Each year, the U.S. government awards hundreds of billions of dollars in federal contracts to businesses to meet the needs of federal agencies and the military.  Because of their scope, these federal contracts can be very important to the businesses that win them.  But these often-coveted contracts come with a lot of strings.

Contractors must meet strict qualifications to bid on a federal government contract. These qualifications vary depending on the particular contract. Once a bid is awarded, the contractor must continue to adhere to the government’s rules and requirements or risk losing the contract. 

The U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) enforces compliance with the affirmative action requirements imposed on federal contractors. If a business has a federal contract, subcontract, or federally assisted construction contract, it may be subject to some or all of the affirmative action requirements OFCCP enforces. In general, any business that does the following must comply with one or more of the requirements OFCCP enforces:

  • Holds a single federal contract, subcontract or federally assisted construction contract in excess of $10,000;

  • Has federal contracts or subcontracts with a combined total in excess of $10,000 in any 12-month period; or

  • Holds government bills of lading, serves as a depository of federal funds or is an issuing and paying agent for U.S. savings bonds and notes in any amount.

Failure to comply with OFCCP’s requirements may subject a federal contractor or subcontractor to an audit and/or an OFCCP-imposed penalty or remedy.

A few years ago, to help contractors improve their understanding of their equal employment opportunity obligations, OFCCP released a 2017 Action Plan. More recently, OFCCP released its 2019 Town Hall Action Plan. The 2019 plan identifies six action items and recommendations to enhance compliance assistance between OFCCP and contractors:

  1. Updating and developing new resources to assist contractors in conducting outreach to diverse talent pools;

  2. Providing more compliance assistance and resources for contractors to develop effective affirmative action programs and allowing for more dialogue between OFCCP and contractors during compliance evaluations;

  3. Enhancing avenues for collaboration between contractors;

  4. Enhancing resources for protected veterans and their spouses, family, and other associates;

  5. Enhancing resources to increase the effectiveness of the Indian and Native American Employment Rights Program; and

  6. Enhancing resources for disability inclusion.

As these action items and recommendations will undoubtedly be a focus of OFCCP going forward, contractors—and would-be contractors—should be aware of them and utilize OFCCP’s tools in their work, including the 2017 plan and the 2019 plan. Awareness of these action items and recommendations will help ensure that businesses will continue to be eligible to receive future federal contracts.