Federal Contractor Requirements — FAR, Prevailing Wages, Affirmative Action & Compliance

The federal government remains one of the world's largest buyers of goods and services. But the current federal-contractor landscape is more fluid than this page previously suggested. The Federal Acquisition Regulation (FAR) still governs core solicitation, award, and contract-administration rules, while labor, wage, cybersecurity, small-business, domestic-preference, and ethics requirements continue to sit on top of it. Since 2025, however, several headline contractor rules have changed: acquisition thresholds were increased government-wide on October 1, 2025, the Biden-era EO 14026 contractor minimum wage was revoked on March 14, 2025, and the federal contractor equal-employment / affirmative-action framework tied to Executive Order 11246 has been materially reshaped by newer presidential directives. That means current compliance depends heavily on contract date, clause flowdown, agency, and whether a contractor is in the civilian, infrastructure, or defense ecosystem.

Current Law (2026)

Legal Authority

• 41 U.S.C. § 107 — Full and open competition requirement
• 41 U.S.C. §§ 1101–1131 — Office of Federal Procurement Policy (OFPP) and procurement policy
• 41 U.S.C. § 1702 — Chief Acquisition Officers and senior procurement executives
• 40 U.S.C. §§ 3141–3148 — Davis-Bacon Act (prevailing wages for construction)
• 41 U.S.C. §§ 6701–6707 — Service Contract Act (minimum wages for service workers)
• Executive Order 11246 — Historical federal-contractor equal employment and affirmative-action framework; current contractor obligations must be read alongside later executive actions and agency implementation changes
• 15 U.S.C. § 637 — Small business contracting goals and set-asides
• 41 U.S.C. §§ 8301–8305 — Buy American Act (domestic source preference)

Implementing Regulations

• 41 CFR Part 60-1 — Obligations of Contractors and Subcontractors (35 sections — the OFCCP's regulations implementing the EEO and affirmative action requirements historically imposed on federal contractors under Executive Order 11246; note: EO 11246 was revoked by EO 14173 on January 20, 2025, materially changing the operative requirements):

  • § 60-1.1 — Purpose and application: Part 60-1 historically imposed equal employment opportunity and affirmative action obligations on federal contractors with contracts over $10,000; required non-discrimination on the basis of race, color, religion, sex, and national origin; required affirmative action programs (AAPs) for contractors with 50+ employees and contracts of $50,000+; the January 20, 2025 Executive Order 14173 ("Ending Illegal Discrimination and Restoring Merit-Based Opportunity") revoked EO 11246 and directed agencies to terminate contractor DEI requirements; OFCCP is implementing the revocation, though the full scope of affected contractor requirements remains in flux as of 2026
  • § 60-1.20 — Compliance evaluations: OFCCP was authorized to conduct compliance evaluations at any federal contractor — desk audits, on-site reviews, and full-scale compliance reviews; contractors had 30 days to respond to audit requests; OFCCP could require submission of AAPs, compensation data, and employment statistics; under EO 14173, the scope of OFCCP compliance evaluations is being restructured away from affirmative action and toward core anti-discrimination obligations
  • § 60-1.21 — Complaints: employees and job applicants may file complaints with OFCCP within 180 days of an alleged EEO violation by a federal contractor; OFCCP investigates and may refer to the Equal Employment Opportunity Commission (EEOC) for concurrent jurisdiction (when the same facts trigger both contractor EEO obligations and Title VII); complaints alleging pay discrimination or systemic disparate treatment remain viable under the non-discrimination components even after EO 11246's revocation
  • § 60-1.26 — Enforcement proceedings: OFCCP may initiate administrative enforcement after finding a violation — the process runs through Administrative Law Judges with appeal to the Administrative Review Board (ARB) and then federal courts; remedies include back pay, hiring/promotion relief, changes to personnel practices, and in extreme cases, debarment from future federal contracting; debarment is the most powerful enforcement tool — it is economically devastating for contractors dependent on federal work
  • § 60-1.12 — Record retention: contractors must retain all personnel and employment records for 2 years after the record's creation (1 year for small contractors below the AAP threshold); records include: applications and resumes, interview notes, hiring and promotion decisions, compensation history, training records, and termination documentation; during an OFCCP audit, these records must be produced; federal contractors must maintain employment records separate from the ADP systems of their parent or affiliate companies

  Current compliance status (2026): EO 11246's revocation means contractors are no longer required to prepare annual Affirmative Action Programs or submit employment utilization analyses to OFCCP under the historical framework. However, the underlying non-discrimination obligations — prohibiting discrimination based on race, color, religion, sex, national origin, disability (Section 503), and veteran status (VEVRAA) — remain in full effect through separate statutes. Section 503 (disability affirmative action) and VEVRAA (veteran affirmative action) have their own statutory bases independent of EO 11246 and continue to require AAPs for covered contractors. Contractors should audit their AAP programs against current agency guidance rather than historical summaries.

