This article outlines that the general rule is that a “subcontractor cannot bring a claim against the government unless it has contractual privity with the government or is an intentional third-party beneficiary of an agreement. However, subcontractors can typically bring claims against the government if a prime contractor brings the suit on behalf of the subcontractor as a pass-through or sponsored claim”.
The article discuses a United States case which granted the government’s motion to dismiss for lack of subject matter jurisdiction because the subcontractor lacked privity of contract with the government.
- Subcontractors should be aware of legislation governing third party suits against the government, and ensure that their contract with the prime contractor requires it to initiate litigation/arbitration on behalf of the subcontractor.
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