6.3 Subcontract Management & Consent to Subcontract (FAR Part 44)
Key Takeaways
An ordinary subcontractor lacks direct privity with the Government for a CDA claim; a legally valid prime-sponsored claim may be available. Protest standing and subcontract-award jurisdiction require separate analysis.
Consent follows RFO 44.201 and the actual 52.244-2 clause. Approved purchasing systems still require consent for specifically identified subcontracts; fixed-price primes have the clause's unpriced-action limitation.
Advance notification is distinct from consent. Civilian cost-reimbursement contracts other than NASA/Coast Guard retain specified statutory notification requirements even with an approved purchasing system.
RFO 44.301-2 makes CPSR need depend on risk factors; it does not set a universal $25 million trigger. Following a decision to conduct a CPSR, reassess its need at least every three years.
Subcontracting plans generally apply over $900,000, or $2 million for construction of a public facility, when subcontracting possibilities exist and no exception applies. Missing a goal alone does not automatically establish lack of good faith.
Commercial-subcontract flow-downs depend on the current 52.244-6 table and each included clause's own applicability; commercial status is not a blanket exemption.
6.3 Subcontract Management & Consent to Subcontract
The October 2026 exam FAQ uses RFO-updated FAR and DFARS. This section uses current RFO Part 44 and related clauses; actual acquisitions also require the applicable agency deviations and contract terms.
1. Privity, claims and protests
An ordinary prime/subcontract relationship has a Government–prime contract and a separate prime–subcontractor contract. Government consent to subcontract does not create a direct Government–subcontractor contract.
Government <-- prime contract --> Prime contractor
|
subcontract
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Subcontractor
Ordinarily, no direct Government–subcontractor contract
Under 41 U.S.C. 7101(7), a CDA contractor is a party to the Federal Government contract. An ordinary subcontractor without privity generally cannot bring a direct CDA claim on the prime contract. A valid prime-sponsored claim may be available, subject to sponsorship, certification and other legal requirements; consult counsel. This is not a rule that every person called a subcontractor is barred in every legal circumstance. CBCA Allred, pages 2–4, discusses the narrow agency/privity issue; CBCA Smith Management, pages 6–7, recognizes the sponsored appeal on its specific facts.
Bid protests have separate standing rules. Under 4 CFR 21.0(a), GAO's ordinary interested-party test concerns an actual or prospective bidder or offeror with direct economic interest. Subcontractor status alone does not confer standing to challenge the prime award. Under 4 CFR 21.5, GAO generally does not review subcontract awards except an agency request under 21.13, and contract administration is generally outside bid-protest review. Do not turn these qualified rules into a universal ban on all subcontractor claims or protests in every forum.
2. Consent and advance notification
Consent is the CO's written approval to enter a particular subcontract. Read RFO 44.201 together with the actual 52.244-2 clause and its schedule entries.
- Approved purchasing system: Consent remains required for the subcontracts specifically identified in clause paragraph (d).
- No approved system: Paragraph (c) covers cost-reimbursement, T&M and labor-hour subcontracts, plus fixed-price subcontracts meeting its dollar tests.
- Fixed-price prime: Paragraph (b) limits consent to unpriced contract actions, including unpriced modifications or delivery orders, and only when (c) or (d) requires it. A cost-type subcontract under any fully priced fixed-price prime is not automatically subject to this clause's consent rule.
For fixed-price subcontracts under paragraph (c), the test is the greater of SAT or 5% of total estimated prime cost for DoD, Coast Guard and NASA awards. For other civilian agencies, it is either SAT or 5%. Use the SAT on the subcontract-award date; the two tests are not interchangeable.
Advance notification is distinct from consent. Under RFO 44.201-2, a cost-reimbursement prime must notify before a CPFF subcontract or a qualifying fixed-price subcontract. For DoD, Coast Guard and NASA, approved-system status provides the stated exception and the fixed-price test uses the greater threshold. For other civilian agencies, notification applies even with an approved system and uses the either-threshold test. Clause Alternate I implements the latter requirement.
Unless expressly stated otherwise, consent or purchasing-system approval does not determine acceptability of subcontract terms or price, cost allowability, or relieve the prime of performance responsibility. RFO 44.201-4 prohibits, among other things, consenting to cost-plus-percentage-of-cost subcontracts or terms making a private subcontract dispute binding on the Government.
