Equal Employment Opportunity: Strengthening Oversight Could Improve Federal Contractor Nondiscrimination Compliance
Published: 2016-09-22T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: OFCCP is charged with ensuring that about 200,000 federal contractor establishments refrain from discrimination and take affirmative action to provide equal employment opportunities for certain protected classes of workers. GAO was asked to review OFCCP practices.
In this report, GAO (1) assessed how OFCCP conducts supply and service compliance evaluations, including the methodology, resources, and results, and (2) evaluated OFCCP outreach, assistance, and guidance efforts to assist contractors in complying with the requirements it enforces. GAO analyzed both OFCCP Information System data and a nongeneralizable sample of 43 case files and reviewed relevant federal laws, executive orders, regulations, guidance, and agency documents. GAO also interviewed a nongeneralizable sample of 24 contractors with and without experience with a compliance evaluation; managers and staff in OFCCP's headquarters and all six regional offices; and representatives of national organizations representing contractors and protected workers' interests.
section_title: What GAO Found
paragraphs: Since 2010, most compliance evaluations conducted by the Department of Labor's (DOL) Office of Federal Contract Compliance Programs (OFCCP) of federal supply and service contractors identified no violations; however, the methods used may not focus evaluations on contractors posing the greatest risk. OFCCP relies on compliance evaluations to detect equal employment violations by federal contractors and conducts evaluations for about 2 percent of federal contractor establishments annually. Since 2010, about 78 percent of evaluations found no violations and about 2 percent had discrimination findings (see figure). However, when it selects contractors for evaluations, OFCCP does not use a generalizable sample that would allow for conclusions about the federal contractor population. Therefore, it does not have reasonable assurance that it is focusing its compliance efforts on those contractors with the greatest risk of noncompliance. During evaluations, OFCCP requested and reviewed documents related to contractors' equal employment efforts, including their Affirmative Action Program (AAP), which outlines contractors' compliance efforts. In 2015, close to 85 percent of evaluated contractor establishments did not submit their AAP within 30 days of OFCCP's request and were granted extensions in some cases. This suggests that OFCCP processes do not ensure that all contractors are complying with their obligation to complete and annually update an AAP.
Figure: Findings of Federal Contractor Nondiscrimination Compliance Evaluations From Fiscal Years 2010-2015
Since 2012, OFCCP's outreach and compliance assistance activities to assist contractors and other stakeholders, such as protected workers and industry groups, have declined as the agency refocused its activities on enforcement, and some stakeholders said guidance could be clearer. Outreach activities, such as community group presentations and job fair participation, decreased more than 80 percent from 2012 to 2014. Some stakeholders told GAO that workers, applicants, and contractors may benefit from more outreach activities. OFCCP's compliance assistance activities, such as seminars, for contractors—are down 30 percent since 2012. Many contractors told GAO they do not feel comfortable contacting OFCCP for assistance and hire third party support to help comply with federal nondiscrimination and affirmative action requirements. While contractors generally found OFCCP guidance helpful, both stakeholders and contractors said the guidance could be clearer to help them understand the requirements. Without clear guidance, contractors may not be able to understand their equal employment obligations.
section_title: What GAO Recommends
paragraphs: GAO is making six recommendations to DOL, including that OFCCP develop a contractor selection process that reflects contractor noncompliance risk, develop a mechanism to monitor contractors' compliance with AAP requirements, and review and assess the clarity of its contractor guidance. DOL agreed with GAO's recommendations.

section_title: Letter
paragraphs: The Department of Labor’s (DOL) Office of Federal Contract Compliance  Programs (OFCCP) is responsible for ensuring that about 200,000 federal  contractor establishments comply with federal equal employment  opportunity and affirmative action requirements. Under an executive order  and other federal laws and regulations, covered federal contractors and  subcontractors are prohibited from discriminating and are required to take  affirmative action to: (1) ensure that all applicants and employees are  treated without regard to race, color, religion, sex, sexual orientation,  gender identity, or national origin, and (2) employ or advance in  employment qualified individuals with disabilities and, qualified covered  veterans. These requirements affect about one out of every four U.S.  workers.
Since fiscal year 2011, OFCCP has changed its enforcement practices  and updated its regulations to, among other things, reflect recently issued  amendments to Executive Order 11246 that established new  nondiscrimination requirements, and to increase contractors’ collection of  data on workers’ and applicants’ veteran and disability status. Protected  worker advocacy organizations have lauded OFCCP’s efforts and many  of these changes. However, other stakeholders, including some in the  federal contracting community, are concerned OFCCP’s efforts are  imposing excessive compliance burdens on contractors, including what  they perceive as overly broad and unnecessary document and data  requests, as well as unreasonably numerous and lengthy compliance  evaluations. You asked us to review OFCCP’s enforcement and  compliance assistance activities. In this report, we (1) assess how  OFCCP conducts compliance evaluations for supply and service  contractors, including the methodology, resources, and results of these  activities, and (2) evaluate OFCCP stakeholder outreach, guidance, and  assistance to contractors in complying with the requirements it enforces.
To assess how OFCCP conducts compliance evaluations of supply and  service contractors, we reviewed 6 years of OFCCP data (from fiscal  years 2010 through 2015) on evaluations and enforcement, including the  number of cases referred to the DOL’s Office of the Solicitor for  administrative enforcement proceedings. We analyzed a  nongeneralizable sample of 43 randomly selected files of compliance  evaluation cases generally closed in fiscal years 2013 through 2015,  ensuring representation from the six OFCCP regions and a variety of  outcomes with respect to how cases were closed and types of violations  identified. We reviewed agency policy, procedures, and operating plans  used to conduct and oversee the compliance evaluation process and  assessed them against standards for internal control in federal  government. We assessed the reliability of the OFCCP Information  System data—used to select our case files and to analyze trends in how  OFCCP conducts compliance evaluations—by (1) performing electronic  testing of required data elements, (2) reviewing existing information about  the data and the system that produced them, such as data dictionaries,  and (3) interviewing agency officials knowledgeable about the data. We  determined that the data were sufficiently reliable for the purposes of this  report.
We also interviewed a nongeneralizable sample of 24 contractors—4 in  each of OFCCP’s 6 regions—to gather their views on how compliance  evaluations were conducted and the consistency of the process. These  contractors were selected to represent contractors that have experienced  a compliance evaluation and contractors that have not yet experienced an  evaluation. We also interviewed representatives from 14 national  employer organizations representing the interests of contractors and 13  civil rights advocates and organizations representing protected groups,  such as veterans, individuals with disabilities, and working women, to  obtain the perspectives of job seekers and workers who may benefit from  OFCCP enforcement activities. In addition, we examined prior reviews of  OFCCP by GAO, DOL’s Office of Inspector General, and others, and  interviewed managers and staff in OFCCP’s headquarters, all six regions,  and one district or area office in each region. The district or area offices  were selected to reflect a range of workloads and geographic diversity.
To evaluate OFCCP stakeholder outreach, guidance, and assistance to  contractors in complying with applicable requirements, we relied on  various approaches. We reviewed relevant federal laws, executive orders,  regulations, and guidance. We also interviewed contractors and  representatives of employer organizations, as well as managers and staff  in OFCCP’s headquarters and field offices as described above. We  reviewed agency policies and procedures for providing outreach,  assistance, and guidance to contractors and evaluated them against  standards for internal control in the federal government. To estimate the  reading level at which OFCCP guidance materials were written, we  evaluated the language in 25 available contractor frequently asked  questions guidance materials identified from the OFCCP website using  the Flesch-Kincaid Grade-Level (FKGL) automated readability tool.
