[Federal Register: January 20, 2006 (Volume 71, Number 13)] [Proposed Rules] [Page 3351-3371] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr20ja06-19] [[Page 3351]] ----------------------------------------------------------------------- Part II Department of Labor ----------------------------------------------------------------------- Office of Federal Contract Compliance Programs ----------------------------------------------------------------------- 41 CFR Part 60-300 Affirmative Action and Nondiscrimination Obligations of Contractors and Subcontractors Regarding Disabled Veterans, Recently Separated Veterans, Other Protected Veterans, and Armed Forces Service Medal Veterans; Proposed Rule [[Page 3352]] ----------------------------------------------------------------------- DEPARTMENT OF LABOR Office of Federal Contract Compliance Programs 41 CFR Part 60-300 RIN 1215-AB46 Affirmative Action and Nondiscrimination Obligations of Contractors and Subcontractors Regarding Disabled Veterans, Recently Separated Veterans, Other Protected Veterans, and Armed Forces Service Medal Veterans AGENCY: Office of Federal Contract Compliance Programs, Labor. ACTION: Notice of proposed rulemaking. ----------------------------------------------------------------------- SUMMARY: The Office of Federal Contract Compliance Programs (OFCCP) is proposing new regulations to implement the amendments to the affirmative action provisions of the Vietnam Era Veterans' Readjustment Assistance Act of 1974 (``VEVRAA'') that were made by the Jobs for Veterans Act (``JVA'') enacted in 2002. JVA amended VEVRAA by: Raising the dollar amount of the Government contracts that are subject to the requirements of VEVRAA; changing the categories of veterans protected under the law; and changing the manner in which the mandatory job listing requirement is to be implemented. The JVA amendments apply to Government contracts entered into on or after December 1, 2003. For the convenience of contractors, veterans, and other interested parties, OFCCP proposes to publish the regulations implementing the JVA amendments to VEVRAA in a new part. This proposed rule would apply only to Government contracts entered into on or after December 1, 2003. The existing VEVRAA implementing regulations will continue to apply to Government contracts entered into before December 1, 2003. Contractors with Government contracts entered into both before, and on or after December 1, 2003, would be subject to both the requirements found in the existing VEVRAA implementing regulations and the requirements in today's proposal. DATES: To be assured of consideration, comments must be received on or before March 21, 2006. ADDRESSES: You may submit comments, identified by RIN number 1215-AB46, by any of the following methods: Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments. E-mail: ofccp-mail@dol-esa.gov. Include ``RIN number 1215- AB46'' in the subject line of the message. Fax: (202) 693-1304 (for comments of 6 pages or less). Mail: James C. Pierce, Acting Director, Division of Policy, Planning, and Program Development, Office of Federal Contract Compliance Programs, Room N3422, 200 Constitution Avenue, NW., Washington, DC 20210. Receipt of submissions will not be acknowledged; however, the sender may request confirmation that a submission has been received by telephoning OFCCP at (202) 693-0102 (voice) or (202) 693-1337 (TTY) (these are not a toll-free numbers). All comments received, including any personal information provided, will be available for public inspection during normal business hours at Room C3325, 200 Constitution Avenue, NW., Washington, DC 20210. People needing assistance to review comments will be provided with appropriate aids such as readers or print magnifiers. Copies of this Notice of Proposed Rulemaking will be made available in the following formats: large print; electronic file on computer disk; and audiotape. To schedule an appointment to review the comments and/or to obtain this Notice of Proposed Rulemaking in an alternate format, contact OFCCP at the telephone numbers or address listed above. FOR FURTHER INFORMATION CONTACT: James C. Pierce, Acting Director, Division of Policy, Planning and Program Development, Office of Federal Contract Compliance Programs, 200 Constitution Avenue, NW., Room N3422, Washington, DC 20210. Telephone: (202) 693-0102 (voice) or (202) 693- 1337 (TTY). SUPPLEMENTARY INFORMATION: Background The Jobs for Veterans Act (``JVA''), (Pub. L. 107-288, 116 Stat. 2033), was signed by President Bush on November 2, 2002. Section 2(b)(1) of JVA amended the affirmative action provisions of the Vietnam Era Veterans' Readjustment Assistance Act of 1974, as amended, 38 U.S.C. 4212, (``VEVRAA''). Section 2(b)(3) of JVA made the amendments applicable to Government contracts entered into on or after December 1, 2003. Prior to amendment by JVA, VEVRAA required that contractors and subcontractors with a nonexempt Government contract in the amount of $25,000 or more take affirmative action to employ and advance in employment qualified disabled veterans, veterans of the Vietnam era, recently separated veterans, and any other veterans who served on active duty during a war or in a campaign or expedition for which a campaign badge has been authorized. OFCCP has adopted the term ``other protected veteran'' to refer to ``veterans who have served on active duty during a war or in a campaign or expedition for which a campaign badge has been authorized.'' In addition, prior to amendment, VEVRAA required that the Secretary promulgate regulations requiring contractors ``to list immediately with the appropriate local employment service office all of its employment openings except that the contractor may exclude openings for executive and top management positions, positions which are to be filled from within the contractor's organization, and positions lasting three days or less.'' The current regulation implementing VEVRAA at 41 CFR 60- 250.5(a) permits contractors to satisfy their job listing obligations by listing employment openings either with the local employment service office or with the U.S. Department of Labor's America's Job Bank. The JVA amendments made significant changes to the affirmative action provisions of VEVRAA. First, section 2(b)(1) of JVA increased the coverage threshold from a contract of $25,000 or more to a contract of $100,000 or more. Second, the JVA amendments changed the categories of covered veterans under VEVRAA. JVA eliminated the category of Vietnam era veterans from coverage under VEVRAA. However, many Vietnam era veterans may remain covered in other categories. JVA added as a new category of covered veterans--those ``veterans who, while serving on active duty in the Armed Forces, participated in a United States military operation for which an Armed Forces service medal was awarded pursuant to Executive Order 12985.'' JVA expanded the coverage of veterans with disabilities. Prior to amendment by JVA, VEVRAA covered veterans rated as having 10% to 20% serious employment handicap or a disability rated 30% or more by the Department of Veterans Affairs. The JVA amendments expanded coverage to include all veterans with service-connected disabilities. JVA also expanded the coverage of ``recently separated veterans'' from one to three years after discharge or release from active duty. Third, JVA modified the mandatory job-listing requirement for covered contractors. Currently, the regulation at 41 CFR 60-250.5 allows contractors to satisfy their job listing obligations by listing employment openings either [[Page 3353]] with the appropriate local employment service office or with America's Job Bank. As a result of the JVA amendments, listing job openings solely with America's Job Bank will no longer comply with the requirements of VEVRAA. Section 2(b)(1) of JVA requires that the Secretary promulgate regulations that obligate each covered contractor to list all of its employment openings with ``the appropriate