[Federal Register Volume 62, Number 160 (Tuesday, August 19, 1997)]
[Rules and Regulations]
[Pages 44174-44192]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-21782]
[[Page 44173]]
_______________________________________________________________________
Part II
Department of Labor
_______________________________________________________________________
Employment Standards Administration, Office of Federal Contract
Compliance Programs
_______________________________________________________________________
41 CFR Parts 60-1, 60-6
Government Contractors, Affirmative Action Requirements, Executive
Order 11246; Final Rule
Federal Register / Vol. 62, No. 160 / Tuesday, August 19, 1997 /
Rules and Regulations
[[Page 44174]]
DEPARTMENT OF LABOR
Employment Standards Administration, Office of Federal Contract
Compliance Programs
41 CFR Parts 60-1, 60-60
RIN 1215-AA01
Government Contractors, Affirmative Action Requirements,
Executive Order 11246
AGENCY: Office of Federal Contract Compliance Programs (OFCCP), ESA,
Labor.
ACTION: Final rule.
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SUMMARY: The Office of Federal Contract Compliance Programs (OFCCP) is
revising a limited number of the regulations to implement Executive
Order 11246, as amended, which prohibits employment discrimination and
establishes affirmative action requirements for nonexempt Federal
contractors and subcontractors. The final rule revises the regulations
relating to record retention, compliance monitoring, maintenance of
non-segregated facilities, and other aspects of enforcement. The
revisions to the Executive Order implementing regulations effected by
this final rule are expected to reduce the compliance burdens of
covered contractors, and improve the efficiency of OFCCP in
administering and enforcing the Executive Order.
EFFECTIVE DATE: September 18, 1997.
FOR FURTHER INFORMATION CONTACT:
Joe N. Kennedy, Deputy Director, Office of Federal Contract Compliance
Programs, Room C-3325, 200 Constitution Avenue, NW., Washington, DC
20210. Telephone 202-219-9475 (voice), 1-800-326-2577 (TDD). Copies of
this final rule, including copies in alternate formats, may be obtained
by calling 202-219-9430 (voice), 1-800-326-2577 (TDD). The alternate
formats available are large print, an electronic file on computer disk
and audiotape. The rule also is available on the Internet at http://
www.dol.gov/dol/esa.
SUPPLEMENTARY INFORMATION:
I. Current Regulations and Rulemaking History
Executive Order 11246, as amended, prohibits all nonexempt
Government contractors and subcontractors, and federally assisted
construction contractors and subcontractors, from discriminating in
employment. The Executive Order also requires these contractors to take
affirmative action to ensure that employees and applicants are treated
without regard to race, color, religion, sex and national origin. OFCCP
has been assigned responsibility for administering Executive Order
11246, and has published regulations implementing the Order at 41 CFR
Ch. 60.
The Executive Order regulations have not undergone substantive
revision since the 1970s. A final rule was published on December 30,
1980 (45 FR 86215; corrected at 46 FR 7332, January 23, 1981), but was
stayed in accordance with Executive Order 12291 on January 28, 1981 (46
FR 9084). This rule later was stayed indefinitely on August 25, 1981
(46 FR 42865), pending action on a notice of proposed rulemaking (NPRM)
published on that same date (46 FR 42968; supplemented at 47 FR 17770,
April 23, 1982). Both the 1980 final rule and the 1981 NPRM addressed
the regulations contained in 41 CFR parts 60-1 and 60-60. No further
action has been taken on the August 25, 1981, proposal, or on the 1980
stayed final rule.
On May 21, 1996, OFCCP published a proposed rule, 61 FR 25516, to
revise specific regulations found at 41 CFR parts 60-1 and 60-60. The
comment period closed on July 22, 1996. A total of 32 comments was
received from six contractors, six contractor associations, one
consulting firm, one law firm, 13 civil rights and women's rights
organizations, two Federal agencies, one local government agency, and
one individual. All the comments were reviewed and carefully considered
in the development of this final rule.
II. Overview of the Final Rule
The final rule, for the most part, adopts the revisions that were
proposed in the May 21 NPRM. However, some of the proposed provisions
have been modified in response to the public comments. The changes
between the NPRM and the final rule are explained in detail in the
Section-by-Section Analysis.
The final rule revises the regulations in 41 CFR part 60-1 in four
areas: Record retention, compliance monitoring, maintenance of non-
segregated facilities, and enforcement procedures. In addition, to
ensure consistency in the administration and enforcement of the Federal
contract compliance laws, the final rule conforms several provisions in
part 60-1 to parallel provisions in the regulations found at 41 CFR
part 60-741. The latter regulations implement section 503 of the
Rehabilitation Act of 1973, as amended (29 U.S.C. 793), which also is
administered by OFCCP. A final rule published on May 1, 1996, made
comprehensive revisions to the Section 503 regulations (61 FR 19936).
The conforming changes made by the final rule published today affect
several definitions and some aspects of enforcement.
Further, the final rule deletes most of the existing provisions in
41 CFR part 60-60, which describe the procedures for conducting
compliance reviews of nonconstruction (i.e., supply and service)
contractors. A few substantive provisions in part 60-60, which are not
contained elsewhere in the regulations, are being transferred to part
60-1. The transferred provisions primarily relate to the procedures for
protecting confidential data, the time frames within which a contractor
must submit its written affirmative action program (AAP) and supporting
documentation, and authorization for nationwide AAP formats.
Finally, in order to avoid conflict, the final rule withdraws part
60-1 of the final rule which was published on December 30, 1980, and
subsequently suspended.
The discussion which follows identifies the significant comments
received in response to the NPRM, provides OFCCP's responses to those
comments, and explains any resulting changes to the proposed revisions.
Section-by-Section Analysis of Comments and Revisions
Section 60-1.3 Definitions
OFCCP proposed in the NPRM to add a definition for the new term
``compliance evaluation.'' Additionally, OFCCP proposed to revise
several definitions in the current regulations to make them consistent
with definitions contained in the Section 503 implementing regulations.
The Section 503 final rule published on May 1, 1996, made changes to
several terms and phrases that are common to both Executive Order 11246
and Section 503 of the Rehabilitation Act. Specifically, the Section
503 final rule revised the regulatory definitions of ``contract,''
``Government contract,'' ``subcontract,'' and ``United States,'' and
replaced the title ``Director'' with the new title, ``Deputy Assistant
Secretary for Federal Contract Compliance.'' In order to maintain
consistency in its administration and enforcement of the Federal
contract compliance laws, OFCCP proposed to make conforming changes to
the definitions of those terms found in existing Sec. 60-1.3.
``Compliance Evaluation.'' Under the existing regulations, the
``compliance review'' is the primary method utilized to investigate
contractor compliance
[[Page 44175]]
with the requirements of the Executive Order. The current regulations
prescribe a three-phase process for conducting compliance reviews: (1)
An off-site or desk audit review of the contractor's written AAP and
supporting documentation; (2) an on-site review of the contractor's
employment policies and activities and investigation of any problem
areas identified during the desk audit; and (3) where needed, an off-
site analysis of data obtained during the on-site review. Under the
current regulations, an on-site review is conducted at nearly every
establishment selected for review, regardless of the results of the
desk audit.
The existing ``all or nothing'' approach to compliance reviews is,
in the view of OFCCP, too restrictive. OFCCP believes that more focused
and streamlined procedures can be used to determine a contractor's
compliance status, and that a flexible approach to monitoring
compliance would enable the agency to target its enforcement resources
more efficiently.
The NPRM proposed to revise the compliance review provisions found
in Sec. 60-1.20 to authorize the agency to utilize ``compliance
evaluations'' to determine the compliance status of a contractor. The
NPRM proposed to define the term ``compliance evaluation'' used in
Sec. 60-1.20(a) of the proposal as ``any one or combination of actions
OFCCP may take to examine a Federal contractor or subcontractor's
compliance with one or more of the Executive Order 11246
requirements.''
Two contractor associations mentioned the proposed definition of
``compliance evaluation'' in their comments. They asserted that the
proposal was vague; that OFCCP had not adequately described how the
compliance evaluation procedure would be implemented. These commenters
also questioned whether the proposed review process for contractors
would be streamlined, because the proposed definition indicated that
OFCCP could take ``any one or combination of actions'' to determine
whether a contractor maintained nondiscriminatory employment practices
and fulfilled its affirmative action obligations.
The concerns raised by these commenters actually are more properly
directed at proposed Sec. 60-1.20(a), which describes four examination
procedures encompassed by the term ``compliance evaluation,'' rather
than to the language of the proposed definition. Accordingly, a
response to these comments is provided below in the preamble discussion
concerning Sec. 60-1.20 of the final rule.
The proposed definition of ``compliance evaluation'' is carried
forward in this final rule without substantive change, although the
wording has been revised slightly for clarity. OFCCP expects that the
flexible approach to compliance monitoring that is reflected in the
term ``compliance evaluation'' will reduce compliance burdens for the
contractors that satisfy their Executive Order obligations. OFCCP also
believes this new approach will increase the efficiency of its
enforcement program by allowing the agency to use its most
comprehensive evaluation procedure--the compliance review--selectively.
Further, a range of methods for evaluating contractor compliance will
enable the agency to reach a greater percentage of its contractor
universe than is reviewed currently.
