FAR 34.104—Contract clause.
Plain-English Summary
FAR 34.104 is a very short but important prescription rule that tells contracting officers when to include a specific contract clause: 52.234-1, Industrial Resources Developed under Title III, Defense Production Act. The section applies to contracts for major systems and items of supply, and its purpose is to ensure the Government can identify and preserve industrial resources developed with Title III support under the Defense Production Act. In practice, this means the clause must be inserted in the covered contract so the contractor is on notice of any obligations tied to those industrial resources, including the Government’s interest in protecting the investment and managing the use of the developed capability. Although the text is brief, it connects acquisition policy to industrial base and defense production objectives, making it relevant in procurements where critical materials, components, or production capacity may have been developed with Government assistance. For contracting officers, the section is a mandatory clause prescription; for contractors, it is a compliance trigger that may affect how they use, track, and report on covered resources. The section does not itself describe the full substance of the clause, but it establishes when the clause must be included and therefore when the associated rights and duties become part of the contract.
Key Rules
Insert the required clause
The contracting officer must insert FAR 52.234-1, Industrial Resources Developed under Title III, Defense Production Act, in the covered contracts identified by this section. This is a mandatory prescription, not a discretionary one, when the contract falls within the stated scope.
Applies to major systems
The clause must be used in contracts for major systems. The rule is aimed at acquisitions where the Government has a significant interest in the industrial base and the resources supporting large, complex defense or mission-critical programs.
Applies to items of supply
The clause must also be included in contracts for items of supply. This extends the requirement beyond major systems to supply contracts where industrial resources developed under Title III may be relevant.
Protects Title III resources
The purpose of the clause is to address industrial resources developed under Title III of the Defense Production Act. The clause helps ensure those resources are recognized and handled consistently with the Government’s industrial preparedness and defense production interests.
Responsibilities
Contracting Officer
Determine whether the contract is for a major system or an item of supply within the scope of FAR 34.104, and insert clause 52.234-1 in the solicitation and resulting contract when required.
Contractor
Review the clause when included, understand any obligations tied to industrial resources developed under Title III, and comply with the contract terms governing use, protection, or reporting of those resources.
Agency
Ensure acquisition personnel apply the clause prescription correctly in covered procurements and support consistent implementation of Title III-related industrial base policy.
Practical Implications
This section is a clause-prescription rule, so the main day-to-day task is simply making sure the clause is included whenever the contract type and scope trigger it.
A common pitfall is overlooking the requirement because the section is brief; contracting officers should verify whether the procurement is for a major system or an item of supply before award.
Contractors should not treat the clause as boilerplate if Title III-developed resources are involved, because it may carry specific obligations affecting production, use, or disposition of those resources.
Failure to include a required clause can create contract administration problems later, especially if the Government needs to enforce rights related to industrial resources or defense production support.
Because the rule is tied to industrial base policy, acquisition teams should coordinate early when a procurement may involve critical materials, capacity, or facilities developed with Government assistance.
Official Regulatory Text
Insert the clause at 52.234-1 , Industrial Resources Developed under TitleIII, Defense Production Act, in all contracts for major systems and items of supply.