Per FAR 44.201-1(b)(2), consent is required for "Fixed-price subcontracts that exceed-
(i) For the Department of Defense, the Coast Guard, and the National Aeronautics and Space Administration, the greater of the simplified acquisition threshold or 5 percent of the total estimated cost of the contract; or
(ii) For civilian agencies other than the Coast Guard and the National Aeronautics and Space Administration, either the simplified acquisition threshold or 5 percent of the total estimated cost of the contract."
Since we would fall under the Department of Defense, am I understanding correctly that for a FFP subcontract a consent is only required if the amount of the subcontract is greater than whichever is higher -- the simplified acquisition threshold OR 5% of the total estimated cost of the contract which in this case would be $27.5M (5% of $550M) and would result as the higher amount? And if I am understanding this correctly, then the prime would NOT need to submit a subcontract consent request for the FFP subcontract purchase order for $590K since it is less that the $27.5M (5% of $550M), correct?
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Your reading of FAR 44.201-1(b)(2)(i) is correct. In your case, the subcontract does not exceed the greater of the SAT or 5% of the prime contract amount, so consent to subcontract for that subcontract is not required. If you worked in a civilian agency, the "greater" qualifier for DOD would not apply, and the $27.5M figure in your acquisition would require consent to subcontract.