Can the contractor use an Indian Design firm since this is an ESPC contract? Do the FAR or DFARS prevent this?
The regulations concerning Energy-Saving Performance Contracts are subject to a number of directives that are independent of the Federal Acquisition Regulations and agency supplements. For example, the location of the site can necessitate the inclusion of state and local requirements. Inclusion of host-nation requirements are also a consideration when the ESPC performance is outside the United States.
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Since you are contemplating entering into a sub-contractor relationship, I recommend that you submit your written inquiry to the prime contractor who can forward the matter to the procuring contracting officer.