  Historical context: EO 11246 (issued by President Johnson in 1965) required federal contractors

• 41 CFR Part 60-300 — Affirmative Action and Nondiscrimination Obligations for Covered Veterans (VEVRAA) (32 sections — the OFCCP regulations implementing the Vietnam Era Veterans' Readjustment Assistance Act (VEVRAA), 38 U.S.C. §§ 4211–4214; this program survived the revocation of EO 11246 because it is statutory, not based on executive authority):

  • § 60-300.4 — Coverage thresholds: all federal contracts and subcontracts of $100,000 or more trigger VEVRAA requirements; the contractor must have 50 or more employees to be subject to the written AAP requirement (smaller contractors have the non-discrimination obligation but no written AAP); VEVRAA coverage is broader than EO 11246 in that it covers all federal contractors and subcontractors over the threshold, not just direct prime contractors; subcontractors that exceed $100,000 are independently covered
  • § 60-300.5 — Equal opportunity clause: covered contracts must include an equal opportunity clause committing the contractor to (1) not discriminate against covered veterans, (2) take affirmative action to employ and advance in employment covered veterans, (3) list all suitable employment openings with state workforce agencies and local employment service offices (the mandatory job listing requirement — one of VEVRAA's most operationally significant provisions)
  • § 60-300.20–60-300.25 — Employment non-discrimination: contractors may not discriminate against disabled veterans, recently separated veterans (within 3 years of discharge), active duty wartime or campaign badge veterans, and Armed Forces service medal veterans in all employment activities — hiring, promotion, pay, training, and termination; reasonable accommodation of disabled veterans is required; pre-offer medical examinations/inquiries are prohibited; post-conditional-offer examinations are permitted but must be applied consistently
  • § 60-300.40 — Written Affirmative Action Program (AAP) requirement: contractors with 50+ employees and $100,000+ contracts must develop and maintain a written AAP for each establishment; the AAP must include: (1) a utilization analysis comparing the contractor's incumbent covered veteran workforce to the availability of covered veterans in the relevant labor market; (2) an annual hiring benchmark (set to equal the national percentage of covered veterans in the civilian labor force, currently approximately 5.8%); (3) data on referrals, applicants, and hires; (4) outreach and recruitment activities to attract covered veterans; the AAP must be updated annually and available to OFCCP for review
  • § 60-300.42 — Invitation to self-identify: contractors must invite applicants to voluntarily self-identify as covered veterans before extending an offer — a pre-offer invitation for voluntary data collection (not a requirement to disclose); after a conditional offer of employment, a second invitation to self-identify is required; the self-identification data is used for the utilization analysis and the hiring benchmark; contractors cannot use the self-identification to make employment decisions
  • § 60-300.44 — VETS-4212 annual reporting: contractors with $150,000+ in federal contracts must submit an annual VETS-4212 report to DOL by September 30 each year disclosing their covered veteran employment data (number hired, number employed, and comparison to hiring benchmarks); the report is filed electronically through DOL's Veterans' Employment and Training Service (VETS) office; the VETS-4212 data is aggregated and published by DOL as national data on federal contractor veteran hiring

  VEVRAA obligations are significant compliance requirements that survived the Trump administration's EO 11246 revocation. Contractors that previously complied with EO 11246 will find the VEVRAA structure similar — but focused exclusively on covered veterans. The mandatory job listing requirement (listing suitable openings with state employment services) is unique to VEVRAA and has no EO 11246 parallel. OFCCP enforces VEVRAA through compliance evaluations, complaint investigations, and, in cases of systemic violations, conciliation agreements or formal enforcement action. Recent rulemakings: 88 FR 51735 (August 2023) — updated hiring benchmark calculation methodology; 78 FR 58662 (September 2013) — major 2013 rule adding the hiring benchmark requirement. to take "affirmative action" to ensure non-discrimination and, beginning in the 1970s, to maintain written AAPs with numerical goals and timetables for remedying underutilization of minorities and women. The Part 60-1 regulatory framework expanded significantly between 1970 and 2000, becoming a major federal employment compliance obligation for companies doing significant government business. The Trump administration's EO 14173 marked the most significant rollback of the framework since its inception.

• 41 CFR Part 60-4 — Construction Contractors — Affirmative Action Requirements: the OFCCP regulations governing EEO and affirmative action requirements specifically for construction contractors and subcontractors with federal or federally assisted construction contracts over $10,000 — separate from the supply-and-service contractor rules in Part 60-1:

