Government Subcontracting Basics

Government subcontracting is a competitive field, and prime contractors look for reliable, ethical companies that provide quality goods and services on deadlines. To work well with both the prime contractor and the government, businesses must have an understanding of the protocol and politics that govern government subcontracting.

Privity: This is a key legal term referring to the contractual ties between parties. In government subcontracting, there are two distinct relationships: one between the government and the prime contractor, and one between the prime contractor and the subcontractor. Prime contractors often wind up stuck in the middle of disputes. Subcontractors are party to the agreement with the prime contractor, not the government agency. Therefore when subcontracting, they usually do not have the right to take action against the government when something goes wrong. However, a prime contractor may sponsor a subcontractor’s claim or make its own claim on behalf of the subcontracting party. Prime contractors can find themselves in a sticky spot financially. If something goes wrong and the agency decides to hold back money, the prime may still be legally obligated to pay the subcontractor. Sometimes on jobs where there is subcontracting, the prime gets stuck paying for goods and services for which it has not been reimbursed.

Jeffrey Gross said,

August 12, 2009 @ 10:39 am

Good day I would like to promote our company to install all keycard locks on any buildings including the Vingcard systems and others including all door hardware.

Please advise who to contact for further info Thanks.

editor said,

August 24, 2009 @ 8:50 am

Jeffrey – I’ll make sure an Onvia Contracting Expert gets in touch with you.

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