OFCCP Now Expects PDN Final Rule Publication This Month
While the Fall 2022 Regulatory Agenda had it slated for March 2023, OFCCP’s Spring 2023 Agenda moved to this month its target date to publish its Final Rule on “Pre-Determination Notice and Conciliation Procedures” (RIN: 1250-AA14). Also known as the “PDN Rule” with PDN standing for “Pre-Determination Notice,” this upcoming Rule will “modify certain provisions” in the November 2020 Final “PDN Rule” and make other related changes to the pre-enforcement notice and conciliation process. On March 22, 2022, OFCCP published its NPRM on this item in the Federal Register. Shortly after its publication, John Fox discussed the NPRM in a bonus blog, “OFCCP’s Proposed NPRM Walks Backwards Promising Less Transparency in Audits and Unknown, But Different (to come), Evidentiary Standards in Discrimination Investigations.”
The comment period ended on April 21, 2022, and OMB received twelve comments. We previously reported that OFCCP submitted this Final Rule to the OMB on December 21, 2022. The agency cited 41 CFR §§60-1, -2, -4, -20, -30, -40, -50, -300, & -741 as the regulatory authority for this Rule.
OFCCP pushed back the target date for its NPRM to “Modernize” Supply & Service Contractor Regulations from April to December 2023
This further delay of this proposed NPRM moves back OFCCP’s target publication date another eight months from the Fall 2022 Agenda target date of April 2023. OFCCP now anticipates that its NPRM to modernize the Affirmative Action Programs, recordkeeping, and other Executive Order 11246 requirements for Federal Supply and Service Contractors and Subcontractors (RIN: 1250-AA13), will be published in the Federal Register in December of 2023. The regulations housing these requirements are at 41 CFR §§60-1, -2, -20 & -300 and 41 CFR §§60-300, -741, & -742. In addition, the proposal “will consider modifications in light of Executive Order 13988, Preventing and Combating Discrimination on the Basis of Gender Identity or Sexual Orientation.”
With this long calendar punt, it is very possible that this proposed NPRM will not see the light of day in the first-term Biden Administration. This is because the White House has made it repeatedly clear to the federal Executive Branch agencies it controls that it wants all controversial policy issues floated and finished this year and not in calendar 2024 as the President heads into a very tough re-election bid culminating in the November 2024 Presidential election. This projected OFCCP overhaul of Affirmative Action Plan regulations will necessarily address fundamental issues of great concern to federal contractors. The federal Affirmative Action Plan community can be expected to vigorously and noisily resist OFCCP’s proposals. The louder the noise, the less likely the White House will be to back OFCCP’s proposed changes in an already super-heated and sensitive policy area like “Affirmative Action.” This is especially true in the absence of a political appointee Director managing OFCCP and passionate about the changes s/he will be proposing.
Final “Technical Amendments” to Update VEVRAA & Section 503 Jurisdictional Thresholds & Remove Gender Assumptive Pronouns Now Slated for December 2023
OFCCP’s target date for its rule-making technical corrections to update jurisdictional thresholds for the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) and Section 503 of the Rehabilitation Act is now December 2023 (RIN: 1250-AA16). That is nine months behind the March 2023 target date listed in the Fall 2022 Agenda. The thresholds were adjusted for inflation by the Federal Acquisition Regulation Council, pursuant to section 807 of the Ronald Reagan National Defense Authorization Act, codified at 41 USC §1908, OFCCP explained. The upcoming Rule will also correct OMB control numbers for OFCCP information collection requirements and remove gender-assumptive pronouns. The regulatory citation for this item is 41 CFR §§60-1, 2, 4, 20, 30, 40, 300, 741, & 999.
High-level point: This OFCCP delay is tactical because OFCCP’s Section 503 and VEVRAA jurisdictional thresholds would increase dramatically from the levels the agency was previously forced to adjust upwards by 50% in 2017 (to $15,000 from $10,000 (as to Section 503) and to $150,000 from $100,000 and earlier from $50,000 (as to VEVRAA). So, there is no utility to OFCCP to announce that fewer federal contractors are covered. And note, these are merely “technical” amendments, according to OFCCP, which most agencies can easily process to conclusion in a matter of months, from start to finish.