employment service delivery system (as defined in section 4101(7) of this title).'' Section 5(c)(1) of JVA defines the term ``employment service delivery system'' as ``a service delivery system at which or through which labor exchange services, including employment, training, and placement services, are offered in accordance with the Wagner- Peyser Act.'' See 38 U.S.C. 4101(7). (The Wagner-Peyser Act established the Employment Service, which is a nationwide system of public employment offices.) JVA provides that a contractor also may list employment openings with ``one-stop career centers under the Workforce Investment Act of 1998, other appropriate service delivery points, or America's Job Bank (or any additional or subsequent national electronic job bank established by the Department of Labor).'' Further, under JVA, as under VEVRAA prior to the JVA amendments, contractors may exclude from the mandatory listing requirement executive and senior management positions, positions that are to be filled with internal candidates, and positions lasting three days or fewer. The JVA amendments to VEVRAA apply only to contracts entered into on or after December 1, 2003. See 38 U.S.C. 4211 Note. Some contractors have Government contracts that were entered into before December 1, 2003. Therefore, it will be necessary for OFCCP to maintain two sets of VEVRAA implementing regulations. OFCCP proposes to publish regulations implementing VEVRAA's affirmative action provisions, as amended by JVA, in a new part 60-300. Part 60-300 will apply to contracts entered into on or after December 1, 2003. The existing VEVRAA requirements in part 60-250 will continue to apply to contracts entered into before December 1, 2003. Contractors with contracts entered into both before, and on or after December 1, 2003, will be subject to both the requirements found in part 60-250 and the requirements proposed for part 60-300. OFCCP recently published a final rule revising the VEVRAA implementing regulations found in part 60-250 to incorporate changes made by the Veterans Employment Opportunity Act of 1998 (VEOA) and the Veterans Benefits and Health Care Improvement Act of 2000 (VBHCIA), (70 FR 72148, December 1, 2005). VEOA increased the amount of the contract required to establish coverage under VEVRAA from $10,000 to $25,000, and extended VEVRAA protection to ``other protected veterans''--those veterans who have served on active duty during a war or in a campaign or expedition for which a campaign badge has been authorized. VBHCIA extended VEVRAA protection to ``recently separated veterans''--those veterans during the one-year period beginning on the date of their discharge or release from active duty. We discuss specific provisions in the Section-by-Section Analysis below. Section-by-Section Analysis This proposed rule is substantially similar to the existing VEVRAA implementing regulations in part 60-250. Indeed, most of the provisions of the proposed rule are identical to the parallel provisions in the existing VEVRAA implementing regulations except where differences are required to implement the amendments made by JVA. The differences between this proposed rule and the existing regulations in part 60-250 are highlighted in the section-by-section analysis. Unless expressly specified, this proposed rule is not intended to create a difference in the substantive meaning between part 60-300 and part 60-250. For a more detailed discussion of provisions in the existing part 60-250 regulations that are incorporated in this proposed rule without substantive change see 61 FR 50080 (September 24, 1996) (Federal Register Notice of Proposed Rulemaking for current part 60-250 rule), 63 FR 59630 (November 4, 1998)(Federal Register Final Rule for current part 60-250 rule), and 70 FR 72148 (December 1, 2005) (Federal Register Final Rule for current part 60-250 rule). Part 60-300 The title of proposed part 60-300 lists the four categories of veterans protected under JVA--disabled veterans, recently separated veterans, other protected veterans, and Armed Forces service medal veterans. Subpart A--Preliminary Matters, Equal Opportunity Clause Section 60-300.1 Purpose, Applicability and Construction This section discusses the purpose, applicability, and construction of the part 60-300 regulations. As required by the JVA amendments, proposed paragraph (b) states that this part applies to any Government contract or subcontract of $100,000 or more entered into on or after December 1, 2003. In proposed paragraph (b), the singular form of the term ``contract'' is used in order to make clear that a single contract in the amount of $100,000 or more is required to establish coverage under VEVRAA; contracts are not aggregated to reach the coverage threshold. Additionally, paragraph (b) states that a contractor whose only covered Government contract was entered into before December 1, 2003, must comply with the requirements in the existing VEVRAA implementing regulations in part 60-250, and a contractor that has covered contracts entered into both before and on or after December 1, 2003, must comply with the regulations in proposed part 60-300 and existing part 60-250. Proposed paragraphs (a) and (c)(2) refer to the four categories of veterans covered under JVA: (1) Disabled veterans, (2) recently separated veterans, (3) other protected veterans, and (4) Armed Forces service medal veterans. Section 60-300.2 Definitions The proposed rule incorporates many of the definitions contained in existing Sec. 60-250.2 without substantive change. Some definitions in the existing Sec. 60-250.2 have been incorporated in the proposed rule with modifications necessitated by the JVA amendments. In addition, new definitions have been added in the proposed rule as a result of the JVA amendments. Accordingly, some definitions in the proposed rule have no parallel definitions in the existing Sec. 60-250.2. Likewise, some definitions in Sec. 60-250.2 have not been adopted in the proposed rule because of the changes JVA made to VEVRAA. The proposal incorporates, without change, the definitions in the paragraphs (a) through (i), (l), (q), and (v) of Sec. 60-250.2. These paragraphs set forth definitions for the terms: ``Act,'' ``equal opportunity clause,'' ``Secretary,'' ``Deputy Assistant Secretary,'' ``Government,'' ``United States,'' ``Recruiting and training agency,'' ``contract,'' ``Government contract,'' ``subcontract,'' ``other protected veteran,'' and ``qualification standards.'' The definitions in proposed paragraphs (j), (k), and (m) for the terms ``contractor,'' ``prime contractor,'' and ``subcontractor,'' respectively, are substantially similar to the definitions for these terms contained in Sec. 60-250.2, except that the provisions in the proposed rule refer to the coverage [[Page 3354]] threshold of a contract of $100,000 or more established by JVA. Proposed paragraph (n) sets forth a definition of ``disabled veteran.'' The proposal incorporates the definition of ``disabled veteran'' found in the statute. See 38 U.S.C. 4211(3). Thus, proposed paragraph (n) provides that a ``disabled veteran'' is: (1) A veteran who is entitled to compensation (or who but for the receipt of military retired pay would be entitled to compensation) under laws administered by the Secretary of Veterans Affairs, or (2) a person who was discharged or released from active duty because of a service-connected disability. The category of disabled veterans is broader than the category of ``special disabled veterans'' that was protected under VEVRAA prior to the JVA amendments. Currently, Sec. 60-250.2(o) defines ``qualified special disabled veteran'' as ``a special disabled veteran who satisfies the requisite skill, experience, education and other job-related requirements of the employment position such veteran holds or desires, and who, with or without reasonable accommodation, can perform the essential functions of such position.'' The regulatory definition of qualified special disabled