Equal Employment Opportunity:

Strengthening Oversight Could Improve Federal Contractor Nondiscrimination Compliance

GAO-16-750: Published: Sep 22, 2016. Publicly Released: Sep 22, 2016.

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Cindy S. Brown Barnes
(202) 512-7215


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What GAO Found

Since 2010, most compliance evaluations conducted by the Department of Labor's (DOL) Office of Federal Contract Compliance Programs (OFCCP) of federal supply and service contractors identified no violations; however, the methods used may not focus evaluations on contractors posing the greatest risk. OFCCP relies on compliance evaluations to detect equal employment violations by federal contractors and conducts evaluations for about 2 percent of federal contractor establishments annually. Since 2010, about 78 percent of evaluations found no violations and about 2 percent had discrimination findings (see figure). However, when it selects contractors for evaluations, OFCCP does not use a generalizable sample that would allow for conclusions about the federal contractor population. Therefore, it does not have reasonable assurance that it is focusing its compliance efforts on those contractors with the greatest risk of noncompliance. During evaluations, OFCCP requested and reviewed documents related to contractors' equal employment efforts, including their Affirmative Action Program (AAP), which outlines contractors' compliance efforts. In 2015, close to 85 percent of evaluated contractor establishments did not submit their AAP within 30 days of OFCCP's request and were granted extensions in some cases. This suggests that OFCCP processes do not ensure that all contractors are complying with their obligation to complete and annually update an AAP.

Figure: Findings of Federal Contractor Nondiscrimination Compliance Evaluations From Fiscal Years 2010-2015

Fig HL-5 v05_131357

Since 2012, OFCCP's outreach and compliance assistance activities to assist contractors and other stakeholders, such as protected workers and industry groups, have declined as the agency refocused its activities on enforcement, and some stakeholders said guidance could be clearer. Outreach activities, such as community group presentations and job fair participation, decreased more than 80 percent from 2012 to 2014. Some stakeholders told GAO that workers, applicants, and contractors may benefit from more outreach activities. OFCCP's compliance assistance activities, such as seminars, for contractors—are down 30 percent since 2012. Many contractors told GAO they do not feel comfortable contacting OFCCP for assistance and hire third party support to help comply with federal nondiscrimination and affirmative action requirements. While contractors generally found OFCCP guidance helpful, both stakeholders and contractors said the guidance could be clearer to help them understand the requirements. Without clear guidance, contractors may not be able to understand their equal employment obligations.

Why GAO Did This Study

OFCCP is charged with ensuring that about 200,000 federal contractor establishments refrain from discrimination and take affirmative action to provide equal employment opportunities for certain protected classes of workers. GAO was asked to review OFCCP practices.

In this report, GAO (1) assessed how OFCCP conducts supply and service compliance evaluations, including the methodology, resources, and results, and (2) evaluated OFCCP outreach, assistance, and guidance efforts to assist contractors in complying with the requirements it enforces. GAO analyzed both OFCCP Information System data and a nongeneralizable sample of 43 case files and reviewed relevant federal laws, executive orders, regulations, guidance, and agency documents. GAO also interviewed a nongeneralizable sample of 24 contractors with and without experience with a compliance evaluation; managers and staff in OFCCP's headquarters and all six regional offices; and representatives of national organizations representing contractors and protected workers' interests.

What GAO Recommends

GAO is making six recommendations to DOL, including that OFCCP develop a contractor selection process that reflects contractor noncompliance risk, develop a mechanism to monitor contractors' compliance with AAP requirements, and review and assess the clarity of its contractor guidance. DOL agreed with GAO's recommendations.

For more information, contact Cindy Brown Barnes at (202) 512-7215 or brownbarnesc@gao.gov.

Recommendations for Executive Action

  1. Status: Open

    Comments: As of August 2018, DOL has consulted with its technical experts and is in the process of revising its scheduling list methodology to address this GAO recommendation. Specifically, the proposed methodology will identify the three industries with the highest rates of Notice of Violations (NOV) for discrimination in the last ten years using its administrative database. While the methodology has not yet been finalized, OFCCP anticipates dedicating 30-50 percent of the FY2019 scheduling list to these three industries. The remainder of the list will include establishments from other industries. Additionally, once DOL finalizes its process to certify Affirmative Action Programs (AAP), contractors that have not developed and maintained an AAP will be more likely to be scheduled for a compliance evaluation. The agency's new scheduling approach aims to strike an appropriate balance for addressing recidivism and noncompliance. DOL's greater focus on industries with contractors at greater risk for violation will also provide an opportunity to reach more workers and job seekers potentially subject to adverse employment practices and reduce the burden on contractors who are more generally in compliance with the law. The agency has made significant progress in revising it's scheduling list methodology to reflect potential risk of noncompliance. However, the process has not been implemented. We will close the recommendation once the process is implemented.

