In plain English
FAR 52.227-5, Waiver of Indemnity, is a contract clause prescribed at FAR 27.201-2(e), 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 27.201-2(e), insert the following clause:
Prescribing reference: FAR 27.201-2(e).
The official text, verbatim
As prescribed in 27.201-2(e), insert the following clause:
Waiver of Indemnity (Apr 1984)
Any provision or clause of this contract to the contrary notwithstanding, the Government hereby authorizes and consents to the use and manufacture, solely in performing this contract, of any invention covered by the United States patents identified below and waives indemnification by the Contractor with respect to such patents:
__________________________________________________ [Contracting Officer identify the patents by number or by other means if more appropriate.]
(End of clause)