FAR 3.503-2—Contract clause.
Plain-English Summary
FAR 3.503-2 tells contracting officers when they must include the clause at 52.203-6, Restrictions on Subcontractor Sales to the Government, in solicitations and contracts. The section covers two main topics: the general requirement to insert the clause in solicitations and contracts exceeding the simplified acquisition threshold, and the special instruction to use Alternate I when the acquisition is for commercial products or commercial services. Its purpose is to protect the Government from improper sales practices by subcontractors and to ensure the prime contract includes the flow-down restriction needed to address those sales. In practice, this means the contracting officer must identify the acquisition type and dollar threshold early enough to select the correct clause version before award. For contractors, it signals that the prime contract may contain restrictions affecting subcontractor sales to the Government and that compliance obligations can extend through the supply chain.
Key Rules
Insert clause above threshold
The contracting officer must include 52.203-6 in solicitations and contracts that exceed the simplified acquisition threshold. This is a mandatory clause requirement, not a discretionary one, when the threshold condition is met.
Use Alternate I for commercial buys
If the acquisition is for commercial products or commercial services, the contracting officer must use the clause with Alternate I. The alternate is required specifically for commercial acquisitions, even though the base clause still applies.
Applies to solicitations and contracts
The requirement applies both at the solicitation stage and in the resulting contract. This ensures offerors are on notice before award and that the final contract contains the correct restriction.
Threshold drives clause use
The simplified acquisition threshold is the trigger for the clause requirement. If the acquisition does not exceed that threshold, this section does not require insertion of the clause under 3.503-2.
Responsibilities
Contracting Officer
Determine whether the acquisition exceeds the simplified acquisition threshold and whether it is for commercial products or commercial services. Insert 52.203-6 in the solicitation and contract when required, and use Alternate I for commercial acquisitions.
Contractor
Review the solicitation and contract for the required clause version and ensure internal compliance with any restrictions that affect subcontractor sales to the Government. Flow down and administer the restriction as needed in subcontracting arrangements.
Agency
Support contracting personnel with acquisition planning, clause selection, and oversight processes that help ensure the correct version of 52.203-6 is used when required.
Practical Implications
Contracting officers must check both the dollar threshold and the commercial-item status before award; missing either point can lead to an incorrect clause package.
For commercial acquisitions, using the base clause instead of Alternate I is a common compliance error that can create solicitation and contract defects.
Contractors should treat this clause as a supply-chain compliance issue, not just a paperwork item, because it can affect subcontractor conduct and sales to the Government.
If the clause is omitted when required, the Government may face enforcement and administration problems later, so clause review should be part of pre-award quality control.
Offerors and subcontractors should watch for this clause early, because it may affect pricing, subcontract terms, and how sales to the Government are handled.
Official Regulatory Text
The contracting officer shall insert the clause at 52.203-6 , Restrictions on Subcontractor Sales to the Government, in solicitations and contracts exceeding the simplified acquisition threshold. For the acquisition of commercial products or commercial services, the contracting officer shall use the clause with its Alternate I.