DFARS Part 226: Other Socioeconomic Programs

In plain English

DFARS Part 226 covers several socioeconomic programs that affect DoD contracting, including Indian incentives, drug-free workforce requirements, base closure assistance, and a demonstration project for contractors employing severely disabled individuals. It matters because it tells you when certain clauses must be included, how set-asides and evaluations may be tailored, and what special opportunities or obligations exist.

Key rules

• Use the clause at 252.226-7001 for solicitations and contracts for supplies or services exceeding $500,000, including those for commercial products and commercial services. (226.104)
• DoD policy requires contractors to maintain a program for achieving a drug-free work force. (226.570-1)
• Use the Drug-Free Work Force clause at 252.226-7003 in solicitations and contracts that invoke access to classified information or when the contracting officer determines it is necessary for national security or health/safety reasons. (226.570-2)
• Do not use the Drug-Free Work Force clause for commercial products and commercial services, when performance is outside the United States and its outlying areas (unless the contracting officer determines inclusion is in the best interest of the Government), or when the value is at or below the simplified acquisition threshold. (226.570-2)
• For acquisitions supporting base closure or realignment, the contracting officer must determine whether offers can be expected from responsible businesses in the vicinity of the military installation before considering 8(a) or set-asides. (226.7103)
• If offers can be expected from vicinity businesses, consider 8(a) only if at least one eligible 8(a) contractor is located in the vicinity, and set aside for small business only if at least one expected offer is from a small business located in the vicinity. (226.7103)
• When planning contracts for services related to base closure activities, contracting officers shall consider including as a source selection factor the extent to which offerors commit to a plan to hire residents of the vicinity. (226.7104)
• Under the Demonstration Project for contractors employing severely disabled individuals, contracting officers may award contracts to eligible contractors, but must justify limiting competition and include the percentage of severely disabled individuals in the workforce as an evaluation factor. (226.7202)

Who does what

In practice

• If you bid on a DoD contract over $500,000 for supplies or services, expect the clause on utilization of Indian organizations and Native Hawaiian small business concerns to be included.
• If your contract involves access to classified information or national security/health/safety concerns, you may need to comply with the Drug-Free Work Force clause, which requires a drug-free workforce program.
• For base closure or realignment acquisitions, if your business is located in the vicinity, you may get priority consideration for 8(a) or small business set-asides, and offerors may be evaluated on plans to hire local residents.
• If you employ severely disabled individuals, you may qualify as an eligible contractor for the Demonstration Project, which allows DoD to award contracts to you and count them toward small disadvantaged business goals.

Common pitfalls

• Do not assume the Drug-Free Work Force clause applies to all contracts; it is prohibited for commercial products and commercial services, when performance is outside the United States and its outlying areas (unless the contracting officer determines inclusion is in the best interest of the Government), or when the value is at or below the simplified acquisition threshold.
• For base closure acquisitions, do not consider 8(a) or set-asides without first determining whether offers can be expected from businesses in the vicinity; if they can, special conditions apply.
• Under the Demonstration Project, do not limit competition to eligible contractors without a written justification and approval as required by FAR 6.302-5.
• Do not overlook the requirement to include the percentage of severely disabled individuals as an evaluation factor when using the Demonstration Project.

Written by AI from this part's codified text (2026-10-04); cited sections are checked against the part. A guide, not legal advice: the regulation text, the solicitation and your contract rule.