More changes to come for contractors

By Jason Miller
Executive Editor
FederalNewsRadio

The Federal Acquisition Regulations Council issued its second major change to how contractors deal with the federal government Friday.

And the council is far from done.

Industry experts say the FAR Council will issue two proposed rules and one advanced notice of proposed rulemaking in the next few weeks that will continue to reshape how federal contractors work with agencies.

The council will issue a proposed rule on organizational conflict of interest and one on personal conflict of interest, as well as an advanced notice of proposed rulemaking about buying counterfeit information technology.

There may be a public comment forum on the counterfeit technology advanced notice of proposed rulemaking the week of Dec. 1.

These three rulemaking actions would follow two from last week.

The council issued the new contractor ethics and conduct final rule Nov. 12, and then another one two days later.

Under the rule issued Nov. 14, contractors must use the Homeland Security Department’s E-Verify system to validate the eligibility of many of their employees to work in the United States.

Vendors must submit employee names, dates of birth and social security number to the Social Security Administration. DHS would verify non-citizen employees’ eligibility.

The E-Verify final goes into effect Jan. 15.

“We support automating what is largely a paper process,” says Trey Hodgkins, the Information Technology Association of America’s vice president for federal programs. “It makes sense from a variety of perspectives, including it is a green initiative, it requires less manpower and makes the process more efficient, but it still lacks some things.”

Hodgkins says the council working with DHS did a good job in incorporating many of the industry’s concerns about the proposed rule.

Janet Kephart, the director of national and security policy at the Center for Immigration Studies and the former counsel of the 9-11 Commission, says DHS tried to make the process more user friendly.

“E-Verify wants employers use the system in way that is helpful to them and to the federal government,” Kephart says. “The program has been running very well for the past year and there has been a huge uptick in employers signing up for it.”

Kephart says DHS’s latest numbers show more than 86,000 employers are using the E-Verify and the error rate has been trimmed to less than a half of a percent.

Kephart and others say now that the program is mandatory there will be hundreds of thousands of employers.

And that is part of the remaining concerns of industry, Hodgkins says.

“The Social Security Administration indicated they would have to hire hundreds of employees to manage the influx of automated [forms] into the system,” Hodgkins says. “We want to make sure the system is scalable and does not cause a delay because employers can’t get sufficient number of employees verified or employee is denied work or has to be laid off because can’t get verification.”

Hodgkins adds that the council and DHS should address more clearly the accountability and requirements for subcontractors, especially two or three tiers down.

“There still are questions around what is the liability for the prime contractor if subsequently an ineligible person is hired by one of the hundreds of subcontractors you have to monitor,” Hodgkins says. “If you tell them to verify, is the prime responsible if something is found wrong? This would be a tremendous burden on a large company.”

Hodgkins says ITAA was pleased that the final rule didn’t include employees in the administrative areas, such as human resources or financial management.

He also says ITAA was pleased the rule didn’t require vendors to resubmit employees with security clearances or secure identification cards under Homeland Security Presidential Directive-12.

The final rule also raises the threshold to $100,000 of which contracts come under this rule, and establishes a $3,000 threshold for subcontracts.

“Companies will have to undergo some transition to use E-Verify because many of their processes do not address this issue,” Hodgkins says.

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On the Web:

Federal Register E-Verify final rule

Homeland Security Department E-Verify Web site

Center for Immigration Studies White Paper on E-Verify

FederalNewsRadio – DHS’s border security progress depends on money

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