# AFFARS IG5315.404-3

Informational Guidance

IG5315.404-3
Pricing of Subcontract Proposals

January 2004

IG5315.404-3 Pricing of Subcontract Proposals

(a) The following information is provided to clarify Federal Acquisition Regulation (FAR) 15.404-3, Subcontracting Pricing Considerations, as supplemented by the Defense Acquisition Regulation Supplement (DFARS) 215.404-3.

(b) If a contractor refuses to provide the results of subcontract reviews and evaluations, or if the Contracting Officer determines that the reviews and evaluations are so deficient as to preclude an adequate analysis and evaluation of the contractor’s proposal, the Contracting Officer should attempt to secure the subcontract reviews and evaluations and/or elicit corrective action. If the contractor persists in refusing to provide subcontract reviews and evaluations, the Contracting Officer should consider withholding the award and elevate the matter to management for resolution.

(c) In addition, the Contracting Officer may assign below-normal values for management and cost criteria under the performance risk factor when using the Weighted Guidelines Method (see DFARS 215.404-71) to establish a profit objective. Contracting Officers should consider taking action described in DFARS 215.407-5 when a contractor consistently fails to provide adequate subcontract reviews and evaluations. If a subcontract represents a significant cost risk to the Government, the Contracting Officer should consider:

(1) directing the contractor to definitize the subcontract prior to completion of prime contract negotiations; or

(2) conducting a joint Government/contractor team analysis of the subcontract proposal.