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We are a prime contractor with a subcontractor who is registered in E-Verify but refuses to identify as a Federal Contractor (FC) on advice of its legal counsel. FAR 52.222-54(e) of our prime requires us to flow down the clause to our subs and we have specified in our subcontracts that subs must be registered as FC. Our sub's legal counsel argues that the "appropriately modified for identification of the parties" means it has a right to choose its own identity as relates to FC or not. We interpret it to mean substitute "[Our company]" for "Government" or "contract analyst" for "Contracting Officer", etc. (e) Subcontracts. The contractor shall include the requirements of this clause, including this paragraph (e) (appropriately modified for identification of the parties), in each subcontract that— After searching awhile for answers, I contacted DHS from the E-Verify website link to get an answer, but did not leave with any level of confidence in its help desk response. When I asked the help desk if there were a definition of FC on the E-Verify site (or anywhere) as FAR doesn't define, she told me to look in Webster's! Then said that we [prime] can't tell our subs how to register [identify] in E-Verify. I would appreciate knowing if your agencies require subs to register as FC and how you interpret the above red text. Please don't send me to Websters. Thank you.