Must a college adopt an affirmative action plan (AAP) because it has accepted federal funds in support of some of the college’s programs when the funds are "grants" supporting certain college activities, not "government contracts," i.e., they are not payments received in exchange for providing services directly to any federal agency?
The obligation to create an AAP is triggered when an organization with 50 or more employees enters into a government contract or subcontract in excess of $50,000. The requirement for government contractors to adopt AAPs arises from Executive Order 12246, a declaration issued by President Johnson prohibiting government contractors from engaging in employment discrimination. For purposes of Executive Order 11246, a "government contract" is "any agreement . . . between any contracting [federal] agency and any person for the purchase, sale or use of personal property or nonpersonal services."
Federal law distinguishes between procurement contracts, which involve the purchase of goods or services by the federal government, and federal grants. According to the Federal Grant and Cooperative Agreement Act (the Grant Act), 31 U.S.C. § 6301-6305, the principal purpose of a procurement contract "is to acquire property or services for the direct benefit or use of the United States Government."
Conversely, the Grant Act requires federal agencies to use grants or cooperative agreements when "the principal purpose of the relationship is to transfer a thing of value ... to carry out a public purpose ... instead of acquiring ... property or services for the direct benefit or use of the United States Government."
Ordinarily, federal grants do not trigger an obligation to draft an AAP, because a federal grant is not a "government contract" to provide goods or services to a federal agency. For example, federal grants to colleges and universities assist those institutions in their research and teaching missions. Thus, if a college received funding from the National Science Foundation to support the college’s Math Institute, the college would not be providing services to a government agency; it would simply be performing an educational function that is encouraged and supported by the U.S. government.
On the other hand, if the U.S. Department of Defense were to enter into a contract with an engineering college to develop and deliver software for a missile guidance system, such a contract could trigger an obligation by the engineering college to draft an AAP. Since a federal grant does not fall within the definition of a "government contract," merely receiving a federal grant does not oblige a school or college to draft an AAP.
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