CFCM Subcontract Management 3 — Questions and Answers
Question 1: A subcontractor on a fixed-price prime contract requests a price adjustment due to government-caused delays. Who has the legal standing to present this claim to the government?
- The subcontractor directly, through a direct access clause
- The prime contractor, who must sponsor the subcontractor's claim (Correct answer)
- Either party, at the election of the subcontractor
- The subcontractor's surety company
Correct answer: The prime contractor, who must sponsor the subcontractor's claim
Because there is no privity between the government and subcontractor, only the prime contractor can present (sponsor) the subcontractor's claim to the government.
Question 2: Which FAR clause requires prime contractors to provide subcontractors with timely payment after receiving payment from the government?
- FAR 52.232-27, Prompt Payment for Construction Contracts (Correct answer)
- FAR 52.232-5, Payments Under Fixed-Price Construction Contracts
- FAR 52.232-29, Terms for Financing of Purchases of Commercial Products
- FAR 52.244-2, Subcontracts
Correct answer: FAR 52.232-27, Prompt Payment for Construction Contracts
FAR 52.232-27 requires prime contractors on construction contracts to pay subcontractors promptly after receiving government payments, within specified timeframes.
Question 3: Under FAR 19.702, what is the small business subcontracting plan requirement threshold for other-than-small business prime contractors?
- Contracts expected to exceed $750,000 ($1.5 million for construction) (Correct answer)
- Contracts expected to exceed $150,000
- All contracts regardless of dollar value
- Contracts expected to exceed $500,000
Correct answer: Contracts expected to exceed $750,000 ($1.5 million for construction)
FAR 19.702 requires subcontracting plans from other-than-small business contractors when the contract is expected to exceed $750,000 ($1.5 million for construction).
Question 4: What action must a contracting officer take before approving a prime contractor's request to change a subcontractor named in a subcontracting plan?
- Obtain SBA concurrence only
- Review and approve the substitution, ensuring the replacement meets small business goals (Correct answer)
- Automatically deny the substitution to protect small business commitments
- Transfer the subcontracting plan obligation to the new subcontractor
Correct answer: Review and approve the substitution, ensuring the replacement meets small business goals
The contracting officer must review and approve any substitution of named subcontractors in a plan to ensure small business goals are not undermined.
Question 5: Which report do other-than-small prime contractors submit to report subcontracting plan achievements under contracts with subcontracting plans?
- DD Form 350, Individual Contracting Action Report
- SF 294, Subcontracting Report for Individual Contracts (Correct answer)
- SF 1449, Solicitation/Contract/Order for Commercial Products
- DD Form 1057, Monthly Contracting Activity
Correct answer: SF 294, Subcontracting Report for Individual Contracts
SF 294 is used by prime contractors to report actual subcontracting achievements against their approved subcontracting plan goals.
Question 6: What is 'pass-through' subcontracting, and why is it a concern under FAR?
- When a prime subcontracts all performance without adding value, potentially constituting an improper award (Correct answer)
- When costs flow from subcontractor to prime to government billing
- When a subcontractor re-subcontracts to a lower tier without consent
- When a prime invoices the government before paying its subcontractors
Correct answer: When a prime subcontracts all performance without adding value, potentially constituting an improper award
Pass-through subcontracting occurs when a prime adds no value and simply passes work through, raising concerns about compliance with limitations on subcontracting and possible affiliation rules.
Question 7: Under FAR 44.303, what is the government's right when a contractor's purchasing system is disapproved?
- The government may terminate the prime contract for default
- The ACO may withhold a percentage of payments until the system is approved (Correct answer)
- The government must re-compete the contract among compliant contractors
- The ACO may assume direct control of all subcontracting activities
Correct answer: The ACO may withhold a percentage of payments until the system is approved
FAR 44.303 authorizes the ACO to withhold a percentage of contract payments when the contractor's purchasing system is disapproved until corrective actions are implemented.
CFCM Subcontract Management 3
A subcontractor on a fixed-price prime contract requests a price adjustment due to government-caused delays.
Who has the legal standing to present this claim to the government?