FAR 44.204—Contract clauses.
Plain-English Summary
FAR 44.204 tells contracting officers which subcontract-related clauses must or may be included in solicitations and contracts, and in what situations. It covers the mandatory use of the Subcontracts clause at 52.244-2, including when to use Alternate I for certain civilian agency cost-reimbursement contracts, and identifies specific exceptions where that clause is not required. It also addresses the optional use of 52.244-4 for architect-engineer contracts and the mandatory use of 52.244-5, Competition in Subcontracting, in negotiated procurements expected to exceed the simplified acquisition threshold unless stated exceptions apply. In practice, this section is about controlling subcontracting risk, preserving government visibility into subcontracting decisions, and promoting competition and oversight where the Government has a strong interest in how prime contractors select and manage subcontractors.
Key Rules
Insert 52.244-2 When Required
The contracting officer must include the Subcontracts clause at 52.244-2 in solicitations and contracts for specified contract types: cost-reimbursement, certain letter contracts above the simplified acquisition threshold, fixed-price contracts above the simplified acquisition threshold with anticipated unpriced actions, and time-and-materials or labor-hour contracts above the simplified acquisition threshold.
Use Alternate I for Civilian Cost-Reimbursement
If a cost-reimbursement contract is contemplated, civilian agencies other than the Coast Guard and NASA must use 52.244-2 with Alternate I. This means the clause must be tailored to the agency context when the contract type triggers the clause.
Know the Clause Exceptions
The Subcontracts clause is not required for fixed-price architect-engineer contracts or for contracts for mortuary services, refuse services, or shipment and storage of personal property when an agency-prescribed clause on approval of subcontractors’ facilities is required instead.
Optional A-E Subcontractor Clause
For architect-engineer contracts, the contracting officer may insert 52.244-4, Subcontractors and Outside Associates and Consultants (Architect-Engineer Services). The rule is permissive, not mandatory, so the contracting officer uses judgment based on the procurement’s needs.
Competition in Subcontracting Clause Required in Negotiated Procurements
When contracting by negotiation and the expected contract amount exceeds the simplified acquisition threshold, the contracting officer must insert 52.244-5, Competition in Subcontracting, unless an exception applies.
Exceptions to 52.244-5
The Competition in Subcontracting clause is not required when a firm-fixed-price contract is contemplated and award will be based on adequate price competition or prices set by law or regulation, or when a time-and-materials, labor-hour, or architect-engineering contract is contemplated.
Responsibilities
Contracting Officer
Determine whether the procurement triggers mandatory subcontracting clauses, select the correct clause version or alternate, and document any applicable exception. The contracting officer must also decide whether to include the optional architect-engineer subcontractor clause based on the needs of the acquisition.
Agency
Use agency-prescribed clauses where the regulation directs them, such as approval of subcontractors’ facilities clauses for certain service and property-handling contracts. Civilian agencies other than the Coast Guard and NASA must ensure the correct alternate is used for cost-reimbursement contracts.
Prime Contractor
Comply with the subcontracting requirements imposed by the inserted clauses, including any obligations related to subcontract management, competition, approvals, or reporting that flow from 52.244-2, 52.244-4, or 52.244-5.
Subcontractors / Consultants
Follow any approval, qualification, or competition-related requirements that the prime contract clause passes down to them, especially in architect-engineer and other subcontract-sensitive procurements.
Practical Implications
This section is a clause-selection rule, so the main day-to-day task is getting the solicitation and contract language right before award. Missing a required clause can create compliance problems, weaken subcontract oversight, or require post-award corrective action.
The biggest pitfall is assuming all contracts use the same subcontracting language. The required clause depends on contract type, dollar threshold, agency type, and whether unpriced actions are expected.
For cost-reimbursement contracts, the alternate version matters. Civilian agencies must be careful not to use the base clause when Alternate I is required.
For negotiated procurements above the simplified acquisition threshold, contracting officers should check whether 52.244-5 is required and whether one of the listed exceptions applies. A common mistake is overlooking that time-and-materials, labor-hour, and architect-engineering contracts are excluded from that clause requirement.
Contractors should read these clauses carefully because they can affect subcontract approval processes, competition expectations, and the level of government oversight over subcontracting decisions.
Official Regulatory Text
(a) (1) The contracting officer shall insert the clause at 52.244-2 , Subcontracts, in solicitations and contracts when contemplating- (i) A cost-reimbursement contract; (ii) A letter contract that exceeds the simplified acquisition threshold; (iii) A fixed-price contract that exceeds the simplified acquisition threshold under which unpriced contract actions (including unpriced modifications or unpriced delivery orders) are anticipated; (iv) A time-and-materials contract that exceeds the simplified acquisition threshold; or (v) A labor-hour contract that exceeds the simplified acquisition threshold. (2) If a cost-reimbursement contract is contemplated, for civilian agencies other than the Coast Guard and the National Aeronautics and Space Administration, the contracting officer shall use the clause with its Alternate I. (3) Use of this clause is not required in- (i) Fixed-price architect-engineer contracts; or (ii) Contracts for mortuary services, refuse services, or shipment and storage of personal property, when an agency-prescribed clause on approval of subcontractors’ facilities is required. (b) The contracting officer may insert the clause at 52.244-4 , Subcontractors and Outside Associates and Consultants (Architect-Engineer Services), in architect-engineer contracts. (c) The contracting officer shall, when contracting by negotiation, insert the clause at 52.244-5 , Competition in Subcontracting, in solicitations and contracts when the contract amount is expected to exceed the simplified acquisition threshold, unless- (1) A firm-fixed-price contract, awarded on the basis of adequate price competition or whose prices are set by law or regulation, is contemplated; or (2) A time-and-materials, labor-hour, or architect-engineer contract is contemplated.