Office of Federal Contract Compliance Programs (OFCCP)

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Jurisdiction

• What entities are subject to the requirements of Executive Order 11246?
• If a State or local government has Government contracts, is it subject to the requirements of Executive Order 11246?
• Our business operates as a fund depository, and an issuing and paying agent for U.S. Saving Bonds and savings notes; therefore, are we required to comply with the Affirmative Actions Program (AAP) obligations under Executive Order (E.O.) 11246, as amended, the Vietnam Era Veterans' Readjustment Assistance Act of 1974 (VEVRAA), as amended, 38 U.S.C. 4212 and Section 503 of the Rehabilitation Act of 1973 (Section 503), as amended?
• Is a financial institution that is covered by the Federal Deposit Insurance Corporation (FDIC) for insurance coverage subject to the Affirmative Actions Program (AAP) requirements under Executive Order 11246, as amended, the Vietnam Era Veterans' Readjustment Assistance Act of 1974 (VEVRAA), as amended, 38 U.S.C. 4212 and Section 503 of the Rehabilitation Act of 1973 (Section 503), as amended?
• Is a hospital or other health care provider covered under the laws enforced by OFCCP as a result of the reimbursements it receives for medical care and services provided to Medicare or Medicaid patients?

What entities are subject to the requirements of Executive Order 11246?

If a business or organization has a Federal contract, subcontract, or federally assisted construction contract it may be subject to the requirements of Executive Order 11246. Generally speaking, any business or organization that (1) holds a single Federal contract, subcontract, or Federally assisted construction contract in excess of $10,000.00; (2) has Federal contract or subcontracts that combined total in excess of $10,000.00 in any 12-month period; or (3) holds Government bills of lading, serves as a depository of Federal funds, or is an issuing and paying agency for U.S. savings bonds and notes in any amount will be subject to requirements under one or more of the laws enforced by OFCCP.

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If a State or local government has Government contracts, is it subject to the requirements of Executive Order 11246?

Yes, if the contracts meet the threshold for coverage. However, the requirements of Executive Order 11246 apply only to the agency, instrumentality or subdivision of the State or local government that participates in work on or under the Government contract or subcontract. Further, except for universities and medical facilities, a State or local government agency, instrumentality, or subdivision that has a Government contract is exempt from the requirement to develop and maintain a written affirmative action program.

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Our business operates as a fund depository, and an issuing and paying agent for U.S. Saving Bonds and savings notes; therefore, are we required to comply with the Affirmative Actions Program (AAP) obligations under Executive Order (E.O.) 11246, as amended, the Vietnam Era Veterans' Readjustment Assistance Act of 1974 (VEVRAA), as amended, 38 U.S.C. 4212 and Section 503 of the Rehabilitation Act of 1973 (Section 503), as amended?

The E.O. 11246 implementing regulations at 41 CFR 60-1.40(a) and 60-2.1(b) state, in relevant part, that any nonconstruction (Supply and Service) contractor that serves as a depository of Government funds in any amount or a financial institution which is an issuing and paying agent for U.S. saving bonds and saving notes in any amount must develop an affirmative action program.

Under Section 503, a Government contractor with 50 or more employees and a Government contract of $50,000 or more must develop a Section 503 affirmative action program. 41 CFR 60-741.40(a). The Section 503 regulations define a Government contract as "any agreement or modification thereof between any contracting agency and any person for the purchase, sale or use of personal property or nonpersonal services." 41 CFR 60-741.2(i). The term "nonpersonal services" as used in this section includes fund depository. 41 CFR 60-741.2(i)(4). Thus, the agreement to serve as a Federal funds depository is a "Government contract."

Under Section 503, however, all government contracts must meet the dollar threshold amount of $50,000 for coverage. Therefore, if you serve as a depository for Federal funds of $50,000 or more, or have an agreement valued at $50,000 or more to be an issuing and paying agent for savings bonds and notes, you would be obligated to develop and maintain a Section 503 affirmative action program.

The same holds true under VEVRAA as under Section 503 for any Government contractor with 50 or more employees and a contract of $50,000 or more to serve as a depository of Federal funds or as an issuing and paying agent for savings bonds and notes, if the Government contract was entered into before December 1, 2003. To view the regulation, click on .