However, the absence of OFCCP’s publication of the new jurisdictional thresholds does not mean OFCCP’s jurisdictional threshoilds have not already increased. (Indeed, OFCCP has yet to update its VEVRAA Rules to recite the 2017 change in its coverage threshold from $100,000 to $150,000 even though OFCCP nonetheless acknowledges, as it must, that its VEVRAA jurisdictional threshold is in fact (“a” covered contract of) $150,000, or more. PROOF OF THEOREM-COMPARE: OFCCP’s VEVRAA out-of-date Rules at 41 CFR Section 60-300.4(a) (reciting (erroneously) the $100,000 jurisdictional threshold) with that portion of OFCCP’s Website titled Jurisdiction Thresholds and Inflationary Adjustments (acknolwedging that VEVRAA’s actual jurisdictional contract valuation threshold is in fact ”a” covered federal Government contract valued at $150,000, or more).
So, the takeaway is that OFCCP’s Section 503 and VEVRAA Rules have ALREADY increased. It is just that OFCCP has yet to update its Section 503 and VEVRAA Rules to so acknowledge to the public the change which has already occurred, as a matter of law. Those contractors uncertain whether they are signatory to a federal contract with financial value sufficient to provoke OFCCP jurisdictional authority under either or both Section 503’s or VEVRAA’s current jurisdictional thresholds should consult legal counsel (since calculating a fedeal contract’s economic value often itself entails yet another involved legal analysis).
Final OFCCP Rule Rescinding Trump-Era Religious Exemption Rule Completed in March
In March 2023, OFCCP published its Final Rule (RIN: 1250-AA09) to rescind, in its entirety and without replacement, the Trump Administration’s December 8, 2020, Final Rule, “Implementing Legal Requirements Regarding the Equal Opportunity Clause’s Religious Exemption.” The new Final Rule – “Rescission of Implementing Legal Requirements Regarding the Equal Opportunity Clause’s Religious Exemption Rule” – took effect on March 31, 2023. (See our story with all the details here)
June 2024 Is The Now Anticipated Publication Date for OFCCP’s NPRM to Require Contractors to Report their Subcontractors to OFCCP
OFCCP has now pushed this proposed NPRM way back from OFCCP’s previously anticipated March 2023 date in the Fall 2022 Agenda. OFCCP currently has targeted June 2024 as the date to publish its NPRM to be titled “Notification of Supply and Service Subcontract Awards” (RIN: 1250-AA15). This item is now designated a “Long-Term Action.”
The proposal would, OFCCP claims, “add provision(s) to the regulations implementing Executive Order 11246 requiring contractors to provide notice to OFCCP when they award supply and service subcontracts. The notice would include information currently unavailable to OFCCP enabling it to schedule supply and service subcontractors for compliance evaluations.” The regulatory citation listed for this Rule is “Not Yet Determined,” but the legal authority is listed (generally) as Executive Order 11246.This field-long calendar punt points out three things:
- OMB does not believe OFCCP has legal authority to compel federal contractors to reveal to OFCCP the contractor’s “subcontractors.” Accordingly, OMB has sent OFCCP back to the “drawing board” to draft a proper proposal to submit to OMB;
- This is a burdensome proposal OFCCP has survived quite nicely without for over a half century. Accordingly, OMB’s first instinct in such situations lacking new regulatory athority is “What current compliance task do you want to give up so the “burden hours” that task costs contractors may be shifted to this new task”? So, OMB has sent this proposal back to the drawing board for a second reason wholly unrelated to the first push back to OFCCP;
- It is likely this proposal will never see the light of day in a first Biden term since OFCCP would be proposing it in June 2024 only five months before the 2024 Presidential election. Debate of the merits of this proposal would thus be occurring during the final crucial 90-days before the election.
Context Note: Every President running for re-election “brings down the curtain” on federal agency regulatory activity and political controversy on a date certain across all of the Executive Branch of the federal government. That date after which the incumbent President wants the federal agencies to go quiet and not inadvertently inject new political issues into the White House’s re-election strategy always varies with each President and each Presidential race. In “the old days,” it was a good bet that the “curtain down” date was early Spring of election year. This White House, however, knows it is facing a very tough political battle and has already issued orders to bring the curtain down at the federal agencies in calendar 2023.
As a result, it looks to us as though OMB just consigned this OFCCP proposal to improbable status during first-term Biden. OFCCP’s proposal will most likely just sit there and be left unattended. If the President wins re-election, OFCCP, like all federal agencies, will then dust off its regulatory agenda and see if it can muscle it through in the first 100 days of the new Administration when the new President is at the zenith of his political power. If Republicans win the White House effective January 20, 2025, or even just hold the House and win the Senate back, OFCCP’s following regulatory agenda will look quite different.