``Contract.'' The term ``contract'' is defined in the current
regulations as ``any Government contract or any federally assisted
construction contract.'' The NPRM proposed to amend this definition to
subsume the term ``subcontractor.'' As was explained in the preamble to
the NPRM, the revision would obviate the need to make a separate
reference to ``subcontract,'' each time ``contract'' is referenced, to
demonstrate that a particular provision applies to both contracts and
subcontracts.
One contractor association objected to the proposed definition of
``contract.'' This commenter believed that the amended definition would
expand the scope of the Executive Order's coverage and impose
obligations upon subcontractors that currently do not exist. This
commenter's concerns are unfounded. The Executive Order always has been
applicable to agreements which fall within the regulatory definition of
subcontractors. No substantive changes in the Executive Order's
coverage were intended nor effected by the proposed change to the
regulatory definition of contract.
Another commenter urged OFCCP to amend the definition to include
``all federally assisted contracts and subcontracts,'' not just
``federally assisted construction contracts and subcontracts.''
However, Section 301 of Executive Order 11246 expressly limits coverage
of federally assisted contracts to agreements involving federally
assisted construction.
The final rule amends the definition of ``contract'' to include
``subcontract,'' as proposed in the NPRM. The term ``subcontract'' is
referenced in the rule only when necessary to the context.
``Deputy Assistant Secretary.'' The NPRM proposed to substitute the
new title of ``Deputy Assistant Secretary for Federal Contract
Compliance Programs'' for the title of ``Director'' in the current
regulations, and to make the title change throughout the proposed rule.
No comments were received on this proposal. The final rule adopts this
title change as proposed, except that the word ``Programs' has been
dropped in order to more accurately reflect the title.
``Government Contract.'' The regulations define ``Government
contract'' as an agreement ``for the furnishing of supplies or services
or for the use of real or personal property, including lease
arrangements.'' The NPRM proposed to revise this definition to clarify
that contracts covered under Executive Order 11246 include those under
which the Government is a seller of goods or services, as well as those
in which it is a purchaser. The proposal substituted a reference to the
contracts for the ``purchase, sale or use of personal property or
nonpersonal services'' and a definition of the term ``personal
services'' for the existing reference to the ``furnishing'' of goods or
services, or for the use of real or personal property, including lease
arrangements. Thus, the proposal provided, in relevant part, that a
``Government contract'' is ``any agreement or modification thereof
between any contracting agency and any person for the purchase, sale or
use of personal property or nonpersonal services.''
Two commenters--a contractor association that represents small
agricultural firms and a national law firm that counsels Government
contractors on the requirements of the Executive Order and its
implementing regulations--objected to the proposed clarification of the
term ``Government contract.'' Both argued that the proposed definition
was too broad; that defining Government contract to include sales by
the Government would extend the Executive Order's reach to activities
that were not intended to be covered. The law firm was concerned that
the revised definition of contract would expand the Executive Order's
coverage to concessionaires and licensees that operate on Government
lands under nonappropriated fund contracts. Specifically, this
commenter was referring to those entities that contract with units of
the Department of Defense called nonappropriated fund instrumentalities
or ``NAFIs'' to operate a wide range of food, retail, and recreational
concessions at military installations. The commenter noted that
concession contracts with NAFIs typically do not involve appropriated
[[Page 44176]]
funds, and do not impose costs to the Government.
The law firm argued that Executive Order 11246 and its implementing
regulations contemplated coverage of traditional procurement contracts
and Government leasing of property, i.e., agreements that require the
Government to expend appropriated funds. Thus, the law firm contended
that OFCCP did not have the authority to define ``Government
contracts'' so as to include the contracts of nonappropriated fund
instrumentalities. Further, this commenter argued alternatively that
no-cost concession agreements with NAFIs should not be covered under
Executive Order 11246 because OFCCP would experience difficulty
computing their dollar value for the purpose of determining whether the
contract satisfied the dollar thresholds for basic coverage and for the
written affirmative action program requirement. This commenter
requested that OFCCP either modify the definition of ``Government
contract'' or include an express exemption for concession contracts
with nonappropriated fund instrumentalities.
The assertions of this commenter ignore the longstanding policy and
practice of the agency to cover concession contracts with
nonappropriated fund instrumentalities or NAFIs. OFCCP consistently has
taken the position that contracts with nonappropriated fund
instrumentalities of the Government, such as the Army and Air Force
Exchange Service, are covered by Executive Order 11246, assuming the
dollar volume thresholds are met. As instrumentalities of the United
States, NAFIs meet the definition of contracting agency under the
regulation at 41 CFR 60-1.3. The fact that these contracts involve
nonappropriated funds, rather than appropriated funds, is
inconsequential. The Executive Order and implementing regulations do
not distinguish between the source of the funds used to pay for the
contract to determine coverage. Coverage under the Executive Order
turns on the status of the parties and the nature of the agreement in
issue.
OFCCP also disagrees with the commenter's contention that the
decision cited in the NPRM's preamble, Crown Central Petroleum Corp. v.
Kleppe, 424 F. Supp. 744 (D. Md. 1976), was limited to lease coverage
issues, and therefore, does not support the agency's position that
``Government contract'' covers sales by the Government. The plaintiff
in Kleppe, the holder of an oil and gas lease from the Interior
Department, argued that it did not have a Government contract because
the financial benefit (cash flow) was toward the Government. In
deciding that a lessee of an oil and gas lease was a ``Government
contractor,'' the court rejected the argument that the provisions of
the Executive Order were limited to those situations in which the
Government is the consumer of goods. Significantly, the court in Kleppe
concluded that it would be an inconsistent application of the national
policy to eliminate discrimination in employment to impose the
Executive Order requirements on employers which had contracted to
supply goods, services and leased property for use of the Government,
but not to impose the requirements of the Order on employers which had
contracted with the Government to receive from it goods, services and
leased property to be used by the employer.
The commenter's alternative argument for exempting concession
contracts with nonappropriated fund entities from the Executive Order
is also unpersuasive. The regulatory provisions concerning contracts
and subcontracts for indefinite quantities found in the current
regulations at Sec. 60-1.5 would govern whether dollar thresholds are
satisfied for coverage purposes.
The contractor association cited recipients of disaster relief
insurance proceeds as an example of a situation that would be newly
covered under the Executive Order as a result of the proposed amendment
to the definition of ``Government contract.'' Disaster relief programs
such as crop insurance and flood insurance usually involve federal
financial assistance. The only federally assisted contracts covered by
the Executive Order are federally assisted construction contracts. This
does not mean, of course, that the agency is taking a position here
that all transactions involving Federal disaster relief are excluded
from coverage. Rather, questions relating to coverage under the
Executive Order necessarily are decided case by case, based on the
particulars of the program and the nature of the agreement at issue.
``Rules, regulations and relevant orders of the Secretary of
Labor.'' A final rule published on May 3, 1996 (61 FR 19982), relating
to the establishment of the Administrative Review Board, amended the
definition of ``Secretary'' to include a ``designee'' of the Secretary
of Labor. Consequently, the definition of ``rules, regulations and
relevant orders of the Secretary of Labor'' in the current regulations,
which makes reference to the designee of the Secretary, is no longer
necessary, and has been omitted in this final rule.
``Subcontract.'' The definition of ``subcontract'' in the current
regulations refers to agreements ``for the furnishing of goods or
services.'' The NPRM contained a proposal to revise this definition so
that it would conform to the NPRM's definition of ``Government
contract.'' Accordingly, the proposal included a definition of
``subcontract'' that referenced agreements ``for the purchase, sale, or
use of personal property or nonpersonal services.''
The contractor association which represents small agricultural
firms objected to the proposal, contending that it would expand the
scope of the Executive Order's coverage. The commenter said the
proposed definition of ``subcontract'' would be particularly burdensome
for companies in the agricultural industry, as the subcontracts for a
producer of fruit products necessarily include growers, pickers,
haulers, as well as fertilizers and pesticide applicators. This
commenter raised a similar objection to the proposed definition of
``contract.'' It appears that these comments were directed primarily at
the ``necessary to the performance'' part of the existing regulatory
definition of ``subcontract,'' rather than the proposed ``purchase,
sale or use'' language. As has been explained previously, the scope of
coverage under the Executive Order has not been expanded. The existing
definition of ``subcontract'' under the Executive Order regulations
applies to agreements which are necessary to the performance of a
Government contract, or under which part of the performance of the
Government contract is assumed or undertaken.
The final rule adopts, without change, the definition of
``subcontract'' that was published in the NPRM.
``United States.'' The NPRM proposed to revise the definition of
``United States,'' by deleting the references to Panama Canal Zone
(which was ceded back to Panama under the terms of the Panama Canal
Treaty), and by specifying the possessions and territories of the
United States as: The Virgin Islands, the Commonwealth of Puerto Rico,
Guam, American Samoa, the Commonwealth of the Northern Mariana Islands,
and Wake Island. No comments were received on this proposed revision.
The proposed definition of ``United States'' is adopted.
Section 60-1.8 Segregated Facilities
Section 60-1.8 of the current regulations prohibits the maintenance
of segregated facilities (paragraph (a)) and requires contractors to
certify that they are in compliance with that obligation (paragraph
(b)). OFCCP proposed in the NPRM to conform paragraph (a) of Sec. 60-
1.8 with the Executive Order's general
[[Page 44177]]
nondiscrimination requirements by expanding the list of prohibited
practices to include gender-based segregation, with the proviso that
separate or single-user restrooms and necessary dressing or sleeping
areas shall be provided to assure privacy between the sexes. Several
stylistic changes to existing paragraph (a) also were proposed. In
addition, the NPRM proposed to eliminate the written certification
requirement in paragraph (b).
