SOP - 10. Subcontractor Procedures

General Information

As explained in more detail in Section 2.H, 7, 10, 18, and 19 of the ATC Contract, the Contractor is liable and responsible for the performance and actions of the subcontractor, and fully indemnifies, defends, and holds harmless the state and the department from lawsuits, actions, damages and costs. Further, the Contractor shall not subcontract any work under the contract, with the exception of those subcontractors authorized by the department, without the prior written consent of the department's contract manager. Subcontractors may not be a related party to the ATC, as defined by the Financial Accounting Standards Board (FASB) and must provide the service as their normal course of business.

Department Approval of Subcontractors

Subcontractors and vendors providing goods or services using the contract fixed price schedule in the Schedule of Pay Item (SPI) were initially identified by the Contractor as part of their “Team” in the original Agency Term Contract (ATC). The ATC Subcontractor List is posted and updated with subsequent approved changes on the Petroleum Restoration Program (PRP) Agency Term Contracts webpage. Section 19 of the ATC contract sets forth the process for a Contractor to request changes to the subcontractor list, which includes:

1. Submittal of the ATC Subcontractor Request Form signed by the ATC Contact Manager (by email) to the department's ATC Contract Manager and copy PRP.Contracts@floridadep.gov. The completed form must include the subcontractor's company name, Federal Employer Identification Number (FEIN), the service provided by the subcontractor and the ATC’s GC#(s) for which the Subcontractor named applies.
2. The completed form with signature provides attestation by the ATC Contract Manager that the subcontractors named  are not a related party to the contractor, as defined by the FASB – Financial Accounting Standards Board.  The signed form is also the Contractor’s confirmation that the subcontractors named are of demonstrated competence and qualification for the work they will be hired to perform.
3. Subcontractors cannot have a conflict of interest with the ATC or to the project being work on. No new subcontractors with a conflict of interest will be approved.
4. DEP has ten days to review and respond to the request in writing and may reject the proposed change. Failure of DEP to respond within this time frame will be deemed an automatic approval. 

Subcontractors with an approved quote for a Cost Reimbursement pay item are considered to be approved by the department for that Purchase Order only and are not required to be added to the ATC Subcontractor List. If the Contractor would like to use the aforementioned subcontractor on another purchase order (PO), for a fixed cost pay item, then the Contractor must add the subcontractor to the ATC Subcontractor List.

Subcontractor/Vendor and In-House Quotes

As outlined in Section V.A.11 of the ATC contract Scope of Services (Attachment A), costs for goods or services not covered by the SPI are on a Cost Reimbursement basis and must be supported by quotes as follows:

1. Purchases with aggregate value in the PO of $2,500.00 or less require a single written quote (electronic copies accepted). If the assigned Contractor is providing an in-house quote, PRP policy also requires one additional quote. 

2. Purchases with aggregate value in the PO greater than $2,500.00 require a minimum of three responsive quotes, one of which may be from the assigned Contractor (in-house). The selected quote shall be reasonably priced from a competent and qualified vendor that is the lowest bid. 

3. The quoted price(s) should be considered to be "fair and reasonable". At the discretion of the DEP Site Manager or Contract Manager, the Contractor may be directed to obtain additional quotes. 

4. The Contractor shall make every effort to procure local (to the site) subcontractor services, good and materials.  

5. The aggregate value applies to the total amount of the Cost Reimbursement goods or services provided by a single vendor regardless of the number of different pay items or tasks included in those costs within the PO.

6. Quotes are not required for utilities, permits and certain franchised services commonly known to be provided by only one source. The amounts approved should be at a “reasonable not to exceed estimate.”

7. Single quotes for “Sole Source” goods or services other than utilities, permits and certain franchised services must be supported by documentation justifying the sole source procurement. 

8. Proprietary products require a current statement of this status from the vendor on or attached to their quote.

9. The use of some products or technologies require the payment of licensing fees or royalties to the vendor or patent holder. These costs should be included in the quoted price for the product and not treated as an add-on.

10. Inability to obtain the required number of quotes require detailed documentation of the efforts undertaken to identify responsive vendors.  

11. The Site Manager should be included in the solicitation for quotes from the Contractor. The Contractor should instruct the subcontractor to send a copy of the written quotation to the Site Manager concurrent with the copy to the Contractor (electronic copies accepted).

