Overview
FAR 17.401 defines leader company contracting as an extraordinary acquisition technique where a developer or sole producer (the leader) provides technical assistance and expertise to other designated firms (the followers) to establish them as additional sources of supply.
Key Rules
- Extraordinary Nature: This technique is not standard and is limited to special circumstances and specific agency procedures.
- Knowledge Transfer: The leader company is contractually required to furnish assistance and "know-how" to follower companies.
- Specific Objectives: The technique must aim to achieve goals such as reducing delivery time, dispersing suppliers geographically, maximizing scarce equipment, or ensuring component interchangeability.
- Proprietary Data Solution: It is specifically used to resolve issues where proprietary data restrictions prevent other competitive acquisition methods.
- Competitive Transition: A primary goal is to facilitate the move from the development phase to a competitive production environment.
Practical Implications
- This approach is typically used for complex military or technical systems where the government needs to broaden the industrial base while maintaining strict standardization and reliability.
- It allows the government to overcome sole-source dependencies by forcing a "mentor-protégé" style production relationship between a dominant developer and potential competitors.