The AAP Certification Initiative
Independently of the “Portal Initiative,” OFCCP seeks to also compel covered federal Government Supply & Service contractors and subcontractors to make three annual “certifications” by check-box Declarations, via the AAP-VI Portal. Let’s call this the “AAP Certification Initiative.” (The VI name (“Verification Interface”) OFCCP has given its portal is unfortunate in that it does not track the language OFCCP uses on the AAP “certification” forms it has created within the AAP-Verification Initiative or the “certification” language the U.S. Government Services Administration (“GSA”) has used for many years in its SAM (System for Award Management) (federal contract (not including subcontracts) and federal grant bid and award software.)
You may wish to also consult pages 16 to 18, inclusive (“AAP Certification”) of its User Guide (linked above) to see OFCCP’s screen shots of its coming required certifications.
The first certification requires contractors and subcontractors to select one of three proffered statements describing the then current status of the entity’s AAP development and maintenance and then click a box so certifying. If the certification initiative indeed comes to fruition, the inclusion of covered federal Government subcontractors in the certification “requirement” will, by the way, create the first-ever database of subcontractors AND will be the first-ever AAP completion certifications the federal government has asked covered federal Government subcontractors to make (since subcontractors operate outside the GSA SAM federal contract and grant bid system, described more fully below). Currently and historically, the federal government and OFCCP have not had a comprehensive or reliable database of covered federal Government “subcontractors.” If subcontractors choose to comply with OFCCP’s AAP Certification Initiative, they will build that first-ever such database, certification-by-certification…a process which will also reveal, for the first-time in history, which companies are “covered federal Government subcontractors.” File this under “shooting oneself with one’s own gun.”
WARNING: Companies and institutions need to be very careful, however, before creating admissions against interest that they are federal “subcontractors.” This is a highly litigated definition with no fewer than seven major case law decisions which define it and have dramatically limited it in the last three decades. Unlike OFCCP’s often overly-expansive explanations of what a “subcontractor” is in its view, federal court decisions and USDOL’s Office of the Solicitor agree that only those subcontracts for goods or services which are “legally” necessary (repeat: legally necessary) to a prime contract or some other covered federal Government subcontract are federal “Government” “subcontracts” subjecting those contracts to OFCCP’s jurisdiction. In other words, if there is no legal requirement operating upon the at-issue prime contract (or operating upon a covered federal Government subcontract) which requires the at-issue subcontractor to perform that task for the prime (or for the covered federal Government subcontractor), the company is merely a “subcontractor,” but not a “covered” federal “Government subcontractor” subject to OFCCP’s jurisdiction and Rules. (In other words, a company supplying workers compensation insurance to a prime federal contractor, for example, is a covered federal Government “subcontractor” because the prime federal contracts require compliance with all state laws and state law, in turn, requires employers to have workers compensation insurance. So, an insurance company’s contract with the prime federal contractor to supply workers compensation insurance is “legally necessary” to the government contractor’s performance of its prime federal contract because the law requires that prime contractor to enter into a workers compensation insurance subcontract.)
Now, back to OFCCP’s first certification. To truly understand this first certification requirement OFCCP hopes to compel, one must first understand and distinguish, to avoid confusion, the very different and separate SAM certification with which bidders on federal prime contracts long ago became familiar when bidding for a contract. It is from the SAM certifications which OFCCP drew inspiration for its first certification announced last Tuesday. Unfortunately, in pursuit of its certification authority, OFCCP was unable to persuade GSA to cooperate with OFCCP and was unable to persuade GSA to provide its certification database to OFCCP. Accordingly, OFCCP decided, and OMB has now approved, OFCCP’s decision to create within OFCCP’s AAP-VI portal a more exacting (and much broader) certification from federal contractors than the existing GSA SAM certification.
But, let’s slow down for a moment to review what AAP certifications federal government contract (and grant) bidders already make when entering a federal contract (or grant) bid. Federal contractors know well the venerable procurement portal known as SAM. SAM is the computer system GSA manages and uses to “register” all individuals and companies which wish to enter into contract with one or more federal agencies of the United States government. SAM is the enormous portal through which almost all federal government contract and grant bids and awards pass. (By the way: another great federal acronym for GSA. SAM. Uncle Sam. Federal Government contracting. Get it?)
SAM has had for many years a “Questions and Declarations Statement” section embedded in every federal contract bid form. The SAM bidding software requires the bidder to “certify” (not “verify”) [currently at Question 23 of the SAM Questions and Declarations section] as true one of the following three statements (abbreviated here for brevity’s sake) about the status of its AAPs by declaring that the bidding entity has:
- “developed and has on file” AAPs “required by Secretary of Labor regulations” at each establishment, as applicable; or
- no AAPs when it should have them in place; or
- just became a covered federal Government contractor within the last 120 days and is thus exempt from just yet developing AAPs (for the moment, per 41 CFR Section 60-2.1(c)).
