United States Department of Labor
Office of Administrative Law Judges Law Library

NOTICE: THIS INDEX WAS PREPARED BY THE CIVIL RIGHTS DIVISION, OFFICE OF THE SOLICITOR, U.S. DEPARTMENT OF LABOR, FOR INTERNAL USE. IT IS NOT AN OFFICIAL INTERPRETATION OF THE CASES, AND WAS LAST REVISED IN NOVEMBER, 1996.

Return to Table of Topics, 503 Index

The regulation at 41 CFR 60-741.3 which lists types of contracts that are covered under the Act is not exhaustive. OFCCP v. Graves Truck Line, Inc., 80-OFC-2, ALJ Rec. Dec. April 16, 1980, slip op. at 2, dismissed, ALJ Order of Dismissal, November 4, 1981.

To determine if there is a relationship between the Government and a contractor, look at the trade realities of conducting business in the market for the goods or services the Government is procuring; the nature and extent of the business which exists between the Government and the contractor; and in the context of each case, whether the contractor has a significant on-going commercial relationship with the Government. Id.

The duties of the Federal-contractor and the rights secured to qualified handicapped individuals seeking employment and employed by the Federal contractor are contractual in nature. OFCCP v. Western Electric Co., 80-OFCCP-29, ALJ Order Granting Defendant's Motion to Dismiss Complaint, March 4, 1981, slip op. at 8, rev'd and remanded on other grounds, Deputy Under Secretary for Employment Standards, April 24, 1985.

Bills of lading supply coverage. OFCCP v. Southern Pacific Transportation, 79-OFC-10A, ALJ Rec. Dec., November 9, 1982, slip op. at 26; remanded on other grounds, Acting Assistant Secretary for Employment Standards Decision and Order of Remand, February 24, 1994; Consent Order, October 13, 1995.

The regulations are a part of the contract regardless of whether they are actually written on any contractual documents executed by the parties. Id. at 27; remanded on other grounds, Acting Assistant Secretary for Employment Standards Decision and Order of Remand, February 24, 1994; Consent Order, October 13, 1995.

A tariff constitutes only an offer until the Government shipper avails itself of the terms, at which time it is a contract. Id.; remanded on other grounds, Acting Assistant Secretary for Employment Standards Decision and Order of Remand, February 24, 1994; Consent Order, October 13, 1995.

All the terms of the contract do not have to be spelled out in a single formal document. Id. at 28; remanded on other grounds, Acting Assistant Secretary for Employment Standards Decision and Order of Remand, February 24, 1994; Consent Order, October 13, 1995.

The value of the contract with the Government is the crucial matter, not how it is divided among those who enter into the contract with the Government. Id. at 30; remanded on other grounds, Acting Assistant Secretary for Employment Standards Decision and Order of Remand, February 24, 1994; Consent Order, October 13, 1995.

The realistic business relationship, rather than any particular contract document for a small part of that relationship is what needs to exceed $2500 or $50,000. Id. at 31; remanded on other grounds, Acting Assistant Secretary for Employment Standards Decision and Order of Remand, February 24, 1994; Consent Order, October 13, 1995.

A contract for the use of Government property and services provides coverage under the Act. OFCCP v. Ozark Air Lines, Inc., 80-OFCCP-24, Deputy Under Secretary for Employment Standards, June 30, 1986, slip op. at 4-5.

A blanket purchase agreement, rather than the orders placed under it, constitutes a contract for purposes of Section 503 coverage. The blanket purchase agreement at issue, although it did not state specific prices, provided that the price for each purchase would be set at a published market rate. The annual value of orders under the BPA exceeded $50,000 each year since 1981, and thus was sufficient to establish AAP coverage. OFCCP v. Bruce Church, Inc., 87-OFC-7, Secretary's Final Decision and Order, June 30, 1987, slip op. at 3, aff'g, ALJ Rec. Dec. May 18, 1987.

