DoD 5% incentive for the use of Indian owned businesses


JES is a federally recognized Indian owned business. This entitles DOD Prime and Sub contractors to a 5% rebate from the government. See below about how you can apply for this 5% rebate. There is 8M in the fund and in the past years only about 1.5M has been applied for. Primes and subs should take advantage of this incentive as it is under utilized.



Eligible Recipients:

Prime Contractors for the DoD contracts that use Federally Recognized Indian-Owned Businesses or enterprises as subcontractors

vThe Prime contractor must either:

ŘHave a contract that includes a subcontracting plan developed in accordance with 15 U.S.C. Sec 637(d) of the Small Business Act. or

ŘHave a contract that includes a subcontracting plan (DFARS 219.708) developed in accordance with “Test Program for Negotiation of Comprehensive Small Business Subcontracting Plans (DFARS 219.709 (CL)).”

This contract must also include FAR 52.226-1“Utilization of Indian Organizations and Indian-Owned Economic Enterprises.”

Commercial off the shelf (COTS) products are not included in this program.



Process: Prime Contractors:


uPrime Contractors submit requests for incentive payments to DoD Contracting Officers
vContractor’s request should contain:


vCite the use of FAR Clause 52.226-1 in DoD contract
vCopies of pertinent pages of subcontract
vCopies of subcontractors invoices
vTotal Payment and calculation of 5% rebate
vSubcontractors status – Indian-owned Economic Enterprise


Process Sub-Contractors:

For actions after 13 September 2001, sub-tier contractors who subcontract to an Indian-owned firm are eligible for the incentive payments by the Prime inserting DFARS Clause 252.226-7001 in the contract. This clause may be added at any time during the performance of the contract by the Prime.