Georgia Tech Procurement Assistance Center

Subcontractor agrees to pay damages after failing to pay prevailing wages on VA construction projects

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Acting United States Attorney Jennifer Arbittier Williams announced that S.A. Taylor, LLC (“S.A. Taylor”) has agreed to settle claims under the False Claims Act and to pay $561,411.72 based on allegations that the company caused the submission of falsified payroll records as part of two United States Department of Veterans Affairs (the “VA”) construction projects.

S.A. Taylor, a Virginia-based construction company, bid on and was awarded subcontracts to work on two VA construction projects under the prime contractor, CTA, I, LLC.  Because the construction work was performed for the federal government, all contractors and subcontractors were required, by law, to pay their workers prevailing wages.  At the time, the prevailing wage was between $57 to $91.50 per hour, depending on the worker’s classification.

The government contends that S.A. Taylor paid its workers significantly less than the prevailing wage, but that it submitted falsified payroll records to make it seem as if the prevailing wage had been paid.  CTA, unaware of the falsity, submitted the payroll to the VA which, in turn, reimbursed S.A. Taylor.  Under this scheme, S.A. Taylor pocketed the difference while its workers were shorted wages they were legally due.  CTA discovered the falsity during a subsequent arbitration when S.A. Taylor produced two sets of payroll records—one showing the prevailing wages which should have been paid and one showing the actual, lower wages which had actually been paid.

Continue reading at:  U.S. Department of Justice

Holding government contractors responsible for cybersecurity is trickier than it sounds

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The federal government wants to hold defense contractors accountable for the cybersecurity of their supply chains but that’s no easy feat, experts said recently.

On March 26th, industry representatives told lawmakers on the Senate Armed Services Committee about attempting to tackle cyber threats as a federal contractor. Much of the hearing was focused on one specific issue: increasingly complex levels of supply chains make it difficult for prime contractor to ensure all subcontractors are upholding cybersecurity protections. And that ever-lengthening chain increases the possibility of compromised information or cyberattacks.

“I don’t know why we don’t hold the larger contractors who are responsible for the contract to make sure the subcontractors they are hiring have protections,” Sen. Joe Manchin, D-W.V., said. “Somebody has to be held accountable.”

Keep reading this article at: https://www.nextgov.com/cybersecurity/2019/03/holding-government-contractors-responsible-cybersecurity-trickier-it-sounds/155862/

The definition of a subcontractor, and why it matters

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What is a subcontractor?

The answer to this question seems obvious – a subcontractor is a contractor that contracts with the prime contractor to perform a scope of work on a construction project.

However, it is not always easy to distinguish a subcontractor from a materials supplier (sometimes referred to as a “materialman”). That distinction is important in the context of claims by lower-tier subcontractors or materials suppliers on payment bonds, such as those provided by prime contractors on federal and state public works projects. That is, a lower-tier subcontractor or materials supplier may not be entitled to recovery from a payment bond if its contract is with a materials supplier instead of a subcontractor. Therefore, identifying the role of the party with whom a contractor is contracting is a key task the prudent contractor will perform at the outset of a project.

This distinction is most important in the context of federal public works projects. For those projects, the Miller Act restricts claimants on payment bonds to those who had a contract with the prime contractor and those who had a contract with a subcontractor, provided that in the latter case the claimant provides notice to the prime contractor. In other words, if a firm has a contract with a materials supplier, as opposed to a subcontractor, the firm does not have entitlement to payment under the bond. Courts look at the “total relationship” between the parties to determine if the party in question is a subcontractor or materials supplier.

Courts have applied a balancing test to make this determination, with some factors weighing in favor of a subcontractor relationship and other factors weighing in favor of a materials supplier relationship.

Keep reading this article at: https://idahobusinessreview.com/2019/02/28/the-definition-of-a-subcontractor-and-why-it-matters/

Who is a subcontractor under a federal government contract?

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If you are a a vendor or supplier, are you a “subcontractor” under a federal government contract?

Sometimes the answer is easy — e.g., you are a subcontractor when a prime contractor contracts directly with a vendor or supplier (hereinafter “vendor”) to perform a federal contract.

But the lines become less clear when a prime contractor does not inform the vendor that the subcontract is being entered into in furtherance of a federal government contract or where the vendor supplies goods that the prime contractor uses to perform commercial and government contracts.

Subcontractor status is important to prime and subcontractors. A federal prime contractor is required to flow-down multiple Federal Acquisition Regulation (FAR) clauses to its subcontractors.

Keep reading this article at: https://governmentcontractsnavigator.com/2019/01/28/who-is-a-subcontractor-under-a-federal-government-contract/

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