Government Contractor Compliance & Regulatory Update

POTENTIAL PARTIAL GOVERNMENT SHUTDOWN – What Government Contractors Need To Know

A partial government shutdown may soon be upon us.  According to the Washington Post, “[t]he White House and a number of federal agencies have started advanced preparations for a partial government shutdown, as President Trump and congressional Democrats appear unlikely to resolve their fight over a border wall before some government funding lapses at week’s end. ” Unlike past shutdowns, because Congress has already passed, and the President has signed, spending bills into law that apply to approximately 75% of government spending, a government shutdown will be far less extensive than those experienced in the past. If one occurs, the departments of the Interior, Agriculture, State, Housing and Urban Development, Treasury, Commerce, and Homeland Security would lose funding – and government contractors with existing contracts with those agencies could face a temporary loss of funding. Continue Reading

New OFCCP Directive Introduces Early Resolution Procedures For Compliance Evaluations

Quick Hit: OFCCP’s new Directive 2019-02 sets forth Early Resolution Procedures (“ERP”) to resolve violations discovered during a desk audit of contractors with multiple establishments.  OFCCP touts that “ERP allows OFCCP and contractors with multiple establishments to cooperatively develop corporate-wide compliance with OFCCP’s requirements.”  Contractors who successfully resolve violations through ERP will be spared full scale compliance evaluations, but will have to agree to conciliation agreements that will include five years of monitoring and commitments to rectify similar issues at some or all of the contractor’s other establishments.  In return, contractors will receive a five-year moratorium on compliance evaluations of some or all of their establishments. Continue Reading

OFCCP Rescinds Active Case Enforcement Procedures

Quick Hit:  Office of Federal Contractor Compliance Programs (“OFCCP”) has issued Directive 2019-01 (the “Directive”), which rescinds Directive 2011-01 which established OFCCP’s now-defunct Active Case Enforcement or “ACE” policy.  Through ACE, OFCCP conducted fewer but more intensive compliance evaluations of government contractors.  In issuing the Directive, OFCCP is formally ending ACE, while adopting an approach it contends keeps the better components of ACE while allowing OFCCP to conduct more compliance evaluations in a more efficient manner. Continue Reading

OFCCP Introduces New Directive Enhancing Compliance Guidance Programs For Contractors

Quick Hit:  The Office of Federal Contractor Compliance Programs (“OFCCP”) issued Directive 2019-03 (the “Directive”), which announces two steps the agency will take to enhance compliance assistance for contractors.  OFCCP will now make “certain Help Desk inquires and responses dynamically available and searchable as a self‐service option on OFCCP’s website.”  OFCCP will also begin using Opinion Letters to provide guidance to the contracting community in response to fact-specific inquiries from contractors and their employees.  The Directive envisions that these changes will provide a resource for contractors, thereby enhancing compliance. Continue Reading

OFCCP Seeks The “Carrot” Approach With Two Contractor Recognition Programs

Quick Hit: The Office of Federal Contractor Compliance Programs (“OFCCP”) is seeking to establish two new contractor recognition programs, which would promote contractors with sound compliance programs and provide temporary relief from compliance reviews and desk audits. First, OFCCP has proposed an Excellence in Disability Inclusion Award (the “Disability Inclusion Award”), which aims to “highlight successful practices and strategies of contractors that have expanded and improved recruitment, hiring, retention, and promotion opportunities for individuals with disabilities.” Continue Reading

Trump Administration OFCCP Continues To Obtain Large Recoveries From Contractors in FY18

Quick Hit: Data released by OFCCP shows the agency obtained $16.4 million in monetary relief for roughly 12,000 class members in FY 2018. While that is a drop from the record year recovery of $23.9 million in FY 2017, it is much higher than $10.5 million obtained in FY 2016 and $6 million obtained in FY 2015. In addition, based on statements  made by OFCCP Acting Director Craig Leen, FY 2019 could set new financial recovery records. Continue Reading

OFCCP Enters Into MOU With Employer Group

Quick Hit: OFCCP has entered into a memorandum of understanding (the “MOU ”) with the National Industry Liaison Group (the “NILG”), a non–profit employer association that focuses on affirmative action and equal employment opportunity. The MOU is aimed at facilitating communications between OFCCP and the NILG in an effort to improve contractor compliance with OFCCP requirements as well as providing a mechanism to share contractor concerns with the agency.

Key Takeaway: Since the beginning of the Trump Administration, OFCCP has repeatedly stated that it is interested in improving relations with the government contractor community, increasing transparency, and balancing its enforcement efforts with those aimed at assisting contractors achieve compliance with its regulations. The MOU appears to be another example of the agency formalizing this commitment. Although the MOU is a welcome development and one that could provide contractors with greater clarity about their OFCCP obligations while also leading to welcome changes to the manner in which OFCCP implements its regulations, time will tell whether this initiative results in real, tangible benefits for government contractors.

More Detail:

The OFCCP and NILG entered into the MOU on August 27, 2018. The stated purpose of the agreement is to provide “a vehicle for exchanging information, obtaining feedback, and receiving advice from contractors” in order to “support contractor education and training; enable voluntary compliance with OFCCP’s regulations; and minimize, to the extent feasible, the cost of compliance by contractors.”

Among the goals of the MOU are: (1) coordination by the two organizations at both the national and local levels; (2) examination of “compliance challenges experienced by contractors”; (3) exploring “options for minimizing and eliminating operational, organizational and attitudinal barriers” contractors believe are impeding affirmative action and equal employment opportunities in their workplaces; and (4) improving OFCCP’s contractor education compliance tools and resources.

