Federal Contracting: Agencies Can Better Monitor E-Verify Compliance
Fast Facts
To confirm their employees' eligibility to work in the U.S., most federal contractors must use the E-Verify program. The Office of Management and Budget expects agencies to ensure that their contractors comply, but not all agency officials we spoke to knew of this expectation.
Also, the Department of Homeland Security used to give agencies a quarterly list of contractors enrolled in and using E-Verify—but discontinued this report last year due to data accuracy issues.
Without clear expectations and useful data, agencies may not be checking their contractors' compliance with this requirement.
Our recommendations address these and other issues.
The E-Verify Website
Highlights
What GAO Found
The E-Verify program allows employers to electronically confirm that their employees are eligible to work in the U.S. The Federal Acquisition Regulation (FAR) requires agencies to include, with certain exceptions, a contract clause directing contractors to enroll in and use the program. The Departments of Defense (DOD), Homeland Security (DHS), and Health and Human Services (HHS) included the clause in 22 of the 24 contracts that GAO reviewed.
However, the three selected agencies' efforts to monitor contractor compliance with the E-Verify clause were inconsistent. Some officials thought they were not responsible for monitoring contractor compliance. The Office of Management and Budget (OMB) office that directs federal procurement policy told GAO that it expects agencies to monitor contractor E-Verify compliance. However, OMB has not clearly communicated this expectation to agencies.
E-Verify Participation Poster
U.S. Citizenship and Immigration Services (USCIS)—a component of DHS—administers E-Verify. USCIS may terminate E-Verify accounts, including those of federal contractors, for misuse and non-use. Misuse includes unresolved discrepancies that prevent confirmation of an employee's eligibility. Non-use includes not verifying any employees in a specified time frame. From 2020 to March 2023, USCIS terminated almost 300 contractor accounts for misuse and more than 5,000 such accounts for non-use. USCIS no longer terminates contractor accounts for non-use.
However, USCIS lacks a process to refer these contractors for further review, as required. The FAR states that DHS must refer contractors whose E-Verify accounts it terminates to suspension and debarment officials who determine whether contractors should be temporarily disqualified or excluded from government contracting. DHS officials acknowledged USCIS—the component responsible for these referrals—is not meeting this requirement. Agencies' suspension and debarment officials, therefore, are not able to determine whether these federal contractors' misuse of E-Verify merits further action. DHS officials said they plan to address this, but these plans are in the early stages.
Why GAO Did This Study
Since 2009, a clause in certain federal contracts requires contractors to use the E-Verify program to confirm their workers' employment eligibility. As of 2023, about 95,000 federal contractors were enrolled in E-Verify. Agencies have obligated hundreds of billions of dollars on contracts that appeared subject to the requirement.
GAO was asked to assess federal agencies' use of the E-Verify clause for federal contractors. This report focuses on the extent to which DOD, DHS, and HHS included the clause in selected contracts and monitored contractor compliance with the clause. It also addresses whether USCIS has taken action when contractors did not follow E-Verify program requirements.
GAO selected the three agencies because they accounted for nearly two-thirds of fiscal year 2021 contract awards that appeared subject to the E-Verify clause, the most recent data available at the time of GAO's review. GAO reviewed fiscal years 2019–2021 contract data, assessed a nongeneralizable sample of 24 contracts, and analyzed data on contractor E-Verify enrollment.
Recommendations
GAO is making eight recommendations, including that OMB clarify agency responsibilities for monitoring contractor compliance with the E-Verify clause, and that DHS implement a process to refer contractors with terminated accounts to appropriate agency officials. DOD, DHS, HHS, and OMB concurred with the recommendations.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | The Secretary of Defense should ensure that DOD's Principal Director of Defense Pricing and Contracting takes steps to ensure that contracting staff correctly select the Employment Eligibility Verification response in FPDS for applicable contracts and orders. (Recommendation 1) |
DOD concurred with our recommendation. In August 2024, DOD's Principal Director of Defense Pricing, Contracting, and Acquisition Policy issued a memorandum to DOD contracting leadership and staff to reiterate the requirement to correctly select the Employment Eligibility Verification response in FPDS for applicable contracts and orders. DOD also added the memorandum to its Policy Vault in August 2024, which is an online resource for its acquisition workforce.
