On September 25, 2012, President Obama issued an Executive Order (EO) that seeks to strengthen protections against human trafficking in federal contracting. See Executive Order—Strengthening Protections Against Trafficking in Persons in Federal Contracts. This EO imposes a number of new obligations on federal contractors.

Currently, the Federal Acquisition Regulation (FAR) provisions explicitly addressing human trafficking are FAR 22.1700-05, Combatting Trafficking in Persons, and its associated contract clause, FAR 52.222-50. These provisions generally set forth contractor requirements to prevent human trafficking, specifically prohibiting contractors, subcontractors and their employees from engaging in the trafficking of persons, procuring commercial sex acts and using forced labor in the performance of a contract. FAR 52.222-50 also imposes notification requirements related to violations of these prohibitions, and sets forth potential remedies for violations. The President's EO builds on these existing FAR provisions and provides further contractor and agency contract administration requirements to combat trafficking in persons and related activities.

The EO charges the Federal Acquisition Regulatory Council (FAR Council), in consultation with the heads of various federal agencies, with amending the FAR to prohibit expressly a wide range of conduct related to human trafficking and to provide for a number of compliance-driven requirements designed to identify and prevent instances of human trafficking. First, the EO seeks to strengthen the Government's "zero-tolerance" policy on trafficking by expressly prohibiting certain conduct by contractor, subcontractor or employees related to human trafficking, including:

  • Misleading or fraudulent recruiting practices;
  • Charging employees recruitment fees;
  • Withholding an employee's identity documentation; and
  • Failing to pay transportation costs upon the end of employment under certain circumstances.

These prohibitions apply to all federal contracts and subcontracts for supplies and services, and the EO expressly states that there is no exception for construction or commercial item contracts.

Second, the EO directs the FAR Council to amend the FAR to add several compliance-driven requirements applicable to both contractors and agency contract administrators, including:

  • A mandatory contract clause that requires contractors to agree to cooperate with government audits or investigations into human trafficking and related activities.
  • A requirement that contracting officers notify agencies' inspector generals and suspension and debarment officials if they become "aware of any activities that justify [contract] termination" under federal law. The agency suspension and debarment official will also be required to consider whether such activities warrant suspension or debarment in order to "protect the Government's interest."
  • A mandatory clause in all contracts and subcontracts to be performed outside the U.S. that exceed $500,000 (except those contracts or subcontracts for commercial off-the-shelf items) requiring contractors and subcontractors to maintain a compliance plan and provide certifications related to human trafficking.
    • The compliance plan requirements include a trafficking awareness program, limitations on the use of recruitment companies, a housing plan if the contractor intends to provide or arrange housing, and a plan to prevent subcontractors at "any tier" from engaging in human trafficking.
    • The certification requirements include yearly certifications that a compliance plan is in place and that neither the contractor nor any of its subcontractors have engaged in trafficking activities. If trafficking-related abuses have been found, the contractor or subcontractor must certify that it has taken appropriate remedial and referral actions.

Together with the FAR's existing requirements, the EO provides concrete guidance for contractors to prevent and prohibit human trafficking. Given the detail included in the EO, it is likely that any proposed rule will include similarly specific obligations. The FAR Council is instructed to take steps to amend the FAR within 180 days of issuance of the EO.