Inspired by the three possible certification statements in SAM, OFCCP mimicked, but did not copy them verbatim for use in its AAP-VI software certification initiative. Rather, OFCCP claims it will require a covered federal Government contractor/subcontractor to pick and certify one of the following three statements OFCCP will present in its AAP-VI software portal:
- “It has developed and maintained affirmative action programs at each establishment, as applicable, and/or for each functional or business unit. See41 CFR Chapter 60.” [This is a good answer from OFCCP’s perspective.]
- “It 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.” [This is a bad answer from OFCCP’s perspective.]
- “It 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.” [This is a good answer from OFCCP’s perspective, for the moment…until AAPs are due to be developed and maintained at and after the 120-day mark after securing one’s covered federal Government contract/subcontract]
Note the verbs of the Declaration OFCCP asks covered federal Government contractors to make: “developed and maintained.” By the way, that is language right out of 41 CFR Section 60-2.1 “Who must develop affirmative action programs” and 41 CFR Section 60-1.12 (b). While these words are undefined in OFCCP’s submission to OMB, presumably OFCCP will argue that “developed” means pursuant to OFCCP’s Rules given the reference to 41 CFR Section 60. Similarly, OFCCP will likely argue that the word “maintained” means that the covered entity must keep its AAPs in its possession for the regulatorily required length of time per 41 CFR Section 60-1.12 (OFCCP’s Recordkeeping Rules).
By the way, Question 22 on the SAM “Questions and Declarations Statement” also asks federal contract bidders to “certify” (not “verify”) that the bidder has “filed (emphasis added) all required” EEO compliance reports [Editor’s Note: not “developed” or “maintained” them: simply “filed” them] pursuant to 52. FAR.222.25 “Affirmative Action Compliance.” This “FAR” reference is to that portion of the Federal Acquisition Regulations which also requires the “offeror” (i.e., the bidder on the federal government contract) to “represent” that it either “has developed and has on file,” or has NOT “developed and does not have on file” at each establishment, AAPs “required by the rules and regulations of the Secretary of Labor (41 CFR 60-1 and 60-2).” Alternatively, the offeror may represent that it has not previously had contracts “subject to the written affirmative action program requirement of the rules and regulations of the Secretary of Labor.” It is really SAM Question 22 that historically has driven the certification of AAPs the contractor has “developed” and maintains in its system of records.
The two 41 CFR citations (60-1 and 60-2) which the SAM representation (above) references should be well familiar to OFCCP practitioners as incorporating the so-called “EEO Clauses” (to Executive Order 11246) at 41 CFR Section 60-1 (including the duty at 41 CFR Section 60-1.7(c) to file EEO-1 Reports. Hmmm. I wonder why OFCCP felt obliged to write a Rule compelling covered federal Government contractor to file EEO-1 reports but does not think it needs to write a Rule for the electronic filing of AAPs with OFCCP or to annually certify several pieces of information with OFCCP?)
In turn, 41 CFR Section 60-2, requires covered federal Government contractors to develop Affirmative Action Plans for Minorites and Women, specifies the contents of those AAPs and requires contractors to provide OFCCP, upon request in audits, with the documentation underlying the various calculations the contractor develops in the various analyses called for in the AAP for Minorites and Women. Nowhere do OFCCP’s existing Rules require contractors to certify to OFCCP that they have prepared AAPs pursuant to OFCCP’s requirements at 41 CFR Section 60-2, whether during an audit or otherwise.
To mechanically accomplish this certification, by the way, OFCCP has set up in its AAP-VI software a “Declarations and Certification tab” setting forth the three possible statements about the status of the contractor’s AAP development and maintenance…much like the bidder certification architecture in SAM. By the way, OFCCP has stated to OMB that it will offer to share its eventual certifications database with GSA. Obviously, OFCCP wants GSA to compare the bidder’s statements to GSA at point of bid with the contactor’s / subcontractor’s annual statements to OFCCP. And, OFCCP hopes GSA will, upon reflection, agree to reciprocate by sharing its certification information back to OFCCP.
The second new certification OFCCP is seeking to unveil is a check-box certification that the covered entity has “developed and maintained” required AAPs for each and every AAP establishment within the covered federal Government contracting entity. OFCCP envisions an annual certification on a date certain for all of a contractor’s AAPs. OFCCP has not yet specified that date, and of course, must do so, at any rate as it has done for the EEO-1 filing and for AAP submissions to the agency, via Rulemaking to make its “certification requirement” legally enforceable. See pages 16 & 17 of OFCCP’s User Guide to see a screen shot of OFCCP’s coming “establishment certification” format. You will also have to read OFCCP’s Supplemental Statement A to obtain OFCCP’s discussion of its thinking favoring an annual simultaneous filing date for all AAP establishments certifications.
