Are CAAs Federal Contractors and Do They Need Affirmative Action Plans
By Rafael Munoz, CAPLAW
Some Community Action Agencies (CAAs) have received
notification from the U.S. Department of Labor (DOL) that the
Office of Federal Contract Compliance Programs (OFCCP) will
conduct a review of their compliance with a number of laws
applicable to federal contractors, including requirements for
affirmative action plans. Other CAAs have received a DOL “Equal
Opportunity Survey” of federal contractors. Before responding to
these communications, CAAs should review all of their grants and
contracts to determine whether they are in fact “federal contractors”
subject to OFCCP jurisdiction. In most cases, CAAs are not federal
contractors and a letter to that effect should be sent to DOL.
In addition, state contracts for Community Services Block Grant
(CSBG), Low-Income Home Energy Assistance Program (LIHEAP),
Weatherization and other “pass-through” grants sometimes include
language that requires CAAs to comply with the affirmative actionrules that apply to federal contractors. If a CAA is not a federal
contractor, it should explain this fact to the state and seek to have the
language removed from its contract. (Keep in mind, though, that
CAAs may be required to comply with state laws, regulations and
executive orders on affirmative action, including a state requirement
that they have an affirmative action plan.)
As a general rule, because CAAs are federal grantees, rather than
federal contractors, they are not required to comply with rules
imposed on federal contractors, such as Executive Order 11246(1) and
41 Code of Federal Regulations (C.F.R.) Part 60 (which require
affirmative action plans for certain federal contractors and federallyassisted
construction contractors and subcontractors).(2) The federal
government distinguishes between those vendors from which it buys
products or services to be used by the government (i.e., contractors),
and those entities to which it provides funds to benefit the public at
large (i.e., grants or federal assistance). Therefore, unless a CAA
receives a direct federal contract (as opposed to a federal grant, such
as Head Start, or a contract with the state that is funded with federal
grant funds, such as CSBG), it is not a federal contractor and will not
generally be subject to OFCCP jurisdiction or be required to have a
federal affirmative action plan. (One example of a situation where a
CAA might be a federal contractor is if it provides services under a
contract with the U.S. Department of Health and Human Services’
Office of Women’s Health, which sometimes issues federal contracts
for services rather than grants.)
How do you know whether you are dealing with a grant or a
contract? Look at documentation of any direct awards your CAA
receives from the federal government (for this purpose, federal funds
that are passed through by a state do not make a CAA a federal contractor, even if the state refers to your CAA as a “contractor”).
Terms such as “financial assistance award,” “notice of grant award,”
“grant agreement,” “grant award,” “loan” or “cooperative
agreement” indicate that you have a grant or other federal assistance,
and not a contract. Language such as “order for supplies and funds you receive directly from the federal government are paid under
a grant or a contract, contact CAPLAW.
Note that if a CAA uses federal grant funds for construction or if
it undertakes construction pursuant to any federal program involving
federal financial assistance in the form of a grant, loan, or
cooperative agreement, it will be subject to some requirements under
41 C.F.R. Part 60 (although not the requirement for an affirmative
action plan). If this is the case, a CAA must: (1) incorporate certain
language into the construction contract requiring construction
contractors and subcontracts not to discriminate; and (2) agree (a) to
cooperate with the DOL in getting the contractors to comply with
these rules, (b) to provide DOL with information that it may require
in order to supervise compliance with these rules, (c) to carry out
penalties and sanctions against contractors and subcontractors who
don’t comply with these rules, and (d) not to enter into or renew
contracts with any contractor debarred from federal contracts.(3)
No matter what the situation, CAAs are still required to comply
with other generally applicable federal or state laws prohibiting
employment discrimination on the basis of race, sex, age, national
origin, disability, etc. They are also subject to similar antidiscrimination
laws imposed by their status as federal grantees in
general and/or as grantees for a particular program.
For assistance with this issue, please contact CAPLAW at
(617) 357-6915.
1 30 Fed. Reg. 12,319 (Sept. 28, 1965).
2 See Partridge v. Reich, 141 F.3d 920 (9th Cir. 1998) (no OFCCP
jurisdiction where grantee not contractor for purposes of Vietnam Era
Veteran’s Readjustment Assistance Act of 1972) and Judge’s Deskbook
for OFCCP Administrative Law Judges (available at
www.oalj.dol.gov/PUBLIC/OFCCP/REFERENCES/
REFERENCE_WORKS/OFCCP_MARCH_2005.HTM#SEC8B2C).
3 Executive Order No. 11246.
