AbilityOne Program: Federal Contracting for Nonprofits Employing People with Disabilities

The AbilityOne Program (formerly known as the Javits-Wagner-O'Day or JWOD Program) is a federal initiative that provides employment opportunities for people who are blind or have significant disabilities. Under this program, federal agencies are required to purchase certain products and services from qualified nonprofit agencies that employ these individuals.

The program is administered by the U.S. AbilityOne Commission, an independent federal agency. The Commission designates specific products and services for the AbilityOne Procurement List, and federal agencies must purchase those items from authorized nonprofit agencies — bypassing normal competitive procurement.

Key Program Statistics:

• Over 40,000 people who are blind or have significant disabilities employed through the program
• Approximately $3.5 billion in federal contract sales annually
• More than 500 nonprofit agencies authorized to participate
• Over 3,000 products and services on the Procurement List

Unlike traditional federal contracting, AbilityOne contracts are not awarded through competitive bidding. Once a product or service is added to the Procurement List, federal agencies are required to purchase it from designated AbilityOne nonprofit agencies — creating a guaranteed market for these organizations.

This is not a set-aside program like 8(a), SDVOSB, or WOSB — it is a mandatory source program. Federal procurement regulations give AbilityOne priority over all other procurement methods except existing contracts and orders under Federal Supply Schedules.

Two Central Nonprofit Agencies (CNAs) manage the program:

• National Industries for the Blind (NIB) — manages products and services provided by agencies employing people who are blind
• SourceAmerica — manages products and services provided by agencies employing people with severe disabilities

These CNAs serve as intermediaries between the AbilityOne Commission and the participating nonprofit agencies, providing training, quality assurance, marketing, and administrative support.

Only qualified nonprofit agencies can participate in the AbilityOne Program. These are not individual contractors or for-profit businesses — they are nonprofit organizations that meet specific criteria related to their mission and workforce composition.

Nonprofit Agency Requirements:

• The organization must be a qualified nonprofit agency for the blind or a qualified nonprofit agency for other severely disabled as defined by the AbilityOne statute
• The organization must comply with applicable federal and state minimum wage laws
• The organization must meet employment ratio requirements: at least 75% of direct labor hours on AbilityOne contracts must be performed by people who are blind or have significant disabilities
• The organization must provide employment and training for individuals who are blind or have significant disabilities
• The organization must be affiliated with either National Industries for the Blind (NIB) or SourceAmerica

Definition of "Blind":

Under the AbilityOne Program, "blind" means:

• Central visual acuity of 20/200 or less in the better eye with corrective lenses, or
• Visual field limitation where the widest diameter of the visual field subtends an angle no greater than 20 degrees

Definition of "Significant Disability":

A person with a "significant disability" is defined as someone who has a severe physical or mental impairment that limits one or more functional capacities (such as mobility, communication, self-care, self-direction, interpersonal skills, work tolerance, or work skills) and whose ability to obtain employment is substantially limited.

75% Direct Labor Hour Requirement:

This is one of the most critical compliance requirements. At least 75% of the direct labor hours performed on each AbilityOne contract must be performed by people who are blind or have significant disabilities. The AbilityOne Commission and CNAs monitor this ratio closely — failure to maintain the 75% threshold can result in removal from the program.

How to Become a Participating Nonprofit Agency:

1. Verify that your organization meets the nonprofit and employment mission requirements
2. Apply to join either National Industries for the Blind (NIB) or SourceAmerica, depending on your workforce composition
3. Complete the CNA's affiliation process, which includes site visits, capability assessments, and quality reviews
4. Once affiliated, work with the CNA to identify products or services your organization can provide
5. Submit proposals to add new products or services to the Procurement List

Affiliation with a CNA is mandatory — you cannot participate in the AbilityOne Program without it. The CNAs provide essential support, including contract administration, quality assurance, and marketing to federal agencies.

The AbilityOne Procurement List includes over 3,000 products and services across a wide range of categories. Federal agencies are required to purchase these items from designated AbilityOne nonprofit agencies.

