To help paint a high-level picture, below are the compliance review steps (i.e. audit) to gain a general idea of how debarment may occur: First, is a desk audit, which is where the compliance officer reviews the contractor's affirmative action plan and statistical data to evaluate the contractor’s employment activity. During this stage, OFCCP may identify one or more focus areas for further follow-up during the desk audit or for step two, which is the onsite audit. During an onsite audit, OFCCP may require the contractor to explain compensation discrepancies, for example, let’s say it's for females or a lower hiring rate for minority applicants than non-minority applicants. The third step may involve the contractor providing additional documentation for OFCCP to review off-site. The fourth step is the administrative closure (if all goes well), but if not, then a resolution process begins... If federal contractors and subcontractors are found in violation of the regulations, OFCCP may attempt to obtain Conciliation Agreements from the contractors to remedy the violations. Other forms of relief to victims of discrimination may also be available, for example, back pay for lost wages. As part of the Conciliation Agreement, contractors may be required to enter into Linkage Agreements with specific outreach organizations to help the contractor identify and recruit qualified workers. The Conciliation Agreement typically includes monitoring the contractor’s progress through periodic compliance reports with OFCCP. Contractors can dispute the appropriateness of the proposed Conciliation Agreement with OFCCP, and if the contractor and OFCCP cannot reach an agreement, then OFCCP can recommend an enforcement action to be brought by the Solicitor of Labor, which gives the contractor another opportunity to defend its position. If the contractor refuses to comply with the final resolution of the enforcement action, the ultimate sanction for violations is debarment, which of course is the loss of a company's federal contracts. Generally speaking, debarments are in the minority. Nonetheless, OFCCP continues revising regulations and proposing executive orders to help mitigate discrimination and to equip itself with the necessary data to direct its enforcement resources to entities where data suggests potential violations. Thus, being proactive - as you stated - is the strongest defense.
You can use this OFCCP audit checklist to ensure you're doing what is required to maintain OFCCP's regulations including VEVRAA, Section 503, and EO 11246. Or request a demo to streamline your compliance and recruiting efforts.