A new Federal Acquisition Regulation (FAR 52.204-27) enacted in June 2023 requires companies with covered contracts to ban the use of TikTok and other apps developed by ByteDance Limited on employee devices, including personal cell phones, which are used in the performance of government contracts.  The ban does not apply to devices “incidental to a Federal contract” however, the term “incidental” is not defined.

The ban applies to federal contracts that include the FAR clause (FAR 52.204-27), which Federal agencies were directed to include in all new solicitations beginning June 2, 2023. Existing contracts and indefinite-delivery contracts may also be amended to include the new clause.  The ban is far-reaching and applies to contracts below the micro-purchase threshold, contracts for commercial products and services, and Commercially Available Off the Shelf (COTS) items.

While the interim rule is already in effect, public comments are still being solicited. The ban was designed to ensure data security but could create headaches for federal contractors as it may implicate wage and hour, free speech and other legal issues.   

Prime contractors must flow down the clause in subcontracts, but there is no current mechanism requiring prime contractors monitor compliance by subcontractors.  There is no self-certification or non-compliance reporting obligation.

To ensure compliance with the new rule, contractors should take the following steps:

  • Review contracts, bids solicitations and any requests for amendment: Examine existing contracts entered in after June 2, 2023 and upcoming solicitations to determine applicability of the ban.
  • Update policies and procedures: Revise company policies and procedures to reflect the ban on TikTok usage and its impact on device policies.  Consider obtaining employee acknowledgment of the policy.
  • Block TikTok on company-issued devices: Take necessary technical measures to prevent the usage of TikTok on devices owned by the company, including those issued to employees.
  • Discuss implications with counsel: The TikTok ban may have an impact on existing policies and practices, and it may create other legal risks and compliance issues, especially in connection with personal employee devices used for work.

The deadline for federal contractors and subcontractors to certify compliance with the affirmative action regulations in the OFCCP Contractor Portal was June 29, 2023.  Leading up to the deadline, many contractors experienced technical issues in registering and certifying on the portal. 

OFCCP released a statement on June 30th stating that

OFCCP will consider a contractor’s registration and/or certification timely if the contractor has a pending request for assistance as of June 29, 2023.

The communication further stated that while the Help Desk is currently working through the open help desk tickets,

the deadline to certify compliance has not been extended. 

OFCCP directs any contractor or subcontractor that has not registered, certified, or submitted a help desk ticket should do so “as soon as possible.”  The Help Desk is still open to assist contractors and subcontractors with the registration and certification process.

We continue to monitor developments with the Contractor Portal and will provide updates as new information becomes available. If you have questions, please contact the Jackson Lewis attorney with whom you regularly work or a member of the Affirmative Action, OFCCP and Government Contract Compliance Group to discuss.

In an update on its EEO-1 Component 1 Data Collection landing page, EEOC pushed

“the tentative opening of the 2022 EEO-1 Component 1 data collection to the Fall of 2023.”

As previously reported, EEOC originally anticipated the portal to open mid-July 2023.  Due to the Agency completing a “mandatory, three-year renewal of the EEO-1 Component 1 data collection by the Office of Management and Budget (OMB),” the opening has been further delayed.  Last year the reporting period began in April with a deadline of May 17, 2022.

A final opening date as well as the opening of the filing support Message Center will be posted to the EEO-1 Component Data Collection landing page once available.  We will keep monitoring developments in this area and will update as more information becomes available.

On June 5, OFCCP released a new Corporate Scheduling Announcement List (CSAL) for construction contractors. The CSAL is the list of construction contractors selected for upcoming audits by the Agency. OFCCP last released a CSAL for construction contractors in 2021.

This CSAL comes on the heels of OFCCP’s Mega Construction Project Program launch and furthers former OFCCP Director Jenny Yang’s campaign to increase OFCCP’s oversight of construction contractor affirmative action compliance efforts.

OFCCP stated that the list includes “250 federal contractors, federally assisted contractors, and federally assisted subcontractors.” The Agency’s scheduling methodology explains that the CSAL was developed by first “downloading federal construction contracts valued over $10,000 from the USA spending database.” The U.S. Department of Transportation provided similar information to OFCCP related to federally assisted construction contracts. The list was then narrowed to those contractors with the highest aggregated contract values, with start dates prior to May 15, 2022, and end dates after May 15, 2025. Finally, OFCCP removed contractors currently under review in a monitoring period pursuant to a conciliation agreement or within the exemption period after a compliance evaluation.

OFCCP indicated that it would not schedule any compliance evaluations from this CSAL until the 2021 construction contractor CSAL has been exhausted.

As a reminder, the construction contractor affirmative action requirements differ significantly from those applicable to supply and service contractors. However, some construction contractors may be subject to both sets of requirements. This advance notice represents an excellent opportunity for contractors on the CSAL to ensure compliance with all applicable regulations and prepare for their impending audit.

We will continue to monitor developments in this area and provide updates as appropriate.

The Office of Federal Contract Compliance Programs (OFCCP) has been working to revise the scheduling letter and itemized listing it uses to initiate compliance reviews of supply and service federal contractors and subcontractors. After considering public comments, the Office of Management and Budget (OMB) has released a new version of the proposed Scheduling Letter and Itemized Listing.

The modified proposal comes with an additional public comment period.
The public can submit comments on the new proposed Scheduling Letter and Itemized is until May 17, 2023. Once the comment period closes, OMB will start reviewing the proposed scheduling letter under the Paperwork Reduction Act. OFCCP will not be authorized to utilize the new scheduling letter until OMB grants its approval.

We are reviewing the proposed changes and will follow up with an updated blog post discussing them. Stay tuned!

