17.402
Limitations
Leader company contracting is only allowed when strictly necessary, with essential assistance, agency authorization, and government oversight of subcontracts.
Overview
FAR 17.402 outlines the specific limitations and conditions under which leader company contracting may be used by the government. This section ensures that such arrangements are only employed when absolutely necessary and under strict controls to protect government interests and promote fair competition.
Key Rules
- Leader Company Qualifications
- Leader company contracting is only permitted if the leader company possesses the required production expertise and can provide essential assistance to follower companies.
- Necessity of Leader Company
- The arrangement is only allowed when no other source can meet the government's needs without the leader company's help.
- Scope of Assistance
- The leader company's assistance must be strictly limited to what is essential for the follower(s) to produce the required items.
- Agency Authorization
- Use of leader company contracting must be authorized according to agency-specific procedures.
- Government Approval of Subcontracts
- The government retains the right to approve any subcontracts between the leader and follower companies.
Responsibilities
- Contracting Officers: Must ensure all four conditions are met before using leader company contracting and must secure agency authorization. They must also reserve the right to approve subcontracts.
- Contractors: Leader companies must provide only essential assistance and work within the scope approved by the government. Follower companies must comply with approved subcontracting arrangements.
- Agencies: Must establish and follow procedures for authorizing leader company contracting and oversee compliance.
Practical Implications
- This section exists to prevent unnecessary or overly broad use of leader company contracting, ensuring it is only used when absolutely required. It protects the government from dependency on a single source and ensures oversight of subcontracting relationships. Common pitfalls include failing to document the necessity or exceeding the essential assistance scope.