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Practitioner's Eye: Part 1: The Shape of Scheduling Letters Now and to Come

By: Paul McGovern

Practitioner's Eye: Part 1: The Shape of Scheduling Letters Now and to Come

This is the first article in a two-part series on OFCCP’s proposed audit practice changes. See here for our article on OFCCP’s proposals for “Focused Reviews” and “Compliance Checks.” We encourage you to participate in the public comment period concerning these changes before it closes on June 7th.

The OFCCP has been going at full speed for more than a year now, with Directives and announcements coming out, it seems, every day. To keep the momentum going, the OFCCP now has six Scheduling Letters in public review and comment. OFCCP’s plans have some things old, some things new, and one thing (additional monitoring detail) already off the table.

The Office of Management and Budget (OMB), which runs the review process, is asking for contractor input. The OMB balances the “burden” of contractors providing requested information with the usefulness of the information obtained. The comment periods end in early June, depending on the Scheduling Letter type. In the past, the public review process has led to significant changes in OFCCP’s plans. For example, the current veterans and disability plan regulations look a lot different in their 2013 proposed and 2014 final forms.

This article focuses on the changes to the standard “supply and service” desk audit that most contractors are familiar with. You can find the proposed scheduling letters here.

Our follow-up article will address the OFCCP’s new “Focused Review” and updated “Compliance Check” initiatives.

Recent Developments for Consideration

Per several of the proposed Scheduling Letters, if your audit notice is sent more than 6 months into your plan period, you would have to provide hire, terminations and promotions data “for every completed month in the current AAP year.” (So, if you have a calendar year plan and receive a Scheduling Letter in mid-September, your monitoring data would run from January 1 to August 30.) Since releasing the Scheduling Letters for comment, OFCCP representatives have said that you won’t have to provide data beyond the standard 6 month monitoring period detail unless you want to.

Another thing: OFCCP Director Leen is saying that the Agency is going to pay much more attention to your mandated review of outreach effectiveness than it has in the past. So, review your outreach program!

What’s up with the current Scheduling Letters?

The current standard Scheduling Letters expire June 30, 2019 (see the current standard “Supply and Service” scheduling letter here. The expiration date of all current Scheduling Letters will be extended, however, until updated versions come into effect. It’s hard to say how long it will take OMB to finish its review. Assume the OFCCP wants to get the new Scheduling Letters in place by October 1, 2019, the start of its 2020 fiscal year. Things may move quickly.

What’s new with the “Supply and Service” Scheduling Letter?

Identifying your three largest “dollar value” subcontractors
This new requirement is in the Scheduling Letter itself, not the “Itemized Listing” section that follows it. Historically, subcontractors were not subject to much OFCCP oversight unless they were federal government contractors on their own. This new request is the government’s way of identifying subcontractors for possible review. The Agency made this a difficult job, however, by asking which of your subcontractors has the largest role in the federal contracts your company fulfills. Many contractors will find this requirement challenging.

Providing minority sub-group availability and placement goals
Items 4 and 6 of the Itemized Listing move beyond the current “minority all” availability and goal reporting to focus on minority sub-group analysis and reporting. While you might already be doing this review on your own, preparing this detail for audit will be time consuming. Additionally, the proposed sub-group goal review will increase the likelihood that your submission has indicators that the OFCCP will want to follow-up on in audit.

Providing an analysis of your compensation system
The requirement for analyzing your compensation program to determine whether there are race/gender disparities is not new. Providing your actual compensation review to the OFCCP when audited is new. The good news is that your Executive Order 11246 review of your “compensation system” need not be hyper-technical. We outlined the critical elements of a “back of the envelope” summary compensation review in AJE’s April webinar on audit practices (you can review the session here).

In addition to identifying the job groups involved in promotions (the “to and from” and related detail), the Agency now wants you to identify individual applicants. What is the point of this? Even if your reporting system is good, your adverse impact results could be, well, random –skewed, for example, because many promotions are “non-competitive,” 1:1 career development and succession planning appointments.

The Comment Period Ends Soon!

Would it take you only the 29 hours that the government estimates to prepare a desk audit submission with all the new trimmings the OFCCP includes in the updated Scheduling Letter? Absolutely not. (It takes so much time to prepare a desk audit submission under the current scheduling letter that most contractors already want the OFCCP to extend the deadline from 30 to 60 days.)

Log a comment, anonymously if you prefer, to let the Agency know what you think, positive, negative or in between. Contractor comments have led to changes in the past. Also, the OFCCP has asked for “transparency” in its relationship with the contractor community – so let the Agency know what you think before the comment period closes on June 11th. You can post comments using the “Comments Now!” button.

Read other articles in this series

In this article we welcome Paul McGovern, a compliance practitioner with a practiced eye. Paul is the founder of Praxis Compliance, an HR consulting firm focusing on Affirmative Action program implementation and audit response, D&I program analysis and remediation, and EEO/ER charge investigation and resolution. Former program lead for Verizon Communications Affirmative Action and EEO/ER investigations initiatives, responsible for the design and implementation of compliant HR processes company-wide, Paul led groups successfully responding to 180+ OFCCP audits and 2,000+ employee relations matters and agency-filed discrimination and harassment complaints. Paul is Chair of the National Industrial Liaison Group (NILG), a consortium of nation-wide Affirmative Action practice groups partnering with federal contractors and regulatory agencies to ensure equal opportunity.

Note: This article is meant to assist in a general understanding of the current law and practice relating to OFCCP. It is not to be regarded as legal advice. Companies or individuals with particular questions should seek advice of counsel.

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