Federal Agencies Issue Contract Clauses Implementing ‘Executive Order on Combating Race and Sex Stereotyping'

On September 22, 2020, President Trump issued “Executive Order on Combating Race and Sex Stereotyping” (Executive Order 13950 or Executive Order) which purports “to combat offensive and anti-American race and sex stereotyping and scapegoating,” as we previously reported. The Executive Order went into effect immediately, but its requirements began to apply to contracts entered into 60 days after the Executive Order. Specifically, Section 4 of the Executive Order required contracting officers to incorporate the Executive Order into its contracts at this time.

No related federal regulations have been issued to implement the Executive Order. And, although the Office of Federal Contractor Compliance Programs (OFCCP) website and the Executive Order landing page includes frequently asked questions and a complaint hotline, it has not yet provided guidance on the flow-down requirements to subcontractors and vendors or union notification. Recently, the Department of Defense (DOD) issued a memorandum that provides the clause (Class Deviation 2021-O0001) that implements the requirements of the Executive Order in DOD solicitations and contracts. The National Aeronautics and Space Administration (NASA) also issued a similar class deviation.

According to the DOD’s memorandum, Class Deviation 2021-O0001 must be placed in solicitations and resultant contracts issued on or after November 20, 2020, “when a contract is contemplated that will include the clause at Federal Acquisition Regulation (FAR) 52.222-26, Equal Opportunity.” Relevant contracting agencies have also been instructed to amend solicitations issued before November 20, 2020, where the resultant contact is expected to occur on or after November 20, 2020. Exemptions, however, do apply. According to Class Deviation 2021-O0001, exemptions applicable to Executive Order 11246 will also apply to Executive Order 13950, such as whenever the work under the contract is to be or has been performed outside the United States and does not involve the recruitment of workers within the United States or is for standard commercial supplies or raw materials, among other exemptions.

Class Deviation 2021-O0001 requires contractors “not use any workplace training that inculcates in its employees any form of race or sex stereotyping or any form of race or sex scapegoating” and provides definitions and the prohibitive concepts. While Section 4 of the Executive Order requires contractors to flow down the clause to subcontractors generally, Class Deviation 2021-O0001 appears to require contractors to include the full text of the clause in all subcontractors that exceed $10,000 (rather than incorporating the Executive Order by reference). The Class Deviation also provides the telephone number and email address for the OFCCP Complaint Hotline to Combat Race and Sex Stereotyping. Class Deviation 2021-O0001 also helpfully provides the notice contractors must send to labor unions regarding compliance requirements under the Executive Order. Notably, the contractor must also post “copies of the notice in conspicuous places available to employees and applicants for employment.” Failure to comply with Executive Order 13950 has severe consequences. The Class Deviation notes that noncompliance may result in cancellation, termination, or suspension of the contract and possible ineligibility for further Government contracts.

The viability of Executive Order 13950 remains uncertain, especially in light of pending lawsuits (including a class action suit filed by the NAACP challenging the constitutionality of the Order) and the impending transfer of power in the federal government. As such, and according to the memorandum, Class Deviation 2021-O0001 will remain in effect until it is incorporated in the FAR or otherwise rescinded. Faegre Drinker will continue to monitor and report Executive Order 13950 developments.