veteran was modeled on the counterpart definition in the Americans with Disabilities Act. The JVA amendments to VEVRAA added a definition for the term ``qualified.'' Section 2(b)(3)(B) of JVA provides that, with respect to an employment position, the term ``qualified'' means ``having the ability to perform the essential functions of the position with or without reasonable accommodation for an individual with a disability.'' Accordingly, proposed paragraph (o) sets forth a definition for the term ``qualified disabled veteran'' that incorporates the definition of ``qualified'' contained in the statute. The proposal incorporates the definitions for the terms ``essential functions,'' ``reasonable accommodation,'' and ``direct threat'' contained in paragraphs (s), (t), and (w) of existing Sec. 60-250.2, except that the term ``special disabled veteran'' has been replaced with ``disabled veteran.'' Proposed paragraph (q) sets forth the definition of ``recently separated veteran.'' Under JVA, a recently separated veteran is ``any veteran during the three-year period beginning on the date of such veteran's discharge or release from active duty.'' The definition of recently separated veteran in proposed paragraph (q) differs from the definition of the term found in existing Sec. 60-250.2(q). Under Sec. 60-250.2(q), a ``recently separated veteran'' is as veteran who has been discharged from military service for one year or less. Proposed paragraph (r) sets forth the definition for ``Armed Forces service medal veteran.'' JVA amended VEVRAA by adding as a new category of covered veterans--those ``veterans who, while serving on active duty in the Armed Forces, participated in a United States military operation for which an Armed Forces service medal was awarded pursuant to Executive Order 12985 (61 FR 1209).'' Armed Forces service medals are awarded to military personnel who participate in a United States military operation deemed to be significant activity, and who encounter no foreign armed opposition or imminent hostile action. The definition of Armed Forces service medal veterans in the proposed rule is derived from the JVA. Proposed paragraph (x) sets forth a definition of ``compliance evaluation.'' Proposed paragraph (y) incorporates the definition of the ``employment service delivery system'' that was added to the definitional section of VEVRAA, 38 U.S.C. 4101(7), by Section 5(c)(1) of JVA. Under JVA, ``employment service delivery system'' means a ``service delivery system at which or through which labor exchange services, including employment, training, and placement services, are offered in accordance with the Wagner-Peyser Act.'' Section 60-300.4 Coverage and Waivers This section is identical to Sec. 60-250.4 in the existing VEVRAA regulations, except that proposed paragraphs (a)(1) and (a)(2) implement the JVA amendments and state that contracts of $100,000 or more are covered under VEVRAA. Section 60-300.5 Equal Opportunity Clause Proposed paragraph (a) contains the equal opportunity (EO) clause that must be included in all covered Government contracts and subcontracts. The language of the EO clause in proposed paragraph (a) is identical to the language of the EO clause in existing Sec. 60- 250.5(a), except that proposed paragraph (a) refers to the categories of veterans protected under JVA. Thus, ``disabled veterans'' and ``Armed Forces service medal veterans'' are mentioned in proposed paragraph (a), while ``special disabled veterans'' and ``veterans of the Vietnam era'' are referenced in existing Sec. 60-250.5(a). Proposed paragraphs (a)(2) and (a)(3) set out the contractor's obligation to list employment openings with the appropriate local employment service delivery system. Existing Sec. 60-250.5(a) requires that contractors list all employment openings at an appropriate local employment service office of the state employment security agency wherein the opening occurs. Existing Sec. 60-250.5(a) also provides that listing employment openings with the Department of Labor's America's Job Bank will satisfy the requirement to list employment openings with the local employment service office. The JVA amendments eliminated listing employment openings solely with America's Job Bank as an option for complying with the mandatory job-listing requirement. JVA requires that contractors and subcontractors list their employment openings with an ``appropriate employment service delivery system.'' See 38 U.S.C. 4212(a)(2)(A). In addition to listing their employment openings with an appropriate employment service delivery system, JVA provides that contractors and subcontractors also may list their employment openings with one-stop career centers under the Workforce Investment Act of 1998, other appropriate service delivery points, or America's Job Bank (or any additional or subsequent national electronic job bank established by the U.S. Department of Labor). Accordingly, proposed paragraph (a)(2) tracks the JVA provision, and provides that contractors must list employment openings with an appropriate employment service delivery system, and that contractors may also list employment openings with one-stop career centers or America's Job Bank. JVA also made technical and conforming amendments to VEVRAA. In proposed paragraphs (a)(6)(i) and (ii), which set forth definitions for terms used in the mandatory listing requirement, the term ``senior management'' is used instead of ``top management'' to conform to a technical amendment made by JVA. See 38 U.S.C. 4212(a)(2)(A). In addition, the word ``Programs'' has been deleted from the paragraphs (a)(9) and (a)(11) to accurately describe the title of the Deputy Assistant Secretary. Paragraph (a)(11) also states that the subcontract or purchase order threshold amount is $100,000 or more. Subpart B--Discrimination Prohibited Section 60-300.21 Prohibitions This section is identical to existing Sec. 60-250.21, except that the categories of veterans covered under JVA are referenced in the proposal. [[Page 3355]] Section 60-300.22 Direct Threat Defense This section is identical to existing Sec. 60-250.22, except that the cross-reference is to proposed Sec. 60-300.2(w). Section 60-300.23 Medical Examinations and Inquiries This section is identical to existing Sec. 60-250.23, except that the proposal references the category of ``disabled veteran(s)'' rather than ``special disabled veterans.'' Section 60-300.24 Drugs and Alcohol This section is identical to existing Sec. 60-250.24 except that this section includes a citation to proposed Sec. 60-300.23(d). Section 60-300.25 Health Insurance, Life Insurance and Other Benefit Plans This section is identical to Sec. 60-250.25 in the current VEVRAA implementing regulations, except that ``disabled veteran'' rather than ``special disabled veteran'' is referenced in proposed paragraph (d). Subpart C--Affirmative Action Program Section 60-300.40 Applicability of the Affirmative Action Program Requirement Proposed paragraph (a) sets out contract dollar and employee thresholds for application of the affirmative action program requirements of Subpart C. Because JVA raised the coverage threshold to a contract of $100,000 or more, the threshold for application of the AAP requirements must also increase. Proposed paragraph (a) provides that the AAP requirements are applicable to ``every Government contractor that has 50 employees and a contract of $100,000 or more.'' Thus, under the proposal, any contractor subject to VEVRAA will be required to develop a written AAP. Section 60-300.42 Invitation to Self-Identify This section is identical to Sec. 60-250.42, except that the categories of veterans protected under JVA are referenced in this section. Proposed paragraph (a) addresses the obligation of contractors to invite ``disabled veterans'' to self-identify as a veteran covered under VEVRAA who wishes to benefit from the contractor's affirmative action program. Proposed paragraph (b) sets out the obligation to invite ``recently separated