  • § 60-4.1 — Scope: applies to all contractors and subcontractors holding any federal or federally assisted construction contract over $10,000; the regulations apply to all of a contractor's construction employees working on the project, even if some are hired through subcontractors or labor unions; the broad coverage ensures that the entire workforce on a federal construction project is subject to EEO requirements, not just employees hired directly by the prime contractor
  • § 60-4.2 — Notice requirements: federal contracting officers must include an equal opportunity notice and the Standard Federal EEO Construction Contract Specifications in all solicitations for federally involved construction; the notice requirement ensures that bidders know about EEO obligations before they price and submit bids
  • § 60-4.4 — Affirmative action requirements: construction contractors must undertake specific affirmative action steps including: maintaining a working environment free of harassment; informing unions, subcontractors, and employment agencies of their EEO commitments; maintaining records of bids, hiring decisions, and referrals; monitoring subcontractor compliance; and taking corrective action when minority or female utilization falls short of goals
  • § 60-4.6 — Goals and timetables: OFCCP historically issued geographic area-specific goals for minority and female utilization in construction trades — expressed as percentages of labor hours worked — for each Metropolitan Statistical Area; these goals reflected the historical underrepresentation of minorities and women in skilled construction trades; the national female utilization goal had been 6.9% of labor hours; under EO 14173 (January 2025), the legal basis for numerical construction trade goals under EO 11246 was revoked, and OFCCP has been implementing the revocation — but the non-discrimination obligations under the regulations remain
  • § 60-4.3 — Equal opportunity clause: construction contracts must include a clause committing the contractor to non-discrimination and EEO in recruitment, hiring, compensation, training, promotion, and termination; the clause applies to all construction trades on the project
  • § 60-4.5 — Hometown Plans: contractors may satisfy affirmative action obligations through participation in approved Hometown Plans — voluntary local industry-wide programs where unions and contractors jointly commit to increasing minority and female participation in construction trades through recruitment, apprenticeship, and training; Hometown Plans are an alternative to contractor-specific goals

  Part 60-4 reflects the construction industry's historical underrepresentation of minorities and women in skilled trades — a pattern driven by both union exclusivity (historically excluding minorities) and apprenticeship systems controlled by incumbent workers. Unlike office employment, construction work is project-based and trade-specific, making workforce monitoring more complex. Post-EO 14173 revocation, the Part 60-4 non-discrimination obligations remain enforceable through complaints and compliance reviews, but the numerical goal framework under EO 11246 is no longer operative. Recent rulemakings: 43 FR 49254 (October 1978) — original Part 60-4 rules; 45 FR 65978 (October 1980) — last major substantive revision.

• 41 CFR Part 60-742 — Procedures for Complaints/Charges of Employment Discrimination Based on Disability Filed Against Federal Contractors: the procedural rules governing the coordination between OFCCP and the EEOC when an employee files a disability discrimination complaint that implicates both the Americans with Disabilities Act (ADA, Title I) and the Rehabilitation Act's Section 503 (which applies specifically to federal contractors). Key provisions:

  • § 60-742.1 — Purpose and application: establishes that complaints filed against federal contractors alleging disability discrimination may be dual-filed under both Section 503 of the Rehabilitation Act and ADA Title I — because a contractor's employees can pursue both statutory frameworks; the Part sets out the agency coordination rules that prevent duplicative proceedings
  • § 60-742.2 — Information sharing: EEOC and OFCCP must share any information about contractor employment practices that may assist either office in carrying out its responsibilities; the information-sharing obligation is mutual and ongoing, not triggered only by active complaints
  • § 60-742.3 — Confidentiality: when DOL/OFCCP receives information originally obtained by EEOC, it must observe the confidentiality requirements of Title VII §§ 706(b) and 709(e) — the EEOC's confidentiality rules — which protect charge information from disclosure during the investigation period
  • § 60-742.4 — Unified standards: in any OFCCP investigation, hearing, or proceeding on a dual-filed complaint, OFCCP must apply the same substantive standards as the ADA — meaning the ADA's definition of disability (actual disability, record of disability, regarded as disabled), reasonable accommodation requirements, and undue hardship defense all apply in OFCCP's Section 503 enforcement context
  • § 60-742.5 — OFCCP-filed complaints: disability discrimination complaints filed with OFCCP against federal contractors are simultaneously dual-filed as ADA charges; OFCCP has primary jurisdiction for contractor-specific Section 503 enforcement, but when the facts also trigger ADA coverage, EEOC is notified; if OFCCP finds cause and the contractor refuses conciliation, OFCCP may initiate administrative proceedings or refer to DOJ for federal court litigation
  • § 60-742.6 — EEOC-filed charges: ADA cause charges that also implicate Section 503 (i.e., the employer is a federal contractor) are referred to OFCCP when EEOC declines to litigate; OFCCP then has authority to pursue the Section 503 enforcement track, including debarment from federal contracting — a remedy unavailable to EEOC under the ADA

  This coordination framework matters because federal contractors face a two-track enforcement system for disability discrimination — the ADA track (EEOC → federal court) and the Section 503 track (OFCCP → administrative enforcement → debarment). An employee who files with EEOC against a federal contractor triggers both tracks automatically; an employee who files with OFCCP gets the additional leverage of debarment. The Part 60-742 rules prevent the two agencies from duplicating investigations or taking conflicting positions. For contractors, the practical implication is that a single disability discrimination complaint can result in both EEOC cause findings (leading to litigation) and OFCCP compliance reviews (leading to potential debarment) — making early resolution of disability complaints through interactive-process accommodation particularly important.

