How to Handle a Letter of Concern When the Problem Is Upstream — Not Yours

By Sean & Doug Reitmeyer — GCExperts. Originally posted on Skool: .

I want to talk today about a situation that catches a lot of federal contractors off guard the first time it happens: You’re performing a federal contract. You’re not behind because of your own work. And then the contracting officer issues a letter of concern anyway. If you don’t understand how responsibility and privity work in federal contracts, this can spiral fast. If you do understand it, this is very manageable. The Scenario This was a VA fire alarm and fiber project. Key facts: - The system used proprietary controls (Johnson Controls) - The government specified those proprietary controls - The prime subcontracted to a local firm - The local firm subcontracted to Johnson Controls for engineering and shop drawings Johnson Controls had a stated 6–8 week turnaround for shop drawings. During their engineering review, they discovered numerous discrepancies between: - The bid drawings issued by the government - What was required to design the proprietary control system correctly As a result: - Shop drawings had not yet been submitted - No field work could start - The schedule was slipping The contracting officer responded by: - Asking why the contractor wasn’t on site - Issuing a letter of concern - Applying pressure based on schedule The First Critical Point: Who You Have Privity With This matters more than anything else. The prime contractor does not have privity of contract with Johnson Controls. The contractual chain looks like this: - Government → Prime - Prime → Subcontractor - Subcontractor → Johnson Controls That means: - Johnson Controls’ obligations flow to the subcontractor - The subcontractor’s obligations flow to the prime - The prime’s obligations flow to the government You cannot bypass that chain. Everything has to move upstream in writing, one contract at a time. The Second Critical Point: Proprietary Systems Shift Risk Back to the Government When the government specifies a proprietary system, they implicitly accept the consequences of that choice.