veterans, other protected veterans, and Armed Forces service medal veterans.'' In addition, the regulatory citations in this section are to provisions in the proposed rule. Section 60-300.43 Affirmative Action Policy This section is identical to Sec. 60-250.43, except that this section specifies the categories of veterans covered under JVA, and contains citations to provisions in the proposed rule. Section 60-300.44 Required Contents of Affirmative Action Programs With the exception of changes necessitated by the JVA amendments, this section is identical to Sec. 60-250.44 in the existing VEVRAA implementing regulations. The categories of veterans protected under JVA are referenced throughout this section. In addition, consistent with the technical amendments to VEVRAA, the term ``senior management'' is used in paragraph (h)(2)(i), which sets out the requirement that the contractor assign responsibility for implementation of the AAP. Further, this section contains citations to provisions in the proposed rule. Subpart D--General Enforcement and Complaint Procedures Section 60-300.60 Compliance Evaluations This section is identical to Sec. 60-250.60, except for the differences necessitated by JVA. The categories of veterans protected under JVA are referenced in this section. In addition, proposed paragraph (c) provides that OFCCP may verify whether a contractor has complied with any reporting requirements required under regulations promulgated by the Veterans' Employment and Training Service (VETS). Paragraph (c) of existing Sec. 60-250.60 provides that OFCCP may verify whether a contractor is complying with its obligation to file its Annual VETS-100 Report pursuant to the regulations in 41 CFR part 61-250. The regulations in part 61-250, which were issued by VETS, apply only to contracts entered into before December 1, 2003. When VETS issues regulations establishing reporting requirements for contracts entered into on or after December 1, 2003, proposed paragraph (c) gives OFCCP authority to investigate compliance with such reporting requirements. Section 60-300.61 Complaint Procedures This section is identical to Sec. 60-250.61, except for the changes necessary to conform to the amendments made by JVA. This section refers to the categories of veterans protected under JVA. Additionally, paragraph (b)(iii) does not contain references to ``serious employment handicaps'' and level of disability by percentage, as JVA protects all disabled veterans. Further, the regulatory citations in this section are to sections in the proposed rule. Section 60-300.64 Show Cause Notice Except for the citations to provisions in the proposed rule, this section is identical to Sec. 60-250.64. Section 60-300.65 Enforcement Proceedings Except for the citations to provisions in the proposed rule, this section is identical to Sec. 60-250.65. Section 60-300.66 Sanctions and Penalties Except for the citations to provisions in the proposed rule, this section is identical to Sec. 60-250.66. Section 60-300.69 Intimidation and interference This section is identical to Sec. 60-250.69, except that this section refers to the categories of veterans protected under VEVRAA. Subpart E--Ancillary Matters Section 60-300.84 Responsibilities of Appropriate Employment Service Delivery System This section is identical to Sec. 60-250.84 in the existing VEVRAA implementing regulations, except for the changes required to implement the JVA amendments. Thus, this section references the categories of veterans protected under JVA. Additionally, consistent with the requirements of JVA, the term ``appropriate employment service delivery system'' is used in the title and in proposed paragraphs (a) and (b). Appendix A to Part 60-300--Guidelines on a Contractor's Duty To Provide Reasonable Accommodation Except for the references to the categories of veterans covered under JVA and citations to provisions in the proposed rule, proposed Appendix A to part 60-300 is substantially similar to Appendix A to part 60-250 in the existing VEVRAA regulations. Appendix B to Part 60-300--Sample Invitation To Self-Identify Except for the references to the categories of veterans covered under JVA and citations to provisions in the proposed rule, proposed Appendix B to part 60-300 is substantially similar to Appendix B to part 60-250 in the existing VEVRAA regulations. [[Page 3356]] Appendix C to Part 60-300--Review of Personnel Processes Proposed Appendix C to part 60-300 is substantially similar to Appendix C to part 60-250 in the existing VEVRAA regulations, except for the references to the categories of veterans covered under JVA and citations to provisions in the proposed rule. Regulatory Procedures Executive Order 12866 These VEVRAA regulations have been drafted and reviewed in accordance with Executive Order 12866, section 1(b), Principles of Regulation. The Department has determined that this notice of proposed rulemaking is a ``significant regulatory action'' under Executive Order 12866, section 3(f), Regulatory Planning and Review, but is not economically significant as defined in section 3(f)(1). Therefore, the information enumerated in section 6(a)(3)(C) of the order is not required. Pursuant to Executive Order 12866, this proposed rule has been reviewed by the Office of Management and Budget. Executive Order 13132 OFCCP has reviewed this proposed rule in accordance with Executive Order 13132 regarding federalism, and has determined that it does not have ``federalism implications.'' This proposed rule will not ``have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.'' Regulatory Flexibility Act This proposed rule, if promulgated in final, will clarify existing requirements for Federal contractors. In view of this fact and because the proposed rule does not substantively change existing obligations for Federal contractors, we certify that the rule will not have a significant economic impact on a substantial number of small business entities. Therefore, a regulatory flexibility analysis under the Regulatory Flexibility Act is not required. Unfunded Mandates Reform Executive Order 12875--This proposed rule, if promulgated in final, will not create an unfunded Federal mandate upon any State, local, or tribal government. Unfunded Mandates Reform Act of 1995--This proposed rule, if promulgated in final, will not include any Federal mandate that may result in increased expenditures by State, local, and tribal governments, in the aggregate, of $100 million or more, or increased expenditures by the private sector of $100 million or more. Paperwork Reduction Act The information collection requirements contained in the existing VEVRAA regulations, with the exception of those related to complaint procedures, are currently approved under OMB Control No. 1215-0072 (Recordkeeping and Reporting Requirements-Supply and Service) and OMB Control No. 1215-0163 (Construction Recordkeeping and Reporting). The information collection requirements contained in the existing complaint procedures regulation are currently approved under OMB Control No. 1215-0131. This proposed rule would adopt a new set of VEVRAA implementing regulations that incorporate the changes made by the JVA amendments, and apply to Government contracts entered on or after December 1, 2003. JVA amended VEVRAA by increasing the contract coverage threshold, changing the categories of veterans protected under the law, and changing the manner in which the mandatory job listing requirement is to be implemented. The increase in the contract coverage threshold from $25,000 to $100,000 may result in a decrease in the number of respondents and burden hours. However, this proposed rule would not make any changes to the currently approved information collections. Consequently, this proposed rule need not be reviewed by the Office of Management and Budget under the authority of the Paperwork Reduction Act of 1995, 44 U.S.C. 3501 et seq. List of Subjects in 41 CFR Part 60-300 Administrative practice and procedure, Civil rights, Employment, Equal employment opportunity, Government contracts, Government procurement, Individuals with disabilities, Investigations, Reporting and recordkeeping requirements, and Veterans. Signed at Washington, DC, this 12th day of January, 2006. Victoria A. Lipnic, Assistant Secretary for Employment Standards. Charles E. James, Sr., Deputy Assistant Secretary for Federal Contract Compliance. Accordingly, under authority of 38 U.S.C. 4212, Title 41 of the Code of Federal Regulations, Chapter 60, Part 60-300, is proposed to be added to read as follows: PART 60-300--AFFIRMATIVE ACTION AND NONDISCRIMINATION OBLIGATIONS OF CONTRACTORS AND SUBCONTRACTORS REGARDING DISABLED VETERANS, RECENTLY SEPARATED VETERANS, OTHER PROTECTED VETERANS, AND ARMED FORCES SERVICE MEDAL VETERANS Subpart A--Preliminary Matters, Equal Opportunity Clause Sec. 60-300.1 Purpose, applicability and construction. 