NCAE White Paper - E-Verify and federal contracts

Mike Gempler, president of the National Council of Agricultural Employers, graciously passed on an analysis of proposed change by the Administration to federal contracting regulations that would require certain contractors and subcontractors to use E-Verify.

From the 9-page report, here is a summary of where the regulation stands:

On June 12, 2008, the Department of Defense, the General Services Administration, and the National Aeronautics and Space Administration published a proposed rule amending the Federal Acquisition Regulation (“FAR”) 2 in the Federal Register. If adopted in its current form, the proposed rule would insert a requirement that each federal prime contractor and a potentially large subset of federal subcontractors at every tier use the Department of Homeland Security’s EVerify system to check employees’ work authorization.3 Comments on the proposed rule are due by August 11, 2008. The proposed rule anticipates an effective date sometime in fiscal year 2009.

The NCAE paper devised scenarios to illustrate "what appears to be clear and what remains ambiguous about the regulation. " From the report:

Scenario No. 1: A Producer Sells Fruit Directly To USDA’s Agricultural Marketing Service’s Commodity Purchase Program.


Scenario No. 2: A Producer Sells Fruit Directly To USDA’s Agricultural Marketing Service’s Commodity Purchase Program, But A Portion Of The Product Comes From Another Grower.


Scenario No. 3: A Producer Of An Agricultural Product Sells Directly To A ‘Broker’ Which Then Sells To USDA’s Agricultural Marketing Service’s Commodity Purchase Program.


Scenario No. 4: A Fruit or Vegetable Producer Sells Directly To A Processing Company Which Processes, Freezes or Cans The Produce And Then Sells Its Product To The Government.


TK: Each of the scenarios are fully evaluated for their implications under the proposed regulation. Under the heading "What should you do," the white paper stated:



The basic outlines of the proposed regulation are clear. If a business sells to the federal government, it will likely be required to use E-Verify under the proposed regulation. If a prime
contractor subcontracts with an entity to provide a food item at least in part to fulfill its xontract with the government, the subcontractor is likely not going to be required to use E-Verify. Conversely, if a subcontractor was hired to perform an identifiable task in connection with the prime contract (i.e., a “service”) or “construction,” it is likely going to be required to use EVerify. Moreover, because the proposed regulation is intended to reach as many businesses as possible, it is not unreasonable to anticipate that any ambiguities pointed out during the public comment period will likely be resolved in favor of expanded coverage.


TK: The NCAE asks members to consider the potential impact to their businesses and comment to federal authorities by the deadline. Clearly, this regulation would cast a wide net; the white paper cites an estimate that in the first year alone, an estimated 168,324 employers will required to enroll in E-Verify, affecting about 3.8 million employees.

Find the white paper here.