As a federal contractor, being aware of key provisions of the Federal Contract Compliance Manual (FCCM) will help you understand what Affirmative Action plans should include and anticipate what to expect in an OFCCP audit. The Federal Contract Compliance Manual (“FCCM”) provides guidance for Office of Federal Contract Compliance Program (OFCCP) Compliance Officers (COs) as they conduct auditsprovides guidance for Office of Federal Contract Compliance Program (OFCCP) Compliance Officers (COs) as they conduct audits under Executive Order 11246, Section 503 of the Rehabilitation Act of 1973 (Section 503), the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) of 1974, OFCCP’s r, and various OFCCP Directives. https://www.dol.gov/agencies/ofccp/manual/fccm
The FCCM does not create new legal rights or requirements. It provides procedural and technical guidance based on current agency procedures and processes. It is intended to “increase efficiency and consistency across the agency’s regional and field offices.”
To familiarize yourself with the albeit lengthy FCCM and other supporting documents, here is an overview of the guide, how to use it and other related materials, and what will best support your Affirmative Action Plans.
The FCCM has eight chapters, a list of key words and phrases, a glossary, and several attachments. Concentrate on Chapter 1. It addresses the necessary components of an Affirmative Action plan and outlines how OFCCP evaluates specific plan elements during desk audit.
The Standard Compliance Evaluation Report (SCER), FCCM Appendices A-1 and A-2, is also a good document to become familiar with. The SCER is the process document COs must complete during the desk audit. It becomes OFCCP’s framework for conducting a desk audit and, when applicable, conducting an on-site review.
For those new to affirmative action practice, the FCCM has good overview information – for example, Section 1F00 on the Organizational Profile and Section 1F01 on Job Groups. Useful “practice pointer” detail in the FCCM includes:
By “specific,” OFCCP requires that the programs describe in some detail what action the contractor will take, who is responsible for taking the action and when the action will be accomplished. “Result-oriented” programs are those where proper execution of the program will likely lead to an increase in minority or female participation, or both, in the department, job group, training program or other identified problem area. The action-oriented programs must be sufficient, if successfully implemented, to achieve their stated objectives. Contractors must describe these programs in the AAP.
For example, if a contractor identifies a lack of women in a job as a problem area, the contractor should also identify the reasons for the absence of women. The reasons identified could include the rigid work hours, the impact or application of leave policies, the lack of recruitment, the lack of training, the absence of a career path or ladder leading to the job, a working environment hostile to women or hiring discrimination. To remedy an identified problem area, the contractor should establish action-oriented programs to eliminate or minimize the reasons women are adversely affected. The action-oriented programs, when fully implemented, should result in an increase in the representation of women in the job identified as a problem area.
The SCER requires the CO to identify “areas where goals were established but not met.” So, have an analysis modeled on the one above ready where you did not show progress towards goals.
In March 2022 OFCCP issued Directive 2022-02 “Effective Compliance Evaluations and Enforcement” rescinding Trump-era Directives DIR-2018-06, DIR 2020-02, DIR 2021-02, and DIR 2018-08 (the last being “Transparency in OFCCP Activities”). In particular, the rescission of the “Transparency Directive” raised concern that the OFCCP would share less information than in the past. However, DIR 2022-02 states “OFCCP will also continue to engage in regular communication with contractors at each phase of a compliance evaluation” (emphasis added), and states that FCCM revisions incorporate many of the requirements of the rescinded Directives.
The FCCM has many references to communications between CO and contractor (Sections IB00, IB04, 1F00, 1F01, 1F05, etc.), but most relate to starting an audit and ensuring that the desk audit submission is complete. Transparency is particularly important when, pursuant to FCCM Section 1C04 “Additional Data Requests,” the CO asks for new detail “to clarify information provided by the contractor for the desk audit”. The FCCM helpfully states that “this supplemental records request must include the basis for the request, be reasonably tailored to the areas of concern, and allow for a reasonable time to respond.” If you question, can’t understand, or have a cogent answer for what is at issue in the information request, speak with the CO. Per the above, you should receive an answer – and be granted reasonable time to pull your response together!
If communication is spotty, consider reaching out to the OFCCP Ombuds. You won’t be alone –a third of this OFCCP troubleshooter’s referrals relate to addressing issues of transparency and to establishing reasonable turn-around times for responses to information requests.
Pay equity review is an area of disagreement between the FCCM’s statement of OFCCP practice and the opinion of many consultants to the contractor community.
Critics applaud the statement in Section IP00 that “OFCCP follows the Title VII standard of comparing similarly situated workers to establish a case of compensation discrimination.” There is concern about the OFCCP’s position, outlined at Section IP03, that the Agency may “aggregate” (combine) “employees from multiple job titles, units, categories and/or job groups to perform a regression analysis, with statistical controls added as necessary to ensure workers are similarly situated”. Title VII requires starting by comparing employees who have similar job responsibilities from the get-go – not using statistics to attempt to adjust for the differences. If the OFCCP rejects the groupings you use in your pay analysis, it may have good reason, but consider professional help to verify.
The Office of Management and Budget (OMB) has not yet acted on Biden-era OFCCP requests to roll back Trump-era changes to the Supply and Service regulation and to change the Scheduling Letter and Itemized Listing. For the time being the current FCCM version reflects how OFCCP is supposed to audit contractors.
Should OMB approve the practice changes, much will change. For example, OFCCP’s proposed changes would require Contractors to supply voluminous supporting data and analysis at the start of a desk audit. This would represent a significant change from the procedure outlined at Section 1C04 of supplying supporting detail on request. See Circa’s blog outlining the scope of these practice changes – changes that could require a rewrite of the FCCM if approved.
Showing how COs should undertake audit review makes the FCCM very important. The FCCM’s other intention, to “provide covered contractors and subcontractors more transparency, certainty, and clarity about basic OFCCP procedures and processes” is also crucial. If you have a plan under audit, please use the FCCM to that end.