§4710 Limitations on Tiering of Subcontractors

Summary

Requires the Federal Acquisition Regulation, for federal agencies except the Department of Defense, to make contractors cut down on unneeded layers of subcontractors. It also stops contractors and higher-level subcontractors from charging indirect costs or profit on work done by lower-tier subcontractors when the higher level adds little or no value, while still allowing charges for indirect costs and profit that are based on the direct costs of managing those lower-tier subcontracts. Applies to any cost-reimbursement contract or task or delivery order worth more than the simplified acquisition threshold (as defined by section 134 of this title). The Department of Defense keeps following its own guidance under the John Warner National Defense Authorization Act for Fiscal Year 2007 (Public Law 109–364, 10 U.S.C. 2324 note) and may set stricter rules. Executive agency — the federal agency meaning used in section 133 of this title.