Affirmative Action for Construction Contractors - Hero Image

Affirmative Action Planning for Construction Contractors

Because the risk of noncompliance includes serious fines and potential loss of future government contracts, construction firms who work with the federal government must understand their affirmative action requirements and take steps to ensure compliance. Though the federal government, through the Office of Federal Contract Compliance Programs (OFCCP), treats construction contractors differently than supply and service contractors, both are required to meet certain affirmative action requirements.  

There are three types of construction contracts subject to OFCCP regulations:  

  • Supply and Services Contracts: Contract paid by a federal agency to the contractor for non-construction services and/or tangible materials (supplies).  

  • Direct Construction Contracts: Contract paid by a federal agency to the contractor for work involved in the construction, rehabilitation, alteration, conversion, extension, demolition or repair of buildings, highways, or other changes or improvements to real property, including facilities providing utility services. The term also includes the supervision, inspection, and other onsite functions incidental to the actual construction. For example, a construction contract awarded by the General Services Administration to build a federal courthouse would constitute a direct federal construction contract.  

  • Federally Assisted Government Contracts: An agreement or modification paid for in whole or in part with funds obtained from the federal government but where the government is not a party to the construction contract. An example of a federally assisted construction contract could be a contract to build highways or bridges funded by federal grants to state Departments of Transportation.  

Contractors who have both Supply and Service contracts and Construction contracts that meet the contract thresholds are required to have both a Supply and Service AAP and a Construction AAP. 

 

 

Who must comply?

Executive Order 11246 applies to federal construction contractors who meet one or more of the following contract thresholds:  

  • A direct federal construction contract or subcontract of over $10,000
  • A federally assisted construction contract or subcontract of over $10,000
  • Two or more federal construction contracts or subcontracts of less than 10,000 that, when added together, total more than $10,000 within any 12-month period or can reasonably be expected to total more than $10,000 during that time
  • A construction contract or subcontract of over $10,000 with a federal non-construction (supply and service) contractor or subcontractor, if the construction contract/subcontract is necessary in whole or in part to the performance of the federal non-construction contract or subcontract
Affirmative Action for Construction Contractors - Who must comply

AAP requirements for Construction Contractors

Federal construction contractors are covered by Executive Order 11246—regardless of the number of employees they have.  

Construction contractors are not required to have a “written annual” affirmative action plan under E.O. 11246, but most show compliance with 16 Affirmative Action Steps and Participation Rates (shown on the right).  

Section 503 and VEVRAA apply solely to direct federal construction contracts. Federally assisted construction contracts are exempt from both Section 503 and VEVRAA.  

More information on these requirements is available on the OFCCP website. 

 

Affirmative Action for Construction Contractors - AAP requirements for Construction Contractors

Audits for Construction Contractors

OFCCP schedules and evaluates construction contractors in compliance reviews (often called audits) based on defined geographic areas. When OFCCP evaluates construction contractors and subcontractors, it looks at all the contractor’s direct federal, federally assisted, and non-federal construction projects. 

As with Supply and Service contractors, OFCCP issues Corporate Scheduling Announcement Lists (CSAL) regularly to notify contractors that they will soon be audited. There is a separate CSAL list for construction contractors and supply and service contractors. Appearing on the CSAL means that your company will receive an official scheduling letter from OFCCP; once you receive that letter, you will have 30 days to respond. This can often be a stressful situation, but Berkshire can help. 

OFCCP offers more information on the scheduling list on its FAQ page. 

Itemized listing

1. Original payroll records for the specified review period

2. Personnel records for the specified review period

3. Documents demonstrating how the company implements each of the specific affirmative action steps  

4. Subcontracts more than $10,000 for federal and federally assisted contracts for the review period

5. EEO Policy statement used by your company

6. Notifications sent to OFCCP of subcontract awards of more than $10,00

7. Records of notices to the company’s subcontractors about their EEO obligations

8. EEO-1 Reports for the last two years 

9. A list of all construction projects (federal, nonfederal and federally assisted) by name and location in the applicable geographic area(s) during the specified review period

10. Communications with unions and community organizations regarding the company's EEO obligations and recruitment efforts to hire women and minorities, qualified individuals with disabilities if the company is subject to Section 503 and protected veterans if the company is subject to VEVRAA

11. Records identifying trade organization affiliations and unions that provide workers for the company’s construction contracts, including a copy of any applicable collective bargaining agreements

12. Written affirmative action programs for individuals with disabilities and protected veterans, if the company is subject to Section 503 and VEVRAA

13. Copies of purchase orders

14. Copies of employment advertisements 

How Berkshire Can Help

Many construction companies have limited resources in their HR department. If you find your team does not have the time or experience to prepare an affirmative action plan, Berkshire can help. With our 40 years of experience in OFCCP compliance, you’ll be in good hands with our consulting team. 

Berkshire can help with:  

  • Documenting compliance with the 16 affirmative action steps and trade participation goals for minorities and women, annually.  
  • Developing written Section 503 and VEVRAA AAP(s), as applicable  
  • Supporting construction contractors in the case of an OFCCP audit. 
Affirmative Action for Construction Contractors - How Berkshire Can Help

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