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It's difficult to provide an answer where you've already gotten input from you internal legal counsel. The manner in which the question was expressed to legal counsel may have caused you to get the specific answer you received. Thus, I'm going to address this issue in a more generic manner, and then you can discuss it again with your legal counsel if you wish. As a general matter, if your organization has a direct contract with a federal agency, it's really the federal agency's responsibility to ensure that the various equal opportunity (EO) clauses found in the federal affirmative action regulations are included in the contract. If the federal agency fails to include these clauses, your organization still has the responsibilities associated with these clauses. In such a situation, the clauses are incorporated in your federal contract through what is know as "operation of law." The more important question is really "Do we need to incorporate the EO clauses in all contracts with our subcontractors and vendors?" Here, it is your organization's responsibility to ensure that the clauses are included when applicable. You are allowed to incorporate the EO clauses into all contracts with your vendors and subcontractors, but you MUST incorporate the EO clauses into contracts with vendors and subcontractors who either (a) provide goods or services that are necessary to the completion of the government contract or (b) undertake any portion of the federal contract on behalf of your organization. While the regulations under Executive Order 11246 give you some flexibility in how you handle the incorporation of its EO clause into contracts with your vendors or subcontractors, the revised regulations for protected veterans and the revised regulations for individuals with disabilities have prescribed language that must be used in contracts with vendors and subcontractors. You can find more information about the specific language to be used in OFCCP's FAQs on the revised veteran and disability regulations. (For the FAQs on the disability regulations, see http://www.dol.gov/ofccp/regs/compliance/faqs/503_faq.htm#Q46. The veterans regulations have a parallel set of FAQs.) Again, I don't know your organization's particular circumstances, so there may be some reason your legal counsel has provided you with the answer you received. I can simply tell you that federal contractors clearly have responsibilities for incorporating the EO clauses into contracts with certain vendors and subcontractors.
You can use this OFCCP audit checklist to ensure you're doing what is required to maintain OFCCP's regulations including VEVRAA, Section 503, and EO 11246. Or request a demo to streamline your compliance and recruiting efforts.