The Federal Acquisition Regulations (FAR) play a significant role in GovCon Contract Professionals and Acquisition Professionals work. The FAR outlines the procurement process, ensures fair access, and protects against fraud, abuse, waste, etc. Often, contracting officers are subject matter experts on the FAR. FAR flow down clauses are important to both prime contractors and subcontractors but the FAR requirements often differ between the two. As defined by the U.S. Small Business Administration (SBA), “Prime contractors work directly with the government. They manage any subcontractors and are responsible for ensuring that the work is completed as defined in the contract.” In contrast, “Unlike prime contractors, subcontractors do not work directly with the government, but instead work for other contractors”. Despite these differences subcontractors must still comply with some FAR clauses depending on the required flow down clauses from the prime contract. To mitigate these risks, subcontractors should be knowledgeable of which clauses are mandatory and which are not.
For example, when you are ready to review your prime contractor’s flow downs, pay particular attention if the prime is trying to flow the Alt1 version of the Government Property clause, FAR 52.245-1Alt I, to your subcontract. This version assigns the risk of loss to you even though the prime contractor might not be subject to the same requirement if the prime contract only contains the basic version of the clause. In addition, be cautious when the prime contractor tries to flow down the Termination for Convenience, 52.249-2, clause to your subcontract. This clause is not a mandatory flow down and it can create a conflict with your general terms and conditions resulting in granting the prime contractor greater rights than those that you might have negotiated as part of your general termination provision. granting the prime contractor greater rights than those that you have painfully negotiated as part of your general termination provision.
Although it may not be your prime contractor’s intention, it is important to analyze the flow down clauses that are unique to your work and determine that unnecessary clauses are not accidentally flowing down to your subcontract.
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Unison FARclause helps prime and subcontractors to review and generate flow down clauses while reducing associated risks. Generate the most precise flow down clauses unique to each subcontractor and keep an audit trail of Why certain clauses were included or omitted.