subcontracting | The Contracting Education Academy

January 24, 2017 By AMK

ASBCA shoots down DCAA overreach on responsibility to manage subcontractors

A prime contractor is responsible for managing its subcontractors, but what exactly does that require?

In a recent decision, the answer of the Armed Services Board of Contract Appeals was: not nearly as much as DCAA claimed.

In Lockheed Martin Integrated Sys., Inc., ASBCA Nos. 59508, 59509, the Board ruled on a Government claim seeking more than $100 million from LMIS for allegedly breaching an obligation to manage subcontracts. In DCAA’s reading, this obligation was extensive and required a number of concrete actions by the prime contractor.

After auditing three LMIS contracts, DCAA questioned $103 million in subcontract costs. DCAA claimed that, for the costs to be allowable, LMIS had to provide documents showing it had: (1) reviewed subcontractor resumes to confirm personnel qualifications; (2) reviewed subcontractor timesheets to confirm the accuracy of invoiced hours; and (3) tried to obtain incurred cost submissions from its subcontractors, contacting “the Government” for “assistance” if the subcontractors refused. DCAA claimed it could find no subcontract costs allowable “[w]ithout an incurred cost submission from the subcontractor,” which was the prime contractor’s responsibility to obtain.

Keep reading this article at: https://www.insidegovernmentcontracts.com/2017/01/asbca-shoots-dcaa-overreach-responsibility-manage-subcontractors/

August 17, 2016 By AMK

SBA’s ‘universal’ small business mentor-protégé program has impact on other agencies

With the finalization of the new SBA Small Business Mentor Protégé Program, other agencies without statutorily-authorized mentor-protege programs must seek SBA approval of their mentor-protege programs within one year, if they wish those programs to continue.

In a final rule scheduled to be effective August 24, 2016, the SBA questioned the need for other agencies (except the Department of Defense) to continue to operate their own mentor-protege programs, but provided a road map for agencies to preserve their separate mentor-protege programs if they wish.

Keep reading this article at: http://smallgovcon.com/statutes-and-regulations/sbas-universal-small-business-mentor-protege-programs-impact-on-other-agencies/

January 22, 2016 By AMK

Subcontracting and supply chain: What government learns from other sectors

Government contracting is as old as government itself. For most of its history, federal contracting was the proverbial 800-pound gorilla, where the golden rule was “He who has the gold, rules.”

Of course as budgets and the role of government (particularly federal) in affecting business or commerce declines, the impact of government acquisition needs and initiatives on the larger economy has declined as well. All contracting professionals are taught the importance of a healthy “industrial base,” which tends to be defined as a healthy and competitive group of prime contractors to meet present and future needs. It has historically been used as the rationale for avoiding overly burdensome or onerous acquisition regulations, lest contractors decide to move out of the business and no longer be a supplier.

Keep reading this article at: http://www.federaltimes.com/story/government/acquisition/blog/2016/01/07/subcontracting-and-supply-chain-what-government-learns-other-sectors/78416168/

November 30, 2015 By AMK

Obscure Pentagon small business program gets a boost from GAO

A mysterious Defense Department research project designed to test ways to encourage large contractors to hire small businesses earned a recommendation for permanent reauthorization from the Government Accountability Office on Monday, a move that surprised some inside the Pentagon and the small business community.

The 25-year-old Test Program for Negotiation of Comprehensive Small Business Subcontracting Plans, results for which the Pentagon has never reported to Congress or the public, in 2013 helped 12 participating companies avoid “about $18.5 million in costs through the use of single comprehensive subcontracting plans rather than multiple individual subcontracting plans,” the GAO said in a report mandated by the fiscal 2015 National Defense Authorization Act.

GAO found after reviewing contracting activities of a dozen firms, including defense giants Lockheed Martin Corp. and Northrop Grumman Corp., the companies had made “acceptable progress” toward enhancing small business opportunities 87 percent of the time, GAO found. “Participants also achieved a 72 percent success rate in increasing small business subcontracts in areas such as integrated circuits and information technology, thus addressing a concern among some small businesses that high-end technical work was not being subcontracted under the program.”

Keep reading this article at: http://www.govexec.com/defense/2015/11/obscure-pentagon-small-business-program-gets-boost-gao/123824

To see a list of current participants in DoD’s Test Program, go to: http://www.acq.osd.mil/osbp/sb/initiatives/subcontracting/participants.shtml

February 6, 2014 By AMK

Defense contractors spread the wealth … by subcontracting to one another

When major U.S. defense companies aren’t fiercely competing for Pentagon contracts to build planes, tanks, and ships, they’re often working for another big customer: each other.

The graphic below, developed by Bloomberg Government, shows the relationships. To see a full size version, please visit: http://www.businessweek.com/articles/2014-01-30/defense-contractors-give-a-lot-of-business-to-each-other.

A prime contractor is responsible for managing its subcontractors, but what exactly does that require?

With the finalization of the new SBA Small Business Mentor Protégé Program, other agencies without statutorily-authorized mentor-protege programs must seek SBA approval of their mentor-protege programs within one year, if they wish those programs to continue.

Government contracting is as old as government itself. For most of its history, federal contracting was the proverbial 800-pound gorilla, where the golden rule was “He who has the gold, rules.”

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