We conducted our work from February 2015 to September 2016 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
subsections: section_title: Office of Federal Contract Compliance Programs
subsections: section_title: Legal and Regulatory Framework
paragraphs: In 1941, President Roosevelt issued Executive Order 8802, which  required federal agencies to include in all defense contracts a provision  prohibiting contractors from discriminating against any worker because of  race, color, creed, or national origin. President Johnson expanded these  obligations in 1965 when he issued Executive Order 11246, which  required a broader range of federal contractors and subcontractors to  refrain from discrimination and to take affirmative action to provide equal  employment opportunity to all employees and job applicants, regardless  of race, creed, color, or national origin. Executive Order 11246, which  generally applies to federal contracts and subcontracts of over $10,000,  has been amended several times over the years and now includes sex,  sexual orientation, and gender identity. In the early 1970s, federal  contractors’ equal employment responsibilities were expanded by statute  to include persons with disabilities by Section 503 of the Rehabilitation  Act of 1973 (Section 503), and certain veterans by the Vietnam Era  Veterans’ Readjustment Assistance Act of 1974 (VEVRAA). The  Section 503 requirements generally apply to federal contracts and  subcontracts that exceed $15,000, while the VEVRAA requirements  generally apply to federal contracts and subcontracts in the amount of  $150,000 or more. Contractors’ compliance with these requirements is  currently overseen by the DOL’s OFCCP, which has issued a number of  regulations to implement Executive Order 11246, Section 503, and  VEVRAA. (See appendix I for more information on the laws and executive  order enforced by OFCCP.)
Whether a particular contractor is subject to Executive Order 11246,  Section 503, or VEVRAA, and if so, what specific requirements apply,  may vary depending on factors such as the size of the contract, the type  of contract, and the number of employees who work for a contractor. In  general, OFCCP’s regulations require covered contractors to comply with  certain recordkeeping and reporting requirements (see fig. 1 for selected  examples of such requirements under Executive Order 11246). For  example, among other things, OFCCP’s regulations generally require that  covered contractors:
Prepare and maintain an Affirmative Action Program (AAP).
Generally, covered non-construction contractors that have 50 or more  employees and a contract above a certain threshold amount are  required to prepare an AAP within 120 days of the commencement of  the contract, and annually review and update the AAP.
Maintain personnel or employment records.
Post certain equal employment opportunity notices.
Allow OFCCP access to their premises during normal business hours  for the purpose of conducting on-site investigations, and to permit  OFCCP to inspect any records relevant to the matter under  investigation.
In addition, OFCCP’s Executive Order 11246 regulations generally  require contractors with 50 or more employees and one or more contracts  of $50,000 or more to annually submit an Employer Information Report  EEO-1 (EEO-1 Report). The EEO-1 Report, also known as the Standard  Form 100, is a joint report used by the Equal Employment Opportunity  Commission (EEOC) and OFCCP to collect certain employment data  from employers.
In addition, federal contractors subject to VEVRAA must annually report  to the DOL’s Veteran’s Employment and Training Service (VETS) the  number of employees and new hires who are qualified covered  veterans.
In recent years OFCCP made a number of changes to its regulations  implementing Executive Order 11246, Section 503, and VEVRAA.  Specifically:  In 2013, OFCCP revised and updated its VEVRAA regulations and its  Section 503 regulations. Among other things, the revised regulations  require certain contractors to establish annual hiring benchmarks for  protected veterans, measure their workforce against an OFCCP- established utilization goal for people with disabilities, and invite  applicants to self-identify as protected veterans or people with  disabilities at the preoffer phase of the application process.
Executive Order 13665, issued on April 8, 2014, amended Executive  Order 11246 to prohibit discrimination against workers and job  applicants who share information about their pay and compensation,  and on September 11, 2015, OFCCP issued a final rule implementing  those changes.
Executive Order 11246 was further amended by Executive Order  13672, issued on July 21, 2014, to prohibit federal contractors and  subcontractors from discriminating on the basis of sexual orientation  or gender identity, and OFCCP published a final rule implementing  those changes on December 9, 2014.
On June 15, 2016, OFCCP issued a final rule updating its regulations  related to discrimination on the basis of sex.
OFCCP and EEOC have also recently proposed collecting additional  compensation data from certain contractors through the EEO-1 Report.
section_title: Other Federal Obligations of Federal Contractors
paragraphs: Federal contractors may also be subject to various other requirements  imposed by federal laws, executive orders, or regulations pertaining to a  variety of areas such as accounting, labor, and ethics. For example,  federal contractors may be subject to certain wage requirements under  the Davis-Bacon Act and related acts and certain financial requirements  under Executive Order 13494, Economy in Government Contracting,  among others. For additional information on selected federal  requirements related to labor and employment that may apply to federal  contractors, see appendix II.
section_title: OFCCP Operations and Compliance Evaluation Process
paragraphs: In fiscal year 2016, OFCCP operated with an annual budget of about  $105 million and is authorized 615 full-time-equivalent (FTE) staff  positions. OFCCP’s office in Washington, D.C., directs the nationwide  enforcement of equal employment opportunity requirements among  federal contractors. Field staff in OFCCP’s 6 regional offices and 48  district and area offices manage and carry out the agency’s activities.  From fiscal years 2011 through 2016, OFCCP staffing levels have  decreased from 755 to 615 FTE staff positions, which is close to a 19  percent decrease. During this time, OFCCP’s budget has increased  slightly from about $105 million to about $105.5 million, which is less than  a 1 percent increase.
OFCCP uses two approaches to ensure compliance with federal equal  employment and affirmative action requirements—enforcement and  compliance assistance. OFCCP’s enforcement program—primarily  conducting contractor compliance evaluations—represents the  preponderance of agency activity and is carried out primarily by using  compliance officers to evaluate contractors, according to agency  officials. Since OFCCP can only evaluate a small fraction of federal  contractors each year, the agency also carries out compliance assistance  efforts, which generally include outreach, compliance assistance to  contractors, and guidance.
During its compliance evaluations, OFCCP reviews the selected  contractor’s hiring, promotion, compensation, termination, and other  employment practices. OFCCP conducts evaluations at the federal  contractor establishment level—the facility or unit which produces the  goods or services, such as a factory, office, or store for the federal  contractor. If OFCCP determines that a business is subject to OFCCP’s  jurisdiction because of a federal contract, it may determine that all of the  business’s establishments or facilities are subject to the federal  nondiscrimination and affirmative action requirements, regardless of  where the federal contract is held. However, a business that is  determined to be a separate corporate entity from the federal contractor  would not be subject to OFCCP’s jurisdiction. OFCCP selects contractor  establishments for evaluations by developing, on a regular basis, a  scheduling list using federal and commercial business databases, and  other factors. The total number of contractors to be reviewed each year  is determined based on OFCCP’s region and district office staffing levels.  The final scheduling list is typically distributed to each district office based  on the contractor establishments’ physical location within the district  office’s jurisdiction and is sorted using any of a number of neutrally  applied factors, such as alphabetical order, employee count at the  establishment, contract value, or contract expiration date. When a  contractor establishment is selected for evaluation, OFCCP typically  provides a courtesy advance notice through a Corporate Scheduling  Announcement Letter (CSAL) informing the establishment that they have  been selected to undergo a compliance evaluation during the upcoming  selection cycle. Once a contractor is scheduled for an evaluation, a  “scheduling letter” is sent requesting the AAP—which outlines the  contractor’s compliance plan—and supporting data. Then, a compliance  officer conducts a comprehensive desk audit, which is an off-site review  of the submitted materials. If necessary, the compliance officer conducts  an on-site review and further off-site analysis to make a final  determination as to whether the contractor has committed any violations.  (see fig. 2).
