Content Last Revised: 8/21/00 ---DISCLAIMER---

41 CFR 60-741.4 - Coverage and waivers.

• Section Number: 60-741.4
• Section Name: Coverage and waivers.

    (a) Coverage--(1) Contracts and subcontracts in excess of $10,000. 
Contracts and subcontracts in excess of $10,000 are covered by this 
part. No contracting agency or contractor shall procure supplies or 
services in less than usual quantities to avoid the applicability of the 
equal opportunity clause.
    (2) Positions engaged in carrying out a contract. (i) With respect 
to the contractor's employment decisions and practices occurring before 
October 29, 1992, this part applies only to employees who were employed 
in, and applicants for, positions that were engaged in carrying out a 
Government contract; with respect to employment decisions and practices 
occurring on or after October 29, 1992, this part applies to all of the 
contractor's positions irrespective of whether the positions are or were 
engaged in carrying out a Government contract. A position shall be 
considered to have been engaged in carrying out a contract if:
    (A) The duties of the position included work that fulfilled a 
contractual obligation, or work that was necessary to, or that 
facilitated, performance of the contract or a provision of the contract; 
or
    (B) The cost or a portion of the cost of the position was allowable 
as a cost of the contract under the principles set forth in the Federal 
Acquisition Regulation at 48 CFR Ch. 1, part 31: Provided, That a 
position shall not be considered to have been covered by this part by 
virtue of this provision if the cost of the position was not allocable 
in whole or in part as a direct cost to any Government contract, and 
only a de minimis (less than 2%) portion of the cost of the position was 
allocable as an indirect cost to Government contracts, considered as a 
group.
    (ii) Application. Where a contractor or a division or establishment 
of a contractor was devoted exclusively to Government contract work, all 
positions within the contractor, division, or establishment shall be 
considered to have been covered by this part. (Appendix D of this part 
provides guidance on positions engaged in carrying out a contract.)
    (3) Contracts and subcontracts for indefinite quantities. With 
respect to indefinite delivery-type contracts and subcontracts 
(including, but not limited to, open end contracts, requirement-type 
contracts, Federal Supply Schedule contracts, ``call-type'' contracts, 
and purchase notice agreements), the equal opportunity clause shall be 
included unless the contracting agency has reason to believe that the 
amount to be ordered in any year under such contract will not be in 
excess of $10,000. The applicability of the equal opportunity clause 
shall be determined at the time of award for the first year, and 
annually thereafter for succeeding years, if any. Notwithstanding the 
above, the equal opportunity clause shall be applied to such contract 
whenever the amount of a single order exceeds $10,000. Once the equal 
opportunity clause is determined to be applicable, the contract shall 
continue to be subject to such clause for its duration, regardless of 
the amounts ordered, or reasonably expected to be ordered in any year.
    (4) Employment activities within the United States. This part 
applies only to employment activities within the United States and not 
to employment
activities abroad. The term employment activities within the United 
States includes actual employment within the United States, and 
decisions of the contractor made within the United States, pertaining to 
the contractor's applicants and employees who are within the United 
States, regarding employment opportunities abroad (such as recruiting 
and hiring within the United States for employment abroad, or transfer 
of persons employed in the United States to contractor establishments 
abroad).
    (5) Contracts with State or local governments. The requirements of 
the equal opportunity clause in any contract or subcontract with a State 
or local government (or any agency, instrumentality or subdivision 
thereof) shall not be applicable to any agency, instrumentality or 
subdivision of such government which does not participate in work on or 
under the contract or subcontract.
    (b) Waivers--(1) Specific contracts and classes of contracts. The 
Deputy Assistant Secretary may waive the application to any contract of 
the equal opportunity clause in whole or part when he or she deems that 
special circumstances in the national interest so require. The Deputy 
Assistant Secretary may also grant such waivers to groups or categories 
of contracts: where it is in the national interest; where it is found 
impracticable to act upon each request individually; and where such 
waiver will substantially contribute to convenience in administration of 
the act. When a waiver has been granted for any class of contracts, the 
Deputy Assistant Secretary may withdraw the waiver for a specific 
contract or group of contracts to be awarded, when in his or her 
judgment such action is necessary or appropriate to achieve the purposes 
of the act. The withdrawal shall not apply to contracts awarded prior to 
the withdrawal, except that in procurements entered into by formal 
advertising, or the various forms of restricted formal advertising, such 
withdrawal shall not apply unless the withdrawal is made more than 10 
calendar days before the date set for the opening of the bids.
    (2) National security. Any requirement set forth in the regulations 
of this part shall not apply to any contract whenever the head of the 
contracting agency determines that such contract is essential to the 
national security and that its award without complying with such 
requirements is necessary to the national security. Upon making such a 
determination, the head of the contracting agency will notify the Deputy 
Assistant Secretary in writing within 30 days.
    (3) Facilities not connected with contracts. (i) Upon the written 
request of the contractor, the Deputy Assistant Secretary may waive the 
requirements of the equal opportunity clause with respect to any of a 
contractor's facilities if the Deputy Assistant Secretary finds that 
the contractor has demonstrated that:
    (A) The facility is in all respects separate and distinct from 
activities of the contractor related to the performance of a contract; 
and
    (B) Such a waiver will not interfere with or impede the 
effectuation of the act.
    (ii) The Deputy Assistant Secretary's findings as to whether the 
facility is separate and distinct in all respects from activities of 
the contractor related to the performance of a contract shall include 
consideration of the following factors:
    (A) Whether any work at the facility directly or indirectly 
supports or contributes to the satisfaction of the work performed on a 
Government contract;
    (B) The extent to which the facility benefits, directly or 
indirectly, from a Government contract;
    (C) Whether any costs associated with operating the facility are 
charged to a Government contract;
    (D) Whether working at the facility is a prerequisite for 
advancement in job responsibility or pay, and the extent to which 
employees at facilities connected to a Government contract are 
recruited for positions at the facility;
    (E) Whether employees or applicants for employment at the facility 
may perform work related to a Government contract at another facility, 
and the extent to which employees at the facility are interchangeable 
with employees at facilities connected to a Government contract; and
    (F) Such other factors that the Deputy Assistant Secretary deems 
are necessary or appropriate for considering whether the facility is in 
all respects separate and distinct from the activities of the 
contractor related to the performance of a contract.
    (iii) The Deputy Assistant Secretary's findings as to whether 
granting a waiver will interfere with or impede the effectuation of the 
act shall include consideration of the following factors:
    (A) Whether the waiver will be used as a subterfuge to circumvent 
the contractor's obligations under the act;

