The Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) has published a new and somewhat confusing “notice of availability” in the Federal Register announcing that the agency is accepting public comment on its application, modification, update, and renewal processes for functional affirmative action plans (FAAPs). Although the OFCCP’s public notices have been less than clear, the agency is proposing some modest changes to these processes as detailed below.
All new federal contractors that are subject to the OFCCP’s affirmative action regulations are required to prepare affirmative action plans (AAPs) by physical location. Contractors have the option to prepare AAPs by functional or business unit instead, or a combination of functional and location-based plans, only after obtaining written approval from the OFCCP. There is an established application process that involves providing the agency with detailed information about the proposed AAP structure. If approved, contractors that prepare FAAPs must then provide annual updates to the OFCCP regarding the AAP structure, obtain agency approval for substantive modifications, and periodically renew the FAAP agreement (obtain permission to continue to prepare FAAPs).
This all involves the OFCCP collecting information and is considered to be “information collection” under the Paperwork Reduction Act (PRA). The PRA requires federal agencies that collect standardized information from more than ten persons to obtain approval for that activity from the Office of Management and Budget (OMB), specifically the Office of Information and Regulatory Affairs (OIRA). Their approval is typically granted for three-year periods, and the OFCCP’s FAAP process approval is set to expire on June 30, 2022. However, so long as the agency submits a request for renewal prior to the expiration (which the OFCCP has done), the expiration date is “tolled” (put on hold) while OIRA considers the request.
The OFCCP actually issued a notice on February 9, 2022 that largely flew under the radar because the agency submitted supporting materials that were never posted to the OIRA website. The OFCCP then collected public comments for 60 days. Given the circumstances, however, the agency only received substantive comments from two organizations. The current notice is the “30-day” notice, soliciting comments for OMB, not the OFCCP. In other words, the OFCCP is done considering outside input and making changes to their request. Comments submitted now should address whether or not OMB should approve the request or send it back to the agency for modification. Instructions for submitting comments can be found in the current Federal Register notice.
What’s Changing?
Not much. The biggest “changes” are better characterized as “clarifications.” For example, the OFCCP’s proposed revised FAAP Directive is much more explicit in that a change in “management officials” at any prior approved functional unit constitutes a “modification” of the FAAP agreement and contractors must notify the agency of management official changes within 60 days. While it is much less explicit in the current FAAP Directive, the agency has always considered changes in management officials an event that should trigger a FAAP modification notice.
Similarly, in the “roles and responsibilities” section, the proposed changes explicitly list notifying the OFCCP when functional affirmative action programs are actually implemented. However, the current FAAP directive already contains this requirement, it just lists it in the section describing the FAAP agreement approval process. So these are not really changes in the requirements so much as they might be changes in emphasis or focus for the agency.
The proposed revised FAAP Directive needs to be read a little more closely to uncover the real changes that are important for FAAP agreement-holders (and those wishing to become so) to know.
Confidentiality
The change of biggest concern to this author involves the confidentiality of the information contractors submit during the FAAP process.
Under “roles and responsibilities,” the current FAAP Directive states that the OFCCP is responsible for “using the information that a contractor provides in support of its request for a FAAP agreement solely to evaluate that request” (emphasis added). However, the proposed revised FAAP Directive drops the word “solely.”
Of course the OFCCP is going to use information submitted to evaluate the FAAP request, as that is the very purpose of the exercise. But without the word “solely,” the agency is merely stating that it will use the information for the intended purpose, which hardly seems necessary. It does not, however, say that the agency won’t use that information for any other purpose.
In fact, the proposed revisions state that the OFCCP is responsible for “Using the information that a contractor provides in support of its request for a FAAP agreement.” It does not actually specify how that information will be used at all, just that it will be “used” (cue ominous music here).
Clearly the agency will also use the detailed information about contractors’ FAAP structures to select functions for audit, so the current language is likely too restrictive and does require some change. But the OFCCP should be explicit about how the agency intends to use the data and information contractors submit. Otherwise, the validity of any resulting FAAP agreement itself can be called into question.
