Overview
FAR 52.226 outlines various socio-economic programs and workplace safety requirements, including incentives for using Indian-owned enterprises, preferences for local businesses in disaster areas, and mandates for drug-free workplaces and food donation. This section serves to implement specific public policies and executive orders through federal contracting vehicles.
Key Rules
- Indian Incentive Program: Prime contractors can receive an incentive payment equal to 5% of the amount paid to a subcontracted Indian organization or Indian-owned economic enterprise (at least 51% Indian ownership).
- Disaster Area Preferences: Solicitations may be set aside for local firms residing or primarily doing business in a designated disaster area; to qualify, a firm must typically generate 50% of its revenue and employ 50% of its staff in that area.
- Subcontracting Limits in Disaster Areas: For local set-asides, contractors must perform a minimum percentage of work (e.g., 50% for services, 15–25% for construction) using their own employees or other local businesses in the disaster zone.
- Drug-Free Workplace: Contractors (except individuals) must publish a formal policy, establish an awareness program, and notify the Contracting Officer within 10 days of any employee's criminal drug conviction for workplace-related violations.
- Food Donation: Under the Federal Food Donation Act, contractors are encouraged to donate excess "apparently wholesome food," but they must assume all logistical costs, and such costs are strictly unallowable for reimbursement.
- Texting While Driving: Contractors are encouraged to adopt and enforce policies banning text messaging while driving for government business and must flow this requirement down to subcontracts exceeding the micro-purchase threshold.
Practical Implications
- Prime contractors can leverage the 5% Indian Incentive Program to reduce effective subcontracting costs, provided they verify subcontractor eligibility through the Bureau of Indian Affairs.
- Firms operating in disaster zones must maintain rigorous payroll and revenue records to prove local status and comply with strict "limitations on subcontracting" that prevent the pass-through of work to non-local entities.