Federal Contractors (and Subs) to Certify Affirmative Action Program Compliance Starting March 31
Federal contractors and subcontractors will soon be required to certify, on an annual basis, to the Office of Federal Contract Compliance Programs (“OFCCP”) that they have developed and maintained a written affirmative action program (“AAP”). On February 1, 2022, registration opened for the OFCCP AAP Verification Interface (“AAP-VI” or “Contractor Portal”) and, on March 31, the certification features will be turned on. When the certification features become available, existing covered contractors will then have until June 30, 2022 to certify that they have developed and maintained their AAPs. [1]
Briefly, federal supply and service prime contractors and subcontractors have long been required, under Executive Order 11246 and Section 503 of the Rehabilitation Act of 1973, to develop AAPs for each establishment where they have 50 or more employees and at least one contract (or subcontract) that is greater than $50,000. Further, under the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (“VEVRRA”), contractors are also required to develop AAPs where they have 50 or more employees and at least one contract (or subcontract) of at least $150,000. [2] Notably, construction contractors that are not also supply and service contractors are not required to certify AAP compliance.
Through the collective AAP regulations, generally, covered contractors agree to not discriminate because of race, color, religion, sex, sexual orientation, gender identity, national origin, disability, and veteran status, and also agree to take affirmative steps to ensure equal employment and advancement for those protected individuals. Thus, while the requirement to develop and maintain an AAP is nothing new, the certification aspect adds a twist given that contractors would ordinarily only encounter AAP “verification” during an OFCCP compliance review or audit, which is typically a lengthy process. [3]
So, with this new certification requirement fast approaching, covered contractors should act now and revisit – or develop – their AAPs, particularly in light of the potential stiff consequences that contractors face for noncompliance. For example, in December, a Department of Labor administrative law judge ordered a federal contractor to provide all requested documents relating to administrative complaints filed by the OFCCP regarding the contractor’s AAP or else face contract termination and debarment “for a period of at least three years or until Defendant complies with the provisions of EO 11246, the VEVRAA, the Rehabilitation Act, and 41 C.F.R. Chapter 60, whichever period is longer.” Similarly, in addition to contract termination or debarment, contractors may also potentially face liability under the False Claims Act.
Important Dates and FAQs
February 1, 2022 – the Contractor Portal opened and covered contractors and subcontractors can register for access.
March 31, 2022 to June 30, 2022 – existing contractors must submit their AAP certification in the Contractor Portal.
New contractors – must develop their AAP within 120 days from the start of a contract, and must register and certify compliance via the Contractor Portal within 90 days of developing their AAP.
Besides these dates and timelines, the OFCCP Contractor Portal website also contains important FAQs to help guide contractors. [4] The FAQs may be found here. The FAQs provide a great overview of the Contractor Portal, details on who is required to use the Contractor Portal, and insight on important issues, including that a contractor's AAP certification does not exempt it from compliance evaluations.
Takeaway
While covered contractors and subcontractors have long been required to adhere to the AAP requirements, OFCCP’s new certification obligation not only introduces another layer of risk but also heightens the importance of developing and maintaining your AAP. Indeed, creating an AAP is no simple task. While there are several regulatory components, AAPs typically include an organizational profile, analysis of job groups, placement of incumbents in job groups, hiring processes, placement goals, and identifying problem areas. Thoughtfully analyzing these issues at the forefront, and during periodic internal audits, will pay dividends in the event of an OFCCP compliance review. [5]
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[1] In implementing the new certification obligation, OFCCP relied on the “program summary” requirement already found in existing AAP regulations, which provide that AAPs “must be summarized and updated annually.” 41 C.F.R. § 60-2.31. In OFCCP’s view, certification through the Contractor Portal is “perhaps the least burdensome way to effectuate this regulatory provision, as it requires only that contractor establishments check a box to indicate their compliance status.”
[2] For more information, visit OFCCP’s website for details on Jurisdictional Thresholds and Inflationary Adjustments.
[3] According to OFCCP, in FY 2019, compliance evaluations took an average of 399 days to close, desk audits with a Notice of Violation (“NOV”) took an average of 158 days to complete, and desk audits without NOVs took an average of 68 days to complete. See OFCCP Directive (DIR) 2020-02, Efficiency in Compliance Evaluations (April 17, 2020), available at https://www.dol.gov/agencies/ofccp/directives/2020-02 (last visited February 10, 2022).
[4] The Contractor Portal will soon include a “User Guide and References” and “How-To Videos.”
[5] During an OFCCP compliance review, contractors will use the Contractor Portal to upload their AAP.
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