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The U.S. Government Accountability Office (GAO) is the federal agency that provides objective, non-partisan information on government programs.  In 2016, GAO released a report outlining recommendations for updating the Office of Federal Contract Compliance Programs’ (OFCCP)  assistance (education) and enforcement practices to ensure the Agency’s goal of providing equal access in the workplace.  The last two administrations have set about updating policies and procedures to address GAO criticism of OFCCP’s operations.  The Trump administration created ‘four pillars’ (certainty, efficiency, recognition and transparency) to improve compliance through cooperation between OFCCP and federal contractors. The current administration is jettisoning  the pillars in favor of “flexible” audit standards that, it states, will help the Agency better identify employer discrimination.  (See Circa’s blogs on proposed  “PDN rule” changes.)

All this to say that, when GAO speaks, OFCCP listens, even if the Agency’s response is not consistent from administration to administration.  On May 26, 2022, GAO released a new report about OFCCP operations, this time as they relate to whether the Agency is meeting its mandated obligations under the Vietnam Era Veterans Readjustment Assistance Act (VEVRAA) to ensure that veterans have equal access in the workplace.

The new GAO report concludes that OFCCP should provide more instruction to federal contractors on how to meet VEVRAA requirements. The report also states that “OFCCP’s [current] benchmark methodology is inconsistent with internal control standards to use quality information to achieve agency objectives.”.  In addition to suggesting new ways to create the benchmark (an estimate of the number of veterans in the workforce), the report recommends uses of the benchmark that are unprecedented for OFCCP’s VEVRAA program.

Are Veterans Underrepresented in the Workforce?

Is there a burning need to revisit OFCCP’s VEVRAA review process?  The May 2022 rate for veteran unemployment is 2.9%, significantly below the civilian unemployment rate of 3.6%.  The veteran unemployment rate has been lower than the civilian rate nearly every year since 2006.   This does not mean that contractors should stop paying attention to the needs of veterans, particularly as those who have served our country transition from military to civilian employment.  However, the unemployment numbers do not evidence that veterans face barriers to participation in the workforce warranting a revamp of OFCCP’s VEVRAA program.

To justify the changes it proposes, GAO states that there “may” be a high number of disabled veterans and “discouraged workers” not counted in the veteran unemployment number.  (“Discouraged workers” are those, veterans or not, who have been unsuccessful in their job search and have stopped looking for work.  They are not included in the unemployment numbers quoted above.)  It is worth noting that discouraged workers are not included in or influence OFCCP’s participation calculations for the race and gender program under 41 CFR 60-2.  Again, this does not mean that federal contractors should not work hard to identify discouraged or disabled veterans for employment – OFCCP’s current VEVRAA regulations requires just such a focus on outreach (41 CFR 60-300.44(f)(3)).

GAO Recommendation for Updating the OFCCP’s VEVRAA Benchmark

As noted above, federal contractors are currently required to assess the effectiveness of their VEVRAA outreach using a hiring benchmark.  Contractors can use a benchmark provided by the Agency, equal to the overall percentage of veterans in the civilian labor force (currently 5.5%), or can create their own benchmark following criteria outlined in OFCCP’s VEVRAA regulation (41 CFR Part 60-300.45).

The new GAO report states that contractors should  apply a benchmark not just to hiring but to review  actual rates of employee participation.  In other words, the report envisions an OFCCP update of its veterans’ program requirements to mirror race and gender program requirements under 41 CFR Part 60-2.  As noted above, this would be entirely new for OFCCP’s veterans’ program.  Making the change would require public comment and Office of Personnel Management (OPM) approval.

GAO also recommends that OFCCP update how it creates its benchmark.  The procedure that GAO recommends, however, appears problematic.  As stated in the current VEVRAA FAQ, “…the only data regarding veteran availability in the labor force encompasses all veterans, and is broader than the subset of veterans who are protected by VEVRAA.  Therefore, such data could not be used as the basis for establishing an availability-based goal.”.  The new GAO report agrees that available labor force data does not specifically outline availability information for the  veterans classifications outlined in VEVRAA (“disabled veterans”, “recently separated veterans”, “armed forces service medal veterans”, and “other protected veterans”).  Instead of recommending that Congress simplify VEVRAA reporting to include all veterans, however, GAO supports using additional data to create a more refined benchmark.  GAO recommends using available Bureau of Labor Statistics (BLS) data and other sources (primarily statistical estimates available via the CPS Veterans Supplement  and the Department of Veterans Affairs’ Veterans Population Projection Model) for which there is “likely a very high overlay between protected veterans and the full veteran population.”.   (Emphasis added)

Conclusion

This situation could get dicey for federal contractors should OFCCP amend its VEVRAA  program as GAO recommends.  Is it fair to expand program requirements and go to specific enforcement on what would remain a very approximated benchmark?

When the Agency’s VEVRAA recommendations were changed in 2014, the Agency indicated that “The benchmark created by the regulations provides contractors with an aspirational hiring target against which they can measure the success of their efforts, and identify any impediments to hiring veterans.”.  (Emphasis added)  Wordhippo defines ‘aspirational’ as “expressing a hope or intention but not creating a legally binding obligation.”.  OFCCP use of the word caused contractors to breathe a sigh of relief in 2014 – but there was concern at the time that one year’s aspiration might become the next year’s obligation.

Will the Agency seek to update its VEVRAA regulations to include  “progress towards goals”, the degree to which outreach and other “good faith efforts” succeed in increasing veterans’ participation in the contractors’ job groups?  The new GAO report may be bringing that day nearer.

Author

Paul McGovern
Managing Partner
Praxis Compliance

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