EO Clause and Annual Vendor Notification

by Fe Ramos
Sr. Consultant
Biddle Consulting Group

EO Clause and Annual Vendor Notification

With the OFCCP’s heightened audit activities, one of the issues that compliance officers (CO) typically find is the failure of employers to send out yearly notification to their vendors, subcontractors, and/or suppliers regarding their company policy. Employers typically mistake the inclusion of the EO Clause in their contracts and subcontracts as something that also addresses the obligation to send out an annual notification. Federal contractors need to do BOTH.

1) Include the EO Clause either by reference or its entirety in all contracts and subcontracts (41 CFR 60-1.4; 41 CFR 60-250.5; 41 CFR 60-300.5). Although not specially stated in the regulations, compliance officers also check to see if the EO Clause is included in the purchase orders, invoices, and other documents issued by the federal contractor. Hence, it is recommended that the EO clause be included in most (if not all) of the contractor’s documents. It is, however, not necessary to include the full text of the EO clause in the job postings or advertisements. Simply stating that the contractor is an EOE (Equal Opportunity Employer) is sufficient as a tag line in the job postings and advertisements.

2) Send written notification of the company policy to vendors, suppliers, and subcontractors (41 CFR 60-741.44[f(5)]; 41 CFR 60-250.44[f(6)]; 41 CFR 60-300.44[f(6)]). Although not specifically stated in the regulations, contractors should be sending out these notifications on a regular basis (i.e., at least annually).