Mandatory Flow-Downs for Commercial-Items: “Must Haves” FAR 52.244-6(c)(1) (Jan. 2017)

1      FAR 52.203-13 Code of Business Ethics and Conduct (2015)

  • Written code of business ethics and conduct, compliance program, and an internal control system that facilitates timely disclosures to the USG of credible evidence of criminal or civil fraud violations

  • Subcontracts in excess of $5,500,000 and performance period of more than 120 days

2      FAR 52.203-15 Whistleblower Protections Under the American Recovery and Reinvestment Act (Jun. 2010)

  • Post notice of employee rights to whistleblower protection, and the remedies that apply in the case of retaliation

3       FAR 52.204-21 Basic Safeguarding of Covered Contractor Information Systems (IS) (June 2016)

  • Apply basic safeguarding requirements and procedures to protect covered contractor information systems (IS), including:

  • limit access to IS based on specific criteria, and authenticate identities of those granted access

  • control information posted on publicly accessible IS

  • separate publicly accessible IS

  • sanitize or destroy system media before disposal or release for reuse

  • monitor, control and protect communications

  • identify, report, and correct IS flaws in a timely manner

  • protect against malicious code

  • perform periodic scans of IS

4      FAR 52.219-8 Utilization of Small Business Concerns (Nov 2016)

  • Agree to carry out Government’s policy of encouraging participation of small business concerns in performing USG contracts

  • Nov. 2016 revision includes additional criteria for primes to determine if subs are small.

  • Threshold: $150,000 (simplified acquisition threshold)

5      FAR 52.222-21 Prohibition of Segregated Facilities (April 2015)

  • Prohibits segregation of facilities based on race, color, religion, sex, sexual orientation, gender identity, or national origin

  • Trigger threshold: $10,000

6      FAR 52.222-26 Equal Opportunity (Sept 2016)

  • Prohibits discrimination against any employee/applicant on the basis of race, color, religion, sex, sexual orientation, gender identity, or national origin and requires employers to follow an affirmative, written action plan to ensure compliance (emphasis added)

  • Trigger threshold: $10,000

7      FAR 52.222-35 Equal Opportunity for Veterans (Oct 2015)

  • Trigger threshold: $150,000

8      FAR 52.222-36 Equal Opportunity for Workers with Disabilities (July 2014)

  • Prohibits discrimination based on disability, and requires affirmative action to employ and advance in employment qualified individuals with disabilities

  • Trigger threshold: $15,000

9      FAR 52.222-37 Employment Reports on Veterans (Feb 2016)

  • Requires that USG contractors and subcontractors report at least annually, no later than September 30 of each year, on the total number of employees who are veterans and the total number of new hires and the max/min number of employees at each hiring location during the reporting period

  • Trigger threshold: $150,000

10    FAR 52.222-40 Notification of Employee Rights Under the National Labor Relations Act (Dec 2010)

  • Requires employers to conspicuously post employees’ rights under the National Labor Relations Act

  • Trigger threshold: $10,000

11     FAR 52.222-50 Combat Trafficking in Persons (2015)

  • Updated in 2015 to expand the definition of trafficking, and include requirement for notification to USG of violations of clause

  • It also requires a compliance program for contracts and subcontracts for supplies, other than commercially available off the-shelf items, acquired outside the United States, or services to be performed outside the United States, which requires employee training and posting of a written compliance plan, process for employees to anonymously report violations, and annual compliance certifications

  • Trigger threshold: $500,000

12     FAR 52.222-55 Minimum Wages Under Executive Order 13658 13 (Dec 2015)

  • Clause requiring contractor and subcontractors to pay workers, while performing in the United States, and performing on, or in connection with a USG contract, a minimum hourly wage rate annually adjusted to meet the Secretary of Labor’s annual E.O. minimum wage determination

  • Currently $10.20 per hour as of Jan. 1, 2017

13    FAR 52.222-59 Compliance with Labor Laws (Executive Order 13673) (Oct 2016)

  • Requires contractors to disclose new labor law decisions in SAM semiannually

  • For subcontracts greater than $500,000 for other than COTS items, contractors must also consider labor law violation information when determining subcontractor responsibility

  • Trigger threshold: $500,000

  • NOTE: This provision is currently enjoined indefinitely per a court order issued October 24, 2016. The enjoined section will become effective immediately if the court terminates the injunction.

