Hunton Employment & Labor Perspectives

The Office of Federal Contract Compliance Programs (OFCCP),  recently signaled that it may conduct more evaluations of multi-facility employers.  Its recently revised standard Corporate Scheduling Announcement Letter (CSAL) describes new and different practices that will accompany compliance audits of federal contractors.

Beginning in its fiscal year 2010, which began October 1, 2009, “there is no limit on the number of compliance evaluations that OFCCP may schedule or conduct per contractor during a fiscal year.”   This is a significant change from past practice, in which the agency limited the number of compliance evaluations identified each scheduling cycle to 25 per parent company.

The CSAL is a courtesy notification, given to a company’s chief executive officer, that two or more of the company’s facilities are to be scheduled for a compliance evaluation (or “audit”) during the scheduling cycle.  The list of contractors to be audited is generated by the Federal Contractor Selection System (FCSS).  Receipt of a CSAL does not mean that an audit has been initiated, but instead that one will be scheduled in the future.  Once an audit is scheduled, the OFCCP sends out a separate Scheduling Letter, which provides only 30 days for the contractor to provide all requested information and materials.

The CSAL may not necessarily list all the establishments that are to be scheduled for an audit.  Examples of those that may be audited without being listed in a CSAL include, for example:  establishments that are not clearly associated with the parent organization through EEO-1 Reports (as in the case of recent mergers); establishments selected for review through means other than the FCSS; an establishment named in a complaint; an establishment subject to monitoring of a conciliation agreement; an establishment recently awarded a federal contract; and establishments selected for auditing as part of the OFCCP’s Corporate Management Compliance Evaluation (CMCE) or Functional Affirmative Action Plan (FAAP) initiatives.

This change in policy will affect large employers with more than 25 facilities subject to OFCCP jurisdiction.  Such companies will likely have to take additional steps to prepare for and defend audits, which typically include statistical analysis and detailed review of affirmative action plans.  If the OFCCP finds statistically significant disparities at one facility, it will not be limited in the number of investigations of other facilities it may pursue in an attempt to identify patterns of discrimination.  In light of this possibility, federal contractors should consider conducting privileged statistical reviews at facilities subject to OFCCP jurisdiction as early as possible, particularly on receipt of a CSAL.