winning a government contract often involves delegating certain tasks to another business but here's the thing some contracts under government contracts have you need challenges so in today's video we're gonna unveil the essential elements of a subcontract so that you can Thrive as a government contractor by leveraging another business's expertise so let's break it down and let's start at the beginning subcontracting is when a company known as the prime contractor hires another company known as the subcontractor to perform certain tasks to help fulfill the requirements of a contract the subcontract is the written agreement between the prime contractor and the subcontractor so let's go over the Essential Elements to include in your subcontract starting with payment terms your contract with the government will specify how and when you will be paid so align the timing and conditions of your payments to your subcontractor with the payment Provisions in your government contract first any subcontract should require the subcontractor to invoice regularly I always required monthly invoices and specify the exact procedure and schedule for this subcontractor to submit invoices to you for example let's say you want to submit your invoice to the government five days after the end of the month you might require your subcontractor to submit its invoice to you by the first day of the month if the government requires you to submit documentation with your invoice such as time cards and receipts and require your subcontractor to submit those documents to you and be sure to pick an invoicing schedule so that you have sufficient time to review your subcontractor's invoice and include their document in your invoice to the government and specify when the subcontractor will be paid for example you could insert a pay when paid Clause that says you will pay the subcontractor's invoice within say 10 days of receiving payment from the government for the subcontractors work next be precise in defining the specific tasks deliverables due dates and quality standards required and to do this I recommend starting with the statement of work in your government contract it's the piece of your contract that specifies the work to be performed note that this goes by different names in different contracts so in your contract you may see it called the performance work statement or PWS so find that piece of your contract and use it as a foundation for writing the scope of work to be performed by yourself subcontractor and be specific about the work the subcontractor is responsible for so there's no question about who's doing what and so that you can hold them accountable for their performance you'll also want the right to review and replace subcontractor employees for example on a Services contract you'll typically specify the qualifications required for the subcontractor employees this is usually stated in terms of required years of experience and education you'll want the right to review the subcontractor employees that are proposed to fill different positions and replace any individuals that don't meet the qualifications or aren't performing adequately next make sure to specify deliverables and their due dates government contracts often require detailed reporting and documentation such as progress reports quality control documentation and certifications of compliance these are things that you as the prime contractor may be required to submit to the government make sure your subcontractor provides you with the information you need to comply with the reporting requirements of your contract for example say you've hired the subcontractor to write a report that's due to the government on June 1st you may require that they submit the report to you on May 1st that gives you time to review it and then submit it to the government by the due date also passed down to your subcontractor and a record-keeping requirements from the government for example subcontractors may be required to create and maintain Financial records Personnel records and quality documentation security requirement are another thing to include in your subcontracts for example your contract with the government might require employee background checks or have badging requirements make sure you pass these requirements onto your subcontractor and your government contract might contain non-disclosure requirements include confidentiality and non-disclosure requirements in the subcontract to safeguard sensitive information you share during the subcontract and also to meet your government contract obligations and take a close look at the insurance requirements in your contract and pass those down to your subcontractors as needed three other critical Clauses to include in a subcontract are a changes Clause a dispute resolution clause and a termination Clause one thing to know about government contracts government contracts offer then undergo change orders or modifications the government could ask for additional work or request a change to the schedule in my experience changes happen often so it's important for the subcontract to address how changes will be handled and many government contracts are issued with options for example let's say the government contract is issued with an option for a one-year extension meaning the government has the right to extend the contract for one year so maybe you want to put in the subcontract it is automatically extended when the government exercises an option outweigh you can just move forward without having to stop and renegotiate and I know we like to think everything will go perfectly but the fact is sometimes government contracts get terminated for reasons that have nothing at all to to do with us or our performance you'll find that your government contract includes a termination for convenience clause which means that government has a right to terminate your contract at any time that's one of the reasons why it's essential to include a termination clause in the subcontract next let's talk about mandatory flow down Clauses when you sign a contract with a government agency there are certain rules terms and conditions you need to follow but here's the thing the subcontractor you hire also needs to follow those rules and that's where flow down Clauses come in they're a way of passing down the rules and requirements from your contract with the government to your subcontractor your contract will include mandatory flow down Clauses that the government requires to be in included in every subcontract mandatory flow down Clauses include contract cost and accounting Clauses such as the audit Clause labor Clauses such as the Equal Employment Opportunity Clause ethics Clauses such as the contractor code of business ethics and certain data rights Clauses the mandatory flow down Clauses can vary depending on the value or duration of the subcontract often you'll see these Clauses listed by their Clause number and Incorporated by reference rather than including the full text of the Clause oh and one last thing be sure to comply with any requirements in your government contract relating to subcontracting or example some government contracts require consent to subcontract if yours does be sure to obtain written consent from the Government Contracting officer before you issue the subcontract hey friends I hope this video has helped demystify subcontracting and give the new confidence about the path forward as you seat out teaming partners for your contract bids to learn all the details on subcontracting check out this video and I'll see you next time