New Directive Calls for More Full Compliance Evaluations

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Every 25th supply and service federal contractor selected for a compliance evaluation by the Labor Department's Office of Federal Contract Compliance Programs will now be subject to a full compliance review that includes onsite visits by compliance officers, even absent indicators of potential discrimination or other violations, according to a recently posted directive on OFCCP's website.

The “active case enforcement” (ACE) directive, which went into effect Jan. 1, also provides that OFCCP will perform a full desk audit in every compliance evaluation to comprehensively analyze a contractor's written affirmative action plans.

Signed Dec. 16 by OFCCP Director Patricia Shiu, the ACE directive replaces a directive rescinded in December that memorialized a tiered “active case management” (ACM) compliance evaluation process. The earlier directive allowed OFCCP to close a compliance evaluation if an abbreviated desk audit of the company's affirmative action plan (AAP) and personnel data revealed no indicators of systemic discrimination.

OFCCP, in a Feb. 18 statement sent to BNA, said contractors can expect “more comprehensive desk audits, more onsite investigations, more flexibility in defining [a] class of victims, and more focused reviews” under the new ACE procedures.

New Evaluation Procedures

Under the ACM procedures, instituted in 2003, OFCCP during compliance evaluations first would conduct an abbreviated desk audit of contractors' written AAP and personnel data. Absent statistical indicators of potential classwide, systemic discrimination, the agency would close the evaluation. If OFCCP found such indicators, however, it would proceed with a full desk audit and a possible full onsite review.

OFCCP memorialized the ACM procedures in a 2008 directive, which also included “quality control measures” for OFCCP to conduct a full desk audit of every 25th contractor selected for the initial abbreviated desk audit, and to conduct a full onsite review of every 50th contractor even absent indicators of systemic discrimination (59 BTM 323, 10/7/08).

In contrast, the ACE directive requires full desk audits for every contractor selected for an evaluation, which may consist of one or more of the following: a compliance review, an offsite review of records, a compliance check, or a focused review.

Where an evaluation consists of a compliance review, which in turn may proceed in three stages consisting of a desk audit, an onsite review, and an offsite analysis, the directive states that OFCCP will contact the Equal Employment Opportunity Commission and other appropriate state and/or local fair employment practice agencies to “determine the nature, status, and outcome of any complaints that have been filed against the contractor at the establishment under review.”

Further, the directive provides, OFCCP will analyze the contractor's compliance with requirements enforced by other labor and employment agencies and review a contractor's compliance history “for the past three years.”

OFCCP may close the compliance review at the conclusion of the desk audit if no indicators of potential discrimination or other violations are identified to require an onsite investigation. Similar to ACM procedures, the ACE directive also includes its own “quality control” measure calling for full compliance reviews, which include onsite visits for every 25th contractor selected for evaluation, even absent indicators of discrimination or other violations.

'Significant' Provisions

David B. Cohen, president of DCI Consulting Group Inc. in Washington, D.C., told BNA Feb. 18 that the procedures outlined in the ACE directive are “pretty consistent” with what he has observed in clients' recent compliance evaluations.

Cohen highlighted several provisions in the ACE directive that he found “significant.” While the ACM directive defined potential systemic discrimination as discrimination affecting a class of at least 10 employees or applicants, the ACE procedures lower that number to “two or more victims,” he said. In systemic “pattern or practice” discrimination cases, Cohen said courts have ruled that isolated or sporadic incidents of discrimination do not constitute a pattern. Yet, he said, OFCCP “is saying two times is a pattern.”

With respect to indicators of discrimination or other violations, ACE provides that these can include “any one or any group of the following: statistical indicators of possible discrimination, anecdotal evidence to support possible discrimination, patterns of individual discrimination, patterns of systemic discrimination, patterns of major technical violations such as recordkeeping deficiencies or failure to maintain an AAP, and indicators of noncompliance with labor and employment laws administered by other agencies.”

In particular, Cohen singled out the phrase “patterns of individual discrimination,” which he said is language he has “never seen before.”

“What's the difference between patterns of individual discrimination and patterns of systemic discrimination?” he asked. Cohen said he thinks OFCCP, by introducing that language, may be creating a “new theory of discrimination” pertaining to the agency's efforts to target compensation discrimination.

By Jay-Anne B. Casuga

OFCCP's website and text of the ACE directive, respectively, can be found at and

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