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Highlights

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.

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Recommendations

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.

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Labor 1. 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.
Open
In 2018, in consultation with technical experts, DOL revised its scheduling list methodology to address this recommendation. The agency's new scheduling approach aims to strike an appropriate balance for addressing recidivism and noncompliance. The new scheduling list methodology, deployed in FY 2019, examined closed cases for FY 2014 through 2018 and grouped them by industries using the 2-digit NAICS code. Within each year, OFCCP identified cases that closed with discrimination findings and included a conciliation agreement to make the victims whole. The percentage of cases with discrimination findings over the total number of cases closed for that year was computed for each industry. This process was repeated for each of the five fiscal years and identified Agriculture, Manufacturing, and Wholesale Trade as three industries with the highest rate of discrimination violations. One-third of 3,500 establishments on the fiscal 2019 scheduling list were selected from these three industries; the remainder of the list included establishments from other industries. Field offices began scheduling from this list in May 2019 and continue to do so. OFCCP will evaluate the efficacy of this methodology once all establishments on the list are scheduled and resulting cases are closed. The agency has made significant effort to revise its scheduling list methodology to reflect potential risk of noncompliance. However, the methodology relies on the results of prior scheduling lists that were nonrandom and did not produce a generalize sample of contractors. Consequently, the results of those scheduling lists do not allow OFCCP to draw accurate conclusions about noncompliance risk. While DOL has made considerable efforts to implement this recommendation, the process described does not necessarily identify those contractors with the greatest risk of not following equal employment opportunity and affirmative action requirements.
Department of Labor
Priority Rec.
This is a priority recommendation.
2. 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.
Open
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 included development of an online portal 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. In addition, 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 reflected this change in an FAQ on its website. The Task Order to develop the portal expired on September 30, 2019 without fully completing the project. A new contract was awarded in September 2019 to continue this work and delivery of the completed portal is anticipated in the third quarter of fiscal year 2020. Concurrently, OFCCP anticipates obtaining approval from the Office of Management and Budget to collect annual certifications using this portal. When launched, the portal will allow all contractors to certify annually that they have developed and maintain compliant AAPs for each of their establishments or functional/business units. Those contractors who fail to certify, or who certify that they do not have compliant AAPs for each of their establishments or business/functional units, will be more likely to be scheduled for compliance evaluations. Further, OFCCP anticipates having contractors that are scheduled for compliance evaluations use the portal to submit their AAPs for review. While the agency has made considerable efforts to implement this recommendation, the processes described have not been fully implemented. Once implemented, GAO will close the recommendation.
Department of Labor 3. 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.
Closed - Implemented
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.
Department of Labor 4. 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.
Closed - Implemented
In FY 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 FY 2018 and a plan of action was created to address gaps in the program to be fully implemented in FY 2019. As part of this plan, the agency 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 FY 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. In June 2019, IACET recognized OFCCP as an accredited provider of adult education. Since accreditation, OFCCP has provided training to all staff on conducting focused compliance evaluations, and investigating complaints of discrimination.
Department of Labor 5. 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.
Closed - Implemented
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.
Department of Labor 6. 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.
Closed - Implemented
OFCCP launched a new webpage for new and small contractors, numerous updated compliance assistance guides, and completed a variety of town halls, which address this recommendation. Specifically, as of September 2019, OFCCP released a number of new compliance assistance guides made available on its new webpage for new and small contractors, as well as OFCCP's general compliance assistance webpage. The agency also sought input from contractors on its guide for educational institutions (e.g., universities) and received more than 400 comments. Once all the comments are addressed, the guide for educational institutions will be finalized. Revisions to OFCCP's Federal Contractor Compliance Manual, last updated in 2014, are being finalized and posted on the website. OFCCP also made town halls an integral component in its compliance assistance development. As of September 2019, OFCCP held town halls for the information technology, financial, and legal sectors, as well as with the Native American community and protected veterans. The final town hall with educational institutions will be held in October 2019.

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