52.242-5 — Payments to Small Business Subcontractors.
Researched by the BidStride Research Team
What This Clause Requires
FAR 52.242-5 — Payments to Small Business Subcontractors.. This clause is part of the Federal Acquisition Regulation and may be included in government contracts as a solicitation provision or contract clause.
Official Regulation Text
52.242-5 Payments to Small Business Subcontractors. As prescribed in 42.1504, insert the following clause: Payments to Small Business Subcontractors (JAN 2017) (a) Definitions. As used in this clause— Reduced payment means a payment that is for less than the amount agreed upon in a subcontract in accordance with its terms and conditions, for supplies and services for which the Government has paid the prime contractor. Untimely payment means a payment that is more than 90 days past due under the terms and conditions of a subcontract, for supplies and services for which the Government has paid the prime contractor. (b) Notice. The Contractor shall notify the Contracting Officer, in writing, not later than 14 days after— (1) A small business subcontractor was entitled to payment under the terms and conditions of the subcontract; and (2) The Contractor— (i) Made a reduced or untimely payment to the small business subcontractor; or (ii) Failed to make a payment, which is now untimely. (c) Content of notice. The Contractor shall include the reason(s) for making the reduced or untimely payment in any notice required under paragraph (b) of this clause. (End of clause) [81 FR 93488, Dec. 20, 2016]
Compliance Checklist
- The Contractor shall notify the Contracting Officer, in writing, not later than 14 days after— (1) A small business subcontractor was entitled to payment under the terms and conditions of the subcontract; and (2) The Contractor— (i) Made a reduced or untimely payment to the small business subcontractor; or (ii) Failed to make a payment, which is now untimely.
- The Contractor shall include the reason(s) for making the reduced or untimely payment in any notice required under paragraph (b) of this clause.
Flow-Down to Subcontractors
Flow-down required
This clause must be included in subcontracts with no subcontractors where the subcontractor will perform work covered by this clause. Typically appears in contract Section Section I.
Frequently Asked Questions
FAR 52.242-5 (Payments to Small Business Subcontractors.) is a federal acquisition regulation clause that may be included in government contracts. It falls under the contract-admin category.
FAR 52.242-5 is typically required when the contracting officer determines it's applicable to the specific procurement. Check the solicitation's Section I for included clauses.
Whether FAR 52.242-5 flows down depends on the specific clause language and contract type. Review the clause text for flow-down provisions.
This summary is for informational purposes only and reflects the BidStride Research Team's plain-English interpretation of the regulation. It is not legal advice and does not constitute an attorney-client relationship. Always consult the official Federal Acquisition Regulation (FAR) or Defense Federal Acquisition Regulation Supplement (DFARS) text and qualified legal counsel for compliance decisions.