# Federal Contractors Assess FAR Flow-Down Exception

An October 14, 2026 legal analysis of FAR 52.222-90 interprets its subcontract flow-down exception to apply when either the place of delivery or the place of performance is outside the United States. Under that interpretation, goods manufactured entirely overseas may qualify even when shipped FOB destination to a U.S. location. The clause otherwise requires flow-down to subcontracts at any tier, including commercial-product and commercial-service subcontracts, and the analysis notes that mixed-location manufacturing, installation, testing, or services remain unresolved. Because the clause involves subcontractor-conduct reporting and potential False Claims Act, suspension, and debarment consequences, contractors’ location-based flow-down decisions carry compliance and enforcement significance.

- Contractors should assess delivery and performance locations separately and document the basis for applying or not applying the clause to each subcontract.
- Mixed-location work is not expressly resolved in the clause; contractors should account for that ambiguity when making and recording flow-down determinations.
- Prime contractors and subcontractors should factor the clause’s reporting obligations and potential enforcement consequences into subcontract administration and risk controls.

**Jurisdictions:** federal
**Topics:** Regulatory Compliance
**Published:** October 14, 2026

### Government Entities
- Federal Acquisition Regulatory Council (FAR Council)

### Sources
- [FAR 52.222-90 and the ‘Outside the United States’ Exception to the Subcontract Flow-Down Requirement - Ogletree](https://ogletree.com/insights-resources/blog-posts/far-52-222-90-and-the-outside-the-united-states-exception-to-the-subcontract-flow-down-requirement) - Ogletree
- [FAR 52.222-90 and the ‘Outside the United States’ Exception to the Subcontract Flow-Down Requirement | Ogletree, Deakins, Nash, Smoak & Stewart, P.C. - JDSupra](https://www.jdsupra.com/legalnews/far-52-222-90-and-the-outside-the-1627530) - JD Supra