OFCCP intends to have contractors and subcontractors register into the AAP-VI platform, create an account for the company and create a separate page for each AAP establishment within the contractor’s company (or companies) which is a covered federal Government contractor or subcontractor. If a company/institution has 100 AAP establishments, for example, OFCCP will thus want the company/institution to create 100 AAP establishment pages, one for each establishment. After creating its AAP establishment pages, OFCCP expects the filing entity to certify, via a checkbox, that it has developed AAPs at each establishment, by going from one establishment page to the next establishment page and checking a box on each page declaring that the filing entity is compliant with OFCCP’s Rules in each AAP establishment governing the development of applicable AAPs.
SURPRISE! SURPRISE! SURPRISE! But OFCCP has included a surprise third certification obtaining the filing entity’s certification that it understands that it may NOT alter or update any active AAP FOLLOWING certification that the contractor has developed it in conformity with OFCCP’s Rules of AAP construction and has maintained all of its active AAPs. This attempt to “tie-the-contractor’s hands” from freely and unilaterally altering and/or correcting its AAPs when it chooses to do so, just like any other corporate document, throws a jab at those unknown and unnamed AAP vendors rumored to prepare only, what are oftentimes called, “skinny AAPs” or “boilerplate AAPs”). “Skinny AAPs”/” boilerplate AAPs) are those not sufficiently fully baked to count as a “reasonable AAP submission” as OFCCP defines that concept in its Federal Contract Compliance Manual. Perhaps the AAP is “skinny” because it is missing major component parts. However, it is more likely that it is “skinny” or “boilerplate” because it is not customized to the AAP establishment in question but rather contains only rote language and analyses created for one lead AAP and then duplicated uncritically and tattooed into all of a contractor’s AAPs across the country regardless of geographic location or the work of the contractor’s various offices and plants.
It is rumored that some AAP vendors develop these skinny/boilerplate AAPs and then trade them out for an upgraded version once the contractor/subcontractor receives notice of a coming audit by way of OFCCP’s periodic CSAL notices. OFCCP has complained for years that it receives AAPs which it believes were altered, often in significant ways, in the days immediately before the contractor or subcontractor placed its AAPs on file with OFCCP for use in an announced OFCCP audit. OFCCP’s belief has been that the sudden major changes to the AAP were accomplished to render them suddenly compliant, but only because OFCCP forced an audit and not because the contractor either discovered honest errors in the HR data contained in the contractor’s/subcontractor’s AAPs and corrected them, or updated the AAPs with newly available data. OFCCP’s concern about this practice has been that it wants to create a “level playing field” among government contractors. Specifically, OFCCP does not want to disincentivize compliance by allowing some scofflaw contractors to get away with decreasing their compliance costs by shrinking their OFCCP compliance duties while other responsible contractors incur more substantial costs to prepare full-fledged and compliant AAPs per OFCCP’s Rules. And, because OFCCP typically annually audits far less than 2% of the covered federal Government contractor universe, the failure of OFCCP to “tie-the-hands” of federal contractors once they certify their AAPs, would allow a lot of “skinny” or missing AAPs to remain so…absent OFCCP’s SURPRISE contractor hand ties.
Specifically, the SURPRISE is that OFCCP has added to its certification of each AAP establishment that the contractor or subcontractor “will not be able to edit my “affirmative Action Plan after I click the submit button.” (emphasis added) This “hands tied” language is unique to OFCCP’s form of AAP certification and does not currently appear in SAM.
The Specific Language of the OFCCP Declaration to be Made in AAP-VI (containing the SURPRISE language): OFCCP intends to have the contractor, subcontractor and/or grantee Declarant “[a]ffirm that the information you are submitting is true and accurate by selecting the checkbox for the Declaration Statement.” And, here is OFCCP’s Declaration Statement:
“I certify that the information that has been provided as part of our Affirmative Action Plan (AAP) certification is true and correct to the best of my knowledge. I also understand that any attempt to refuse to submit an AAP certification, alteration or falsification of required records or information and any substantial or material violation may result in the institution of administrative or judicial enforcement proceedings…. I also understand that I will not be able to edit my Affirmative Action Plan after I click the submit button.” (emphasis added)
See page 17 of OFCCP’s User Guide (Section 5.1) containing a fuzzy screen shot depicting “Step 1 of 2” of the AAP certification process and specifically the “SAM Questions and Declaration Statement.”
Now, many Government contractors and subcontractors can relax.
|There is no OFCCP proposal on the table to collect all AAPs from all covered federal Government contractors / subcontractors and have them deliver those AAPs to OFCCP’s glutenous AAP portal.