OFCCP Proposed Scheduling Letter Series Part 2/5: Reviewing “Campus-Like Settings”

By: Bill Osterndorf 

There are many proposed revisions in the Office of Federal Contract Compliance Programs’ (OFCCP) scheduling letter and itemized listing that was released on November 20, 2022. One of the proposed revisions to the scheduling letter seeks to allow OFCCP to review all affirmative action programs associated with a “campus-like setting.” The specific language reads as follows: 

If you are a post-secondary institution or federal contractor with a campus-like setting that maintains multiple AAPs, you must submit the information requested in this scheduling letter for all AAPs developed for campuses, schools, programs, buildings, departments, or other parts of your institution, or company located in [city and state only]. 

Reviews Are Conducted by Establishment 

As background, a scheduling letter and itemized listing are sent to federal contractors and subcontractors to open a compliance review. The current version of the scheduling letter requires the submission of the current affirmative action programs (AAPs) under the laws enforced by OFCCP for the establishment that received the scheduling letter. It does not request AAPs for multiple establishments. 

OFCCP’s regulations for the laws it enforces state that AAPs must be prepared by establishment. 

• The regulations regarding Executive Order 11246 state that each non-construction contractor covered by the AAP provisions in the regulations “must develop and maintain a written affirmative action program for each of its establishments.”  (See 41 CFR 60-1.40 and 60-2.1) 
• The regulations regarding the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA or Section 4212) and Section 503 of the Rehabilitation Act (Section 503) state that federal contractors covered by the AAP provisions in the regulations “shall, within 120 days of the commencement of a contract, prepare and maintain an affirmative action program at each establishment.” (See 41 CFR 60-300.40(b) and 41 CFR 60-741.40(b)2) 

The regulations regarding compliance reviews under the Executive Order, VEVRAA, and Section 503 each state that OFCCP may conduct a compliance review of “the affirmative action program” associated with the relevant law. (See 41 CFR 60-1.20(a)1, 60-300.60(a)1 and 60-741.60(a)1) There is no mention of multiple “affirmative action programs” undergoing review at the same time. 

In the agency’s justification for the changes to the scheduling letter, OFCCP asserts that it is “clarifying that post-secondary institutions and contractors with ‘campus-like settings,’ in which the contractor maintains multiple AAPs for the same campus, must submit the requested information for all AAPs for that campus located in the [relevant city where the review is occurring].” The agency then cites to its Frequently Asked Questions regarding campus-like settings, and later cites to the technical assistance guide the agency has published for educational institutions. 

“Establishment” and “Campus-Like Setting” 

OFCCP has never published in its formal regulations a definition of “establishment.” In the Federal Contract Compliance Manual (FCCM), “establishment” is defined as: 

A facility or unit that produces goods or services, such as a factory, office store, or mine. In most instances, the unit is a physically separate facility at a single location. In appropriate circumstances, OFCCP may consider as an establishment several facilities located at two or more sites when the facilities are in the same labor market or recruiting area. The determination as to whether it is appropriate to group facilities as a single establishment will be made by OFCCP on a case-by-case basis. 

OFCCP has provided federal contractors and subcontractors with alternatives to preparing AAPs by physical building or single location. This is the case with AAPs prepared by functional or business unit. (See 41 CFR 60-2.1(d)4) However, OFCCP and the employer must reach a mutually satisfactory agreement on the parameters of a functional affirmative action program (FAAP) agreement before the employer can produce something other than AAPs by establishment. (See Directive 2013-01 revision 3) 

The concept of a “campus-like setting” appears nowhere in OFCCP’s formal regulations. The idea of a “campus-like setting” is discussed in the FAQs and technical assistance guide noted above. However, these documents do not have the force of law in the same way that regulations have the force of law. Instead, directives, FAQs, and technical assistance guides act as interpretive materials that OFCCP can revise or withdraw at any time. 

In the technical assistance guide for educational institutions, OFCCP lists the following questions for educational institutions to consider regarding the development of AAPs and whether to group various buildings together into one AAP: 

1. What is the function of the building, and how do the employees in the building interact with employees in other buildings?
2. Are employees across different buildings part of the same organizational unit, such as department, division, section, branch, group, job family, or project team?
3. Are the hiring, compensation, and other personnel decisions handled separately at each building, or are those functions consolidated across multiple buildings?
4. Does each building handle its own recruitment, or is that function consolidated across multiple buildings?
5. To what extent are other human resources and EEO compliance functions operationally distinct for each building?
6. To what extent do certain employees perform work functions across various buildings?
7. To what extent are employees across buildings transferable or interchangeable? 

These decisions are left to the relevant educational institution. While they may be challenged by OFCCP, the technical assistance guide does not provide specific directions as to how AAPs must be prepared. Thus, educational institutions may have AAPs for each establishment, or one or more AAPs that contain multiple establishments. 

OFCCP has provided no formal insight into how any organization other than an educational institution should prepare AAPs for a “campus-like setting.” Instead, the justification document for the proposed scheduling letter assumes that non-educational institutions will be able to create AAPs similar to those that educational institutions are allowed (but not required) to create. 

Can OFCCP Require the Submission of AAPs for a “Campus-Like Setting”? 

OFCCP is seeking comment on whether the proposed scheduling should retain the requirement to submit all AAPs for a “campus-like setting.” Such a requirement would have to meet the following challenges: 

• While OFCCP has never formally defined what constitutes an “establishment,” the agency has traditionally considered an establishment to be a building or office that is physically separate from other buildings or offices. 
• OFCCP’s regulations state that reviews are to be conducted by “establishment.”  “Establishment” remains an undefined term that federal contractors and subcontractors can appropriately determine based on their organizational needs and past OFCCP practice. 
• The only formal exception to having reviews conducted by establishment requires an agreement between OFCCP and an employer to prepare functional or business unit AAPs. 

• OFCCP has not formally defined what constitutes a “campus-like setting.” It is not clear how extensive a campus-like setting might be and who has the right to define what is included in the campus-like setting. 
• Review of a campus-like setting might be permissible under the current federal regulations if such a setting was approved by OFCCP as part of a functional affirmative action program agreement. Such an agreement would need to be reached with the agency prior to onset of any compliance review. 

Actions for Federal Contractors and Subcontractors to Take 

OFCCP is currently taking comments on its proposed scheduling letter and itemized listing. The comment period ends January 20, 2023. The notice released with the proposed scheduling letter and itemized listing provides information on how to submit comments. 

As we previously reported, the proposed scheduling letter and itemized listing may not be approved for some time and may not be approved in the current form. However, educational institutions should seriously consider what this proposal signals regarding OFCCP’s interest in reviewing all parts of an educational institution rather than just one small segment of the institution. Similarly, private sector employers with large campus-like settings should consider how affirmative action programs might be reviewed in the future by OFCCP and how AAPs should be developed to best serve the employer. 

Federal contractors and subcontractors should also realize that OFCCP’s interest in reviewing “campus-like settings” is one part of the agency’s initiative to get a wholistic picture of large federal contractors and subcontractors. Large employers should consider how actions taken for one part of the organization will impact OFCCP compliance reviews in all parts of the organization. Large employers should also prepare for OFCCP to continue on its current path of reviewing multiple establishments belonging to a single employer within a short period of time. 

Stay tuned to the DCI Blog for more in our OFCCP Proposed Scheduling Letter Series.