FAR 22.807—Exemptions.
Plain-English Summary
FAR 22.807 explains when all or part of the Equal Opportunity requirements of E.O. 11246 may be excluded from a contract or subcontract, and who has authority to grant, request, or withdraw those exclusions. It covers national security exemptions, special-contract and group exemptions, automatic or conditional exemptions that apply even when the Equal Opportunity clause is in the contract, and the special treatment of small-dollar awards, work performed outside the United States, contracts with State or local governments, work on or near Indian reservations, facilities separate from contract performance, indefinite-quantity contracts, and contracts with religious entities. It also explains the process for requesting exemptions, including the contracting officer’s role in preparing a justification and submitting it for approval, and the Deputy Assistant Secretary’s authority to approve or withdraw exemptions. In practice, this section tells agencies and contractors when E.O. 11246 coverage may be limited, but it also makes clear that exemptions are narrow, must be justified, and often do not remove all equal opportunity obligations. The section matters because misapplying an exemption can lead to improper clause omission, compliance failures, or invalid assumptions about what employment practices are allowed under a contract.
Key Rules
National security exemption
An agency head may determine that a contract is essential to national security and that award without one or more E.O. 11246 requirements is necessary. If that happens, the agency must notify the Deputy Assistant Secretary in writing within 30 days.
Special contract exemptions
The Deputy Assistant Secretary may exempt an agency from including one or more E.O. 11246 requirements in a specific contract when special circumstances in the national interest require it. Group or category exemptions are also allowed when individual action would be impracticable or group treatment would improve administration.
Small-dollar transactions
Prime contracts and subcontracts of $10,000 or less are generally exempt from the Equal Opportunity clause, but the exemption does not apply if the contractor’s aggregate awards in any 12-month period exceed, or can reasonably be expected to exceed, $10,000. Government bills of lading are not exempt regardless of amount.
Work outside the United States
Contracts are exempt from E.O. 11246 requirements for work performed outside the United States by employees who were not recruited within the United States. This is a location-and-recruitment-based exemption, not a blanket exemption for all overseas work.
State and local government contracts
When a contract is with a State or local government, E.O. 11246 does not apply to any agency, instrumentality, or subdivision of that government that does not participate in work on or under the contract. The exemption is limited to nonparticipating entities.
Indian reservation preference
A contractor may publicly announce a preference in employment for Indians living on or near an Indian reservation for work on or near that reservation. The preference cannot be used to discriminate among Indians on the basis of religion, sex, sexual orientation, gender identity, or tribal affiliation, and it does not excuse compliance with E.O. 11246 or contract clauses.
Separate facilities exemption
The Deputy Assistant Secretary may exempt facilities that are in all respects separate and distinct from contract-related activities, but only if the exemption will not interfere with or impede E.O. 11246’s effectiveness. This is a facility-specific exemption, not a company-wide waiver.
Indefinite-quantity contract rule
For indefinite-quantity contracts and subcontracts, the Equal Opportunity clause applies unless the contracting officer has reason to believe annual orders will not exceed $10,000. The officer must decide at award for the first year and annually thereafter, and the clause applies whenever a single order exceeds $10,000; once applicable, it stays with the contract for its duration.
Religious entity exemption
Under E.O. 13279, Section 202 of E.O. 11246 does not apply to certain religious corporations, associations, educational institutions, or societies with respect to employing individuals of a particular religion to perform work connected with their activities. These entities remain subject to the other requirements of the order.
Exemption request process
Requests for exemptions under the special-contract and separate-facility provisions must be supported by a detailed justification prepared by the contracting officer under agency procedures and submitted to the Deputy Assistant Secretary for approval.
Withdrawal of exemptions
The Deputy Assistant Secretary may withdraw an exemption for a specific contract or group of contracts when necessary and appropriate to achieve E.O. 11246’s purposes. Withdrawal does not affect contracts already awarded, and for sealed bid contracts it generally cannot apply unless made more than 10 days before bid opening.
Responsibilities
Agency Head
May determine that a contract is essential to national security and authorize award without one or more E.O. 11246 requirements. Must ensure the agency notifies the Deputy Assistant Secretary in writing within 30 days of the determination.
Deputy Assistant Secretary
May grant special contract or group exemptions, approve requests for exemptions from separate facilities or other covered situations, and withdraw exemptions when necessary to further E.O. 11246. Must evaluate whether the requested relief is justified and whether it would impair the order’s effectiveness.
Contracting Officer
Must determine whether the Equal Opportunity clause applies to indefinite-quantity contracts at award and annually thereafter, and must reassess when a single order exceeds $10,000. Must prepare a detailed justification and submit exemption requests under agency procedures for approvals under paragraph (a)(2) or (b)(5).
Contractor
Must apply any valid exemption only within its scope, continue complying with all non-exempt E.O. 11246 requirements, and avoid assuming that a limited exemption removes broader nondiscrimination obligations. Contractors using the Indian reservation preference must not discriminate among Indians on prohibited bases.
Agency
Must follow internal procedures for exemption requests, maintain proper documentation, and implement any approved exemption or withdrawal consistently in contract administration.
Practical Implications
Do not treat exemptions as blanket waivers; most are narrow and limited to specific contracts, facilities, or circumstances.
