FAR 22.1605—Contract clause.
Plain-English Summary
FAR 22.1605 tells contracting officers when to include the labor-law notice clause at FAR 52.222-40, Notification of Employee Rights under the National Labor Relations Act, in solicitations and contracts. It applies broadly to acquisitions, including commercial products, commercial services, and commercially available off-the-shelf (COTS) items, but it also identifies three important exceptions: acquisitions at or below the simplified acquisition threshold, work performed exclusively outside the United States, and acquisitions covered in their entirety by a Secretary-granted exemption. The section also addresses indefinite-quantity contracts by requiring a forward-looking judgment about whether the value of orders in any calendar year is expected to exceed the simplified acquisition threshold. Finally, it allows the contracting agency to modify the clause when needed to reflect a Secretary-granted exemption. In practice, this section is about making sure the NLRA employee-rights notice is inserted where required, while avoiding over-inclusion in exempt or out-of-scope acquisitions.
Key Rules
Insert the clause broadly
The contracting officer must include FAR 52.222-40 in all solicitations and contracts unless an exception applies. This includes commercial products, commercial services, and COTS acquisitions.
Simplified acquisition threshold exception
Do not include the clause for acquisitions under the simplified acquisition threshold. For indefinite-quantity contracts, include it only if the expected value of orders in any calendar year will exceed the simplified acquisition threshold.
Outside-U.S. work exception
The clause is not required for work performed exclusively outside the United States. The exception applies only when the work is entirely outside the U.S., not when performance is partly domestic.
Secretary-granted exemption exception
If the Secretary has granted an exemption that covers the acquisition in its entirety, the clause is not required. The exemption must fully cover the acquisition, not just a portion of it.
Agency may tailor clause text
A contracting agency may modify FAR 52.222-40 as necessary to reflect a Secretary-granted exemption. Any modification should be limited to accurately implementing the exemption and should not expand or narrow the exemption beyond what was granted.
Responsibilities
Contracting Officer
Determine whether FAR 52.222-40 must be included in the solicitation and contract, apply the simplified acquisition threshold and outside-U.S. exceptions correctly, assess indefinite-quantity contracts based on expected annual order value, and modify the clause only as needed to reflect a Secretary-granted exemption.
Contracting Agency
Ensure acquisition templates, clause libraries, and internal procedures support correct insertion or modification of FAR 52.222-40 when required, and implement any Secretary-granted exemption consistently across affected procurements.
Contractor
Review solicitations and contracts for the presence of FAR 52.222-40, understand the employee-rights notice obligations if the clause is included, and ensure compliance with the clause when awarded a covered contract.
Secretary
Grant exemptions, when appropriate, that may remove the need for the clause in whole or in part for covered acquisitions.
Practical Implications
This section is a clause-insertion rule, so the main day-to-day task is deciding whether the acquisition falls inside or outside the clause requirement before award.
A common pitfall is overlooking the indefinite-quantity contract rule and assuming the simplified acquisition threshold exception applies automatically; the key question is the expected annual value of orders.
Another frequent mistake is treating partially overseas performance as exempt; the exception applies only when work is performed exclusively outside the United States.
If a Secretary-granted exemption exists, the contracting officer should confirm the exemption’s scope before modifying the clause, because the exemption must cover the acquisition in its entirety.
Contractors should watch for the clause in commercial-item solicitations as well, since this section expressly applies to commercial products, commercial services, and COTS items.
Official Regulatory Text
(a) Insert the clause at 52.222-40 , Notification of Employee Rights under the National Labor Relations Act, in all solicitations and contracts, including acquisitions for commercial products, commercial services, and commercially available off-the-shelf items, except acquisitions- (1) Under the simplified acquisition threshold . For indefinite-quantity contracts, include the clause only if the value of orders in any calendar year of the contract is expected to exceed the simplified acquisition threshold; (2) For work performed exclusively outside the United States; or (3) Covered (in their entirety) by an exemption granted by the Secretary. (b) A contracting agency may modify the clause at 52.222-40 , if necessary, to reflect an exemption granted by the Secretary (see 22.1603 (b)).