Reed Smith Client Alerts

In response to the impacts of the COVID-19 pandemic, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) issued a March 17, 2020 National Interest Exemption (NIE) via memorandum to all federal agencies.1 The NIE granted a limited exemption and waiver, in certain circumstances, of Executive Order 11246,2 Section 503 of the Rehabilitation Act3 (Section 503), and Section 4212 of the Vietnam Era Veterans' Readjustment Assistance Act (VEVRAA).4

Specifically, the NIE requires modification of the mandatory Federal Acquisition Regulation (FAR) clauses under the Executive Order, Section 503 and VEVRAA, FAR 52.222-26, Equal Opportunity, 52.222-35, Equal Opportunity for Veterans, and 52.222-36, Equal Opportunity for Workers with Disabilities, for all new COVID-19 relief related supply, service and construction contracts awarded by federal agencies from March 17, 2020 to June 17, 2020. This three month period is subject to extensions if required by circumstances and the national interest. The NIE has the effect of relieving contractors entering into new COVID-19 related contracts of certain, but not all, equal opportunity obligations imposed by the FAR and related DOL regulations.

Authors: Holly A. Roth Lawrence P. Block David J. McAllister Liza V. Craig William T. Kirkwood Elizabeth Leavy Lauren R. Weaver

scaffolding

Background

 OFCCP is responsible for ensuring that covered5 government contractors and their subcontractors6 comply with the legal requirement to take affirmative action and not discriminate on the basis of race, color, sex, sexual orientation, gender identity, religion, national origin, disability, or status as a protected veteran. The Executive Order and these statutes impose certain requirements such as preparing and maintaining affirmative action programs. DOL regulations applicable to the Executive Order and the two statutes authorize, when special circumstances are determined to exist and when it is in the national interest to do so (41 CFR Part 60-1.5(b))7 the making of the following exemptions:

(i) an agency or any person from requiring the inclusion of any or all of the equal opportunity clause in any specific contract or subcontract when he deems that special circumstances in the national interest so require, and

(ii) groups or categories of contracts or subcontracts of the same type where he finds it impracticable to act upon each request individually or where group exemptions will contribute to convenience in the administration of the order.

NIE impact

The OFCCP’s NIE applies to new contracts awarded by federal agencies between March 17, 2020 and June 17, 2020, to obtain COVID-19 relief related products, services and construction. As a result, the NIE will generally only affect companies that are not currently subject to the FAR clauses identified above because they are entering into new contracts with federal agencies, or subcontracts with prime contractors, in the prescribed period to provide supplies, services, or construction related to COVID-19 relief. The NIE memorandum provides that contracting officers are in the best position to determine which contracts should be subject to the exemption and waiver, and it contains specific language that contracting officers must include in newly awarded COVID 19 related contracts.