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Clauses · FAR · Pricing and audit

FAR 52.227-9 Refund of Royalties

Does the regulation require it to flow down?

Yes

(f): 'The substance of this clause... shall be included in any subcontract in which the amount of royalties reported during negotiation of the subcontract exceeds $250'

Form
substance
Reaches
first tier (self-inclusion of (f) not confirmed in the verified excerpt (unconfirmed))

Checked against acquisition.gov on 2026-08-04 · edition APR 1984 · 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.

    • A statement of royalties paid or required to be paid on this work and its subcontracts, with the reasons, furnished before final payment

      FAR 52.227-9(c)
    • The substance of this clause, including paragraph (f) itself, written into your own subcontracts

      Owed on any subcontract in which the royalties reported during its negotiation exceed $250

      FAR 52.227-9(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 refund owed where a royalty priced into the contract is later relieved — a lapsed license, an invalidated patent — at any time within three years after final payment

      FAR 52.227-9(e)

When it is used

Goes into negotiated contracts when the price includes reported royalties (prescription 27.202-5). Flows down via (f) to any subcontract where the royalties reported during the sub's negotiation exceed $250.

Read closely

Royalty priced in but never paid comes back as a refund, so the trail of what was built into the proposal is what the paragraph (c) statement is written from. Paragraph (d) pays only what was in the contract price and is allocable to the contract.

The 13 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 216155CORPDOC 4A — FAR/DFARS Flowdown Provisions for Cost-Reimbursement/T&M Subcontracts under a DoD Prime ContractLockheed Martinline 233233RTX Flowdown of U.S. Government Contract Clauses Under U.S. Government ContractsRTXline 875105Raytheon TC-002 — Supplement 1: Government Contract Provisions from the FARRTXline 90166Northrop Grumman CTM-P-ST-001 — U.S. Government Firm Fixed Price Order (Not for Commercial Products and Services)Northrop Grummanline 2319166Northrop Grumman CTM-P-ST-003 — U.S. Government T&M Order (Not for Commercial Products and Services)Northrop Grummanline 2260168Northrop Grumman CTM-P-ST-004 — U.S. Government Cost Reimbursement Order (Not for Commercial Products and Services)Northrop Grummanline 2351255GD Mission Systems SCM-TMP-005 — General Provisions, Firm Fixed Price PO under U.S. Government Contract (Non-Commercial)General Dynamicsline 1057243GD Mission Systems SCM-TMP-048 — T&M Purchase Orders for Non-Commercial Items in Support of a U.S. Government ContractGeneral Dynamicsline 1979240L3Harris LGL-50.F1 — General T&C and Flowdown Clauses for Other Than Commercial Products/Services under a U.S. Government ContractL3Harrisline 2025106L3Harris LGL-50.F2 — General T&C and Flowdown Clauses for Commercial Products/Services under a U.S. Government ContractL3Harrisline 1620273BAE Systems Inc. USGOVA — FAR/DFARS Flow Down Provisions for Subcontracts/Purchase Orders under a U.S. Government (DoD) Prime ContractBAE Systemsline 586178AAR Component Services NY — U.S. Government Contract FAR and DFARS Clauses Incorporated by ReferenceAAR Corpline 1101

Source: acquisition.gov, FAR 52.227-9 and 27.202-5 (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.