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    (B) The contractor's compliance with the act or any other Federal, 
State or local law requiring equal opportunity for disabled persons;
    (C) The impact of granting the waiver on OFCCP enforcement efforts; 
and
    (D) Such other factors that the Deputy Assistant Secretary deems 
are necessary or appropriate for considering whether the granting of 
the waiver would interfere with or impede the effectuation of the act.
    (iv) A contractor granted a waiver under paragraph (b)(3) of this 
section shall:
    (A) Promptly inform the Deputy Assistant Secretary of any changed 
circumstances not reflected in the contractor's waiver request; and
    (B) Permit the Deputy Assistant Secretary access during normal 
business hours to the contractor's places of business for the purpose 
of investigating whether the facility granted a waiver meets the 
standards and requirements of paragraph (b)(3) of this section, and for 
inspecting and copying such books and accounts and records, including 
computerized records, and other material as may be relevant to the 
matter under investigation.
    (v)(A) A waiver granted under paragraph (b)(3) of this section 
shall terminate on one of the following dates, whichever is earliest:
    (1) Two years after the date the waiver was granted.
    (2) When the facility performs any work that directly supports or 
contributes to the satisfaction of the work performed on a Government 
contract.
    (3) When the Deputy Assistant Secretary determines, based on 
information provided by the contractor under this section or upon any 
other relevant information, that the facility does not meet the 
requirements of paragraph (b)(3) of this section.
    (B) When a waiver terminates in accordance with paragraph 
(b)(3)(v)(A) of this section the contractor shall ensure that the 
facility complies with this part on the date of termination, except 
that compliance with Secs. 60-741.40 through 60-741.45, if applicable, 
must be attained within 120 days of such termination.
    (vi) False or fraudulent statements or representations made by a 
contractor under paragraph (b)(3) of this section are prohibited and 
may subject the contractor to sanctions and penalties under this part 
and criminal prosecution under 18 U.S.C. 1001.

Source: 61 FR 19350, May 1, 1996, as amended at 65 FR 45179, July 20, 2000