Tuesday, April 18, 2023: OFCCP’s Modified Proposal to Revise Scheduling Letter & Itemized Listing Revealed Via Newly Posted Documents
Explanatory Documents Not Posted Until Day After Federal Register Notice
Changes to Initial Proposal Minimal
Estimated Burden Hours Reduced: Still Far Too Low Relative To Reality
After considering public comments on its initial proposal, OFCCP now reports it intends to proceed with its proposed changes – with some (small) modification – to its proposal on November 21, 2022, to greatly expand the agency’s audit Scheduling Letter and demand for documents (i.e. Itemized Listing) to Supply & Service federal contractors and subcontractors. According to a new 49-page Supporting Statement – dated April 10, 2023 – but not posted for public viewing until Tuesday, April 18, “OFCCP has modified the requested information on contractors’ promotions and has updated the burden estimates.” In addition, the agency “made nonsubstantive language changes to Item 21 and Item 24 in the scheduling letter for clarity. OFCCP has also renumbered some items for consistency with the current scheduling letter.” The now modified proposed Scheduling Letter and Itemized Listing are available here. (See below for a detailed discussion of the changes.)
Significantly, OFCCP is NOT yet implementing its proposed audit Scheduling Letter and Itemized Listing. Rather, the agency simply tweaked its November 2022 proposal, has published the newly revised audit Scheduling Letter and Itemized Listing and now seeks comments on the agency’s new proposal. Public comments on the newly modified proposal are due on or before May 17, 2023, and may be submitted here or here.
Comment Again?
While the law is bit uncertain whether those companies and institutions that previously commented in response to OFCCP’s November 2022 proposed audit Scheduling Letter MUST file fresh comments, contractors are best advised to assume the worst case. Contractor might either send in a letter in response to OFCCP’s new proposals or should at least put a fresh letter on file with OFCCP and OMB stating that the Commenter reaffirms its earlier-filed Comments. And, it will be especially important for contractors to make clear in their new comments which portions of their old comments remain viable following OFCCP’s changes to its first proposal. Remember: you are building a trial record for a reviewing court: if the court is unclear whether OFCCP addressed your prior comment with the agency’s new changes, the Court will be unable to credit and rely upon your comment. You need to create a record of which (or all) of your comments continue to survive despite OFCCP’s changes to its initial proposals. Uncertainty and ambiguity works to your disadvantage: make it clear which of your comments you want a reviewing court to consider despite OFCCP’s changes.
OFCCP submitted both its initial and modified proposals in conjunction with its request for the White House Office of Management and Budget’s (“OMB”) approval to continue its information collection requirements (“ICRs”) for Supply and Service Contractors pursuant to the federal Paperwork Reduction Act (“PDA”). OMB’s current approval for these ICRs expires on April 30, 2023.
However, it is now apparent that OMB will not be able to address OFCCP’s new proposal prior to May 18 after the public has had an opportunity to file comments with OMB about this new proposal. The May 17, 2023 date is over two weeks AFTER OMB’s approval of the current audit Scheduling Letter and Itemized Listing expires on April 30. In cases like this where an existing OMB data collection approval times out before OMB may either renew the existing collection request or approve a new one, OMB typically approves extensions in 30-day segments. That is what will happen here: OMB will undoubtedly extend the current ICR approving OFCCP’s use of its current audit Scheduling Letter and Itemized Listing for another 30 days…from April 30, 2023, to and through May 30, 2023.
What Exactly Changed in OFCCP’s Modified Proposal?
Like its notice in November, OFCCP’s April 17 Federal Register notice itself contained no new substantive information other than the reference to the November notice and that there would be a new 30-day comment period. The substance of the modified proposal is disclosed via a new Supporting Statement and the modified proposed Scheduling Letter and Itemized Listing documents.
The differences between the initial proposal and the newly modified proposal are as follows:
Electronic submission. OFCCP is sticking to the provision in its initial proposal that would require contractors to submit their responses in electronic form to OFCCP audit Scheduling Letters and to its ATTACHED Itemized Listing. Noting that one commenter expressed concern regarding confidentiality, OFCCP stated that it “has several safeguards in place to ensure that its email system is secure, including ensuring that all employees access the network using a Personal Identity Verification card.” Contractors may also submit data and documents to OFCCP using the Department’s secure file-sharing system known as Kiteworks. [See pages 13-14 of the April Supporting Statement]
OFCCP walked back a few of its proposed information and data demands. The agency made a few modifications to the initial notice’s provisions regarding the Itemized Listing information/data/document demands.
First, in November, OFCCP proposed adding a new item (numbered as a new Item 7 in the Itemized Listing) requesting a list identifying all action-oriented programs designed to correct any problem areas identified pursuant to 41 CFR § 60-2.17(b). OFCCP modified the proposal to instead require contractors to provide the list OR documents demonstrating the “development and execution” of action-oriented programs. [April Supporting Statement, pages 17-18]
Second, under the modified proposal (at Itemized Listing Item 20(c) in the November Notice/Renumbered to Item 18(c) in the April Notice), contractors will not be required to identify whether a promotion is “competitive” or “non-competitive.” OFCCP also removed the requirement that for each promotion, contractors identify the previous supervisor, current supervisor, previous compensation, current compensation, department, job group, and job title from which and to which individuals were promoted. [April Supporting Statement, pages 25-26]
Third, regarding terminations, OFCCP removed the proposed requirement (at Itemized Listing Item 20(d) in the November Notice/Renumbered to Item 18(d) in the April notice) that contractors provide the reason for each termination. [April Supporting Statement, pages 26-27]
Burden hours reduced. While a legion of stakeholder comments requested OFCCP reevaluate its initial estimate of 39 hours to respond to the proposed Scheduling Letter and Itemized Listing, the agency instead doubled down and reduced its burden estimate from 39 hours to only 37.5. The rationale cited by OFCCP for this reduction was the changes to a few of the initial proposals’ information/data/document demands. Moreover, OFCCP wrote:
“The agency declines to make additional changes to the time burden estimates for contractors. OFCCP acknowledges that the precise amount of time each contractor will take to develop and maintain AAPs and respond to the scheduling letter is difficult to estimate, as contractors vary in terms of resources and procedures. To estimate the burden, the agency uses weighted averages to account for contractors of different sizes. The agency provides different burden estimates for contractors with 50 – 100 employees, 101 – 150 employees, 151 – 500 employees, and 501 or more employees and then uses a weighted average across all four groups. The burden estimates detailed below are based on these averages (see burden calculations below).”
[April Supporting Statement, page 40]
How We Got Here
We reported last week that OFCCP published a new notice on Monday, April 17 in the Federal Register referencing its earlier November 2022 notice of its initial proposal. However, it was not until the following day (Tuesday) that a new Supporting Statement and the modified proposed Scheduling Letter and Itemized Listing – both submitted on April 10, 2023 – popped up on the White House Office of Management and Budget’s (“OMB”) RegInfo.gov website.
As we previously reported in detail the day OFCCP published the November notice, OFCCP’s initial proposal included significant changes to the agency’s Scheduling Letter and Itemized Listing – including five new items (see the November 2022 version of the proposed revised Scheduling Letter and Itemized Listing here). However, the Federal Register notice itself provided no substantive details on OFCCP’s proposed changes, or why the agency was now changing its November 2022 proposal.
Rather, OFCCP only revealed the substantive details of its new proposal in its 31-page Supporting Statement. The public comment period for the November 21, 2022, notice closed on Tuesday, January 20, 2023. DirectEmployers Association filed extensive and detailed comments on behalf of its member companies. Forty-seven other entities also filed comments. We discussed those comments in our story here.