Can we reject the use of the subcontractor? If we reject can the subcontractor come back at us that we are "black listing" them? what are our rights to not do business with them?
FAR 9.104-4(b) (Subcontractor Responsibility) provides general guidance: "When it is in the Government’s interest to do so, the contracting officer may directly determine a prospective subcontractor’s responsibility...the same standards used to determine a prime contractor’s responsibility shall be used by the Government to determine subcontractor responsibility." As with many situations, it's up to the contracting officer's judgment as to what is "in the Government's interest" and what is considered non-responsible. You are right to consider possible legal implications, but I'm not certain if a potential subcontractor (as opposed to prime contractor) would have much leg to stand on with regard to the Government's responsibility determination. Clearly, you need to consult with your organization's legal counsel to discuss this matter further.
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