Subcontracts for Commercial Products and Commercial Services
Contractors must flow down a specific set of FAR clauses to all subcontracts for commercial products and services to ensure federal compliance throughout the supply chain.
Overview
FAR 52.244-6 establishes the requirements for contractors to flow down specific FAR clauses to their subcontracts for commercial products and commercial services. The clause aims to ensure that key federal compliance obligations are maintained throughout the supply chain, including ethics, equal opportunity, cybersecurity, and prohibitions on certain products and practices. Contractors must incorporate a defined list of FAR clauses into all applicable subcontracts and ensure that lower-tier subcontractors do the same, with certain clauses only required under specific conditions (e.g., contract value thresholds, funding sources, or performance locations). The regulation also encourages, to the maximum extent practicable, the use of commercial or non-developmental items as components in contract deliverables. Definitions for key terms are provided, and the clause applies to transfers between divisions, subsidiaries, or affiliates as well as traditional subcontracts.
Key Rules
- Mandatory Flowdown Clauses
- Contractors must include a specific set of FAR clauses in subcontracts for commercial products and services, covering areas such as ethics, whistleblower protections, equal opportunity, cybersecurity, and prohibitions on certain products and services.
- Use of Commercial Items
- Contractors are required to use commercial products, commercial services, or non-developmental items as components whenever practicable.
- Applicability of Clauses
- Some clauses are only required if certain conditions are met (e.g., contract value, funding source, or if the subcontract offers further subcontracting opportunities).
- Subcontract Definition
- The term "subcontract" includes transfers between divisions, subsidiaries, or affiliates, not just external vendors.
- Minimal Additional Clauses
- Contractors may include additional clauses only as necessary to meet their own contractual obligations.
- Inclusion of Clause Terms
- The terms of this clause, including the flowdown requirements, must be included in all applicable subcontracts.
Responsibilities
- Contracting Officers: Ensure the clause is included in prime contracts as required and verify contractor compliance.
- Contractors: Flow down the specified FAR clauses to all applicable subcontracts, ensure lower-tier compliance, and use commercial/non-developmental items where practicable.
- Agencies: Oversee compliance and address violations reported through required disclosure mechanisms.
Practical Implications
- This clause ensures that critical federal requirements are maintained throughout the supply chain for commercial products and services.
- Contractors must carefully review each subcontract to determine which clauses apply based on contract type, value, and other conditions.
- Failure to flow down required clauses can result in noncompliance, impacting contract performance and eligibility for future awards.