Definitize /de-fə-nə-ˌtīz/: A govcon way of saying to make definite. The Definitizer focuses on news and issues in the realm of government contracting to (hopefully) bring a bit more definition to an often murky world.

Obama to Contractors: Time to Get Serious about Human Trafficking

A few weeks ago, President Obama appeared before the Clinton Global Initiative’s annual gathering in New York and in his remarks forcefully spoke out on the issue of human trafficking that he said “must be called by its true name—modern slavery.”

Among the initiatives that the President commented on, he announced that “as one of the largest purchasers of goods and services in the world the United States Government will lead by example.” To accomplish that, the President issued an Executive Order (EO) that same day mandating new obligations to protect against human trafficking.

Presently, the Federal Acquisition Regulations (FAR) provide that neither contractors nor their employees shall “[e]ngage in severe forms of trafficking in persons during the period of performance of the contract.” FAR 52.222-50 (contract clause that is required in federal contracts by FAR 22.1705(a)). “Severe forms of trafficking in persons” includes sex trafficking or the use of force, fraud or coercion to “subject” a person to “involuntary servitude, peonage, debt bondage, or slavery.” In addition, the FAR further prohibits contractors from procuring commercial sex acts or making use of forced labor to perform the contract.” Contractors further are required to “flow down” these policies to their subcontractors as well as notify their own employees about them. If a contractor learns of any information that suggests that violations may have occurred, the contractor must notify its contracting officer immediately and inform him or her about what actions the contractor has taken in response. The Contracting Officer then may impose a number of sanctions for violations such as suspending payments, terminating the contract, or suspension or debarment from further government contracts.

The new Executive Order expands the existing policy first by prohibiting additional activities that tend to promote trafficking. Specifically, the EO will prohibit:

  • 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.

The EO further will require the inclusion of a new contract clause that would require contractors to cooperate with investigations into trafficking. Additionally, Contracting Officers will be required to notify their agencies’ suspension and debarment official and inspectors general who then must, themselves, consider whether the alleged activities require the suspension or debarment of the contractor to protect the Government’s interests.

Contractors further will be required to create compliance plans applicable to that portion of their government contracts performed outside the US if the value of performance outside the US will exceed $500,000. To ensure compliance, the plans must include:

  • an awareness program;

  • a process for employees to report possible violations;

  • a recruitment and wage plan that only permits recruitment companies with trained employees, that precludes charging employees recruitment fees and pays wages that meets local requirements;

  • a housing plan that meets local housing and safety standards if employees are to be housed by the contractor; and

  • procedures to prevent subcontractors from engaging in prohibited conduct including the monitoring, detecting, and (if necessary) terminating of noncompliant subcontractors.

Before being awarded a contract and thereafter annually during the performance of a contract, each contractor and subcontractor will be required to certify that it has a compliance plan in place. Contractors further will be required to certify that neither they nor their subcontractors have violated the prohibitions against trafficking in persons, and that, if any violations have occurred, that the violations resulted in appropriate remedial and referral actions.

Additional requirements likely are on the way to the White House from the Hill. Congress has been working on legislation that would further enhance protections to combat human trafficking. If passed, significant aspects of this legislation would resemble the features of the EO, but pending versions of the legislation would extend the prohibitions to federal grantees and would criminalize intentional engagement in foreign labor bondage for work on a federal contract outside the US.

In the meantime, if it meets the President’s deadline, the FAR Council will revise the FAR so that the new provisions will be in effect and applicable to solicitations issued no later March 24, 2013. However, contractors and subcontractors should not wait until the new FAR provisions go into effect to formulate compliant policies and plans. This particularly is true for contractors that do not already have procedures in place under the present terms of FAR 52.222-50.

Great care should be taken to make sure that your compliance program is up to speed. Given the heightened attention being paid to the issue of human trafficking at the White House and on the Hill—it’s time to get serious.

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