Government Contractors Re-Enlisted for Yet Another Program

December 15, 2008

Continuing a decades long practice of using government contracts to implement every conceivable social or policy program, usually having nothing remotely to do with the efficiency or integrity of the public contracting process, the administration has just issued a new regulation that requires government contractors to use the Homeland Security Department’s e-Verify system to verify the eligibility of their employees to work in the United States.  The FAR already requires contractors to label ozone-depleting substances, to reduce waste and encourage recycling, to not participate in the international trafficking in persons, and to comply with prohibitions on the importation of goods manufactured with child labor.  Preferences for small businesses and small disadvantaged businesses are so embedded in the procurement system that we no longer think of them as implementing social policies.  So it should not be surprising that the administration wants government contractors to assist in enforcing the immigration laws.

E-Verify is a free, Internet based system operated by the Department of Homeland Security that allows participating employers to electronically verify the employment eligibility of their newly hired employees.  Based on the information provided by the employee on the Form I-9, E-Verify checks this information electronically against records contained in DHS and Social Security Administration (SSA) databases.

The new regulation, which is effective on January 15, 2009, adds a new Subpart 22.18 to the FAR.  Agencies are required to include a new contract clause entitled Employment Eligibility Verification, found at FAR 52.222-54, in contracts that are:

1.     Over $100,000,
2.     Include work within the United States,
3.     Have a period of performance of 120 days or more, and
4.     Include items or services that are not “commercially available off-the-shelf” as defined by the regulation (FAR 22.1803(c)).

The clause requires a contract to do the following:

1.     Enroll as a federal contractor in the e-Verify program within 30 days of contract award, if not already enrolled. The includes signing the e-Verify program MOU (which is not negotiable).
2.     Verify employees “assigned to the contract” as that is defined by the clause within 90 days after enrollment in the program, 90 days of contract award, or 30 days of assignment of the employee to the contract, whichever is later.
3.     Beginning within 90 calendar days after enrollment in the e-Verify program or the date of award, whichever is later, verify all new employees whether or not they are assigned to the contract within 3 business days after the date of hire.

Contractors have the option of verifying all employees hired after November 6, 1986.  Individuals with active security clearances or who have had background checks and credentials HSPD-12 do not have to be verified.  Information on the e-Verify program can be found at http://www.dhs.gov/E-Verify.

An employee is not considered to be directly performing work under a contract if the employee:
(1)     Normally performs support work, such as indirect or overhead functions; and
(2)     Does not perform any substantial duties applicable to the contract.

Employees subsequently assigned to the contract must be verified within 30 days of being assigned to the contract.

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