Federal construction contractors, if they have a construction contract of the requisite amount with a federal agency,172 are covered by Executive Order 11246, as amended; VEVRAA, as amended; and Section 503, as amended. These authorities also cover construction contractors if they have a contract or subcontract with a nonconstruction contractor or another construction contractor, and the:
- Contract or subcontract is necessary in whole or in part to the performance of the covered contract; or
- Contractor or subcontractor performs, undertakes or assumes any portion of the contractor’s obligation under a covered contract.
Federally assisted construction contracts and subcontracts are covered by the Executive Order but are not covered by Section 503 or VEVRAA.173
The following subsections provide COs additional guidance on the requirements of these legal authorities.
172. For current jurisdiction thresholds for OFCCP coverage, see https://www.dol.gov/ofccp/taguides/jurisdiction.htm.
173. EO 11246, as amended, Sec. 301.
Regulations applicable to the affirmative action requirements of construction contractors and federally assisted construction contractors under Executive Order 11246 are published primarily in 41 CFR Part 60-4. Specific provisions in other parts of 41 CFR Chapter 60 are also applicable to federal and federally assisted construction contractors.174 The regulations implementing Section 503175 and VEVRAA176 apply to contractors and subcontractors with a federal construction contract or subcontract covered under those laws. As mentioned earlier, the regulations implementing Section 503 and VEVRAA do not apply to federally assisted construction contracts and subcontracts.
174. 41 CFR Parts 60-1, 60-3, 60-20, 60-40, and 60-50.
175. 41 CFR Part 60-741.
176. 41 CFR Part 60-300.
Bid solicitations for all federal and federally assisted construction contracts in excess of $10,000 must include the “Notice of Requirement for Affirmative Action to Ensure Equal Employment Opportunity (Executive Order 11246)” found at 41 CFR 60-4.2(d) and the “Standard Federal Equal Employment Opportunity Construction Contract Specifications (Executive Order 11246)” found at 41 CFR 60-4.3(a).
The “Notice of Requirement for Affirmative Action to Ensure Equal Employment Opportunity (Executive Order 11246)” (referred to in this chapter as the “Notice”) sets forth the goals for minority and female participation in construction trades in covered areas, identifies the covered areas and requires that contractors provide OFCCP with written notice about construction subcontracts in excess of $10,000 that are awarded in connection with the covered contract. In addition, the Notice must be included in:
- Grants, contracts, subcontracts, loans, insurance or guarantees involving federally assisted construction covered by Part 60-4 as a condition of these agreements; and
- Construction contracts and subcontracts that are necessary in whole or in part to the performance of a covered nonconstruction contract.
The “Standard Federal Equal Employment Opportunity Construction Contract Specifications (Executive Order 11246)” (referred to in this chapter as the “Specifications”) describe the affirmative action obligations and detail the specific affirmative action steps construction contractors must implement to ensure equal employment opportunity. The Specifications must be in:
- Solicitations for offers and bids on all federal and federally assisted construction contracts in excess of $10,000 in accordance with 41 CFR 60-4.6;
- Grants, contracts, subcontracts, loans, insurance or guarantees involving federally assisted construction covered by 41 CFR Part 60-4, as a condition of these agreements;
- Federal and federally assisted construction contracts in excess of $10,000 in accordance with 41 CFR 60-4.6; and
- Construction subcontracts in excess of $10,000 that are necessary in whole or in part to the performance of nonconstruction federal contracts and subcontracts.177
By operation of the Executive Order, the Notice and the Specifications discussed in this section are deemed to be incorporated in every solicitation and every covered contract and subcontract. This is true whether or not they are expressly incorporated in the solicitation or contract, and whether or not the contract is written.178
177. 41 CFR 60-4.3(a).
178. 41 CFR 60-4.9.
The equal opportunity clauses may be expressly included in construction contracts and subcontracts, or incorporated by reference.179 The clauses are, however, a part of the construction contracts even if the contractor does not physically incorporate them into the contract document.180 If a contractor fails to include the required clauses in covered subcontracts and purchase orders, either in their entirety or by reference, a CO shall cite this omission as a violation in the closure document.
a. Federal Construction Contracts. Each federal contracting agency must include the equal opportunity clauses found at 41 CFR 60-1.4(a), 60-300.5 and 60-741.5, in all covered prime construction contracts. And, each federal contractor and subcontractor must include the equal opportunity clauses in its covered construction subcontracts – either in their entirety or by reference.181 An example of an acceptable way to incorporate all three equal opportunity clauses by reference is found below. Note that the example is in bold typeface for compliance with Section 503 and VEVRAA regulations. If a contractor incorporates the clauses by reference, but does not use the appropriate language or style for Section 503 and VEVRAA equal opportunity clauses, then a CO shall cite the failure as a violation in the closure document.
