Although the Federal Acquisition Regulation (FAR) previously included regulations regarding combatting trafficking in persons (See FAR 22.1700-05 and FAR 52.222-50) the new provisions which became effective on March 2, 2015 impose more burdensome obligations on entities doing business with the U.S. Government.
The new requirements apply to any contract or subcontract for supplies, other than commercially available off- the-shelf items, acquired outside the United States or services to be performed outside the United States and with an estimated value that exceeds $500,000. In such cases, the rule requires that a Contractor shall maintain a compliance plan during the performance of the contract that is appropriate to the size and complexity of the contract and to the nature and scope of the activities to be performed for the Government. The compliance plan must include, at a minimum, the following:
- An awareness program to inform the contractor’s employees about the Government’s policy prohibiting trafficking related activities.
- The actions that will be taken against the employee for violations.
- A process for employees to report, without fear of retaliation, activity inconsistent with the policy prohibiting trafficking in persons, including a means to make available to all employees a hot line phone number.
- A recruitment and wage plan that only permits the use of recruitment companies with trained employees, prohibits charging recruitment fees to employees, and ensures that wages meet applicable host-country legal requirements or explains any variance.
- A housing plan, if the contractor or subcontractor intends to provide or arrange housing, that ensures that the housing meets host-company housing and safety standards.
- Procedures to prevent agents and subcontractors at any tier and any dollar value from engaging in trafficking in persons and to monitor, detect and terminate any agent, subcontractors or subcontractor employees that have engaged in such activities.
Contractors are required to provide the compliance plan to the Contracting Officer upon request. Annually after receiving an award, a Contractor is required to certify to the Contracting Officer that it has implemented a compliance plan and after having conducted due diligence certifies that to the best of its knowledge and belief neither it nor any of its agents or subcontractors or their agents is engaged in any activities or if any is found to have engaged in any of the prohibited activities the Contractor or subcontractor has taken appropriate remedial and referral actions.
The contractor is required to flow-down the substance for the compliance and certification requirements to all of its subcontractors.
Contractors are also required to immediately self-report to the Government any information that any of its employees or subcontractors engaged in prohibited trafficking-in-persons activities. Enforcement of the requirements can result in suspension or debarment of the Contractor or subcontractor. Contractors are required to fully cooperate with the Government in all investigations of violations of the policy. The FAR sets out the U.S. Government policy that prohibits trafficking in persons including:
- Engage in severe forms of trafficking in persons during the period of performance of the contract.
- Procure commercial sex acts during the performance of the contract.
- Use forced labor in the performance of the contract.
- Destroy, conceal, confiscate or otherwise deny access by employee to the employee’s identity or immigration document such as passports or drivers licenses.
- Use misleading or fraudulent practices during the recruitment of employees or offering of employment.
- Use recruiters who comply with local labor laws of the country in which the recruiting takes place.
- Charge employees’ recruitment fees.
- Fail to provide return transportation or pay for the costs of return transportation upon the end of employment for employee who is not a national of the country in which the work is taking place or for an employee who is not a U.S. national and who is brought into the U.S. for purpose of working on a U.S. contract or subcontract.
- Provide or arrange housing that fails to meet the host country housing and safety standards.
- If required by law or contract, fail to provide an employment contract, recruitment agreement or other required work document in writing.
What will be challenging is for a prime Contractor to ensure that its subcontractors down the supply chain are complying with all the requirements of combatting human trafficking. It is one thing to police one’s own company, but it is another thing to ensure that subcontractors and suppliers in the lower tiers are abiding by all the requirements.
There are no safe harbor provisions and no de minimus exceptions. The new FAR will present considerable burdens and problems for U.S. Government Contractors.