Leader Company Contracting Law and Legal Definition

A leader company contracting is an acquisition technique that is applied under special circumstances and utilized only when its use is in accordance with agency procedures. A developer or producer of a product or system is designated under the acquisition technique to be the leader company. It can also furnish assistance and know-how under an approved contract to one or more designated follower companies, so they can become a source of supply

The objectives of this technique are one or more of the following:

1. Reduce delivery time;

2. Achieve geographic dispersion of suppliers;

3. Maximize the use of scarce tooling or special equipment;

4. Achieve economies in production;

5. Ensure uniformity and reliability in equipment, compatibility or standardization of components, and interchangeability of parts;

6.Eliminate problems in the use of proprietary data that cannot be resolved by more satisfactory solutions;

7.Facilitate the transition from development to production and to subsequent competitive acquisition of end items or major components.

According to 48 CFR 17.402, a leader company contracting is to be used only when:

1.the leader company has the necessary production know-how and is able to furnish required assistance to the followers;

2.there is no other source that can meet the government's requirements without the assistance of a leader company.