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Which clauses must go into a contract paid with federal grant money?

Source last checked: 1 September 2026. Quoted from Appendix II to 2 CFR Part 200 as printed in the 1 January 2025 edition of the Code of Federal Regulations.

The short answer

Appendix II is one of the shortest pieces of 2 CFR Part 200 and one of the most often quoted. It does not explain procurement, it does not set policy, and it does not tell you how to run a competition. It lists what a contract has to say. Its opening sentence sets the frame:

In addition to other provisions required by the Federal agency or non-Federal entity, all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable.

Appendix II to Part 200, Contract Provisions for Non-Federal Entity Contracts Under Federal Awards, 1 January 2025 edition

Two words in that sentence carry the whole appendix. All contracts means the list is not limited to construction, or to large awards, or to any one agency. As applicable means the list is not a block you paste into every contract: each lettered clause has its own trigger, and most of the triggers are dollar values. Appendix II, opening paragraph, 2 CFR Part 200, 1 January 2025 edition, p. 126

The twelve clauses, and what switches each one on

The appendix carries its own amendment history: 78 FR 78608 of 26 December 2013, as amended at 79 FR 75888 of 19 December 2014 and 85 FR 49577 of 13 August 2020. Appendix II, amendment note, 2 CFR Part 200, 1 January 2025 edition, p. 128

The four thresholds that actually decide

Three of the four are stated as figures in the appendix itself: $2,000 for Davis-Bacon on prime construction contracts, $10,000 for the termination clause, and $100,000 twice over — once for the Contract Work Hours and Safety Standards Act and once for Byrd anti-lobbying. Those numbers sit in the regulation and do not move with inflation.

The fourth does move, and the appendix deliberately does not print it. Clause (A) applies to contracts for more than the simplified acquisition threshold, which the appendix defines as the inflation-adjusted amount determined by the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council as authorised by 41 U.S.C. 1908. That is a pointer to a number maintained elsewhere, and it is the reason a summary of Appendix II that quotes a dollar figure for the threshold is telling you something the appendix does not say. Appendix II, clause (A), 2 CFR Part 200, 1 January 2025 edition, p. 127

The three labour clauses, and why they are not one clause

Clauses (C), (D) and (E) are often collapsed into "the labour clauses", and they are not interchangeable. (C) turns on contract type: a contract that meets the definition of a federally assisted construction contract in 41 CFR 60-1.3 must include the equal opportunity clause at 41 CFR 60-1.4(b), in accordance with Executive Order 11246 as amended by Executive Order 11375, except as otherwise provided under 41 CFR Part 60. Appendix II, clause (C), 2 CFR Part 200, 1 January 2025 edition, p. 127

(D) turns on two conditions at once, and both must hold: the contract must be a prime construction contract in excess of $2,000, and Davis-Bacon must be required by the federal program legislation behind the award. Where it applies, contractors must pay laborers and mechanics at not less than the prevailing wages in a wage determination made by the Secretary of Labor, and must pay wages not less than once a week. The non-Federal entity has three duties of its own: put a copy of the current prevailing wage determination in each solicitation, condition the decision to award on acceptance of that determination, and report all suspected or reported violations to the Federal awarding agency. Appendix II, clause (D), 2 CFR Part 200, 1 January 2025 edition, p. 127

(E) turns on value and on who does the work: contracts in excess of $100,000 that involve the employment of mechanics or labourers must provide for compliance with 40 U.S.C. 3702 and 3704 as supplemented by Department of Labor regulations at 29 CFR Part 5. Under 40 U.S.C. 3702, wages are computed on a standard work week of forty hours, and work beyond it is permissible only on the terms the Act allows. The appendix also carves the clause out: its requirements do not apply to purchases of supplies or materials or articles ordinarily available on the open market, or to contracts for transportation or transmission of intelligence. Appendix II, clause (E), 2 CFR Part 200, 1 January 2025 edition, p. 127

Inventions, and the narrow gate of clause (F)

