The Trump Administration has declared this month National Slavery and Human Trafficking Prevention Month, calling on industry associations, law enforcement, private businesses, and others to work toward ending modern slavery and human trafficking. This proclamation follows the Administration’s efforts to combat human trafficking, which we have previously discussed here, and comes on the heels of an OMB memorandum released last fall aimed at “enhanc[ing] the effectiveness of anti-trafficking requirements in Federal acquisition while helping contractors manage and reduce the burden associated with meeting these responsibilities.”

The OMB memorandum directs executive agencies to conduct a review of contract spending to ensure appropriate safeguards are in place to prevent trafficking in high-risk areas. These safeguards include potentially incorporating additional obligations in solicitations (such as code of conduct requirements) and documenting trafficking issues that arise during contract performance through the past performance process. The OPM memorandum also directs executive agencies to appoint a trafficking in persons expert and a procurement trafficking in persons contact for purposes of coordinating and implementing anti-trafficking requirements.

Additionally, the OMB memorandum seeks to respond to a host of questions that contractors have raised since the FAR’s anti-trafficking requirements were revised in 2015. To that end, the OMB memorandum provides a list of “best practices” that a contractor may implement as part of its anti-trafficking compliance program. These best practices generally fall within two categories:

  • Internal Steps: Compliance Policies and Accountability Official – The OMB memorandum notes that the FAR anti-trafficking rule does not technically require compliance policies or an accountability official, but the memorandum identifies such measures as important steps in ensuring compliance. According to the OMB memorandum, compliance policies (including a compliance plan, when required) should take into account recruitment practices, disciplinary action, and host country housing and employment requirements. The compliance policies should also regularly be assessed and updated to account for developing best practices and lessons learned. The OMB memorandum further explains that an official within the company should be responsible for implementing anti-trafficking policies and have the authority to assess supply chain compliance.
  • External Steps: Monitoring High-Risk Portions of the Supply Chain – The OMB memorandum’s guidance for external steps focuses largely on supply chain due diligence that prioritizes high-risk areas and assessing subcontractor compliance. For instance, it explains that contractors should maintain auditing processes to ensure subcontractor compliance with anti-trafficking requirements, including methods for assessing the use of recruiters and the sufficiency of reporting mechanisms. The OMB memorandum also recommends confirming that corrective action measures are in place to ensure appropriate remedial action (including contract termination) and follow-up monitoring when subcontractors engage in violations of anti-trafficking rules.

Notably, the OMB memorandum explains that contracting officers may use these best practices in assessing a contractor’s anti-trafficking compliance program, and notes that such assessments should be performed periodically, such as when a contractor reports a human trafficking incident, as part of a procurement involving a high-risk area, or in connection with a past performance review. When trafficking issues arise, the OMB memorandum advises contracting officers to consider a range of mitigating factors, including:

  • whether the contractor identified the issue as the result of effective monitoring and reporting programs,
  • how quickly the contractor notified the government of the incident,
  • the contractor’s cooperation with the resulting investigation,
  • the complexity of the contractor’s supply chain,
  • the contractor’s experience as a federal contractor, and
  • the presence of systemic violations.

Finally, the OMB memorandum seeks to provide further guidance to contractors’ most frequently asked questions regarding anti-trafficking compliance. Of particular note, the OMB memorandum acknowledges that contractors have struggled to determine the threshold for reporting “credible information” and notes that the term is not defined in the FAR. Although the OMB memorandum attempts to provide some guidance by explaining that the term “refers to believable information received from any source,” the memorandum’s guidance still leaves contractors without any particular direction for determining if an allegation is “believable” or “credible.” In addition, the OMB memorandum addresses a common question concerning whether to develop a company-wide or contract-specific compliance plan, explaining that multiple plans may be impractical and instead encouraging contractors to develop a company-wide compliance plan, which is subsequently tailored to specific contracts.

Given the increased emphasis on anti-trafficking requirements and the need for contractors to certify compliance with such requirements, contractors would be well served by assuring that their compliance structures meet government expectations, including confirming that work performed outside the United States is covered by an adequate compliance plan, if required, and that appropriate diligence and monitoring procedures are in place to address potential human trafficking risk in supply chains.

