Panoptic Enterprises’


Federal Acquisition Developments, Guidance, and Opinions

March 2015
Vol. XVI, No. 3
[pdf version]


OFCCP Proposes Updates to Sex Discrimination Rules
DOD Issues Multitude of Guidance (and Some Regulations)
Advisory Small Business Size Opinions Available
Governmentwide Mentor-Protégé Program Proposed
GSA Revises Its Regulations
DOSAR Brought Up-to-Date

OFCCP Proposes Updates to
Sex Discrimination Rules

The Office of Federal Contract Compliance Programs (OFCCP) is proposing to revise its equal employment opportunity regulations at Title 41 of the Code of Federal Regulations (CFR), part 60-20, Sex Discrimination Guidelines (41 CFR part 60-20), “which have not been substantively updated since 1970, and replace them with regulations that align with current law and legal principles and address their application to current workplace practices and issues.”

41 CFR part 60-20 implements Executive Order 11246, Equal Employment Opportunity, September 24, 1965, which prohibits federal contractors and subcontractors that receive contracts of more than $10,000 during any 12-month period from discriminating “against any employee or applicant for employment because of race, creed, color, or national origin.” Executive Order 11246 was amended by Executive Order 11478, Equal Employment Opportunity in the Federal Government, August 8, 1969, to bar discrimination against federal employees on the basis of race, color, religion, sex, national origin, handicap, and age. Executive Order 13087, Further Amendment to Executive Order 11478, May 28, 1998, added “sexual orientation” to the list of protected categories. (EDITOR’S NOTE: Executive Order 11246, as amended, is implemented in Federal Acquisition Regulation (FAR) subpart 22.8, Equal Employment Opportunity, and the corresponding clause FAR 52.222-26, Equal Opportunity.)

On July 21, 2014, President Obama issued Executive Order 13672, Equal Employment Opportunity Amendments Regarding Sexual Orientation and Gender Identity, which further amended Executive Order 11246 to prohibit federal contractors from discriminating against lesbian, gay, bisexual, and transgender (LGBT) employees, and amended Executive Order 11378 to prohibit discrimination based on gender identity in federal employment. Implementing this executive order is the main thrust of the OFCCP proposed rule.

The proposed rule takes 32 pages to explain and justify the three-page rule. “By clarifying that discrimination against an individual because of her or his gender identity is unlawful sex discrimination, the [notice of proposed rulemaking] would ensure that contractors are aware of their nondiscrimination obligations with respect to transgender employees and would assure equality of opportunity for transgender employees, the vast majority of whom report that they have experienced discrimination in the workplace.”

New 41 CFR 60-20.2, General Prohibition, would summarize the proscribed activities: “It is unlawful for a contractor to discriminate against any employee or applicant for employment because of sex. The term ‘sex’ includes, but is not limited to pregnancy, childbirth, or related medical conditions; gender identity; and transgender status.” It goes on to provide 11 examples of unlawful sex-based discriminatory practices, and four examples of employment policies or practices that have an adverse impact on the basis of sex and are not job-related and consistent with business necessity. Probably the most controversial is the “discriminatory practice” described in paragraph (b)(10): “Denying transgender employees access to the bathrooms used by the gender with which they identify...”

Comments on this proposed rule must be submitted no later than March 31, 2015, identified as “RIN number 1250-AA05,” by any of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov; (2) fax: 202-693-1304 (for comments of six pages or fewer); or (3) mail: Debra A. Carr, Director, Division of Policy, Planning, and Program Development, Office of Federal Contract Compliance Programs, Room C–3325, 200 Constitution Avenue NW, Washington, DC 20210.

For more on Executive Order 13672, see the August 2014 Federal Contracts Perspective article “Sexual Orientation and Gender Identity Order Issued.” Also see the January 2015 Federal Contracts Perspective article “No Sexual Orientation or Gender Identity Discrimination.”

DOD Issues Multitude of Guidance (and Some Regulations)

The Department of Defense (DOD) took it easy on the regulatory front, only issuing three final rules revising the Defense FAR Supplement (DFARS) and one proposed rule to revise the DFARS. However, DOD issued a multitude of guidance and information documents, including six memoranda to the acquisition workforce and three class deviations!

Advisory Small Business Size Opinions Available

The Small Business Administration (SBA) has issued a final rule that implements Section 1681 of the National Defense Authorization Act of 2013 (Public Law 112-239), which requires that SBA create an exemption to the penalties imposed under Title 15 of the U.S. Code, Section 645 (15 USC 645), for misrepresentation of small business status where the person or concern making the misrepresentation acted in good faith reliance on a written advisory opinion from a Small Business Development Center (SBDC) or Procurement Technical Assistance Center (PTAC). In addition, the rule establishes the criteria that small business status advisory opinions must meet to be considered adequate and specifies the review process for such opinions. Finally, the rule updates the circumstances under which SBA may initiate a formal size determination.

