GAO Releases Detailed Report Criticizing Office of Federal Contractor Compliance Programs
The Government Accountability Office (“GAO”) has released a report critical of the Office of Federal Contractor Compliance Programs (“OFCCP”) and making suggestions for improvement. The report followed the GAO’s investigation into the OFCCP’s practices, including conducting interviews with 27 industry groups and 24 government contractors.
Some of the key findings of the report are discussed below.
Ineffective Compliance Evaluation Selection Procedures
The report is critical of the methods by which the OFCCP selects its contractors for compliance evaluations, finding its methods “cannot ensure that contractors with the highest risk of not following equal employment opportunity and affirmative action requirements will be selected.” This is because the selection procedures are “nonrandom” and do “not produce a generalized sample of contractors for evaluations.” As a result, the GAO found that OFCCP’s selection process does not permit the OFCCP to draw conclusions as to the level of compliance in the federal contracting community as a whole.
Over-Reliance on Voluntary Compliance
The report also criticized the OFCCP for relying on voluntary compliance of contractors, rather than establishing a mechanism to audit compliance annually. The report focused on contractors’ completion of an Affirmative Action Plan (“AAP”). The investigation revealed that in 2015 nearly 85% of contractors failed to submit a copy of their AAP within 30 days of receiving a scheduling letter from the OFCCP. From this statistic, the GAO concluded that contractors are likely not complying with their obligation to complete AAPs annually, and were instead waiting until an audit to complete their AAPs.
Ineffective Compliance Evaluation Staffing
The report found that the OFCCP “assigns compliance evaluations to OFCCP district or area offices … based on the number of compliance evaluation officers located in each district and the physical address of the contractor establishment.” The GAO concludes that this has resulted in an uneven distribution of compliance evaluations across the country, exacerbated by the fact the distribution of compliance officers is not aligned with the “national distribution of contractors.” In other words, a contractor’s chances of being audited depend largely on the number of compliance officers and other contractors in its district.
Lack of Training Creates Inconsistencies in Audits
Based on interviews with contractors, the GAO found that there are concerns about the consistency of audit processes between district offices and even within district offices. The report suggests that this may be due to a lack of initial and continuing training for compliance evaluation officers.
Lack of Outreach Activities
Historically, the OFCCP would assist contractors with their compliance obligations by hosting job fairs and connecting contractors with potential job candidates. The OFCCP also used to serve as a resource for federal contractors needing compliance assistance. The GAO notes that the number of OFCCP outreach events decreased from 1,257 in 2012 to just 204 events in 2014. The decline is the result of a deliberate choice by the OFCCP to focus its resources on enforcement, rather than proactive outreach. The report concludes that “without improvement in outreach efforts, OFCCP may not be able to educate employees of federal contractors about their rights and contractors about their obligations, which is critical to OFCCP’s mission.”
Contractors Find Complying With OFCCP Requirements Challenging
Not surprisingly, contractors and industry groups reported that compliance with OFCCP requirements is difficult and costly. The GAO found that contractors often turn to third-parties, including vendors and attorneys, to keep up with the constantly changing regulations, Executive Orders, laws, and processes by which they must abide. Contractors also expressed fear of seeking guidance from the OFCCP, fearing that such an inquiry could result in an audit.
Contractors told the GAO that OFCCP’s data collection and documentation requirements have become burdensome and overwhelming. The result of the increased data collection obligations is a need for new forms, processes and human resources information systems. All of this comes at a considerable expense of both time and money to contractors. One concern echoed by 13 industry groups and four contractors interviewed by the GAO was that these costs continue to increase as the OFCCP issues new guidance and regulations.
As if the costs and burden alone where not enough, contractors and industry groups also told the GAO that the OFCCP “guidance is too general and lacks the specificity needed to understand the requirements.” Contractors also noted that the “OFCCP guidance is sometimes open to interpretation and does not always provide a clear answer,” and would sometimes conflict with other guidance issued by the agency. The GAO itself found the OFCCP materials to be complex. Indeed, the GAO tested available FAQ documents and found that “the reading level required for these guidance materials ranged from that of a high school 12th-grader to that of someone with a post-graduate degree.” Based upon this, the GAO found that “it seems likely that the information in these guidance materials may not be understandable to the range of contractors and human resource professionals attempting to comply with federal requirements.”
The GAO’s Recommendations
Based on its findings, the GAO makes six recommendations for future action to remedy the deficiencies found in its investigation.
The OFCCP should change the way it develops its scheduling list for compliance evaluations “so that compliance efforts focus on those contractors with the greatest risk of not following” the law.
The OFCCP should develop a “mechanism” to monitor federal contractors’ compliance with the AAP requirements “on a regular basis.” The report goes as far as to suggest that the OFCCP could “electronically collect AAPs.”
The OFCCP should change the way it determines which contractors to audit so that who gets audited is not based largely on geographic location.
The OFCCP should “provide timely and uniform training to new staff” and continuing training opportunities to existing staff to “ensure quality and consistency of evaluations across regions and district offices.”
The OFCCP should review its outreach and compliance assistance efforts and “identify options for improving information provided to federal contractors and workers to enhance their understanding” of the various legal requirements.
The OFCCP should “[a]ssess existing contractor guidance for clarity,” to ensure contractors have the best information available to assist with compliance. This comes on the heels of concerns raised by many contractors that the current guidance of the agency is often less than clear and sometimes even contradictory.
Whether the GAO report will lead to any changes in OFCCP practices remains to be seen. Of course, we will alert our readers of any developments.