• 41 CFR Part 60-50 — OFCCP Guidelines on Discrimination Because of Religion or National Origin: the OFCCP interpretive guidance implementing EO 11246's nondiscrimination requirement for religion and national origin — distinct from the affirmative action provisions revoked by EO 14173 in 2025, these nondiscrimination obligations remain fully in force for covered federal contractors:

  • § 60-50.2 — Equal employment policy: contractors must not discriminate in hiring, promotion, compensation, training, or termination based on religion or national origin; this prohibition mirrors Title VII but applies through the EO 11246 contractor compliance framework (OFCCP enforcement, not EEOC) and covers contractors that may be below EEOC's 15-employee threshold
  • § 60-50.3 — Religious accommodation: a covered federal contractor must accommodate an employee's or applicant's religious observances and practices unless the employer demonstrates that accommodation would cause undue hardship; the standard mirrors Title VII's religious accommodation requirement — "undue hardship" means more than a de minimis cost or burden; common accommodations include shift swaps, modified schedules for religious observances, leave for religious holidays, and dress code exceptions for religious attire; the contractor cannot simply claim hardship without demonstrating actual operational difficulty
  • § 60-50.5 — Non-use as a basis for discrimination: the religious accommodation provisions cannot be used to discriminate against any other protected group; a contractor cannot justify race, sex, or disability discrimination by claiming it would conflict with the religious beliefs of other employees or managers

The Part 60-50 guidelines have gained renewed relevance in the post-EO 14173 environment: while EO 11246's affirmative action mandates were revoked, the underlying non-discrimination obligations — including the religious accommodation requirement — are rooted in the surviving portions of EO 11246 and are enforced by OFCCP independently of the revoked affirmative action framework. Contractors navigating religious accommodation requests from employees — particularly requests related to Sabbath observance, religious dress, or religious holidays — must apply the same "undue hardship" analysis under Part 60-50 as they would under Title VII, and OFCCP can investigate complaints and impose debarment sanctions for violations.

• 41 CFR Part 61-300 — Annual Report from Federal Contractors (VETS-4212): the DOL Veterans' Employment and Training Service (VETS) regulations specifying the procedural requirements for the mandatory annual veterans' employment report filed by covered federal contractors. Part 61-300 is the procedural counterpart to the substantive VEVRAA obligations in 41 CFR Part 60-300:

  • § 61-300.1 — Coverage threshold: any contractor or subcontractor with a federal contract or subcontract of $100,000 or more must file the VETS-4212 Report annually; coverage attaches at contract award, not employee count; a contractor with 10 employees and a $150,000 contract must file, while a 1,000-employee company with only $50,000 in federal contract work does not
  • § 61-300.11 — Filing deadline and method: VETS-4212 Reports must be filed by September 30 of each calendar year, reporting employment data from the reporting period ending August 31; filing is exclusively electronic through DOL's VETS reporting system (at dol.gov/agencies/vets); paper filings are not accepted; contractors must register with the system before their first filing
  • § 61-300.10 — Required content: the report discloses (by job category and hiring location) the number of employees who are covered veterans (disabled veterans, recently separated veterans, active duty wartime/campaign badge veterans, and Armed Forces Service Medal veterans); the number of new hires who are covered veterans; and total employees in each job category; this data allows DOL to track national trends in federal contractor veteran hiring and feeds the OFCCP's utilization analysis for affirmative action audits
  • § 61-300.20 — Compliance evaluation: during a VEVRAA compliance evaluation, OFCCP will verify that the contractor filed timely VETS-4212 Reports for the most recent reporting periods; failure to file or late filing is independently citable as a violation; contractors that cannot demonstrate timely filing may face compliance proceedings even if their actual veteran employment is otherwise satisfactory

• 29 CFR Part 13 — Establishing Paid Sick Leave for Federal Contractors (29 sections — the DOL regulations implementing Executive Order 13706, which required covered federal contractors and subcontractors to provide at least 56 hours (7 days) of paid sick leave per year to their employees; authority: 5 U.S.C. § 301; promulgated September 2016):

  • § 13.2 — Coverage: Part 13 applied to "new contracts" (contracts entered into after January 1, 2017, or contracts entered into before that date and extended or renewed after it) for (1) services under the Service Contract Act; (2) construction under Davis-Bacon; (3) concessions on federal property; and (4) services for federal employees and their families; excluded: contracts with state, local, or tribal governments; workers covered by a bona fide collective bargaining agreement that already provided equivalent paid leave
  • § 13.22 — Accrual: employees accrued 1 hour of paid sick leave per 30 hours worked on or in connection with a covered contract; accrual was capped at 56 hours per accrual year (the 12-month period defined in the contract); unused leave must be carried over at year-end but the annual cap could be applied to limit total available leave at any time to 56 hours; employers who provided a front-loaded 56 hours at the start of the year satisfied the accrual requirement without needing to track hours
  • § 13.5 — Permitted uses: employees could use paid sick leave for their own illness, medical diagnosis, care, or preventive care; to care for a family member or close associate for similar medical needs; and for reasons related to domestic violence, sexual assault, or stalking (consistent with the Violence Against Women Act); the employer could not require documentation for absences of three or fewer consecutive days unless the employee would be absent for more than three days
  • § 13.11 — Contract clause: contracting agencies were required to include the EO paid sick leave clause in all covered contracts; the clause was a material contract term, and contractors received payment conditioned on compliance
  • § 13.40–13.44 — Anti-retaliation: employers could not discharge, reduce pay, or take other adverse action against any employee for using or attempting to use paid sick leave; employees who were retaliated against could file complaints with WHD; remedies included reinstatement and recovery of lost wages

