Tag Archives: Department of Defense

Administrative Review Board Finds That Participation in TRICARE Did Not Subject Florida Hospital to OFCCP’s Jurisdiction

On October 19, 2012, the Department of Labor’s Administrative Review Board (“ARB”) found in OFCCP v. Florida Hospital of Orlando that the OFCCP did not have jurisdiction over a federal contractor based solely on its participation in TRICARE. The ARB, however, left open whether other healthcare contractors participating in TRICARE would be subject to OFCCP’s jurisdiction.


TRICARE is a program sponsored by the Department of Defense (“DoD”) that pays for medical benefits for active and retired military personnel and their families. There are three prime contractors that administer the TRICARE program. These three contractors enter into subcontracts with hospitals and medical providers to provide medical care and supplies to TRICARE participants. Florida Hospital held a subcontract with one of the TRICARE prime contractors.

In August 2007, OFCCP scheduled Florida Hospital’s Orlando establishment for a compliance review. Florida Hospital refused to submit to OFCCP’s compliance review, asserting that it was not subject to OFCCP’s jurisdiction. OFCCP initiated enforcement proceedings arguing that Florida Hospital’s participation in TRICARE subjected it to OFCCP jurisdiction.

On October 18, 2010, an Administrative Law Judge (“ALJ”) found that Florida Hospital was a federal subcontractor because it assumed the performance of the TRICARE prime contractor’s obligation to the federal government. The ALJ also rejected Florida Hospital’s argument that TRICARE payments did not subject it to OFCCP’s jurisdiction because it was federal financial assistance. Florida Hospital appealed the decision to the ARB.

While the decision was pending appeal, on December 31, 2011, the National Defense Authorization Action for Fiscal Year 2012 (“NDAA”) was signed into law. The NDAA expressly stated that medical providers who participated in TRICARE were exempt from OFCCP’s jurisdiction.

ARB’s Decision

The ARB reviewed the NDAA exemption and held that OFCCP lacked jurisdiction over Florida Hospital because it met the specific language in the NDAA exemption. The ARB, however, found that the exemption was narrow and would only exempt TRICARE contractors that require establishment and management of a network of providers. The ARB indicated that it would review OFCCP’s jurisdiction over other TRICARE subcontractors on a “case by case” basis.

Because the ARB has left open the possibility that some TRICARE subcontractors may be covered by OFCCP’s jurisdiction, healthcare contractors must closely scrutinize their participation in TRICARE to see if they are subject to OFCCP’s jurisdiction.

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Filed under Department of Labor, OFCCP

FAR Council Issues Proposed Rule That Would Require Contractors to Safeguard Their Information Systems

On August 24, 2012, the Department of Defense, the General Services Administration, and the National Aeronautics and Space Administration (“FAR Council”) issued a Proposed Rule that would require contractors to implement basic safeguards for their information systems to protect non-public information and data of the federal government provided by or generated for the government (“Government Information”). The Proposed Rule adopts most of the “basic” requirements from the Advance Notice of Proposed Rulemaking issued by the Department of Defense on March 3, 2012.

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DoD, GSA, and NASA Issue Proposed Rule Implementing Executive Order Requiring Certain Contractors to Hire Predecessor Employees

On May 3, 2012, the Department of Defense (“DoD”), the General Services Administration (“GSA”), and the National Aeronautics and Space Administration (“NASA”) issued a proposed rule implementing Executive Order 13495, Nondisplacement of Qualified Workers Under Service Contracts (“EO 13495”) and the Department of Labor’s (“DOL’s”) final regulations implementing EO 13495.  EO 13495 was initially signed by President Obama on January 30, 2009.  It requires federal contractors and subcontractors that are successors to certain government contracts to offer employment on a “first right of refusal” to employees (not including managerial and supervisory employees) employed under the predecessor contract, whose employment would otherwise be terminated at the end of the predecessor contract.

 As we previously reported, on August 29, 2011, the DOL issued final regulations that implemented EO 13495 and clarified many of the terms in that Executive Order.  The proposed rule issued by DoD, GSA, and NASA would amend the Federal Acquisition Regulations (“FAR”) to add subpart 22.12 and a new clause at FAR 52.222-XX to require service contractors and their subcontractors under successor contracts to offer employees of the predecessor contractor a right of first refusal of employment for all positions for which they are qualified.  The proposed rule contemplates amending the FAR clause so that it is virtually identical to DOL’s final regulations, except it will not include provisions concerning the investigative methods, available reviews, or enforcement mechanisms established by the DOL.

 Comments on the proposed rule are due by July 2, 2012.

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Filed under Department of Defense, Department of Labor, Service Contract Act (SCA)

Department of Defense Issues Final Rule Requiring Contractors to Certify Compliance with Revolving Door Restrictions

On November 18, 2011, the Department of Defense (“DoD”) issued a final rule that requires contractors bidding on solicitations to certify that former DoD officials employed by or receiving compensation from the contractor who are anticipated to work on the contract have complied with their post-employment restrictions under 18 U.S.C. § 207, 41 U.S.C. §§ 2101–2107, and 5 C.F.R. parts 2637 and 2641, including Federal Acquisition Regulation § 3.104–2.  The representation will be required only one time rather than continuously throughout the performance of the contract.  The certification will apply to all solicitations entered on or after November 18, 2011. 

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Final Rule on Personal Conflicts of Interests for Contractors

On November 2, 2011, the Department of Defense (“DoD”), General Services Administration (“GSA”), and the National Aeronautics and Space Administration (“NASA”) issued a final rule that holds federal contractors and subcontractors that perform acquisition functions closely associated with inherently governmental functions liable for their employees’ personal conflicts of interests.  As we previously reported, these agencies issued a proposed rule on November 13, 2009, which contemplated requiring each contractor with employees performing qualifying acquisition functions to identify and prevent personal conflicts of interest for such employees.  The final rule adopts, without change, many of the requirements of the final rule, including requirements that contractors:

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