Existing Contracts May be Modified to Include E-Verify Requirement

Our firm previously reported on the upcoming additional delay, until September 8, 2009, in the implementation of the final rule requiring federal contractors and subcontractors to begin using the federal government's electronic Employment Eligibility Verification system (E-Verify) to verify eligibility of newly hired employees and existing employees assigned to work on government contracts.
 
Notably, in issuing the notice of additional delay in implementation on June 5, 2009, the Federal Register announcement states that "On or after September 8, 2009, contracting officers "should modify, on a bilateral basis, existing indefinite delivery/indefinite-quantity contracts in accordance with FAR 1.108(d)(3) to include the clause for future orders if the remaining period of performance extends beyond March 8, 2010, and the amount of work or number of orders expected under the remaining performance period is substantial." (Emphasis added.)
 
Thus, not only are new solicitations and contracts issued after September 8, 2009, going to include the new E-Verify clause, but existing indefinite quantity/indefinite delivery (IDIQ) contracts also may be modified to include the clause. This Federal Register notice and amendment does not specify what "amount of work" or "number of orders" would constitute a "substantial" amount to trigger the inclusion of this clause in existing IDIQ contracts.
 
According to FAR 1.108(d)(3), you may be eligible for appropriate consideration if your contract or subcontract is being modified to include this new provision. If you have an existing GSA Federal Supply Schedule, Multiple Award Schedule or other form of IDIQ contract or you are a subcontractor to a prime contractor who has one, you should carefully check any proposed contract or subcontract modifications going forward to see whether the government or your higher-tier prime or sub contractor is proposing to flow the E-Verify requirements down to you. Compliance requirements for such a modification may have a cost impact and may be something for which you can and should be compensated through a bilateral contract or subcontract modification. If you have questions about the application of this new rule and its impact on a possible contract modification, please contact us.