As part of its enforcement efforts, OFCCP changed its compliance  evaluations process in December 2010 from what it called Active Case  Management (ACM) to Active Case Enforcement (ACE). According to the  OFCCP directive outlining ACE procedures for conducting compliance  evaluations, ACM proved to be of limited utility because it did not allow  OFCCP to effectively use all of its investigative tools, such as offsite  review of records. To address this limitation, OFCCP implemented the  new ACE process, which requires evaluations of each selected contractor  that are more comprehensive. This more comprehensive evaluation  process includes, among other things, a determination of whether there  are indicators of potential discrimination or violations that will require an  onsite investigation. In addition to statistical and anecdotal evidence of  discrimination, indicators of potential discrimination or other violations  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.
OFCCP is only one of the federal agencies responsible for enforcing  equal opportunity laws and regulations. The EEOC enforces Title VII of  the Civil Rights Act of 1964, as amended, which prohibits employment  discrimination on the basis of race, color, religion, sex, or national origin.  EEOC also is responsible for enforcing other federal laws that prohibit  discrimination in employment based on age and disability, among other  characteristics. EEOC and OFCCP have some shared activities and  have established a memorandum of understanding (MOU) and  coordination regulations to minimize any duplication of effort. For  example, under the MOU, individual complaints filed with OFCCP alleging  discrimination under Title VII are generally referred to EEOC. In  addition, when EEOC receives a complaint not within its purview, but over  which it believes OFCCP has jurisdiction, it will refer the complaint to  OFCCP. Under the coordination regulations, OFCCP generally acts as  EEOC’s agent in investigating complaints of employment discrimination  brought by certain persons with disabilities.
section_title: OFCCP’s Compliance Evaluations Have a Number of Weaknesses that Impact the Effectiveness of its Enforcement Efforts
paragraphs: OFCCP’s weak compliance evaluation selection process, reliance on  voluntary compliance, and lack of staff training create several challenges  to its enforcement efforts. While OFCCP conducted compliance  evaluations for about 2 percent of all contractors in its jurisdiction, it is not  able to determine the extent contractors are complying with equal  employment opportunity requirements because of weaknesses in the  contractor selection process. Instead, OFCCP relies on federal  contractors to voluntarily comply with equal employment opportunity  requirements, and some contractors may not be completing certain  required activities. Further, the way OFCCP assigns compliance  evaluations to district or area offices may result in geographic  imbalances. Some industry groups and contractors we spoke with also  reported variation in how OFCCP conducts compliance evaluations. We  found that these reported inconsistent practices may be attributed in part  to a lack of timely and continuing training for compliance officers. When  OFCCP finds violations during compliance evaluations, it often resolves  those violations with conciliation agreements that outline remedial action  that contractors agree to take.
subsections: section_title: Weakness in OFCCP’s Process for Selecting Contractors for Compliance Evaluations Makes it Challenging to Know the Extent to Which Equal Opportunity Requirements Are Followed
paragraphs: Since fiscal year 2010, OFCCP has not found violations in the vast  majority of its compliance evaluations. For example, in fiscal year 2015  OFCCP did not find violations in 83 percent of its evaluations and found  discrimination in about 1 percent of evaluations (see table 1).
In 2015, OFCCP conducted 2,345 compliance evaluations, which  represents about 2 percent of federal contractor establishments in its  jurisdiction. OFCCP has been conducting evaluations that are more  comprehensive—every evaluation includes a comprehensive analysis of  contractors’ AAPs and supporting documentation—under Active Case  Enforcement since December 16, 2010. However, the number of  evaluations has decreased by 47 percent since that time.
The process used by OFCCP to select contractors for compliance  evaluations cannot ensure that contractors with the highest risk of not  following equal employment opportunity and affirmative action  requirements will be selected. OFCCP’s contractor selection process is  nonrandom and does not produce a generalizable sample of contractors  for evaluation. As a result, OFCCP is not able to draw conclusions  about noncompliance risk in the overall federal contractor population.  While the selection process includes consideration of a number of  neutrally applied factors, such as alphabetical order, employee count at  the establishment, contract value, or contract expiration date, OFCCP is  not able to identify which of these factors, or any factors, are associated  with risk of noncompliance due to the use of nonrandom selection of  contractors for review. Given these limitations, OFCCP is unable to  quantify the extent to which federal contractors in its jurisdiction are  noncompliant, and does not have reasonable assurance that it is focusing  its efforts on those contractors at greatest risk of not following equal  employment opportunity or affirmative action requirements. Standards for  internal control in the federal government state that internal controls  should provide for an assessment of the risks the agency faces from both  external and internal sources. Past efforts by OFCCP to develop a  model for identifying factors associated with noncompliance did not prove  useful when put into practice, according to agency officials, in part  because the model was developed with a nonrandom set of contractor  establishments selected from prior OFCCP compliance reviews. OFCCP  is currently working to identify potential noncompliance risk in the federal  contractor population, although it has not yet incorporated these factors  into its selection process.
section_title: OFCCP Relies on Voluntary Compliance with Requirements
paragraphs: OFCCP relies significantly on voluntary compliance by federal contractors  because it is unable to conduct compliance evaluations for the tens of  thousands of establishments in its jurisdiction. However, this approach  cannot ensure that contractors are complying with basic requirements like  developing and maintaining an AAP. OFCCP typically provides  establishments selected for a compliance evaluation with a courtesy  advance notice through a CSAL before providing them with a scheduling  letter when their evaluation has been initiated. The scheduling letter  includes a request for the establishment to submit data, including the  AAP, within 30 days. However, according to OFCCP compliance  evaluation data, in 2015, close to 85 percent of contractor establishments  did not submit an AAP within 30 days of receiving a scheduling letter, as  requested, and OFCCP officials said that it was not unusual for  establishments to request an extension. By signing a qualifying federal  contract, covered contractors are required to develop an AAP within 120  days of contract commencement and update it annually. However,  OFCCP has no process for ensuring that the tens of thousands of  establishments that have signed a qualifying federal contract have  developed an AAP within 120 days of the commencement of the contract,  or updated it annually. Standards for internal control in the federal  government state that internal control activities help ensure that  management’s directives are carried out and that they be effective and  efficient in accomplishing the agency’s control objectives. Because  OFCCP does not have a mechanism to ensure that these contractors are  implementing this requirement, it has no assurance that this agency  objective is being accomplished. Implementing a mechanism, such as by  allowing contractors to submit their AAPs electronically or certify that they  have completed annual updates, could provide OFCCP reasonable  assurance that contractors are complying with this requirement, which is  a central component of OFCCP’s efforts to prevent discrimination and  ensure covered contractors take affirmative action to ensure equal  employment opportunities for protected workers.
