Wednesday, September 21, 2022: Backing Off From Several Proposed Changes, OFCCP Published FAAP Directive Revision #3 Hoping to Spawn More FAAPs as Contractor Community Increasingly Shuns Them
Agency will not require proposed management change notifications or Portal submission, and will not change termination notice time period
OFCCP issued a third revision to its Functional Affirmative Action Programs (FAAP) Directive (Directive 2013-01, Revision 3). The Office of Management and Budget (OMB) has now approved use of the Directive, from a paperwork perspective, through September 25, 2025.
This revision made some minor changes to the modifications OFCCP had proposed in February 2022 to OMB to policies and procedures for interested contractors to request, modify, and renew FAAP agreements. Notably, OFCCP tabled its earlier proposed requirement that would have required contractors to submit FAAPs via its AAP submission Portal. (The rationale, discussed, below, is interesting). It also nixed its proposal to modify certain notice requirements regarding management changes (that Soul Cherradi, at DirectEmployers’ Member company BP Petroleum had championed on behalf of FAAP contractors) as well as the agency’s proposal to reduce the termination notice period.
According to an email sent to stakeholders the day after the OFCCP published the revised Directive:
…the revisions provide “clarification regarding procedural requirements, in addition to minor language and formatting changes.”
Any contractor that enters into a FAAP agreement or modifies or renews a current agreement on or after the Directive’s September 21, 2022, effective date is subject to the revised Directive.
Number of FAAPS Continues to Decline, Precipitously: Relevance of Program Now in Question
“OFCCP currently has FAAP agreements with 86 contractors that cover 2,509 functional units,” the agency reported on page 15 of a 21-page Supporting Statement the agency provided to the Office of Management and Budget on September 7, 2022 (addressing collection hour burdens). The agency added, “OFCCP estimates that there will be approximately five requests for new FAAP agreements each year, an estimate that is based on the number of agreements requested in the previous three years.” However, contractors with FAAPs continue to NOT renew at a higher rate than contractors sign-up for new FAAP Agreements. The number of FAAP agreements has dropped by almost two-thirds since the approximately 225 agreements the Obama and Trump Administrations reported.
“The number of contractors who request a FAAP is a small portion of OFCCP’s contractor universe,” the agency also noted (on page 8 of its Supporting Statement, addressing small business impact). That small portion is in fact far less than .5%=½ of 1% of the 25,000 covered federal Government contractors OFCCP reports exist, even apart from an unknown and uncounted number of covered federal Government “subcontractors” subject to one or more of OFCCP’s Rules.
How We Got Here
As we reported in February of this year, OFCCP published a Federal Register Notice seeking comments on its proposal to renew – with changes – the “Information Collection Requirement” (“ICR”) for supply and service contractors seeking approval to develop FAAPs. The comment period on that proposal ended on April 11, 2022. OFCCP then read the public comments and distilled its conclusions into a further revised proposal to OMB it delivered on May 27, 2022. The previous information collection approval (Directive 2013-01 Revision 2) then expired on June 30, 2022, without OMB response to OFCCP’s May 27, 2022 request for renewal of its ICR authority. OMB then, on September 21, 2022 (last Wednesday)—after an almost 4-month delay)—finally approved OFCCP’s May 27, 2002, revised proposal. OFCCP then immediately published its Revised FAAP Directive #3, lying ready and waiting in its launch tube, the same day (last Wednesday, September 21, 2022).
OFCCP’s February Notice was not seeking to change an OFCCP Rule pursuant to the Administrative Procedure Act. Rather, OFCCP was merely seeking public comment in support of an “ICR” affecting 10 or more members of the public for which OFCCP was seeking OMB’s approval pursuant to the Paperwork Reduction Act. Notices for Public Rulemakings (“NPRMs”) published in the Federal Register seek the legal authority to change substantive agency Rules (aka “regulations” in informal “street talk”) having the binding force and effect of law. Agency “Notices” of an Information Collection Requirement–like OFCCP’s February 2022 Notice–seek authority only from OMB pursuant to its authority to enforce the Paperwork Reduction Act against federal agencies when they seek to impose an information collection burden on 10 or more members of the regulated community.
