Overview
FAR 22.807 identifies specific scenarios where contracts and subcontracts are partially or entirely exempt from the Equal Opportunity requirements of Executive Order 11246. These exemptions are based on factors such as national security, contract value, geographic location of work, and the nature of the contracting entity.
Key Rules
- National Security and Special Interests: Agency heads may exempt contracts for national security reasons, and the Deputy Assistant Secretary (DAS) may grant exemptions for specific contracts or categories of contracts in the national interest.
- Dollar Thresholds: Contracts and subcontracts of $10,000 or less are generally exempt, provided the contractor's total aggregate contract value in a 12-month period does not exceed $10,000. Government bills of lading are never exempt regardless of value.
- Indefinite-Quantity Contracts: The Equal Opportunity clause applies if the Contracting Officer (CO) expects annual orders to exceed $10,000; once any single order exceeds $10,000, the clause applies for the life of the contract.
- Geographic Limitations: Work performed outside the United States by employees recruited outside the United States is exempt.
- Specific Entity Allowances:
- Religious Entities: May favor individuals of a particular religion for employment but must comply with all other non-discrimination requirements (sex, race, etc.).
- Indian Reservations: Contractors may publicly announce an employment preference for Indians living on or near a reservation for work performed in that area.
- State/Local Governments: Exempts specific subdivisions or agencies that are not participating in the performance of the contract.
- Separate Facilities: The DAS may exempt a contractor’s facilities that are entirely separate and distinct from the activities related to the performance of the government contract.
Practical Implications
- Threshold Monitoring: Contracting Officers and prime contractors must track the aggregate value of small-dollar awards over a 12-month period, as a series of sub-$10,000 awards can trigger E.O. 11246 compliance requirements once the cumulative total exceeds $10,000.
- Regulatory Precision: Contractors utilizing specific exemptions (such as religious or Indian preferences) must realize these are narrow exceptions; they do not provide a "blanket" exemption from other protected class non-discrimination requirements or general E.O. 11246 record-keeping.