U.S. Department Of Labor
Office of Federal Contract Compliance Programs
200 Constitution Avenue, N.W. Washington, DC 20210
November 08, 2019
This letter is in response to your jurisdictional inquiry concerning whether businesses participating in the Department of Defense’s SkillBridge Program constitute federal contractors for the purposes of Executive Order 11246, as amended (E.O. 11246); Section 503 of the Rehabilitation Act of 1973, as amended (Section 503), 29 U.S.C. § 793; and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974, as amended (VEVRAA), 38 U.S.C. § 4212.
The SkillBridge program grants service members the opportunity "to gain valuable civilian work experience through specific industry training" by matching civilian opportunities to a service member’s job training and work experience.1 The stated goal of providing service members with such opportunities is to enhance their marketability and career prospects following their separation from military duty.2 The SkillBridge program therefore aims to serve as a bridge between military service and civilian employment, with the Department of Defense overseeing the placement of service members in a variety of employment fields.
The terms of the SkillBridge program permit service members of any rank to use up to the last 180 days of service to work and learn with an industry partner that best matches that applicant’s job training and work experience.3 Throughout their SkillBridge participation and training, service members continue to receive military compensation and benefits from the Department of Defense, with release for the SkillBridge program contingent upon unit commander authorization and mission-dependency.4
Employers and industry partners participating in the SkillBridge program in turn "craft SkillBridge programs to meet their specific workforce needs, matching those needs to the skills and abilities of highly motivated service members, all at no cost."5 Military installation commanders may also make on-base facilities available to industry partners, "or members may be authorized to train at the industry partner’s location off installation at minimal to no cost."6
GENERAL LEGAL PRINCIPLES
The Office of Federal Contract Compliance Programs (OFCCP) administers and enforces E.O. 11246, Section 503, and VEVRAA. Collectively, these laws prohibit federal contractors and subcontractors from discriminating on the basis of race, color, sex, sexual orientation, gender identity, religion, national origin, disability, and protected veteran status. Contractors are also prohibited from discriminating against applicants or employees because they inquire about, discuss, or disclose their compensation or that of others, subject to certain limitations. Finally, OFCCP’s laws require federal contractors and subcontractors to take affirmative steps to ensure equal employment opportunity in all aspects of their employment practices. Federal contracting agencies must include an equal opportunity clause in their contracts, and prime contractors and subcontractors must include the clause in each of their nonexempt subcontracts. 41 C.F.R. §§ 60-1.4(a), (c); 60-300.5(a), (b); 60-741.5(a), (b).
The corresponding regulations governing OFCCP’s jurisdiction define a government procurement 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 service." See 41 C.F.R. §§ 60-1.3; 60-300.2; 60-741.2. A contractual relationship between the federal government and an employer has generally not attached to legal arrangements where the primary purpose is to extend help or support through conferring a grant or benefits under Federal assistance programs. Thus, with the exception of federally-assisted construction contracts such as those specifically covered by Part III, Sections 301-304 of E.O. 11246, neither E.O. 11246, Section 503, nor VEVRAA apply to arrangements involving Federal financial assistance. See Partridge v. Reich, 141 F.3d 920, 925-26 (9th Cir. 1998); OFCCP v. USAA Federal Savings Bank, No. 87-OFC-27, ALJ’s Recommended Decision & Order on Motions for Summary Judgment, Oct. 4, 1990, pp. 3, 8.
When determining whether a procurement contract has been sufficiently established for the purposes of OFCCP oversight, the agency is governed by the Federal Grant and Cooperative Agreement Act ("Grant Act"), 31 U.S.C. § 6301, et seq., which prescribes criteria for uniform use by executive agencies in determining whether to use a contract, a grant, or a cooperative agreement as the legal instrument reflecting a relationship between the United States Government and a State, a local government, or other recipient. See 31 U.S.C. § 6301. The Grant Act requires an executive branch agency to utilize a cooperative agreement when "(1) the principal purpose of the relationship is to transfer a thing of value to the State, local government, or other recipient to carry out a public purpose or stimulation . . . instead of acquiring (by purchase, lease or barter) property or services for the direct benefit or use of the United States Government; and (2) substantial involvement is expected between the executive agency and the State, local government, or other recipient when carrying out the activity contemplated in the agreement." 31 U.S.C. § 6305.
As OFCCP’s jurisdiction extends only to procurement contracts, and not to grants or cooperative agreements, the distinction between these instruments is integral to determining whether participation in the SkillBridge Program is governed by OFCCP’s regulations implementing E.O. 11246, Section 503, and VEVRAA. Transfers that do not acquire "property or services for the direct benefit of the United States government" do not constitute federal procurement contracts that would fall under the jurisdiction of OFCCP authority. See 41 C.F.R. § 60-1.3.
The SkillBridge Program does not acquire property or services for the direct benefit of the federal government but rather stimulates the important public purpose of transitioning service members to civilian life by affording employers and industry partners the opportunity to match their needs to the skills of service members at no cost. See 31 U.S.C. § 6303(1); 41 C.F.R. §§ 60-1.3; 60-300.2; 60-741.2. The civilian opportunities afforded by employers and trade partners in turn further the additional public purpose of enhancing the marketability and career prospects of service members through their transition to civilian life, serving as a bridge to many vulnerable service members who face numerous burdens once they are discharged from active service. See 31 U.S.C. § 6305(1)-(2). Accordingly, participation in the SkillBridge Program does not reflect a contractual arrangement but is more akin to a cooperative agreement. See 31 U.S.C. §§ 6303-6305.
As a cooperative agreement is a statutorily defined legal instrument separate from that of a procurement contract, participation in the SkillBridge Program is not sufficient by itself to render an employer or industry participant a covered federal contractor subject to E.O. 11246, Section 503, or VEVRAA. See 31 U.S.C. §§ 6303-6305; Partridge, 141 F.3d at 924-25 (holding that OFCCP regulations do "not apply to all agreements between the federal government and third parties" due in part to the separate statutory definitions of a contract, a grant, and a cooperative agreement embodied in the Grant Act).
We trust that this letter is responsive and affords clarification to your inquiry.
Craig E. Leen
Director, Office of Federal Contract Compliance Programs
U.S. Department of Labor
*Note: The actual name(s) was removed to protect privacy in accordance with 5 U.S.C. § 552(b)(7).
The contents of this document do not have the force and effect of law and are not meant to bind the public in any way. This document is intended only to provide clarity to the public regarding existing requirements under the law or agency policies.