However, the Jobs for Veterans Act (JVA) amended VEVRAA by raising the dollar threshold amount required for contract coverage to $100,000. The new threshold applies to contracts entered on or after December 1, 2003. Accordingly, if your business or organization became a fund depository or an issuing and paying agent for savings bonds and notes on or after December 1, 2003, it would also be subject to the written AAP requirement under VEVRAA if the contract is for $100,000 or more.

For your additional information, there is an interactive electronic tool called the Federal Contract Compliance Advisor, also referred to as Elaws Advisor, to assist Federal contractors and subcontractors in understanding basic coverage and the requirements for compliance with the laws administered by OFCCP. This electronic tool can be accessed E-Laws Federal Contractor Compliance Advisor. You may wish to consult the Elaws Advisor if you have additional questions about coverage.

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Is a financial institution that is covered by the Federal Deposit Insurance Corporation (FDIC) for insurance coverage subject to the Affirmative Actions Program (AAP) requirements under Executive Order 11246, as amended, the Vietnam Era Veterans' Readjustment Assistance Act of 1974 (VEVRAA), as amended, 38 U.S.C. 4212 and Section 503 of the Rehabilitation Act of 1973 (Section 503), as amended?

Financial institutions with federal share and deposit insurance are considered to be government contractors within the meaning of the regulations implementing Executive Order 11246, as amended, the Vietnam Era Veterans' Readjustment Assistance Act of 1974 (VEVRAA), as amended, 38 U.S.C. 4212 and Section 503 of the Rehabilitation Act of 1973 (Section 503), as amended. These three programs enforced by the Office of Federal Contract Compliance Programs (OFCCP) require equal employment opportunity by government contractors.

The implementing regulations for Executive Order 11246 (41 CFR 60-1.3), have consistently defined a government contract as 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 "nonpersonal services" as used in this section includes, but is not limited to, the following services: utilities, construction, transportation, research, insurance, and fund depository. This definition explicitly includes agreements for insurance.

The implementing regulations for the VEVRAA and Section 503 programs, found at 41 CFR 60-250.2 and 60-741.2 respectively, also define a government contract as 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 "nonpersonal services" as used in this section includes, but is not limited to, the following services: utilities, construction, transportation, research, insurance, and fund depository. This definition also explicitly includes agreements for insurance. Therefore, financial institutions with federal share and deposit insurance are considered to be government contractors.

For additional information, this position was addressed in the following preamble text to a 1996 VEVRAA proposed rule:

The purpose and application section of the 1980 final rule (Sec. 60-250.1) states that Part 60-250 applies to all Government contracts, "including Federal deposit and share insurance." The preamble to the 1980 final rule (45 FR 86218) states that OFCCP believes that Federal deposit and share insurance are contracts within the meaning of Section 4212. In the course of preparing its 1996 final rule implementing Section 503, OFCCP conducted a careful and detailed reevaluation of its position in light of changes in some of the statutes affecting the financial industry. Based upon that review, OFCCP continues to believe in the soundness of its position. However, today's proposal differs from the 1980 final rule in that it does not expressly state that the regulations cover Federal deposit and share insurance. The proposal does not otherwise make reference to the precise subject matter of particular types of covered contracts, and therefore OFCCP no longer considers it necessary to single out deposit and share insurance for express mention in the regulations. OFCCP wishes to reemphasize that it will continue to maintain its long-standing policy of imposing sanctions other than debarment of financial institutions from future deposit or share insurance, or cancellation, termination or suspension of a financial institution's deposit or share insurance for violations of Section 4212.

To review the entire text of the 1996 VEVRAA proposed rule, go on-line.

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Is a hospital or other health care provider covered under the laws enforced by OFCCP as a result of the reimbursements it receives for medical care and services provided to Medicare or Medicaid patients?

The provider agreements, pursuant to which hospitals and other health care providers receive reimbursement for services covered under Medicare Parts A and B, and the provider agreements that hospitals and other health care facilities have entered into with State Medicaid agencies, are not covered Government contracts under the laws enforced by OFCCP. Accordingly, a hospital or other health care provider is not covered under the laws enforced by OFCCP if its only relationship with the Federal government is as a participating provider under Medicare Parts A and B and Medicaid. Please note that a hospital or other health care provider may be a covered contractor because of other contractual arrangements, such as providing health care to active or retired military under a contract with the Department of Veterans' Affairs or the Department of Defense. Likewise, a teaching hospital doing research for a university that has a contract with the Federal government may be covered.