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Clauses · FAR · Pricing and audit

FAR 52.230-2 Cost Accounting Standards

Does the regulation require it to flow down?

Yes

(d): include 'in all negotiated subcontracts' the substance of the clause, except (b), in subs above the lower CAS threshold of FAR 30.201-4(b), except subcontracts exempted by 48 CFR 9903.201-1 — the small business exemption travels along with the flowdown

Form
substance (except paragraph (b))
Reaches
all tiers

Checked against acquisition.gov on 2026-08-04 · edition JUN 2020 · base v0.9.3 Read the text ↗

What it makes you produce

2 items for your checklist, slowest first.

  1. A program you have to be running

    You are either running it or you are not, and what the prime asks for is the date it started.

    • Cost accounting that follows the disclosed practices consistently, applies any change prospectively, and complies with every standard in 48 CFR 9904

      FAR 52.230-2(a)(2) and (a)(3)

  2. Something you write

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

    • A Disclosure Statement describing your cost accounting practices — how direct cost is distinguished from indirect, and the bases each pool is allocated on

      FAR 52.230-2(a)(1)

When it is used

Negotiated CAS-covered contracts with FULL coverage (business unit with ≥ $50M in CAS-covered awards, 48 CFR 9903.201-2). Flows down to negotiated subcontracts above the lower CAS threshold (pegged to TINA: $2.5M since 2025-10-01), EXCEPT for the 48 CFR 9903.201-1(b) exemptions — and the one that saves the small sub is (b)(3): a small business is EXEMPT from CAS at any dollar value. Commercial/competitive FFP escapes too ((b)(6) and related).

Read closely

Paragraph (d) excludes from its own reach any subcontract exempted by 48 CFR 9903.201-1, and 9903.201-1(b)(3) is the small business exemption — that condition sits in the clause's own text rather than in a prescription, which is what makes it answerable in writing when the prime asks for a coverage representation. Paragraphs (a)(4) and (a)(5) are the price adjustment, with interest, for a noncompliance or for a practice change that raises cost to the Government.

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 235155CORPDOC 4A — FAR/DFARS Flowdown Provisions for Cost-Reimbursement/T&M Subcontracts under a DoD Prime ContractLockheed Martinline 256233RTX Flowdown of U.S. Government Contract Clauses Under U.S. Government ContractsRTXline 1237105Raytheon TC-002 — Supplement 1: Government Contract Provisions from the FARRTXline 294166Northrop Grumman CTM-P-ST-001 — U.S. Government Firm Fixed Price Order (Not for Commercial Products and Services)Northrop Grummanline 843166Northrop Grumman CTM-P-ST-003 — U.S. Government T&M Order (Not for Commercial Products and Services)Northrop Grummanline 826168Northrop Grumman CTM-P-ST-004 — U.S. Government Cost Reimbursement Order (Not for Commercial Products and Services)Northrop Grummanline 965255GD Mission Systems SCM-TMP-005 — General Provisions, Firm Fixed Price PO under U.S. Government Contract (Non-Commercial)General Dynamicsline 1066243GD Mission Systems SCM-TMP-048 — T&M Purchase Orders for Non-Commercial Items in Support of a U.S. Government ContractGeneral Dynamicsline 1987240L3Harris LGL-50.F1 — General T&C and Flowdown Clauses for Other Than Commercial Products/Services under a U.S. Government ContractL3Harrisline 2109273BAE Systems Inc. USGOVA — FAR/DFARS Flow Down Provisions for Subcontracts/Purchase Orders under a U.S. Government (DoD) Prime ContractBAE Systemsline 629178AAR Component Services NY — U.S. Government Contract FAR and DFARS Clauses Incorporated by ReferenceAAR Corpline 1488

Source: acquisition.gov, FAR 52.230-2 and 30.201-4; 48 CFR 9903.201-1(b) (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.