Nearly half of the commenters addressed the proposed changes
concerning segregated facilities. Commenters representing the
constituencies most directly affected by the regulations--minorities,
women and Government contractors--all supported the proposed
prohibition against gender-based segregated employee facilities. The
women's rights groups, in particular, applauded the proposal. In their
view, the proposed amendment recognizes that sex-segregation remains a
problem in traditionally male workplaces.
The comment of the Equal Employment Opportunity Commission (EEOC)
concerned the requirement that ``separate or single-user restrooms,
dressing or sleeping areas shall be provided to assure privacy between
the sexes.'' EEOC suggested that we alert contractors that, under Title
VII of the Civil Rights Act of 1964, as amended, it would be an
unlawful employment practice for an employer to deny employment or to
otherwise adversely affect the employment opportunities of an applicant
or employee in order to avoid the cost of providing separate or single
restroom or dressing facilities. Likewise, contractors are advised that
the costs of providing such separate facilities would not be a defense
to a charge of sex-based employment discrimination brought under the
Executive Order.
Further, all but two comments expressed support for the elimination
of the written certification requirement in paragraph (b). A women's
rights organization and a local government entity objected to the
proposal. The women's rights organization argued that retention of the
written certification requirement would serve as a useful reminder of
the new prohibition against sex-segregated employee facilities. This
commenter suggested that the benefits of the notice-serving function of
the certification outweighed any time-savings that would be realized by
elimination of the requirement. The governmental entity similarly
commented that requiring a contractor to certify that it maintains non-
segregated facilities reflected the essence of the Executive Order, but
imposed only a minimal burden on contractors.
OFCCP agrees that contractors should be apprised of their
obligation under the Executive Order regulations to ensure that
employee facilities are not segregated on the basis of sex, except
where it is necessary to safeguard privacy between men and women. The
agency, however, is of the view that the prohibition against segregated
facilities can be effectively enforced without the benefit of the
written certification. Eliminating the certification will not, for
example, affect the contractor's obligation to maintain facilities on a
non-segregated basis. In short, the written certification is a
paperwork requirement that does not produce commensurate benefit, and
its repeal is consistent with the Administration's regulatory reform
initiative.
Another commenter asked that OFCCP clarify in the final rule that
repeal of the written certification will not expose prime contractors
to liability for the violations of the Executive Order committed by
their subcontractors. OFCCP accepts the point that the repeal will not
expose prime contractors to liability for violations committed by their
subcontractors. However, it is not necessary to codify the point in the
regulations. Under the existing regulations, prime contractors are not
responsible for the compliance of their subcontractors with the
requirements of the Order and regulations. Consequently, the
certification of non-segregated facilities has not, as the comment
seems to suggest, served to shield prime contractors from liability for
the noncompliance of their subcontractors. The certification merely has
provided notice to the prime contractors of whether their
subcontractors (in the latters' view at least) are complying with the
nondiscrimination requirements of the order.
The final rule amends paragraph (a) and deletes paragraph (b) of
Sec. 60-1.8 as was proposed in the NPRM.
Section 60-1.12 Record Retention
Section 60-1.12(a) General Requirements
The obligation to retain relevant employment records is implicit in
some of the current regulatory requirements (e.g., those relating to
maintaining data on applicants, hiring, transfers and promotions, and
developing and updating written affirmative action programs). However,
the regulations, with one exception, do not prescribe a record
retention period. That exception is the requirement under the Uniform
Guidelines on Employee Selection Procedures published at 41 CFR part
60-3 (hereinafter UGESP) to keep certain adverse impact data for two
years after the adverse impact has been eliminated.
Paragraph (a) of the proposal would amend the record retention
obligation in several ways. First, proposed paragraph (a) would make
the record retention obligation applicable to any personnel or
employment record made or maintained by the contractor and lists
examples of the types of records that must be retained. Second,
proposed paragraph (a) would establish the required record retention
period as two years. The proposal would establish a one-year record
retention period for contractors that employ fewer than 150 employees
or that do not have a Government contract of at least $150,000. Third,
proposed paragraph (a) would provide that when a contractor has been
notified that a complaint has been filed, a compliance evaluation has
been initiated or an enforcement action has been commenced, the
contractor shall preserve all relevant personnel records until the
final disposition of the action.
Several of the commenters expressed views on proposed paragraph
(a). The civil rights and women's rights organizations commended the
proposal to make record retention requirements explicit. They viewed
the addition of a record retention regulation as essential to effective
enforcement and said it would ensure consistency with the regulations
under Title VII and Section 503.
The contractor community opposed the record retention proposal. Two
contractor associations asserted that proposed paragraph (a) was too
broad. They claimed that the proposal would expand the scope of records
subject to the retention requirement; that is, the examples of records
listed suggest that any document related to an employee or employment
decision must be retained for two years. These commenters contended
further that the proposed regulation would impose a considerable
burden, particularly on the larger contractors that have employment
related activities which might generate millions of records.
The concern that the proposal would oblige contractors to maintain
records beyond current requirements is unfounded. The NPRM explained
that the proposed record retention requirement (paragraph (a)) comports
with the analogous record retention requirements under Title VII and
the
[[Page 44178]]
Americans with Disabilities Act (ADA). In addition, proposed paragraph
(a) is consistent with the provisions adopted in the Section 503 final
rule. The types of employment records covered by the record retention
requirement, listed in proposed paragraph (a), include items not listed
in the corresponding Title VII and ADA regulations. But, as EEOC noted
in its comment, those additional items--the results of any physical
examination, job advertisements and postings, applications and resumes,
tests and test results, and interview notes--are examples of ``any
personnel or employment record made or kept,'' and, therefore, clearly
fall within the coverage of the existing Title VII and ADA record
retention rule.
Another contractor association contended that the proposed
regulatory language was inadequate because it failed to answer
contractors' recurrent questions embraced by record retention
obligations under Executive Order 11246. This commenter argued that the
regulations should include guidance on: (1) Who is an ``applicant'' for
the purposes of the record retention requirement; and (2) whether and
to what extent the record retention requirement applied when a
contractor used electronic bulletin boards and the Internet as
recruitment sources.
OFCCP has issued the following guidance on the meaning of the term
``applicant'':
The precise definition of the term `applicant' depends upon [a
contractor's] recruitment and selection procedures. The concept of
an applicant is that of a person who has indicated an interest in
being considered for hiring, promotion, or other employment
opportunities. This interest might be expressed by completing an
application form, or might be expressed orally, depending upon the
[contractor's] practice. Question and Answer No. 15, Adoption of
Questions and Answers to Clarify and Provide a Common Interpretation
of the Uniform Guidelines on Employee Selection Procedures (44 FR
11996, 11998 (March 2, 1979)).
Accordingly, whether an individual will be considered an applicant
turns on the employee selection procedures designed and utilized by the
contractor. OFCCP is studying the range of ways contractors are
utilizing electronic media in their employee selection processes and
intends to issue guidance responding to questions most frequently asked
by contractors regarding this issue.
Commenters from the contractor community criticized the two-year
record retention period proposed for larger contractors. These
commenters argued that it was inconsistent for OFCCP to impose a two-
year retention period, when the retention period under Title VII is
one-year. They argued that, because OFCCP follows the principles
developed under Title VII case law to enforce the Executive Order, the
agency should adopt the EEOC rule. These same commenters said that
OFCCP had underestimated the administrative and storage costs
associated with maintaining an additional year of records.
These comments ignore the differences in the enforcement schemes of
EEOC and OFCCP. Reviews of contractors' compliance with the Executive
Order and regulations cover a two-year period. The policy and practice
are to examine the contractor's personnel policies and activities for
the two years preceding the initiation of the review, and to assess
liability for discriminatory practices dating back two years. The two-
year record retention period provides greater assurance that relevant
records will be available during OFCCP compliance evaluations. In
contrast, EEOC's enforcement of Title VII is triggered exclusively by
charges, which must be filed within 180 days (or, in deferral
jurisdictions, 300 days) of an alleged violation. EEOC's one-year
retention period is designed to ensure that relevant records are not
discarded before the expiration of the complaint filing period.
Turning to the concern about the burdens on contractors, OFCCP
believes that requiring larger contractors to retain records for an
additional year will result in only a minimal increase in burden. As
was noted in the preamble to the NPRM, many large employers and some
smaller employers as well, are increasingly maintaining records
electronically. In such instances, compliance with the record retention
requirement will impose little or no additional burden. Moreover, the
decision to establish a one-year record retention period for smaller
contractors--the same period required by EEOC--is part of the agency's
effort to maintain burdens associated with record keeping at a minimal
level. The one-year rule also will accommodate those smaller
contractors that are less likely to maintain electronic records.
Two contractor associations commented on the separate record
retention requirements for larger and smaller contractors. One
association questioned whether OFCCP had authority under the U.S.
Constitution and Federal procurement laws to tie the record retention
requirement to workforce and contract size. This comment overlooks the
fact that size distinctions are common in regulatory schemes. Indeed,
the existing Executive Order regulations provide different requirements
for smaller contractors (e.g., those that employ fewer than 50
employees or do not have a contract of at least $50,000). Such
contractors, for example, are exempted from the regulatory requirement
to develop and maintain a written AAP.