section_title: OFCCP’s Compliance Evaluation Assignment Process May Result in Geographic Imbalances
paragraphs: OFCCP emphasizes the geographic location of compliance officers and  contractor establishments when distributing its scheduling list, which may  result in geographic imbalances. OFCCP distributes its scheduling list—or  assigns compliance evaluations to OFCCP district or area offices—based  on the number of compliance evaluation officers located in each district  and the physical address of the contractor establishments. In fiscal year  2015, there were approximately 433 compliance officers spread across  OFCCP’s 48 district and area offices (see figure 3). In accordance with  OFCCP’s distribution method, the physical address of each establishment  determines which OFCCP district or area office conducts the evaluation.  OFCCP officials said they do this to minimize potential travel costs in the  event that a compliance evaluation should require an onsite visit from a  compliance officer. However, agency officials have not updated the way  they distribute the scheduling list to reflect a steadily declining percentage  of evaluations that require onsite visits. Specifically, in 2015, 25 percent  of evaluations required onsite visits, according to agency officials.  OFCCP officials told us that they have had success in assigning most  specialized evaluations examining a contractor’s functional or business  unit to district or area offices irrespective of geographic location.
Further, OFCCP officials acknowledge that they have not aligned the  current geographic distribution of compliance officers across district and  area offices with the national distribution of contractors. OFCCP officials  told us that the large variation in the number of compliance officers in  each office—ranging from 1 to 26—was due to differing attrition levels  across offices. OFCCP is trying to resolve this issue by changing how  new compliance officer positions are allocated in the field in response to  attrition. However, it is not yet known how long this action might take and  it does not address the decreasing extent to which OFCCP has used  onsite visits during compliance reviews. Standards for internal control in  the federal government state that management of human capital, which  includes maintaining continuity and providing personnel the right structure  for operational success, helps ensure that directives are carried out and  are effective and efficient in accomplishing the agency’s objectives, which  for OFCCP is ensuring federal contractor compliance with  nondiscrimination requirements. However, the lack of a timely response  to changes in human capital or changes to the scheduling process to  avert the necessity of human capital changes, may impact the  effectiveness of the scheduling list distribution process, and the  proportion of contractors OFCCP evaluates in a given district office will be  driven primarily by the number of compliance officers in that district, and  not by relevant risk factors.
section_title: Reported Inconsistencies in Compliance Evaluations May Be Exacerbated by Lack of Training
paragraphs: Some industry groups and contractors we spoke with reported variation in  how OFCCP conducts compliance evaluations. About half of the 14  industry groups and several contractors we spoke with said that regional  compliance evaluation activities were inconsistent across offices. For  example, one contractor we interviewed said there was uncertainty in the  compliance evaluation process due to inconsistency among the regions.  Specifically, the contractor described a situation where different OFCCP  district offices interpreted nondiscrimination language on identical  purchase orders used nationally by the contractor’s establishments as  noncompliant for different reasons. The contractor, who implemented  many of its nondiscrimination policies and practices nationally, told us he  finds understanding how to ensure uniform compliance untenable under  such conditions. Similarly, a contractor that responded to a 2015 OFCCP  customer experience survey observed that while OFCCP’s regulatory  language is the same nationwide, the interpretations vary depending on  the region or district office. OFCCP officials noted that while a contractor  may have identical policies and practices across its establishments, the  specific activities and circumstances at each establishment, such as  significant hiring or promotion activity at one establishment, might result in  different compliance evaluation findings.
OFCCP has taken recent steps to improve the quality and consistency of  compliance evaluations across its offices. In 2014, OFCCP issued a  revised Federal Contract Compliance Manual to provide both new and  experienced compliance officers with the procedural framework for  executing quality and timely compliance evaluations and complaint  investigations. OFCCP implemented the revisions to the manual to  support the more comprehensive compliance evaluation process under  ACE and with the intent of creating a greater level of consistency across  regions. However, the manual acknowledges that there may be minor and  infrequent differences between regions and offices because some  discretion remains with compliance officers and their supervisors. In  2015, OFCCP created a work group to propose additional changes and  updates to the manual, according to agency officials. OFCCP is currently  updating the manual to incorporate recent regulatory and procedural  changes. OFCCP also reported that its internal quality assurance  program, which audits 10 percent of closed cases quarterly, showed  measurable improvement in the consistency of its casework and the  ability to systematically identify areas for improvement and training. Since  fiscal year 2012, OFCCP reported reducing compliance evaluation major  deficiencies—errors impacting the ability to identify discrimination—from  26 to 2 percent. Similarly, OFCCP reported reducing technical  deficiencies—procedural errors not impacting the ability to identify  discrimination—from over 40 to 22 percent. OFCCP field office staff may  also coordinate across district offices to improve compliance evaluation  consistency, according to agency officials. For example, in one region,  district offices hold conference calls to share information across offices to  improve the consistency of the evaluation process.
Lack of training to help compliance officers maintain the skills needed to  conduct compliance evaluations could also lead to inconsistent practices  across offices. Beginning in 2013, OFCCP began focusing its compliance  officer professional training primarily on building knowledge about and  skills related to recent regulatory changes. OFCCP officials have  developed a multiyear training plan that includes resuming a more  general training schedule once the agency is past building the necessary  knowledge and skills for compliance officers related to recent regulatory  changes. In the interim, without access to essential professional training,  some compliance officers may not have the skills to address the range of  issues and topics that are part of compliance evaluations, which could  result in inconsistent practices. For example, compliance officers we  spoke to in one district office were concerned that the lack of ongoing  professional training limited their ability to correctly and consistently  conduct compliance evaluations. In some regions we visited,  management addressed this challenge by pairing compliance officers with  less expertise in particular issues with more experienced compliance  officers. GAO guidance on assessing federal strategic training and  development efforts also recommends that in planning training and  development efforts, agencies address employees’ career development  issues as well as skill-specific training needs. In addition, standards for  internal control in the federal government state effective management of  human capital is essential to ensuring that management’s directives are  carried out and that training should be aimed at developing and retaining  employee skills.
OFCCP also may not be providing timely training for new compliance  officers. Since 2010, OFCCP has provided new compliance officers with  its Basic Compliance Officer Training package, which consists of 16  courses covering the entire compliance evaluation process. However,  according to agency officials, budget constraints have made it difficult to  hold timely centralized training for new compliance officers. In half of the  regions we visited, compliance officers or management officials we spoke  with noted that this training is not provided in a timely manner after being  hired. For example, one compliance officer told us he or she worked for 8  months before receiving formal training. Standards for internal control in  the federal government state that a factor in fostering a positive control  environment is all personnel possessing and maintaining a level of  competence that allows them to accomplish their assigned duties and  management providing needed training. In addition, GAO guidance on  assessing federal strategic training and development efforts recommends  that an agency consider both the suitability and timeliness of the selection  of employees for training and development given employees’ current  duties and existing skills and competencies. OFCCP officials told us that  in the absence of timely formal training, compliance officers may rely on  other development opportunities, such as on-the-job training. In one  district office, compliance officers we spoke with explained that the lack of  uniform, timely training made compliance officers feel unprepared when  they began their job. Before receiving formal training, the compliance  officer told us newly hired compliance officers may rely on informal, non- standardized, on-the-job training led by the regional or district office  management that may promote inconsistent practices. While structured  on-the-job learning experiences can be an appropriate means of staff  development, the content of these experiences may vary across regions  and district offices and lead some compliance officers to feel unprepared  to do their jobs, potentially further exacerbating any inconsistencies in  compliance evaluations.
