Prior Noncompliance with E-Verify Does Not Render Federal Contractors Ineligible for Future Work

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Participation in E-Verify is mandatory for certain businesses such as those having contracts with federal agencies. One of the requirements is that the “FAR clause,” which provides that a contractor not enrolled in E-Verify at the time of the contract award shall enroll within 30 days, must be inserted into federal contracts.

In Ashland Sales & Service Co. (Nov. 2013), a federal contractor enrolled in E-Verify the day after having received the award at issue. The contractor had previously been awarded similar contracts and had performed work under those contracts without enrolling in E-Verify as required by the FAR clause. Faced with a protest from another bidder, the Government Accountability Office ("GAO") found that the contractor’s prior noncompliance did not make it ineligible for the current award. Rather, the contractor’s noncompliance was simply a matter of contract administration. Additionally, the GAO clarified that a contractor may enroll in E-Verify after receiving an award, so long as it does so within the 30 days required by the FAR clause.

E-Verify is the internet-based system that allows employers to verify a new hire’s work authorization by checking the employee’s information against Department of Homeland Security (“DHS”) and Social Security Administration (“SSA”) databases. At the Federal level, participation in E-Verify is mandatory for federal government agencies and a few others, including businesses having contracts with federal agencies. Some states have also enacted laws mandating the use of E-Verify. For the rest of U.S. employers, however, E-Verify is voluntary.