OFCCP Did Listen to Some Contractor Commenters to Bolster Its Flagging FAAP Program
OFCCP’s September 7, 2022, Supporting Statement to OMB addressed the six comments the agency had received in response to its February proposed revisions to FAAP Directive #2. “After carefully considering these comments, OFCCP has decided to proceed with the proposed information collection, with some modifications,” the statement said. “Based on the public comments, OFCCP will modify the requirement to notify the agency of primary corporate contact changes and will not require submission of FAAP documents via the Contractor Portal.”
Agency Tabled Proposed FAAP Portal Submission Requirements
As to the Contractor Portal, OFCCP acknowledged (Supporting Statement, page 10) that contractors may need additional time to become familiar with the Portal before requiring FAAP document submissions via this method. Therefore, OFCCP will allow contractors to continue to submit the requests and documentation to the FAAP email address at OFCCP_FAAP-UNIT@dol.gov. “As contractors become more familiar with the Contractor Portal, OFCCP may revisit this issue in future information collection requests,” the agency wrote.
EDITOR’s NOTE: This is where OFCCP Rulemaking would have been helpful to the agency, although OFCCP historically and currently loathes formal Rulemaking given the controversy in the contractor community which inevitably surrounds any proposed change. Moreover, many impatient OFCCP Directors just decide to “jamb it through” without formal otherwise required Rulemaking to just “Get it Done” and hope the federal contractor community will just either follow OFCCP’s lead without contest or will just “knuckle under.” OFCCP lacks the legal authority, without Rulemaking pursuant to the Administrative Procedure Act (OMB approval alone is not enough: the agency must have both a substantive Rule in place AND OMB approval to do so) to require contractors to submit data electronically and/or digitally. OFCCP does not dispute this and has repeatedly so advised OMB that it agrees that the agency needs formal Rulemaking to require electronic and digital filings with the agency.
So, what OFCCP did here is to mirror what it did when it created the Contractor Portal earlier this year: it has offered an alternative method of filing documents with OFCCP other than via its electronic Contractor Portal for those contractors which do not wish to voluntarily agree to submit information via the OFCCP Contractor Portal. One day, OFCCP will publish a Rulemaking requiring electronic and/or digital filings of contractor documents to be delivered to OFCCP.
In the meantime, many contractors fearing that OFCCP lacks sufficient security and data privacy procedures and Rules to properly protect their confidential electronic documents from computer “hacking,” leaks, and disclosure outside of OFCCP pursuant to the FOIA continue to hope that day never comes. And meanwhile, OFCCP continues to orally insist contractors must file all communications with OFCCP in electronic or digital format. The transition to the “Digital Age” is proving difficult for both OFCCP and the federal contractor community.
OFCCP Also Nixed Proposed Modifications to Notice Requirements on Management Changes
In its February 2022 proposal, OFCCP had suggested updating its current definition of the term “modification” as used in FAAP Agreements to require contractors to report changes to any one of the contractor’s management officials covered within a FAAP. A related notification proposal would also have required contractors to identify which functional or business unit was impacted by the change and include the name, address, and email address of the new management official. OFCCP’s February 2022 proposal would have also required that contractors notify the agency within 60 calendar days of the change of a management official.
In its September 7, 2022, Supporting Statement (page 12) to OMB, OFCCP noted that it had received two comments disagreeing with this proposal. Both commenters claimed that OFCCP had no identifiable need for the name, address, and email address of each new corporate management official because the agency has contact information for the contractor representatives managing the FAAP Agreement and affirmative action compliance. Moreover, the commenters noted that managing officials frequently change, and OFCCP’s proposal would therefore make this obligation very time-consuming and burdensome.
After considering these points, OFCCP decided to maintain the requirement to notify the agency within 60 calendar days of a change in only the primary corporate contact. This decision means that contractors will not be required to report on changes to the company’s managing officials. See Sections 5 (“Background”), 7(f) and 9(c) of the newly revised Directive.
Termination Notice Period Remains Unchanged
OFCCP proposed to change – to 30 calendar days – the existing 90-calendar-day period during which either party may terminate the FAAP agreement with written notice. Concurrently, the agency had also proposed to change the current 90 calendar days’ notice – to 30 calendar days – when it denies a request to renew a FAAP. In response to contractor concerns that they need earlier notice of terminations, OFCCP will maintain both of the current 90-day notice periods for terminating a FAAP and to deny renewal.