Overview
This section defines the scope of Subpart 12.5, establishing which types of contracts, subcontracts, and entities are subject to the laws and waivers governing the acquisition of commercial products and commercial services.
Key Rules
- Universal Tier Application: The subpart applies to all levels of the supply chain, including prime contracts and subcontracts at any tier.
- "Added Value" Requirement: Statutory waivers do not apply to subcontracts if the prime contractor is merely reselling or distributing items without adding value; this prevents the use of "pass-through" arrangements to circumvent legal requirements.
- 8(a) Program Treatment: For the purposes of this subpart, small businesses awarded subcontracts under the SBA 8(a) program are legally treated as prime contractors rather than subcontractors.
Practical Implications
- Prime contractors must perform meaningful work or provide integration to ensure their subcontractors benefit from the streamlined legal environment afforded to commercial acquisitions.
- 8(a) participants must comply with the more stringent "prime contractor" regulatory standards under this subpart, even when technically acting as a subcontractor to the SBA.