  Current status (2026): Executive Order 13706 was revoked by President Trump's Executive Order 14236 (issued January 20, 2025), which revoked multiple Biden-era and Obama-era federal contractor labor standards executive orders. Part 13 remains in the CFR but DOL has indicated it is no longer enforcing the paid sick leave requirement for new contracts entered into after the revocation date. Contractors who entered into new contracts since January 20, 2025 are not required to provide Part 13 sick leave. However, contracts entered into before the revocation date that include the EO 13706 contract clause may continue to require paid sick leave for the duration of those contracts depending on the contract's terms and the agency's contracting officer guidance. Separately, many states (California, New York, Massachusetts, and others) have their own paid sick leave laws that apply to federal contractor employees — those state requirements remain in force independently of the federal EO revocation.

• 41 CFR Part 60-1 — Obligations of Contractors and Subcontractors: the OFCCP regulations implementing Executive Order 11246, which prohibits employment discrimination and requires affirmative action by federal contractors and subcontractors. EO 11246 was signed by President Johnson in 1965 and applies to contractors with federal contracts of $10,000 or more (nondiscrimination only) or $50,000 or more combined with 50+ employees (full affirmative action program required). Key provisions:

  • § 60-1.1 — Purpose and application: Part 60-1 implements EO 11246's prohibition on employment discrimination based on race, color, religion, sex, sexual orientation, gender identity, and national origin; every covered federal contract and subcontract must include the equal opportunity clause specified in § 60-1.4 as a condition of contract performance
  • § 60-1.4 — Equal opportunity clause: every covered contract must include language prohibiting discrimination, requiring the contractor to take affirmative action, stating that the EEO clause is incorporated by reference even if not expressly stated, and requiring the same obligation in subcontracts; the clause is operative regardless of whether the contract is in writing or oral
  • § 60-1.12 — Record retention: contractors must maintain personnel and employment records (applications, interview notes, test results, promotion records) for 2 years if the contractor has 150+ employees and $150,000+ in federal contracts; smaller contractors must retain for 1 year; these records are the primary evidentiary basis in OFCCP compliance evaluations
  • § 60-1.20 — Compliance evaluations: OFCCP may conduct compliance evaluations (desk audits and on-site reviews) without prior notice and without a complaint triggering the evaluation; OFCCP uses a scheduling methodology that selects contractors for audit based on indicators of potential systemic discrimination — workforce composition relative to availability data, compensation differences, etc.; compliance evaluations are the primary enforcement mechanism, far outnumbering complaint-based investigations
  • § 60-1.21 — Complaints: individual employees and applicants may file complaints with OFCCP within 180 days of the alleged violation; OFCCP may refer complaints to EEOC or investigate them directly; complaints may be filed at any OFCCP regional or district office; OFCCP complaint processing has historically had significant backlogs
  • § 60-1.40 — Affirmative action programs (AAP): contractors with 50+ employees and $50,000+ in contracts must develop and maintain a written Affirmative Action Program analyzing their workforce composition, establishing placement goals where women or minorities are underutilized relative to availability in the relevant labor market, and describing action-oriented programs to achieve the goals; the AAP must be updated annually; contractors must make their AAP available to OFCCP on request within 30 days; AAPs are not filed with OFCCP (unlike the VETS-4212), but must be produced on demand

  The OFCCP's EO 11246 compliance program is one of the most significant workplace nondiscrimination mechanisms in U.S. law, extending federal EEO standards to private contractors who might not otherwise be subject to them. The contractor community covered by EO 11246 includes virtually all large U.S. employers (most major corporations hold federal contracts through their government services, defense, or technology work) — so EO 11246's reach substantially exceeds the direct government contractor workforce. OFCCP's enforcement approach has evolved: under the Obama and Biden administrations, OFCCP increased focus on systemic compensation discrimination audits and pay transparency; under Trump administrations, the emphasis shifted toward reducing compliance burden and updating the scheduling methodology. The Trump administration's March 2025 executive orders rescinded several DEI-related directives and directed OFCCP to review whether its affirmative action program requirements remained legally valid in light of Students for Fair Admissions v. Harvard (2023) — creating significant uncertainty about the future scope of AAP requirements.

  Note: EO 11246 was revoked by Executive Order 14173 in January 2025, which directed agencies to terminate DEI-related contractor requirements. As of 2026, OFCCP is implementing this rollback; contractors should monitor OFCCP guidance for current requirements.

