Subcontractors & Payment From The Government

Subcontractors who have not been paid for their goods or services as a general rule do not have the ability to seek redress from the government. Because subcontractors lack privity, their recourse lies in an action against the prime for breach of contract or some other commercial law claim.

The federal government, however, expects primes flowing money down to subcontractors to honor their business agreements. As a result, acquisition regulations exist that create consequences for non-payment at the prime/government level.

FAR 32.112-1 allows a subcontractor to make an assertion of non-payment in procurements for noncommercial items directly to the Contracting Officer. If the Contracting Officer concludes the prime has not met its payment obligations, it may reduce or suspend payments to the prime.

 

SubcontractorsOur government contracts posts are published by Attorney Kristi Morgan Aronica. She serves as counsel to government contractors and subcontractors throughout Texas and nationally.