Consent to Subcontract

Subject: Subcontracting

Source: FAR

FAR Part: FAR 44

DFAR Part:

What is the rule?

“Consent to subcontract” means the contracting officer’s written consent for a contractor to enter into a particular subcontract.

The contract clause FAR 52.244-2 - Subcontracts requires a contractor that does not have an approved purchasing system to obtain consent, when:

1. The contract is a cost-reimbursement, time-and-materials, or labor-hour type, or

2. Is fixed price and exceeds:

• • i. A Department of Defense, Cost Guard, or National Aeronautics and Space Administration, the greater of the simplified acquisition threshold or 5% of the total estimated cost of the contract, or

• • ii. For a contract awarded by a civilian agency other than the ones noted above, either the simplified acquisition threshold or 5% of the total estimated cost of the contract.

For additional discussion of the requirements, please see FAR 44.204 - Contract Clauses

FAR Part 44.2

44.201-1 Consent requirements

• (a) 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. The contracting officer may require consent to subcontract if the contracting officer has determined that an individual consent action is required to protect the Government adequately because of the subcontract type, complexity, or value, or because the subcontract needs special surveillance. These can be subcontracts for critical systems, subsystems, components, or services. Subcontracts may be identified by subcontract number or by class of items (e.g., subcontracts for engines on a prime contract for airframes).

• (b) 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, and also for unpriced actions (including unpriced modifications and unpriced delivery orders) under fixed-price contracts that exceed the simplified acquisition threshold, for—

• • (1) Cost-reimbursement, time-and-materials, or laborhour subcontracts; and

• • (2) Fixed-price subcontracts that exceed—
    • (i) For the Department of Defense, the Coast Guard, and the National Aeronautics and Space Administration, the greater of the simplified acquisition threshold or 5 percent of the total estimated cost of the contract; or
    • (ii) For civilian agencies other than the Coast Guard and the National Aeronautics and Space Administration,

either the simplified acquisition threshold or 5 percent of the total estimated cost of the contract.

• (c) Consent may be required for subcontracts under prime contracts for architect-engineer services.
• (d) The contracting officer’s written authorization for the contractor to purchase from Government sources (see Part 51)

constitutes consent.

44.201-2 Advance notification requirements

Under cost-reimbursement contracts, the contractor is required by statute to notify the contracting officer as follows:

• (a) For the Department of Defense, the Coast Guard, and the National Aeronautics and Space Administration, unless the contractor maintains an approved purchasing system, 10 U.S.C. 2306 requires notification before the award of any cost-plus-fixed-fee subcontract, or any fixed-price subcontract that exceeds the greater of the simplified acquisition threshold or 5 percent of the total estimated cost of the contract
• (b) For civilian agencies other than the Coast Guard and the National Aeronautics and Space Administration, even if the contractor has an approved purchasing system, 41 U.S.C. 254(b) requires notification before the award of any cost-plusfixed-fee subcontract, or any fixed-price subcontract that exceeds either the simplified acquisition threshold or 5 percent of the total estimated cost of the contract.

44.202 Contracting officer’s evaluation

If this applies to your contract, please see the referenced FAR above for the responsibilities of an ACO.

44.204 Contract clauses

(a)(1) The contracting officer shall insert the clause at 52.244-2, Subcontracts, in solicitations and contracts when contemplating—

• (i) A cost-reimbursement contract;
• (ii) A letter contract that exceeds the simplified acquisition threshold;
• (iii) A fixed-price contract that exceeds the simplified acquisition threshold under which unpriced contract

actions (including unpriced modifications or unpriced delivery orders) are anticipated;

• (iv) A time-and-materials contract that exceeds the simplified acquisition threshold; or
• (v) A labor-hour contract that exceeds the simplified acquisition threshold.
• (2) If a cost-reimbursement contract is contemplated, for civilian agencies other than the Coast Guard and the

National Aeronautics and Space Administration, the contracting officer shall use the clause with its Alternate I.

• (3) Use of this clause is not required in—
  • (i) Fixed-price architect-engineer contracts; or
  • (ii) Contracts for mortuary services, refuse services, or shipment and storage of personal property, when an agency-prescribed clause on approval of subcontractors’facilities is required.

(b) The contracting officer may insert the clause at 52.244-4, Subcontractors and Outside Associates and Consultants (Architect-Engineer Services), in architect-engineer contracts.

(c) The contracting officer shall, when contracting by negotiation, insert the clause at 52.244-5, Competition in Subcontracting, in solicitations and contracts when the contract amount is expected to exceed the simplified acquisition threshold, unless—

• (1) A firm-fixed-price contract, awarded on the basis of adequate price competition or whose prices are set by law or regulation, is contemplated; or
• (2) A time-and-materials, labor-hour, or architect-engineer contract is contemplated.

What is a subcontract?

An agreement between 2 parties. It could be more than just a typical subcontract. It could be consulting or buying from a vendor.

What if I don't get a written consent to subcontract?

DCAA may and probably will question all of the costs.

Resources

File:DCMA-INST-143 - Consent to Subcontract.pdf]