Are You a Federal Contractor or Subcontractor?

By Angela Adams, CEBS, SPHR, Director, Human Resource Services
Published March 28, 2017

Federal Contractors and SubcontractorsOne of the questions we ask when doing a complimentary HR Check-Up for a member is whether the member is a federal government contractor or subcontractor. Occasionally, the member isn’t sure. 

There are a number of reasons why it is important to know if you are a contractor or subcontractor (“contractor”), including the fact that if you have at least 50 employees and a federal contract or subcontract ("contract") of at least $50,000, you most likely have some obligations to create and maintain a written affirmative action program (AAP). You don’t want to be caught unaware if you get an audit letter from the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) asking to see your AAP. In fact, the OFCCP just sent out a batch of “audit letters” last week. If you don’t know if you’re a contractor, how can you find out?

General Signs You Are a Contractor

  • If you have been filing the EEO-1 Report and checking off that you are a contractor (one of the questions that must be answered), at some point in your organization’s life, you were a contractor, even if you aren’t currently aware of any contracts. Often, organizations continue to check this box, not knowing for sure if they are still contractors. You may want to investigate with your sales team or contracts department whether you currently have any covered agreements. Typically, you will find language in the contract that refers to affirmative action, Executive Order 11246, the Rehabilitation Act of 1973 or the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA), whether it is a direct contract with the government or a subcontract with a customer. If any of that verbiage appears, feel free to contact us at the Association, and we will help you figure out your obligations.
  • If you have received a notice separate from a contract from any of your customers informing you that they are federal contractors, this most likely means you are a subcontractor. Again, if you need clarification on this, call us at the Association.
  • You may have even gotten a request from a customer to see your AAP. This is also a good sign you are a contractor.
  • Getting an “audit letter” from the OFCCP is also an indication that you have a contract. If this happens, contact the Association right away, and we will assist you in determining your status and help you reply.
  • Are you part of a large company with a parent organization, and your parent has contracts, or another subsidiary does? In most cases, that makes you a contractor too, even if your division has nothing to do with the government contract, due to the OFCCP’s view of a “single enterprise.” If you find yourself in this situation, again, call the Association and we can help you determine if you need an AAP.

Online Resources 

Here are a variety of government sources that may help you find whether you are a contractor.

  • Federal Procurement Data System (FPDS) - Use your organization’s name or Dun & Bradstreet number (DUNS) to search this site. It has a great deal of information about contracts, including dates, amounts, contracting agency, type of contract, etc. If you don’t know your DUNS (Dun & Bradstreet’s Data Universal Numbering System), use the System for Award Management to find it or to register for a DUNS.
  • USASpending - Another site that allows searching by employer name, DUNS or contract number. Data includes award IDs, contract amounts, dates and more. This database includes whether a contract falls under the Service Contract Act, Walsh-Healey Act or Davis Bacon Act, but is not limited to those laws. It can be helpful to know whether a contract falls under one of those Acts, as there are special affirmative action issues that may apply to you if so.

What is the difference between these two sites? USASpending includes information on grants and loans in addition to procurement. Procurement information comes directly to USASpending from the FPDS, but there is a lag in the data being shared (it is not real time). Therefore, while FPDS is a subset of information on USASpending, both sites are useful in determining contractor status. Grants can possibly make you a contractor. Loans generally do not, but may require more investigation.

  • National Pre-Award Registry - The OFCCP automatically audits any organization that is awarded a contract for $10 million or more. This site won’t provide contract-specific data, but if a company is on this site as being audited, it typically means that it is or was a contractor. This site can be especially helpful if you are a subsidiary to a parent company and want to know if the parent or another subsidiary is a contractor. In most cases, that makes any related organizations contractors as well, as discussed previously. In addition, if any entities related to you show up on the DOL’s Data Enforcement site, it likely means your division is a contractor.

Even if you don’t show up in any of these databases, you might still be a contractor. Look carefully at all contracts to see if there are affirmative action clauses, as the OFCCP does not consider “not showing up in the databases” as a reason to cancel any planned audit it has, if it can prove you are a contractor through other means.

Make sure you know your contractor status. Questions? Need some help navigating all of this? Contact an AAP Specialist at 800-448-4584 or info@hrsource.org.

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