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All in a Day's Work® - Insights on Labor & Employment Law

Affirmative action update: National Defense Authorization Act relieves TRICARE subcontractors of affirmative action obligations

On Dec. 31, 2011, President Obama signed the National Defense Authorization Act (NDAA) for fiscal year 2012. Of note for TRICARE subcontractors, Section 715 of the bill states that TRICARE managed care support contracts may not be considered as contracts for the performance of services or supplies. This statement presumably relieves such subcontractors of any federal affirmative action obligations required of subcontractors that provide services or supplies, directly or indirectly, on behalf of the federal government. Prior to the NDAA, the Office of Federal Contract Compliance Programs (OFCCP) had taken the position, and had successfully argued, that TRICARE subcontractors were subject to OFCCP jurisdiction and affirmative action requirements. While this legislation arguably resolves the issue of TRICARE coverage, health care providers may still be subject to OFCCP’s jurisdiction and federal affirmative action requirements. The OFCCP’s Directive No. 293, published in Dec. 2010, clearly states that the OFCCP believes participation in Medicare Part C (Advantage) or Medicare Part D (covering prescription drug plans) subjects health care providers to the OFCCP’s jurisdiction. Accordingly, health care providers should review all federal contracts in the process of determining whether of not they are a covered federal contractor for purposes of affirmative action.

February 13, 2012

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