This is an issue which I was concerned with - some universities would say
OVERLY CONCERNED - in my former life as an Administrative Contracting
Officer for the Office of Naval Research when I performed Contractor
Procurement System Reviews.  NO, you need not automatically flow down ALL of
the clauses included in your prime contract. Take the time to ascertain which
are REQUIRED flow down clauses and which are not required flow down
clauses.  Secondly, as in your example, the clauses applicable to the type
of organization that your are subcontracting with would be
substituted/modified for the clauses in the prime agreement.  For example,
the Allowable Cost and Payment Clause would be modified to reflect the
cost princilpes A-21 instead of A-122. Finally, if your subcontract does
not required certain types of clauses, they are not flowed down even if
they were required flow down clauses in certain circumstances.  For
example, if your subcontract is not for R&D effort, no patent clause would
be required.

Speaking of patent clauses,  the government always receives a royalty
free, paid up non exclusive license for federal purposes and the
subcontractor (inventing organization) always receives right of first
refusal to title for any subject inventions.  The prime would receive
nothing subject to negotiated positions ((See FAR 27.304-4)).  This last
point is a good example where just substituting "government" for
"contractor" and "subcontractor" for "contractor" does not always work.

Good luck as you tread this minefield!!!!

Norm Meeks
GLCC 8401 Lakeview Parkway, Suite 200
Kenosha, WI 53142

414-947-8902
xxxxxx@freenet.columbus.oh.us  /  xxxxxx@aol.cpm

On Mon, 31 Jul 1995, Doug Wilkerson, Ph.D. wrote:

>       A for-profit entity receives a federal CONTRACT with all of the
> appropriate FAR clauses for a for-profit entity.  The for-profit then
> issues a subcontract to an educational institution (in this case a state
> supported institution, if that matters) to do a part of the work. In the
> subcontract the for-profit "flows down" to the educational
> institution all of the FAR clauses that were in the Prime.  Is the
> educational institution responsible for compliance with ALL the FAR
> clauses that come to it in the subcontract, or only those applicable to
> educational institutions?  How much flexibility does the prime recipient
> have to change the requirements that go out to the subcontractor?  For
> example, substituting a patent clause that would be appropriate for an
> educational institution, allowing the institution, rather than the
> government to have title to inventions or deleting or modifying the
> requirement for indemnification of the government.
>
> Doug Wilkerson, Ph.D.           VOICE:  (419) 381-4252
> Assoc. V.P. for Research        FAX:    (419) 381-4262
> Professor of Pharmacology       e-mail: xxxxxx@GEMINI.MCO.EDU
> Medical College of Ohio
> 3000 Arlington Ave.
> Toledo, OH 43614
>
>