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Interim Internal Purchasing Guidelines > 6 Contract Administration > 6.7 Subcontracting Guidelines
6.7.1.a Requirements
1. When a contract contains Clause B-18, Subcontracts, the supplier must
notify the contracting officer in advance of its intent to subcontract. The
supplier may enter into a subcontract unless notice of disapproval is
received from the contracting officer within 15 days from the date the
contracting officer was notified.
2. The purchase team, represented by the contracting officer, must:
(a) Promptly evaluate supplier notices of intent to subcontract;
(b) Obtain assistance in this evaluation, as necessary, from
subcontracting, audit, pricing, technical, or other specialists; and
(c) Have the contracting officer notify the supplier in writing if the
subcontract is disapproved.
6.7.1.b Considerations
1. The purchase team must review the notice of intent to subcontract and
any supporting data and should consider the following:
(a) Is the subcontractor to acquire special test equipment or facilities
that are available from Postal Service sources?
(b) Is the selection of the particular supplies, equipment, or services
technically justified?
(c) Was adequate price competition obtained or its absence justified?
(d) Did the supplier adequately assess its subcontractor's alternate
proposals?
(e) Does the supplier have a sound basis for selecting and
determining the capability of the subcontractor?
(f) Has the supplier performed adequate price or cost analysis?
(g) Is the proposed subcontract type appropriate for the risks
involved and consistent with current policy?
(h) Will subcontractors be working in Postal Service-furnished
facilities?
(i) Has the supplier adequately and reasonably translated prime
contract technical requirements into subcontract requirements?
(j) Is the proposed subcontractor on the Postal Service's
consolidated list of debarred, suspended, and ineligible
suppliers?
2. Particularly careful and thorough consideration is necessary when:
(a) The prime supplier's purchasing system or performance is
inadequate;
(b) Close working relationships or ownership affiliation between the
prime and subcontractor may preclude free competition or result
in higher prices;
(c) Noncompetitive subcontracts are proposed at prices that appear
unreasonable, or higher than those offered the Postal Service in
comparable circumstances; or
(d) Subcontracts are proposed that are not fixed-price.
6.7.2 Limitations
6.7.2.a Lack of Disapproval. Lack of disapproval of a subcontract does not constitute
a determination of the acceptability of the subcontract terms or price, or of the
allowability of costs.
6.7.2.b Disapproval to Avoid Disputes. Subcontracts should not be disapproved
merely because they give the subcontractor the right to appeal a dispute to
the Board of Contract Appeals in the name of the prime supplier.
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