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Where did 2021 end? In a muddle. In the spring, the country was reaching COVID ‘herd immunity’ through vaccination. Then came summer and the Delta strain of the virus, followed by Christmas Eve, when 3,000 airline flights were cancelled due to the Omicron variant. Similarly, the year whittled-down the Biden Administration’s social agenda. The President’s massive proposal for public spending to address inequality lost momentum in a Congress concerned about inflation and divided about the role of government in fostering change.

The current state of the post-George-Floyd social agenda may make the Office of Federal Contract Compliance Programs (OFCCP) the last best hope of the Biden administration to effect change. The OFCCP is, after all, mandated to identify and eradicate systemic discrimination.

This puts the Agency at a crossroads. Director Yang has yet to put her mark on the Agency. This is understandable, as it commonly takes more than a year for a new administration to implement initiatives. Instead, as outlined in Circa’s OFCCP: 2021 Year in Review blog, the Agency spent the year ‘clearing the decks’ of some of the prior administration’s initiatives. In the upcoming second year of the Biden era, what direction will Director Yang take?

A Lean and Efficient Agency

The Agency is not likely to receive the resources it hoped for. In June 2021 the OFCCP requested a 33% budget increase, to $141M. It intended to add nearly 200 employees. Six months later, in December 2021, the House of Representatives and Senate agreed, barely, to nothing more than a short-term extension of all current federal funding. Given the political environment, the Agency will likely remain short-staffed in 2022, with under 450 employees. One expects, then, that in 2022 the OFCCP will use its limited resources in the most efficient way possible.

Update Audit Selection Process

One likely way will be by updating the Agency’s process of selecting federal contractors for audit. Director Yang is well aware that the Corporate Scheduling Announcement List (CSAL) has identified the same companies for audit year after year. Expect the next set of CSALs to identify federal contractors who have not been audited for a long time – if ever. Get help with your Affirmative Action Plans (AAPs) if they are not in order – Circa can help!

AAP Verification

The ‘AAP Verification Initiative’, now rebranded as the ‘Contractor Portal’, should also help the OFCCP reach more contractors than in the past despite its limited resources. By June 30, 2022, contractors must certify whether they have developed and maintained an affirmative action program for each ‘establishment’ (work location) and/or functional unit (reported organization in a Functional Affirmative Action Plan). Federal contractors who fail to certify will face increased likelihood of audit. Again, get help with your plans if they are not in order.

New Census Data—New Complexities

The new census code set will be a game changer in 2022, both in terms of the work involved in contractors incorporating the codes into their plans and the codes likely effect on OFCCP audits. Unfortunately, unless the Agency is careful, the new code set will not increase its efficiency. Formally called the 2014-2018 EEO Tabulation, the codes provide the race and gender profile of those with work skills relevant to a contractor’s operations who are ‘available’ (i.e., who Iive in areas contractor is likely to canvass for employees). Contractors must compare this availability information against the composition of relevant segments of the contractor’s workforce. This ‘incumbency to availability’ comparison identifies ‘goals’ when the percentage of minorities or women employed in a contractors’ particular job group does not sufficiently align with census-reported availability detail. See 41 C.F.R. 60-2.15(b). In audit, the Agency reviews the effectiveness of the contractor’s ‘good faith’ efforts to address these goals.

A fly in the ointment is that the new census set reduces the number of codes from 488 to 237. (See an excellent OFCCP presentation on the new codes here.) Having so many fewer codes than before means that a lot more job types are jammed into each new grouping. This reduction will change availability metrics and will likely create unexpected incumbency goals. Such goals may be false indicators reflective of the new, over-generalized codes set rather than the actual availability of those with skills relevant to a contractor’s operations available for hire. If it is not careful, the Agency may require contractors to take ‘good faith’ efforts to address goals that do not actually exist.

Rethinking ‘Supply and Service’ Review

Other developments also complicate the analysis of AAP data. Many contractors report that a growing percentage of employees decline to self-identify race, gender and disability status. Increases in ‘two or more’ race identification and ‘non-binary gender self-ID’ further complicate race and gender analyses. Increases in work-at-home employment complicates who should be reported in which establishment plan. To what degree can or should the OFCCP rely on piecemeal data to identify potential discrimination?

For reasons such as those above, Director Yang has said that the OFCCP is rethinking the ‘supply and service’ audit process. But to what end? One concern is that the OFCCP will limit the use of establishment-based plans. Despite the shortcomings possible with these work-location-specific views of contractor operations, previously mentioned, they remain the best representation for many smaller companies, and commonly reflect the actual hiring and promotional practices of most employers. There is not likely to be a ‘one size fits all’ solution to AAP analysis issues.

Another concern is that, despite analysis issues such as those outlined above, the OFCCP doubles down in 2022 on an increasingly technical, detail-driven search for indicators of possible discrimination. Was progress made to address a particular participation goal? (Was the goal meaningful to start with?) Was there a ‘statistically significant’ disparity disfavoring minorities or women selected for hire? (Can one really say, if a third of the candidates did not provide relevant self-ID information?) An indication that the OFCCP is going in the ‘deep dive’ direction is the fact that in 2021 the OFCCP increased the frequency and complexity of its requests for information during audits. Such a detailed focus may be particularly inappropriate for reviewing 2022 plans, which will include metrics reflecting contractors’ 2021 scramble to find any applicants to fill the more than 11 million job vacancies open during the year.

There are plenty of alternatives to a technical dive into questionable (census) or incomplete (AAP) data sets. Opening up the CSAL selection process will help address criticism made in a 2016 General Accountability Office (GAO) study, which found that the OFCCP engages with only 2% of contractors annually. Focusing on federal contractors who do not comply with the upcoming Contractor Portal requirements will help address the GAO concern that the Agency is not “focusing its compliance efforts on those contractors with the greatest risk of noncompliance.”
Concentrating Agency attention on the breath of a company’s outreach and talent development programs is another way that the OFCCP can effectively use Agency resources. Director Yang has spoken of her interest in Affirmative Action working closely with Diversity, Equity and Inclusion (DE&I). DE&I needs the data Affirmative Action creates; it needs Affirmative Action-style analysis to measure progress toward goals. Director Yang has spoken of her interest in the OFCCP studying evidence-based policy initiatives that foster equal access to the workplace. To Director Yang’s point, Affirmative Action could do well by adopting elements of the broader DE&I review. Centering Agency-contractor discussions around the effectiveness of good faith efforts, and giving federal contractors credit for a wide range of company and community activities seems a useful avenue.

There is a lot to think through. A federal contractor does not have an obligation to take pro-active measures unless there is a plan goal or problem area (41 CFR 60-2.17(b)) to remedy. Does this mean, however, that the contractor who has no minority goals or employment processes impeding minority participation in the workplace should take no measures to, for example, decrease the unemployment rate of African American men? (As of November 2021, the unemployment rate for Black males was more than twice as high as that of White men – 7.3% compared with 3.4%.) Fingers crossed that the OFCCP does some thinking about this in 2022, the better to foster action promoting equal employment opportunity, which is to begin with the whole point of Affirmative Action.


Paul McGovern
Managing Partner
Praxis Compliance

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