The Department of the Treasury has issued a proposed rule that would require federal contractors doing significant business with the agency to certify that they have made good faith efforts to hire women and minorities. Specifically, the proposal would amend the Department of the Treasury Acquisition Regulation (DTAR) to include a contract clause on minority and women inclusion, as required under the Dodd-Frank Wall Street Reform and Consumer Protection Act (P.L. 111-203), signed into law on July 21, 2010.

The contract clause would apply to all service contracts with the Department above the simplified acquisition threshold, which is currently $150,000. The proposed clause would read as follows:

Contractor confirms its commitment to equal opportunity in employment and contracting. To implement this commitment, the Contractor shall ensure, to the maximum extent possible consistent with applicable law, the fair inclusion of minorities and women in its workforce. The Contractor shall insert the substance of this clause in all subcontracts under this Contract whose dollar value exceeds $150,000. Within ten business days of a written request from the contracting officer, or such longer time as the contracting officer determines, and without any additional consideration required from the Agency, the Contractor shall provide documentation, satisfactory to the Agency, of the actions it (and as applicable, its subcontractors) has undertaken to demonstrate its good faith effort to comply with the aforementioned provisions. For purposes of this contract, “good faith effort” may include actions by the contractor intended to identify and, if present, remove barriers to minority and women employment or expansion of employment opportunities for minorities and women within its workforce. Efforts to remove such barriers may include, but are not limited to, recruiting minorities and women, providing job-related training, or other activity that could lead to those results.

Treasury interprets “good faith efforts” to mean efforts consistent with the Equal Protection Clause of the Constitution and Title VII of the Civil Rights Act of 1964, such as the identification and elimination of employment barriers, the widespread publication of employment opportunities, and other forms of outreach to minorities and women. Documentation that would demonstrate a contractor’s “good faith effort” might include the total number of contractor’s or subcontractor’s employees, and the number of minority and women employees, by race, ethnicity, and gender; a list of subcontract awards under the contract that includes: dollar amount, date of award, and subcontractor’s race, ethnicity, and/or gender ownership status; and/or the contractor’s plan to ensure that minorities and women have appropriate opportunities to enter and advance within its workforce, including outreach efforts.

The proposed rule notes that a failure to comply with these hiring efforts could result in termination of the contract, referral to the Office of Federal Contract Compliance Programs, or other appropriate action.

Comments on the proposal must be received by October 22, 2012. Comments may be submitted electronically through the federal eRulemaking Portal or via mail to: Department of the Treasury, Office of Minority and Women Inclusion, Attention: Contractor Clause, Room 2438, 1500 Pennsylvania Avenue, NW, Washington, DC 20220.