2 CFR § 3485.330 - What methods must I use to pass requirements down to participants at lower tiers with whom I intend to do business?
(a) Before entering into a covered transaction with a participant at the next lower tier, you must require that participant to -
(1) Comply with this subpart as a condition of participation in the transaction. You must do so using the method specified in paragraph (b) of this section; and
(2) Pass the requirement to comply with this subpart to each person with whom the participant enters into a covered transaction at the next lower tier.
(b) To communicate the requirements in this part to a participant, you must include a term or condition in the transaction that requires the participant's compliance with part 180, subpart C, of this title, as adopted at § 3485.12, and requires the participant to include a similar term or condition in lower-tier covered transactions.
(c) The failure of a participant to include a requirement to comply with Subpart C of 2 CFR part 180 in the agreement with a lower tier participant does not affect the lower tier participant's responsibilities under this part.