Overview
This section outlines the discretionary authority and specific conditions under which civilian agency contracting officers include FAR clause 52.226-1 to encourage the use of Indian organizations and Indian-owned economic enterprises.
Key Rules
- Agency Applicability: The provision is specifically directed at contracting officers within civilian agencies.
- Subcontracting Assessment: The clause is inserted if the contracting officer determines that viable subcontracting opportunities exist for Indian-owned entities.
- Funding Requirement: Use of the clause is contingent upon the availability of funds to cover potential incentive payments (typically 5% of the amount paid to the Indian-owned subcontractor) as specified in the clause at 52.226-1.
- Reference Clause: The specific regulatory tool used is FAR 52.226-1, Utilization of Indian Organizations and Indian-Owned Economic Enterprises.
Practical Implications
- Contractors have a financial incentive to source Indian-owned businesses, as the clause allows them to request an additional payment equal to 5% of the subcontract value.
- Contracting officers must ensure "bonus" funding is specifically budgeted and available before including this clause, as it creates a potential additional cost to the government beyond the base contract price.