• 41 CFR Part 60-2 — Affirmative Action Programs (17 sections — the OFCCP regulations specifying the detailed methodology and required contents of the written Affirmative Action Programs that supply-and-service federal contractors with 50+ employees and $50,000+ in contracts were historically required to maintain under EO 11246; with the revocation of EO 11246 by EO 14173, the scope of Part 60-2 applicability is in transition, but its analytical framework remains operative for Section 503 and VEVRAA AAPs and for any surviving EO 11246 obligations):

  • § 60-2.10 — Purpose of the AAP: an Affirmative Action Program is a management tool designed to ensure equal employment opportunity; the premise is that absent discrimination, workforce composition over time should roughly reflect the composition of qualified labor pools; when significant gaps exist, the AAP's action-oriented programs are designed to systematically eliminate barriers
  • § 60-2.11 — Organizational profile: the contractor must depict its staffing pattern by creating either a workforce analysis (a list of job titles ranked from lowest to highest pay with data on the sex and race/ethnicity of incumbents) or an organizational display (showing the organizational units, their reporting relationships, and the sex and race/ethnicity of employees in each unit); the organizational profile is the starting point for identifying whether minorities and women are concentrated in certain job levels or excluded from others
  • § 60-2.12 — Job group analysis: jobs with similar content, wage rates, and opportunities must be grouped together for analysis; within each job group, the contractor must separately track the percentage of minority employees and the percentage of women employees; job grouping is the unit of analysis for the utilization comparison — each job group is assessed independently
  • § 60-2.13 — Placement of incumbents: for each job group, the contractor must state the percentage of minorities and the percentage of women currently employed — "incumbency" — separately; the incumbency percentages are the baseline from which the AAP measures progress
  • § 60-2.14 — Availability determination: availability is an estimate of the percentage of qualified minorities and women in the relevant labor market for each job group; contractors use two factors: (1) the percentage of minorities and women with the requisite skills in the reasonable recruitment area; and (2) the percentage of minorities and women among those promotable, transferable, and trainable within the contractor's organization; availability is the benchmark against which incumbency is compared
  • § 60-2.15 — Incumbency vs. availability comparison: the contractor compares incumbency to availability for each job group; where the percentage of women or minorities employed is less than "would reasonably be expected given their availability," the contractor has a "placement goal" obligation for that group in that job group
  • § 60-2.16 — Placement goals: placement goals are targets for increasing utilization in job groups where underutilization exists; goals must be "reasonably attainable" through good faith effort; they are not rigid quotas — the standard is good faith effort to achieve the goal, not numerical compliance; goals are set at the availability percentage (i.e., "if availability is 15% women, the goal is to achieve 15% incumbency") and measured against progress over the AAP year
  • § 60-2.17 — Additional AAP elements: beyond the statistical analysis, the AAP must designate a responsible official for EEO coordination; identify problem areas (through audit and reporting systems); develop and execute action-oriented programs to eliminate barriers; establish a system for periodic internal review of progress toward goals; and conduct an annual program summary update
  • § 60-2.30 — Corporate Management Compliance Evaluations: a specialized OFCCP audit specifically designed to identify whether minorities and women face "glass ceiling" barriers — artificial obstacles to advancement into mid-level and senior management; these evaluations examine promotion rates, compensation disparities by level, and whether any job groups in corporate management show lower-than-expected minority/female incumbency despite apparent availability; the audit covers all establishments of a single corporate enterprise

  Part 60-2 is the technical blueprint that turns Part 60-1's general obligation to maintain an AAP into a defined analytical methodology. The eight-step process (organizational profile → job group analysis → incumbency → availability → comparison → goals → action programs → internal audit) became the de facto standard for workforce diversity analysis in large federal contractors — and its analytical approach influenced broader workforce analytics practices even outside the federal contracting context. Post-EO 14173 status: the Part 60-2 AAP methodology specifically for race and sex under EO 11246 was effectively suspended by the January 2025 revocation of EO 11246. However, the same analytical steps are required for Section 503 (disability) AAPs under 41 CFR Part 60-741 and for VEVRAA (veteran) AAPs under 41 CFR Part 60-300 — which have independent statutory bases not affected by EO 14173. Contractors maintaining those AAPs will continue using a similar analytical structure. Recent rulemakings: 65 FR 68042 (November 2000) — comprehensive revision of Part 60-2's AAP methodology; 79 FR 72995 (December 2014) — technical updates.

• 41 CFR Part 60-741 — Affirmative Action and Nondiscrimination Obligations for Contractors Regarding Individuals with Disabilities: the OFCCP regulations implementing Section 503 of the Rehabilitation Act of 1973 (29 U.S.C. § 793), which requires covered federal contractors with contracts over $15,000 to take affirmative action to employ and advance in employment qualified individuals with disabilities. Key provisions:

