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Clauses · DFARS · Small business, labor and socioeconomic

DFARS 252.226-7001 Utilization of Indian Organizations, Indian-Owned Economic Enterprises, and Native Hawaiian Small Business Concerns

Does the regulation require it to flow down?

Yes

(g): insert the substance 'in all subcontracts exceeding $500,000' — below that, it doesn't flow down

Form
substance, including paragraph (g) itself
Reaches
all tiers, in subcontracts above $500,000

Checked against acquisition.gov on 2026-08-11 · edition JAN 2023 · base v0.9.3 Read the text ↗

What it makes you produce

2 items for your checklist, slowest first.

  1. Something you fill in and send back2

    Hours, once you know which one is missing.

    • A request for the incentive payment, 5 percent of the estimated cost, target cost or fixed price of the subcontract

      Owed when you place a subcontract with an Indian organization, an Indian-owned economic enterprise or a Native Hawaiian small business concern, and program funds are available

      DFARS 252.226-7001(f)
    • A written representation of eligibility, which the buyer may rely on in good faith unless an interested party challenges the status

      Owed when you are yourself an Indian organization, an Indian-owned economic enterprise or a Native Hawaiian small business concern

      DFARS 252.226-7001(c)

When it is used

Contracts for supplies or services above $500,000, including FAR part 12 (prescription 226.104 codified; 226.102-2 under RFO class deviation 2026-O0008, which is the address a DoD contracting officer applies). Flows down via (g) to subcontracts above $500,000. It's an incentive clause, not a restriction: it pays 5% to the contractor that subcontracts with an eligible entity.

Read closely

This is an incentive clause rather than a restriction, so for an eligible concern the second row is a selling point: the buyer comes out 5 percent cheaper. Paragraph (d) holds the challenge procedure, paragraph (e) the cases where no incentive is paid, and paragraph (g) carries the substance into subcontracts above $500,000.

The 17 templates that name it, with the line
76CORPDOC 2A — FAR/DFARS Flowdown Provisions for Commercial Products/Services under a DoD Prime ContractLockheed Martinline 155143CORPDOC 3A — FAR/DFARS Flowdown Provisions for Fixed Price Non-Commercial Items under a DoD Prime ContractLockheed Martinline 415155CORPDOC 4A — FAR/DFARS Flowdown Provisions for Cost-Reimbursement/T&M Subcontracts under a DoD Prime ContractLockheed Martinline 450233RTX Flowdown of U.S. Government Contract Clauses Under U.S. Government ContractsRTXline 160360Raytheon TC-003 — Supplement 2: Government Contract Provisions from the DFARSRTXline 193166Northrop Grumman CTM-P-ST-001 — U.S. Government Firm Fixed Price Order (Not for Commercial Products and Services)Northrop Grummanline 2498166Northrop Grumman CTM-P-ST-003 — U.S. Government T&M Order (Not for Commercial Products and Services)Northrop Grummanline 2435168Northrop Grumman CTM-P-ST-004 — U.S. Government Cost Reimbursement Order (Not for Commercial Products and Services)Northrop Grummanline 2525255GD Mission Systems SCM-TMP-005 — General Provisions, Firm Fixed Price PO under U.S. Government Contract (Non-Commercial)General Dynamicsline 1369243GD Mission Systems SCM-TMP-048 — T&M Purchase Orders for Non-Commercial Items in Support of a U.S. Government ContractGeneral Dynamicsline 2278122GD Mission Systems SCM-TMP-095 — FFP Purchase Orders for Commercial/COTS Products or Services in Support of a U.S. Government ContractGeneral Dynamicsline 1138240L3Harris LGL-50.F1 — General T&C and Flowdown Clauses for Other Than Commercial Products/Services under a U.S. Government ContractL3Harrisline 2594106L3Harris LGL-50.F2 — General T&C and Flowdown Clauses for Commercial Products/Services under a U.S. Government ContractL3Harrisline 1733273BAE Systems Inc. USGOVA — FAR/DFARS Flow Down Provisions for Subcontracts/Purchase Orders under a U.S. Government (DoD) Prime ContractBAE Systemsline 1190107Honeywell — Supplemental Provisions Under Fixed Price U.S. Government Contracts for Commercial ItemsHoneywellline 88289AAR Government Services — C40 Purchase Order General Provisions, Non-Commercial Firm Fixed Price Items or ServicesAAR Corpline 3201178AAR Component Services NY — U.S. Government Contract FAR and DFARS Clauses Incorporated by ReferenceAAR Corpline 1071

Source: acquisition.gov, DFARS 252.226-7001. CODIFIED REGIME, read 2026-08-11 at DFARS Change 5/7/2026: prescribed at 226.104, "Use the clause at 252.226-7001 ... in solicitations and contracts, including solicitations and contracts using FAR part 12 procedures for the acquisition of commercial products and commercial services, that are for supplies or services exceeding $500,000 in value", and the clause head reads "As prescribed in 226.104, use the following clause:" with designation (JAN 2023). RFO CLASS DEVIATION 2026-O0008 (DFARS part 226, DARS tracking number on every page, effective February 1, 2026) MOVES THE PRESCRIPTION AND KEEPS THE CLAUSE NUMBER: 226.104 appears ZERO times in that memo, and 226.102-2 Contract clause reads "Insert the clause at 252.226-7001 ... that are for supplies or services exceeding $500,000 in value", with the clause printed at 252.226-7001 as "As prescribed in 226.102-2, use the following clause:" and designated (JAN 2023). So the $500,000 reach and the designation are identical in both regimes and only the prescription address moves. A prescription directs a contracting officer rather than the buyer, so this corrects a published citation and moves no verdict on either axis. Prescription and designation read in both regimes on 2026-08-11 (verified 2026-08-11)

This is research, not legal advice. It states what the regulation says about this clause and cites the paragraph behind it. It does not rule on your order, and it does not rule on whether a prime's markings are correct.