GAO Recommendations for OFCCP: FAAPs
The DCI team has released several communications on the recent Diversity in the Technology Sector report. The final recommendation made by the GAO is that “the Director of OFCCP should evaluate the Functional Affirmative Action Program to assess its usefulness as an effective alternative to an establishment-based program, and determine what improvements, if any, could be made to better encourage contractor participation.”
Interestingly, the GAO found that some companies may not have known about the option for a functional affirmative action program (FAAP) agreement. With only 73 companies engaging in this program, the “OFCCP officials hypothesized it could have to do with a requirement intended to ensure that companies with FAAPs would be reviewed at least as often as others, but that may result in these companies being reviewed more often than most.” In fact, the FAAP Directive does include a condition for a FAAP 3-year renewal term. Specifically, the directive states: “Contractors with approved FAAP agreements will undergo at least one compliance evaluation during the term of their FAAP agreement.” This directive has gone through OMB approval and thus holds more weight in comparison to other OFCCP released documents, for example the frequently asked questions. If contractors engage in a FAAP agreement with the OFCCP, they are essentially agreeing to a compliance evaluation within a 3-year term should they want to renew the agreement. There is no such statement in EO 11246 for similar establishment-based audits.
At the conclusion of the report, there is a response letter from the Deputy Director (Acting Interim Agency Director), Tom M. Dowd. Dowd mentioned that “the agency has worked to improve its ability to identify federal contractor establishments under its jurisdiction and has made vast improvements in the quality of its scheduling list and, as a result, has substantially reduced administrative closures from lack of jurisdiction that are inefficient both for OFCCP and for federal contractors undergoing a compliance evaluation.” How may this relate to FAAP-based audits? Establishment-based audits are identified primarily through the federal contractor selection system, whereas functional-based audits are not. It is not uncommon for federal contractors under a current FAAP agreement with the OFCCP to receive a scheduling letter for an establishment. In these cases, the OFCCP and federal contractor collaborate to confirm whether the establishment is included within a functional plan covered by an agreement. If so, the OFCCP will administratively close the establishment-based audit. If not, the OFCCP will proceed within jurisdiction to evaluate that establishment. Continuous review and improvement to the selection process for identifying actionable (i.e., within jurisdiction) compliance reviews could benefit the OFCCP and all contractors, not just the technology industry.
In general, functional plans are adaptive to the ever-evolving nature of organizations, for example the management reporting channels and remote access to work. They align to the business units/functions within the organization and may have more stability in headcount per function than establishments. However, with every positive outcome there are alternatives to consider in the decision-making process. The OFCCP agreed that they “…will fully explore the operational implications and funding requirements.” Completing the OMB approval process to modify the agreement does take time and resources. Additionally, the OFCCP must find what will attract a broader audience to agree to such a program. There are several factors that should be considered regardless of any future-focused incentive from the OFCCP to encourage contractor participation (e.g., impact of sample sizes in establishment- vs. FAAP-based plans, applicant flow successes/challenges). DCI welcomes you to reach out for more information on what factors could be important to weigh into your decision to go the route of functional- vs. establishment-based plans.
By Keli Wilson, Senior Manager of EEO Compliance, Diversity and Inclusion