The issuance by the Office of Federal Contract Compliance Programs (“OFCCP” or “Agency”) of Directive 295 on December 16, 2010, changed the way that the OFCCP will conduct affirmative action compliance evaluations going forward. Federal contractors and subcontractors will have to be prepared for the Agency to use any one of four investigative tools to determine contractors’ compliance, or lack thereof, with Executive Order 11246, Section 503 of the Rehabilitation Act, and the Vietnam Era Veterans’ Readjustment Assistance Act (“VEVRAA”).

Directive 295, Active Case Enforcement (“ACE”), rescinded the Agency’s former Active Case Management (“ACM”) system. Under the ACM process, the OFCCP’s goal was to concentrate its resources to further scrutinize those contractors’ affirmative action plans (“AAPs”) that, based on the Agency’s preliminary review, evidenced systemic discrimination. The OFCCP’s challenge under ACM was its requirement that the Agency must establish a threshold of 10 or more discrimination victims, which allowed the Agency to proceed with a serious inquiry into the contractor’s AAP and outreach efforts. Many within the OFCCP believed that ACM hindered the Agency’s ability to effectively use all of its investigative tools.

The ACE system mandates an initial assessment of a contractor’s AAP to determine which of the Agency’s investigative tools is best suited to ensure contractors’ compliance with their affirmative action obligations. In essence, the Agency has transitioned from a “one size fits all” evaluation model to a “customized” review based upon the data, or lack of data, within an AAP. To this end, the Agency may utilize a compliance check to require a contractor to tender only portions of its AAP, providing the Agency with a quick “snapshot” of the contractors’ compliance. Basically, if the contractor can provide the requested documents, then compliance is not at issue. If, however, the Agency issues a 30-day letter and requests a contractor’s AAP, the desk audit has been activated and the Agency has an opportunity to conduct a more detailed and comprehensive analysis of the contractors’ workforce, job groupings, goals, selections, and compensation. If the Agency identifies indicators of systemic discrimination at the desk audit phase, the Agency may then elect to proceed with an on-site review whereby OFCCP compliance officers visit the contractor’s facility to review records and interview managerial and non-managerial personnel or utilize a focused review to only “focus” on specific areas of concern. Should the OFCCP move forward with an on-site visit, which typically lasts three or four days, the Agency may request additional records. Following that visit, the OFCCP may ask for more documents during an off-site review to further analyze data and/or determine whether information gathered during interviews can be verified. It is anticipated that the implementation of ACE will result in more OFCCP on-site reviews.