# Federal Acquisition Regulation (FAR) Compliance ## 150+ Mandatory Flowdown Clauses. Do You Know Which Ones Apply to Every Subcontract in Your Supply Chain? FAR compliance requires clause-level tracking across every tier of your government contract supply chain—with mandatory flowdowns, evolving thresholds, and continuous audit exposure. The Revolutionary FAR Overhaul is rewriting entire Parts in real time. DFARS deviations are stacking up. Your clause matrices from last year are already out of date. Certivo automates FAR clause tracking from prime contract award to subcontractor flowdown evidence. 150+ Mandatory flowdown clauses across FAR and DFARS $350K Simplified Acquisition Threshold (SAT) as of August 2025 $15M Maximum civil penalty per False Claims Act violation ## Regulation Overview **Jurisdiction** United States (all federal civilian and defense agencies) **Regulatory Body** FAR Council (DoD, GSA, NASA) / Office of Federal Procurement Policy (OFPP) **Regulation Number** Title 48 CFR, Chapters 1–53 (supplemented by DFARS, GSARS, and agency FAR supplements) **Effective Date** April 1, 1984 (continuously amended; Revolutionary FAR Overhaul underway since April 2025) **Official Source** https://www.acquisition.gov/ **Key Threshold** $350,000 Simplified Acquisition Threshold (FAC 2025-06, August 2025) # What is the Federal Acquisition Regulation? The FAR is the principal regulatory framework governing how the U.S. federal government purchases goods and services. For supply chain teams, FAR compliance means managing clause-level obligations across every prime contract, subcontract, and purchase order touching federal procurement dollars. FAR prescribes over 150 mandatory flowdown clauses covering cost accounting, cybersecurity, domestic sourcing, labor standards, small business subcontracting, and contractor ethics. The Revolutionary FAR Overhaul—initiated by Executive Order 14275 in April 2025—is rewriting the FAR in plain language and removing non-statutory rules, with revised Parts rolling out through 2026. NDAA FY2026 raised the TINA threshold to $10 million and full CAS coverage to $100 million effective mid-2026. FAR compliance requires clause-specific evidence from every contractor and subcontractor in your chain. When FAR Parts are revised or thresholds change, your entire subcontract library requires reassessment. ## Key Components / Sub-Frameworks **Obligation** Streamlined clauses; limited flowdowns per FAR 52.212-5(e) **FAR Part 12** Commercial Product/Service Acquisitions **Obligation** Cost or pricing data, source selection, competitive range **FAR Part 15** Contracting by Negotiation **Obligation** Service Contract Act, Davis-Bacon, EEO, anti-trafficking **FAR Part 22** Labor Standards **Obligation** Domestic preference, trade agreements, country-of-origin **FAR Part 25** Foreign Acquisition / Buy American **Obligation** Government audit rights, CPSR, subcontract consent **FAR Part 42** Contract Administration **Obligation** Cybersecurity (7012), CMMC, specialty metals, domestic sourcing **DFARS (48 CFR Ch.2)** Defense Supplement ## Key Compliance Requirements **Who Must Comply** Prime contractors awarded federal government contracts Subcontractors at all tiers receiving mandatory FAR flowdown clauses Small business subcontractors subject to set-aside and reporting obligations Commercial product and service suppliers selling to the federal government Importers and manufacturers subject to Buy American / Trade Agreements Act clauses Defense contractors subject to DFARS cybersecurity and domestic sourcing clauses ## Key Thresholds **$15,000** Micro-Purchase Threshold (MPT) as of FAC 2025-06 **$350,000** Simplified Acquisition Threshold (SAT) as of FAC 2025-06 **$10,000,000** Certified Cost or Pricing Data (TINA) threshold effective July 1, 2026 **$100,000,000** Full CAS coverage threshold effective mid-2026 (NDAA FY2026 §1806) ## Core Obligations 1. **Clause Flowdown** Incorporate mandatory FAR/DFARS clauses into subcontracts at all tiers **DEADLINE** At time of subcontract award 2. **Cost or Pricing Data** Submit certified cost or pricing data for negotiated contracts above TINA threshold **DEADLINE** Prior to contract/modification award 3. **Small Business Subcontracting** Submit and comply with small business