Sep 18, 2014

Continued Noncompliance with 8(a) Subcontracting Limitations

The Government Accountability Office (GAO) just released a second report on 8(a) compliance with subcontracting limitations.   The report examined the extent to which 8(a) companies and contracting officers monitor compliance to ensure the 8(a) contractor is performing the requisite amount of work.  The report states:

Similar to prior GAO findings from April 2006 and January 2012,  the GAO found that contracting officers are generally not collecting information on the amount of subcontracted work performed under the 8(a) contracts reviewed, as required. The amount of work prime contractors must perform differs according to what is being procured. For example, the subcontractor’s personnel costs are not to exceed 50 percent of the total work under service contracts. Two of the contracting officers associated with the 10 contracts GAO reviewed had monitored and ensured that the subcontracting limitations were not exceeded. In these cases the contractors had been asked to provide necessary information. In the other cases, however, contracting officers did not monitor and were not fully aware of what they were required to do, in part because their responsibilities are not set forth in the Federal Acquisition Regulation (FAR), the primary source for federal procurement policies, to which they regularly turn for guidance. Instead, these responsibilities are outlined in agency agreements with the Small Business Administration (SBA).

GAO is recommending that OFPP amend the FAR to reflect the contracting officer’s responsibilities for monitoring the work divide on 8(a) contracts.  I’ll keep you posted on any draft rules in this area.

Here’s the report.

Please feel free to contact me with any questions: bkinosky@centreconsult.com.

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