XL EagleSubcontract
Subcontract. A subcontract is a contract between the prime contractor and another business that performs part of the work. The government is not a party to it, so the sub works for and is paid by the prime.
Many federal clauses must be flowed down from the prime contract into the subcontract, such as labor standards, safety and cybersecurity rules. Subs must follow them even though they never signed the prime contract.
Why it matters to a small contractor
Subcontracting is the fastest way for a trade to get federal work without bidding on its own. Read the flow-down clauses and payment terms before signing.
Example
A prime wins a $600,000 base maintenance contract. It signs a $180,000 subcontract with a local HVAC company to handle all heating and cooling repairs.
Subcontract: common questions
Can I go to the government if the prime does not pay me?
Usually you have no direct contract with the government. Your claim is against the prime, though payment bonds may protect subs on construction jobs.
What is a flow-down clause?
A clause from the prime contract that must be included in subcontracts so the sub follows the same rules.
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