Federal Subcontract Agreement Checklist: What to Review Before Signing

A federal subcontract can look straightforward and still contain obligations that are easy to miss. The risk is usually not one dramatic clause. It is the combination of payment terms, incorporated documents, federal flowdowns, notice deadlines, scope language, and prime-drafted commercial terms.

This checklist is meant for the period before you sign, price the work, or commit key resources. It is not a substitute for legal advice. It is a way to organize the questions that deserve an answer before the agreement becomes binding.

1. Confirm the exact scope and workshare

• Is the statement of work attached and complete?
• Are deliverables, quantities, milestones, acceptance standards, and exclusions clear?
• If this began as a teaming arrangement, does the subcontract match the workshare discussed before award?
• Does the agreement allow the prime to reduce, reassign, or add work without a defined process?

If the scope is still vague, read our guide to teaming agreement workshare and pre-award scope.

2. Read the payment language, not just the payment schedule

• What triggers the prime's obligation to pay?
• Does the contract use pay-when-paid, pay-if-paid, condition-precedent, retainage, setoff, or backcharge language?
• Is there a clear outside payment date?
• What notice must the prime give before withholding money?

See our existing guide to pay-when-paid and pay-if-paid terms for a deeper review of contingent payment language.

3. Identify every document incorporated by reference

Do not review only the signed subcontract form. Check for references to the prime contract, solicitation, statement of work, specifications, drawings, wage determinations, cybersecurity attachments, quality requirements, flowdown exhibits, proposal instructions, and later-issued policies.

If an incorporated document was not provided, ask for it before signing. Our guide on incorporation by reference explains why the missing attachment matters.

4. Separate federal flowdowns from prime-drafted terms

A prime may have legitimate reasons to include FAR or DFARS clauses, but there is no single universal list that applies to every subcontract. Applicability can depend on the clause text, subcontract type, dollar value, scope, agency, information handled, and whether the subcontract is for commercial products or commercial services.

Start with our FAR flowdown guide, then compare any clause list against the actual prime contract and your scope.

5. Check change authority and notice deadlines

• Who can direct a change?
• Must notice be given within a fixed number of days?
• Can late notice waive time or money?
• Does the subcontract require you to continue performance while a dispute is unresolved?
• Do change orders contain broad release language?

Related guides: unauthorized change directions and change order releases.

6. Review termination and default language

Confirm the difference between termination for convenience and termination for default. Look for cure periods, immediate-termination rights, supplier commitments, demobilization costs, settlement deadlines, and any limits on what you can recover after a convenience termination.

Our termination for convenience guide covers the main pre-signing questions.

7. Check liability, indemnity, insurance, and delay risk

• Does indemnity extend beyond your own acts or scope?
• Is there a separate duty to defend?
• Do required insurance limits match your actual coverage?
• Can the prime pass through owner liquidated damages or delay costs without proving your responsibility?

See broad indemnification and liquidated damages and delay terms.

8. Identify labor, sourcing, cyber, audit, and data requirements

Federal work can bring requirements that are not part of a normal commercial subcontract. Depending on the project, review wage determinations, certified payroll, Buy American requirements, cybersecurity and CMMC obligations, audit and records clauses, certified cost or pricing data, technical data rights, and software rights.

The key is applicability. Do not assume every federal requirement applies, and do not assume it does not apply because the prime has not explained it clearly.

9. Check dispute resolution and order of precedence

• Where must disputes be brought?
• Is arbitration mandatory?
• Which state's law governs?
• If the subcontract conflicts with the prime contract, specifications, or exhibits, which document controls?