Does this clause apply overseas? I know the DFARs says to put in all contracts over $500K, but considering small business does not apply overseas (i.e.) Japan is it actually applicable?
Yes, it is applicable. If you go back to the FAR you will see a "Note" at the beginning of Part 26, "Other SocioEconomic Programs". It says "This part has been created to facilitate promulgation of additional FAR and agency level socioeconomic coverage which properly falls under FAR Subchapter D - Socioeconomic Programs, but neither implements nor supplements existing FAR Parts 19,22 through 25." As you know, FAR 19 and DFARS 19 covers small business programs. This Indian Incentive Program has specifically been put in Part 26 ie. None of the FAR/DFARS Part 19 rules on small business apply. The FAR allows CIVILIAN agencies to apply the incentive clauses if in the opinion of the contracting officer, these subcontracting opportunities exist and funds are available. DOD does not allow this judgement or flexiblity. 252.226-7001 goes into all contracts over $500K.
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