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Who is a Federal Contractor?

If your company does business with the federal government you are most likely a federal contractor under the Executive Order 11246 (see the FAQ section of this website for further specifics regarding which EEO and AA laws that apply to your company or agency). If your company does business with another company who holds direct contracts with the federal government, you are a subcontractor, e.g., a company makes a product or provides a service which is sold to a federal contractor.

Are you a federal contractor or subcontractor, an institution of higher education, a small business with over 15 employees, or a government agency? There are MANY discrimination and affirmative laws and regulations on the books and not all apply to everyone, but rest assured  there are discrimination laws that apply to everyone. 

During our workshops we are finding more and more companies, both blue and white collar industries, who are simply not fully aware of  their legal obligations.  Certainly, their employees and supervisors are not educated in their personal obligations regarding discrimination and harassment. 

 

The courts are often finding companies NOT GUILTY when they can prove they fully educated their employees and supervisors  - and when an incident occurred, they reacted immediately and appropriately. 

 

Can you say your business is in compliance with EEO and Affirmative Action laws and regulations?  Don’t let your supervisors or employees stay in the dark when it comes to their EEO responsibilities.  Be smart – be proactive.  By all means, do not allow your business or agency to be the focus of a class action case or high profile discrimination case.  Teach all employees to maintain a respectful and non-discriminatory environment. Doing the right thing absolutely pays great dividends!     

Contract means any Government contract or subcontract or any federally assisted construction contract or subcontract.

Contractor means, unless otherwise indicated elsewhere in the regulations at 29 CFR 60, a prime contractor or subcontractor.

Prime Contractor means any person holding a contract and, for the purposes of this definition, any person who has held a contract subject to the order (11246).

Subcontract means any agreement or arrangement between a contractor and any person (in which the parties do not stand in the relationship of an employer and an employee):

  1. For the purchase, sale or use of personal property or nonpersonal services which in whole or in part, is necessary to the performance of any one or more contracts; or
  2. Under which any portion of the contractor's obligation under any one or more contracts is performed, undertaken or assumed.

Subcontractor means any person holding a subcontract, and, for the purposes of this definition, any person who has held a subcontract subject to the order. The term "first-tier subcontractor" refers to a subcontractor holding a subcontract with a prime contractor.

Federally Assisted Construction Contract means any agreement or modification thereof between any applicant and a person for construction work which is paid for in whole or in part with funds obtained from the Government or borrowed on the credit of the Government pursuant to any Federal program involving a grant, contract, loan, insurance, or guarantee, or undertaken pursuant to any Federal program involving such grant, contract, loan, insurance, or guarantee, or any application or modification thereof approved by the Government for a grant, contract, loan, insurance, or guarantee under which the applicant itself participates in the construction work.

Government contract means any agreement or modification thereof between any contracting agency and any person for the purchase, sale, or use of personal property or nonpersonal services. The term "personal property," as used in this definition, includes supplies, and contracts for the use of real property (such a lease arrangements), unless the contract for the use of real property itself constitutes real property (such as easements). The term "nonpersonal services" as used in this definition includes, but is not limited to, the following services: Utilities, construction, transportation, research, insurance, and fund depository. The term Government Contract does not include:

  1. Agreements in which the parties stand in the relationship of employer and employee; and
  2. Federally assisted construction contracts

The OFCCP enforces Executive Order 11246, as amended, which prohibits federal contractors and federally-assisted construction contractors and subcontractors, who do over $10,000 in Government business in one year from discriminating in employment decisions on the basis of race, color, religion, sex, or national origin. The Executive Order also requires Government contractors to take affirmative action to insure that equal opportunity is provided in all aspects of their employment.

The OFCCP's jurisdiction covers approximately 26 million or nearly 22% of the total civilian workforce (92,500 non-construction establishments and 100,000 construction establishments). The Federal Government awarded more than $179 billion tax-payer dollars in prime contracts in Fiscal Year 1995.

OFCCP requires a contractor or subcontractor, as a condition of having a federal contract/subcontract, to engage in a self-analysis for the purpose of discovering any barriers to equal employment opportunity. No other Government agency conducts comparable systemic reviews of employers’ employment practices to ferret out discrimination. OFCCP also investigates complaints of discrimination. In Fiscal Year 1999, OFCCP conducted 3,833 compliance reviews. Moreover, OFCCP programs prevent discrimination.

A contractor in violation of E.O. 11246 may have its contracts canceled, terminated, or suspended in whole or in part, and the contractor may be debarred, i.e., declared ineligible for future government contracts. However, a contractor cannot be debarred without being afforded the opportunity for a full evidentiary hearing. Debarments may be for an indefinite term or for a fixed term. When an indefinite term debarment is imposed, the contractor may be reinstated as soon as it has demonstrated that the violations have been remedied. A fixed-term debarment establishes a trial period during which a contractor can demonstrate its commitment and ability to establish personnel practices that are in compliance with the Executive Order. If a matter is not resolved through conciliation, OFCCP may refer the matter to the Office of the Solicitor of Labor, which is authorized to institute administrative enforcement proceedings. After a full evidentiary hearing, a Department of Labor Administrative Law Judges issues recommended findings of fact, conclusions of law, and a recommended order. On the basis of the entire record, the Secretary of Labor issues a final Administrative Order. Cases also may be referred to the Department of Justice for judicial enforcement of E.O. 11246, primarily when use of the sanctions authorized by the Order is impracticable, such as a case involving a sole source supplier. The regulations implementing the Executive Order establish different affirmative action provision for non-construction (i.e., service and supply) contractors and for construction contractors.

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