12. The eQuote process meets the quote requirements and subcontractor eQuote documentation is not required.

Verify Integrity and Accuracy of Quotes

All subcontractor quotes must be reviewed for consistency with the scope of work and the specific items included. Subcontractors selected must be of demonstrated competence and qualification, and must provide the service, goods or materials as their normal course of business. The Site Manager should verify that all subcontractor and vendor quotes are valid at least through the date of issuance of the PO (no expiration date before then), are legible, include all pages, and contain sufficient breakdown, details and specifications as applicable. All materials quotes require a breakdown of quantities and unit costs. 

• Quotes and attachments must not have any type of confidential disclaimer. Per DEP Directive 301, no confidential information may be uploaded to MyFloridaMarketPlace (MFMP). If this is the case, the document owner will need to provide a revised document or remove/strike-through/redact the confidential disclaimer and add a very brief statement with a signature that they removed/struck-through/redacted this disclaimer.
• Multiple quotes for the same item(s) should represent the same scope of work, i.e., apples to apples, and the quotes can not include costs that are already covered by one or more of the pay items allowed for the PO. Review the included and excluded lists in the contract Scope of Services, as well as PRP guidance.
• If the subcontractor quotes do not appear to reflect the same scope of work, then electronic copies of the quote solicitation may be requested to verify that all subcontractors were provided a quote solicitation for the same scope of work. If there is any discrepancy among the solicitations, then the Contractor should obtain new quotes using the correct scope of work.
• The Contractor should not add a markup to the subcontractor’s estimate. If the Contractor has added a markup, it must be backed out because the SPI automatically calculates a 6% handling fee in pay item 1-7. 
• Shipping, handling and sales tax, if applicable, should be part of the quote because they cannot be added after the fact.

See the RAC/O&M/SR Tips to Speed Up PR Processing webpage for additional information pertaining to subcontractor/vendor quotes.

Switching Subcontractors

Contractors are not required to identify which of the subcontractors on the ATC Subcontractor List are being utilized for the Fixed Cost (SPI) pay items. However, because the subcontractors and vendors utilized for Cost Reimbursement pay items with quotes are approved on a PO specific basis, Contractors must provide prior notice and secure the department's prior consent to use a different subcontractor or vendor identified in the quote process.

If the subcontractor or vendor that provided the lowest quote initially is not able to provide the services or goods, or the Contractor or Site Manager has demonstrated good reason not to use them, then the next lowest bidders in sequence can be selected without the need to re-solicit new quotes if they agree to match the low quote price. If neither of the other bidders will agree to these terms, then three new quotes should solicited. If the change in subcontractors results in an increase in cost, this must be approved in a Request for Change prior to performing the work. 

Subcontractor Travel

As stated in Section V.A.5 of the contract Scope of Services, subcontractor travel-related expenses for activities covered by the SPI Fixed Price pay items can be allowed using the applicable mobilization and per diem pay items. However, in the case of Cost Reimbursement items, mobilization and per diem for subcontractor travel, if applicable, should be included in the quotes.

Equipment Purchase

In accordance with Section V.A.16 of the contract Scope of Services, other than pre-existing state-owned equipment and approved replacement/modification parts, all remedial systems must be provided at unit costs utilizing the fixed price pay items in the SPI where applicable. If equipment parts or components are purchased, then all state property rules and guidelines for capitalization, transfer, tracking and surplus must be followed.

6% Handling Fee

All Cost Reimbursable pay items are allowed a 6% handling fee to cover the Contractor’s administrative costs and MFMP transaction fees. This fee is automatically applied by the SPI workbook (pay item 1-7).

Prompt Payment of Subcontractors and Vendors

Contractor final invoices require all subcontractors and vendors to have been paid in full prior to submittal. In accordance with Section 9 of the ATC contract and Chapter 376.3071 (6)(h), F.S., Contractors must pay subcontractors within 30 working days after receipt of payment from the department in at least the same proportion as that paid by the department. All Contractor invoices must be accompanied by the Subcontractor Utilization Form (contract Attachment E) listing all subcontractors and vendors with included costs, regardless of the payment method (Fixed Cost/Cost Reimbursement) and final invoices must also include an executed Contractor Affidavit/Release of Claim Form (contract Attachment G) attesting that all subcontractors and vendors have been paid in full.

Return to: PRP Site Manager Standard Operating Procedures (SOP) webpage.