Managing FAR and DFAR Flow Downs

In this episode of Sourced by Cofactr, Ed tackles one of the most complex and often misunderstood challenges in government contracting: managing Federal Acquisition Regulation (FAR) and Defense Federal Acquisition Regulation Supplement (DFARS) flow-down clauses. Winning a major defense contract is cause for celebration, but it also introduces a web of compliance obligations that can extend throughout the supply chain. Through relatable analogies and real-world examples, Ed explains why passing government requirements to suppliers isn't as simple as attaching a lengthy legal document to every purchase order. He breaks down the critical differences between thresholds and triggers, revealing how even a $50 purchase order can carry significant compliance obligations depending on the information shared and the work being performed. From there, the episode explores a practical four-question framework for determining which FAR and DFARS clauses actually apply, which suppliers must comply, and how requirements should be incorporated into supplier agreements. Ed examines common mistakes, including the dangers of passing down every clause indiscriminately, assuming commercial off-the-shelf (COTS) purchases are automatically exempt, and relying on standardized contract attachments without evaluating individual supplier responsibilities. Along the way, he demonstrates how excessive flow-down requirements can create unnecessary legal exposure, inflate procurement costs, and damage supplier relationships. Ultimately, the episode makes the case that effective government contracting compliance isn't about passing down more requirements—it's about making accurate, defensible decisions, documenting the reasoning behind them, and building procurement processes that protect both compliance and supply chain efficiency.