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Federal Contractor Compliance Advisor

Determining if You Are a Federal Contractor or Subcontractor Subject to the Laws Enforced by OFCCP

If your business or organization has a Federal contract, subcontract, or federally assisted construction contract it may be subject to some or all of the civil rights requirements enforced by OFCCP. 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 contracts 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 agent 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. Federal contracts or subcontract, as described above, in excess of $10,000 are subject to Executive Order 11246; those in excess of $15,000 are also subject to Section 503 of the Rehabilitation Act of 1973 (Section 503); and those in excess of $100,000 are also subject to the Vietnam Era Veterans’ Readjustment Assistance Act of 1974, as amended (VEVRAA). However, federally assisted construction contracts and subcontracts are subject only to Executive Order 11246. See: 41 CFR Sec. 60-1.5(a), 41 CFR Sec. 60-300.4, and 41 CFR Sec. 60-741.4.

The obligations for Federal contractors under the laws enforced by OFCCP will vary depending on the dollar amount and the nature of the covered contract(s). This Advisor will help you determine what laws your business or organization may be subject to and what obligations may be imposed. Once it has been determined that a business or organization is subject to OFCCP jurisdiction, generally all of the business's or organization's establishments will be covered, regardless of whether the Federal contract is to be performed at only one of the business's or organization's facilities.

Single entity test: In addition, some businesses or organizations that do not independently hold Federal contracts/subcontracts may still be covered by Executive Order 11246, Section 503 of the Rehabilitation Act and/or VEVRAA if they are considered a "single entity" with a related business or organization that holds such contracts. In such instances, OFCCP uses a "single entity" test to determine whether the businesses or organizations are so closely related that they may constitute a single entity for purposes of OFCCP jurisdiction.

If you are not sure whether your business or organization would qualify as a single entity in its relation to a Federal contractor or subcontractor, the following pages provide guidance in making that determination.

Federal subcontractor test: OFCCP jurisdiction extends to all Federal subcontractors as well as contractors. The Federal subcontractor test allows businesses and organizations to determine if the work they do for a Federal contractor constitutes a Federal subcontract.

1 In accordance with an inflation-adjustment statute, codified at 41 U.S.C. § 1908, the Section 503 coverage threshold was raised from $10,000 to $15,000 by the Federal Acquisition Regulatory Council (FARC) in 2010. The FARC is authorized to reconsider and adjust for inflation the monetary thresholds of various statutes, including Section 503 and VEVRAA, every five years.

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