The other contractor representative raised questions regarding the
record retention obligations of contractors who are at or near the
thresholds that trigger the different retention periods. Specifically,
the commenter questioned what would happen if the employment levels or
contract values exceed or fall below the 150 employees, $150,000
thresholds during the course of the contract. A change in status
relating to either threshold would affect the record retention
obligation. If the number of employees should fall below 150 or if the
contractor no longer has a contract of at least $150,000, the
contractor would not be required to retain employment records for two
years. The requirement to keep records for two years would become
effective again on the date that the contractor met the thresholds of
150 employees and a contract of $150,000. The record retention
requirement, however, would not be applied retroactively, i.e., the
change from one year to two years would be phased in day-by-day. But
see the discussion regarding the obligation to maintain records once a
compliance evaluation has commenced, which follows.
One commenter expressed disapproval of the requirement in proposed
paragraph (a) that contractors retain all relevant records once a
compliance evaluation has been initiated. This commenter contended that
the requirement was burdensome and unfair to contractors, particularly
because of the proposal to eliminate the provision in Sec. 60-60.7,
which allows the agency 60 days to complete a compliance review.
The purpose of this record retention requirement is to ensure that
OFCCP can obtain all relevant documents during a compliance
investigation or enforcement action. OFCCP appreciates the contractor's
concerns about the timely completion of compliance evaluations, but
disagrees with the assertion that the schedule has to be codified in
the regulations. In the preamble discussion concerning Sec. 60-1.20 of
the final rule, and again in the discussion regarding part 60-60 of the
regulations, OFCCP explains that the agency's standards for timeliness
and work schedules are not derived solely from the regulations.
Therefore, there would be set time frames for completing
[[Page 44179]]
compliance evaluations even if the regulatory provisions were
eliminated.
The final rule adopts the record retention provisions proposed in
the NPRM without change.
Section 60-1.12(b) Affirmative Action Programs
Paragraph (b) of the proposal provides that a contractor
establishment required to develop a written affirmative action program
(AAP) shall maintain the AAP for the current year and preserve the AAP
for the preceding year, together with the supporting documentation,
including good faith efforts undertaken. Three commenters from the
contractor community objected to proposed paragraph (b). They
questioned the relevance of information contained in an expired AAP and
expressed concern that OFCCP would examine the AAP for deficiencies.
One of the commenters contended that the only possible reason OFCCP
could have for requesting an AAP from the preceding year is to see if
one exists. This commenter urged OFCCP to include a statement to that
effect in the final regulation.
The written AAP serves dual purposes. The AAP is developed
primarily to assist the contractor in monitoring its employment
practices to ensure that they are nondiscriminatory and that
affirmative action is taken to ensure equal employment opportunity.
OFCCP also reviews and relies upon the AAP to determine whether the
contractor is complying with the Executive Order and regulations. The
contractor's affirmative action performance (e.g., personnel activity,
goals progress and good faith efforts to meet goals) is examined for at
least the last full AAP year. However, a compliance evaluation may be
scheduled at any time during the year. If, at the time of the review,
the contractor is six months or more into its current AAP year, OFCCP
examines performance under both the current year and the prior year
AAP. Accordingly, the requirement in proposed paragraph (b) that the
contractor preserve the AAP for the previous year would ensure the
availability of an AAP covering a full AAP year.
In addition, under the current regulations the AAP for the current
year must contain a progress report on goals for the previous AAP year.
Whether progress or little or no improvement was made in the goal
areas, the AAP for the previous year should provide an explanation of
the efforts undertaken and the results achieved. For example, the AAP
and documentation of good faith efforts may describe the contractor's
outreach and recruitment activities designed to increase its pool of
female or minority applicants, or training programs instituted to
enhance the skills and talents of incumbent employees with an eye to
increasing the pool of those eligible for promotion. In other words the
AAP from the previous year may contain information that would allow an
evaluation of those commitments that are directly related to the
performance of the contractor in the current year. In addition the
affirmative action obligation is not a one year requirement. Rather, it
is a continuing obligation and maintaining the AAPs in the fashion
proposed in paragraph (b) enables OFCCP to assess the quality and
effectiveness of the contractor's affirmative action commitments on a
multi-year basis.
The regulation in proposed paragraph (b) is adopted without change.
Section 60-1.12(c) Failure To Preserve Records
Paragraph (c) of the proposed rule provides that the failure to
maintain and preserve the records as proposed in paragraphs (a) and (b)
is a violation of Executive Order 11246. Additionally, paragraph (c)
proposes that a contractor's failure to preserve required records or
destruction of such records, may raise a presumption that the records,
if available, would have been unfavorable to the contractor. Paragraph
(c) of the proposed rule includes a proviso that the presumption shall
not apply if the contractor demonstrates that the destruction or
failure to preserve records resulted from circumstances beyond the
contractor's control.
EEOC commented that its Compliance Manual limited application of
the ``adverse inference rule'' to situations in which an employer acted
with the intent to defeat the purposes of Title VII. The view of EEOC
is that the proposal does not limit the adverse inference to instances
of deliberate destruction with an intent to frustrate the purposes of
the Executive Order.
OFCCP believes that clarification would be helpful. The adverse
inference presumption in proposed paragraph (c) is not limited to
situations in which the destruction or failure to preserve records may
be attributed to the willful conduct of the contractor. The agency
intends to invoke the presumption on a case-by-case basis as the
circumstances warrant. The proposed rule, in recognition of this
discretionary approach, states that a presumption may arise if the
contractor destroyed or failed to preserve records.
One commenter suggested that we amend the proposal to expressly
provide a procedure that would permit the contractor to rebut the
presumption that the records destroyed or not maintained were
unfavorable. The suggested amendment is unnecessary. The presumption is
rebuttable, and contractors will have a full opportunity to submit
evidence to refute the inference.
Another commenter recommended that the final rule set forth the
sanctions that may be imposed for violations of the record retention
requirements. The sanctions described in Sec. 60-1.27 may be imposed
for any violation of Executive Order 11246 or the implementing
regulations, including Sec. 60-1.12. A separate sanction provision for
violations of the record retention regulations, accordingly, is
unnecessary.
The final rule adopts paragraph (c) of the proposal without change.
Section 60-1.12(d) Effective Date
Paragraph (d) of the proposal provides that the contractor is
obligated to preserve only those records which are created or kept on
or after the effective date of this rule. No comments were received on
this provision. The final rule adopts paragraph (d) as proposed.
Section 60-1.20 Compliance Evaluations
The compliance review is the primary method of evaluating a
contractor's compliance with the Executive Order and regulations
Paragraph (a) of the current Sec. 60-1.20 describes the purpose of the
compliance review and provides that the review shall consist of a
comprehensive analysis of each aspect of a contractor's employment
practices, and where appropriate, include recommendations for
appropriate sanctions.
The NPRM would amend paragraph (a) to authorize OFCCP to use a
range of methods to revaluate a evaluate a contractor's compliance with
the regulations. Specifically, paragraph (a) would provide that a
compliance evaluation may consist of any one or a combination of the
following: (1) A compliance review, (2) of off-site review of records,
(3) a compliance check, and (4) a focused review.
Nearly all commenters addressed the proposed compliance evaluation
regulation. The commenters from the women's rights and civil rights
communities supported the proposal. They opined that the flexible
approach of the proposal would improve the efficiency of OFCCP and
permit the agency to target resources better. A contractor also
supported proposed paragraph (a) and offered that it was a thoughtful
proposal to streamline the compliance review process.
[[Page 44180]]
Some of the contractor associations favored the concept of having a
range of evaluation methods to determine compliance with Executive
Order 11246 and the regulations, but expressed reservations about
various aspects of the proposed regulation. For example, one commenter
questioned the off-site review of records, especially confidential
data. Another questioned whether the ``compliance check'' would entail
an on-site visit, off-site review of records, or both. Another
commenter requested that the rule be clarified as to whether the
additional options for evaluating compliance--the off-site review of
records of records, the compliance check and the focused review--would
constitute a complete evaluation. Specifically, this commenter wanted
to know whether the current practice of reviewing a contractor no more
frequently than once every 24 months would continue under the expanded
system.
Three commenters from the contractor community objected outright to
the proposed compliance evaluation regulation. One of the contractor
associations contended that the proposed rule would give OFCCP
unbridled authority to evaluate contractor compliance, and that
contractors would be subjected to endless requests for information,
data, and records if the rule were finalized. In addition, this
commenter contended that contractors needed regulatory notice of how
each type of compliance evaluation would be implemented. Similarly,
another commenter argued that the procedures for each of the evaluation
methods needed to be spelled out in the regulations with the same level
of detail provided in the current regulations concerning the compliance
review process. These commenters believed they should have the
opportunity to comment upon a proposed regulation that specified, among
other things, the number of evaluation methods the contractor could
expect, the frequency of such evaluations, and the time frames for
completing each method of evaluation.
OFCCP has made revisions in the final rule to provide more detail
about the methods for evaluating contractor compliance. The revisions
are explained below. Further, OFCCP agrees that contractors should be
apprised of how the agency intends to implement the proposed compliance
evaluation procedures. The agency disagrees, however, with the notion
that the particulars of implementation must be included in the
regulations.