    Recommendation: To ensure that federal contractors are complying with equal employment opportunity requirements, the Secretary of Labor should direct the Director of OFCCP to make changes to the contractor scheduling list development process so that compliance efforts focus on those contractors with the greatest risk of not following equal employment opportunity and affirmative action requirements.

    Agency Affected: Department of Labor

  2. Status: Open

    Comments: Since 2018, OFCCP issued Directive 2018-07, AAP Verification Initiative, publicly committing to a comprehensive program to verify that federal contractors are complying with AAP obligations on a yearly basis. The program includes: development of a process whereby contractors would certify on a yearly basis compliance with AAP requirements; inclusion of a criterion in the neutral scheduling methodology increasing the likelihood of compliance reviews for contractors that have not certified compliance with the AAP requirements; compliance checks to verify contractor compliance with AAP requirements; requesting proffer of the AAP by contractors when requesting extensions of time to provide support data in response to a scheduling letter; and development of information technology to collect and facilitate review of AAPs provided by federal contractors. OFCCP senior leadership initiated a public campaign by emphasizing AAP certification as an agency priority in meetings with contractors and other external stakeholders. OFCCP also changed its criteria for granting extensions of time for the submission of support data in response to a scheduling letter and made it contingent upon timely submission of an AAP, within 30 days of receiving the scheduling letter. OFCCP has reflected this change in an FAQ on its website. To address annual certification of compliance with AAP requirements, OFCCP formally requested, in July 2018, that the General Services Administration (GSA) share System for Award Management (SAM) data with OFCCP; SAM data documents contractor certification of whether they have established an AAP for each establishment as a part of their annual SAM registration. OFCCP will use these data, specifically for those contractors that indicate they do not have AAPs at all of their establishments, to assist in identifying noncompliance and will schedule such contractors for a full compliance evaluation. GSA's Change Control Board is currently reviewing OFCCP's request for the relevant SAM data. Once GSA approves and shares the data with OFCCP, the agency anticipates it can incorporate the information into its scheduling methodology for the first FY 2019 scheduling list. The agency will also promote a public information campaign to inform contractors that OFCCP will enforce AAP certifications rigorously. As a longer-term strategy, OFCCP is developing a web-based portal to allow contractors to upload their AAPs electronically for convenience and increased compliance, and for OFCCP review and resource prioritization. A contract was awarded to an IT vendor on September 27, 2018, to develop this portal with an expected delivery date of September 29, 2019. While the agency has made considerable efforts towards implementing this recommendation, the processes described have not been implemented. Once implemented GAO will close the recommendation. is believed to have made a false or misleading statement.

    Recommendation: To ensure that federal contractors are complying with equal employment opportunity requirements, the Secretary of Labor should direct the Director of OFCCP to develop a mechanism to monitor AAPs from covered federal contractors on a regular basis. Such a mechanism could include electronically collecting AAPs and contractor certification of annual updates.

    Agency Affected: Department of Labor

  3. Status: Closed - Implemented

    Comments: In fiscal year 2016, OFCCP transferred 310 cases from eight offices in one region to 25 offices across three other regions. Similarly, OFCCP experimented with transferring Functional Affirmative Action Program (FAAP) cases to various field offices irrespective of the physical location of contractor's scheduled unit. In fiscal year 2018, OFCCP incorporated human resource information into its scheduling list distribution process with the release of its most recent scheduling list and has implemented geographically free scheduling.

    Recommendation: To ensure that federal contractors are complying with equal employment opportunity requirements, the Secretary of Labor should direct the Director of OFCCP to make changes to the current scheduling list distribution process so that it addresses changes in human capital and does not rely exclusively on geographic location.