60-300.2 Definitions. 60-300.3 [Reserved] 60-300.4 Coverage and waivers. 60-300.5 Equal opportunity clause. Subpart B--Discrimination Prohibited 60-300.20 Covered employment activities. 60-300.21 Prohibitions. 60-300.22 Direct threat defense. 60-300.23 Medical examinations and inquiries. 60-300.24 Drugs and alcohol. 60-300.25 Health insurance, life insurance and other benefit plans. Subpart C--Affirmative Action Program 60-300.40 Applicability of the affirmative action program requirement. 60-300.41 Availability of affirmative action program. 60-300.42 Invitation to self-identify. 60-300.43 Affirmative action policy. 60-300.44 Required contents of affirmative action programs. Subpart D--General Enforcement and Complaint Procedures 60-300.60 Compliance evaluations. 60-300.61 Complaint procedures. 60-300.62 Conciliation agreements. 60-300.63 Violation of conciliation agreements. 60-300.64 Show cause notices. 60-300.65 Enforcement proceedings. 60-300.66 Sanctions and penalties. 60-300.67 Notification of agencies. 60-300.68 Reinstatement of ineligible contractors. 60-300.69 Intimidation and interference. 60-300.70 Disputed matters related to compliance with the Act. Subpart E--Ancillary Matters 60-300.80 Recordkeeping. 60-300.81 Access to records. 60-300.82 Labor organizations and recruiting and training agencies. 60-300.83 Rulings and interpretations. 60-300.84 Responsibilities of local employment service offices. Appendix A to Part 60-300--Guidelines on a Contractor's Duty To Provide Reasonable Accommodation Appendix B to Part 60-300--Sample Invitation To Self-Identify Appendix C to Part 60-300--Review of Personnel Processes Authority: 29 U.S.C. 793; 38 U.S.C. 4211 and 4212; E.O. 11758 (3 CFR, 1971-1975 Comp., p. 841). [[Page 3357]] Subpart A--Preliminary Matters, Equal Opportunity Clause Sec. 60-300.1 Purpose, applicability and construction. (a) Purpose. The purpose of the regulations in this part is to set forth the standards for compliance with the Vietnam Era Veterans' Readjustment Assistance Act of 1974, as amended (38 U.S.C. 4212, or VEVRAA), which requires Government contractors and subcontractors to take affirmative action to employ and advance in employment qualified covered veterans. Disabled veterans, recently separated veterans, other protected veterans, and Armed Forces service medal veterans are covered veterans under VEVRAA. (b) Applicability. This part applies to any Government contract or subcontract of $100,000 or more, entered into on or after December 1, 2003, for the purchase, sale or use of personal property or nonpersonal services (including construction): Provided, that subpart C of this part applies only as described in Sec. 60-300.40(a). Compliance by the contractor with the provisions of this part will not necessarily determine its compliance with other statutes, and compliance with other statutes will not necessarily determine its compliance with this part. Any contractor or subcontractor whose only contract(s) for the purchase, sale or use of personal property and nonpersonal services (including construction) was entered into before December 1, 2003, must follow part 60-250. Any contractor or subcontractor who has contracts for the purchase, sale or use of personal property and nonpersonal services (including construction) that were entered into both before December 1, 2003, and on or after December 1, 2003, must follow both parts 60-250 and 60-300. (c) Construction--(1) In general. The Interpretive Guidance on Title I of the Americans with Disabilities Act (ADA) (42 U.S.C. 12101, et seq.) set out as an appendix to 29 CFR part 1630 issued pursuant to Title I may be relied upon for guidance in interpreting the parallel provisions of this part. (2) Relationship to other laws. This part does not invalidate or limit the remedies, rights, and procedures under any Federal law or the law of any state or political subdivision that provides greater or equal protection for the rights of disabled veterans, recently separated veterans, other protected veterans, or Armed Forces service medal veterans as compared to the protection afforded by this part. It may be a defense to a charge of violation of this part that a challenged action is required or necessitated by another Federal law or regulation, or that another Federal law or regulation prohibits an action (including the provision of a particular reasonable accommodation) that would otherwise be required by this part. Sec. 60-300.2 Definitions. For the purpose of this part: (a) Act means the Vietnam Era Veterans' Readjustment Assistance Act of 1974, as amended, 38 U.S.C. 4212. (b) Equal opportunity clause means the contract provisions set forth in Sec. 60-300.5, ``Equal opportunity clause.'' (c) Secretary means the Secretary of Labor, United States Department of Labor, or his or her designee. (d) Deputy Assistant Secretary means the Deputy Assistant Secretary for Federal Contract Compliance of the United States Department of Labor, or his or her designee. (e) Government means the Government of the United States of America. (f) United States, as used in this part, shall include the several States, the District of Columbia, the Virgin Islands, the Commonwealth of Puerto Rico, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and Wake Island. (g) Recruiting and training agency means any person who refers workers to any contractor, or who provides or supervises apprenticeship or training for employment by any contractor. (h) Contract means any Government contract or subcontract. (i) Government contract means any agreement or modification thereof between any contracting agency and any person for the purchase, sale or use of personal property or nonpersonal services (including construction). The term Government contract does not include agreements in which the parties stand in the relationship of employer and employee, and federally assisted contracts. (1) Modification means any alteration in the terms and conditions of a contract, including supplemental agreements, amendments and extensions. (2) Contracting agency means any department, agency, establishment or instrumentality of the United States, including any wholly owned Government corporation, which enters into contracts. (3) Person, as used in this paragraph (i) and paragraph (l) of this section, means any natural person, corporation, partnership or joint venture, unincorporated association, state or local government, and any agency, instrumentality, or subdivision of such a government. (4) Nonpersonal services, as used in this paragraph (i) and paragraph (l) of this section, includes, but is not limited to, the following: Utility, construction, transportation, research, insurance, and fund depository. (5) Construction, as used in this paragraph (i) and paragraph (l) of this section, means the construction, rehabilitation, alteration, conversion, extension, demolition, or repair of buildings, highways, or other changes or improvements to real property, including facilities providing utility services. The term also includes the supervision, inspection, and other on-site functions incidental to