Federal contractors are generally not required to provide detailed information to the OFCCP regarding their AAP structures, contact information for each AAP, etc. As a result, such information is generally unavailable to the OFCCP to either use for enforcement purposes or to share with other law enforcement agencies or anyone else. Contractors seeking FAAP approval need to know precisely how that information will be used by the agency and whether and to what extent it might be shared so they can fairly evaluate what they are agreeing to. Under the proposed changes, contractors would ostensibly be agreeing to carte blanche “use.”
Deadlines
In general, the OFCCP proposes to loosen any deadlines the agency might be held to. Specifically, the current FAAP Directive commits the OFCCP to making a decision regarding a new FAAP request within 60 calendar days after receiving a complete application. Implicit in the current Directive is the fact that the OFCCP determines whether or not a FAAP application is “complete,” so if the agency requests additional information, that 60-day deadline is tolled.
The proposed changes merely state that the OFCCP will “generally” make a decision on new FAAP applications within 60 calendar days.
Similarly, the current FAAP Directive states that if the agency denies a FAAP renewal request (now referred to as a “certification”), the OFCCP will provide the contractor at least 90 calendar days’ notice. The proposed changes slash that notice period to just 30 days.
Audit Moratorium Remains Unchanged
For “regular” contractors, the OFCCP has long maintained a policy of not auditing the same establishment twice within the same 24-month period. This is often referred to as an audit “moratorium.” Additionally, in a past effort to encourage more FAAP participation, the agency granted a 36-month audit moratorium for functional units.
Surprisingly, this remains unchanged in the new proposal. It retains the promise that if the OFCCP audits a functional unit, it will not audit the same unit again until at least 36 months have passed from the time the first audit was closed.
Note that this is an informal agency policy that does not have the force and effect of law, and the agency retains the right to initiate complaint investigations and/or audits based on “credible third-party evidence.” In other words, if the agency believes it has sufficient reason to override the moratorium, they will.
Contract Coverage
Part of the FAAP application process involves providing proof of at least one current, qualifying federal contract. Normally it is the OFCCP’s responsibility to establish their jurisdiction for an audit or investigation, but FAAP contractors are required to do that for them.
Ostensibly this is because the OFCCP believes they cannot enter into a “valid” agreement with a private employer regarding how they will prepare their AAPs if they are not a current, qualifying federal contractor. That is, of course, hogwash. Contractor status at the time a FAAP agreement is signed would have no impact at all on the enforceability of that agreement. And just because an employer held a qualifying contract when a FAAP agreement was signed does not mean that they will not fall out of contractor status at some point before the agreement expires, which absolutely would impact the OFCCP’s jurisdiction over that employer.
Regardless, employers are required to prove that they at least meet the threshold for E.O. 11246 and Section 503 AAP requirements by producing a qualifying federal contract valued at $50,000 or more. The proposed revised FAAP Directive would require employers to provide a qualifying federal contract valued at $150,000 or more, if they have one, otherwise a contract valued at $50,000 or more.
Why? Because the OFCCP wants to know if the employer is also subject to VEVRAA AAP requirements. Presumably, this is in the name of efficiency, so when the agency sends an audit letter and the contractor does not submit a VEVRAA AAP in response, the OFCCP already knows why. Seems like a minimal gain in efficiency for the agency at the cost of a significant increase in burden for the contractor, but at the end of the day there are much worse things in the world to worry about.
Take Aways
Lately, the OFCCP has taken a bit of a U-turn when it comes to commitments to transparency and this process continues that trend. The agency is making relatively minor changes to its FAAP Directive but seems to be hiding the ball a bit for no apparent reason.
The “changes” that other organizations picked up and commented on during the initial 60-day comment period turn out to not be changes at all. The agency is mostly shrugging off any perceived shackles put on it by the current Directive in terms of deadlines. And although the agency does need to clarify how they do and do not intend to use information submitted during the FAAP process, it is unlikely that they actually intend to post that information to the Internet or anything nefarious.
All in all, the FAAP process will change slightly, but the changes are nothing to lose sleep over.
If you have questions about this or any other OFCCP issue, feel free to contact us at BCGi@Biddle.com.