42.1504
Contract clause
FAR 42.1504 mandates including the Payments to Small Business Subcontractors clause in contracts requiring a Small Business Subcontracting Plan, ensuring prompt payment and reporting for small business subcontractors.
Overview
FAR 42.1504 requires contracting officers to include the clause at 52.242-5, Payments to Small Business Subcontractors, in all solicitations and contracts that already require the clause at 52.219-9, Small Business Subcontracting Plan. This ensures that prime contractors are obligated to pay their small business subcontractors promptly and to report any late or reduced payments. The regulation is part of the broader effort to monitor and improve contractor performance, particularly in supporting small business participation in federal contracting.
Key Rules
- Clause Inclusion Requirement
- The clause at 52.242-5 must be inserted in all solicitations and contracts that contain the clause at 52.219-9.
- Applicability Trigger
- The requirement is triggered whenever a Small Business Subcontracting Plan is required, typically for contracts above the simplified acquisition threshold awarded to large businesses.
Responsibilities
- Contracting Officers: Must ensure the clause at 52.242-5 is included in applicable solicitations and contracts.
- Contractors: Must comply with the requirements of 52.242-5, including timely payment to small business subcontractors and reporting obligations.
- Agencies: Oversee compliance and monitor contractor performance related to small business subcontracting.
Practical Implications
- This section ensures small business subcontractors are protected and paid promptly, supporting federal small business goals.
- Failure to include the required clause can result in compliance issues and negatively impact contractor performance evaluations.
- Contractors should be aware of their obligations under both 52.219-9 and 52.242-5 to avoid penalties and maintain good standing.