Denying Access of Data to Prime
INQUIRY: What is the far clause for a lower tier subcontractor to deny audit access to the prime for competitive purposes?
RESPONSE: There is no FAR clause that provides for permitting a subcontractor's denial of a prime contractor audit access to the subcontractor's books and records. A subcontractor is required to demonstrate its compliance with CAS and/or FAR (as applicable) in accordance with the applicable flow-down contract clauses. If a subcontractor denies its prime contractor access to the subcontractor's books and records, the prime contractor will have to request assistance from the contracting officer to ensure the subcontractor's compliance with CAS and/or FAR.
FAR 15.404-3 states that the prime contractor shall conduct appropriate price or cost analyses to establish the reasonableness of proposed subcontract prices. DFARS PGI 215.404-3 provides that if a prime contractor is unable to complete its required price or cost analyses of a subcontractor's proposal because the prime contractor has been denied access to the subcontractor's records, then the prime contractor may request assistance from the contracting officer to analyze and evaluate the subcontractor's proposal.
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