the actual construction. (6) Personal property, as used in this paragraph (i) and paragraph (l) of this section, includes supplies and contracts for the use of real property (such as lease arrangements), unless the contract for the use of real property itself constitutes real property (such as easements). (j) Contractor means, unless otherwise indicated, a prime contractor or subcontractor holding a contract of $100,000 or more. (k) Prime contractor means any person holding a contract of $100,000 or more, and, for the purposes of subpart D of this part, ``General Enforcement and Complaint Procedures,'' includes any person who has held a contract subject to the Act. (l) Subcontract means any agreement or arrangement between a contractor and any person (in which the parties do not stand in the relationship of an employer and an employee): (1) For the purchase, sale or use of personal property or nonpersonal services (including construction) which, in whole or in part, is necessary to the performance of any one or more contracts; or (2) Under which any portion of the contractor's obligation under any one or more contracts is performed, undertaken, or assumed. (m) Subcontractor means any person holding a subcontract of $100,000 or more and, for the purposes of subpart D of this part, ``General Enforcement and Complaint Procedures,'' any person who has held a subcontract subject to the Act. (n) Disabled veteran means: (1) A veteran who is entitled to compensation (or who but for the receipt of military retired pay would be entitled to compensation) under laws administered by the Secretary of Veterans Affairs, or (2) A person who was discharged or released from active duty because of a service-connected disability. [[Page 3358]] (o) Qualified disabled veteran means a disabled veteran who has the ability to perform the essential functions of the employment position with or without reasonable accommodation. (p) Other protected veteran means a person who served on active duty during a war or in a campaign or expedition for which a campaign badge has been authorized, under the laws administered by the Department of Defense. (q) Recently separated veteran means any veteran during the three- year period beginning on the date of such veteran's discharge or release from active duty. (r) Armed Forces service medal veteran means any veteran who, while serving on active duty in the Armed Forces, participated in a United States military operation for which an Armed Forces service medal was awarded pursuant to Executive Order 12985 (61 FR 1209). (s) Essential functions--(1) In general. The term essential functions means fundamental job duties of the employment position the disabled veteran holds or desires. The term essential functions does not include the marginal functions of the position. (2) A job function may be considered essential for any of several reasons, including but not limited to the following: (i) The function may be essential because the reason the position exists is to perform that function; (ii) The function may be essential because of the limited number of employees available among whom the performance of that job function can be distributed; and/or (iii) The function may be highly specialized so that the incumbent in the position is hired for his or her expertise or ability to perform the particular function. (3) Evidence of whether a particular function is essential includes, but is not limited to: (i) The contractor's judgment as to which functions are essential; (ii) Written job descriptions prepared before advertising or interviewing applicants for the job; (iii) The amount of time spent on the job performing the function; (iv) The consequences of not requiring the incumbent to perform the function; (v) The terms of a collective bargaining agreement; (vi) The work experience of past incumbents in the job; and/or (vii) The current work experience of incumbents in similar jobs. (t) Reasonable accommodation--(1) The term reasonable accommodation means: (i) Modifications or adjustments to a job application process that enable a qualified applicant who is a disabled veteran to be considered for the position such applicant desires; \1\ or --------------------------------------------------------------------------- \1\ A contractor's duty to provide a reasonable accommodation with respect to applicants who are disabled veterans is not limited to those who ultimately demonstrate that they are qualified to perform the job in issue. Disabled veteran applicants must be provided a reasonable accommodation with respect to the application process if they are qualified with respect to that process (e.g., if they present themselves at the correct location and time to fill out an application). --------------------------------------------------------------------------- (ii) Modifications or adjustments to the work environment, or to the manner or circumstances under which the position held or desired is customarily performed, that enable a qualified disabled veteran to perform the essential functions of that position; or (iii) Modifications or adjustments that enable the contractor's employee who is a disabled veteran to enjoy equal benefits and privileges of employment as are enjoyed by the contractor's other similarly situated employees who are not disabled veterans. (2) Reasonable accommodation may include but is not limited to: (i) Making existing facilities used by employees readily accessible to and usable by disabled veterans; and (ii) Job restructuring; part-time or modified work schedules; reassignment to a vacant position; acquisition or modifications of equipment or devices; appropriate adjustment or modifications of examinations, training materials, or policies; the provision of qualified readers or interpreters; and other similar accommodations for disabled veterans. (3) To determine the appropriate reasonable accommodation it may be necessary for the contractor to initiate an informal, interactive process with the qualified disabled veteran in need of the accommodation.\2\ This process should identify the precise limitations resulting from the disability and potential reasonable accommodations that could overcome those limitations. (Appendix A of this part provides guidance on a contractor's duty to provide reasonable accommodation.) --------------------------------------------------------------------------- \2\ Contractors must engage in such an interactive process with a disabled veteran, whether or not a reasonable accommodation ultimately is identified that will make the person a qualified individual. Contractors must engage in the interactive process because, until they have done so, they may be unable to determine whether a reasonable accommodation exists that will result in the person being qualified. --------------------------------------------------------------------------- (u) Undue hardship--(1) In general. Undue hardship means, with respect to the provision of an accommodation, significant difficulty or expense incurred by the contractor, when considered in light of the factors set forth in paragraph (u)(2) of this section. (2) Factors to be considered. In determining whether an accommodation would impose an undue hardship on the contractor, factors to be considered include: (i) The nature and net cost of the accommodation needed, taking into consideration the availability of tax credits and deductions, and/ or outside funding; (ii) The overall financial resources of the facility or facilities involved in the provision of the reasonable accommodation, the number of persons employed at such facility, and the effect on expenses and resources; (iii) The overall financial resources of the contractor, the overall size of the business of the contractor with respect to the number of its employees, and the number, type and location of its facilities; (iv) The type of operation or operations of the contractor, including the composition, structure and functions of the work force of such