Recent OFCCP Activity Signals Greater Transparency and Collaboration for Federal Contractors

In response to town hall meetings held late last year, the OFCCP has taken a number of actions geared toward addressing some of the contractor concerns discussed during those meetings. In particular, several of the directives and other publications issued by the OFCCP in recent months signal the OFCCP’s intent to provide greater transparency with respect to its auditing and enforcement efforts and reflect a more collaborative mindset than contractors have seen during the past decade.

For instance, on September 19, 2018, following the release of its latest round of Corporate Scheduling Audit Letters (CSALs) (courtesy notifications to establishments selected for a compliance evaluation), the OFCCP for the first time publicly published lists containing the names and addresses of contractors selected to receive CSALs in 2017 and 2018. Although CSAL lists have previously been available only via a Freedom of Information Act (FOIA) request, the OFCCP has indicated it will now publish the lists because they are “frequently requested” and are “not covered under any of the FOIA exemptions.” The CSAL lists for FY 2017 and FY 2018, as well as the FY 2018 CSAL Supplement, can all be found in the OFCCP’s online FOIA library.

Additionally, on September 20, 2018, the OFCCP issued Directive 2018-08, Transparency in OFCCP Compliance Activities. According to the OFCCP, Directive 2018-08 is designed to “to ensure transparency in all stages of OFCCP compliance activities to help contractors comply with their obligations and know what to expect during a compliance evaluation, and to protect workers from discrimination through consistent enforcement of OFCCP legal authorities.” Directive 2018-08 highlights the various steps taken by the OFCCP so far this year to improve “transparency, cooperation, and communication” with federal contractors, including:

• Implementation of a 45-day scheduling delay following issuance of Corporate Scheduling Announcement Letters to provide contractors more time to prepare for an audit and participate in regional compliance assistance events, if desired;
• Publication of the OFCCP’s scheduling methodology for supply and service contractors on the agency’s website;
• Release of Directive 2018-01, Use of Predetermination Notices, which requires the OFCCP to issue predetermination notices and provide contractors an opportunity to respond to potential violation findings before issuing a formal Notice of Violation; and
• Release of “What Federal Contractors Can Expect,” which sets forth the OFCCP’s commitment to “clear, accurate, and professional interactions” in carrying out compliance assistance, compliance evaluations, and complaint investigations.

Directive 2018-08 also sets forth the procedures that will be used by the OFCCP during the scheduling, pre-desk audit, desk audit, pre-onsite, offsite, and conciliation phases of a compliance evaluation. Among other things, these procedures provide for a one-time 30-day extension to provide supporting data (not AAPs) to the OFCCP, regular contact from the OFCCP (at least once every 30 days) during the review, completion of “typical” desk audits (where there are no indicators of discrimination or evidence of other violations) within 45 days of receiving complete and acceptable AAPs and supporting data, and collaborative conciliation discussions focused on innovative remedies.

In addition to Directive 2018-08, the OFCCP has released a number of other directives, as well as a memorandum of understanding, focused on transparency, collaboration, and greater clarity for contractors regarding the OFCCP’s auditing and enforcement procedures. These include:

• Directive 2018-04, Focused Reviews of Contractor Compliance with Executive Order 11246, Section 503, and VEVRAA, which states that a portion of future scheduling lists will include “focused reviews” in which the OFCCP will go onsite and conduct a review of the particular authority (i.e., E.O. 11246, VEVRAA, or Section 503) at issue and directs OFCCP staff to develop a standard protocol for conducting such reviews, along with a neutral system to select contractors for review;
• Directive 2018-05, Analysis of Contractor Compensation Practices During a Compliance Evaluation, which rescinds the OFCCP’s prior compensation directive (commonly referred to as Directive 307), details the specific method the OFCCP will use to conduct compensation analyses, and allows contractors to provide information regarding their “compensation hierarchy and job structure” for consideration in connection with the OFCCP’s analyses;
• Directive 2018-06, Contractor Recognition Program, which establishes a program to “recognize contractors with high-quality and high-performing compliance programs and initiatives” and reward contractors who are “innovative thought leaders among their peers for achieving diverse and inclusive workplaces;”
• Directive 2018-09, OFCCP Ombud Service, which describes the OFCCP’s planned national Ombud Service and sets forth the anticipated role ombudsmen will play in future interactions between the OFCCP and contractors; and
• Memorandum of Understanding Between OFCCP and the National Industry Liaison Group (NILG), pursuant to which the OFCCP and NILG have committed to meet regularly and partner on improving contractor education and training, helping contractors comply with the OFCCP’s regulations, and minimizing the cost of compliance for contractors.

Together, these actions emphasize a kinder, gentler approach from the OFCCP. However, this does not mean that contractors can become lax with respect to their compliance obligations; to the contrary, with the new information and insight provided by the OFCCP, contractors should take steps now to make any necessary changes and ensure a smooth path going forward.