On August 21, 2012, the United States Department of the Treasury (“Treasury”) issued a proposed rule to implement the provisions of the Dodd-Frank Wall Street and Reform and Consumer Protection Act of 2010 (“Dodd-Frank”). The proposed rule requires the Treasury to confirm that its contractors undertake good faith efforts to include women and minorities in their workforce. Section 342 of Dodd-Frank established an Office of Minority and Women Inclusion (“OMWI”) in various agencies, including the Treasury, and requires those agencies to ensure “fair inclusion of women and minorities in the [contractor’s] workforce.”
In accordance with Dodd-Frank, the proposed rule would require Treasury to include a clause in its service contracts requiring contractors to confirm their “commitment to equal opportunity in employment and contracting.” In addition, the proposed rule would require a contractor holding a Treasury contract to “provide documentation, satisfactory to the [Treasury], of the action it (and as applicable, its subcontractors) has undertaken to demonstrate its good faith effort” to ensure inclusion of women and minorities in its workforce. “Good faith efforts” may include “actions by the contractor intended to identify and, if present, remove barriers to minority and women employment [,such as engaging in minority and female recruiting and training initiatives,] or expansion of employment opportunities for minorities and women.”
The proposed rule also provides the following examples of documentation that can demonstrate “good faith efforts”:
• Demographic profile of the contractor’s workforce, such as an EEO-1 report, or of its subcontractor’s workforce;
• List of subcontracts under the contract that show the subcontractor’s race, ethnicity, and/or gender ownership status; and
• The contractor’s plan to ensure minorities and women have appropriate opportunities to enter and advance within its workforce, including outreach efforts.
Contractors who fail to adhere to these requirements could face termination of their contract, referral to the Office of Federal Contract Compliance Programs, or other sanctions and actions. If the proposed rule is adopted, these requirements will be included in all service contracts that exceed $150,000.