> ### Subpart 17.4- Leader Company Contracting

> ## 17.401 General.

> Leader company contracting is an extraordinary acquisition technique that is limited to special circumstances and utilized only when its use is in accordance with agency procedures. A developer or sole producer of a product or system is designated under this acquisition technique to be the leader company, and to furnish assistance and know-how under an approved contract to one or more designated follower companies, so they can become a source of supply. The objectives of this technique are one or more of the following:

> (a) Reduce delivery time.
> (b) Achieve geographic dispersion of suppliers.
> (c) Maximize the use of scarce tooling or special equipment.
> (d) Achieve economies in production.
> (e) Ensure uniformity and reliability in equipment, compatibility or standardization of components, and interchangeability of parts.
> (f) Eliminate problems in the use of proprietary data that cannot be resolved by more satisfactory solutions.
> (g) Facilitate the transition from development to production and to subsequent competitive acquisition of end items or major components.

> ## 17.402 Limitations.

> (a) Leader company contracting is to be used only when-
> (1) The leader company has the necessary production know-how and is able to furnish required assistance to the follower(s);
> (2) No other source can meet the Government's requirements without the assistance of a leader company;
> (3) The assistance required of the leader company is limited to that which is essential to enable the follower(s) to produce the items; and
> (4) Its use is authorized in accordance with agency procedures.
> (b) When leader company contracting is used, the Government shall reserve the right to approve subcontracts between the leader company and the follower(s).

> ## 17.403 Procedures.

> (a) The contracting officer may award a prime contract to a-
> (1) Leader company, obligating it to subcontract a designated portion of the required end items to a specified follower company and to assist it to produce the required end items;
> (2) Leader company, for the required assistance to a follower company, and a prime contract to the follower for production of the items; or
> (3) Follower company, obligating it to subcontract with a designated leader company for the required assistance.
> (b) The contracting officer shall ensure that any contract awarded under this arrangement contains a firm agreement regarding disclosure, if any, of contractor trade secrets, technical designs or concepts, and specific data, or software, of a proprietary nature.