The Federal Acquisition Regulation (FAR) is the primary set of rules that regulate how the government purchases goods and services and the activities of government personnel involved in procurement. The E-Verify amendment to the FAR began on September 8, 2009. September 8, 2009 is NOT the date that covered federal contractors were required to use E-Verify. Rather, September 8 was the date on which federal government contracting officers were to begin to include a specific E-Verify clause in covered contracts.

Once a federal contractor is subject to FAR E-Verify requirement through a covered federal contract the timeline for implementing E-Verify is set forth below.



Background
The Federal Acquisition Regulation (FAR) is the primary set of rules that regulate how the government purchases goods and services and the activities of government personnel involved in procurement. The E-Verify amendment to the FAR began on September 8, 2009. September 8, 2009 is NOT the date that covered federal contractors were required to use E-Verify. Rather, September 8 was the date on which federal government contracting officers were to begin to include a specific E-Verify clause in covered contracts.

September 8th federal contracting officers were also to begin amending certain existing indefinite-delivery/indefinite-quantity (IDIQ) contracts on a bilateral basis provided that the remaining period of performance extends at least six months after September 8, 2009, and the amount of work or number of deliveries in the remaining performance period is substantial.

Covered Contracts and Subcontracts
In general, the regulation applies only to certain federal contracts awarded on or after September 8, 2009; it does not apply to federal grants or cooperation agreements, as these arrangements are not governed by the FAR.

A federal contract will be subject to the E-Verify requirement if it is valued at more than the simplified federal acquisition threshold of $100,000, is for work that is performed in the U.S., has a performance period of at least 120 days, and is not for “commercially available off-the-shelf” (COTS) items, items that would be COTS but for minor modifications, items that would be COTS if they were not bulk cargo, or commercial services that are part of the purchase of a COTS item and are performed by the COTS provider as a normal part of provision of the COTS item.

However, tit is the responsibility of federal contracting officials, not contractors, to determine which contracts are subject to the requirement and to include the prescribed E-Verify clause in such contracts.

The contractor's entire organization must comply with the E-Verify requirement--a departure from the traditional practice of allowing employers the option to participate in E-Verify at only certain of its locations. However, the requirement will apply only to the corporate entity that signs the federal contract. Parent and subsidiary entities that are not obligated under the contract and that do not perform direct services under the contract are not generally required to comply with the regulation.

In general, if a prime federal contract is covered by the requirement, some subcontractors may be covered and thus required to use E-Verify. If the prime federal contract contains an E-Verify clause, a subcontract is also covered if it is for services or construction and has a value of more than $3,000. If the prime federal contract is exempt from the requirement, its subcontracts are exempt as well.

It is the responsibility of the prime contractor to “flow down” the E-Verify requirement by including an E-Verify clause in subcontracts subject to the regulation.

The subcontractor obligation is potentially quite broad. The regulation defines “subcontract” as “any contract ... entered into by a subcontractor to furnish supplies or services for performance of a prime contract or a subcontract ... including but not limited to purchase orders, and changes and modifications to purchase orders.”

Commentary to the regulation indicates that the obligation applies to covered subcontracts flowing from the prime contract “at any tier”--a potentially very broad and burdensome obligation for employers given the complexity of many federal contracts.

Prime contractors are also responsible for “general oversight” of a subcontractor's compliance with the E-Verify requirement. Although the regulation and its commentary are largely silent on the extent of this responsibility, the government has stated that prime contractors are not required to monitor are not expected to monitor the verification of individual subcontractor employees.

Exemptions
The federal contractor E-Verify regulation contains several exemptions and limitations. As noted above, the requirement does not apply to federal contracts with a value of $100,000 or less, that are for work that will be performed solely outside of the U.S., that have a performance period of less than 120 days, or that are only for commercially available off-the-shelf items. The rule also contains the possibility of an E-Verify waiver. In exceptional circumstances, the head of a contracting activity may grant a waiver of the requirement.

In addition, a federal contractor that is an institution of higher education, a state or local government, the government of a federally recognized Native American tribe, or a surety performing under a takeover agreement with a federal agency has modified E-Verify obligations, as discussed below.