The Federal Contract Compliance Manual (FCCM) contains the policy
guidance interpreting the Executive Order and regulations, as well as
agency instructions for implementing the regulatory provisions. OFCCP's
Compliance Manual currently describes the procedures for conducting
compliance reviews. The aspects of implementation addressed in the
Manual include the time frames for conducting the review, how to open
and close a review, and how frequently reviews should be conducted. The
FCCM is the appropriate medium to specify the procedures for conducting
the different types of compliance evaluations. The agency, therefore,
declines to adopt the changes suggested by some of the commenters. The
final rule adopts the compliance evaluation provisions of proposed
paragraph (a). However, paragraph (a) of the final rule differs from
the proposal by including expanded descriptions of the activities
contemplated under each evaluation method. The final rule for example,
clarifies that a compliance review is the same comprehensive
examination of the contractor's employment practices that is prescribed
by the current regulations. In addition, the description of the off-
site review of records is revised in the final rule to explain that the
scope of the examination would be substantially similar to the desk
audit phase of the compliance review. Further, the final rule provides
that the compliance check involves an on-site visit to an establishment
to review the contractor's books and records for the purpose of
determining whether: (1) Data and other information previously
submitted by the contractor are accurate and complete; (2) the
contractor has maintained records consistent with the requirements of
Sec. 60-1.12; and/or (3) the contractor has developed an AAP consistent
with the requirements of Sec. 60-1.40.
Contractor fears of repeated and unending evaluations are
unfounded. OFCCP always has been sensitive to contractor concerns about
the amount of time, money and personnel resources consumed by
compliance reviews. Thus, the agency's practice normally has been to
conduct a compliance review of a contractor no more frequently than
once every two years. Additionally, the agency's Compliance Manual
instructs the compliance officer to complete the compliance review
within 60 days from the date the AAP is received. (See FCCM C204). The
compliance officer must request an extension of time whenever it
becomes apparent that the compliance review cannot be completed within
the allotted time. (Id.)
OFCCP intends to continue to follow the currently prescribed time
frames whenever the compliance review is the method used to evaluate a
contractor's performance. The agency also intends to establish similar
standards regarding the frequency and duration of the off-site review
of records, the compliance check, and the focused review, to ensure
that the compliance evaluations authorized by Sec. 60-1.20 are not
overly intrusive. Finally, OFCCP will develop other policies and
procedures for compliance officers to follow when implementing these
new evaluation methods. That policy and procedural guidance will be
incorporated in the Compliance Manual, and thereby made available to
the public, before any of the new methods for evaluating contractor
compliance are utilized.
Section 60-1.20(d) Preaward Compliance Evaluations
Section 60-1.20(d) in the current regulations requires contracting
agencies to obtain clearance from OFCCP prior to awarding Federal
supply and service contracts of $1 million or more. The current
regulations require OFCCP to conduct a preaward compliance review if
the facility at which the contract will be performed has not undergone
a compliance review within the preceding 12 months, and to provide its
report of compliance within 30 days of receipt of the request from the
contracting agency.
The NPRM would revise paragraph (d) of the current regulation to
make the preaward compliance evaluation optional. Under paragraph (d)
of the proposed rule, OFCCP would have 15 days to inform an awarding
agency of its intentions to conduct a preaward compliance evaluation.
The proposed rule would allow OFCCP an additional 20 days from the date
of the notice of intention to conduct the preaward evaluation to
provide the conclusions regarding compliance to the contracting agency.
The proposed rule further provides that clearance shall be presumed if
OFCCP does not give notice of its intention to conduct a preaward
compliance evaluation or does not report its conclusions within the
prescribed time periods.
Several comments urged that the proposal be revised. Women's rights
and civil rights groups unanimously opposed the proposal to make
preaward compliance evaluations optional. They contended that changing
the preaward review from a mandatory function to a discretionary
function would seriously diminish the effectiveness of a compliance
procedure they viewed as an important enforcement tool. A few
[[Page 44181]]
expressed the fear that preawards would be discontinued entirely if
they were left to the discretion of the agency. As an alternative to
making all preaward compliance evaluations optional, some commenters
suggested that OFCCP could target its enforcement resources more
efficiently by: (1) Raising the $1 million minimum threshold to reflect
inflation over the last 25 years; and (2) expanding the 30-day time
allowed to conduct preaward compliance evaluations.
Most of the comments from the contractor community on proposed
paragraph (d) were supportive of the proposal to make preaward
compliance evaluations optional. However, one contractor and the
Department of Defense recommended that the agency eliminate preawards
entirely, and adopt a post-award notification and post-award review
procedure. Another contractor questioned the feasibility of the
proposed time frames for conducting preaward compliance evaluations,
noting that proposed paragraph (d) requires OFCCP to report its
conclusions about compliance within 20 days, while proposed paragraph
(e) would allow the contractor 15 days to submit an AAP.
The NPRM discusses the problems associated with the current
preaward process at length, so that discussion will not be recounted
here. (See 61 FR 25516, 25519.) The NPRM explained that several models
for modifying the preaward provisions were considered during the
development of the proposal, including an increase in the dollar amount
of the preaward contract threshold.
Upon reconsideration and in response to the comments, OFCCP has
decided to maintain the current mandatory nature of preaward
evaluations, but to raise the threshold trigger for the conduct of the
preaward evaluation. Accordingly, the final rule requires that a
preaward compliance evaluation of a prospective contractor be conducted
when the amount of the contract is $10 million or more, and that a
preaward evaluation of known prospective subcontractors be conducted
when the amount of the subcontract is $10 million or more, unless OFCCP
has conducted an evaluation and found them to be in compliance with the
Order within the preceding 24 months. These increases in contract
amount and compliance history thresholds will reduce the number of
preaward compliance evaluations OFCCP will need to conduct. A reduction
in the number of preaward evaluations will permit OFCCP greater
flexibility in targeting its enforcement resources. Continuing the
requirement that the agency conduct preawards, albeit of a smaller
universe, addresses the concerns of the civil rights and women's rights
groups that a discretionary preaward evaluation process would seriously
undermine the utility of preaward compliance evaluations as an
enforcement tool. Under the final rule, the preaward evaluation process
will remain a significant component of the Executive Order enforcement
program by targeting those contractors who benefit most from taxpayers-
funded Government contracts.
OFCCP also studied the option of eliminating the preaward
provisions, and considered replacing preawards with post-award
compliance evaluations. In OFCCP's view, however, the preaward
evaluation still has value as an enforcement tool. The final rule will
retain the preaward clearance time frames contained in the proposal to
ensure that the preaward evaluation process is conducted expeditiously.
The reduction of the number of preaward evaluations which will be
conducted under the final rule and the regulatory time frames for
completing the evaluations, coupled with the administrative changes
OFCCP is making to streamline the preaward clearance process, will
significantly decrease the burden on contracting agencies of processing
Executive Order preaward clearance requests during the procurement
process.
As for the question regarding the compatibility of the time frames
in paragraphs (d) and (e) of the proposal, the deadline for the
submission of documents in proposed paragraph (e) would not apply to
preaward compliance evaluations. Under the existing preaward
procedures, the contractor is not asked to submit its AAP and support
data for review. Currently, OFCCP either conducts an abbreviated desk
audit or review of the AAP and support data on-site, or dispenses with
review and analysis of the AAP and support data altogether. Contractors
can expect that OFCCP will continue to adjust its compliance evaluation
procedures to meet the preaward clearance time frames in paragraph (d).
The final rule revises paragraph (d) of Sec. 60-1.20 by requiring
that a preaward compliance evaluation of a prospective contractor be
conducted when the amount of the contract is $10 million or more and a
preaward evaluation of its known first-tier prospective subcontractors
be conducted when the amount of the subcontract is $10 million or more,
unless OFCCP has conducted an evaluation and found them to be in
compliance in the preceding 24 months. The final rule establishes time
frames for OFCCP to inform the awarding agency of the necessity for
conducting a preaward evaluation and for OFCCP to provide its
conclusions about the contractor's compliance status.
Section 60-1.20(e) Submission of Documents; Standard Affirmative
Action Formats
Under Sec. 60-60.2, a contractor must submit its AAP and supporting
documents to OFCCP within 30 days of a request. If the contractor fails
to submit the documents within the prescribed time period, the
enforcement procedures specified in Sec. 60-1.26 are applicable. The
NPRM proposed to incorporate the provisions of Sec. 60-60.2 as a new
paragraph (e) of Sec. 60-1.20, with one modification. Under proposed
paragraph (e), the time for submission of an AAP and supporting
documentation would be reduced from 30 days to 15 days.
Several comments on the proposed change in time frames were
received. The commenters from the civil rights and women's rights
communities supported the proposal. They viewed 15 days as more than
adequate time to submit an AAP because, they argued, contractors are
required to have an AAP in place as a condition of doing business with
the Federal Government. These commenters believed the 15-day deadline
would address the unacceptable (and unlawful) practice of contractors
waiting until a compliance review has been scheduled before they
develop an AAP.
The commenters from the contractor community objected to the
proposal and strongly urged retention of the 30-day time frame for
submission of the AAP and supporting data. One commenter observed that
the 15-day requirement assumes that a contractor could simply pull the
AAP out of a file, copy it, and send it to OFCCP. But, according to
this commenter and others, an AAP is a fluid, evolutionary document
rather than a static piece of paper. They asserted that the 15-day
deadline ignored other realities of compliance reviews and how AAPs are
developed and updated.
