THE BUSH ADMINISTRATION PROPOSES NEW RULES GOVERNING FEDERAL CONTRACTING AND PROCUREMENT

News Date June 20, 2008

       Following the issuance of an presidential executive order compelling the use of the Department of Homeland Security's E-Verify system to confirm the employment eligibility of federal contractors, the Department of Defense, the General Services Administration, and the National Aeronautics and Space Administration published a proposed rule on June 12, 2008, requiring each federal contractor, as a matter of contract, to use E-Verify for verification of employment authorization documents of existing employees and those provided by applicants for employment.  The proposed rule anticipates an effective date sometime in 2009.
       With the exception of certain grants and cooperative agreements, mandatory compliance would apply to every federal contract issued after the date the final rule is published.  Each new contract,  with few exceptions, will contain a clause that requires the contractor and any subcontractor to use E-Verify to determine the employment authorization of all new employees, whether or not those employees work on the contract in question, and all existing employees hired after November 6, 1986, who work on the contract in question. Current existing indefinite delivery/indefinite time contracts will be subject to the new regulations if substantial performance remains.  The only exceptions are contracts for commercial off-the-shelf items, except for bulk agricultural and other products; contracts below the $3,000 micro-purchase threshold; or contracts that do not involve any work in the United States. 
       Subcontractors providing commercial services or construction would also be required to use E-verify if the contract exceeds $ 3,000 and includes work in the United States.  Subcontractors of the prime contractor would be required to include the clause requiring E-verify in their subcontracts.  Ultimately, the requirement would flow down to every tier of subcontractor providing "services or construction."  (Contact: Amy Mann)