Non-Profits and the Government Contracting Industry DETAIL v2

Non-Profits and the Government Contracting Industry

06/06/2021 Written by: Jeff Ramsey

The federal government has determined that non-profits that hire people with disabilities take priority when it comes to products and services that are purchased for, or in service of, the federal government. We will focus on those contracts that fall under the jurisdiction of the Service Contract Act.

Non-profit agencies or contractors must adhere to the requirements of the McNamara-O’Hara Service Contract Act (SCA), where there is a fringe allocation for health and welfare benefits. SCA contracts pertain to contracts that perform jobs that fall into the service category. Examples of services that fall under the SCA include, but are not limited to:

  • Custodial work
  • Facilities maintenance
  • Commissary shelf stocking
  • Call centers
  • Administrative service
  • Document management services

The AbilityOne Program

The AbilityOne Program creates jobs and training opportunities for people who are blind or have other disabilities. The AbilityOne program accomplishes this by requiring federal government agencies to purchase selected products and services from non-profit agencies employing such individuals. As a result, AbilityOne employees are able to lead more productive and independent lives.

Named for its enabling legislation, the Javits-Wagner-O'Day Act of 1971 (41 U.S.C. 46-48c), the AbilityOne Program is a mandatory supply source for federal employees. To illustrate the prominence and importance of AbilityOne, the only program that takes priority over the AbilityOne initiative is the Federal Bureau of Prisons. The AbilityOne program is responsible for the employment of 45,000 people who are blind or have significant disabilities and approximately 3,000 veterans, including wounded warriors. Texas is the largest producing state in the initiative, with over $529 million in revenue for 2019.


There are over 480 non-profit agencies (NPAs) participating in the AbilityOne program. These NPA contracts are managed through SourceAmerica. SourceAmerica was established in 1974 to aid in the support and implementation of the AbilityOne program. SourceAmerica is a non-profit organization in and of itself that eligible non-profits may register through, for all GovCon-related projects. SourceAmerica then selects the non-profit that is best suited for the AbilityOne contract. Selection is based upon a combination of location, capabilities, and financial capacity relating to startup expenses. Once the non-profit is selected, SourceAmerica provides ongoing support relating to regulatory contract compliance, human resources, training, and notices pertaining to contract eligibility. 

Non-Profits and GovCon

In order to maintain an awarded contract, non-profits selected by the AbilityOne program are required to maintain a 75% disabled workforce. Contracts awarded within the AbilityOne program are guaranteed for the life of the contract. If the contractor who is awarded the contract is unable to perform for any reason, they are replaced by another SourceAmerica participating non-profit. The SourceAmerica network is comprised of several non-profits. Goodwill Industries and ARCs are two notable non-profits that consistently work with the federal government on contracts.

SourceAmerica provides access and resources to all member organizations that work in the government contracting industry. Many of these independent non-profits are exclusive to particular locations or are adjacent to particular military bases. Click here to locate non-profits within the SourceAmerica network.

AssuredPartners Government Contractor Solutions

It is an extremely rewarding experience to work within SourceAmerica’s network. While the program itself is providing employment opportunities and competitive pay for people with disabilities, AssuredPartners helps to provide medical and retirement programs that go the extra mile for these workers. In many cases, these benefits provided through AssuredPartners represent the first time that these employees have access to medical and retirement benefit options. Annually, the government allots an hourly health and welfare amount allocated toward each employee, called the fringe. 

At AssuredPartners Government Contractor Solutions, we proudly boast decades of experience working with some of the largest SourceAmerica companies in the nation. This allows us to provide creative solutions, crafted out of practical experience and a unique understanding of this niche industry. To learn more, contact our team of government contractor specialists.

DOL Raises Overtime Eligible Salary Level
Government Contracting06/13/2024

Effective July 1, 2024, the U.S. Department of Labor (DOL) increased the Fair Labor Standards Act's (FLSA) annual salary-level threshold for white-collar exemptions from overtime requirements from...

Minimum Wage Increase for Federal Government Contractors
Government Contracting05/24/2024

In April 2021, President Biden issued Executive Order 14026, a significant policy change that increased the minimum wage for employees of federal government contractors to $15. This increase is not a...

Service Contract Act Wage Determination Compliance Requirements
Government Contracting04/17/2024

The Service Contract Act (SCA) is a crucial legislation that sets minimum wages, fringe dollars, vacation, holidays, and sick leave for employees working on federal service contracts in the domestic...