On November 17, 2022, OFCCP hosted a webinar discussing the changes it made to Directive 2013-01 earlier this year through Revision 3 (the “Directive”). The Directive sets forth the agency’s policies and procedures for federal contractors implementing and maintaining FAAPs.

As many contractors know, FAAPs provide an alternative for federal supply and service contractors to align their Affirmative Action Programs (“AAPs”) with functional or business units, rather than a particular establishment. OFCCP explains that this approach enables a covered contractor “to organize its AAP to reflect how the entity operates functionally rather than where its facilities and people are physically located.” FAAPs may therefore be a preferable and more efficient approach for multi-establishment contractors.

A contractor may choose to utilize both FAAPs and traditional establishment AAPs for different aspects of their organizations. However, a functional or business unit must have: (i) at least 50 employees; (ii) its own managing official; and (iii) the ability to track and maintain its own personnel activity.

Unlike establishment AAPs, FAAPs must be approved in advance by OFCCP. Although FAAPs are not a new option for contractors, OFCCP in recent years has become much more accepting and even encouraging of contractors utilizing FAAPs. Depending on a contractor’s workforce, FAAPs may be an attractive option, but FAAPs have some drawbacks of which contractors should be aware and carefully consider before seeking to transition their establishment AAP(s) to a FAAP.

According to OFCCP, Revision 3 primarily “provides clarification regarding procedural requirements, in addition to minor language and formatting changes, that continue to provide for a FAAP process that is efficient, fluid, and collaborative.”

Although minor, Revision 3 establishes the following changes and clarifications to the Directive:

1. Corporate Headquarters Information. Contractors requesting a FAAP agreement must provide:

(i) the name and address of the contractor’s corporate headquarters overseeing the contractor operations in the U.S.; and

(ii) the name and contact information of the corporate representative in charge of overseeing the agreement.

1. Notification of Changes to the Primary Corporate Contact. In the event of a change to the primary contact listed in a FAAP agreement, the contractor must notify OFCCP within 60 days of the change. The communication must provide the updated information of the new primary corporate contact, including their name, address, and email address.
2. Renewal Procedure. Once established, a FAAP agreement is valid for five years. It may be terminated upon 90 calendar days’ written notice, which must include an explanation and the effective date for the termination. Alternatively, a FAAP agreement can be renewed by following the procedure outlined in Revision 3. A renewal certification must be submitted in writing at least 120 calendar days before the expiration of the existing FAAP agreement.
3. Electronic Submissions. Where possible, all submissions – including requesting, modifying, or terminating a FAAP agreement – must now be submitted electronically to OFCCP. Instructions on electronic submissions can be found here.

The revisions apply to any covered contractor entering, modifying, or renewing an agreement on or after September 21, 2022.

We will continue to monitor and report on further OFCCP developments.

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