section_title: Most Violations Are Resolved Through Conciliation Agreements
paragraphs: Between fiscal years 2010 and 2015, OFCCP resolved 99 percent of  violations with conciliation agreements—agreements between OFCCP  and the contractor—that outline remedial action that contractors agree to  take to correct violations. In conciliation agreements resolving violations,  contractors may be required to take a range of remedies—including  corrective remedies and make-whole relief—depending on the facts of the  case (see table 2 for data on some of the remedies used to address  discrimination findings). Specifically:
Some corrective remedies include injunctive-type action designed to  stop the discriminatory conduct, such as requiring the contractor to  stop using discriminatory interviews or tests and implement self- monitoring procedures. For example, in one case file we reviewed, a  social services organization that failed to implement a tracking system  for applicants, hires, promotions, and terminations, was required as  part of the conciliation agreement to implement such a tracking  system and retain support data for at least two years.
The conciliation agreements also may include monetary and other  relief, including back pay, job offers, promotion, and retroactive  seniority designed to make the victims of employment discrimination  whole (see table 2). For example, in one case file we reviewed, a  veterans’ health care services company that OFCCP found to have  discriminated against applicants based on their race was required to  extend job opportunities to affected Black applicants currently  interested in employment and provide financial remuneration to all  Black applicants identified as victims of discrimination.
OFCCP compliance officers are responsible for monitoring the  implementation of these remedies during the monitoring and reporting  period set forth in the conciliation agreement to demonstrate progress  toward rectifying the violation. If the contractor is not demonstrating  progress, OFCCP may open an investigation into compliance with terms  of the agreement, according to agency officials.
While OFCCP resolved most citations for violations through conciliation  agreements, since 2010, OFCCP has referred a small number of cases to  the DOL Office of the Solicitor for enforcement through administrative  enforcement proceedings, according to data we reviewed. Additionally,  OFCCP may refer a case to the Office of the Solicitor in certain other  circumstances, such as when an establishment has denied compliance  officers access to information or their facilities. When referred a case, the  Office of the Solicitor generally reviews the case and may take further  action through administrative enforcement procedures.
One of the sanctions that may be imposed through administrative  enforcement proceedings is debarment, meaning the companies or  individuals are declared ineligible to receive future federal contracts.  According to OFCCP officials, debarments are infrequent because they  view them as a last resort. There was an average of fewer than one  debarment per year since fiscal year 2010. OFCCP officials told us they  prefer to obtain compliance through conciliation agreements over  debarment because contractors who are debarred are no longer under  OFCCP’s jurisdiction and not subject to the worker protection  requirements the agency oversees. Although rare, OFCCP can also  bypass the administrative enforcement procedures and refer cases to the  Department of Justice for litigation.
OFCCP’s operating plan emphasizes the importance of timely completion  of compliance evaluations to effectively obtain relief for affected  employees and applicants, although compliance evaluation processing  times are lengthy. In 2015, OFCCP’s average processing days for cases  without violations was well over 6 months at 247 days (median was 172).  The average processing days for cases with nondiscrimination violations  was over a year at 402 days (median was 309), and the average  processing days for cases with findings of discrimination were 1,487  (median was 1,188). Some contractors and industry groups we spoke  with noted concerns with the resources devoted to lengthy and expansive  compliance evaluations. For example, one contractor told us an ongoing  yearlong evaluation was consuming a great deal of company resources  and was uncertain as to when OFCCP would close the evaluation.  OFCCP officials told us contractors’ delays in providing AAPs extends the  length of compliance evaluations. OFFCP’s 2015 timeliness measures for  case closure were based on case type: 120 days for cases with no  violations, 180 days for cases with violations but no findings of  discrimination, and 900 days for cases with findings of discrimination. In  fiscal year 2015, OFCCP closed 32 percent of cases without violations  within 120 days, and 16 percent of cases with violations but no finding of  discrimination within 180 days. OFCCP has since revised its measures  and begun benchmarking a new median-day goal, beginning with fiscal  year 2016, to address concerns about incentives to close cases  prematurely.
section_title: OFCCP Outreach and Compliance Assistance Activities Have Decreased and Stakeholders Reported Need for Improvement
subsections: section_title: Outreach Activities and Compliance Assistance Have Decreased Since 2012 and Contractors Often Use Third Parties for Compliance Support
subsections: section_title: Outreach
paragraphs: Prior to 2014, OFCCP focused its outreach on conducting a wide range of  outreach events that furthered its mission through informing protected  workers and applicants of their rights. Those events included: developing stakeholder relationships through contact with, and  presentations to, industry and community groups; participating in job fairs; using tools and technologies to engage workers and communities  through its website, and other communication strategies; and  translating OFCCP products into various languages.
These activities took place at both the national and regional level. In one  region, an official described an event designed to link contractors with  workers protected under OFCCP requirements that was attended by 200  contractors and 10-15 community-based organizations.
Since 2012, OFCCP significantly decreased the number of outreach  events it conducted to assist stakeholders from 1,257 activities in 2012 to  204 activities in 2014, a decrease of over 80 percent. This is because,  over the past 4 years, OFCCP’s outreach goals have evolved toward  refocusing its outreach program and supporting the agency’s enforcement  role. Specifically, in 2014, OFCCP made a strategic decision to further  advance effective enforcement and regulatory reform as its highest  priorities and outreach as a lower priority. DOL’s 2014-2018 Strategic  Plan states that strengthening enforcement is part of a multi-year effort to  restore OFCCP as a premier civil rights agency. Officials also noted  budget constraints as an additional factor contributing to the decrease in  events. Under the agency’s new focus, for example, OFCCP now  considers efforts to work closely and strategically with community-based  organizations to identify workers who were harmed by discrimination as  community outreach, in addition to typical outreach activities.
Stakeholders we spoke with identified areas where OFCCP outreach  activities could be improved. Of the 27 stakeholders we spoke with:
14 stakeholders said OFCCP could better leverage existing resources  to conduct outreach to protected workers and job seekers; and
6 of these 14 stakeholders identified outreach to veterans, disabled  persons, and the Lesbian, Gay, Bisexual, and Transgender  community as areas where OFCCP should increase its focus.
For example, an official from one civil rights advocacy group said the  extent to which OFCCP has reached out to veterans about resources  available to them has been limited. This official was aware of veterans  who were unaware of their protections under VEVRAA. Another industry  group official said that it would be helpful if OFCCP worked with unions to  improve hiring of women and minorities. A few groups we spoke with  acknowledged OFCCP’s resource constraints, but by decreasing  outreach efforts, OFCCP may not be reaching the preponderance of  workers, applicants, and most federal contractors. Standards for internal  control in the federal government state that management should ensure  there are adequate means of communicating with, and obtaining  information from, external stakeholders that may have a significant impact  on the agency achieving its goals. However, without improvement in  outreach efforts, OFCCP may not be able to educate employees of  federal contractors about their rights and contractors about their  obligations, which is critical to OFCCP’s mission.
