OFCCP’s Scheduling List Targets Contractors That Didn’t Certify in OFCCP’s Contractor Portal

On January 20, 2023, the Office of Federal Contract Compliance Programs (OFCCP) published a Corporate Scheduling Announcement List (CSAL) identifying 500 establishments of federal supply and service contractors and subcontractors for compliance reviews. The list also includes twenty-four Corporate Management Compliance Evaluation (CMCE or “headquarters”) reviews, and twenty-four Functional Affirmative Action Program (FAAP) reviews. The CSAL is a heads up to federal contractors that one or more of their establishments is likely to undergo a compliance evaluation by OFCCP. The number of establishments identified on this CSAL is significantly smaller than previous CSALs, which in recent years included more than 2,500 establishment-based reviews.

This CSAL Focuses on Noncompliant Contractors and Larger Establishments

Beginning in 2022, eligible contractors were required to register and certify compliance with affirmative action program (AAP) obligations in the OFCCP Contractor Portal. For the January 20, 2023, CSAL, OFCCP selected federal contractors and subcontractors that allegedly did not certify in OFCCP’s Contractor Portal as of December 1, 2022. This CSAL also includes larger establishments with at least 200 employees or 1,000 employees for a CMCE.

We have discovered that several establishments on the CSAL did, in fact, certify compliance in the Contractor Portal as of December 1, 2022. We are hopeful that OFCCP will edit the CSAL to remove these establishments before scheduling letters are sent to contractors.

Subtle Cues From OFCCP: Casting a Wide Net

The CSAL, methodology, and frequently asked questions accompanying the CSAL suggest that OFCCP takes a broad view of its jurisdiction over federal contractors.

OFCCP relies, in part, on the EEO-1 reports filed by federal contractors to schedule compliance reviews. Due to technical constraints in the U.S. Equal Employment Opportunity Commission’s system, some companies that are not federal contractors are identified as federal contractors on EEO-1 reports. OFCCP’s CSAL may well include some of these “non-contracting” companies. The CSAL methodology states, “For each parent company with at least one contract of $50,000 anywhere in the organization, all establishments that meet the scheduling list’s criteria are included in the eligible pool of contractors.” This may result in entities being identified by OFCCP as noncompliant and scheduled for compliance evaluations, even if they are actually not subject to OFCCP’s regulations.

OFCCP also intends to consolidate compliance evaluations of different establishments within one OFCCP region. The methodology states, “Where a parent company has two or more establishments on the scheduling list, OFCCP reassigned these compliance reviews to the same region so that both the agency and the contractor can engage in these reviews in a coordinated manner.” With this consolidation, OFCCP has more visibility on common “issues” such as hiring and compensation to try to leverage technical and/or discrimination allegations among two or more contractor establishments.

Options for Contractors

In response to the CSAL, contractors could consider several options:

• If a contractor with one or more an establishments on the CSAL did, in fact, certify its establishments’ compliance in OFCCP’s Contractor Portal, OFCCP has expressed willingness to remove the certified establishment from the CSAL. Contractors can notify OFCCP of preexisting certifications via the Scheduling Mailbox at OFCCP-DPO-Scheduling@DOL.gov or through a local Regional Office.
• Contractors with establishments on the CSAL that are not subject to OFCCP’s jurisdiction can notify OFCCP of this fact now or when an actual compliance evaluation scheduling letter arrives.
• If your company is not a prime federal contractor but instead has subcontracts, keep in mind that not all subcontracts with federal contractors subject employers to OFCCP’s jurisdiction. Pursuant to 41 C.F.R. § 60-1.3, a federal subcontract includes any agreement “(i) [f]or the purchase, sale or use of personal property or nonpersonal services which, in whole or in part, is necessary to the performance of any one or more contracts; or (ii) [u]nder which any portion of the contractor’s obligation under any one or more contracts is performed, undertaken, or assumed.”
• Contractors that are already defending more than four OFCCP audits may wish to notify the agency upon receipt of a scheduling letter that the maximum number of audits has been reached, citing OFCCP’s methodology.
• Contractors with establishments of fewer than 200 employees or fewer than 1,000 employees at a corporate headquarters should not be on the CSAL.

Ogletree Deakins’ Affirmative Action and OFCCP Compliance Practice Group will continue to monitor developments with regard to the CSAL Supply and Service list and will update the Affirmative Action / OFCCP and Government Contractors blogs as additional information becomes available. Important information for employers is also available via the firm’s webinar and podcast programs.