The commenters said that even where a detailed AAP has been
developed contractors frequently use the 30 days provided under the
current regulations to update the support data. They pointed out that a
request for an AAP may require that the contractor submit data on
personnel activity for the current goal year, which normally would be
compiled and analyzed during the 30-day period. Further, the commenters
identified several situations
[[Page 44182]]
which might make it difficult for a contractor to meet the 15-day
deadline. The request for the AAP might come when the company officials
responsible for updating or reviewing the AAP are unavailable, or at
the expiration of the AAP year and before the contractor has had an
opportunity to review and analyze the current labor force statistics in
order to update its AAP.
In recognition of the concerns of the contractors, OFCCP has
decided not to adopt the 15-day deadline in the final regulation. The
final rule retains the existing 30-day time frame for the submission of
the AAP and support data.
The current regulation at Sec. 60-60.3(a) states, in relevant part,
that ``Contractors may reach agreement with OFCCP on nationwide AAP
formats or on frequency of updating statistics.'' OFCCP proposed also
to incorporate this provision, without any changes, in new paragraph
(e).
Two contractor associations and one contractor commented on this
provision. All favored the inclusion of the provision in the final rule
and viewed it as a change in agency policy on nationwide AAPs, which
also are called standardized affirmative action formats or ``SAAFs.''
Some officials in OFCCP had been critical of the nationwide AAP formats
that had previously been negotiated and viewed them as impediments to
effective enforcement of the Executive Order. In response to these
agency concerns, a moratorium on new SAAF agreements was issued on
December 16, 1994. That moratorium remains in effect today. Thus, the
inclusion of the provision regarding nationwide AAP formats does not
represent a change in agency policy. Rather, it preserves the status
quo until OFCCP completes its evaluation of the concept.
The final rule adopts all the provisions proposed in paragraph (e)
except the change proposed in the time frame for the submission of
documents. The existing 30-day time frame for submitting the AAP and
supporting documents is retained in the final regulation.
Section 60-1.20(f) Confidentiality
The regulation at Sec. 60-60.3 provides that information made
available during the on-site review may be taken off-site if the
compliance officer finds that further analysis is required to make a
determination of compliance. Section 60-60.4 contains procedures under
which contractors may seek rulings on the relevancy of data requested
for off-site analysis. The regulation also prescribes procedures for
preserving the confidentiality of contractor data removed off-site for
analysis.
Under the current regulations, a contractor concerned about the
confidentiality of information such as employee names and compensation
data may submit alphabetic and coded data for desk audit purposes.
However, the contractor must provide the compliance officer with full
access to all relevant data on-site, as is directed by Sec. 60-1.43.
The information to be removed for off-site analysis may be coded, but
only if the key to the code is made available to the compliance
officer. The contractor also may seek a ruling from the District
Director as to the relevance of documents requested for off-site
analysis. The District Director is allowed 10 days to issue a ruling,
the contractor 10 days to appeal the District Director's ruling to the
Regional Director, and the Regional Director 10 days to issue a final
ruling. The current regulations provide that, during the pendency of
the relevancy determination, the contractor must allow the compliance
officer to remove the disputed information off-site.
The NPRM would delete part 60-60 of the regulations and transfer
the provisions found in Sec. 60-60.3(c) and Sec. 60-60.4 to a new
Sec. 60-1.20(f). The new paragraph (f) would incorporate the
substantive provisions of the current regulations, but would revise the
procedures for rulings on relevancy. The proposed rule would eliminate
the provision concerning the removal of disputed data off-site pending
the ruling on relevancy. In addition, paragraph (f) of the proposed
rule would replace the existing 10-day time frames for issuing rulings
on relevancy with the requirement that the District Director and
Regional Director issue their rulings ``promptly.''
The provisions concerning confidentiality and removal of data for
off-site analysis generated extensive comments from the contractor
community. All the commenters contended that the proposed rule did not
ensure protection of confidential or proprietary information during
compliance evaluations. Some commenters claimed that the provision
requiring the contractor to make the key to coded data available to a
compliance officer posed a threat to confidentiality. They recommended
amending the proposed rule to provide that the key to coded data may
never be taken off-site.
In fact, no changes to the provisions regarding the coding of
confidential data were proposed. The proposed rule would continue the
current regulatory requirement that the contractor make the key to
coded data available to the compliance officer. If the key to coded
data is needed for off-site analysis, contractors can be assured that
confidentiality will be protected, as it has been under the current
regulations. Where the contractor codes data that are submitted for
desk audit purposes, the current practice is that the key to the code
is retained by the contractor and made available to the compliance
officer during the on-site review. (See FCCM at 2GO1). That practice
would continue also under the proposed regulation.
Other commenters expressed concern about the provisions regarding
rulings on the relevancy of data requested for off-site analysis. They
argued that the determination of relevancy should be made prior to the
removal of any confidential data off-site. The commenters asserted also
that the regulations should contain definite time frames for the
District Director and Regional Director to issue rulings on relevancy.
Although the NPRM proposed modifications to the procedures for
obtaining rulings regarding the relevance of data requested for off-
site analysis, OFCCP has decided not to adopt those changes in the
final regulation. The final rule retains the provision that the
contractor must allow removal of the disputed data off-site pending a
final ruling on relevancy. Upon further consideration, OFCCP believes
that eliminating the provision regarding off-site availability pending
a relevance determination would prolong the compliance evaluation
process and adversely impact efficiency and effectiveness. The
resumption of an interrupted compliance evaluation might be delayed
well beyond the date the final ruling regarding relevancy is issued
because the compliance officer may have initiated another compliance
evaluation in the interim. The current regulation and practice allows
the compliance officer to proceed with the investigation while the
trail is still fresh and close the compliance evaluation within a
reasonable amount of time.
Further, in response to contractors' criticism concerning the
proposed removal of the definite time frames for issuing relevancy
determinations, OFCCP has decided not to adopt that provision of the
proposal. Instead, the final rule provides that the District Director
shall issue a ruling within 10 days, and that if the contractor appeals
the District Director's ruling to the Regional Director, the Regional
Director shall issue a final ruling within 10 days.
The comments concerning proposed paragraph (f) reveal that the
contractors' overriding concern is that confidential or proprietary
information obtained by
[[Page 44183]]
OFCCP for off-site analysis may be disclosed pursuant to the Freedom of
Information Act (FOIA). Several commenters recommended that the rule be
amended to require that all confidential data be returned at the
conclusion of the complaint investigation or compliance evaluation. One
commenter further suggested that the amendment state expressly that
contractor data are not subject to disclosure under FOIA while the
investigation or compliance evaluation is open, and that the compliance
review or investigation is not considered closed until all data are
returned to the contractor.
OFCCP follows the Department's regulations implementing the Freedom
of Information Act and Executive Order 12600 when processing FOIA
requests. The Department's FOIA regulations are found at 29 CFR Part
70. Data obtained from contractors that are contained in files
connected with open compliance evaluations, complaint investigations or
administrative enforcement actions are not disclosed. The agency
considers such information to be part of an investigatory file complied
for law enforcement purposes within the meaning of 5 U.S.C. 552(b)(7),
and therefore exempt from mandatory disclosure under FOIA. The
exemption in FOIA for information compiled for law enforcement
purposes, however, is not a permanent one. Once the compliance
evaluation, complaint investigation, or enforcement action has been
concluded and the investigatory files exemption no longer is in effect,
another exemption would need to apply in order to protect the
information in the files from disclosure in response to a FOIA request.
For example, information obtained from contractors arguably might be
protected from disclosure under the exemption for trade secrets or
commercial or financial information that is privileged or confidential
(5 U.S.C. 552(b)(4)).
The Department's FOIA regulations set forth procedures for
processing requests for the disclosure of information and material
provided by business submitters. Those regulations permit the
contractor to designate specific information as confidential commercial
information at the time of submission to the Department. 29 CFR
70.26(b). In addition, the Department's FOIA regulations require OFCCP
to give the contractor written notice of any request encompassing
confidential commercial information, and to provide the contractor an
opportunity to object to disclosure. 29 CFR 70.26 (d) and (e).
OFCCP previously has considered the question of whether assertedly
confidential data may be returned to the contractor upon completion of
the investigation or compliance evaluation. The position of OFCCP is
that the Federal records retention requirements do not permit the
agency to return data obtained from the contractor during a compliance
review or complaint investigation upon completion of the action. The
information and records received from the contractors in connection
with enforcement activities constitute Government records. As such,
their disposition is strictly prescribed by statute and regulation and
must be made in accordance with the agency's records management
program, with the approval of the Archivist of the United States. The
documents may be disposed of only by the methods defined by the
statute, which do not include returning them to the originating source,
i.e., the contractor, but instead call for disposal by sale or salvage,
donation for preservation and use, or destruction.
Paragraph (f) of the proposal is adopted in the final rule with the
changes regarding the procedures for issuing relevancy determinations
described herein. In addition, at the suggestion of one commenter, the
final rule substitutes ``key to coded data'' for the reference to ``the
code'' to the data. Thus, the final rule provides, in relevant part,
``Such data may only be coded if the contractor makes the key to the
code available to the compliance officer.''
Section 60-1.20(f) Access to Information
Section 60-60.4(d), concerning public access to information,
describes outdated procedures under which requests received from the
public for information obtained from the contractor previously were
processed. OFCCP proposed to substitute provisions in the current rule
with a statement of the agency's current practices. Accordingly,
paragraph (g) of the proposal provides that ``the disclosure of
information obtained from a contractor will be evaluated pursuant to
the public inspection and copying provisions of the Freedom of
Information Act, 5 U.S.C. 552, and the Department of Labor's
implementing regulations at 29 CFR Part 70.''