Regarding OFCCP’s outreach efforts to communicate information on  recent regulatory changes and the updated enforcement process, 11  stakeholders and 3 contractors told us they did not think OFCCP’s efforts  had been effective. Of these, 9 stakeholders said that they would like  OFCCP to provide more opportunities for their involvement and input in  the policy process. For example, one industry group official told us that  when OFCCP was updating the VEVRAA and Section 503 regulations,  the listening sessions were held too late. OFCCP officials, however, said  that in addition to holding six listening sessions, OFCCP routinely met  with industry liaison groups to provide members with compliance  assistance and agency updates. Further, officials told us that the final  regulations were revised significantly based on contractor feedback.
section_title: Compliance Assistance
paragraphs: OFCCP conducts a variety of compliance assistance events; however the  number of events has decreased since 2012. According to OFCCP  officials, in fiscal year 2016, compliance assistance is available and  delivered on-demand to contractors and covers a variety of topics,  including understanding the laws and executive order that OFCCP  enforces, clarifying regulatory changes, and preparing an affirmative  action program, among others. Compliance assistance includes  seminars, one-on-one meetings, and webinars designed specifically for  contractors. For example, OFCCP recently conducted three webinars for  contractors related to the final rule prohibiting pay secrecy policies and  actions, and it plans to conduct other webinars on new regulatory  changes and policies. Similarly, officials in one district office described  providing videoconference compliance assistance to a group of  contractors who were going to be operating in the region in the aftermath  of Hurricane Sandy.
OFCCP’s compliance assistance also includes a “Help Desk” and an  email inquiry process that contractors can use for compliance issues.  OFCCP officials said OFCCP received 903 emails and 2,239 phone calls  through its tools in fiscal year 2015; however, a significant portion of the  phone calls were from potential victims of discrimination. While OFCCP  conducts a variety of compliance assistance activities, the number of  compliance assistance events decreased by more than 30 percent since  2012. OFCCP noted budget constraints as one reason for the decrease.
Of the 24 contractors we spoke with, 20 told us that they use third-party  support, such as consultants and attorneys knowledgeable about the  relevant federal laws, executive orders, regulations, and processes, to  help them understand the applicable requirements, interpret guidance  materials, and develop their AAP. Stakeholders and contractors also  identified various reasons for not using OFCCP compliance assistance,  including:  fear that asking OFCCP for assistance would call attention to them  and possibly make them a target for future OFCCP enforcement  actions, such as compliance evaluations; and having their own resources, such as third party assistance, or not  needing OFCCP assistance.
OFCCP officials noted that while some contractors may be hesitant to  contact them, there are no ramifications for contacting OFCCP to ask  questions. They added that no compliance evaluation had ever been  initiated as a result of a call or written inquiry received by OFCCP’s Help  Desk.
Multiple industry groups and contractors we spoke with said complying  with federal equal employment and affirmative action requirements is  challenging:
Some industry groups and contractors we spoke with believe data  collection and new documentation requirements are extensive and  have increased. Ten industry groups and ten contractors we spoke  with said that OFCCP data collection and documentation  requirements are extensive and new data collection requirements  have been particularly problematic. For example, updates to the  Section 503 and VEVRAA regulations have increased data collection  and analysis requirements for contractors, who must compile and  retain certain records for three years, including data on the number of  applicants known to be protected veterans or to have disabilities, the  total number of applicants hired, and the total number of individuals  with disabilities and protected veterans hired. To comply with these  requirements, some contractors we spoke with said they needed to  update their human resource information systems, forms, and  practices. However, OFCCP officials told us that the collection of data  required by the Section 503 and VEVRAA regulations is needed by  contractors to review and assess their effectiveness at recruiting  protected workers, as well as create accountability. Further, they said  parts of the regulations as originally proposed were scaled back or  eliminated to address cost and burden concerns. In OFCCP’s fiscal  year 2017 budget justification, OFCCP states that focusing on  providing access to compliance assistance and resources to help  minimize burden and support contractor compliance is one of its  priorities.
Some industry groups and a few contractors we spoke with find  compliance activities overly burdensome and challenging. Nine  industry groups and two contractors we spoke with reported being  overwhelmed by the magnitude of recent regulatory changes and  specifically the extent of additional requirements. One industry group  official said its members struggle with managing a compliance  program with hundreds of locations, tens of thousands of employees,  and multiple OFCCP evaluations each year. Another industry group  official spoke of the burden for a small company, which may have only  one person devoted to human resources management as a small part  of their overall responsibilities.
Some industry groups and a few contractors we spoke with reported  that compliance costs and resources are significant or have increased  due in part to the cost of additional data collection requirements and  the need to hire additional staff or consultants. Thirteen industry  groups and four contractors we spoke with had concerns with  increasing costs and resources required to comply with OFCCP  requirements. One industry group official said that while a large  federal contractor may have in-house expertise to handle most  compliance evaluations, it may need outside legal counsel for a  particular evaluation if it does not have experience in a particular area.  This official also said other contractors rely on outside counsel for all  of their OFCCP compliance work. Charges for these types of services  are significant, according to this official. For example, the official told  us that an economic consultant may charge $200-400 per hour, and  legal counsel may charge $600-700 per hour. In another example, an  official of an industry group representing contractors said that the cost  of complying with data requests can reach from the thousands to tens  of thousands of dollars. OFCCP officials estimate that the cost of  developing a new AAP is between $3,000 and $4,000.
OFCCP’s operating plan states that providing compliance assistance to  contractors to educate them about their nondiscrimination and affirmative  action obligations is needed to achieve its mission. However, without  increased contractor utilization of OFCCP compliance assistance, federal  contractors may face challenges in complying with federal equal  employment and affirmative action requirements, all to the potential  detriment of protected workers.
section_title: OFCCP Has Ongoing Efforts to Update Guidance Materials
paragraphs: OFCCP provides contractors with access to a variety of guidance  materials. These materials, which appear on OFCCP’s website, identify  and explain Executive Order 11246, VEVRAA, and Section 503, and  provide information that interprets their implementing regulations.  OFCCP’s guidance materials include Frequently Asked Questions  (FAQs), contractor guides, and infographics.  OFCCP uses guidance  documents to explain how the agency interprets regulations and to  provide information when additional clarification is needed. To develop  the guidance, OFCCP officials said the agency reviews and discusses the  types of inquiries it receives and processes that information to identify  broad trends or areas where better guidance, education, or website  navigability may assist contractors with understanding their obligations  and workers with understanding their rights.
However, no contractor guides are currently available on OFCCP’s  website. Contractor guides typically assist contractors in understanding  OFCCP compliance processes and policies. OFCCP removed these  guides from the website in order to update them based on the final rules  promulgated by OFCCP since 2013. According to OFCCP officials, the  guides being updated include one for supply and service contractors, one  for construction contractors, and one for new and small contractors.  Although OFCCP reports in its fiscal year 2017 budget justification that  focusing on developing stakeholder guidance is one of its priorities, the  guides have been unavailable on the website for over 2 years and  contractors must look for answers to their questions elsewhere. OFCCP  officials told us that it will take time to develop the new guides, and the  cost of developing them is not a dedicated part of their budget. To  address the lack of available guidance materials, between 2013 and  2015, OFCCP delivered nearly 30 external training sessions focused on  regulatory changes and updates, according to agency officials.