This rule goes into effect August 10, 2015.

The rule amends Title 13 of the Code of Federal Regulations, Part 121, Small Business Size Regulations (13 CFR part 121), as follows:

SBA received comments from 16 respondents in response to the proposed rule. In response to these comments, the following changes are made in the final rule:
For more on the proposed rule, see the July 2014 Federal Contracts Perspective article “SBA Addresses Small Business Size Standards.”

Governmentwide Mentor-Protégé Program Proposed

The SBA is proposing to establish a governmentwide mentor-protégé program for all small business concerns that would be consistent with the mentor-protégé program for participants in its 8(a) Business Development program.

This governmentwide mentor-protégé program would implement Section 1347 of the Small Business Jobs Act of 2010 (Public Law 111-240) and Section 1641 of the National Defense Authorization Act for Fiscal Year 2013 (Public Law 112-239).

Section 1347 authorizes the SBA administrator to “establish mentor-protege programs for small business concerns owned and controlled by service-disabled veterans, small business concerns owned and controlled by women, and HUBZone small business concerns modeled on the mentor-protégé program of the [SBA] for small business concerns participating in programs under section 8(a) of the Small Business Act (15 USC 637(a)).”

Section 1641 authorizes the SBA to “establish a mentor-protégé program for all small business concerns…The mentor-protégé program…shall be identical to the mentor-protégé program of the [SBA] for small business concerns that participate in the program under section 8(a)…except that [SBA] may modify the program to the extent necessary given the types of small business concerns included as protégés.” Section 1641 goes on to prohibit agencies from conducting their own mentor-protégé programs unless the head of the agency submits a plan to SBA for approval (this does not apply to DOD because it already has the necessary statutory and regulatory framework for its mentor-protégé program).

While the SBA considered adding four mentor-protégé programs to SBA’s current 8(a) mentor-protégé program (one each for service-disabled veteran-owned small businesses, HUBZone small businesses, women-owned small businesses, and all other small businesses), SBA has decided to propose adding only one mentor-protégé program for all small businesses (in addition to the 8(a) mentor-protégé program) since the other three types of small businesses would necessarily be included within any mentor-protégé program targeting all small businesses. “SBA believes that having five separate small business mentor-protégé programs could become confusing to the public and procuring agencies and hard to implement by SBA.”

The 8(a) mentor-protégé program is used as a business development tool in which mentors provide diverse types of business assistance to their 8(a) protégés to enhance their capabilities and improve their ability to compete for government and commercial contracts. This assistance may include technical and/or management assistance, financial assistance in the form of equity investments and/or loans, subcontracts, and/or assistance in performing federal prime contracts through joint venture arrangements. Similarly, the proposed mentor-protégé program for all small businesses would require approved mentors to provide assistance to their protégés to enhance their capabilities and improve their ability to compete for contracts.

In addition, this proposed rule would amend the current joint venture provisions to clarify the conditions for creating and operating joint venture partnerships, including the effect of such partnerships on any mentor-protégé relationships.

Finally, the proposed rule would make several additional changes regarding the applicability of the “rule of two” to reverse auctions, processing applications for HUBZone certification, reconsideration of SBA’s Office of Hearings and Appeals decisions, and the review of the administrative record in 8(a) appeals.

Comments on this proposed rule must be submitted no later than April 6, 2015, identified as “RIN 3245–AG24,” by either of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov; or (2) mail/hand delivery/courier: Brenda Fernandez, U.S. Small Business Administration, Office of Government Contracting, 409 3rd Street SW, 8th Floor, Washington, DC 20416.

For more on Public Law 111-240, see the October 2010 Federal Contracts Perspective article “Parity Among Small Business Programs Mandated by Statute.” For more on Public Law 112-239, see the February 2013 Federal Contracts Perspective article “FY 2013 National Defense Authorization Act Extends FAR Subpart 13.5 Procedures Through 2014.”

GSA Revises Its Regulations

The General Services Administration (GSA) is revising (or proposing to revise) several of its regulations: the GSA Acquisition Regulation (GSAR), the Federal Property Management Regulations (FPMR), and the Federal Management Regulation (FMR).

DOSAR Brought Up-to-Date

The Department of State (DOS) is making technical amendments to the DOS Acquisition Regulation (DOSAR) to provide needed editorial changes, update procedures and terminology, and align it with changes to the FAR.

All the amendments are either corrections of typographical errors, alignments of wording/titling/numbering with the FAR, renumbering/relocating without substantive change, changes in delegated authority, incorporation of agency procedural guidance into the Code of Federal Regulations (CFR), or other minor editorial adjustments without substantive change.

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