FAR 9.108-3—Representation by the offeror.
Plain-English Summary
FAR 9.108-3 addresses the offeror’s required representation regarding inverted domestic corporations and subsidiaries of inverted domestic corporations, and the contracting officer’s ability to rely on that representation. In practice, this section is a gatekeeping rule for award eligibility: an offeror must affirm that it is not an inverted domestic corporation and is not a subsidiary of one, or it cannot receive award unless a waiver is granted under FAR 9.108-4. The section also tells contracting officers when they may accept the offeror’s statement at face value and when they must question it. Its purpose is to prevent the Government from awarding contracts to entities that fall within the inverted domestic corporation prohibition while still allowing efficient procurement processing when no red flags exist. For contractors, this means the representation must be accurate and supportable; for contracting officers, it means the representation is generally sufficient unless there is a reason to doubt it.
Key Rules
Offeror must make the representation
To be eligible for award, the offeror must represent that it is neither an inverted domestic corporation nor a subsidiary of an inverted domestic corporation. This is an affirmative eligibility requirement, not merely a disclosure item.
Failure bars award absent waiver
If an offeror cannot make the required representation, it is ineligible for contract award unless the prohibition is waived under FAR 9.108-4. The contracting officer cannot simply ignore the issue and proceed with award.
Contracting officer may rely on the representation
The contracting officer may accept the offeror’s representation as sufficient evidence of compliance. The rule is designed to avoid unnecessary verification burdens in the ordinary case.
Reason to question triggers further scrutiny
If the contracting officer has reason to question the representation, reliance is no longer automatic. The contracting officer must investigate or otherwise address the concern before award.
Responsibilities
Offeror
Must represent that it is not an inverted domestic corporation and not a subsidiary of one in order to remain eligible for award. The offeror is responsible for ensuring the representation is truthful and for understanding that an inability to make it can disqualify the offer unless a waiver applies.
Contracting Officer
Must obtain and consider the offeror’s representation as part of award eligibility. The contracting officer may rely on the representation unless there is reason to question it, in which case the contracting officer must take appropriate follow-up action before award.
Agency
Must apply the prohibition consistently and ensure waivers, if any, are handled under FAR 9.108-4. The agency must support contracting officers in resolving questionable representations and maintaining compliance with the award restriction.
Practical Implications
Offerors should verify corporate structure before certifying, because an inaccurate representation can make them ineligible for award and create serious compliance risk.
Contracting officers generally do not need to independently investigate every offeror, but they should watch for ownership, merger, or corporate-structure indicators that suggest the representation may be unreliable.
A questionable representation should be treated as a procurement issue before award, not after award, because the rule is tied directly to eligibility.
This section works together with the waiver process in FAR 9.108-4, so a contractor that cannot make the representation should not assume award is impossible, but it must pursue the proper waiver path.
Common pitfalls include relying on outdated corporate information, misunderstanding subsidiary relationships, and assuming that a representation alone cures known facts that suggest ineligibility.
Official Regulatory Text
(a) In order to be eligible for contract award, an offeror must represent that it is neither an inverted domestic corporation, nor a subsidiary of an inverted domestic corporation. Any offeror that cannot so represent is ineligible for award of a contract, unless waived in accordance with the procedures at 9.108-4 . (b) The contracting officer may rely on an offeror’s representation that it is not an inverted domestic corporation unless the contracting officer has reason to question the representation.