Question

What is privity of contract? To what extent does a subcontractor have privity with the government? What is available to the prime contractor and/or contractor to secure payment for the subcontractor's services?

Answer 1

The privity of contract is best described as the relationship amongst parties to a deal or contract. Moreover, this type of contract allows either of one or both parties to sue one another but inhibitsthe third party from the act of bringing legal charges. When it comes to the subcontractor, the government hold the right in arranging the argument between the prime contractor, subcontractor, and the Government. On the other hand, the prime contractor needs to give its subcontractor an authority when it comes to the contract called cost-reimbursement. The prime contract can also file an appeal in favor of the subcontractor under the argument clause within government contracts. The subcontractor can also make sure that their services are being paid by asking for down payment, asking for the payment of each development completed, and make sure that contracts include the fact that prime contractors agree on giving subcontractor full payment even if contractors still not received the complete payment from the government.