In plain English
FAR 52.203-3, Gratuities, is a contract clause prescribed at FAR 3.202, most recently dated Apr 1984. The complete official text is reproduced below, verbatim, from GSA's published FAR source files.
Its text contains no sentence requiring insertion into subcontracts; see the flowdown section below for what that does and does not mean.
Does it flow down to subcontracts?
No flowdown mandate found in the clause text
We scanned the full clause text and found no sentence directing the contractor to insert this clause into subcontracts. That is a statement about the text, not legal advice: a prime contractor may still flow terms down contractually, an agency supplement (DFARS, VAAR, …) may add requirements, and clauses listed below (if any) may order this clause into subcontracts from the outside.
Where it's prescribed
As prescribed in 3.202 , insert the following clause:
Prescribing reference: FAR 3.202.
The official text, verbatim
As prescribed in 3.202 , insert the following clause:
Gratuities (Apr 1984)
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(a) The right of the Contractor to proceed may be terminated by written notice if, after notice and hearing, the agency head or a designee determines that the Contractor, its agent, or another representative-
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(1) Offered or gave a gratuity (e.g., an entertainment or gift) to an officer, official, or employee of the Government; and
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(2) Intended, by the gratuity, to obtain a contract or favorable treatment under a contract.
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(b) The facts supporting this determination may be reviewed by any court having lawful jurisdiction.
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(c) If this contract is terminated under paragraph (a) of this clause, the Government is entitled-
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(1) To pursue the same remedies as in a breach of the contract; and
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(2) In addition to any other damages provided by law, to exemplary damages of not less than 3 nor more than 10 times the cost incurred by the Contractor in giving gratuities to the person concerned, as determined by the agency head or a designee. (This paragraph (c)(2) is applicable only if this contract uses money appropriated to the Department of Defense.)
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(d) The rights and remedies of the Government provided in this clause shall not be exclusive and are in addition to any other rights and remedies provided by law or under this contract.
(End of clause)