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| Department of Homeland Security | The Secretary of Homeland Security should ensure that DHS's Chief Procurement Officer takes steps to ensure that contracting staff correctly select the Employment Eligibility Verification response in FPDS for applicable contracts and orders. (Recommendation 2) |
DHS concurred with our recommendation. In January 2024, DHS's Office of the Chief Procurement Officer issued a memorandum to DHS component contracting leadership and staff to reiterate the requirement to correctly select the Employment Eligibility Verification response in the Federal Procurement Data System (FPDS) for applicable contracts and orders. In addition, DHS's Office of the Chief Procurement Officer has developed job aids, provided training, and created FPDS edit checks to reinforce accurate reporting of this information in FPDS.
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| Department of Health and Human Services | The Secretary of Health and Human Services should ensure that HHS's Deputy Assistant Secretary for Acquisitions takes steps to ensure that contracting staff correctly select the Employment Eligibility Verification response in FPDS for applicable contracts and orders. (Recommendation 3) |
HHS concurred with our recommendation. In March 2024, HHS's Office of Acquisition shared E-Verify compliance procedures and training with HHS acquisition leadership and staff. The E-Verify training focused on the importance of accurately reporting information in FPDS about whether the E-Verify clause was included in applicable contracts and orders. In April 2024, HHS's Office of Acquisition added the March 2024 E-Verify training to its Acquisition Portal, which is an online resource for its acquisition workforce.
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| Office of Management and Budget | The Director of OMB should ensure that Office of Federal Procurement Policy's Administrator takes steps to identify the extent to which there are government-wide issues with the accuracy of FPDS's Additional Reporting field, and takes appropriate management measures as necessary, such as including the field in the annual verification and validation process as it pertains to E-Verify. (Recommendation 4) |
OMB concurred with the recommendation. As of July 2024, OMB reported it had actions in progress to address this recommendation, but did not specify what actions, or provide a timeframe for completion.
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| Office of Management and Budget | The Director of OMB should ensure that Office of Federal Procurement Policy's Administrator issues guidance for agencies clarifying its expectations that they should monitor contractor enrollment in and use of E-Verify with resources provided by USCIS. (Recommendation 5) |
OMB concurred with the recommendation. As of July 2024, OMB reported it had actions in progress to address this recommendation, but did not specify what actions, or provide a timeframe for completion.
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| United States Citizenship and Immigration Services | The Director of USCIS should identify and implement an approach to collect quality information on federal contractors enrolled in E-Verify for the purpose of helping agencies monitor contractor compliance, such as by collecting Unique Entity Identifiers from federal contractors with existing E-Verify accounts. (Recommendation 6) |
USCIS concurred with the recommendation. In June 2024, USCIS reported it is in the process of implementing an approach to collect quality information on federal contractors enrolled in E-Verify to help agencies monitor contractor compliance. USCIS must comply with the Paperwork Reduction Act to collect information such as federal contractors' Unique Entity Identifiers. USCIS is working with agency components and the Office of Management and Budget to gain approval to collect Unique Entity Identifier information. USCIS estimates that it will complete this process by June 2025.
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| United States Citizenship and Immigration Services | After implementing an approach to collect quality information, the Director of USCIS should develop and implement an approach to communicate quality information to agencies for the purpose of monitoring contractor compliance with E-Verify. (Recommendation 7) |
USCIS concurred with the recommendation. In June 2024, USCIS reported it is working to develop and implement an approach to communicate quality information to agencies to help them monitor contractor compliance with E-Verify. USCIS noted that doing so is dependent on USCIS's ability to collect the information mentioned in recommendation 6. USCIS estimates that it will develop and implement an approach to communicate quality information by June 2025.
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| Department of Homeland Security | The Secretary of Homeland Security should ensure that USCIS's Director takes steps to document and implement a process for referring federal contractors to a suspension or debarment official if USCIS terminates their E-Verify MOU. (Recommendation 8) |
DHS concurred with our recommendation. In August 2023, USCIS's E-Verify program updated its notices it provides to federal contractors who are at risk of having their MOUs terminated to include references to the suspension and debarment referral process. In September 2023, the E-Verify program documented and shared the referral process with relevant officials, which includes forwarding the referral information to USCIS's Office of Contracting and, if necessary, to a DHS suspension and debarment official. USCIS officials provided documentation of how, by January 2024, USCIS had fully implemented the new referral process.
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