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Photo of Jennifer Plitsch Jennifer Plitsch

Jennifer Plitsch leads the firm’s Government Contracts Practice Group, where she works with clients on a broad range of issues arising from both defense and civilian contracts including contract proposal, performance, and compliance questions as well as litigation, transactional, and legislative issues.

She…

Jennifer Plitsch leads the firm’s Government Contracts Practice Group, where she works with clients on a broad range of issues arising from both defense and civilian contracts including contract proposal, performance, and compliance questions as well as litigation, transactional, and legislative issues.

She has particular expertise in advising clients on intellectual property and data rights issues under the Federal Acquisition Regulations (FAR) and obligations imposed by the Bayh-Dole Act, including march-in and substantial domestic manufacturing. Jen also has significant experience in negotiation and compliance under non-traditional government agreements including Other Transaction Authority agreements (OTAs), Cooperative Research and Development Agreements (CRADAs), Cooperative Agreements, Grants, and Small Business Innovation Research agreements.

For over 20 years, Jen’s practice has focused on advising clients in the pharmaceutical, biologics and medical device industry on all aspects of both commercial and non-commercial agreements with various government agencies including:

  • the Department of Veterans Affairs (VA);
  • the Department of Health and Human Services (HHS), including the Biomedical Advanced Research and Development Authority (BARDA), the National Institutes of Health (NIH), and the Centers for Disease Control (CDC);
  • the Department of Defense (DoD), including the Defense Threat Reduction Agency (DTRA), the Defense Advanced Research Projects Agency (DARPA), and the Joint Program Executive Office for Chemical Biological Defense (JPEO-CBRN); and
  • the U.S. Agency for International Development (USAID).

She regularly advises on the development, production, and supply to the government of vaccines and other medical countermeasures addressing threats such as COVID-19, Ebola, Zika, MERS-CoV, Smallpox, seasonal and pandemic influenza, tropical diseases, botulinum toxin, nerve agents, and radiation events. In addition, for commercial drugs, biologics, and medical devices, Jen advises on Federal Supply Schedule contracts, including the complex pricing requirements imposed on products under the Veterans Health Care Act, as well as on the obligations imposed by participation in the 340B Drug Pricing program.

Jen also has significant experience in domestic sourcing compliance under the Buy American Act (BAA) and the Trade Agreements Act (TAA), including regulatory analysis and comments, certifications, investigations, and disclosures (including under the Acetris decision and Biden Administration Executive Orders). She also advises on prevailing wage requirements, including those imposed through the Davis-Bacon Act and the Service Contract Labor Standards.

Photo of Frederic Levy Frederic Levy

Fred Levy is senior counsel in the firm’s Government Contracts and White Collar Defense and Investigations Practice Groups. He is a leading suspension and debarment lawyer, focusing his practice on the resolution of complex compliance and ethics issues. He has successfully represented numerous…

Fred Levy is senior counsel in the firm’s Government Contracts and White Collar Defense and Investigations Practice Groups. He is a leading suspension and debarment lawyer, focusing his practice on the resolution of complex compliance and ethics issues. He has successfully represented numerous high-profile corporations and individuals under investigation by the government in civil and criminal matters, including False Claims Act cases, and in suspension and debarment proceedings to ensure their continued eligibility to participate in federal programs. He has also conducted numerous internal investigations on behalf of corporate clients and advises corporations on voluntary or mandatory disclosures to federal agencies. Fred regularly counsels clients on government contract performance issues, claims and terminations, and litigates matters before the boards of contract appeals and in the Federal Circuit.

Related to his work involving program fraud, Fred counsels clients in the area of contractor “responsibility.” He is involved in the development and implementation of contractor ethics and compliance programs that meet the standards of the Federal Acquisition Regulation, Federal Sentencing Guidelines, and Sarbanes-Oxley, and he regularly conducts ethics and compliance training.

Fred is a principal editor of Guide to the Mandatory Disclosure Rule, and of The Practitioner’s Guide to Suspension and Debarment, 4th Edition. He is a vice-chair of the Debarment and Suspension Committee of the ABA Public Contract Law Section, and a former co-chair of that committee and of the Procurement Fraud Committee. He is a graduate of Columbia College and Columbia Law School.