Clause (F) is the one most often included when it does not apply and omitted when it does. It bites only where the federal award meets the definition of "funding agreement" under 37 CFR 401.2(a) and the recipient or subrecipient wishes to enter into a contract with a small business firm or nonprofit organisation regarding the substitution of parties, assignment or performance of experimental, developmental or research work under that funding agreement. Where both hold, the recipient must comply with the requirements of 37 CFR Part 401. A supply contract under a research award does not trigger it; a research subcontract under a non-research award does not either. Appendix II, clause (F), 2 CFR Part 200, 1 January 2025 edition, p. 127

Clause (G): what this page does not tell you

Clause (G) is the environmental compliance clause. The text this page is written from breaks off inside it and carries only its closing words, a reference to the Office of the Environmental Protection Agency. We do not have its full wording, and we are not going to paraphrase a clause we cannot quote.

That is a deliberate gap and not an oversight. Read (G) at the source. It is the one clause on this page for which a summary — including this one — is not a substitute. Appendix II, clause (G), 2 CFR Part 200, 1 January 2025 edition, p. 128

Debarment and lobbying: the two that apply almost everywhere

Clause (H) has no dollar trigger. A contract award, as defined at 2 CFR 180.220, must not be made to parties listed on the governmentwide exclusions in the System for Award Management, in accordance with the OMB guidelines at 2 CFR 180 that implement Executive Orders 12549 and 12689. SAM Exclusions contains parties debarred, suspended or otherwise excluded by agencies, as well as parties declared ineligible under statutory or regulatory authority other than Executive Order 12549. Section 200.214 of the same part puts the same obligation on recipients and subrecipients directly. Appendix II, clause (H), 2 CFR Part 200, 1 January 2025 edition, p. 128

Clause (I) has one: contractors that apply or bid for an award exceeding $100,000 must file the required certification under 31 U.S.C. 1352. Each tier certifies to the tier above that it has not used and will not use federal appropriated funds to pay any person or organisation for influencing or attempting to influence an officer or employee of any agency, a member of Congress, an officer or employee of Congress, or an employee of a member of Congress in connection with obtaining any federal contract, grant or other covered award. Each tier must also disclose any lobbying with non-federal funds connected with obtaining any federal award, and those disclosures are forwarded from tier to tier. Appendix II, clause (I), 2 CFR Part 200, 1 January 2025 edition, p. 128

The three pointers, and what they actually require

(J), (K) and (L) are the shortest lines in the appendix and the longest reading behind it. Each is a bare cross-reference, so the wording that has to reach your contract lives in the section it names.

(J), 2 CFR 200.323 — recovered materials. A recipient or subrecipient that is a State agency or an agency of a political subdivision of a State, and its contractors, must comply with section 6002 of the Solid Waste Disposal Act as amended by the Resource Conservation and Recovery Act: procuring in a manner that maximises energy and resource recovery, and establishing an affirmative procurement program for the recovered materials identified in the EPA guidelines. Beyond that requirement the section turns to encouragement — recipients should, to the greatest extent practicable and consistent with law, buy products that can be reused, refurbished or recycled, contain recycled content, are biobased, or are energy and water efficient. 2 CFR 200.323, 2 CFR Part 200, 1 January 2025 edition, p. 51

(K), 2 CFR 200.216 — covered telecommunications. Recipients and subrecipients are prohibited from obligating or expending loan or grant funds to procure or obtain covered telecommunications equipment or services, to extend or renew a contract to do so, or to enter into such a contract. What counts as covered is defined in section 889 of Public Law 115-232. Section 200.101 of the same part records that 200.216 applies to loans as well as grants, which is unusual within Part 200 and worth noticing. 2 CFR 200.216, 2 CFR Part 200, 1 January 2025 edition, p. 31

(L), 2 CFR 200.322 — domestic preferences. The recipient or subrecipient should, to the greatest extent practicable and consistent with law, prefer goods, products or materials produced in the United States, and the requirements of that section must be included in all subawards, contracts and purchase orders under federal awards. The section defines its own terms: "produced in the United States" means, for iron and steel products, that all manufacturing processes from initial melting through the application of coatings occurred in the United States; "manufactured products" covers items and construction materials composed in whole or in part of non-ferrous metals such as aluminium, plastics and polymer-based products, aggregates such as concrete, glass including optical fibre, and lumber. For infrastructure projects, federal agencies must implement the Buy America preferences at 2 CFR Part 184. 2 CFR 200.322, 2 CFR Part 200, 1 January 2025 edition, p. 51