subcontracting plans (contracts >$750K / >$1.5M for construction) **DEADLINE** With proposal; ongoing reporting 4. **Contractor Purchasing System Review (CPSR)** Maintain approved purchasing system subject to government review **DEADLINE** Ongoing; triggered by contract value and type 5. **Audit & Records Retention** Maintain and provide access to cost, pricing, and performance records **DEADLINE** 3 years after final payment (6 years for fraud) ## FAR-Specific Pain Points ### The Flowdown Clause Maze Your prime contract contains 85 FAR clauses and 40 DFARS clauses. Which ones must flow down to each subcontract? The answer depends on contract type, dollar value, commerciality, and whether the subcontractor handles CUI. Your contracts team spends days building clause matrices manually—and still misses mandatory flowdowns that surface during CPSR. ### The Threshold Whiplash The SAT jumped from $250K to $350K. The TINA threshold moves to $10M in July 2026. Full CAS coverage now starts at $100M. Every threshold change cascades across your subcontract library—triggering clause additions, removals, and renegotiations. Without centralized threshold tracking, you cannot confirm which subcontracts remain compliant. ### The FAR Overhaul Tracking Gap The Revolutionary FAR Overhaul is rewriting Parts at pace—with agency deviations layered on top. FAR Companion v2, new buying guides, and 31 DFARS deviations create a moving compliance target. Your subcontract templates reference clause versions that may be superseded. Manual regulatory intelligence at this velocity is unsustainable. ### The Audit Evidence Scramble DCAA requests cost or pricing data supporting a $6M subcontract modification. You need the original proposal, negotiation memorandum, subcontractor certifications, and flowdown evidence across three tiers. The records are spread across email, a shared drive, and your ERP. Compiling the audit package takes three weeks—and the auditor found a gap. ## Certivo in Action ### Certivo Workflow **GET EVIDENCE IN** Collect Compliance Declarations and Certifications from Every Subcontractor—Without the Chasing **MAKE SENSE OF IT** Know Instantly Which Subcontracts Are Missing Mandatory Flowdowns or Certifications **PROVE COMPLIANCE OUT** Respond to DCAA Audits and CPSR Reviews in Hours, Not Weeks ## Features - Subcontractor Compliance Collection - Clause & Certification Extraction - FAR/DFARS Monitoring - Audit Response - Flowdown Compliance Management ## Related Regulations - **DFARS**: Defense supplement to FAR; adds cybersecurity, specialty metals, and domestic sourcing clauses - **CMMC 2.0**: Cybersecurity certification required for defense contractors; implemented through DFARS clauses - **Buy American Act / TAA**: Domestic preference and trade agreements implemented through FAR Part 25 - **Cost Accounting Standards (CAS)**: Cost allocation rules triggered by FAR-governed contracts above CAS thresholds - **Small Business Regulations (FAR Part 19)**: Set-asides, subcontracting plans, and SBA compliance ## Key Statistics - **150+**: FAR/DFARS mandatory flowdown clauses tracked with automatic regulatory sync - **99.2%**: Clause and certification extraction accuracy from subcontractor submissions - **95%**: Subcontractor response rate with CORA-powered campaigns ## Frequently Asked Questions 1. **What companies and contracts are subject to FAR requirements?** Any company that sells goods or services to the U.S. federal government—or subcontracts under a federal prime contract—is subject to FAR obligations. 2. **What are the penalties for FAR non-compliance?** FAR non-compliance exposes contractors to suspension, debarment, contract termination, and False Claims Act liability with penalties up to $15 million per violation. 3. **How does Certivo track FAR regulatory changes and threshold updates?** Certivo syncs with Federal Acquisition Circulars, DFARS deviations, and agency FAR supplement updates as they are published. 4. **What formats does Certivo accept from subcontractors?** Certivo accepts any format: PDF certifications, signed representations, SAM.gov exports, spreadsheets, etc. 5. **Does Certivo support FAR alongside DFARS, CMMC, and other frameworks?** Yes. Certivo validates subcontractor evidence against multiple frameworks simultaneously.