  • § 60-741.21 — Utilization goal: OFCCP's 2013 revision to Part 60-741 established a 7% utilization goal for individuals with disabilities in each job group of a contractor's workforce; the goal is not a quota but a benchmark for self-assessment — contractors that fail to achieve it must document the specific actions they took to recruit and hire individuals with disabilities; this 7% goal represented a significant tightening compared to the pre-2013 rule, which had no numeric benchmark
  • § 60-741.44 — Required affirmative action activities: covered contractors must invite applicants and employees to voluntarily self-identify as individuals with disabilities at pre-offer, post-offer, and annual re-solicitation stages; must review all personnel processes to ensure they do not screen out qualified individuals with disabilities; must develop and maintain a written AAP for individuals with disabilities
  • § 60-741.42 — Physical and mental qualifications: contractors may require that an individual be able to perform the essential functions of the job, but must consider whether reasonable accommodation would enable performance; contractors cannot screen out individuals with disabilities based on inability to perform non-essential functions

  Part 60-741 works alongside EO 11246 (Part 60-1) and VEVRAA (Part 60-300) as the third leg of OFCCP's contractor affirmative action framework — the three statutes/orders cover race/sex/national origin, disabilities, and veterans respectively. The disability self-identification system is the most direct interaction most employees have with Part 60-741; OFCCP's 7% goal has been met with significant pushback from employer groups who argue it creates de facto quotas.

• 41 CFR Part 60-30 — Rules of Practice for OFCCP Administrative Enforcement Proceedings (38 sections — the procedural rules governing ALJ hearings when OFCCP initiates formal enforcement action against a federal contractor for violating EO 11246, Section 503, or VEVRAA; in the absence of a specific provision, the Federal Rules of Civil Procedure apply; 43 FR 49259 (1978), updated 88 FR 51735 (2023)):

  • § 60-30.1 — Applicability: Part 60-30 governs all OFCCP administrative proceedings — compliance hearings, debarment proceedings, and show-cause proceedings — for construction and supply-and-service contractors; formal proceedings begin when OFCCP files a complaint with the Office of Administrative Law Judges after failing to reach a conciliation agreement with the contractor
  • §§ 60-30.3–60-30.7 — Commencement and pleadings: OFCCP initiates an enforcement proceeding by filing a notice of hearing and complaint; the contractor has 20 days to answer; OFCCP may file a reply to the answer; the complaint must specify the violations alleged, the facts supporting each violation, and the relief requested (which may include back pay, hiring or promotion relief, practice changes, and debarment)
  • § 60-30.10 — Document production and site inspection: after commencement, any party may serve document requests; requested documents must be produced within a reasonable time and at a reasonable place; OFCCP may seek access to contractor facilities for inspection and measurement — particularly relevant in construction contractor cases where physical site accessibility for workers with disabilities is at issue
  • § 60-30.11 — Depositions: either party may take depositions after commencement; parties must produce their own employees and witnesses; depositions may be used to establish facts, test witness credibility, or preserve testimony for use at the hearing
  • § 60-30.12 — Prehearing conferences: the ALJ may convene prehearing conferences to simplify issues, obtain stipulations, resolve discovery disputes, and set hearing schedules; prehearing conferences are common in complex cases with large volumes of employment data or multiple plant locations
  • §§ 60-30.15–60-30.20 — Hearings: hearings are conducted before an Administrative Law Judge; testimony is taken under oath; the rules of evidence applicable in the ALJ hearing context apply; parties have the right to cross-examine adverse witnesses; the hearing record is the sole basis for the ALJ's decision
  • §§ 60-30.25–60-30.30 — Initial and final decisions: the ALJ issues an initial decision with findings of fact and conclusions of law; parties may file exceptions within 25 days; the Administrative Review Board (ARB) reviews exceptions and issues the final agency decision; ARB decisions are reviewable in federal circuit courts
  • § 60-30.35 — Sanctions: the ALJ may impose sanctions (including drawing adverse inferences from a party's failure to comply with discovery orders) for failure to cooperate with discovery or hearing procedures; ultimate sanctions available to OFCCP through the hearing process include: (1) back pay for identified victims; (2) injunctive relief requiring specific hiring or promotion actions; (3) cancellation of existing federal contracts; and (4) debarment from future federal contracting — the most severe remedy, rarely imposed but legally available for willful and persistent violations

  OFCCP's Part 60-30 hearing process is rarely reached in practice: the vast majority of OFCCP enforcement actions are resolved through conciliation agreements before formal proceedings are filed. The administrative hearing track serves primarily as leverage — the credible threat of a public hearing with potential debarment motivates contractors to negotiate settlements. When proceedings do go to hearing (typically in cases of systemic compensation discrimination or repeated noncompliance across multiple compliance evaluations), they can take 1–3 years from complaint filing to ARB decision. The 2025 revocation of EO 11246 did not eliminate Part 60-30 — OFCCP continues to use these procedures to enforce the surviving statutory programs (Section 503 and VEVRAA). Recent rulemakings: 88 FR 51735 (August 2023) — procedural updates; 85 FR 30627 (May 2020) — amendments clarifying the ARB's review scope.

