You won a federal prime contract. Good. Now you are buying parts, services, and labor from other firms to deliver it. Each of those deals is a subcontract or a purchase order. And some of them carry a duty most companies miss.

That duty is called flow-down. As a covered prime, you do not just follow the veteran equal opportunity rules yourself. You have to pass them down to certain subcontracts. The rule lives inside the equal opportunity clause itself. Skip it, and the gap shows up in an audit. It also leaves your subs out of compliance without them knowing why.

This guide covers the flow-down side of VEVRAA only. Not who is covered overall. Not how to set a benchmark. Just one question. Which veteran clauses must you pass on, and at what dollar size? If you want the broad obligations first, start with our VEVRAA compliance overview for federal contractors. Then come back here for the subcontract piece.

What does VEVRAA flow-down actually mean?

VEVRAA is the Vietnam Era Veterans' Readjustment Assistance Act. It sits in federal law at 38 U.S.C. 4212. It tells covered federal contractors to take affirmative action to employ and advance protected veterans.

Flow-down is the part that travels. Say a covered prime signs a subcontract at or above the trigger size. It must include the veteran equal opportunity clause in that deal. The sub then carries its own duty. The sub may also have to flow it down again to its own vendors.

Think of it as a chain. The duty starts at the federal contract. It moves down through each link that meets the dollar bar. One missing link breaks the chain. And the prime that failed to pass the clause on is the one who answers for it.

The rule does not live in a separate section. It sits right inside the equal opportunity clause at 41 CFR 60-300.5. Paragraph 11 of that clause is the key line. It says the contractor will include the clause in every covered subcontract or purchase order. So when you accept the clause, you also accept the duty to pass it on.

Which clause are we talking about?

The clause is the VEVRAA equal opportunity clause. It is the block of contract language that binds you to the veteran rules. It covers nondiscrimination against protected veterans. It covers affirmative action. And it covers the duty to flow itself down.

Protected veterans fall into four groups. Knowing them helps you read why the clause matters to a sub.

You do not need to memorize the four groups to flow the clause down. You just include the clause. The clause carries those definitions with it. The sub inherits the same rules you have.

What even counts as a subcontract here?

This part trips people up. The flow-down rule reaches more than the deals you label as subcontracts. It also reaches purchase orders. So a routine buy can pull a vendor into coverage. It just has to be big enough and tied to the federal work.

Under VEVRAA, a subcontract is an agreement to do part of the federal work. It can also be a deal to supply goods or services that go into it. The OFCCP rules at 41 CFR 60-300.2 define the terms. The label on the document does not control. What controls is what the deal does and how big it is.

A few quick examples make the line clearer.

When you are not sure, treat the deal as covered or ask counsel. The cost of flowing the clause down on a borderline deal is almost nothing. The cost of missing one that should have carried it is a finding. So err toward including it.

What dollar amount triggers flow-down?

Here is where most teams get tripped up. There is a base number in the law. And there is a different number that actually applies right now.

The statute and the CFR clause text use $100,000 as the base figure. But the Federal Acquisition Regulatory Council adjusts that number for inflation. As of October 1, 2025, the operative VEVRAA coverage threshold is $200,000. That adjustment shows up in the Federal Acquisition Regulation. So a subcontract at or above $200,000 triggers the flow-down duty under the current adjusted figure.

Do not cite the $100,000 in the older clause text as the live number. It reads $100,000 because the inflation adjustment sits outside that text. The working number is $200,000 right now. Confirm the current figure on the OFCCP jurisdiction page before you set your own cutoff.

One more note. The threshold looks at the size of each subcontract or purchase order on its own. It is not your total program size. A $5 million prime contract can include subcontracts that fall both above and below the bar. You flow the clause down to the ones at or above. You leave the small ones alone.

Who flows what to whom?

The duty moves in one direction. Down. Let me lay out the path so it is clear who acts at each step.

So the answer to who flows what is simple. Each covered firm passes the same equal opportunity clause to the next covered firm below it. You are responsible for your own subcontracts. Your sub is responsible for theirs. The clause is the thing that travels at every step.

How do you put the clause in a subcontract?

You have two ways to include it. Both are accepted. Pick the one that fits how your contracts team works.

The rule allows incorporation by reference. So you do not have to bury a long clause in every purchase order. You can name it and cite where it lives. That said, write the reference clearly. A vague nod to federal rules is not enough. State the clause and the regulation by number.

One trap to avoid. Do not assume your standard commercial terms cover this. A generic equal opportunity line in your boilerplate is not the VEVRAA clause. The clause has specific content the law expects. Use the right language or cite the right regulation.

What happens if you skip the flow-down?

The risk does not land on the sub first. It lands on you, the prime. You held the duty to pass the clause on. If you did not, your compliance file has a hole in it.

OFCCP runs the audits on the veteran rules. When a contractor gets reviewed, the reviewer checks the covered subcontracts. Did the equal opportunity clause make it in? A missing clause is a finding. It signals that the chain broke at your link.

There is a second cost that is easy to miss. Your subs may not know they were covered. This hits hardest on cleared work, where many subs staff cleared veteran talent for GovCon roles. If you never flowed the clause down, they never built their own veteran program. So when they get reviewed, they are exposed too. And the relationship sours when they trace the gap back to your paperwork.

Did the 2025 executive order changes end this duty?

This question comes up a lot right now, so let me be careful with it. In 2025, an executive order rescinded Executive Order 11246. That older order covered race and gender affirmative action for contractors. Some teams heard that and assumed the whole contractor program ended.

It did not, at least not on the veteran side. VEVRAA is statutory. It sits in federal law at 38 U.S.C. 4212. An executive order cannot repeal a statute. So the veteran equal opportunity clause and the flow-down duty remain in force in 2026.

Here is the honest part. There is active rulemaking around the contractor compliance world right now. Agencies have proposed changes. Some would wind down parts of the program. So do not assume VEVRAA is dead. And do not assume nothing changed. Confirm the current OFCCP and DOL guidance, and check with counsel, before you change your subcontract language.

How do you build flow-down into your process?

You do not want to make this a judgment call on every deal. Bake it into the workflow so it happens by default. Here is a simple checklist your contracts and procurement teams can run.

Two other guides pair well here. Our walkthrough on how to build OFCCP good-faith-effort outreach records covers the documentation side. Are you a sub looking up the chain? See how to hire cleared veterans for GovCon as a subcontractor.

How does flow-down connect to actually hiring veterans?

Passing the clause down is the paperwork. Meeting the veteran goal behind it is the work. Once a sub is covered, it has to take real steps to recruit and advance protected veterans. The clause is the trigger. Hiring is the point.

This is where a lot of covered firms stall. They flow the clause down. Then their sub asks a fair question. Where do we even find qualified veteran candidates? The compliance file says recruit veterans. It does not hand you a pipeline.

That is the gap we built BMR to close on the employer side. The platform adds over 1,000 new veteran profiles every month. It is built on more than 60,000 resumes built with veterans translating their service into civilian terms. So when your subcontract chain needs veteran talent to back up the clause, the supply is there.

Want to see who is in the pool for your roles? You can reach out about BMR's veteran talent pool. A covered prime and its subs can pull from the same source. That keeps the whole chain pointed at the same goal.

One last word on getting this right. The OFCCP benchmark behind all of this is a goal, not a quota. Want the tracking side? Read our guide on the OFCCP veteran hiring benchmark and what contractors track. Missing it is not a violation on its own. Findings come from not setting a benchmark, not tracking your numbers, or not acting on a shortfall. Flow the clause down, track what you did, and act on the data. That is the whole game.