Attachment 10 - Subcontractor Analysis Guidance.pdf

This document is a guidance template for prime contractors to analyze and document subcontractor costs, as referenced in FAR 15.404-3.

Subcontractor analysis must be submitted whenever a subcontractor is involved in the proposal, with no dollar limitation threshold. The prime contractor should provide comprehensive analysis and documentation addressing the reasonableness, realism, and completeness of each subcontractor's proposal. A mere statement of technical necessity is insufficient to demonstrate these criteria. The analysis must include examination of materials, labor, and other direct costs by type and quantity, as well as proposed profit rates. For labor costs, the prime contractor should evaluate the adequacy of proposed hours and labor mix, review fully-burdened labor rates for reasonableness, and compare rates against previous efforts, the prime's similar rates, and other subcontractor proposals. Material costs require review of quantities, types, item needs, and value assessment to ensure item value aligns with effort requirements. Travel costs must be evaluated for trip necessity and reasonableness of per diem rates, airfares, and car rentals. Other direct costs require review of necessity and reasonableness. Finally, the prime contractor must assess whether the proposed profit is reasonable for the type of effort contemplated and provide supporting conclusions.