More than half of the contractors we spoke with said the OFCCP  guidance is generally helpful, with some citing the FAQs as particularly  helpful. However, many stakeholders, including 10 industry groups, 3 civil  rights advocacy groups, and 6 contractors, told us the guidance is too  general and lacks the specificity needed to understand the requirements.  One contractor found FAQs, webinars, and Powerpoints helpful, but said  that sometimes the materials were too general and ambiguous. For  example, another contractor said that under the new regulations the  contractor is required to revise its Equal Employment Opportunity “tag  line.” This contractor said that OFCCP eventually provided a sample tag  line, but initially only provided FAQs that were not illustrative. Another  contractor said that OFCCP guidance is sometimes open to interpretation  and does not always provide a clear answer. For example, one guidance  document stated that an activity “should” be conducted, but the OFCCP  compliance officer interpreted it as the activity “must” be conducted.
Seven contractors and one industry group official told us that OFCCP’s  guidance may sometimes be conflicting and could be simplified. For  example, one contractor had questions for OFCCP on its guidance  related to protected veterans. OFCCP initially provided a response but  later offered a different response from the original one. Another official  representing a contractor said that the guidance is written for an audience  familiar with the materials and well steeped in the issues, and noted that  the materials are not written for human resource generalists typically  employed by small contractors. Nine stakeholders and three contractors  told us they needed more guidance. For example, one stakeholder said  that contractors would like to see guidance that is more specific to certain  industries or situations. Another stakeholder said that smaller and  medium sized companies need more specific guidance on how to comply  because they do not have the money to pay for predeveloped software  that may be used to prepare AAPs.
According to the Plain Writing Act of 2010, plain writing is clear, concise,  well-organized, and consistent with other best practices appropriate to the  subject or field and intended audience. Although the Plain Writing Act  does not specify a particular standard, the experiences of contractors we  spoke to indicate that OFCCP’s guidance may not accomplish the  purpose stated in the act to improve the effectiveness and accountability  of federal agencies to the public by promoting clear government  communication that the public can understand and use. The Office of  Management and Budget (OMB) memorandum providing guidance on  implementing the act states that plain writing avoids jargon, redundancy,  ambiguity, and obscurity and can assist the public in complying with  applicable requirements simply because people better understand what  they are supposed to do. Plain writing can be essential to the successful  achievement of legislative and administrative goals, and it promotes the  rule of law, according to the OMB guidance. OFCCP officials told us they  recently spent 2 years updating the agency’s FAQs and directives to be  more consistent with the OMB guidance after stakeholders complained  that they contained excessive jargon.
We tested 24 available OFCCP FAQ documents with an automated  grade-level readability test. According to the test, the reading level  required for these guidance materials ranged from that of a high school  12th-grader to that of someone with a post-graduate degree, which  demonstrates there is variation in the readability and complexity of  OFCCP guidance. Thus, it seems likely that the information in these  guidance materials may not be understandable to the range of  contractors and human resource professionals attempting to comply with  federal requirements. Standards for internal control in the federal  government state that management should ensure there are adequate  means of communicating with, and obtaining information from, external  stakeholders that may have a significant impact on the agency achieving  its goals. Our interviews with contractors and stakeholder groups show  that many contractors do not clearly understand OFCCP compliance  requirements and do not know what they are supposed to do to meet the  requirements. According to OFCCP officials, FAQs may include  negotiated language, technical terms, and other complex phrasing that  they believe cannot be easily changed or simplified. However, in its fiscal  year 2017 budget justification, the agency noted plans to issue new  guidance interpreting or clarifying the application of recently finalized  regulations, and to develop contractor guides to assist contractors tasked  with complying with these new regulatory obligations. While OFCCP’s  plans may help mitigate some of the issues reported to us, without clearer  guidance about the requirements, contractors may be hindered in their  ability to comply with federal requirements due to a lack of understanding  about the requirements.
section_title: Conclusions
paragraphs: Contractor compliance with federal equal employment opportunity and  affirmative action requirements is increasingly important as the workforce  continues to diversify and many workers face the risk of discrimination in  the workplace, such as limited opportunities for hiring and promotion.  OFCCP needs to ensure that contractors are complying with  nondiscrimination requirements designed to promote and protect a  diverse workforce, and our report identified areas for improvement. The  process OFCCP uses to select contractors for compliance evaluations, its  primary tool for enforcement, is not designed to focus on contractors with  the greatest risk of noncompliance. OFCCP also lacks a mechanism to  ensure contractors are voluntarily complying with nondiscrimination  requirements by annually updating their Affirmative Action Plans (AAP).  Further, without providing timely training to new compliance officers and  essential ongoing professional training for all of its compliance officers,  OFCCP cannot ensure consistency in its enforcement efforts across its  offices.
Ensuring that contractors comply with equal employment opportunity and  affirmative action requirements using effective outreach, assistance, and  guidance can prevent discriminatory contractor practices at the outset.  Regulatory requirements regarding contractors’ nondiscrimination  obligations have changed, but OFCCP has reduced the outreach and  compliance assistance efforts that can help contractors understand these  changes and workers understand their protections. Given that these  recent regulatory updates may require contractors to significantly adjust  their policies, practices, and data collection systems in order to comply  with nondiscrimination requirements, it is essential that OFCCP provides  effective outreach and compliance assistance, and that contractors  receive clear guidance. While enforcement has been the agency’s  predominant approach to achieving its mission, outreach, compliance  assistance, and guidance in support of voluntary compliance provide  important opportunities to extend the agency’s influence beyond the few  contractors that are evaluated and help OFCCP better achieve its  mission.
section_title: Recommendations for Executive Action
paragraphs: To ensure that federal contractors are complying with equal employment  opportunity requirements, we recommend that the Secretary of Labor  direct the Director of OFCCP to take the following six actions:  1.  Make changes to the contractor scheduling list development process  so that compliance efforts focus on those contractors with the greatest  risk of not following equal employment opportunity and affirmative  action requirements.  2.  Develop a mechanism to monitor AAPs from covered federal  contractors on a regular basis. Such a mechanism could include  electronically collecting AAPs and contractor certification of annual  updates.  3.  Make changes to the current scheduling list distribution process so  that it addresses changes in human capital and does not rely  exclusively on geographic location.  4.  Provide timely and uniform training to new staff, as well as provide  continuing training opportunities to assist compliance officers in  maintaining a level of competence to help ensure quality and  consistency of evaluations across regions and district offices.  5.  Review outreach and compliance assistance efforts and identify  options for improving information provided to federal contractors and  workers to enhance their understanding of nondiscrimination and  affirmative action requirements to ensure equal employment  opportunities for protected workers.  6.  Assess existing contractor guidance for clarity to ensure that  contractors have information that helps them better understand their  responsibilities regarding nondiscrimination and affirmative action  requirements to ensure equal employment opportunities for protected  workers.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of the report to the Department of Labor’s Office of  Federal Contract Compliance Programs for review and comment. DOL  comments are reproduced in appendix III. In its comments, DOL indicated  agreement with our recommendations and that the agency should take  additional steps to strengthen oversight and improve compliance with  nondiscrimination requirements. DOL also stated that actions are  underway that would address some of our recommendations. We are  pleased that DOL agreed with our recommendations and is taking action  towards making these changes. In addition, DOL provided technical  comments, which we incorporated as appropriate.