Who Appendix II binds, and who applies it differently

The appendix speaks to the non-Federal entity making contracts under a federal award. Part 200 adds a wrinkle for two categories of recipient: a State or Indian Tribe conducting procurement under a federal award follows the same policies and procedures it uses for procurements with non-federal funds, and only if such policies and procedures do not exist does it follow the procurement standards at 200.318 through 200.327. But four sections apply regardless — 200.321, 200.322, 200.323 and 200.327 — and two of those four are the sections behind clauses (L) and (J). 2 CFR 200.317, 2 CFR Part 200, 1 January 2025 edition, p. 45

What Appendix II does not decide

It does not tell you which procurement method to use, what counts as adequate competition, or when a noncompetitive award is allowed; those live at 200.318 through 200.327. It does not set the simplified acquisition threshold or the micro-purchase threshold. It does not say whether a cost is allowable once the contract is running — that is subpart E. And it does not replace the terms an agency adds on its own: the opening words are "in addition to other provisions required by the Federal agency or non-Federal entity", which means this list is a floor and never a ceiling. Appendix II, opening paragraph, 2 CFR Part 200, 1 January 2025 edition, p. 126

Questions we are asked about Appendix II

Which clauses apply to a contract of $5,000 under a federal grant?

On the face of Appendix II, few. Clause (B) on termination applies to contracts in excess of $10,000; clause (D) on Davis-Bacon to prime construction contracts in excess of $2,000, and only when required by federal program legislation; clause (E) on the Contract Work Hours and Safety Standards Act to contracts in excess of $100,000 that involve mechanics or labourers; and clause (I) on Byrd anti-lobbying to contractors bidding for an award exceeding $100,000. A $5,000 construction contract can still pick up Davis-Bacon; a $5,000 supply contract normally picks up none of the four.

What is the dollar figure for the simplified acquisition threshold in clause (A)?

Appendix II does not state one. It defines the threshold as the inflation-adjusted amount determined by the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council as authorised by 41 U.S.C. 1908. Any page that gives you a figure for it without saying where the figure came from and when it was checked is worth distrusting.

Do clauses (J), (K) and (L) have text of their own?

No. They are pointers. (J) points to 2 CFR 200.323 on procurement of recovered materials, (K) to 200.216 on the prohibition of certain telecommunications and video surveillance equipment or services, and (L) to 200.322 on domestic preferences for procurements. The obligation is real, but the wording you have to put in the contract lives in those sections, not in Appendix II.

Does Appendix II apply to a subaward, or only to a contract?

Appendix II is about contracts. Its opening sentence says that all contracts made by the non-Federal entity under the Federal award must contain provisions covering the listed items, as applicable. Two of the cross-referenced sections reach further: 200.322 says its requirements must be included in all subawards, contracts and purchase orders under federal awards.

Which clause covers environmental compliance?

Clause (G). The corpus this page is written from breaks off inside that clause and carries only its closing reference to the Environmental Protection Agency, so this page does not reproduce its wording. Read (G) at the source rather than from any summary, this one included.

Who decides whether a clause is "as applicable"?

The recipient, and it is a judgement made per contract rather than once for the whole award. The opening sentence of Appendix II frames the whole list with the words "as applicable", and each lettered clause then carries its own trigger: a dollar value, a contract type such as federally assisted construction, or a statutory condition such as "when required by Federal program legislation" in Davis-Bacon.

This guide describes 2 CFR Part 200 as revised in 2024 (89 FR 30046, effective 1 October 2024), which is the text in force today. OMB published a proposed rewrite on 29 May 2026 (91 FR 32198, docket OMB-2026-0034); the comment period closed on 13 July 2026 and the target effective date is 1 October 2026. The proposal has no legal effect until it is finalised. Checked against the source on 1 September 2026. Clause letters and section numbers are given as they appear in the Code of Federal Regulations; this page quotes the regulation and does not give legal advice. For what Part 200 covers as a whole and which entities it binds, see our guide to 2 CFR Part 200 and who it binds — that page explains the rules, this one carries the text of the contract clauses.