Blank Rome Partner Justin A. Chiarodo will be a presenter at BDO’s Winter 2019 Marketplace Outlook Update for Government Contractors, “Top 10 Trends and Compliance Obligations in the Evolving World of Commercial Item Procurement.” This live webinar will take place Thursday, February 28, 2019, from 12:30 to 1:30 p.m. EST.
For more information, please visit our website.
Merle M. DeLancey Jr.
Recently, clients have asked if they or a vendor or supplier are a “subcontractor” under a federal government contract. Sometimes the answer is easy—e.g., you are a subcontractor when a prime contractor contracts directly with a vendor or supplier (hereinafter “vendor”) to perform a federal contract. But the lines become less clear when a prime contractor does not inform the vendor that the subcontract is being entered into in furtherance of a federal government contract or where the vendor supplies goods that the prime contractor uses to perform commercial and government contracts.
Why Is Subcontractor Status Important?
Subcontractor status is important to prime and subcontractors. A federal prime contractor is required to flow-down multiple Federal Acquisition Regulation (“FAR”) clauses to its subcontractors. See FAR 52.212-5(e). The required flowdown clauses that receive the most attention implement three antidiscrimination laws: Executive Order 11246, Section 503 of the Rehabilitation Act of 1973, as amended; 29 U.S.C. § 793; and Section 402 of the Vietnam Era Veterans’ Readjustment Assistance Act, 38 U.S.C. § 4212. A prime contractor’s failure to flow down these clauses to its subcontractors could result in the prime contractor being held responsible and/or liable for its subcontractor’s noncompliance. Continue reading “Who Is a Subcontractor under a Federal Government Contract?”
Merle M. DeLancey Jr.
Effective October 1, 2018, verification of Veteran-Owned Small Businesses (“VOSBs”) and Service-Disabled Veteran-Owned Small Businesses (“SDVOSBs”) now rests with the Small Business Administration (“SBA”). (See, VA Veteran-Owned Small Business (VOSB) Verification Guidelines.) Previously, the SBA and the Department of Veterans Affairs (“VA”) had concurrent jurisdiction over VOSB/SDVOSB “ownership” and “control” determinations. This led to the confusing and inconsistent results. Now, the VA will no longer vet (pun intended) contractors to determine if they are eligible VOSBs or SDVOSBs. Exclusive authority to verify these businesses is now with the SBA. The new rule clarifies the VA verification process and makes VA and SBA regulations concerning VOSB and SDVOSB joint ventures consistent. The new rule stems from the Fiscal Year 2017 National Defense Authorization Act, Public Law 114-840, which called for the SBA and VA to eliminate inconsistent regulatory interpretations of “ownership” and “control” requirements for VOSBs and SDVOSBs. Continue reading “New Rules Affecting Veteran-Owned Small Businesses (Important to Large Businesses, Too)”