14     FAR 52.222-60 Paycheck Transparency (Executive Order 13673) (2016)

  • Requires contractors to provide a wage statement document (e.g. a pay stub) to all individuals subject to the Fair Labor Standards Act, the Davis Bacon Act, and the Service Contract Act

  • Trigger threshold: $500,000

15    FAR 52.222-62 Paid Sick Leave Under Executive Order 13706 (Jan 2017)

  • Requires contractors to provide sick leave and allow employees to earn not less than 1 hour of paid sick leave for every 30 hours worked

  • Contractors must keep records with respect to wages and accrued sick leave for employees

  • Failure to comply may result in withholding, contract termination, suspension and/or debarment

  • Applies to contracts subject to the Service Contract Act or the Davis Bacon Act

16     FAR 52.225-26 Contractors Performing Private Security Functions Outside the U.S. (Oct 2016)

  • Requires training, human resource vetting, arms control, and reporting of situations where firearms were used

  • Contractors required to cooperate with Government-authorized investigations

17     FAR 52.232-40 Providing Accelerated Payments to Small Business Subcontractors (Dec 2013) 

  • Applies if payments are accelerated by USG

18     FAR 52.247-64 Preference for Privately Owned U.S.-Flag Commercial Vessels

  • Requires use of a U.S. flagged commercial vessel for shipment of at least 50% of gross tonnage whenever transporting via ocean vessels

Mandatory Flow-Down for Non-Commercial Items

1    Anti-Kickback Procedures, FAR 52.203-7

  • Prohibits contractors from providing any kickback or soliciting or attempting to accept any kickback

  • Trigger threshold: $150,000

2    Limitation on Payments to Influence Certain Federal Transactions, FAR 52.203-12

  • Prohibits contractors from using appropriated funds to pay any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the award of the contract

  • Trigger threshold: $150,000

3    Audit and Records—Negotiation, FAR 52.215-2

  • Applies to subcontracts that exceed the simplified acquisition threshold, and are cost-reimbursement, time-and-materials, labor-hour, or price re-determinable types; or subcontracts for which cost and pricing data are required

4    Price Reduction for Defective Certified Cost or Pricing Data, FAR 52.215-10

  • Non-commercial item subcontracts above the TINA threshold, $750,000

5    Subcontractor Certified Cost or Pricing Data, FAR 52.215-12

  • In subcontracts that require FAR 52.215-10

6    Patent Rights—Ownership by the Contractor, FAR 52.227-11

  • In subcontracts for experimental, developmental, or research work

  • Subcontractor has rights and obligations of contractor in clause; contractor shall not obtain subcontractor’s subject inventions

Mandatory Flow-Downs for Service Subcontracts Other Than Construction

1     Accident Prevention, FAR 52.236-13

  • Provide and maintain work environments and procedures that

  • Safeguards the public and Government personnel, property, materials, supplies, and equipment

  • Avoids interruption of Government operations

  • Controls costs in performance of contract

2    Service Contract Labor Standards, FAR 52.222-41

  • Requires contractor to pay all service employees no less than the wage rates and fringe benefits determined by the Secretary of Labor

  • If no wage rate is established, contractor may not pay less than the minimum wage established by the Fair Labor Standards Act of 1938

  • Disputes about labor standard requirements are resolved through procedures established by the Department of Labor in 29 C.F.R. Parts 4, 6, and 8, and
    not the Disputes clauses of the contract

3    Preventing Personal Conflicts of Interest for Contractor Employees Performing Acquisition Functions: FAR 52.203-16

  • Procedures to screen employees that will perform inherently governmental functions on service contracts

There are additional Flow down Clauses, which have to be complied in execution of US Fed Government contracts. 

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