Overview
Federal Acquisition Regulation (FAR) Subpart 22.18 establishes the requirement for federal contractors to use the Department of Homeland Security (DHS) E-Verify system. This internet-based program allows contractors to programmatically confirm that their employees (both new hires and those assigned to the contract) are legally authorized to work in the United States.
Key Rules
- Threshold for Application: The requirement applies to all solicitations and contracts exceeding $150,000 with a performance period of 120 days or more.
- Enrollment Requirement: Contractors must formally enroll in the E-Verify program as "Federal Contractors" and verify the eligibility of all new hires in the U.S.
- Employee Scope: Contractors must verify all new hires AND all existing employees "assigned to the contract" (those performing direct work in the U.S.).
- Verification Exemptions: Contractors are not required to verify employees who:
- Hold an active security clearance (Confidential, Secret, or Top Secret).
- Have completed background investigations and received credentials under HSPD-12.
- Applicability Exemptions: The rule does not apply to:
- Work performed entirely outside the United States.
- Commercially available off-the-shelf (COTS) items or bulk cargo.
- Commercial services that are part of a COTS item purchase and performed by the COTS provider.
- Subcontract Flow-down: The requirement must be flowed down into subcontracts for services and construction that meet the criteria.
Responsibilities
- Contracting Officers (CO): Responsible for ensuring the clause at FAR 52.222-54 is inserted into applicable solicitations and contracts.
- Prime Contractors: Responsible for enrolling in E-Verify, verifying the eligibility of staff, and ensuring compliance by subcontractors in the services and construction sectors.
- Head of the Contracting Activity (HCA): Holds the non-delegable authority to waive E-Verify requirements in exceptional cases.
- DHS and Social Security Administration (SSA): Manage the E-Verify system and have the authority to terminate a contractor’s Memorandum of Understanding (MOU) for non-compliance.
- Suspending and Debarring Official: Reviews cases referred by DHS/SSA when a contractor’s MOU is terminated to determine if the contractor should be barred from future government work.
Practical Implications
- Administrative Burden: Contractors must distinguish between "direct" and "indirect" staff. Employees performing support work (overhead/indirect functions) are generally exempt unless they perform "substantial duties" under the contract.
- COTS Protection: The FAR provides significant relief for manufacturers and vendors of COTS items. If your company only provides unmodified commercial products, you are likely exempt from the E-Verify mandate under this subpart.
- Integration with Onboarding: For non-exempt contractors, E-Verify is an addition to, not a replacement for, the Form I-9 process. Contractors must update their HR onboarding workflows to ensure verification occurs within the timelines mandated by the E-Verify MOU.
- Serious Penalties: Failure to maintain E-Verify compliance or having an MOU terminated by DHS is a high-stakes risk; it triggers a mandatory referral for suspension or debarment, which can effectively end a company's ability to do business with the federal government.