As previously discussed in our firm’s Immigration Update dated August 31, 2009, the final rule amending the Federal Acquisition Regulations (FAR) to require certain federal agency contracts and sub-contracts that are performed within the United States to include a provision mandating the use of the E-Verify program became effective on September 8, 2009. Since its implementation, our firm has received many inquiries about this new requirement, especially from colleges and universities.  

The following is additional information about the new FAR E-Verify requirement:  

  1. The new requirement only applies to contracts and sub-contracts issued on or after September 8, 2009 that specifically include a provision mandating the use of the E-Verify system. Contracts including an E-Verify requirement that are not issued pursuant to this regulation can not require the use of the special FAR E-Verify provisions.  
  2. The following types of contracts are exempt from the regulationa.  
  1. Grants. A grant is defined as “an award of financial assistance” that is consistent with 31 U.S.C. Section 6304, is used to enter a relationship: a) the principal purpose of which is to transfer a thing of value to the recipient to carry out a public purpose of support or stimulation authorized by a law of the United States, rather than to acquire property or services for the federal government’s direct benefit or use; and b) in which substantial involvement is not expected between the federal agency and the recipient when carrying out the activity contemplated by the award;
  2. Cooperative Agreements. A “cooperative agreement” is defined as an award of financial assistance that, consistent with 31 U.S.C. Section 6305) is used to enter into the same kind of relationship as a grant… except that substantial involvement is expected between the federal agency and the recipient when carrying out the activity contemplated by the award;
  3. Other agreements that do not constitute “acquisition contracts;”
  4. Contracts of less than the simplified acquisition threshold of $100,000;
  5. Contracts that are for a period of performance less than 120 days;
  6. Contracts for work being entirely performed outside the United States;
  7. Contracts for commercially available off-the-shelf (COTS) items and related services;
  8. Contracts for items that would be classified as COTS items, but for minor modifications, and related services;
  9. Contracts for items that would be classified as COTS items if they were not bulk cargo;
  10. Sub-Contracts (even if they flow from the prime acquisition contract) that only provide supplies, rather than construction or services; and
  11. Sub-contracts of less than $3,000.  
  1. The regulation does not create any new dispute resolution procedure but instead relies on those procedures that already exist in the FAR. If a contractor does not believe that it should be subject to the E-Verify provision, the contractor may obtain review prior to the award of the contract by submitting a written “protest” to the contracting officer, Agency Head or the Government Accounting Office (GAO). If the federal contractor chooses to wait until the contract is awarded to challenge the application of the E-Verify requirement, the contractor may dispute the contracting officer’s determination through different procedures contained in the FAR.
  2. Colleges and universities should review the details of a contract with a federal agency and, to the extent possible, advocate for the final agreement to be structured as a grant or cooperative agreement which does not require the E-Verify clause. Although the FAR E-Verify requirement is limited for colleges and universities to existing and future employees working directly on the contract, the university will decrease its administrative efforts if it is not subject to the E-Verify requirement at all.