Last August, the Office of Federal Contract Compliance Programs (OFCCP) created Directive 2018-08, a commitment to greater transparency from OFCCP as it relates to compliance activities. One area OFCCP pledged to assist contractors and be proactive in answering questions was by releasing Opinion Letters.
OFCCP's first Opinion Letter tackled the subject of colleges receiving Pell Grants. The "OFCCP's Jurisdiction Related to Pell Grants" letter specifies that a college receiving a Pell Grant does not require them to adhere to Affirmative Action Program (AAP) obligations. These grants are not considered government contracts; therefore, colleges are not placed under AAP coverage.
The Pell Grant actually involves the government transferring value to a particular recipient to further "a public purpose of support or stimulation." In order for a post-secondary higher education institution to be obligated to OFCCP regulations, it would need to have an agreement "for the purchase, sale, or use of personal property or non-personal services."
This Opinion Letter should give many colleges and universities peace of mind in receiving Pell Grants. There will certainly be more clarity given to higher education establishments in the future to help them determine which types of government funding places them under OFCCP jurisdiction.