Products:

• Office supplies — pens, paper, binders, file folders, envelopes
• Janitorial supplies — cleaning chemicals, trash bags, paper towels, dispensers
• Textiles — uniforms, linens, towels, bedding, flags
• Personal protective equipment (PPE) — gloves, masks, safety vests, eyewear
• Packaging and shipping materials — boxes, labels, tape, pallets
• Medical and healthcare products — surgical gowns, drapes, wound care supplies
• Food service items — trays, utensils, food containers
• Apparel — military uniforms, work wear, insignia

Services:

• Custodial and grounds maintenance — facility cleaning, landscaping, snow removal
• Base supply operations — warehouse management, logistics, distribution
• Food service — cafeteria operations, food preparation, catering
• Administrative support — mail services, document management, data entry
• Information technology — help desk support, software development, cybersecurity services
• Contact center operations — customer service, call center support
• Manufacturing and assembly — light manufacturing, product assembly, kitting
• Scanning and imaging — document digitization, records management

Adding a Product or Service to the Procurement List:

If your nonprofit agency can provide a product or service not currently on the Procurement List, you can submit a proposal to the AbilityOne Commission to have it added. The process includes:

1. Work with your CNA (NIB or SourceAmerica) to develop a proposal
2. Demonstrate that the nonprofit agency has the capability to produce the product or perform the service at fair market prices
3. Show that adding the product or service will create employment opportunities for people who are blind or have significant disabilities
4. Submit the proposal through the CNA to the AbilityOne Commission for review

Once a product or service is added to the Procurement List, federal agencies are required to purchase it from designated AbilityOne agencies — creating a guaranteed market. This is a significant competitive advantage over traditional federal contracting.

Fair Market Pricing:

Prices for AbilityOne products and services must be "fair market prices" — meaning they are comparable to prices for similar products or services sold in the commercial market. The AbilityOne Commission monitors pricing to ensure federal agencies receive fair value, and nonprofit agencies must justify pricing when adding items to the Procurement List.

Federal agencies do not have discretion on whether to purchase AbilityOne products and services — they are required to do so under the AbilityOne statute and Federal Acquisition Regulation (FAR) 8.7.

Procurement Hierarchy:

The FAR establishes a procurement hierarchy that federal contracting officers must follow:

1. Existing inventory or services — use what the agency already has
2. Federal Supply Schedules — purchase from GSA schedules if available
3. AbilityOne Program — purchase from the Procurement List if the item is on it
4. Other procurement methods — open market competition, other contract vehicles

This hierarchy means that AbilityOne has priority over competitive procurement for products and services on the Procurement List. If an agency needs a product or service that is on the list, they must purchase it from a designated AbilityOne nonprofit agency — bypassing normal competitive bidding.

How Agencies Place Orders:

Federal agencies can purchase AbilityOne products and services through several channels:

• Direct purchase — agencies contact the designated nonprofit agency directly to place orders
• eCommodity website — an online ordering platform for AbilityOne products
• Federal Supply Schedules — many AbilityOne agencies also hold GSA Schedule contracts, allowing agencies to purchase through GSA Advantage
• Base supply centers — on-site AbilityOne operations that maintain inventory and fulfill orders for military installations and federal facilities

Agency Obligations:

Contracting officers and procurement officials are required to:

• Check the AbilityOne Procurement List before initiating any procurement action
• Purchase products and services from the Procurement List whenever they meet the agency's requirements
• Ensure that specifications in solicitations do not preclude the use of AbilityOne products or services

Failure to comply with the AbilityOne statute can result in contracting officer violations and agency-level scrutiny.

Direct vs. Set-Aside Allocations:

Some AbilityOne contracts are direct allocations — meaning a specific nonprofit agency is designated as the sole provider for a particular agency or facility. Other contracts are multiple-source allocations — meaning multiple nonprofit agencies can compete for orders from agencies. Your CNA will work with you to determine which allocation model applies to your products or services.

Participating in the AbilityOne Program provides unique advantages for qualified nonprofit agencies:

Guaranteed Market Access

Once a product or service is added to the Procurement List, federal agencies are required to purchase it from designated AbilityOne nonprofit agencies. This creates a stable, predictable revenue stream — federal demand is not subject to competitive bidding or price competition.

No Competitive Bidding

AbilityOne contracts are not awarded through competitive procurement. Federal agencies must buy from designated nonprofits — eliminating the need to compete against other contractors on price, technical approach, or past performance. This significantly reduces the cost and complexity of winning federal contracts.

Priority Over Other Procurement Methods

FAR 8.7 gives the AbilityOne Program priority over most other procurement methods, including open market competition and many contract vehicles. This means agencies cannot simply choose a different vendor — they must purchase from the Procurement List.

Large Contract Values

Many AbilityOne service contracts are large, long-term agreements. For example, base supply operations, custodial services, and food service contracts can exceed $10 million annually. These contracts provide substantial revenue and employment opportunities for participating nonprofit agencies.

Mission Alignment

The AbilityOne Program directly supports the mission of nonprofit agencies that employ people who are blind or have significant disabilities. Federal contract revenue funds job creation, training, and support services for individuals who face barriers to employment in the traditional labor market.

