52.244-2 Subcontracts.

As prescribed in 44.204(a)(1), insert the following clause:

Subcontracts (Jun 2020)

(a) Definitions. As used in this clause-

"Approved purchasing system" means a Contractor’s purchasing system that has been reviewed and

approved in accordance with part 44 of the Federal Acquisition Regulation (FAR).

"Consent to subcontract" means the Contracting Officer’s written consent for the Contractor to

enter into a particular subcontract.

Subcontract means any contract, as defined in FAR subpart 2.1, entered into by a subcontractor to

furnish supplies or services for performance of the prime contract or a subcontract. It includes, but

is not limited to, purchase orders, and changes and modifications to purchase orders.

(b) When this clause is included in a fixed-price type contract, consent to subcontract is required

only on unpriced contract actions (including unpriced modifications or unpriced delivery orders),

and only if required in accordance with paragraph (c) or (d) of this clause.

(c) If the Contractor does not have an approved purchasing system, consent to subcontract is

required for any subcontract that-

(1) Is of the cost-reimbursement, time-and-materials, or labor-hour type; or

(2) Is fixed-price and exceeds-

(i) For a contract awarded by the Department of Defense, the Coast Guard, or the National

Aeronautics and Space Administration, the greater of the simplified acquisition threshold, as defined

in FAR 2.101 on the date of subcontract award, or 5 percent of the total estimated cost of the

contract; or

(ii) For a contract awarded by a civilian agency other than the Coast Guard and the National

Aeronautics and Space Administration, either the simplified acquisition threshold, as defined in FAR

2.101 on the date of subcontract award, or 5 percent of the total estimated cost of the contract.

(d) If the Contractor has an approved purchasing system, the Contractor nevertheless shall obtain

the Contracting Officer’s written consent before placing the following subcontracts:

________________________________________________________________________________

(e)

(1) The Contractor shall notify the Contracting Officer reasonably in advance of placing any

subcontract or modification thereof for which consent is required under paragraph (b), (c), or (d) of

this clause, including the following information:

(i) A description of the supplies or services to be subcontracted.
(ii) Identification of the type of subcontract to be used.

(iii) Identification of the proposed subcontractor.

(iv) The proposed subcontract price.

(v) The subcontractor’s current, complete, and accurate certified cost or pricing data and Certificate

of Current Cost or Pricing Data, if required by other contract provisions.

(vi) The subcontractor’s Disclosure Statement or Certificate relating to Cost Accounting Standards

when such data are required by other provisions of this contract.

(vii) A negotiation memorandum reflecting-

(A) The principal elements of the subcontract price negotiations;

(B) The most significant considerations controlling establishment of initial or revised prices;

(C) The reason certified cost or pricing data were or were not required;

(D) The extent, if any, to which the Contractor did not rely on the subcontractor’s certified cost or

pricing data in determining the price objective and in negotiating the final price;

(E) The extent to which it was recognized in the negotiation that the subcontractor’s certified cost or

pricing data were not accurate, complete, or current; the action taken by the Contractor and the

subcontractor; and the effect of any such defective data on the total price negotiated;

(F) The reasons for any significant difference between the Contractor’s price objective and the price

negotiated; and

(G) A complete explanation of the incentive fee or profit plan when incentives are used. The

explanation shall identify each critical performance element, management decisions used to quantify

each incentive element, reasons for the incentives, and a summary of all trade-off possibilities

considered.

(2) The Contractor is not required to notify the Contracting Officer in advance of entering into any

subcontract for which consent is not required under paragraph (b), (c), or (d) of this clause.

(f) Unless the consent or approval specifically provides otherwise, neither consent by the

Contracting Officer to any subcontract nor approval of the Contractor’s purchasing system shall

constitute a determination-

(1) Of the acceptability of any subcontract terms or conditions;

(2) Of the allowability of any cost under this contract; or

(3) To relieve the Contractor of any responsibility for performing this contract.

(g) No subcontract or modification thereof placed under this contract shall provide for payment on a

cost-plus-a-percentage-of-cost basis, and any fee payable under cost-reimbursement type

subcontracts shall not exceed the fee limitations in FAR 15.404-4(c)(4)(i).

(h) The Contractor shall give the Contracting Officer immediate written notice of any action or suit

filed and prompt notice of any claim made against the Contractor by any subcontractor or vendor
that, in the opinion of the Contractor, may result in litigation related in any way to this contract,

with respect to which the Contractor may be entitled to reimbursement from the Government.

(i) The Government reserves the right to review the Contractor’s purchasing system as set forth in

FAR subpart 44.3.

(j) Paragraphs (c) and (e) of this clause do not apply to the following subcontracts, which were

evaluated during negotiations:

_______________________________________________________________________________

(End of clause)

Alternate I (June 2020). As prescribed in 44.204 (a)(2), substitute the following paragraph (e)(2) for

paragraph (e)(2) of the basic clause:

(e)(2) If the Contractor has an approved purchasing system and consent is not required under

paragraph (c), or (d) of this clause, the Contractor nevertheless shall notify the Contracting Officer

reasonably in advance of entering into any (i) cost-plus-fixed-fee subcontract, or (ii) fixed-price

subcontract that exceeds either the simplified acquisition threshold, as defined in FAR 2.101 on the

date of subcontract award, or 5 percent of the total estimated cost of this contract. The notification

shall include the information required by paragraphs (e)(1)(i) through (iv) of this clause.

Parent topic: 52.244 [Reserved]