Daily Rules, Proposed Rules, and Notices of the Federal Government
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Section 342 of the Dodd-Frank Act, 12 U.S.C. 5452, establishes an Office of Minority and Women Inclusion (OMWI) in each of certain agencies, including the Departmental Offices of the Department of the Treasury. Section 342(c)(2) provides that covered agencies shall require contractors to provide a written statement that the “contractor shall ensure, to the maximum extent possible, the fair inclusion of women and minorities in the workforce of the contractor, and as applicable, subcontractors.” This rule will implement the statement required by the Dodd-Frank Act through a contract clause.
The proposed contact clause, which is similar to those adopted by other OMWI agencies, requires that a contractor make good faith efforts to include minorities and women in its workforce. This standard is derived from section 342(c)(3) of the Dodd-Frank Act, which provides for remedies, including termination, against a contractor who fails to make good faith efforts to include minorities and women in its workforce. Treasury interprets “good faith efforts” to mean efforts consistent with the Equal Protection Clause of the Constitution and Title VII of the Civil Rights Act of 1964, such as the identification and elimination of employment barriers, the widespread publication of employment opportunities, and other forms of outreach to minorities and women.
Section 342 applies to “all contracts * * * for services of any kind,” but the section does not define the term “contract.” Treasury proposes to apply the clause to all service contracts above the simplified acquisition threshold. As noted above, section 342 applies to Treasury Departmental Offices (DO). DO does not currently include an office responsible for operational procurement; acquisitions in support of DO are performed primarily by the Internal Revenue Service Office of Treasury Procurement Services. The clause will be included in all contracts in support of requirements originating from DO, regardless of the Treasury component performing the acquisition.
Because this proposed rule relates to public contracts, it is exempt from the requirements of 5 U.S.C. 553. However, it is being published for public comment pursuant to 41 U.S.C. 1707.
The Regulatory Flexibility Act (5 U.S.C. 601
First, this rule will not affect a substantial number of small entities. While this rule will affect all contracts for services above the simplified acquisition threshold ($150,000), it will not affect a substantial number of small entities because it will only apply to those entities that actually contract with Departmental Offices. In fiscal year 2011, DO contracted with 370 small businesses.
Additionally, the rule's economic impact is not expected to be significant. The rule satisfies the statutory requirement that contractors affirm a commitment to the fair inclusion of minorities and women in the workforce, but does so in a way that minimizes burden on contractors. The rule provides maximum flexibility for contractors in implementing the statutory requirement because it does not impose any specific requirements on contractor hiring. Further, most contractors are already subject to and have implemented other FAR requirements that will satisfy this rule's requirements. Essentially all contracts to which this requirement applies are subject to FAR Clause 52.222-26, Equal Opportunity, which requires, among other things, that contractors complete the EEO Form 1 containing workforce demographic data. Thus, contractors are already required to compile and retain much of the data required by this clause. Further, contractors with over 50 employees are required by Department of Labor regulations to develop affirmative action plans; development of and compliance with such a plan would normally satisfy the requirements of the clause.
Notwithstanding the certification that this rule, if finalized, would not have a significant economic impact on a substantial number of small entities, the Department invites comments on the rule's impact on small entities.
This proposed rule is not a “significant regulatory action” for the purposes of Executive Order 12866.
The information collections contained in the notice of proposed rulemaking have been previously approved by the Office of Management and Budget (OMB) and assigned control number 1505-0080. Under the Paperwork Reduction Act (44 U.S.C. chapter 35), an agency may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a valid OMB control number.
For the reasons set forth in the preamble, the Department proposes to amend 48 CFR Chapter 10 as follows:
1. Add part 1022 to read as follows:
12 U.S.C. 5452.
Insert the clause at 1052.222-70, Minority and Women Inclusion, in all solicitations and contracts in support of Departmental Offices for services that exceed the simplified acquisition threshold.
2. Add subpart 1052.2 to read as follows:
12 U.S.C. 5452(c)(2).
As prescribed in 1022.7000, insert the following clause:
“Contractor confirms its commitment to equal opportunity in employment and contracting. To implement this commitment, the Contractor shall ensure, to the maximum extent possible consistent with applicable law, the fair inclusion of minorities and women in its workforce. The Contractor shall insert the substance of this clause in all subcontracts under this Contract whose dollar value exceeds $150,000. Within ten business days of a written request from the contracting officer, or such longer time as the contracting officer determines, and without any additional consideration required from the Agency, the Contractor shall provide documentation, satisfactory to the Agency, of the actions it (and as applicable, its subcontractors) has undertaken to demonstrate its good faith effort to comply with the aforementioned provisions. For purposes of this contract, “good faith effort” may include actions by the contractor intended to identify and, if present, remove barriers to minority and women employment or expansion of employment opportunities for minorities and women within its workforce. Efforts to remove such barriers may include, but are not limited to, recruiting minorities and women, providing job-related training, or other activity that could lead to those results.
“The documentation requested by the contracting officer to demonstrate “good faith effort” may include, but is not limited to, one or more of the following:
1. The total number of Contractor's employees, and the number of minority and women employees, by race, ethnicity, and gender (e.g., an EEO-1);
2. A list of subcontract awards under the Contract that includes: dollar amount, date of award, and subcontractor's race, ethnicity, and/or gender ownership status;
3. Information similar to that required in item 1, above, with respect to each subcontractor; and/or
4. The Contractor's plan to ensure that minorities and women have appropriate opportunities to enter and advance within its workforce, including outreach efforts.
“Consistent with Section 342(c)(3) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L. 111-203) (Dodd-Frank Act), a failure to demonstrate to the Director of the Agency's Office of Minority and Women Inclusion such good faith efforts to include minorities and women in the Contractor's workforce (and as applicable, the workforce of its subcontractors), may result in termination of the Contract for default, referral to the Office of Federal Contract Compliance Programs, or other appropriate action.
“For purposes of this clause, the terms “minority,” “minority-owned business” and “women-owned business” shall have the meanings set forth in Section 342(g) of the Dodd-Frank Act.”