How It Works

Federal contracting begins with a solicitation — an RFP, RFQ, or IFB, typically posted through SAM.gov — where contractors submit offers evaluated under the solicitation's stated criteria. The simplified acquisition threshold is $350,000 and the micro-purchase threshold is $15,000 effective October 1, 2025; above those thresholds, agencies generally operate under the FAR's competition rules unless a statutory or regulatory exception applies. Federal contractors face wage and labor standards beyond ordinary private employment law: the Davis-Bacon Act applies prevailing-wage rules to covered federal construction contracts over $2,000, and the Service Contract Act applies prevailing wages and fringe-benefit rules to covered federal service contracts over $2,500. Executive Order 14026 was revoked on March 14, 2025 and is no longer being enforced; some older contracts remain subject to EO 13658, whose minimum wage increases to $13.65/hour beginning May 11, 2026 for covered non-tipped workers; contractors also need to monitor paid-sick-leave rules, anti-trafficking clauses, and occupational safety requirements where applicable.

The federal government maintains a statutory goal of awarding 23% of prime contract dollars to small businesses, with category-specific subgoals pursued through set-asides, sole-source authorities, and subcontracting plans; firms working through those programs often also rely on SBA loan programs, SBIR/STTR innovation programs for R&D work, and the Minority Business Development Agency for business-center support. Federal contractors face unique compliance obligations: cost accounting and pricing-data rules where applicable, organizational-conflict-of-interest restrictions, supply-chain and domestic-preference clauses (notably the Buy American Act), cybersecurity requirements such as CMMC in the defense sector, ethics obligations, and exposure to suspension or debarment and False Claims Act liability for serious violations. Contractors receiving federal money in grant rather than contract form should separately check the rules under federal grants and cooperative agreements.

How It Affects You

If you're a business seeking federal government contracts: Entry still starts with SAM.gov registration, an active UEI, correct NAICS coding, and understanding whether you qualify for any SBA certification or set-aside program. But you also need to check the date-sensitive rules attached to each opportunity. Thresholds changed on October 1, 2025, labor clauses may differ depending on whether a contract is still under EO 13658, and agency-specific clauses can matter as much as headline FAR rules.

If you're a worker employed on a federal contract: The wage floor depends on which law or clause governs your contract. The Service Contract Act and Davis-Bacon Act still matter a great deal because they often require wages above the FLSA minimum wage. But the blanket statement that all covered federal contractors must pay $17.75/hour is no longer current law. The Department of Labor says EO 14026 is revoked and no longer enforced, while some older contracts remain subject to EO 13658 rates instead.

If you're a small business owner competing for federal work: The set-aside ecosystem still creates real opportunity, but you should verify program mechanics against current SBA and FAR guidance rather than rely on older thresholds or legacy portal names. In particular, use the current SAM.gov environment rather than the old beta.SAM.gov terminology.

If you're a subcontractor working under a prime federal contract: Many federal requirements flow down to subcontractors through the prime contract's terms. Whether you're subject to Davis-Bacon or SCA wages depends on whether the subcontract is for construction or services covered by those acts — your prime contractor's subcontract should specify, and you should ask before pricing. Federal Acquisition Regulation FAR 52.222-26 (Equal Opportunity, applying to contracts over $10,000) flows down to subcontractors over $10,000 — requiring nondiscrimination in hiring. FAR 52.219-8 (Utilization of Small Business Concerns) requires primes on large contracts to report on their subcontracting utilization plans. For cybersecurity: the CMMC (Cybersecurity Maturity Model Certification) requirements for DoD contracts flow down to all subcontractors handling Controlled Unclassified Information (CUI) — even if you're several tiers removed from the prime, if you handle CUI you need CMMC compliance. Understand your obligations before signing a subcontract; the compliance burden can be substantial and should be priced into your subcontract bid.

State Variations

Federal procurement rules apply to federal contracts regardless of state. However:

• State and local governments have their own procurement rules (often modeled on the ABA Model Procurement Code)
• State prevailing wage laws may apply to state-funded construction (not all states have prevailing wage laws — ~27 states do)
• State minority/women business enterprise (M/WBE) programs supplement federal small business programs
• Some state laws affect federal contractor operations (e.g., state employment laws, environmental regulations)

Pending Legislation (119th Congress)

As of April 8, 2026, no single enacted federal law has replaced the overall contractor-compliance framework described above. The live issues for this page are mainly regulatory updates, executive-order changes, threshold adjustments, and program-specific implementation guidance.

Recent Developments

• Oct. 1, 2025: Acquisition.gov's threshold update raised the general micro-purchase threshold to $15,000 and the general simplified acquisition threshold to $350,000.
• Mar. 14, 2025: President Trump issued EO 14236, revoking EO 14026. The Department of Labor now says it is no longer enforcing EO 14026 or its implementing rule.
• Feb. 9, 2026 / May 11, 2026: DOL announced that the EO 13658 contractor minimum wage for covered legacy contracts would increase to $13.65/hour beginning May 11, 2026.
• 2025-2026: CMMC implementation continued to advance for defense contractors handling controlled unclassified information, making cybersecurity compliance a central federal-contractor issue even outside traditional labor and wage topics.
• 2025-2026: Executive actions addressing DEI-related contractor practices materially changed the prior OFCCP / EO 11246 compliance environment, so contractors should not assume older affirmative-action program summaries remain fully current without checking current agency guidance.