For a significant number of years, the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) has given little attention to federal contractors and subcontractors that are directly involved in construction projects. It appears this is about to change. OFCCP has produced two important documents that make it clear construction companies will be receiving more attention soon.
Budget Justification for Federal Fiscal Year 2022
In the last month, the Department of Labor (DoL) released the federal fiscal year 2022 budget justification for all DoL agencies. The budget justification for OFCCP makes it clear that compliance evaluations of construction companies will be a major focus for the agency. The budget justification states that “OFCCP is beginning to reengage the construction contractor community by conducting several hundred construction compliance checks.” A compliance check is a limited type of compliance evaluation. OFCCP is currently in the midst of conducting these compliance checks.
During the last few years, OFCCP has conducted a very limited number of compliance evaluations of construction companies. The data available on OFCCP’s website shows that only 12 compliance evaluations of construction companies were conducted during federal fiscal year (FY) 2019, and only 2 compliance evaluations were conducted during FY 2020. The number of reviews has already increased to 20 during the current federal fiscal year. It seems likely that all of these latest reviews are compliance checks. OFCCP’s budget justification makes it clear that OFCCP will be conducting more extensive compliance reviews as the current fiscal year continues.
New Scheduling Letter for Construction Compliance Reviews
As part of its focus on construction companies, OFCCP intends to use a new scheduling letter to request information at the start of a traditional compliance review. The new scheduling letter is under review by the Office of Management and Budget (OMB) and can be found on OMB’s website. OFCCP’s current scheduling letter for construction compliance reviews can be found as part of OFCCP’s Federal Contract Compliance Manual.
The pending version of the scheduling letter is a foundational change for OFCCP. Among the most significant changes are that the new scheduling letter would:
- State that there would be a desk audit as part of a compliance review. OFCCP has previously conducted most parts of a construction compliance review by going on-site to one or more construction sites.
- Require the submission of extensive data on personnel activity as part of the desk audit phase of a compliance review.
- Specify the information to be included as part of submitting payroll data to OFCCP during the desk audit phase of a compliance review.
- Require certain specific items associated with the affirmative action plans (AAPs) for protected veterans and individuals with disabilities. Previously, OFCCP simply requested the AAPs for these two classes at the start of a review when a construction company was covered by the affirmative action laws for these two classes.
- Itemize the information to be submitted as per the 16 specifications found in the Executive Order affirmative action regulations for construction companies.
The latest version of the new scheduling letter for construction reviews has been undergoing OMB scrutiny since earlier in the year. The public was asked to submit comments to OMB on this version of the scheduling letter no later than May 19, 2021. It is not clear why the release of the new scheduling letter has been delayed. Regardless, OFCCP is clearly looking to make construction companies a focus of their regulatory activities during the current calendar year.
By Bill Osterndorf, Principal Consultant; Macy Cheeks, M.A., Consultant; Tyler Wurtz, M.S., Associate Consultant; Zach Olsen, Consultant