DoD Contracting Officers Cannot Withhold Consent to Subcontract where Purchasing System has been Approved

DoD issued a final rule amending its FAR Supplement (DFARS) that for Defense contractors with approved accounting system, contracting officers are not permitted to withhold "consent to subcontract" unless it has written approval from a program manager.

FAR 44.201 regarding subcontract consent and advance notification requirements, distinguishes between contractors with approved purchasing systems and those without. For contractors with approved purchasing systems, consent is required for subcontracts specifically identified by the contracting officer in the subcontracts clause of the contract.Why would a contracting officer call out a specific subcontract for consent?  When the contracting officer has determined that an individual consent action is required to protect the Government adequately because of the subcontract type, complexity, or value , or because the subcontract needs special surveillance. In other words, its a judgment call by the contracting officer.

For contractors without approved purchasing systems, consent to subcontract is required for cost-reimbursement, time-and-materials, labor-hour, or letter contract and also for unpriced actions under certain fixed-price contracts.

This new DoD provision applies to contractors with approved purchasing systems. Evidently, some contracting officers have been feeling their oats and have made life miserable for contractors - often for picayune reasons - so much so that programs were being impacted because contractors have been unable to award subcontracts in a timely manner. This problem came to Congress' attention and Congress included a provision in the 2019 NDAA (National Defense Authorization Act) to make it unlawful for contracting officers to withhold approval unless it receives concurrence from a program manager. 

Specifically, the new provision, applying only to DoD contracts, and appearing at DFARS 244.201-1, reads as follows:

In accordance with Section 824 of the National Defense Authorization Act for Fiscal Year 2019 (Pub. L., 115-232), notwithstanding the requirements in FAR 44-201(a), the contracting officer shall not withhold consent to subcontract without the written approval of the program manager, or comparable requiring activity official exercising program management responsibilities, if the contractor has a approved purchasing system as defined in FAR 44.101.