3 Things to Know About Flowdowns in Government Contracting
The world of government contracting is complex and ever-changing. Adding suppliers and subcontractors into the process can make it even more complicated. Therefore, if you’re a supplier or contractor thinking about entering the world of government, it’s important to note that each government contract requires specific oversight and regulation.
How does the government regulate contracts?
Government contracts are regulated by the Federal Acquisition Regulations (FAR), as well as supplemental editions related to specific agencies (such as the Defense Federal Acquisition Regulation Supplement, aka DFARS). When a contract between business and government is entered, the contracting officer selects clauses from these regulations that apply to the specific contract. These clauses may include language that requires the prime contractor to “flowdown” the requirements to their supplier or subcontractor. View examples of flowdowns and their descriptions.
What is a subcontract?
A subcontract as defined in FAR 44.101 includes, but is not limited to, purchase orders and changes and modifications to purchase orders. The regulations in the prime contract can be flowed down through purchase orders, subcontracts, or terms and conditions. These flowdowns are important because it helps to ensure the prime contractor is meeting its contractual requirements.
How does this impact subcontractors and suppliers?
Some flowdowns may apply to all purchase orders and subcontracts, and others are only applicable to those at a certain dollar value. Each subcontractor should understand the responsibility they have when accepting an order from a prime government contractor. Many of the requirements may already be met by the subcontractor, but it is their responsibility to ensure compliance.
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