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Prime contractor

Also called: prime, prime contract, general contractor, the prime

A prime contractor is the firm that holds the contract directly with the government, is responsible for all performance, and may hire subcontractors to do part of the work.

The FAR defines prime contract and prime contractor in FAR 44.101 in the context of subcontract consent, and the whole regulation is written from the prime's seat: the prime certifies, invoices, reports, flows down clauses, and answers for its subs. Only the prime has privity with the government, so a subcontractor's claim goes to the prime, not to the agency, and the government's remedies for poor performance run against the prime.

What to check before you prime: the bonding, insurance and accounting the contract requires, the limitations on subcontracting on a set-aside, the flow-down clauses you must put in subcontracts (FAR 52.244-6 lists the commercial ones), the subcontracting plan threshold if you are large, and your cash position, because the government pays on its own schedule and your subs expect theirs.

What it is not: always the bigger company. On a set-aside the small business is the prime and a large firm may be its sub, and on a mentor-protege JV the protege manages the venture.

See also: Subcontractor, Subcontracting plan, Limitations on subcontracting, Teaming agreement

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