Once a large company becomes a federal contractor, even though the relationship may involve only a single contract that is clearly limited in scope, the Labor Department’s Office of Federal Contract Compliance Programs (OFCCP) takes the position that the entire company is a federal contractor, unless the company has been granted a so-called “separate facility exemption waiver.”
To illustrate, consider the scenario of a large multi-facility retailer that enters into a contract with the Department of Defense (DOD) for the purchase online of $1 million worth of goods. The goods are manufactured overseas, sent to a fulfillment center in the United States, and from there directly to the DOD. The corporate headquarters and the fulfillment center are the only U.S. facilities that have anything to do with the contract. Yet, unless the company has applied for and been granted a separate facility exemption — i.e., a request to exempt all company establishments that have no connection to the contract — OFCCP will deem the company to be a federal contractor across-the-board and therefore subject to all of OFCCP’s AAP and nondiscrimination requirements.
So what is the separate facility exemption waiver, how does a company go about asking for it, and what are the odds that OFCCP may actually grant it?
Members of the Equal Employment Advisory Council (EEAC) can read more here.