Annual Verification Proposed For Contractors

Constangy, Brooks, Smith & Prophete, LLP

Constangy, Brooks, Smith & Prophete, LLP

The OFCCP seeks an online certification process.

The Office of Federal Contract Compliance Programs has issued an Information Collection Request seeking comments on “an annual Affirmative Action Program online certification process for federal contractors. . . .”

The online portal would be called the Affirmative Action Program Verification Interface, or AAP-VI. The portal would also provide contractors “a secure method” for submitting affirmative action plans to the OFCCP during a compliance evaluation.

The impetus of this proposal is a 2016 report by the Government Accountability Office, which recommended that the OFCCP develop a process for regular monitoring of contractor compliance.

According to the proposal, the OFCCP would require all covered contractors and subcontractors to use AAP-VI to select one of the following responses on an annual basis:

  1. Entity has developed and maintained affirmative action programs at each establishment, as applicable, or for each functional or business unit. See 41 CFR Chapter 60.
  2. Entity has been party to a qualifying federal contract or subcontract for 120 days or more and has not developed and maintained affirmative action programs at each establishment, as applicable. See 41 CFR Chapter 60.
  3. Entity became a covered federal contractor or subcontractor within the past 120 days and therefore has not yet developed applicable affirmative action programs. See 41 CFR Chapter 60.

The OFCCP plans to send an email to each known contractor establishment meeting the monetary and employee thresholds requiring the development of an AAP. Notification would also be posted on the agency’s website advising about the annual certification requirement.

Generally, the system would work as follows:

  • Contractors would create an account within the AAP-VI system.
  • Users would be granted authorization to access the system through a unique company identifier.
  • Contractors would confirm basic company information that typically appears on the EEO-1 Report, such as establishment name, parent company, unit number, federal employer identification number, etc.
  • If selected for a compliance evaluation, contractors would upload AAPs using the AAP-VI system.
  • Contractors would certify on an annual basis to one of the three responses noted above.

Contractors would be provided 90 days to complete the certification process once AAP-VI goes into effect. Thereafter, the “OFCCP [would] set a date by which all existing contractors must renew their annual certification.” Entities that become contractors after AAP-VI becomes effective would be required to complete the certifications within 90 days after developing their AAPs. (Employers are granted a 120-day window to develop AAPs after becoming covered by the regulations.)

The OFCCP notes that AAP-VI would allow it “to run a comprehensive and informative report identifying the AAP status of covered federal contractors.” Presumably, the agency would use this data to select contractors for compliance evaluations. Contractors who fail to certify, or who select option #2, may be most likely to be considered non-compliant.

The OFCCP has long sought methods for identifying contractors who are most likely to be in violation of its laws so that they can be targeted for enforcement, and this may provide a vehicle to achieve that. However, the proposal does not specifically address the consequences for failing to certify or for responding that AAPs have not been appropriately prepared.

The OFCCP has requested comments on AAP-VI that address the following:

  • The proposed frequency and level of information to be collected.
  • Whether the proposed collection of information is necessary for the enforcement and compliance assistance functions that support the agency's compliance mission, including whether the information will have practical utility.
  • The accuracy of the estimated burden of the proposed collection of information, including the validity of the methodology and assumptions.
  • The quality, utility, and clarity of the information to be collected.
  • How to minimize the burden for those responding, including the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.

One issue that the proposal does not seem to anticipate is the inevitable window of time between the expiration of an AAP on its plan date and the development of the next AAP. Depending on the size of the establishment and the number of AAPs that a contractor must develop, the process for developing new AAPs can take weeks or even months. Further, some multi-establishment contractors develop AAPs throughout the year for their different locations and are thus in a constant state of renewing AAPs. The OFCCP’s proposal does not indicate whether contractors that are in the “in-between” stage of re-developing expired AAPs would be able to accurately certify that they have “developed and maintained affirmative action programs at each establishment . . . ” for the applicable annual cycle.

If implemented, AAP-VI will certainly create greater incentives for contractors to ensure that AAPs are updated annually and in a timely fashion. We will continue to monitor the agency’s actions and report further developments here.

Comments to the OFCCP’s proposal are due by November 13, 2020.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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