Mandatory Subcontract and Purchase Order Language

January 16th, 2014|

Federal affirmative action regulations mandate that Federal contractors include an Equal Opportunity (EO) clause in all contracts, subcontracts and purchase orders.  The intent is to make the nondiscrimination and affirmative action provisions of Executive Order 11246, Section 503 of the Rehabilitation Act of 1973, the Vietnam Era Veterans’ Readjustment Assistance Act, and the Jobs for Veterans act flow down to all tiers of contractors.  Additionally, OFCCP’s new regulations require the use of specific, mandatory language.

To ensure compliance with these requirements, we recommend inserting the following paragraph into your subcontracts and the terms and conditions of your purchase orders.  The language must be in BOLD font.

This contractor and subcontractor shall abide by the requirements of 41 CFR §§ 60-1.4(a), 60-300.5(a) and 60-741.5(a). These regulations prohibit discrimination against qualified individuals based on their status as protected veterans or individuals with disabilities, and prohibit discrimination against all individuals based on their race, color, religion, sex, sexual orientation, gender identity or national origin. Moreover, these regulations require that covered prime contractors and subcontractors take affirmative action to employ and advance in employment individuals without regard to race, color, religion, sex, sexual orientation, gender identity, national origin, protected veteran status or disability.

This specific clause is only required in contracts that are entered into or modified on or after March 24, 2014.

Who is a Subcontractor?

OFCCP’s new VEVRAA regulations define subcontract as:

“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 (including construction) 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.”

As an example, your cleaning service may not meet this definition unless part of your contract is to provide cleaning services to the government.  If you sell vehicles to the government, then your agreement with the company that makes the tires for the vehicle would most likely meet this definition of subcontract.

Additional considerations:

As noted above, the requirements of which clauses to include vary depending on the size of the subcontract or purchase order. Contractors may elect to include all of the above clauses in all contracts to provide blanket coverage.  It is also important to know that the absence of these clauses does not relieve a subcontractor of their potential affirmative action requirements.

While the regulations implementing Executive Order 11246 (41-CFR 60-1.4) must be referenced in the EO clause, there is no specific language that must be used.  The paragraph above follows OFCCP’s guidance by incorporating reference to those regulations along with the mandatory language from the VEVRAA and Section 503 regulations.

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