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Clauses · FAR · Pricing and audit

FAR 52.215-23 Limitations on Pass-Through Charges

Does the regulation require it to flow down?

Yes

(f): in all cost-reimbursement subcontracts above the SAT; in a DoD contract, also in fixed-price subcontracts above the certified cost or pricing data threshold of FAR 15.403-4

Form
substance
Reaches
all tiers (the substance carries the obligation to insert it in subcontracts; the 'including this paragraph (f)' wording was not verified in the text as read (unconfirmed))

Checked against acquisition.gov on 2026-08-04 · edition JUN 2020 (Basic); Alt I OCT 2009 · base v0.9.3 Read the text ↗

What it makes you produce

3 items for your checklist, slowest first.

  1. Something you write2

    Days to weeks, and nobody outside your company has to agree to it.

    • Written notice identifying the revised cost of the subcontracted effort together with verification that you will provide added value

      Owed once the subcontracted effort passes 70 percent of the total cost of the work to be performed under the order

      FAR 52.215-23(c)
    • The substance of this clause, including paragraph (f) itself, written into your own subcontracts

      Owed on cost-reimbursement subcontracts above the simplified acquisition threshold and, on a DoD contract, on fixed-price subcontracts above the certified cost or pricing data threshold at FAR 15.403-4

      FAR 52.215-23(f)

  2. Nothing to send now

    It does not hold the order. It decides what money moves later — what you can claim, what can be claimed from you, and what can be held back — and none of that changes after signature.

    • The indirect cost and profit riding on the passed-through work, which is recoverable from you as an excessive pass-through charge where the added value is not shown

      FAR 52.215-23(d)

When it is used

At the prime (15.408(n)(2)): civilian agencies — cost-reimbursement contracts above the SAT; DoD — contracts above the TINA threshold ($2.5M) of nearly every type, except FFP/FP-EPA with adequate competition, commercial FFP/FP-EPA, and FPI with adequate competition or commercial. Flows down via (f) along the same split. Alt I when the CO has already recognized the contractor's added value.

Read closely

The management functions are documented before the price is proposed, not after the charge is questioned. Paragraph (e) is the audit right behind all of it.

Alternates

  • Alt I · OCT 2009

    FAR 15.408(n)(2)(iii).

    Alt I rewrites paragraph (b) to record that the contracting officer has already determined there will be no excessive pass-through charge so long as the disclosed value-added functions are performed, in place of the basic clause's after-the-fact determination. The reporting at paragraph (c), the recovery at (d) and the insertion duty at (f) are untouched.

The 12 templates that name it, with the line
143CORPDOC 3A — FAR/DFARS Flowdown Provisions for Fixed Price Non-Commercial Items under a DoD Prime ContractLockheed Martinline 154155CORPDOC 4A — FAR/DFARS Flowdown Provisions for Cost-Reimbursement/T&M Subcontracts under a DoD Prime ContractLockheed Martinline 156233RTX Flowdown of U.S. Government Contract Clauses Under U.S. Government ContractsRTXline 854105Raytheon TC-002 — Supplement 1: Government Contract Provisions from the FARRTXline 37166Northrop Grumman CTM-P-ST-001 — U.S. Government Firm Fixed Price Order (Not for Commercial Products and Services)Northrop Grummanline 2224166Northrop Grumman CTM-P-ST-003 — U.S. Government T&M Order (Not for Commercial Products and Services)Northrop Grummanline 2170168Northrop Grumman CTM-P-ST-004 — U.S. Government Cost Reimbursement Order (Not for Commercial Products and Services)Northrop Grummanline 2266255GD Mission Systems SCM-TMP-005 — General Provisions, Firm Fixed Price PO under U.S. Government Contract (Non-Commercial)General Dynamicsline 949243GD Mission Systems SCM-TMP-048 — T&M Purchase Orders for Non-Commercial Items in Support of a U.S. Government ContractGeneral Dynamicsline 1873240L3Harris LGL-50.F1 — General T&C and Flowdown Clauses for Other Than Commercial Products/Services under a U.S. Government ContractL3Harrisline 1486273BAE Systems Inc. USGOVA — FAR/DFARS Flow Down Provisions for Subcontracts/Purchase Orders under a U.S. Government (DoD) Prime ContractBAE Systemsline 290178AAR Component Services NY — U.S. Government Contract FAR and DFARS Clauses Incorporated by ReferenceAAR Corpline 484

Source: acquisition.gov, FAR 52.215-23 and 15.408(n)(2) (verified 2026-08-04)

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.