9.405-2
Restrictions on subcontracting
Contractors must not subcontract over $35,000 to debarred or suspended parties without compelling justification and written notification to the contracting officer.
Overview
FAR 9.405-2 establishes strict restrictions on subcontracting with parties that are debarred, suspended, proposed for debarment, or voluntarily excluded from government contracting. The regulation aims to protect the Government’s interests by preventing contractors from engaging with ineligible subcontractors, except under compelling circumstances and with proper notification and justification.
Key Rules
- Consent for Subcontracts
- Contracting officers cannot consent to subcontracts with debarred, suspended, or excluded parties unless the agency head provides written justification for a compelling reason.
- Prohibition on Subcontracting
- Contractors are prohibited from entering into subcontracts over $35,000 (except for commercially available off-the-shelf items) with debarred, suspended, or excluded parties unless there is a compelling reason and proper notification is provided.
- Notification Requirement
- Before entering into such a subcontract, contractors must notify the contracting officer in writing, providing the subcontractor’s name, reasons for exclusion, compelling reasons for subcontracting, and systems to protect the Government’s interests.
- Review of Compliance
- Contractor compliance with these requirements is subject to review during Contractor Purchasing System Reviews.
Responsibilities
- Contracting Officers: Must withhold consent for subcontracts with ineligible parties unless justified in writing by the agency head.
- Contractors: Must avoid prohibited subcontracts, provide required notifications, and establish protective systems and procedures.
- Agencies: Must review contractor compliance during purchasing system reviews and approve exceptions only for compelling reasons.
Practical Implications
- This section exists to prevent government funds from flowing to ineligible or risky parties.
- Contractors must have robust due diligence and notification processes to avoid compliance violations.
- Failure to comply can result in system review findings, contract issues, or further exclusion actions.