U.S. Department of Labor’s Office of Federal Contract Compliance Programs Announces New Flexibility for Federal Contractors Regarding Equal Opportunity Clauses Required to Be Included in Contracts

April 16, 2014
Client Alert

As providers of utility service to federal government offices, most investor owned utility companies (“IOUs”) are “federal contractors” subject to the Equal Opportunity (“EO”) rules established and enforced by the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (the “OFCCP”). Included among such rules is the requirement for a federal contractor to include certain EO requirements in its contracts with companies (“Federal Subcontractors”) who perform work for the federal contractor that is related to and necessary for the federal contractor’s performance of work for the federal government. Consequently many IOUs take the prudent approach of including EO requirements in most or all of their procurement agreements (as often goods and services supplied to an IOU will be considered “related to and necessary” for the IOUs provision of utility service to the federal government). The purpose of this article is to summarize recent changes in the rules governing contractual language that federal contractors must use in their agreements with Federal Subcontractors. As further detailed herein, in many cases, the long and rather cumbersome EO rule references previously required in such agreements may now be replaced with a single incorporation by reference clause.

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