 5 percent of the total estimated cost of the contract; or
(2) for civilian agencies other than the Coast Guard and
NASA, either the simplified acquisition threshold or 5
percent of the total estimated cost of the contract.
The contracting officer’s written authorization for the contractor to purchase from government sources constitutes consent.
B. CONTRACTOR PURCHASING SYSTEMS
REVIEWS (FAR 44.3)
The objective of a contractor purchasing system review (CPSR) is to
evaluate the efficiency and effectiveness with which the contractor spends government funds and complies with government policy when subcontracting.
The review provides the administrative contracting officer (ACO) a basis for granting, withholding, or withdrawing approval of the contractor’s purchasing system.
The ACO shall determine the need for a CPSR based on, but not limited to, the past performance of the contractor, and the volume, complexity, and dollar value of the subcontracts. If a contractor’s sales tothe government (excluding competitively awarded firm-fixed-price and competitively awarded fixed-price with economic price adjustment contracts and sales of commercial items pursuant to part 12) are expected to exceed $25 million during the next 12 months, perform a review to determine if a CPSR is needed.
C. SUBCONTRACTS FOR COMMERCIAL ITEMS AND COMMERCIAL COMPONENTS
(FAR 44.4)
Contractors and subcontractors at all tiers shall be required
to incorporate commercial items or nondevelopmental items as components of items delivered to the government to the maximum extent practicable.
Only contract clauses identified at FAR 52.244-6 are required to be in subcontracts for commercial items or commercial components.
