Contractors may be familiar with receiving a long list of flow-down provisions from their prime contractor that don’t seem to apply to them or are burdensome to comply with. This entails pushback to tailor flow-downs or even acts as a barrier for some companies to enter into the federal marketplace at all. The House Armed Services Chairman apparently agrees this may be the case, and pursuant to his proposed NDAA 2017, the Secretary of Defense would be required to enter into a contract with an independent entity to:
- Identify the required flow-downs in the FAR and DFARS;
- Identify flow-down provisions critical for national security;
- Examine which clauses are applied inappropriately to subcontracts;
- Assess applicability of flow-downs for the purchase of commodity items that are acquired in bulk for multiple acquisition programs;
- Determine unnecessary costs or burdens flow-downs place on the supply chain; and
- Determine the effect of flow-downs on the participation rate of small businesses and non-traditional defense contractors in defense procurements.
If this provision makes its way into the final version of the NDAA for 2017, we can expect a briefing on interim findings by March 1, 2017, and a final report to the congressional defense committees by August 1, 2017. So, don’t expect the flow-downs to be eliminated anytime soon!