For small-dollar awards, watch the 12-month aggregate and expected-value rules, because multiple small awards can trigger coverage even if each award is under $10,000.
For indefinite-quantity contracts, the clause determination is not one-and-done if the contract remains active; it must be revisited annually, and a single large order can trigger applicability.
Religious-entity and Indian-reservation provisions are special carve-outs, but they do not eliminate all equal opportunity obligations, so contractors still need to comply with the rest of E.O. 11246 and related clauses.
If an exemption is withdrawn, timing matters: existing awards are protected, and sealed bid procurements have a 10-day pre-bid-opening limitation, so contracting officers should monitor exemption status closely.
Official Regulatory Text
(a) Under the following exemptions, all or part of the requirements of E.O. 11246 may be excluded from a contract subject to E.O. 11246: (1) National security . The agency head may determine that a contract is essential to the national security and that the award of the contract without complying with one or more of the requirements of this subpart is necessary to the national security. Upon making such a determination, the agency shall notify the Deputy Assistant Secretary in writing within 30 days. (2) Specific contracts . The Deputy Assistant Secretary may exempt an agency from requiring the inclusion of one or more of the requirements of E.O. 11246 in any contract if the Deputy Assistant Secretary deems that special circumstances in the national interest so require. Groups or categories of contracts of the same type may also be exempted if the Deputy Assistant Secretary finds it impracticable to act upon each request individually or if group exemptions will contribute to convenience in the administration of E.O. 11246. (b) The following exemptions apply even though a contract or subcontract contains the Equal Opportunity clause: (1) Transactions of $10,000 or less . The Equal Opportunity clause is required to be included in prime contracts and subcontracts by 22.802 (a). Individual prime contracts or subcontracts of $10,000 or less are exempt from application of the Equal Opportunity clause, unless the aggregate value of all prime contracts or subcontracts awarded to a contractor in any 12-month period exceeds, or can reasonably be expected to exceed, $10,000. (Note: Government bills of lading, regardless of amount, are not exempt.) (2) Work outside the United States. Contracts are exempt from the requirements of E.O. 11246 for work performed outside the United States by employees who were not recruited within the United States. (3) Contracts with State or local governments . The requirements of E.O. 11246 in any contract with a State or local government (or any agency, instrumentality, or subdivision thereof) shall not be applicable to any agency, instrumentality, or subdivision of such government that does not participate in work on or under the contract. (4) Work on or near Indian reservations . It shall not be a violation of E.O. 11246 for a contractor to extend a publicly announced preference in employment to Indians living on or near an Indian reservation in connection with employment opportunities on or near an Indian reservation. This applies to that area where a person seeking employment could reasonably be expected to commute to and from in the course of a work day. Contractors extending such a preference shall not, however, discriminate among Indians on the basis of religion, sex, sexual orientation, gender identity, or tribal affiliation, and the use of such preference shall not excuse a contractor from complying with E.O. 11246, rules and regulations of the Secretary of Labor, and applicable clauses in the contract. (5) Facilities not connected with contracts . The Deputy Assistant Secretary may exempt from the requirements of E.O. 11246 any of a contractor’s facilities that the Deputy Assistant Secretary finds to be in all respects separate and distinct from activities of the contractor related to performing the contract, provided, that the Deputy Assistant Secretary also finds that the exemption will not interfere with, or impede the effectiveness of, E.O. 11246. (6) Indefinite-quantity contracts . With respect to indefinite-quantity contracts and subcontracts, the Equal Opportunity clause applies unless the contracting officer has reason to believe that the amount to be ordered in any year under the contract will not exceed $10,000. The applicability of the Equal Opportunity clause shall be determined by the contracting officer at the time of award for the firstyear, and annually thereafter for succeeding years, if any. Notwithstanding the above, the Equal Opportunity clause shall be applied to the contract whenever the amount of a single order exceeds $10,000. Once the Equal Opportunity clause is determined to be applicable, the contract shall continue to be subject to such clause for its duration regardless of the amounts ordered, or reasonably expected to be ordered, in anyyear. (7) Contracts with religious entities . Pursuant to E.O. 13279, Section 202 of E.O. 11246, shall not apply to a Government contractor or subcontractor that is a religious corporation, association, educational institution, or society, with respect to the employment of individuals of a particular religion to perform work connected with the carrying on by such corporation, association, educational institution, or society of its activities. Such contractors and subcontractors are not exempted or excused from complying with the other requirements contained in the order. (c) To request an exemption under paragraph (a)(2) or (b)(5) of this section, the contracting officer shall submit, under agency procedures, a detailed justification for omitting all, or part of, the requirements of E.O. 11246. Requests for exemptions under paragraph (a)(2) or (b)(5) of this section shall be submitted to the Deputy Assistant Secretary for approval. (d) The Deputy Assistant Secretary may withdraw the exemption for a specific contract, or group of contracts, if the Deputy Assistant Secretary deems that such action is necessary and appropriate to achieve the purposes of E.O. 11246. Such withdrawal shall not apply- (1) To contracts awarded before the withdrawal; or (2) To any sealed bid contract (including restricted sealed bidding), unless the withdrawal is made more than 10 days before the bid opening date.