Effective January 1, 2011, the Labor Department’s Office of Federal Contract Compliance Programs (OFCCP) began processing all supply and service (S&S) contractor compliance evaluations scheduled from the Federal Contractor Scheduling System (FCSS) using the “Active Case Enforcement” (ACE) procedures established in OFCCP Directive No 295. This directive, dated December 16, 2010 and posted online on February 16, 2011, outlines ACE procedures which replace the Active Case Management (ACM) procedures formally implemented by the Bush Administration in September 2008 (via Directive No 285). The ACM procedures were rescinded by Directive No 292, “Discontinuation of Active Case Management (ACM) Procedures,” dated December 2, 2010.

Basic principles. Under ACE procedures, all S&S contractors selected for review by the FCSS system will be required to submit their Affirmative Action Programs (AAPs) and supporting documentation to the OFCCP. A full desk audit will be performed in every compliance evaluation to ensure the contractor’s compliance with Executive Order (E.O.) 11246, Section 503 of the Rehabilation Act (Section 503), and the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA). Indicators of potential discrimination may be of an individual and/or class (i.e., two or more victims) nature. In contrast, the previous ACM procedures set forth an abbreviated desk audit process that sought to quickly close reviews where there was no indicator of systemic discrimination (i.e., 10 or more potential victims). ACE procedures require that, for quality control purposes, every 25th federal contractor establishment will be selected by FCSS for a full compliance review (which includes the full desk audit plus an onsite evaluation). Under the rescinded ACM procedures, absent any indicators of discrimination, full desk audits were to be performed only in every 25th review and onsite evaluations only in every 50th review.

In addition, ACE procedure provide that, whenever an onsite review is conducted, the compliance officer will document the contractor’s compliance with E.O. 13496, which requires notification to employees of their rights under the National Labor Relations Act (NLRA). Contractor establishments that have undergone a compliance evaluation will be excepted from scheduling from the FCSS for another compliance evaluation of any kind for 24 months from the date of closure of the compliance evaluation. If there is a conflict between any previous guidance or existing procedures and the ACE procedures, the ACE procedures will take precedence.

Scheduling procedures. The OFCCP will use the FCSS to select S&S contractor establishments for compliance evaluation using administratively neutral selection criteria. Once identified by the FCSS, establishments selected for evaluation will appear on a computer-generated list developed by the OFCCP National Office. This list will designate the contractor establishments that each Regional/District/Area Office is to schedule for a compliance evaluation during the scheduling cycle. Using administratively neutral selection criteria, this list will also designate which investigative procedure (i.e. , compliance review; off-site review of records; compliance check; or focused review) will be followed. The Regional/District/Area Offices are required to schedule the federal contractor establishment identified on the FCSS in strict sequential order.

Compliance review procedures. When a contractor is designated for a compliance review, the OFCCP will take the following steps:

1. Coinciding with the mailing of the scheduling letter, the OFCCP will contact the U.S. Equal Employment Opportunity Commission (EEOC) and the state and/or local fair employment practice (FEP) agency to determine the nature, status and outcome of any complaints that have been filed against the contractor at the establishment under review.
2. The compliance officer will conduct a full desk audit in every compliance review and evaluate the contractor’s compliance with its obligations under EO 11246, Section 503, and VEVRAA.
3. The compliance officer will review the contractor’s compliance history for the past three years, to assess the contractor’s recent compliance history and determine if there are patterns of non-compliance. To this end, the compliance officer will use the OFCCP internal database system, and review any information received from EEOC, state or local FEP, and/or other labor and employment agencies, such as Labor Department’s Veterans’ Employment and Training Administration and Wage Hour Division.
4. The compliance officer will determine whether there are indicators of potential discrimination or violation that will require an onsite investigation. In addition to statistical and anecdotal evidence of discrimination, indicators of potential discrimination/violation also include, but are not limited to: patterns of individual discrimination, patterns of systemic discrimination, patterns of major technical violations such as recordkeeping deficiencies or failure to maintain an AAP, and non-compliance with other labor and employment laws, e.g., wage and hour laws.
5. If the contractor’s AAP or supporting document submitted is insufficient to make a compliance determination, the compliance officer may elect to proceed to the onsite.
6. The compliance officer may close the compliance review at the conclusion of the desk audit, if no indicators of potential discrimination/violation are found. However, if the compliance review is designated as the “quality control” review or a focused review, the compliance officer must conduct an onsite review, even in the absence of indicators of discrimination.
7. If indicators are identified during the desk audit, the compliance officer may conduct an onsite review of the contractor’s compliance with all of the laws enforced by OFCCP.
8. An onsite review is not limited to the nature or scope of the indicators that triggered the onsite review.
9. Where an onsite review is conducted, the compliance officer will also document the contractor’s compliance with E.O. 13496.
10. During the desk audit, if minor technical violations are identified and there are no indicators of potential discrimination, the compliance officer should try to remedy the deficiencies at this stage.
11. If the compliance review indicates that there is no potential discrimination or unresolved minor technical violations with E.O. 11246, Section 503 or VEVRAA, the compliance officer will follow established closure procedures and issue the “Closure for No Apparent Violations or Technical Violations “(attached to the ACE directive).
12. At the conclusion of an investigation where major technical violations were resolved and/or discrimination was remedied through a conciliation agreement, the CO will issue the appropriate closure document(s), including the “Closure Letter for Substantive Violations” (attached to the ACE directive).
13. If the contractor denies the OFCCP access or refuses to provide requested information, the compliance officer will follow the show cause notice procedures authorized in the OFCCP’s enforcement regulations.

Other Investigative Procedures. Some contractors selected on the FCSS list may be designated for a compliance evaluation that uses an investigative method other than a compliance review. Specifically, the OFCCP may designate a contractor for a compliance evaluation using the offsite review of records, compliance check or focused review investigative procedure. Nevertheless, all S&S contractors selected for review by the FCSS system will be required to submit their AAPs and supporting documentation to OFCCP for a full desk audit. An offsite review of records, compliance check or focused review, may be expanded to include the use of one or more additional investigative methods, including conducting a full compliance review in appropriate circumstances, e.g., when indicators of discrimination are found. If there are no indicators found during an offsite review of records, compliance check, or focused review the compliance evaluation may be closed. To close the evaluation the compliance officer will issue the “Closure Letter for No Apparent Violations or Technical Violations.”