In order to achieve these goals, the OFCCP has committed, among other things, to:

  • Attend one annual meeting with the NILG Board;
  • Provide input and participating in the NILG’s annual national conference;
  • Make representatives available for at least one regional or local ILG meeting in each OFCCP region annually;
  • Engage in “various outreach initiatives that encourage all contractors, including NILG and local ILG members, to provide constructive feedback on OFCCP’s compliance evaluation process, education, outreach, and compliance assistance activities. OFCCP may reflect a consideration of this feedback in the development of contractor–focused activities”;

The NILG’s commitments include:

  • Using the annual meeting with OFCCP’s national office to discuss contractor concerns regarding OFCCP’s evaluation process and improving training and education;
  • Working with OFCCP to work cooperatively with OFCCP regarding its annual NILG conference and local ILG meetings;
  • Informing its Board members and local ILG members of OFCCP initiatives, opportunities to provide OFCCP feedback, and OFCCP-sponsored compliance assistance programs;

OFCCP Proposes New FAAP Directive

The Office of Federal Contractor Compliance Programs (“OFCCP”) is seeking approval to change its Functional Affirmative Action Program  (“FAAP”) requirements. The proposed directive, for which comments are due by November 13, 2018, proposes sweeping changes to the current FAAP directive, with the stated aim of encouraging contractors to use FAAPs. Continue Reading

OFCCP Announces Contractor Recognition Program

The Office of Federal Contractor Compliance Programs (“OFCCP”) has announced though Directive 2018-06 (the “Directive”) the development of a Contractor Recognition Program, which aims to “recognize contractors with high-quality and high-performing compliance programs and initiatives.” The Contractor Recognition Program arises out of feedback the OFCCP received from the contracting community in 2017 and 2018.

While the Contractor Recognition Program is still under development, the Directive provides some indication as to what contractors can expect. The Directive states that the OFCCP is currently developing “a contractor recognition program that highlights implementable best or model contractor practices, a contractor mentoring program that uses contractors to help their peers improve compliance, and other initiatives that provide opportunities for contractors to collaborate or provide feedback to OFCCP on its compliance assistance efforts.”

OFCCP Issues Directive Announcing Ombud Service

Quick Hit: OFCCP has announced its intention to create an Ombud Service. The new service will create a new position within the OFCCP, the “Ombud,” who will serve as a contact for contractors seeking to raise concerns or suggestions about OFCCP.

Key Takeaways:

  • The Ombud Service represents another example of OFCCP working to implement initiatives identified in its Town Hall Action Plan. With its flurry of recent Directives, OFCCP is taking steps to show contractors that it is responsive to their concerns.
  • The OFCCP’s new Directive merely announces the creation of the service in the future. In principle, the idea of an Ombud Service makes sense. It would provide contractors with an avenue to raise concerns and address perceived unfair conduct by compliance officers. However, until we see the details of the program it is difficult to predict how useful it will be.
  • One detail that will portend the effectiveness of the new service is how it handles confidentiality. Although the Directive recognizes that contractors are concerned that raising issues with the agency could lead to retribution, the Directive does not contain any statements regarding how the Ombud Service will protect the identities of contractors raising concerns. Whether and to what extent OFCCP can provide contractors such assurances will be a key element of the program and perhaps the key determinant of its success.

More Detail: On September 19, 2018, OFCCP issued Directive 2018-09 (the “Directive”), which announces the “planned implementation of an Ombud Service in the national office to facilitate the fair and equitable resolution of specific types of concerns raised by OFCCP external stakeholders in coordination with regional and district offices.”

As explained in the Directive, OFCCP is creating the Ombud Service in response to recommendations made by the Government Accountability Office’s (“GAO”) September 2016 Equal Employment Opportunity: Strengthening Oversight Could Improve Federal Contract Nondiscrimination Compliance report, as well as contractor feedback received at Town Hall meetings held by OFCCP in 2017. The new service appears aimed at addressing the concern reported by the GAO that “[s]takeholders and contractors fear that asking OFCCP for assistance would call attention to them and possibly make them a target for future OFCCP enforcement actions, such as compliance evaluations.” It also aims to respond to concerns that the agency “does not have an independent mechanism through which external stakeholders, after having exhausted district and regional office channels, can share their concerns with OFCCP about a particular open matter or provide general feedback and recommendations to improve the administration of the agency.”

The Directive does not create the Ombud Service; rather it simply announces that OFCCP plans to implement such a service. The Ombud Service’s mission will be “to facilitate the fair and equitable resolution of concerns raised by OFCCP’s external stakeholders, conduct independent and impartial inquiries into issues related to the administration of the OFCCP program, and propose internal recommendations to continuously improve the quality of services OFCCP provides to its stakeholders.”

The Directive provides contractors with some details about what to expect from the new service. Per the Directive, the Ombud Service “should require the Ombud to:

  • Listen to external stakeholder concerns about OFCCP matters and suggestions for improvements;
  • Promote and facilitate resolution of OFCCP matters at the district and region office level;
  • Work with OFCCP district and regional offices as a liaison to resolve certain issues after stakeholders have exhausted district and regional office channels;
  • Refer stakeholders to the OFCCP Help Desk for routine compliance and technical assistance inquiries;
  • Accept and review matters referred directly by the national office; and
  • Have the discretion to reject a referral in appropriate circumstances.”

The Directive also makes clear that the Ombud Service “will not

  • Advocate for either side of a dispute;
  • Give legal advice, analysis, opinions, or conclusions;
  • Conduct compliance evaluations, complaint investigations or participate in conciliation agreement negotiations; and
  • Have any role in conduct or discipline issues regarding OFCCP staff.”

When more details about the Ombud Service are announced we will report them here.

 

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