Clauses · FAR · Payment and financing
FAR 52.242-5 Payments to Small Business Subcontractors
Does the regulation require it to flow down?
No
No mandate in the clause (it has only (a) definitions, (b) notice, (c) content of notice) and none in 42.1504. It travels wherever 52.219-9 travels. Primes put it in the same block as 52.219-9 so that a large-business sub running its own subcontracting plan carries the identical self-reporting duty toward the small businesses beneath it. Flowed to a small business sub it is inert — a common template defect, not an obligation.
A clause can reach your subcontract without a mandate. Once it is in your document, it is a contract term all the same. The missing mandate is a fact about the regulation. It is not a ruling on your order.
Checked against acquisition.gov on 2026-08-05 · edition JAN 2017 · base v0.9.3 Read the text ↗
What it makes you produce
One item for your checklist.
Something you write
Days to weeks, and nobody outside your company has to agree to it.
- FAR 52.242-5(b) and (c)
Written notice to the contracting officer, not later than 14 days after a small business subcontractor was entitled to payment, of a reduced payment, a payment more than 90 days past due, or a failure to pay — for supplies and services the Government has already paid you for, stating the reason each time
Owed where both halves of paragraph (b) are met — (b)(1), a small business subcontractor became entitled to payment under the terms and conditions of the subcontract, together with either (b)(2)(i), a reduced or untimely payment, or (b)(2)(ii), a payment not made and now untimely. Paragraph (b) states no size test and no subcontracting-plan test of its own
When it is used
FAR 42.1504: 'Insert the clause at 52.242-5, Payments to Small Business Subcontractors, in all solicitations and contracts containing the clause at 52.219-9, Small Business Subcontracting Plan.' It has no threshold of its own — it inherits 52.219-9's ($900,000; $2,000,000 construction, in force since 2025-10-01) and 52.219-9's conditions (other-than-small business, subcontracting opportunities exist). At subcontract level a small business sub gives it nothing to act on: a small business is not required to submit a subcontracting plan, so there is no plan under 52.219-9 for this clause to report against. It reaches a sub only when that sub is a large business carrying its own subcontracting plan. Read the other way, this is the clause the small sub wants to know exists — it is the duty the PRIME owes about paying YOU.
Read closely
The size and subcontracting-plan condition usually quoted with this clause is FAR 42.1504's, not paragraph (b)'s, and 42.1504 directs the contracting officer on where to insert the clause rather than the company holding the order. From the other side the clause is a lever rather than a duty: FAR 42.1502(g) puts unjustified reduced or untimely payments into the past-performance record, and three unjustified occasions on one contract inside 12 months make a history of them. Five things are not unjustified — a genuine dispute over performance, partial payment of the undisputed amount, recovery of an earlier overpayment, an administrative mistake, and the supplier's own late performance that delayed the payment. The entitlement date and the 90-day mark are the whole case.
The 5 templates that name it, with the line
Source: acquisition.gov, FAR 52.242-5, FAR 42.1504 and FAR 42.1502(g) (verified 2026-08-05)
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.