When OFCCP seeks enforcement of one of the contract-related civil rights laws it administers, it is vindicating the government's interest in performance of one of the terms of the contract, not suing or initiating enforcement on behalf of private individuals. OFCCP v. WMATA, 84-OFC-8, Assistant Secretary for Employment Standards Order Denying Motion to Amend August 23 Order, November 17, 1989, slip op. at 4, vacated on other grounds, WMATA v. DeArment, 55 EPD ¶40,507 (D.D.C. 1991).

An order to pay back pay under Section 503 is a claim by the government against a contractor for violation of the terms of the contract, and the provisions of the Debt Collection Act are applicable as they would be to any other government claim. Id. at 6.

An electrical utility contractor, which is statutorily required to provide utility services to all users, including the Government, did not voluntarily assume the obligations of Section 503. OFCCP v. City Public Service of San Antonio, 89-OFC-5, ALJ Rec. Dec. and Order, April 4, 1990, slip op. at 4; reversed and remanded, Assistant Secretary for Employment Standards Decision and Remand Order, January 18, 1995, slip op. at 7; Consent Order dismissing case, February 5, 1996.

FSLIC insurance is not a Government contract; rather, it is

a type of Federal financial assistance. OFCCP v. USAA Federal Savings Bank, 87-OFC-27, ALJ Recommended Decision and Order on Motions for Summary Judgment, October 4, 1990, slip op. at 9-12, affirmed on other grounds, Secretary of Labor Final Decision and Order, March 16, 1995.

ALJ discusses purpose of FSLIC insurance. Id. at 9.

ALJ discusses differences between Federal deposit insurance and ordinary commercial insurance contracts. Id. at 10-11.

It would not be unfair to require contractor to expend additional resources necessary to respond to discovery regarding work-on-the-contract issue after considerable expense of defending litigation because even if case were dismissed now for lack of jurisdiction, OFCCP could renew investigation to resolve the issue and, under 41 CFR 60-1.43, could require contractor to make available its records on Government contracts and subcontracts. OFCCP v. Rowan Companies, Inc., 89-OFC-41, Special Assistant to the Assistant Secretary for Employment Standards Dec. and Order of Remand, May 28, 1992, slip op. at 7, ALJ Rec. Dec. and Order on Remand, January 4, 1993; remanded on other grounds, Assistant Secretary for Employment Standards Order of Partial Remand, April 11, 1995; Second ALJ Decision and Order on Remand, March 11, 1996; pending, Administrative Review Board.

Contractor's mere acknowledgment that it is a Government contractor under Section 503 cannot be construed as an admission that it had Government contracts which complainants would have performed. OFCCP v. Yellow Freight Systems, Inc., 79-OFCCP-7, Special Assistant to the Assistant Secretary for Employment Standards Dec. and Order of Remand, August 24, 1992, slip op. at 5-6; Consent Decree, February 2, 1993.

The ALJ held that Rowan's assertion that [a lease, by the United States to a third-party granting the exclusive right to drill for, develop and produce oil and gas reserves from particular outer shelf submerged lands], is not a "contract" under the Act must fail, because 41 CFR § 60-741.2 defines a "Government contract" as including . . . "any agreement . . . for the use of real . . . property including lease agreements." OFCCP v. Rowan Companies, Inc., Marine Division, 89-OFC-41, ALJ Second Recommended Decision and Order on Remand, March 11, 1996, at 3-4; exceptions pending, Administrative Review Board.

Rowan's drilling services were indeed necessary to the prime contractor's exercise of its right to drill for oil and gas. The arrangement thus meets the definition of "Subcontract mean[ing] any agreement . . . between a contractor and any person . . . [f]or the furnishing of . . . services . . . which, in whole or in part, is necessary to the performance of anyone or more contracts. . . ." Id. at 4.

Department of Labor regulations explicitly provide that "Government contract means any agreement . . . between any contracting agency and any person for the furnishing of supplies or services" and that "[t]he term services' . . . includes . . . fund depository." 41 CFR § 60-1.3. Defendant's fund depository agreement was sufficient to establish coverage. Government agencies are bound by their own regulations. OFCCP v. First Federal Savings Bank of Indiana, 91-OFC-23, Secretary of Labor, Amended Final Decision and Order, November 20, 1995, at 2-3.