    Agency Affected: Department of Labor

  4. Status: Open

    Comments: In fiscal year 2017, OFCCP issued new guidance and finalized its compliance officer core competency model. In fiscal year 2018, OFCCP retained an expert consultant to assess its national training program, and standardize its training development and evaluation processes. The assessment was completed in fiscal year 2018 and a plan of action was created to address gaps in the program to be implemented in fiscal year 2019. When implemented, OFCCP training program anticipates International Association for Continuing Education and Training (IACET) accreditation. As an IACET accredited training program, OFCCP's national training program will be providing continuing education and training that is high-quality because it is based on the IACET Standard for Continuing Education and Training. The agency has already implemented a new instruction design process required by the International Association for Continuing Education and Training (IACET) that includes, among other features, documented and standardized operating procedures, needs assessments, clearly defined course objectives, testing and evaluations, and recordkeeping. The new process also includes incorporating the core competency model developed in fiscal year 2017 that identifies the knowledge, skills and abilities that compliance officers must possess to be successful in their positions. Moreover, the process includes using subject matter and training specialists working together to develop and refine course content, conducting legal sufficiency reviews of course content, and piloting courses to internal and external stakeholders (as appropriate) to obtain feedback. Courses developed in FY 2018, include a Complaint Training course and a Foundations for Building an Effective Database course, and future courses that will be developed in the coming months by the national training program for compliance officers and contractors will follow this more rigorous process. Once the agency has received final accreditation, this recommendation will be fully implemented.

    Recommendation: To ensure that federal contractors are complying with equal employment opportunity requirements, the Secretary of Labor should direct the Director of OFCCP to provide timely and uniform training to new staff, as well as provide continuing training opportunities to assist compliance officers in maintaining a level of competence to help ensure quality and consistency of evaluations across regions and district offices.

    Agency Affected: Department of Labor

  5. Status: Closed - Implemented

    Comments: OFCCP launched its digital engagement campaign in fiscal year 2017 to provide compliance assistance and other information to its stakeholders. The campaign was designed to increase the number of list serve subscribers and their level of online engagement with OFCCP. Since launching the campaign, OFCCP has experienced a 75 percent increase in the total number of its online subscribers. The campaign uses a series of emails to provide these subscribers with compliance assistance and other information. As of second quarter of fiscal year 2018, the average email open rate by subscribers was 22 percent, which exceeded the federal average of 14 percent. This specific campaign using Granicus, Inc. will end in fiscal year 2018, but OFCCP will continue to enroll subscribers, use emails to communicate relevant information, and use web analytics to gather information on the effect of its digital presence.

    Recommendation: To ensure that federal contractors are complying with equal employment opportunity requirements, the Secretary of Labor should direct the Director of OFCCP to review outreach and compliance assistance efforts and identify options for improving information provided to federal contractors and workers to enhance their understanding of nondiscrimination and affirmative action requirements to ensure equal employment opportunities for protected workers.

    Agency Affected: Department of Labor

  6. Status: Open

    Comments: In September 2017, OFCCP contractor held town halls and in early 2018 held three stakeholder listening sessions where the agency obtained feedback on its programs and activities, including its compliance assistance. Beginning in fiscal year 2018, OFCCP's six regions were required to offer standardized training to contractors on the scheduling list. These standardized trainings provide an opportunity for contractors to receive compliance assistance prior to an evaluation and are now required part as of OFCCP's compliance assistance process. Also in fiscal year 2018, in response to contractor feedback during town hall and other outreach sessions, OFCCP developed seven new compliance assistance resources that address: internet applicant definition, posting and notice requirements, recordkeeping requirements, compliance evaluation process, and introduction to OFCCP and its laws. OFCCP plans to launch in fiscal year 2018 using a combination of the new online communities of practice and OFCCP's web site. As of August 2018, OFCCP plans to complete its technical assistance guides for supply and service contractors, universities, and construction contractors; guides for new and small contractors; and revisions of the compliance manual in FY 2019.

    Recommendation: To ensure that federal contractors are complying with equal employment opportunity requirements, the Secretary of Labor should direct the Director of OFCCP to assess existing contractor guidance for clarity to ensure that contractors have information that helps them better understand their responsibilities regarding nondiscrimination and affirmative action requirements to ensure equal employment opportunities for protected workers.

    Agency Affected: Department of Labor


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