Downstream Compliance and Contractor Responsibility

Every year, the federal government spends more than $500 billion a year on contracts. More than 50 percent of that total works its way down to subcontractors.


The business of government contracting is built upon the hard work of government contractors and the subcontractors that make these massive projects possible. It’s a partnership that is not only common but vital.

So what laws apply in these working relationships? The subcontractor is subject to the same laws and regulations as the prime contractor when that subcontractor enters into an arrangement with a federal contractor for any service that is necessary to the performance of any one or more government contracts.

The same rule applies to an arrangement that assumes, undertakes, or promises performance of any portion of the federal contractor’s obligation under one or more government contracts.

Additionally, the prime contractor is also responsible for the subcontractor’s compliance with the regulatory requirements.

Many subcontractors do not have access to the professionals that can design compliant and comprehensive healthcare solutions. As stated above, ultimately, the prime contractor is responsible for the overall compliance of all parties working under the prime contract. So, how are the prime contractor and its subcontractors to ensure their compliance?

By understanding the rules and working with professionals who know them.

Contractors have options on how they spend the fringe dollars afforded to them. Employers that provide health insurance typically experience more employee engagement, reduced absenteeism, and significantly lower healthcare costs overall.

For 35+ years, Boon has been providing our clients with efficient, knowledgeable, and purposeful solutions to address their compliance issues. We can keep you compliant from the top down, all while providing your employees accessible healthcare through flexible and meaningful healthcare plans.

The Boon Blog is your source for the latest in industry tips, information, and news. You can also keep up with all things Boon on our FacebookTwitter, and LinkedIn.

About The Boon Group

The Boon Group® is a full service employee benefits company specializing in the design, implementation and administration of cost-effective fringe benefit plans for federal, state and local government contractors. Since 1982, The Boon Group has developed a partnership philosophy that expands beyond the products and services we offer. We stand with the employers and employees who, just like all who work at The Boon Group, are faced with the daunting task of navigating the U.S. healthcare system. Together, we can find a better way for all Americans to access healthcare. The Boon Group, Inc. is the parent holding company of The Boon Insurance Agency, Inc., Boon Administrative Services, Inc. (formerly named CEBA), Boon Insurance Management Services, L.P., Health & Welfare Benefit Systems, Inc. and Boon Investment Group, Inc. The Boon Group was formed to support and strengthen the position of these companies as a wholesaler of exclusive products and services.
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