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Hospital's TRICARE contract qualifies as federal subcontract

July 26, 2013

Florida Hospital of Orlando’s TRICARE contract qualifies as a federal subcontract as a matter of law and would permit the Office of Federal Contract Compliance Programs to review and enforce various affirmative action compliance obligations on the hospital, the Administrative Review Board of the Department of Labor determined in a 3-2 decision Monday. However, the board remanded the case back to the administrative law judge to determine whether OFCCP is barred from asserting jurisdiction over the hospital because the hospital’s TRICARE reimbursements constitute “federal financial assistance” exempt from OFCCP oversight and enforcement. The board specifically instructs that on remand the most critical question is whether Congress intended that TRICARE be a federal financial assistance program. Two dissenting judges in the decision said that Congress’ enactment of the TRICARE exemption in Section 715 of the National Defense Authorization Act categorically eliminates OFCCP's jurisdiction over the hospital. This new decision results from the board simultaneously granting OFCCP’s November 2012 motion to reconsider the October 2012 board decision.