We are sending copies of this report to the appropriate congressional  committees and the Secretary of Labor. In addition, the report will be  available at no charge on the GAO website at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  us at (202) 512-7215 or brownbarnesc@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix III.
section_title: Appendix I: The Laws and Executive Order Enforced by the Office of Federal Contract Compliance Programs (OFCCP)
paragraphs: Appendix I: The Laws and Executive Order  Enforced by the Office of Federal Contract  Compliance Programs (OFCCP)
The descriptions below provide only a summary and are not intended to  be comprehensive. Although construction contracts are not included in  the body of the report, they are included here. Additional details on  applicable requirements and coverage can be found in the cited sources.
Executive Order 11246 (Equal Employment Opportunity): Executive  Order 11246—first issued in 1965 and amended by subsequent executive  orders several times over the years—prohibits covered federal  contractors from discriminating in employment decisions on the basis of  race, color, religion, sex, sexual orientation, gender identity, or national  origin. It also requires these contractors to take affirmative action to  ensure that equal opportunity is provided in employment without regard to  these protected characteristics. In addition, Executive Order 11246  prohibits covered contractors from, under certain circumstances, taking  adverse employment actions against applicants and employees for asking  about, discussing, or sharing information about their pay or the pay of  their co-workers.
In general, federal contractors and subcontractors, and federally-assisted  construction contractors and subcontractors, who do over $10,000 in  federal government business in a year are covered by Executive Order  11246. Under OFCCP’s implementing regulations, non-construction  contractors with contracts of $50,000 or more and 50 or more employees  must develop and maintain a written Affirmative Action Program (AAP)  that covers each of their establishments. Companies whose sole  coverage comes from construction contracts or federally assisted  construction contracts are not required to develop an AAP, but they must  comply with a set of specific affirmative actions outlined in the regulations.
Section 503 of the Rehabilitation Act of 1973 (Section 503): Section  503, as amended, requires covered federal contractors to take affirmative  action to employ and advance in employment qualified individuals with  disabilities. OFCCP regulations implementing this law provide that  covered contractors’ obligations include the duty to refrain from  discriminating in employment against qualified individuals on the basis of  disability.
Federal contracts and subcontracts (including construction contracts) that  exceed $15,000, and contracts or subcontracts for indefinite quantities  (unless the purchaser has reason to believe that the cost in any one year  will not exceed $15,000) are covered by Section 503. Under the  regulations, contractors with contracts of $50,000 or more and 50 or more  employees must develop and maintain a written Section 503 Affirmative  Action Program for each of their establishments.
Vietnam Era Veterans’ Readjustment Assistance Act of 1974  (VEVRAA): OFCCP enforces the affirmative action provisions of the  VEVRAA, as amended, which require covered contractors to take  affirmative action to employ and advance in employment qualified  covered veterans. Covered veterans include disabled veterans, recently  separated veterans, active duty wartime or campaign badge veterans,  and Armed Forces service medal veterans. OFCCP regulations  implementing this law provide that covered contractors’ obligations  include the duty to refrain from discriminating in employment against  employees or applicants based on their status as protected veterans.
Employers with federal contracts or first-tier subcontracts, including  construction contracts, in the amount of $150,000 or more are covered by  VEVRAA. Under the regulations, contractors with 50 or more employees  must develop and maintain a written VEVRAA Affirmative Action Program  for each establishment.
section_title: Appendix II: Selected Federal Laws and Executive Orders Related to Labor and Employment Specific to Federal Contractors
paragraphs: The list of requirements below is not intended to be comprehensive;  federal contractors may be subject to other federal, state, or local  requirements related to labor and employment as well as other topics.  Furthermore, not all of these requirements apply to all federal contractors;  application of these requirements varies depending on the type and  amount of the contracts they hold, among other things. Finally, these  descriptions provide only a summary of key aspects of the selected laws  and executive orders; additional requirements may apply that are not  described here.
In addition to the laws and executive orders listed below, federal  contractors are also generally subject to the Federal Acquisition  Regulation (FAR). For example, Part 22 of the FAR (Application of Labor  Laws to Government Acquisitions) establishes various labor-related  requirements for federal contractors. Federal contractors may also be  subject to specific department and agency contracting regulations, such  as the Department of Defense Federal Acquisition Regulation  Supplement (DFARS). For example, if the contract is awarded by the  Department of Defense, DFARS Part 222 (Application of Labor Laws to  Government Acquisitions) would also apply to the contractor.
Contract Work Hours and Safety Standards Act: The Act requires  certain construction and service contractors to pay laborers and  mechanics employed in the performance of the contracts one and one- half times their basic rate of pay for all hours worked over 40 in a  workweek.
Copeland “Anti-Kickback” Act: The Act prohibits anyone from inducing  employees on federally funded or federally assisted construction  contracts to give up any part of the compensation to which they are  entitled.
Davis-Bacon and Related Acts: The Davis-Bacon Act generally requires  the payment of local prevailing wages to mechanics and laborers on  federal contracts involving the construction, alteration, or repair (including  painting and decorating) of public buildings or public works. The Davis- Bacon Act requirements are incorporated into other federal statutes,  referred to by the Department of Labor as the “Related Acts,” which  authorize federal assistance in the form of grants, loans, insurance, or  guarantees for various construction programs.
Drug-Free Workplace Act of 1988: The Drug-Free Workplace Act of  1988 requires certain federal contractors to agree to provide drug-free  workplaces as a condition of receiving a contract from a federal agency.
Executive Order 13494 (Economy in Government Contracting):  Under the executive order, certain labor relations costs, not directly  related to a contractor’s provision of goods or services to the government,  may not be allowed for reimbursement or payment by the contracting  agency. However, costs incurred in maintaining a satisfactory relationship  between the contractor and its employees, including costs of shop  stewards and labor management committees, are allowable for payment.
Executive Order 13495 (Nondisplacement of Qualified Workers  Under Service Contracts): The executive order requires that federal  service contracts include a clause requiring that successor contractors  give certain employees employed on a predecessor contract for the  performance of the same or similar services at the same location a “right  of first refusal” of employment under the successor contract in positions  for which they are qualified.
Executive Order 13496 (Notification of Employee Rights Under  Federal Labor Laws): The executive order generally requires federal  contractors to post a notice describing the rights of employees under  federal labor law.
Executive Order 13502 (Use of Project Labor Agreements for Federal  Construction Projects): Under the executive order, contracting agencies  may require project labor agreements for certain federal construction  projects to provide structure and stability to large-scale construction  projects. A project labor agreement is a pre-hire collective bargaining  agreement with one or more labor organizations that establishes the  terms and conditions of employment for a specific construction project.
Service Contract Act: The Service Contract Act establishes minimum  wage and minimum fringe benefit payment requirements for covered  federal services contractors.
Walsh-Healey Act: The Act establishes minimum wage, overtime, and  safety requirements for covered federal supply contractors.
section_title: Appendix III: Comments from the Department of Labor
section_title: Appendix IV: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Blake Ainsworth (Assistant  Director), Amber Yancey-Carroll (Analyst-in-Charge), Brandon Booth,  Sarah Cornetto, Holly Dye, Brandon Kruse, Arthur T. Merriam Jr., Jean  McSween, Mimi Nguyen, and Rosemary Torres Lerma made significant  contributions to this report.
Also contributing to this report were Carl Barden, Timothy Bober, Sheila  McCoy, John Mingus, Almeta Spencer, and Williams T. Woods.