Federal Sub-Contractors: Beware of the Big Guys Who Will Dump You As Soon As the Ink Dries

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At www.allgov.com

Doing business as a small government contractor has distinct vulnerabilities, like getting used and tossed aside by bigger contractors. In a survey by American Express, almost 30% of small contractors said they had been victimized by bait-and-switch tactics employed by larger firms. This can happen when a large contractor needs a particular type of smaller contractor--one owned by a veteran or a minority, for instance--in order to win a bid from a federal agency. They list the subcontractor on the bid, but once the prime contractor gets the deal, they dump the little guy. Such actions are not considered illegal under federal contracting law. In a tepid response to this problem, the House of Representatives has passed a bill that would require notifying government agencies if a prime contractor changes subcontractors after winning a contract.

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