What is the difference between a Subcontractor and External Services?

External services cover services such as hire of facilities, computer services, manpower services (e.g. consultancy), plating of parts, services for procurement of HIREL parts etc. The costs for these should be shown on the PSS A2 form of the Prime Contractor under Other Cost Elements Point 3.7 and further detailed on Exhibit.
A Third Party should be involved as subcontractor (not as external services) when they are contributing to the development work of the project, when they are responsible for the realisation of specific work packages. To include a Third Party as Subcontractor also involves a firm commitment by the Third Party (contract between Prime contractor and Subcontractor) and is especially recommended when this Third Party is essential to carry out the activity.