Doing business with the United States federal government can be very lucrative, but it comes with a price. That price arrives in the form of reporting obligations, recordkeeping, outreach, and much more! Failure to comply with all applicable regulatory requirements can also have steep consequences, so it is very important for federal contractors to ensure they are doing all that is required.
Companies are sometimes unaware that they are a covered contractor or subcontractor and, thus, find themselves unprepared for an OFCCP compliance review. In an effort to better prepare for these types of situations, this article is intended to provide some practical information and resources about federal contractor thresholds and where to look for federal contracts.
Money Talks (and So Do Employee Numbers)!
Executive Order 11246 and the regulations applicable to individuals with disabilities and protected veterans apply to supply and service contractors and subcontractors, as well as construction contractors and subcontractors (although the obligations for construction entities are slightly different than supply and service).
Companies with federal contracts or subcontracts totaling more than $10,000 are subject to Executive Order 11246. Covered contractors with 50 or more employees and at least one government contract or subcontract of $50,000 or more must develop, maintain, and annually update a written affirmative action program (AAP) for minorities and females. More information can be found in OFCCP’s regulations at Title 41, Chapter 60, Parts 1 and 2.
Section 503 of the Rehabilitation Act of 1973 (Section 503) addresses obligations with respect to individuals with disabilities. Section 503 applies to companies with federal contracts or subcontracts in excess of $15,000. Covered contractors with 50 or more employees and at least one government contract or subcontract of $50,000 or more must develop, maintain, and annually update a written AAP for individuals with disabilities. More information about Section 503 can be found in OFCCP’s regulations at Title 41, Chapter 60, Part 741.
The Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA) addresses obligations with respect to veterans. VEVRAA applies to companies with a federal contract or subcontract of $150,000 or more. Covered contractors with 50 or more employees and at least one government contract or subcontract of $150,000 or more must develop, maintain, and annually update a written AAP for covered veterans. More information about VEVRAA can be found in OFCCP’s regulations at Title 41, Chapter 60, Part 300.
OFCCP created an infographic that assists contractors in navigating the different thresholds for coverage under Executive Order 11246, Section 503, and VEVRAA. The infographic was last updated in January 2016 and is available on OFCCP’s website.
FREE Online Resources to Help Analyze Coverage
Companies that want to conduct a preliminary search of existing federal contracts can utilize a number of free online resources offered by the federal government. These include, but are not limited to, the following websites:
Note that just because a company is listed on any of the above websites does not mean it is automatically covered by some or all federal contractor regulations. These websites, and others like them, simply provide companies with a resource to what contracts may exist so that an analysis can be completed in light of federal contractor coverage thresholds.
After a company determines it is a federal contractor and covered by Executive Order 11246, Section 503, and/or VEVRAA, the next step will be to get a handle on the specific obligations that exist and whether current processes need to be revised to meet those requirements. Be aware that once a notice of a compliance evaluation is issued, the contractor will be required to show compliance with all applicable regulations for 12-24 months back from the date of the scheduling letter. Federal contractors should be prepared for such requests and keep compliance information and documents up-to-date and readily available if and when a compliance review is initiated.