The U.S. Department of Labor released its fiscal year (FY) 2013 Budget Request earlier this year. As usual, the Office of Federal Contract Compliance Programs’ (OFCCP’s) justification for its requested budget provides a blueprint for what lies ahead with the OFCCP. OFCCP’s FY 2013 congressional budget justification is available here. The plans announced in this year’s budget justification that are likely to have a significant impact on the federal contractor community.

  • More and Higher Quality Audits: OFCCP will set out to complete 4,530 thorough compliance evaluations in FY 2013, a 12% increase over FY 2012 levels. It also appears that OFCCP wants to pay attention to the quality of compliance investigations, not just the quantity. The OFCCP plans to conduct regular training and implement monitored operational audits in field offices. The OFCCP’s efforts towards training, quality and accuracy may improve the consistency of the OFCCP compliance officers during audits, but it also may make audits more difficult if auditors are imposing additional requirements. The proposed training materials have not been released to the public so the contractor community is in the dark regarding what standards are to be applied to them.
  • Be Alert to Enterprise-Wide Audits; New “Strategic” Selection Process: Another big, though not surprising, development is OFCCP’s plan to implement a “strategic” selection process to prioritize enforcement efforts and pinpoint multi-establishment and industry-wide deficiencies and violations. Contractors have been hearing for some time now about OFCCP’s plan to crack down on those it calls “egregious violators” and enterprise-wide patterns of discrimination. It appears that OFCCP has come up with a formula that purports to find these contractors. OFCCP does not provide any specifics about its new strategic selection process, and its lack of transparency is troubling. OFCCP also remarked on its “renewed collaborative enforcement approach with the Office of the Solicitor (SOL) and other Departmental agencies,” to increase its attention on those with multiple establishments and within industries of specific interest to the OFCCP. Contractors with multiple locations should anticipate greater attention and should be more vigorous in conducting self-audits and resolving apparent issues.
  • New Compliance Manual: OFCCP is also in the process of updating its compliance evaluation manual with revised enforcement procedures. The FY 2012 procedures are expected to support a more robust and thorough compliance evaluation process, as well as create a level of consistency across regions. Our sources tell us that the new manual is in the final stages of review.
  • Continued Emphasis on Eliminating the Pay Gap: It should come as no surprise to contractors that the OFCCP anticipates continuing its effort to combat pay discrimination through increasing the number and quality of its investigations of contractor pay practices. The OFCCP is more focused on pay equity than it has ever been and we expect that trend to continue.
  • Sharper Focus on the Construction Industry: Construction contractors should be on their toes, as the budget justification provides some specifics about the OFCCP’s plans to get actively involved with federal and federally-assisted construction contractors and subcontractors at the earliest stages of construction and to encourage construction contractors’ recruitment and retention efforts of women, and racial, and ethnic minorities. OFCCP states that it will be directing its enforcement efforts specifically toward so-called Mega Projects, which OFCCP defines as “federal or federally-assisted construction projects lasting longer than one year, and likely to have a major employment or economic impact on a community.” According to OFCCP, a focus on mega projects will enable it to utilize its enforcement resources more efficiently because such projects “tend to involve larger contractor and subcontractor workforces.” Thus, it is more important than ever for constructor contractors to be audit-ready and keep up to date on the latest developments at the OFCCP concerning the construction industry.