No comments were received on paragraph (g) of the proposal. The
provision is adopted in the final rule as proposed.
Section 60-1.26 Enforcement Proceedings
The NPRM would revise and restructure, for clarity, Sec. 60-1.26,
which specifies the Executive Order enforcement procedures. With the
exception of the provisions relating to the calculation of interest,
the proposal would not make substantive changes to this section.
Subsection (a) of the proposal would apply to both administrative and
judicial enforcement. Proposed subsection (b) would address
administrative enforcement procedures. Subsections (c) and (d) of the
proposed regulation would cover judicial enforcement proceedings
initiated by the Department of Justice.
Several of the proposed changes are consistent with provisions
included in the Section 503 implementing regulations at 41 CFR 60-
741.65(a)(1). Subsection (a)(2) of the proposed regulation, clarifies
that OFCCP may seek relief for victims of discrimination identified
either during a compliance evaluation or a complaint investigation
whether or not such individuals have filed a complaint with OFCCP.
Subsection (a)(2) of the proposal would require that interest on back
pay be compounded quarterly at the percentage rate established by the
Internal Revenue Service for the underpayment of taxes.
The proposal would provide, in subsection (b)(1), that
administrative enforcement proceedings may be instituted where OFCCP
determines that referral for formal enforcement (rather than
settlement) is appropriate. Subsection (b)(1) of the proposed
regulation would specify that the litigation referral will be made to
the Solicitor of Labor. Further, consistent with a requirement included
in the Section 503 regulations, the proposal would require that the
Department's Final Administrative Order in an Executive Order case be
issued within one year from the date of the Administrative Law Judge's
recommended decision, or the submission of the parties' exceptions and
responses to exceptions to such decision (if any), whichever is later.
The commenters from the civil rights and women's rights communities
welcomed the clarification in subsection (a)(2) that OFCCP may seek
back pay and other make whole relief for victims of discrimination
identified during a complaint investigation or compliance evaluation,
regardless of whether such individuals have filed a complaint with the
agency. One contractor suggested that contractors be given the
opportunity to correct a discriminatory practice or situation
identified for the first time during a compliance review before
liability is imposed. However, simply changing the offending employment
practice only addresses part of the problem. In most instances, the
discriminatory practice cannot be
[[Page 44184]]
considered ``corrected'' unless and until remedial relief is provided
for those victimized by the practice.
Two commenters from the contractor community objected to the
proposal concerning the compounding of interest on back pay awards. One
commenter suggested that compound interest provided a ``windfall'' to
the victim. OFCCP disagrees. Compounded interest is necessary to make
the victim whole. OFCCP has a longstanding policy of requiring that
interest on back pay awards under the Executive Order be compounded.
That policy is consistent with the policy and practice of the
Department to request compounded, pre-judgment interest whenever back
pay is sought in cases arising under the Fair Labor Standards Act. See
e.g., Brock v. The Claridge Hotel and Casino, 644 F.Supp. 899, 908
(D.N.J. 1986), aff'd, 846 F.2d 180 (3d Cir. 1988), cert. denied, 488
U.S. 925 (1988); and Brennan v. Bd. of Ed., Jersey City, 374 F.Supp.
817, 833 (D.N.J. 1974). Moreover, as noted in the NPRM, compounding
interest on awards of back pay is consistent with the case law under
Title VII of Civil Rights Act of 1964 and other Federal employment
discrimination laws. See e.g., Saulpaugh v. Monroe Community Hospital,
4 F.3d 134, 144 (2d Cir. 1993), cert. denied, 510 U.S. 1164 (1994);
EEOC v. Gurnee Inn Corp., 914 F.2d 815, 820 (7th Cir. 1990), and Mennen
v. Easter Stores, 951 F.Supp. 838, 863 n. 28 (N.D. Iowa 1997). The
proposal would reinstate this policy to ensure that victims of
discrimination obtain complete relief.
A contractor association objected to the provision in subsection
(a)(1)(ix) of the proposal, which provides that violations of the
Executive Order may be based upon the ``alteration or falsification''
of records. This commenter argued that the term ``alteration'' should
be deleted because it implied that contractors could not alter records
to correct errors without violating the Order. OFCCP, however, believes
that it is clear from the context that the term ``alteration'' refers
to changes or modifications in records which misrepresent the facts.
Accordingly, the agency declines to make that modification to the
proposed rule.
Further, a commeter from the contractor community objected to the
provision in proposed subsection (b), which would provide that OFCCP
may refer matters to the Solicitor of Labor with the recommendation for
the institution of administrative enforcement proceedings ``when OFCCP
determines that referral for consideration of formal enforcement
(rather than settlement) is appropriate.'' The commenter said the
provision appeared to eliminate the duty to conciliate and considered
it to be a substantive change to the existing regulations. The
commenter is incorrect. The proposed regulation does not change the
existing regulations; OFCCP is still required to make reasonable
efforts to secure compliance through conciliation. Proposed paragraph
(b), however, recognizes, that some violations, such as denial of OFCCP
access, are not always amenable to conciliation, and therefore, warrant
OFCCP initiating immediate administrative enforcement.
Section 60-1.26 of the proposal is adopted in the final rule.
However, some modifications have been made in the final regulation.
Subsection (a)(1)(ii) of the proposal, which provides that violations
may be based upon the results of a compliance review, has been deleted
from the final regulation as redundant. The final rule specifies that
violations may be based on the results of a compliance evaluation,
which includes compliance reviews. In addition, the final rule adds a
new subsection which states that violations may be based on a
contractor's refusal to provide data for off-site review or analysis as
required in the regulations. Although subsection (a)(1)(viii) of the
final rule references the refusal to furnish records, OFCCP believes
the amendment is necessary to clarify that violations may be based upon
the contractor's refusal to furnish records requested for off-site
review or analysis.
Section 60-1.27 Sanctions
The current sanction regulation provides only that the sanctions
authorized by Section 209 of the Executive Order may be exercised by or
with the approval of the Director of OFCCP. The NPRM would add a new
paragraph specifically to address the sanction of debarment. Paragraph
(b) of the proposal would provide that the contractor may be debarred,
subject to reinstatement pursuant to the provisions in Sec. 60-1.31.
The proposal also would provide that debarment may be imposed for an
indefinite term or for a fixed minimum period of at least six months.
Several comments were received on the proposed sanction provision.
The comments from the women's rights and civil rights communities
supported the proposal to make the debarment sanction explicit in the
regulations. Commenters from the contractor community, however,
objected to the proposed sanction regulation. It appeared from a few
comments that the indefinite debarment sanction needed further
explication.
The duration of an indefinite term of debarment is not
indeterminable, as some commenters suggested. Under the current
regulations, and the proposed reinstatement regulation as well, a
contractor debarred for an indefinite term may request reinstatement at
any time. Thus, as OFCCP noted in the preamble discussion concerning
sanctions, a contractor debarred for an indefinite term can be
reinstated immediately without incurring any economic loss.
Several commenters from the contractor community thought that fixed
term debarments were too harsh a sanction. Two commenters questioned
whether fixed term debarments were authorized under the Executive
Order. A contractor association argued that the Secretary does not have
authority to continue a debarment beyond the time the contractor
demonstrates its willingness and ability to comply. A contractor, in an
extensive comment on this proposal, contended that fixed term
debarments were not authorized under the Order because they were
punitive in nature.
Under Section 209(a)(6) of the Order, a debarred contractor remains
ineligible for future Government contracts ``until such contractor has
satisfied the Secretary of Labor that such contractor has established
and will carry out personnel and employment policies in compliance with
the provisions of this Order.'' The Executive Order does not, as the
contractor association's comment suggests, require the Secretary to
reinstate a contractor merely because it promises to implement revised
policies. Rather, the Order states that the Secretary must be
``satisfied'' that the contractor will carry out the revised policies.
In some cases, a contractor will have to demonstrate its commitment to
changed employment policies over a period of time, before an
affirmative determination can be made about the contractor's
willingness and ability to comply with the Executive Order's
requirements.
The debarment for a fixed period is not intended as a
``punishment.'' The purpose of the sanction is to provide a trial
period during which a contractor can demonstrate its commitment and
ability to establish employment practices that will ensure continued
compliance with its Executive Order obligations. OFCCP believes that
the prospect of a fixed period of ineligibility for government
contracts will deter contractors from engaging in violations. Contrary
to the contentions of one commenter, sanctions can discourage
[[Page 44185]]
certain conduct without being retributive.
Other commenters from the contractor community objected to the
proposal because it would authorize the Secretary to impose a fixed
term debarment for ``any'' violation. They said that, while the
Secretary had imposed the fixed term debarment in very limited
circumstances in the past, paragraph (b) of the proposal was not
tailored to address these limited and unusual circumstances. A few
commenters recommended that we amend the proposed regulation to specify
the instances that would warrant the imposition of a fixed term
debarment.
It is neither practicable nor necessary precisely to define the
types of violations for which it would be appropriate to impose a fixed
term debarment. Where a fixed term debarment is ordered, in contrast to
an indefinite term debarment, the length of the debarment period will
be determined case-by-case, and will depend upon factors such as the
nature and severity of the violations. The sanction regulation is
adopted in the final rule as proposed.
