govcon.forum

Subcontractor

Also called: sub, subcontract, first-tier sub, lower-tier subcontractor, subbing to a prime

A subcontractor is a firm that performs part of a government contract under an agreement with the prime contractor (or with a higher-tier sub) rather than with the government itself.

FAR 44.101 defines subcontract and subcontractor broadly: any purchase order or agreement under a prime contract for supplies or services counts. The subcontract is a commercial contract, so the prime's terms, payment schedule and dispute process govern, with federal clauses flowed down where the FAR requires it (cybersecurity, labor standards, Buy American, among others). The government pays the prime, and FAR 52.232-40 and the Prompt Payment Act push primes to pay small subs promptly, but enforcement is the sub's own job.

What to check: the flow-down clauses and whether you can meet them, the payment terms (pay-when-paid clauses are common and legal in most states), the scope in the subcontract against the prime contract's statement of work, the bond or insurance the prime wants, and your right to a copy of the payment bond on a Miller Act job. Ask for a teaming agreement before the bid and a subcontract immediately after award.

What it is not: a lesser status. Most firms' first federal revenue and first past performance come as a sub.

See also: Prime contractor, Teaming agreement, Miller Act, Limitations on subcontracting

Questions that use this term

Search all