Overview
This section establishes the restrictive criteria and necessary conditions that must be met before a federal agency can employ leader company contracting. It ensures this method is only used when essential for technical assistance and authorized by specific agency procedures.
Key Rules
- Capability Requirement: The leader company must possess the specific technical production expertise and the actual ability to provide necessary assistance to the follower company.
- Sole Source Justification: Use is only permitted if no other source can fulfill the Government’s requirements without the specialized assistance of a leader company.
- Scope of Assistance: Support provided by the leader company must be strictly limited to the essential elements required for the follower(s) to produce the items.
- Authorization: The use of this method must be formally authorized in accordance with specific agency-level procedures.
- Subcontract Oversight: The Government is required to reserve the right to review and approve any subcontracts formed between the leader company and the follower(s).
Practical Implications
- Contracting Officers must perform a rigorous market research analysis to prove that no independent sources exist before choosing this complex arrangement.
- The Government maintains high levels of control over the business relationship between the two contractors to prevent any inappropriate commercial arrangements or cost inefficiencies.