Blog Post

5 Reasons Why Companies Should Abandon their Corporate FAR Flowdown Clauses

1 A Corporate Flowdown list is not representative of the clauses that exist in the prime contract. They cause you to either flow too few or include too many clauses, risking a CPSR violation or, in latter case, putting an unnecessary strain on your supply chain.

If they are not representative, they are not “flowdowns”, simple as that!

2 Corporate Flowdowns are not tailored to subcontractors’ unique characteristics. Even though the “better” corporate flowdowns we’ve seen attempt to tailor to commercial/non-commercial items and different contract types, these two types of exceptions are just not enough to prevent the inclusion of clauses that are dependent on the work location or type of work, business size, competitive vs. sole source nature of the procurement, etc.

They also completely omit the fact that the selection of clauses for a commercial subcontract is dependent on whether the prime contract is commercial or non-commercial. FAR 52.244-6(c)(1) and FAR 52.212-5 (e)(1) contain different flowdown clauses!

3 Some companies attempt to supplement Corporate Flowdowns with additional lists of clauses unique to their prime contract; however, this task is time consuming, producing inconsistent results. Since companies are unable to fully reconcile the differences between the multiple lists, they end up flowing duplicate clauses and/or flowing clauses that create immediate conflicts with the clauses listed on their Corporate flowdown list.

4 Corporate Flowdowns need to be constantly updated. It is not uncommon for the FAR Council to update clauses twice a month, resulting in additions, deletions, or edits to the clauses.

5 Corporate Flowdowns are “like a box of chocolates – you never know what you’re gonna get!” Our side-by-side comparison of corporate flowdowns available online by the Top 5 Defense Contractors showed that less than 40% of clauses and provisions were in common between those that were tailored to the same type of items (commercial/non-commercial) and same contract types (FFP/T&M). Separately, some companies completely omit version Dates, while some will try to pass down all possible combination of clauses by trying to convince you that non-applicable clauses will be self-deleting. If you would never except general terms and conditions that are subject to the self-deleting “standard”, why would you accept this standard with your FAR clauses?

…and a bonus reason: Because FARclause.com is capable of instantly extracting and processing clauses from prime contracts, and guiding you through the process of generating flowdowns unique to your subcontractor's characteristics.