The Office of Federal Contract Compliance Programs is requesting that the Office of Management and Budget approve changes to the letters the agency uses to initiate compliance evaluations for supply and service contractors. Specifically, the agency wants to make changes to
- Scheduling letter and itemized listing
- Compliance check letter
- Focused review letters
Scheduling letter and itemized listing
The scheduling letter and itemized listing advises contractors that they have been selected for a compliance evaluation and sets out all of the information that must be submitted for the desk audit.
1. The proposed changes to the itemized listing include the following:The OFCCP is proposing that contractors be required to provide the specific racial categories of employees in the job group analysis, availability determination, setting of placement goals, and analysis of progress toward prior year goals. Currently, all racial categories are grouped together as “minorities.”
This proposed change deviates from the current scheduling letter, which requires the comparison of the availability of “minorities” to the representation of “minorities” overall. The OFCCP’s proposal would require that the analyses be performed for each individual racial group and that goals be set for individual races as opposed to “minorities” in general.
2. The OFCCP seeks to require the submission of “results of the most recent analysis of the compensation system(s) to determine whether there are gender-, race-, or ethnicity-based disparities” as required by the regulations.
Most contractors perform these analyses under protection of the attorney-client privilege or generally consider the results to be confidential. However, because the regulations require contractors to perform the analyses, the agency may argue that any privileges do not apply.
3. For contractors that are more than six months into the affirmative action plan year when the scheduling letter is received, the proposal would require the submission of year-to-date data for every completed month of the year.
This clarifies what has been a subject of debate in some compliance evaluations. Most contractors interpret the current letter to require the submission of only the first six months of their current year data. Some compliance officers rejected that limited approach if the contractor was more than six months into the current year. This change would require that contractors include year-to-date data for each month of the current year that has passed.
4. The proposed itemized listing would require contractors to submit “the pool of candidates” that were considered for promotions.
Thus, if internal candidates apply for positions within the organization, this data must be included with the desk audit submission.
5. Termination data would need to include whether the separation was voluntary or involuntary.
6. The OFCCP would also require contractors to identify their three largest subcontractors based on contract value.
This would not be a simple task for many contractors whose suppliers or vendors provide goods or services for both government and non-government projects. The value of the government portion is not likely to have been separately tracked or calculated. Although the OFCCP does not indicate the reason for requesting this information, it seems likely that the agency will make sure those subcontractors listed are included in its database of federal contractors subject to compliance evaluations.
In addition, the OFCCP would add the following to the scheduling letter:
Please also be aware that OFCCP may use the information you provide during a compliance evaluation in an enforcement action. We may also share that information with other enforcement agencies within DOL, as well as with other federal civil rights enforcement agencies with which we have information sharing agreements.
Clearly, the OFCCP is putting contractors on notice that potential violations in other areas will be passed along to the responsible enforcement agency.
Despite the significant increase in information to be submitted, the OFCCP has not proposed any increase to the 30-day deadline to respond.
Compliance check letter
A compliance check is more limited in scope than a compliance evaluation, and the compliance check letter requests a more abbreviated version of what is mandated by the scheduling letter. The OFCCP proposes two significant changes to the compliance check letter:
- The OFCCP would require submission of the entire AAPs for Executive Order 11246, Section 503 of the Rehabilitation Act, and the Vietnam Era Veterans’ Readjustment Assistance Act. Currently, contractors are required to submit only the AAP results for the prior year for each AAP.
- Instead of submitting examples of accommodations made for individuals with a disability, the OFCCP is seeking requests for accommodations, as well as whether those requests were granted or denied.
Focused review letters
The OFCCP’s focused reviews are restricted to one of the areas that it enforces: EO 11246, Section 503, and VEVRAA. The OFCCP recently obtained approval for its Section 503 focused review letter and is now seeking to revise it and obtain approval for a similar focused review letter for VEVRAA. The agency says that it “is exploring the option of a focused review letter for EO 11246, [but] its contents have not been finalized. . . .” The proposed Section 503 focused letter is available here, and the proposed VEVRAA focused letter is available here.
Some of the proposed changes to the focused review letter include the following:
1. The OFCCP has added a footnote regarding the submission of the EO 11246 AAP:
OFCCP will not conduct a review of the Executive Order 11246 AAP during a Section 503 [or VEVRAA] focused review. This AAP will only be used to help OFCCP understand the contractor’s organizational structure, confirm Section 503 job groups, and understand generally how the Section 503 [or VEVRAA] compliance strategies fit with the contractor’s other affirmative action efforts. OFCCP will not analyze data contained in the Executive Order 11246 AAP to look for discrimination based on sex or race or ethnicity.
Contractors should note that their adverse impact analyses are not a required component of the EO 11246 that must be included with the AAP.
2. The OFCCP seeks to add required submission of “[a]pplicant and employee level information on self-identification maintained for individuals with a disability.” Presumably, this means a list of applicants and employees who self-identified as disabled. In addition, contractors would be required to provide “[a]pplicant and employee level employment activity data for all applicants and employees” for the AAP year and, if more than six months into the current year, the data for all completed months of the current year. Again, presumably, the OFCCP will use the former to compare with the latter to determine whether disparities exist on the basis of disability or protected veteran status.
Even more significantly, the OFCCP would require the following for each applicant and employee:
- Whether the applicant or employee was hired, promoted, or terminated
- Job title and job group for which each applicant applied
- Job title and job group of each employee hired, promoted, or terminated
- Date each employee was hired or promoted
- Whether the employee was an external hire or promotion
- For promotions, the pool of candidates
- Date of each employee termination and whether the separation was voluntary or involuntary
3. The focused review letter would also require submission of the same employee-level compensation data currently required by the regular scheduling letter and itemized listing.
Again, despite the substantial increase in information to be submitted, the OFCCP has not proposed increasing the amount of time contractors would have to respond from the current 30-day notice period.
Contractors have until June 11 to submit comments about these proposed changes. Considering the significant modifications that substantially increase the burden on contractors, I expect many contractors and organizations will be submitting comments critical of the proposal, as well as the agency’s under-calculation of the expected time to respond to these new items.