[author: Dylan Tomsey]
An OFCCP compliance evaluation is a process in which a federal contractor or subcontractor’s affirmative action program is reviewed for regulatory compliance with the affirmative action and nondiscrimination provisions of their contracts. The Office of Federal Contract Compliance Programs (OFCCP) conducts these audits across several phases, wherein an Investigator from OFCCP will review submitted information for accuracy, completeness, and compliance. In this blog, DCI seeks to outline each of these phases so that federal contractors may have a full understanding of the process to aid in preparing for a potential audit.
Corporate Scheduling Announcement List (CSAL)
Federal contractors are selected for an audit based on an administratively neutral selection process. In other words, the process is not necessarily random. However, specific contractors cannot be targeted. There are parameters set for each scheduling list, such as employee headcount at an establishment, start and end date for federal contracts held by the company, industry, and more. Contractors that have been selected for a particular audit list are published in OFCCP’s Corporate Scheduling Announcement List (CSAL). Upon publication, listed contractors may receive their scheduling letter at any moment, the timing of which is unpredictable. Historically, OFCCP offices waited at least 45 days before sending scheduling letters, but recent CSALs have seen letters go out within two weeks.
Receipt of Scheduling Letter
An audit officially begins when OFCCP sends the Office of Management and Budget (OMB) approved scheduling letter and itemized listing OFCCP guidance. Contractors should receive this letter via email with a read receipt requested.
The scheduling letter serves two main purposes:
- To notify contractors of the start of their audit
- To outline the items which must be submitted as part of the desk audit
Desk Audit
Once all materials from the itemized listing have been compiled and submitted, the desk audit begins. At this step, the Investigator examines these materials at their designated field office. At any point during this process, the Investigator may contact contractors to request additional materials, provide follow-up questions, or to offer technical assistance.
The desk audit consists entirely of the Investigator reviewing each item submitted by a contractor. They will seek to:
- Understand the basic structure of the contractor’s organization
- Evaluate Affirmative Action Plans (AAPs) for relevant data and narratives
- Examine company policies and procedures for regulatory compliance
- Identify progress or lack thereof in meeting goals, including possible development of new programs to improve opportunities for minority and women job seekers and/or employees
- Identify possible indicators of discriminatory decision-making in hiring, promotions, terminations, compensation, and other opportunities
At the end of the Desk Audit, the Investigator will notify the contractor in writing of any identified disparities that could warrant additional requests for information or a possible onsite review.
Requests for Information (RFI)
During or after the desk audit, OFCCP may issue one or more RFIs. This entails the Investigator requesting additional materials, data, or other supporting information to further supplement materials provided in the desk audit submission. OFCCP may also request virtual interviews of employees, separate from an onsite review. When requesting data beyond the itemized listing, the Investigator must include the basis for the request, reasonably tailor it to the area(s) of concern, and allow for a reasonable time to respond.
Onsite Review
Following the completion of the desk audit, the Investigator may pursue an onsite if there are potential problem areas identified that cannot be fully examined at the desk audit or the desk audit reveals indicators of discrimination. At an onsite, the Investigator will verify information provided as part of the Desk Audit submission and follow up on any potential areas of concern. The Investigator will coordinate a mutually agreed upon date for the visit and will provide an onsite confirmation letter. This letter may also include an additional Itemized Listing of new materials to be provided either prior to or during the onsite review.
An onsite review will proceed in the following phases:
- Introductory conference with the contractor’s CEO or other designated official
- Comparison of materials submitted in the Desk Audit to actual procedures observed at the contractor's establishment
- Review of personnel, compensation, and other employment data
- Interviews with employees and other company officials
- Review of documentation employment files, self-identification forms, logs of requests for reasonable
At the conclusion of the Onsite Visit, the Investigator will hold an exit conference with the contractor’s designated top official.
Offsite Analysis
If there happens to be information or data beyond the Desk Audit and Onsite Visit to review, the Investigator may conduct an Offsite Analysis of these remaining items. At this juncture, the Investigator may review all information, documents, and other items to being making a final determination as to whether the contractor is in compliance with pertinent regulatory governance at the establishment or in the functional area scheduled for review.
Notice of Findings
At the conclusion of the audit, OFCCP will notify the contractor of any findings related to its evaluation. If no issues are found, the contractor will receive a Notice of Compliance (NOC), which indicates that there are no apparent violations of Executive Order 11246, Section 503, or VEVRAA and closes the audit. If issues are found, the contractor may receive a Pre-Determination Notice (PDN) followed by a Notice of Violation (NOV) if discrimination violations are found, or solely a NOV if only technical, non-financial violations (i.e., record-keeping, outreach and recruitment) are found.
If a PDN and/or NOV are issued and the contractor is unable to rebut the findings, OFCCP will issue a conciliation agreement with terms designed to remedy the violations, including follow-up progress reports. If any of the violations allege discrimination, agreements will include financial penalties and may require the contractor to make job offers to affected applicants, if applicable. If the contractor refuses to enter into a conciliation agreement, OFCCP may escalate the case to seek administrative or judicial enforcement through a decision order (e.g., consent decree). Learn more about OFCCP Compliance Review outcomes here.
Final Points
In the face of a pending OFCCP Compliance Review, it is critical to have an understanding of the process from start to finish in order to ensure full preparation. DCI’s dedicated team of audit experts are here to help every step of the way—consider contacting us to learn more about how we can assist you with your compliance needs and beyond or check out our audit toolkit for access to free resources.
