FAR 3.502-3—Contract clause.
Plain-English Summary
FAR 3.502-3 is a narrow but important prescription that tells contracting officers when they must include the Anti-Kickback Procedures clause at FAR 52.203-7. It covers three core topics: the mandatory use of the clause, the dollar threshold for coverage, and the commercial products/commercial services exception referenced in FAR part 12. In practice, this section ensures that solicitations and contracts over $200,000 contain the contractual language needed to deter, detect, and address kickbacks in federal procurement. It matters because the clause creates enforceable obligations and remedies tied to anti-kickback compliance, and its omission can weaken the Government’s ability to police improper payments or gratuities in the supply chain. For contractors, it signals that anti-kickback compliance requirements will apply on covered noncommercial awards and should be flowed through and managed accordingly. For contracting officers, it is a straightforward but mandatory clause-insertion rule that must be applied consistently whenever the threshold and scope conditions are met.
Key Rules
Insert the required clause
The contracting officer must include FAR 52.203-7, Anti-Kickback Procedures, in the solicitation and resulting contract. This is not discretionary when the rule applies.
Applies above $200,000
The clause is required only for solicitations and contracts exceeding $200,000. Awards at or below that amount are outside this prescription.
Commercial items are excluded
The clause does not apply to solicitations and contracts for commercial products or commercial services. The cross-reference to FAR part 12 means the commercial-item framework controls this exception.
Covers both solicitations and contracts
The prescription applies at the solicitation stage and must carry through into the contract. This ensures offerors are on notice and the final award includes the required term.
Responsibilities
Contracting Officer
Determine whether the acquisition exceeds $200,000 and whether it is for commercial products or commercial services. If the rule applies, insert FAR 52.203-7 in both the solicitation and the contract.
Contractor
Review the solicitation and contract for the anti-kickback clause, understand that anti-kickback compliance obligations apply on covered noncommercial awards, and ensure internal controls and subcontractor oversight support compliance.
Agency
Support acquisition personnel with policy, training, and oversight so the clause is used consistently in covered acquisitions and omitted where the commercial-item exception applies.
Practical Implications
This is a simple clause-prescription rule, but missing it can create compliance and enforcement problems on a covered procurement.
The key screening questions are the dollar threshold and whether the acquisition is for commercial products or commercial services; if either point is misread, the clause may be wrongly included or omitted.
Contracting officers should verify the acquisition type early, especially when requirements evolve from noncommercial to commercial or vice versa.
Contractors should treat the clause as a signal to maintain anti-kickback controls, train employees and subcontractors, and watch for improper inducements in the supply chain.
Because the rule applies to both solicitations and contracts, the clause should be checked at both drafting and award to avoid administrative errors.
Official Regulatory Text
The contracting officer shall insert the clause at 52.203-7 , Anti-Kickback Procedures, in solicitations and contracts exceeding $200,000, other than those for commercial products or commercial services (see part 12 ).