Support from Central Nonprofit Agencies

NIB and SourceAmerica provide extensive support to participating agencies, including:

• Contract administration and quality assurance
• Marketing and business development with federal agencies
• Training and technical assistance
• Advocacy and policy support
• Networking and peer learning opportunities

Long-Term Stability

Unlike traditional federal contracts that must be recompeted every few years, AbilityOne contracts can remain in place for decades as long as the nonprofit agency continues to meet performance and compliance requirements. This provides financial stability and allows agencies to invest in workforce development and infrastructure.

AbilityOne nonprofit agencies must comply with strict program requirements to maintain eligibility and contract performance.

75% Direct Labor Hour Requirement

At least 75% of the direct labor hours performed on each AbilityOne contract must be performed by people who are blind or have significant disabilities. This is the most critical compliance metric. Nonprofit agencies must track labor hours meticulously and report them to their CNA. Falling below the 75% threshold can result in contract termination and removal from the program.

Fair Market Pricing

Prices for AbilityOne products and services must be "fair market prices" — comparable to commercial market prices for similar items. The AbilityOne Commission reviews pricing annually and may require price reductions if market prices decline. Nonprofit agencies must justify pricing and demonstrate cost competitiveness.

Quality Standards

AbilityOne products and services must meet the quality standards specified in federal agency requirements. CNAs conduct regular quality reviews, and agencies can be removed from the program for persistent quality deficiencies. Federal agencies also provide performance feedback, and negative performance reports can jeopardize continued participation.

Timely Delivery

Nonprofit agencies must meet delivery schedules and performance timelines. Late deliveries, stockouts, and missed service schedules damage the reputation of the AbilityOne Program and can lead to contract termination.

CNA Affiliation and Reporting

Nonprofit agencies must maintain active affiliation with their CNA (NIB or SourceAmerica) and submit required reports, including:

• Quarterly labor hour reports documenting the 75% compliance
• Annual financial reports
• Quality assurance reports
• Pricing documentation

Failure to comply with CNA reporting requirements can result in suspension or termination from the program.

Federal and State Employment Law Compliance

AbilityOne nonprofit agencies must comply with all applicable federal and state employment laws, including:

• Fair Labor Standards Act (minimum wage and overtime)
• Service Contract Act (prevailing wages for service contracts)
• Equal Employment Opportunity laws
• Occupational Safety and Health Administration (OSHA) requirements

Audits and Site Visits

The AbilityOne Commission and CNAs conduct periodic audits and site visits to verify compliance with program requirements. These reviews assess labor hour tracking, pricing, quality, and workforce composition. Nonprofit agencies must maintain accurate records and be prepared to demonstrate compliance during audits.

Consequences of Noncompliance

Noncompliance with AbilityOne requirements can result in:

• Corrective action plans
• Contract termination
• Removal of products or services from the Procurement List
• Suspension or termination from the AbilityOne Program
• Legal liability for failure to meet federal contract obligations

If you are a nonprofit agency that employs people who are blind or have significant disabilities, here is how to get started with the AbilityOne Program:

Step 1: Verify Eligibility

Confirm that your organization:

• Is a qualified nonprofit agency under the AbilityOne statute
• Has a mission focused on employing people who are blind or have significant disabilities
• Can meet the 75% direct labor hour requirement
• Complies with federal and state employment laws

Step 2: Choose a Central Nonprofit Agency

Determine whether your organization should affiliate with:

• National Industries for the Blind (NIB) — if your workforce primarily consists of people who are blind
• SourceAmerica — if your workforce consists of people with severe disabilities

Visit nib.org or sourceamerica.org for affiliation information.

Step 3: Apply for CNA Affiliation

Submit an affiliation application to the CNA. The CNA will conduct a site visit, assess your capabilities, review your quality systems, and verify that you meet program requirements. The affiliation process can take several months, so begin early.

Step 4: Identify Products or Services

Work with the CNA to identify products or services your organization can provide. Review the current Procurement List to see if there are existing opportunities, or develop a proposal to add new items to the list.

Step 5: Submit Procurement List Proposals

If you want to add a new product or service to the Procurement List, work with your CNA to develop and submit a proposal to the AbilityOne Commission. The proposal must demonstrate:

• Your organization's capability to produce the product or perform the service
• Fair market pricing
• Demand from federal agencies
• Employment impact (number of jobs created for people who are blind or have significant disabilities)

Step 6: Begin Contract Performance

Once your product or service is added to the Procurement List, federal agencies will begin purchasing from your organization. Work closely with your CNA to ensure quality, pricing, and compliance with the 75% labor hour requirement.

Resources:

• AbilityOne Commission: abilityone.gov
• National Industries for the Blind: nib.org
• SourceAmerica: sourceamerica.org