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.
Something you fill in and send back2
Hours, once you know which one is missing.
- DFARS 252.226-7001(f)
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(c)
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
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
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.