3. Contractor purchasing system review
A CPSR assesses purchasing efficiency, effectiveness and compliance, supporting approval, withholding or withdrawal of purchasing-system approval.
RFO 44.301-2 requires the responsible CO to decide whether a CPSR is needed based on such factors as past performance and the volume, complexity and dollar value of subcontracts. The current text has no universal $25 million sales trigger. Once the CO determines to conduct a CPSR, the CO must reassess whether one is needed at least every three years; that is not an automatic requirement to conduct a new full review every three years.
Approval can reduce routine consent requirements, but specifically identified subcontracts remain subject to consent and applicable notification remains. If approval is withdrawn, apply the contract's rules for an unapproved system; withdrawal does not create a blanket requirement for consent to every subcontract regardless of type, price or prime-contract conditions.
4. Small-business plans, reporting and good faith
Under RFO 19.109, acquisitions expected to exceed $900,000, or $2 million for construction of a public facility, generally require the selected offeror to submit an acceptable subcontracting plan when subcontracting possibilities exist. Exceptions include small-business concerns, personal-services contracts and contracts or modifications performed entirely outside the United States and its outlying areas. Threshold alone is insufficient.
RFO 19.206-1 distinguishes:
| Plan | Coverage |
|---|---|
| Individual | One contract, including options, with separate goals for the base and options |
| Master | Plant/division-wide elements except goals; effective for three years after approval and incorporated into an individual plan |
| Commercial | The contractor's fiscal year; covers relevant commercial production/services and Government contracts while effective |
A commercial plan is a method of compliance, not a blanket commercial-contract exemption. RFO 19.302-2 requires monitoring and reports in the prescribed SPR within 45 days after the report ending date. Follow the current clause and reporting instructions rather than assuming legacy paper forms or a superseded platform.
Under 52.219-16, missing a goal alone does not automatically establish failure to make a good-faith effort. Before a final decision, the CO gives written notice, permits the contractor to demonstrate good faith and discuss the matter, and considers pertinent evidence. If the CO finds lack of good faith under the clause, liquidated damages correspond to the actual dollar shortfall in each goal, measured against actual subcontracting dollars; a commercial plan uses the Government-attributable pro rata share. The decision is subject to the Disputes clause.
5. Applicable flow-down clauses
52.244-6 governs subcontracts for commercial products and commercial services. If a listed clause is included in the prime contract, insert it and flow down its requirements as the individual clause directs. Examples include applicable veterans/disability employment requirements, anti-trafficking and accelerated small-business payment provisions. Each clause's conditions still matter.
Include the terms of 52.244-6, including its lower-tier requirement, as directed by paragraph (c). Noncommercial subcontract requirements also depend on their individual prescriptions and conditions. Do not treat every FAR, CAS, pricing-data or domestic-preference requirement as universally applicable to every noncommercial subcontract.
Consent, purchasing-system approval, small-business plans and flow-downs answer different questions. Satisfying one does not automatically satisfy the others.
An ordinary subcontractor has no direct Government contract and alleges damage from Government action under the prime contract. Which statement is generally correct?
It can file a direct CDA appeal solely because it is a subcontractor
A valid prime-sponsored claim may be available, subject to sponsorship, certification and other legal requirements
Government consent automatically created direct privity
GAO bid-protest review is the normal route for prime contract administration
What does approved purchasing-system status change under RFO 44.201 and 52.244-2?
It approves every subcontract price as allowable
It reduces routine consent requirements, while specifically identified consent and applicable notification requirements remain
It lets the prime sign Government contract modifications
It removes applicable small-business subcontracting plans
A domestic standard supply/service acquisition offers subcontracting possibilities, the selected offeror is other than small, and no plan exception applies. Above which expected value does RFO 19.109 require a subcontracting plan?
$250,000
$350,000
$900,000
$2,000,000
After the notice and review required by 52.219-16, the CO finds the contractor failed to make a good-faith effort to meet its subcontracting plan. What does the clause provide?
Automatic debarment of the contractor
Liquidated damages based on the actual dollar shortfall in each subcontracting goal
A mandatory contract-type conversion
Automatic default termination within 24 hours
Sections you finish are checked off in the contents.