On March 25, 2019, the Office of Federal Contract Compliance Programs (“OFCCP”) issued a Corporate Scheduling Announcement List (“CSAL”) for FY 2019. As it announced in February, OFCCP changed how it notifies government prime contractors and subcontractors that they may be subject to a compliance review. Rather than sending the traditional advanced notification letters, OFCCP posted the FY 2019 CSAL on its website. In addition to the CSAL, OFCCP also posted its Scheduling Methodology, CSAL Frequently Asked Questions (“FAQs”), Corporate Management Compliance Evaluation (“CMCE”) FAQs, and a link to its Section 503 Focused Review page.
OFCCP significantly increased the number of contractors potentially subject to review to more than 3,500. OFCCP’s CSALs for FY 2018 and 2017 identified 1,003 and 802 contractors, respectively. The FY 2019 CSAL identifies:
- 500 Section 503 Focused Reviews;
- 83 CMCE Reviews;
- 500 Compliance Checks;
- 2,345 Establishment Reviews; and
- 72 Functional Affirmative Action Program (“FAAP”) Reviews.
Unlike a typical OFCCP audit, a Section 503 Focused Review is an audit of a contractor’s compliance with the protections for individuals with disabilities under Section 503 of the Rehabilitation Act. The Focused Review takes place at a contractor’s headquarters and includes an onsite investigation and interviews of managers responsible for equal employment opportunity and Section 503 compliance.
A CMCE Review is designed to ensure qualified minorities, women, persons with disabilities, and protected veterans do not face artificial barriers to advance into and within mid-level and senior corporate management. Thus, the Review focuses on mid-level and senior corporate managers and a contractor’s development and selection processes for corporate management positions and whether any unlawful discrimination exists. CMCE reviews cover the full scope of a contractor’s compliance with all OFCCP’s laws and regulations at the corporate level as compared to Section 503 Focused Review, which focuses solely on compliance with Section 503.
A Compliance Check evaluates a contractor’s efforts to meet its affirmative action goals, outreach activities, and recruitment efforts for protected groups. The Check involves a determination of whether the contractor has maintained records consistent with 41 CFR 60‑1.12. A contractor has the option of providing access to its records either on- or offsite.
An Establishment Review is a full blown OFCCP Compliance Review of the specific contractor facility/location identified in the applicable CSAL. This is the most common type of OFCCP review and involves an assessment of a contractor’s hiring and employment practices, its Affirmative Action Program (“AAP”), and the results of its affirmative action efforts.
An FAAP is an alternative form of AAP permitted with OFCCP’s approval. Unlike a traditional AAP, a FAAP is based on how a business functions as opposed to its physical facilities. Thus, contractors can combine employees in the same function, for example all salespersons, or business division to create AAPs that span across a contractor’s offices regardless of the locations of the offices.
What Should You Do If Your Company Is on the CSAL?
The CSAL triggers a 45-day clock until the OFCCP can begin issuing scheduling letters (on May 9). Contractors should use the 45 days to prepare for an audit. There is not sufficient time to begin audit preparation after receipt of a Scheduling Letter. A good place to start is reviewing the September 2018 Transparency in OFCCP Compliance Activities Directive.
Merle DeLancey is a partner in Blank Rome’s Government Contracts practice group. He routinely defends clients in connection with government program investigations and compliance with government program requirements.
In addition to Merle, Brooke T. Iley, chair of Blank Rome’s Labor & Employment practice group, advises clients on OFCCP audits, compliance programs, and affirmative action planning in conjunction with our government contracts group.
Please feel free to contact either of us with questions or concerns regarding the FY 2019 CSAL or OFCCP Compliance.