Identification of Subcontracted Effort in Offers

Presently, FAR 52.215-22 requires offerors who intend to subcontract more than 70 percent of the work to be performed under the contract, task order, or delivery order to identify in its proposal the amount of the offeror's indirect cost and profit/fee applicable to the work to be performed by the subcontractor and a description of the added value provided by the offeror as related to the work to be performed by the subcontractor(s).

Until now, this information wasn't really used in any meaningful way. Today, the FAR Council's published a final rule (effective June 8, 2015) that will require contracting officers to do something with the information. Specifically in those instances where an offeror for a contract, task order, or delivery order informs the agency pursuant to FAR 52.215-22 of its intention to award subcontracts for more than 70 percent of the total cost of work to be performed under the contract, task order, or delivery order, the contracting officer must:

1. Consider the availability of alternative contract vehicles and the feasibility of contracting directly with a subcontractor or subcontractors that will perform the bulk of the work; 
2. Make a written determination that the contracting approach selected is in the best interest of the Government; and 
3. Document the basis for such determination. 

This requirement comes from the 2013 NDAA (National Defense Authorization Act) so it applies statutorily to Defense and State Departments but for consistency, the FAR Councils extended the requirement to all agencies.

Wonder how many offerors will come in over the 70 percent subcontracted threshold now? Contracting officer just got a whole lot more work dumped on them if thy try to award contracts to firms with 70 percent or more subcontracted effort.