OFCCP Audits Will Now Be More Burdensome for Federal Supply and Service Contractors
The Office of Federal Contract Compliance Programs has released a new version of its Scheduling Letter and Itemized Listing, which sets forth the information and documents that federal supply and service contractors will be required to provide if they are selected for a compliance audit. The new letter vastly expands the required information and data, which must still be submitted within a 30-day timeframe (with extensions rarely granted). In addition, if a potential violation is found, the process for resolving the matter has become less transparent.
Among the more significant changes to the Scheduling Letter and Itemized Listing are the following:
- Additional factors in the availability analyses for females and minorities.
- New documentation to demonstrate the development and execution of action-oriented programs designed to correct any identified problem areas.
- Additional documentation about outreach and recruitment efforts of disabled individuals under Section 503 and protected veterans under VEVRAA.
- Description of steps taken to determine whether and where impediments to EEO exist under Section 503.
- Two years – not just one – of compensation data. Additionally, contractors must also provide information on factors used to determine employee compensation as well as documentation and policies related to compensation practices.
- New documentation of policies and procedures relating to employment recruiting, screening, and hiring, including the use of artificial intelligence (AI) and other technology-based selection processes.
- New documentation that the contractor has met its obligation to evaluate its compensation systems for disparities based on race, gender, or ethnicity.
- Copies of all EEO policies (e.g. harassment, complaint procedures, arbitration agreement policies, etc.).
- Where a contractor has a campus-like setting, they must produce AAPs for all those campus buildings in the same city – not just that of the establishment selected for audit.
In the course of the compliance review, if the OFCCP identifies preliminary indicators of potential discrimination, regulations require the agency to provide the contractor with a Predetermination Notice (PDN) and allow the contractor to respond prior to the OFCCP issuing a Notice of Violation (NOV). In 2020, these regulations were amended to provide greater transparency in the PDN process and permit early resolution of open audits. However, the OFCCP has just issued revised regulations that dial back much of the transparency.
Given the increasing burden of responding to an OFCCP compliance audit, contractors should take steps now to ensure that they are in compliance with their affirmative action obligations. If they wait until they show up on the Corporate Scheduling Announcement Letters list (the next one is due to be released soon), it may be too late, particularly since some contractors will be scheduled for an audit immediately following issuance of the list.