HOW ARE CONTRACTORS SELECTED FOR AN OFCCP AUDIT? IT'S COMPLICATED BUT NEUTRAL

On May 21, Consuela Pinto, an attorney within the Department of Labor’s Office of the Solicitor, spoke at the OFCCP Institute’s Annual Summit Conference.  While she provided insight on a variety of topics, this blog will focus on the detail provided about how Federal Contractors are selected for an OFCCP audit.

 

At the most general level, the Federal Contractor Selection System (FCSS) is a neutral process and selection is based on a variety of factors gleaned from various sources.  Each year, the scheduling team, which is tasked with creating the list of contractor establishments to be audited in a given year, begins the process of creating that list using several information sources and a variety of other factors.  This team is the only group that has input on creating the list, though Pinto’s office reviews the methodology.  Pinto listed several of these information sources, including, the Federal Procurement Data System (FPDS), EEO-1 reports, and Dun & Bradstreet (D&B) data used to identify an initial list of physical addresses, employee counts, and affiliated (i.e., sub) contractors.  As explained in the OFCCP FAQs, the FPDS is the starting point, and an initial list of active contracts and associated contractors is developed from this database. The OFCCP FAQs also explain that the EEO-1 and D&B data are used to identify the corporate parent and/or affiliated establishments of covered contractors (D&B), as well as confirming physical addresses and employee counts at each establishment (EEO-1).

 

The OFCCP FAQs state that the list is refined at this point, by applying several neutral factors, including contract expiration date, contract value, and pre-defined operational limits on the number of establishments per contractor that may be scheduled in any one cycle. “There is no point in putting contractors on the list that we are going to review in maybe six months if their contracts expire in the next two months,” Pinto said.  Additionally, establishments covered by FAAP agreements, those currently being audited, those audited within the last 24 months, those under a conciliation agreement or consent decree, and those waiting to be scheduled from the prior list are excluded.  At that point, OFCCP determines the total number of establishments that will be reviewed under the list.  Typically, two scheduling lists are established per fiscal year.  However, this year only one scheduling list with 2,193 establishments has been released so far.  It is likely that another will be created before the end of the fiscal year.  Each district office receives a scheduling list, but it can be sorted using a number of factors, including alphabetical order, employee count at the establishment, contract value or contract expiration date.  Pinto stated that other potential neutral factors may include employer size or industry (i.e., the scheduling team may focus on large contractors or a specific industry one year).

 

Pinto also reiterated that although a contractor may feel as though it is being targeted when several establishments are selected for audit in a given year, it is not the case.  It is more likely that those establishments had not received an audit in several years.  If a contractor feels that it was inappropriately scheduled, either because it is not a Federal contractor, or because it should be ineligible for some other reason (i.e., audited within last 24 months, less than 50 employees at the establishment), the contractor should notify the OFCCP.  Pinto addressed this scenario by requesting that contractors assist OFCCP in investigating their contractor status. Specifically, Pinto said that “…when we ask you to help us to investigate your status to see if it is accurate, then please be responsive. The agency has the authority to investigate whether a company is a covered contractor…The agency is not interested in forcing you to have an audit if you are not a covered contractor, but you have to tell us the basis for your claim.”

 

By Kristen Pryor, M.S., Associate Consultant and Mike Aamodt, Ph.D, Principal Consultant, DCI Consulting Group

 

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