Hunton Employment & Labor Perspectives

A letter issued by director of the U.S. General Services Administration (GSA) on February 15 marked a significant shift in federal procurement practices. The Civilian Agency Acquisition Council (CAAC) Letter authorizes federal agencies to deviate from certain provisions of the Federal Acquisition Regulations (FAR) and procurement practices that were mandated under Executive Order (EO) 11246, which was revoked by President Trump’s EO 14173 (“Ending Illegal Discrimination and Restoring Merit-Based Opportunity.”)

Per the CAAC Letter, federal contractors and subcontractors are relieved from maintaining affirmative action plans and complying with the related clauses under FAR Subpart 22.8, which outlined Equal Opportunity provisions.

Specifically, the CAAC Letter details the following changes:

• Revocation of Clauses Previously Used to Implement Rescinded EO 11246: Several FAR clauses that were previously used should now be excluded from new contracts. These include:
  • FAR 52.222-21, Prohibition of Segregated Facilities
  • FAR 52.222-22, Previous Contracts and Compliance Reports
  • FAR 52.222-23, Notice of Requirement for Affirmative Action to Ensure Equal Employment Opportunity for Construction
  • FAR 52.222-24, Pre-award On-Site Equal Opportunity Compliance Evaluation
  • FAR 52.222-25, Affirmative Action Compliance
  • FAR 52.222-26, Equal Opportunity
  • FAR 52.222-27, Affirmative Action Compliance Requirements for Construction
  • FAR 52.222-29, Notification of Visa Denial
• Impact on the System for Award Management (SAM): Contractors will no longer be required to comply with SAM representation requirements.
• “Gender Identity” Clause Changes: Pursuant to EO 14168 (“Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government”), the term “gender identity” has been removed from FAR 22.801 and related clauses in FAR part 52.

While the changes announced in the CAAC Letter may reduce the regulatory burden on federal contractors, contractors must remain vigilant. Notably, the letter emphasizes that federal contractors are still bound by existing civil rights and non-discrimination laws in the United States, including Title VII of the Civil Rights Act. Even though the recent EOs modify federal contracting policies, contractors cannot rely on compliance with the EOs to defend against violating such anti-discrimination laws.

Federal contractors must stay apprised to how entities are responding to the CAAC Letter. Some federal entities are attempting to add clauses referencing anti-discrimination laws and the False Claims Act (FCA). For example, the Army and Air Force Exchange Service (AAFES) has posted contract terms that require contractors to certify that they do not operate programs in violation of federal anti-discrimination laws, explicitly referencing the False Claims Act. It is unclear whether this contractual term would survive a legal challenge, so contractors should remain vigilant when reviewing this language.

As always, federal contractors should pay close attention to their contractual obligations and ensure they are up to date on the latest procurement requirements. Employers should consult legal counsel before taking action with regard to this whirlwind of changes in federal mandates.