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The U.S. Department of Veterans Affairs (VA) Maintaining Internal Systems and Strengthening Integrated Outside Networks (MISSION) Act of 2018’s primary objectives are to provide veterans with greater access to health care in VA facilities and communities, to expand benefits for caregivers, and to improve the VA’s ability to retain and recruit the best medical providers. In Section 107 of the VA MISSION Act, Congress exempted federal contractors who enter into agreements with the VA under 38 U.S.C. § 1703A and/or 38 U.S.C. § 1745 from the jurisdiction of the Office of Federal Contract Compliance Programs (OFCCP).

This exemption operates in the same manner as the TRICARE moratorium established in OFCCP Directive 2014-01. Under the moratorium, TRICARE subcontractors are exempted from affirmative action obligations. On July 2, 2020, OFCCP released the final rule on “Affirmative Action and Nondiscrimination Obligations of Federal Contractors and Subcontractors: TRICARE Providers,” which made the TRICARE moratorium permanent. While the final rule focuses on the TRICARE moratorium, OFCCP also took the opportunity to address the exemption under the VA MISSION Act. Specifically, OFCCP discusses Veterans Care Agreements (VCAs) under 38 U.S.C. §1703A. VCAs provide the VA with “the authority to enter into … arrangements to address gaps in care that may arise in hospital care, medical services, and/or extended care services.” Despite the statutory language of the VA MISSION Act, in the final rule, OFCCP takes the position that VCAs are under its jurisdiction because 38 U.S.C. § 1703A(i)(2)(B)(ii) states that VCAs are subject to “all laws that protect against employment discrimination or that otherwise ensure equal employment opportunities.” Therefore, according to OFCCP, “the statutory language of the 2018 VA MISSION Act, standing alone, does not serve to remove these agreements from OFCCP’s authority.”

OFCCP also took the time to address VA Community Care Networks (CCNs).The agency describes a CCN as a “third-party network manager that is a prime contractor with VA.”OFCCP distinguishes TRICARE providers from CCN providers because “the CCN is a contract to create a network of providers and coordinate the provision of care, but is not a contract for the provision of care itself.”Because CCNs are generally “competitively bid [f]ederal contacts” and the VA MISSION Act does not contain language defining CCNs as noncontractual, OFCCP did not exempt CCNs from its jurisdiction.

With the release of the final rule, federal contractors can no longer solely rely on Section 107 of the VA MISSION Act to claim that they do not fall under OFCCP jurisdiction. Instead, federal contractors may want to also examine other factors besides just the statutory language of the VA MISSION Act to determine OFCCP jurisdiction.

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The experienced attorneys in our OFCCP Compliance, Government Contracting, and Reporting Practice Group advise and defend federal contractors and subcontractors on jurisdictional, compliance, and enforcement issues relevant to government contracting, including those involving the Office of Federal Contract Compliance Programs (OFCCP).

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