Ambika Biggs authored an article in the Fall 2020 issue of Today’s General Counsel addressing compliance issues businesses may not realize apply to them because of their overlooked status as a federal contractor.
“As surprising as it may seem, many companies do not realize that they are considered government contractors and are subject to certain federal regulations,” Biggs said. “This often happens because government contracting is a relatively small part of their business or is handled by a separate division of the company. Or else, businesses that do not directly contract with the federal government do not realize that they are subject to federal regulations that apply to subcontractors.”
Government contractors are beholden to additional regulatory demands in many areas. For example, Executive Order 11246 implements compliance requirements related to discriminatory practices beyond Title VII of the Civil Rights Act of 1964. In addition to prohibiting discrimination on the basis of race, color, religion, sex, sexual orientation, gender identity or national origin, the Executive Order requires contractors and first-tier subcontractors with 50 or more employees to provide compliance reports on their affirmative action efforts annually. In the article, Biggs detailed several other anti-discrimination regulations for federal contractors that require close consideration and compliance beyond the standard requirements for other businesses.
Beyond the employment regulations, Biggs also discussed the prohibitions related to giving gifts to their clients that happen to be government entities. “Executive branch employees typically cannot accept gifts that have an aggregate market value of more than $20 per occasion, or that exceed a $50 market value in a calendar year,” Biggs said. “Each contractor is a singular entity, so if one employee gives a government employee a gift worth $20 on one occasion, all other employees would be limited to giving that government employee gifts totaling no more than $30 during the rest of the calendar year.” Government contractors must also take care to ensure that, in any scenario where they are giving a gift or offering anything of value, it is not with the intent to influence an official act or win additional business.
Curious about other regulatory risks associated with not identifying as a federal contractor? Click to read the full article here.
Luis F. Ruiz