contractor, and the geographic separateness and administrative or fiscal relationship of the facility or facilities in question to the contractor; and (v) The impact of the accommodation upon the operation of the facility, including the impact on the ability of other employees to perform their duties and the impact on the facility's ability to conduct business. (v) Qualification standards means the personal and professional attributes including the skill, experience, education, physical, medical, safety and other requirements established by the contractor as requirements which an individual must meet in order to be eligible for the position held or desired. (w) Direct threat means a significant risk of substantial harm to the health or safety of the individual or others that cannot be eliminated or reduced by reasonable accommodation. The determination that a disabled veteran poses a direct threat shall be based on an individualized assessment of the individual's present ability to perform safely the essential functions of the job. This assessment shall be based on a reasonable medical judgment that relies on the most current medical knowledge and/or on the best available objective evidence. In determining whether an individual would pose a direct threat, the factors to be considered include: (1) The duration of the risk; (2) The nature and severity of the potential harm; (3) The likelihood that the potential harm will occur; and (4) The imminence of the potential harm. [[Page 3359]] (x) Compliance evaluation means any one or combination of actions OFCCP may take to examine a Federal contractor's or subcontractor's compliance with one or more of the requirements of the Vietnam Era Veterans' Readjustment Assistance Act. (y) Employment service delivery system means a service delivery system at which or through which labor exchange services, including employment, training, and placement services, are offered in accordance with the Wagner-Peyser Act. Sec. 60-300.3 [Reserved] Sec. 60-300.4 Coverage and waivers. (a) General--(1) Contracts and subcontracts of $100,000 or more. Contracts and subcontracts of $100,000 or more, are covered by this part. No contracting agency or contractor shall procure supplies or services in less than usual quantities to avoid the applicability of the equal opportunity clause. (2) Contracts for indefinite quantities. With respect to indefinite delivery-type contracts (including, but not limited to, open end contracts, requirement-type contracts, Federal Supply Schedule contracts, ``call-type'' contracts, and purchase notice agreements), the equal opportunity clause shall be included unless the contracting agency has reason to believe that the amount to be ordered in any year under such contract will be less than $100,000. The applicability of the equal opportunity clause shall be determined at the time of award for the first year, and annually thereafter for succeeding years, if any. Notwithstanding the above, the equal opportunity clause shall be applied to such contract whenever the amount of a single order is $100,000 or more. Once the equal opportunity clause is determined to be applicable, the contract shall continue to be subject to such clause for its duration, regardless of the amounts ordered, or reasonably expected to be ordered in any year. (3) Employment activities within the United States. This part applies only to employment activities within the United States and not to employment activities abroad. The term ``employment activities within the United States'' includes actual employment within the United States, and decisions of the contractor made within the United States pertaining to the contractor's applicants and employees who are within the United States, regarding employment opportunities abroad (such as recruiting and hiring within the United States for employment abroad, or transfer of persons employed in the United States to contractor establishments abroad). (4) Contracts with state or local governments. The requirements of the equal opportunity clause in any contract or subcontract with a state or local government (or any agency, instrumentality or subdivision thereof) shall not be applicable to any agency, instrumentality or subdivision of such government which does not participate in work on or under the contract or subcontract. (b) Waivers--(1) Specific contracts and classes of contracts. The Deputy Assistant Secretary may waive the application to any contract of the equal opportunity clause in whole or part when he or she deems that special circumstances in the national interest so require. The Deputy Assistant Secretary may also grant such waivers to groups or categories of contracts: where it is in the national interest; where it is found impracticable to act upon each request individually; and where such waiver will substantially contribute to convenience in administration of the Act. When a waiver has been granted for any class of contracts, the Deputy Assistant Secretary may withdraw the waiver for a specific contract or group of contracts to be awarded, when in his or her judgment such action is necessary or appropriate to achieve the purposes of the Act. The withdrawal shall not apply to contracts awarded prior to the withdrawal, except that in procurements entered into by formal advertising, or the various forms of restricted formal advertising, such withdrawal shall not apply unless the withdrawal is made more than 10 calendar days before the date set for the opening of the bids. (2) National security. Any requirement set forth in the regulations of this part shall not apply to any contract whenever the head of the contracting agency determines that such contract is essential to the national security and that its award without complying with such requirements is necessary to the national security. Upon making such a determination, the head of the contracting agency will notify the Deputy Assistant Secretary in writing within 30 days. (3) Facilities not connected with contracts. The Deputy Assistant Secretary may waive the requirements of the equal opportunity clause with respect to any of a contractor's facilities which he or she finds to be in all respects separate and distinct from activities of the contractor related to the performance of the contract, provided that he or she also finds that such a waiver will not interfere with or impede the effectuation of the Act. Such waivers shall be considered only upon the request of the contractor. Sec. 60-300.5 Equal opportunity clause. (a) Government contracts. Each contracting agency and each contractor shall include the following equal opportunity clause in each of its covered Government contracts or subcontracts (and modifications, renewals, or extensions thereof if not included in the original contract): EQUAL OPPORTUNITY FOR DISABLED VETERANS, RECENTLY SEPARATED VETERANS, OTHER PROTECTED VETERANS, AND ARMED FORCES SERVICE MEDAL VETERANS 1. The contractor will not discriminate against any employee or applicant for employment because he or she is a disabled veteran, recently separated veteran, other protected veteran, or Armed Forces service medal veteran in regard to any position for which the employee or applicant for employment is qualified. The contractor agrees to take affirmative action to employ, advance in employment and otherwise treat qualified individuals without discrimination based on their status as a disabled veteran, recently separated veteran, other protected veteran, or Armed Forces service medal veteran in all employment practices, including the following: i. Recruitment, advertising, and job application procedures; ii. Hiring, upgrading, promotion, award of tenure, demotion, transfer, layoff, termination, right of return from layoff and rehiring; iii. Rates of pay or any other form of compensation and changes in compensation; iv. Job assignments, job classifications, organizational structures, position descriptions, lines of progression, and seniority lists; v. Leaves of absence, sick leave, or any other leave; vi. Fringe benefits available by virtue of employment, whether or not administered by the contractor; vii. Selection and financial support for training, including apprenticeship, and on-the-job training under 38 U.S.C. 3687, professional meetings, conferences, and other related activities, and selection for leaves of absence to pursue training; viii. Activities sponsored by the contractor including social or recreational programs; and ix. Any other term, condition, or privilege of employment. 