The Federal Acquisition Regulation (FAR) and the Defense Federal Acquisition Regulation Supplement (DFARS) requires Federal prime contractors and first-tier and lower-tier subcontractors, small and large alike, to flow-down certain clauses from their Federal contracts and subcontracts when buying items from their suppliers and subcontractors. Although Small businesses are exempt from the requirement for subcontracting plans, small businesses are not exempt from FAR and DFARS flow-down requirements. Noncompliance can be costly and could result in contract termination and potential litigation between the prime contractor and its subcontractors.
Some FAR flow-down requirements are applicable to all subcontracts and purchase orders, regardless of the dollar value of the subcontract (or purchase order), while others are tied to the simplified acquisition threshold (SAT), or other specific dollar thresholds established in Federal statute.
The FAR contains over 630 provisions and clauses and is ever-changing. A recent FAR Case, 2018-010, issued under Federal Acquisition Circular (FAC) 2005-99, created a new FAR Clause with a flow-down requirement effective July 16, 2018 (FAR Clause 52.204-23—Prohibition on Contracting for Hardware, Software, and Services Developed or Provided by Kaspersky Lab and Other Covered Entities (JUL 2018). This new clause is required to be flowed-down in all subcontracts, including purchase orders., Some prime contractors have attempted to comply with the flow-down requirements by simply incorporating and flowing down all of the FAR and DFARS clauses contained in their contracts into their subcontracts. This practice is unadvisable and can create myriad problems for both the prime contractor and subcontractors.
Complicating the matter is the FAR and DFARS do not contain matrices showing their respective flow-down requirements—but there is a product available to solve this contract administration challenge for you.
What you will learn:
- How to increase your firm’s compliance and reduce its risk
- How to find and determine which clauses must be flowed-down
- How to determine if a flow-down is mandatory or optional
- Know when flow-downs must be verbatim or contain the substance of the clause
- First-tier subcontractors will learn when flow-downs to lower-tier subcontractors are required.
- How to ensure continued compliance, find when flow-down requirements are changed, such as new clauses or discontinuance of clauses
BONUS: Save 20% on FAR/DFAR Matrix Subscription:
Identifying all of the flowdown clauses is time-consuming, but we’ve got you covered! Join this webinar and get a discount on a one-year FAR/DFAR Matrix Subscription. You’ll be able to identify all flowdown clauses and receive updates throughout the year. Use this tool to increase contract compliance and reduce the risk of noncompliance— your contract administrators will thank you. Further details about the subscription will be discussed during the webinar.
- FAR Flowdown Matrix — $159 — 20% off — $127.20
- DFARS Flowdown Matrix — $159 — 20% off — $127.20
- FAR and DFARS Matrices (bundle) — $254.40 — Additonal $25 off for webinar participant —$229.40
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