As we reported last month, OFCCP has taken steps to move forward with most of the sweeping changes the agency proposed in late 2022 to the Supply & Service Scheduling Letter and Itemized Listing (Scheduling Letter). The Scheduling Letter formally initiates a review of federal contractors selected for a compliance audit by the agency and identifies the items that a federal contractor must initially produce to OFCCP during the audit.
The agency released an updated Scheduling Letter proposal and a Supporting Statement on April 19, providing the public with 30 days to provide further comment. Berkshire has submitted comments, which are available to review.
Our comments reiterated our concerns that many of the agency’s changes seek items that are not currently required to be included in an annual AAP under OFCCP’s existing regulations. We also provided feedback on OFCCP’s burden estimates, which we believe significantly underestimate how much time it will take contractors to respond to the new requests. Finally, we reiterated our concerns that while the proposed changes add new burdens to contractors under audit, the OFCCP has not provided additional time to respond, placing an undue burden on contractors.
The Office of Management & Budget will now review all comments and decide whether to approve the information collection request under the Paperwork Reduction Act. There is no specific timetable for OMB’s review – sometimes it is quick and sometimes it is months and months.
Until the new letter is approved, OMB will authorize OFCCP to use the old Scheduling Letter, which technically expired in April 2023, by authorizing 30-day extensions.
Contractors, especially those on a current scheduling list, should review the OFCCP’s latest proposal and prepare to submit much more detailed information in supply & service compliance reviews.
Does this mean OFCCP can’t schedule new audits until the Scheduling Letter proposal is finalized?
Until the changes are finalized, supply & service contractors on current audit lists will continue to receive the Scheduling Letter used by the OFCCP in the past. Although the current Scheduling Letter was set to expire on April 30, 2023, the Office of Management and Budget is expected to renew OFCCP’s use of the current Scheduling Letter for at least 30 days while the new Scheduling Letter proposal is being finalized. Typically, OMB authorizes an agency’s continued use of an existing data collection for successive 30-day periods while any new proposals are reviewed and finalized.
How has OFCCP’s proposal changed?
Although the OFCCP scaled back some parts of its proposal in response to public comments, the revised Scheduling Letter proposal is still significant and far-reaching. Contractors should review the proposal carefully, especially if on a current scheduling list and still waiting for OFCCP to start your audit.
In a bit of good news for contractors, OFCCP removed its proposals to collect significantly more data about promotion and termination activity, including information about whether promotions were competitive or non-competitive, data regarding the previous and current supervisor, and previous and current compensation for each promotion, and termination data separated by reason.
However, the revised Scheduling Letter proposal retains all of the agency’s other far-reaching proposals with little modification, including requests for the following new data:
All AAPs in the city and state selected for review for contractors with campus-like settings
More information about the placement goal setting process, including evidence that the most current external availability data was used, the reasonable recruitment areas selected, and the pool of promotable employees.
A list or other documentation of “all action-oriented programs designed to correct any problem areas identified” in a contractor’s EO 11246 AAP
More information about a contractor’s disability utilization analysis, veteran hiring benchmark and written assessment of the effectiveness of their outreach efforts for individuals with disabilities and protected veterans
Integrated Postsecondary Education Stata Systems (IPEDS) data from academic institutions
“[D]ocumentation of policies and practices regarding all employment recruiting, screening, and hiring mechanisms, including the use of artificial intelligence, algorithms, automated systems or other technology-based selection procedures.”
Two compensation snapshots, copies of compensation policies and pay factor information.
Consistent with OFCCP’s recent Directive 2022-01 Revision 1, “documentation that the contractor has satisfied its obligation to evaluate its “compensation system(s) to determine whether there are gender-, race-, or ethnicity-based disparities.”
Copies of EEO employment policies, including typical policies such as a company’s antiharassment policies, but also “employment agreements, such as arbitration agreements, that impact employees’ equal opportunity rights and complaint processes”
More detailed data about a contractor’s review of its personnel processes
Despite significantly expanding the number of items contractors will be required to provide in response to a Scheduling Letter, OFCCP declined requests to provide contractors with more than 30 days to submit this information in an audit. The OFCCP also made modest changes to its burden estimates in response to public comment. Rejecting claims the agency’s initial burden estimates were far too low, OFCCP estimates contractor burden to respond to the revised Scheduling Letter at 37.5 hours (down from 39 hours in the original proposal).
What to do next?
Carefully review the OFCCP’s revised proposal.
Begin preparing now for how your organization will respond to a Scheduling Letter with these sweeping changes.
Berkshire will be closely monitoring developments regarding the agency’s proposed changes to its audit process and will keep you updated.