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Stimulus Bill Prompts Renewed Interest In Government Contracting

    Client Alerts
  • February 13, 2009

As details of the proposed federal economic stimulus package become more concrete, a number of businesses with little or no experience in government contracting may be tempted to explore opportunities in supply, professional services, or construction. Companies considering bidding on such contracts need to be aware of the substantial employment and labor regulations that accompany federal contractor status.

First and foremost, government contracts over $10,000 will subject the contractor to Executive Order 11246. In addition to anti-discrimination rules, this Order imposes Affirmative Action Plan (AAP) requirements for contractors with 50 or more employees and a contract that exceeds $50,000. These rules may apply regardless of whether the company is participating in the government work as a prime contractor or subcontractor.

The AAP must be drafted and implemented within 120 days of award of the contract. It requires a detailed analysis of underutilization of women and minorities across job categories, and development of action plans to address any such underutilization. The AAP may apply to all of the company's operations and divisions, and not just the ones performing the government work. The employer must maintain detailed records regarding applicants and promotions, including records of electronic recruiting database searches.