Rules Issued to Combat Human Trafficking
The final rule applies to all federal contracts regardless of tier, contract type, or contract value and bars contractors and subcontractors from: destroying, concealing, confiscating or otherwise denying access by an employee to his or her identity or immigration documents; using misleading or fraudulent recruitment practices; charging employees recruitment fees; providing or arranging housing that fails to meet the host country housing and safety standards; and failing to provide return transportation or requiring payment for the cost of return transportation for certain employees.
These policies, stated in FAR 22.1700 and 52.222-50, must be flowed down to all subcontractors, and contracts performed outside the United States of more than $500,000 will now require a compliance plan and annual certifications of compliance.
This note only highlights the final rule. The final rule and the FAR Council discussion and analysis can be found at 80 Fed. Reg. 4967 issued on Jan. 29.
Here are key provisions of the new rule.
All contracts performed outside the United States exceeding $500,000 will require the successful offeror to certify, pre-award, an implemented compliance plan to prevent any prohibited trafficking in persons activities and to monitor, detect and terminate subcontractors engaging in such prohibited activities. The offeror must further certify annually — after conducting due diligence — that to the best of its knowledge neither it nor any of its proposed agents, subcontractors or their agents have engaged in any such activities. The prohibited activities are described in FAR 52.222-50(b).
Compliance plans are mandatory for contracts performed outside the United States that were more than $500,000 in value, and must be appropriate to the contract’s nature, scope, size and complexity.
At a minimum, the compliance plan must include: an awareness program to inform contractor employees about the law prohibiting trafficking-related activities; a reporting process for employees to report, without fear of retaliation, activity inconsistent with these policies; a recruitment and wage plan that prohibits recruitment fees paid by the employee and ensures that wages comply with host-country laws; a housing plan that ensures that contractor-furnished housing meets host country housing and safety standards; and procedures to prevent violations by agents and subcontractors and to monitor, detect and terminate any agents, subcontracts or subcontractor employees that have engaged in such activities at any tier and any dollar amount.
Contractors must include the substance of the clause at FAR 52.222-50 in all subcontracts so that the same rules apply to subcontractors and prime contractors, and subcontractors must cooperate fully with government officials during audits, investigations or other actions.
Contractors must notify their employees and agents of these requirements for preventing trafficking in persons, and the actions against employees or agents for all validated violations. Actions may include removal from the contract, reduction in benefits or termination of employment. A contractor must take appropriate action — up to and including termination — against employees, agents, or subcontractors that violate these policies.
Contractors must inform the contracting officer and the agency inspector general immediately of any credible information surfacing from any source — including host country law enforcement — of any contractor employee, subcontractor, subcontractor employee or their agents having engaged in conduct that violates the policy prohibiting trafficking in persons. Contractors must also report all actions taken against contractor employees, subcontractors, subcontractor employees, or agents for any such violation. The final rule no longer requires contractors to interview all employees suspected of being victims of or witnesses to prohibited trafficking in persons activities.
The final rule provides a wide range of sanctions for failure to comply with the policies to combat trafficking in persons. These include removal of employees, termination of subcontracts, suspension of contract payments until remedial action is taken, loss of award fee, declination to exercise options, default termination of the contract and suspension or debarment.
The Defense Department also issued on Jan. 29 its final rule governing trafficking in persons, at 80 Fed. Reg. 4999. For contracts exceeding $5 million, this DFARS final rule requires hotline posters in English and in languages commonly spoken by the workforce, for both trafficking and fraud. This final rule also requires representations by offerors that hiring practices address combating trafficking and comply with all applicable requirements, and further, that employees and subcontractors have been effectively notified as to their obligations to report trafficking violations and that whistleblower protection applies.
This final rule reinforces the U.S. government’s zero-tolerance policy against human trafficking and establishes policies governing all federal contracts. It also imposes new requirements for compliance plans, certifications and reporting violations.
Contractors that perform work overseas should analyze these new FAR and DFARS compliance requirements and perform a gap analysis against their existing human trafficking prevention programs.
Complying with these new requirements will necessitate corporate involvement of several functional areas including human relations, compliance, legal, quality assurance, contracting, subcontracting and operations.
James A. “Ty” Hughes is general counsel for the Fluor Government Group. The views expressed are his own.