2. The contractor agrees to immediately list all employment openings which exist at the time of the execution of this contract and those which occur during the performance of this contract, including those not generated by this contract and including those occurring at an establishment of the contractor other than the one wherein the contract is being performed, but excluding those of independently operated corporate affiliates, with the appropriate employment service delivery system. In addition, the [[Page 3360]] contractor also may list employment openings with one-stop career centers under the Workforce Investment Act of 1998, other appropriate service delivery points, or America's Job Bank (or any additional or subsequent national electronic job bank established by the U.S. Department of Labor). 3. Listing of employment openings with the appropriate employment service delivery system pursuant to this clause shall be made at least concurrently with the use of any other recruitment source or effort and shall involve the normal obligations which attach to the placing of a bona fide job order, including the acceptance of referrals of veterans and nonveterans. The listing of employment openings does not require the hiring of any particular job applicants or from any particular group of job applicants, and nothing herein is intended to relieve the contractor from any requirements in Executive orders or regulations regarding nondiscrimination in employment. 4. Whenever the contractor becomes contractually bound to the listing provisions in paragraphs 2 and 3 of this clause, it shall advise the state employment security agency in each state where it has establishments of the name and location of each hiring location in the state: Provided, That this requirement shall not apply to state and local governmental contractors. As long as the contractor is contractually bound to these provisions and has so advised the state agency, there is no need to advise the state agency of subsequent contracts. The contractor may advise the state agency when it is no longer bound by this contract clause. 5. The provisions of paragraphs 2 and 3 of this clause do not apply to the listing of employment openings which occur and are filled outside of the 50 states, the District of Columbia, the Commonwealth of Puerto Rico, Guam, the Virgin Islands, American Samoa, the Commonwealth of the Northern Mariana Islands, Wake Island, and the Trust Territories of the Pacific Islands. 6. As used in this clause: i. All employment openings includes all positions except executive and senior management, those positions that will be filled from within the contractor's organization, and positions lasting three days or less. This term includes full-time employment, temporary employment of more than three days' duration, and part-time employment. ii. Executive and senior management means any employee: (a) Whose primary duty consists of the management of the enterprise in which he or she is employed or of a customarily recognized department or subdivision thereof; and (b) who customarily and regularly directs the work of two or more other employees therein; and (c) who has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring or firing and as to the advancement and promotion or any other change of status of other employees will be given particular weight; and (d) who customarily and regularly exercises discretionary powers; and (e) who does not devote more than 20 percent, or, in the case of an employee of a retail or service establishment who does not devote as much as 40 percent, of his or her hours of work in the work week to activities which are not directly and closely related to the performance of the work described in (a) through (d) of this paragraph 6.ii.; Provided, that (e) of this paragraph 6.ii. shall not apply in the case of an employee who is in sole charge of an independent establishment or a physically separated branch establishment, or who owns at least a 20-percent interest in the enterprise in which he or she is employed. iii. Positions that will be filled from within the contractor's organization means employment openings for which no consideration will be given to persons outside the contractor's organization (including any affiliates, subsidiaries, and parent companies) and includes any openings which the contractor proposes to fill from regularly established ``recall'' lists. The exception does not apply to a particular opening once an employer decides to consider applicants outside of his or her own organization. 7. The contractor agrees to comply with the rules, regulations, and relevant orders of the Secretary of Labor issued pursuant to the Act. 8. In the event of the contractor's noncompliance with the requirements of this clause, actions for noncompliance may be taken in accordance with the rules, regulations, and relevant orders of the Secretary of Labor issued pursuant to the Act. 9. The contractor agrees to post in conspicuous places, available to employees and applicants for employment, notices in a form to be prescribed by the Deputy Assistant Secretary for Federal Contract Compliance, provided by or through the contracting officer. Such notices shall state the rights of applicants and employees as well as the contractor's obligation under the law to take affirmative action to employ and advance in employment qualified employees and applicants who are disabled veterans, recently separated veterans, other protected veterans, or Armed Forces service medal veterans. The contractor must ensure that applicants or employees who are disabled veterans are informed of the contents of the notice (e.g., the contractor may have the notice read to a visually disabled individual, or may lower the posted notice so that it might be read by a person in a wheelchair). 10. The contractor will notify each labor organization or representative of workers with which it has a collective bargaining agreement or other contract understanding, that the contractor is bound by the terms of the Vietnam Era Veterans' Readjustment Assistance Act of 1974, as amended, and is committed to take affirmative action to employ and advance in employment qualified disabled veterans, recently separated veterans, other protected veterans, and Armed Forces service medal veterans. 11. The contractor will include the provisions of this clause in every subcontract or purchase order of $100,000 or more, unless exempted by the rules, regulations, or orders of the Secretary issued pursuant to the Vietnam Era Veterans' Readjustment Assistance Act of 1974, as amended, so that such provisions will be binding upon each subcontractor or vendor. The contractor will take such action with respect to any subcontract or purchase order as the Deputy Assistant Secretary for Federal Contract Compliance may direct to enforce such provisions, including action for noncompliance. [End of Clause] (b) Subcontracts. Each contractor shall include the equal opportunity clause in each of its subcontracts subject to this part. (c) Adaption of language. Such necessary changes in language may be made to the equal opportunity clause as shall be appropriate to identify properly the parties and their undertakings. (d) Inclusion of the equal opportunity clause in the contract. It is not necessary that the equal opportunity clause be quoted verbatim in the contract. The clause may be made a part of the contract by citation to 41 CFR 60-300.5(a). (e)