Historically, the Office of Federal Contract Compliance Programs (“OFCCP”) has not required federal contractors to submit proof that their written affirmative action plans were completed. The only time that a contractor had to produce evidence of its plan was during an OFCCP audit. As many federal contractors now know, that is about to change.
In December, OFCCP announced the creation of an online Contractor Portal. Through the Contractor Portal, federal contractors (assuming jurisdictional thresholds are met) will be required to certify they have complied with affirmative action plan requirements. Registration for the Contractor Portal opened on February 1, 2022. Starting on March 31, 2022, contractors will be able to use the portal to certify compliance. Existing contractors will have until June 30, 2022 to complete the certification process.
Even though the certification process begins in less than a month, there are lots of unanswered questions about the new requirement. As federal contractors begin to contemplate registration and certification, here are a few things to consider:
- Do All Federal Contractors Have to Certify?
No. First, only service and supply contractors (and subcontractors) are required to certify compliance. Construction contractors do not have a certification requirement (yet). Further, service and supply contractors only have written affirmative action plan requirements when certain thresholds are met. Contractors with 50 or more employees and a contract of $50,000 or more have plan requirements (under Executive Order 11246 and Section 503 of the Rehabilitation Act). Contractors with 50 or more employees and a contract of $150,000 or more have additional plan requirements under Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA). It is service and supply contractors who meet either of these jurisdictional thresholds that would have certification requirements.
- What Does “Certification” Mean?
No one knows, exactly. OFCCP has released information on the Contractor Portal itself, including registration and user permissions. It has not, however, identified exactly what the certification process will entail. More information on certification is expected at the end of March, as the certification mechanism in the portal opens. Regardless of form, a contractor can expect to certify (under penalty for providing false information) either: (1) it has a written plan for its current plan year; (2) it does not have such a plan; or (3) it does not believe it is subject to any plan requirements. Stay tuned for more information on this at the end of the month.
- How Often Is Certification Required?
Consistent with the obligation to prepare written affirmative action plans on an annual basis, OFCCP will require annual certification. Contractors should add certification to their annual compliance checklist and complete it as part of its written plan process.
- I am Considering Becoming a Federal Contractor. When Would I Need to Certify?
New federal contractors have 120 days from the start of the contract to create their plans. Under the certification requirement, a new contractor will have 90 days from the development of the plan to certify compliance.
- How Will This Impact OFCCP Audit Activity?
This remains to be seen. One thing is for sure – certification is not meant to replace compliance audits. So, contractors should not expect to avoid closer scrutiny simply by certifying themselves as compliant. Many commentators have predicted just the opposite. There are a few reasons why this may be true. First, by registering and certifying, each contractor is identifying itself as being under the jurisdictional authority of OFCCP. For contractors that have flown under OFCCP’s radar to date, that is about to end. Second, contractors that certify they have not complied with the plan requirements (or otherwise indicate they believe they are not subject to the plan requirements), should certainly not be surprised to find themselves on OFCCP’s scheduling list for audits.
With a June 30th deadline, existing federal contractors need not rush to register and certify. The best approach may be to wait until after the end of March to initiate the process, when more information is available on what “certification” actually entails. However, contractors should begin to contemplate compliance and prepare accordingly – including updating any outdated plans.