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, national origin, or for inquiring about, discussing, or disclosing compensation. 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, disability or veteran status.
b. Federally Assisted Construction Contracts. Applicants for federal assistance involving a construction contract are required to include the equal opportunity clause found at 41 CFR 60-1.4(b) in all covered federally assisted construction contracts. Moreover, each administering agency must include this clause as a condition of any grant, contract, loan, insurance or guarantee involving federally assisted construction. Federally assisted construction contractors and subcontractors are to incorporate only the Executive Order equal opportunity clause in subcontracts – either in its entirety or by reference. An example of an acceptable way to incorporate the equal opportunity clause by reference is found below.
This contractor and subcontractor shall abide by the requirements of 41 CFR 60-1.4(b). These regulations prohibit discrimination against all individuals based on their race, color, religion, sex, sexual orientation, gender identity, national origin, or for inquiring about, discussing or disclosing compensation. 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 or national origin.
c. Nonconstruction Contractors. Nonconstruction contractors must include the appropriate clauses in construction subcontracts that are necessary, in whole or in part, to the performance of a covered nonconstruction contract. The clauses may be expressly included in the contract or incorporated by reference, in the same manner as described above. The clauses are, however, a part of the construction contracts even if the contractor does not physically incorporate them into the contract document.
179. 41 CFR 60-1.4(d), 60-300.5(d) and 60-741.5(d).
180. 41 CFR 60-4.9, 41 CFR 60-300.5(e) and 60-741.5(e).
181. 41 CFR 60-1.4(a) and (b) at paragraph (7); 60-1.4(c); 41 CFR 60-300.5, paragraph 11; and 41 CFR 60-741.5, paragraph 11.
The CO must identify the contract(s) on which the contractor’s obligations are based. The CO records this information in the case file and related correspondence. Information on contract awards may be obtained from other federal agencies.
Various federal, state and local government contracting offices may be able to provide notice of contract awards and help ensure that the contractors include equal opportunity and affirmative action clauses in construction contracts. For example, OFCCP has an MOU with the General Services Administration (GSA) that provides for information sharing on construction contract awards.182
Other agencies within the DOL may also have information not available from the contractor. For example, the WHD may be able to provide the number of employees of the contractor by reviewing payroll records certified under the Davis-Bacon Act. Other sources of interagency cooperation may include the ETA funded agencies such as Job Corps, Office of Apprenticeship, and YouthBuild, and the Women’s Bureau.
182. See “U.S. Department of Labor and U.S. General Services Administration: Memorandum of Understanding on Mega Construction Projects,” signed June 2013.
A mega construction project is a construction project spanning more than a year, with a value of at least $25 million. OFCCP developed its Mega Construction Project Program to facilitate construction contractors’ access to a pipeline of diverse talent for some of this nation’s largest construction projects. The focus of this program is first and foremost on providing compliance assistance and facilitating relationships that connect contractors with jobs to qualified people seeking jobs.
The program includes providing intensive compliance assistance to participating construction contractors, and facilitating connections between contractors and job training and recruiting sources, unions, local or community based organizations, and federal, state and local governments. Through this approach, the expectation is that there will be an increase in the representation of women and minorities in the construction trades. While contractor participation in the mega construction program is not required, it is encouraged.
On mega construction projects, COs can monitor the solicitations, offers and bid documents to ensure the funding and contracting agencies include the Notice.183 Additionally, COs coordinate with the funding agency to ensure incorporation of the Specifications and appropriate equal opportunity clauses into prime contracts and subcontracts.184 Once the solicitation is made public, the District Director or Assistant District Director should participate in as many pre-bid conferences as feasible that the federal funding agency and the entity receiving federal assistance may schedule with prospective bidders. Once the prime contract is awarded, the District Director or Assistant District Director should contact185 the prime contractor for two purposes:
- To offer the prime contractor the opportunity to participate in the program, so as to receive extensive compliance assistance and support; and
- To explain the prime contractor’s role and responsibilities if it participates in the program.
If a mega construction project is located on or near an Indian reservation, the CO should contact OFCCP’s Indian and Native American Employment Rights Program (INAERP) before contacting tribal officials, TEROs or Indian and Native American community based organizations. INAERP will work with the CO to ensure the proper tribal officials are notified about the project and determine their level of involvement based on their resources and tribal infrastructure. INAERP will also conduct introductory meetings via conference call and assist with providing a list of resources for contractors and subcontractors to use in the creation of linkages with tribal entities and Indian and Native American community based organizations. The INAERP staff is available throughout the course of a review to assist COs.
183. See FCCM 3B01.
184. 41 CFR 60-1.4(a) or (b), 41 CFR 60-4.3, 41 CFR 60-300.5, and 41 CFR 60-741.5.
185. See Letter L-10 – Construction Outreach for New Projects.