OFCCP has once again updated the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) hiring benchmark. Effective March 31, 2023, the new veteran hiring benchmark (the percentage of total hires who are protected veterans that the contractor seeks to hire in the following AAP year) is 5.4%. This is a 0.1% decrease from the 5.5% mark set last year and continues the trend of reduced benchmarks. The database with previous benchmarks can be found here.

As a reminder, contractors required by VEVRAA to develop a written affirmative action program (AAP) must also establish a hiring benchmark for protected veterans every year, or adopt the national benchmark provided by the Office of Federal Contract Compliance Programs (OFCCP) each year, as part of their AAP update. Under either approach, contractors must compare the percentage of hires who are protected veterans in each of their written AAPs to the hiring benchmark set for that AAP. Contractors should use the result of this comparison when assessing the effectiveness of their veteran outreach and recruitment efforts.

Jenny Yang announced earlier today in a letter to OFCCP stakeholders that she will step down from her position as Director of the OFCCP, effective March 31, 2023. Director Yang will begin a new position as the Deputy Assistant to the President for Racial Justice and Equity at the White House Domestic Policy Council as of April 3, 2023. In her new role she will work on “a broad range of issues, including equal opportunity in employment, criminal justice, democracy and voting, disability policy, Native Affairs, racial wealth gap, and many others”

Director Yang announced that OFCCP Deputy Director Michele Hodge will serve as the Acting Director of the OFCCP after Director Yang concludes her tenure tomorrow. Director Yang stated that the OFCCP will continue to play “a critical role in the years ahead to ensure that our nation’s once-in-a-generation investments in our infrastructure and economy create opportunities for us all to access good jobs with family sustaining wages.”

We wish Director Yang the best of luck in her new endeavor and congratulate Deputy Director Hodge in her new role as Interim Director.

On March 20, 2023, the Office of Federal Contract Compliance Programs (OFCCP) announced that it will re-open the Contractor Portal on March 31, 2023. Once open, covered federal contractors and subcontractors must certify that they have developed and maintained AAPs before the June 29, 2023, deadline.

In a change from last year that should benefit the contractor community going forward, OFCCP will require contractors to provide its “AAP Coverage Period.” This new information will allow OFCCP to shift away from requiring certification by all contractors at the end of June each year and move to a rolling deadline based on a contractor’s AAP plan year.

In its announcement, OFCCP reiterated that contractors who do not certify by the June 29th deadline would have a greater chance of an audit. This is no idle threat. As we saw with OFCCP’s latest CSAL list, the agency selected contractors for audit that did not complete the annual certification in 2022.

Covered federal contractors and subcontractors that did not certify last year should register on the Contractor Portal as soon as possible. New federal contractors and subcontractors will have 120 days from entering a covered contract to prepare written AAPs – according to existing regulations – and 90 days from then to register and certify in the Portal. According to OFCCP’s recent announcement, the Contractor Portal will remain open after June 29th to account for these new contractors.

Last year, contractors encountered many technical difficulties trying to register and certify. Hopefully, OFCCP has worked out these “kinks” with the Portal. Nevertheless, we highly recommend contractors start the certification process as early as possible in case of unforeseen challenges.

We continue to monitor developments with the Contractor Portal and will provide updates as new information becomes available. If you have questions, please contact the Jackson Lewis attorney with whom you regularly work or a member of the Affirmative Action, OFCCP and Government Contract Compliance Group to discuss.

OFCCP has launch its Mega Construction Project (Megaproject) Program, intended to increase compliance attention on and provide compliance assistance to federal construction contractors with federally funded projects valued at $35 million or more and lasting at least one year.

This development marks another step in OFCCP Director Jenny Yang’s campaign to reinvigorate OFCCP’s oversight of construction contractor affirmative action compliance efforts. From the 2020 release of OFCCP’s Construction Contractor Technical Assistance Guide to the 2020 and 2021 Construction Contractor audit CSALs (Corporate Scheduling Announcement Lists) and the launch of a new Construction Contract Award Portal, OFCCP is increasing enforcement attention on construction contractors.

This new program was developed, at least in part, because of President Joe Biden’s Infrastructure Investment and Jobs Act (IILJA), under which construction companies are landing big dollar projects partly funded by the federal government. OFCCP wants to ensure equal opportunity for employees on the projects, as well as increase representation of qualified workers from underrepresented groups in the construction trades.

OFCCP says it will offer compliance assistance to prime and subcontractors on Megaprojects, in addition to conducting compliance evaluations. OFCCP intends to engage with prime and subcontractors at both the pre-bid and post-bid stages to “provide ongoing compliance assistance” and “evaluate contractors’ efforts to recruit and utilize talent from underrepresented backgrounds.”

The Megaproject Program’s website includes a toolkit with a Reference Sheet, a Quick Reference Guide, a letter from OFCCP to IILJA grantees, as well as a description of the Sixteen Affirmative Action Steps a construction contractor must take to fulfill its affirmative action obligations. In its Reference Sheet, OFCCP cites two examples of past Megaprojects in which it successfully engaged with the construction prime and subcontractors, as well as other stakeholders, to provide compliance assistance. OFCCP touts these projects as examples of how OFCCP’s involvement in Megaprojects early and often can positively affect the community.

There will also be a list of designated Megaprojects accessible from the Megaproject Program’s website.

The last construction CSAL published was in 2021, and OFCCP acknowledged contract size was considered in its Methodology for Developing the Construction Scheduling List in 2021. With the launch of this new program, construction contractors on Megaprojects can expect their chances of being audited by OFCCP to spike.

If you have questions, please contact the Jackson Lewis attorney with whom you regularly work or a member of the Affirmative Action, OFCCP and Government Contract Compliance Group.