Section 60-1.30 Notification of Agencies
Currently, the regulations require the OFCCP distribute a list of
debarred contractors to all executive departments and agencies. OFCCP
proposed to eliminate this requirement because the General Services
Administration now publishes a listing of debarred contractors. The
proposal substitutes in its place a provision requiring the Deputy
Assistant Secretary ensure that the heads of agencies are notified of
debarments. The proposal also renames the section ``Notification of
Agencies'' instead of ``Contract ineligibility list.''
No comments were received on proposed Sec. 60-1.30. The regulation
is adopted in the final rule as proposed.
Section 60-1.31 Reinstatement of Ineligible Contractors
The current regulation provides that a contractor declared
ineligible for future contracts may request reinstatement in a letter
directed to the Director. The regulations state that the contractor
must show that it has established and will carry out employment
policies in compliance with the equal opportunity clause in any
reinstatement proceedings. The NPRM would revise the current provisions
regarding reinstatement to conform them to proposed Sec. 60-1.27(b),
which authorizes debarment either for an indefinite term or for a fixed
term of not less than six months. Under the proposal, a contractor
debarred for an indefinite period could request reinstatement at any
time. A contractor debarred for a fixed period could request
reinstatement after the expiration of the fixed period. The proposal
would authorize a compliance evaluation of the contractor's employment
practices before a final disposition of the reinstatement request.
Commenters from the contractor community objected to the
reinstatement procedures proposed for contractors debarred for a fixed
term. They contended that reinstatement should occur automatically at
the conclusion of the fixed term. According to these commenters, the
absence of definite time frames in the reinstatement procedures
outlined in the proposal would mean that the fixed term debarment could
drag on indefinitely.
OFCCP submits that the reinstatement process set forth in the
proposed regulation is fair to debarred contractors. The argument that
reinstatement should be automatic at the end of the fixed period misses
a critical point. A debarred contractor is required to demonstrate that
its employment policies and practices comply with the Order, and that
showing usually is made in the context of a compliance evaluation.
Nevertheless, in response to concerns that proposed Sec. 60-1.31
would effectively extend a debarment well beyond the original fixed-
term, OFCCP has modified the reinstatement process in the final rule.
Under the final rule, a contractor debarred for a fixed period may file
a request for reinstatement 30 days prior to the expiration of the
fixed debarment period, or at any time thereafter. However, filing a
reinstatement request 30 days before the end of the debarment period
will not result in early reinstatement; a contractor debarred for a
fixed period may be reinstated and declared eligible for future
Government contracts only upon or after the fixed debarment period
expires.
OFCCP intends to process reinstatement requests in a timely manner
upon receipt. In many instances the compliance evaluation or other
activity necessary to ensure that the contractor is in compliance and
will remain in compliance may be completed during the 30-day ``window''
prior to the expiration of the debarment. In other instances that
activity may extend beyond the 30-days, in which case the contractor
will be reinstated (or notified of a decision not to reinstate)
promptly upon completion of OFCCP's examination of the contractor's
compliance status.
Section 60-1.32 Intimidation and Interference
The current regulation states that sanctions and penalties may be
imposed against the contractor who fails to ensure that no one
intimidates, threatens, coerces or discriminates against any individual
who files a complaint or otherwise participates in a compliance
activity under the Executive Order or a similar Federal, state or local
law. The proposal would include a similar prohibition, but would
specify that the contractor itself shall not engage in such activities
and shall ensure that all persons under its control do not do so, and
would add that the prohibition applies to harassment. The proposed
regulation would apply the prohibition to an individual's opposition to
any practice that is unlawful under the Order or similar Federal,
state, or local law.
The women's rights and civil rights organizations supported the
proposal, and commented that the protections outlined in the proposed
provisions are needed to ensure the integrity of the enforcement
process. A contractor, however, was critical of the proposal. This
commenter suggested that the proposed regulation be revised to clarify
that the protections extended only to ``persons who were known to the
contractor to have participated in an investigation'' or ``persons who
were known to the contractor to have opposed unlawful practices.'' The
burden of proof standards applicable to disparate treatment
discrimination cases are applied to retaliation cases, and thus, there
must be direct or circumstantial evidence that the contractor had
knowledge of the protected conduct in order to prove the violation.
Accordingly, the suggested clarification is not necessary.
The provision is carried forward in the final rule as proposed.
Section 60-1.34 Violation of a Conciliation Agreement or Letter of
Commitment
The current regulation sets forth the procedures that apply when a
contractor violates a conciliation agreement. The proposal would add a
new subsection which would provide that, in any proceedings related to
an alleged violation of a conciliation agreement, OFCCP may seek
enforcement of the agreement and shall not be required to present proof
of the underlying violations resolved by the agreement.
Two comments from the contractor community objected to the
proposal. A
[[Page 44186]]
contractor association argued that OFCCP should be required to prove
the underlying violations resolved by a conciliation agreement in order
to protect contractors from being coerced into signing unreasonable or
impracticable agreements. Similarly, a law firm, whose clients include
Government contractors, contended that contractors frequently enter
into conciliation agreements in order to terminate the compliance
review, and not because they have actually committed violations of the
Executive Order. Thus, the law firm's argument continues, OFCCP should
have the burden of proving the truth of its findings of violation, and
the contractor should not be precluded from demonstrating that it did
not violate the Order, in the event the contractor is unable to honor
the commitments it made.
The proposal is consistent with the well-settled principle under
Title VII case law that a conciliation agreement entered to resolve
employment discrimination claims is specifically enforceable
independent of a finding that the employer did, in fact, engage in
discriminatory practices, so long as regular contract rules are
satisfied and enforcement does not conflict with the purposes of Title
VII. See, e.g., EEOC v. Safeway Stores, Inc., 714 F.2d 567 (5th Cir.
1983), cert. denied, 467 U.S. 1204 (1984). The courts have concluded
that conciliation agreements would be rendered worthless as a means of
securing voluntary compliance with Title VII, if a finding on the
merits were required before any voluntary agreement to resolve
discrimination claims could be enforced.
Likewise, contractors that enter into conciliation agreements to
resolve findings of discrimination or other substantive violations of
the Executive Order do so voluntarily and knowingly. Contractors are
under no compulsion to execute conciliation agreements; they are free
to reject the terms of settlement and have the matter resolved through
the contested litigation. However, if a contractor voluntarily and
knowingly accepts an offer to conciliate a matter, both parties,
including the Government, are entitled to rely on the representations
contained in the conciliation agreement. The conciliation contract
binds both parties, and no useful purpose would be served here by
outlining the litany of equities and inequities that would result if
one or the other party were allowed to ignore its agreement and return
to ground ``zero.''
The final rule adopts the proposed amendment to Sec. 60-1.34
without change.
Section 60-1.42 Notices To Be Posted
This section sets forth the language that must be included in the
equal opportunity notices Government contractors must post in
conspicuous places. OFCCP proposed technical corrections to the wording
of the poster concerning the jurisdictional coverage of Title VII and
the address of the EEOC. No comments were received on this proposal.
The provision is adopted in the final rule as proposed.
Section 60-1.43 Access to Records and Site of Employment
Under the current regulations, each contractor is required to
permit access to its premises for the purpose of conducting on-site
compliance reviews and inspecting and copying such books, records,
accounts and other material as may be relevant to the matter under
investigation or pertinent to compliance with the Order. The current
regulations allow the information to be used only in connection with
the administration and enforcement of the Executive Order and the Civil
Rights Act of 1964.
The proposed amendment would add computerized records to those
which the contractor must produce for inspection and copying. The
proposal would continue the requirement that the contractor permit
access to its premises for the purpose of conducting compliance
evaluations and complaint investigations. In addition, the proposal
would allow the information to be used in connection with the
administration of other laws that are enforced in whole, or in part, by
OFCCP.
Several commenters from the contractor community objected to the
proposal regarding access to computerized records. They contended that
the proposal would allow unlimited access to sensitive information in
the contractors' human resource files, regardless of its relevancy to a
determination of compliance with the Order. The commenters requested
that OFCCP revise the proposal to clarify that access would be limited
to existing files and that contractors would not be required to
reprogram their computers to comply with an OFCCP request.
The proposed rule does not expand the scope of records that would
be made available; contractors must give OFCCP access to data in
computer files under the current regulations. Rather, the proposed
regulation simply would clarify that records include those maintained
in computerized form.
The concern that the provision would permit, if not encourage,
unfettered access to confidential commercial proprietary data or
irrelevant information is unjustified in OFCCP's view. Under the
proposed rule, as under current regulation, access is limited to
records that may be relevant to the matter under investigation and
pertinent to compliance with the Order. Further, the contractor is not
required to reprogram its computers in order to generate data
responsive to OFCCP's request; access is limited to the records and
data that already exists in computerized form. Moreover, requests to
take computerized records off-site for further analysis would be
subject to the relevancy determinations prescribed by Sec. 60-1.20(f)
of the final rule.
The regulation is adopted in the final rule as proposed in the
NPRM.
Part 60-60 Contractor Evaluation Procedures for Contractors for
Supplies and Services
Part 60-60 of the current regulations concerns the conduct of
compliance reviews. The NPRM proposed to delete a sizable portion of
part 60-60. Most of part 60-60 properly is characterized as internal
operating procedures. The NPRM explained that the agency's internal
procedures are incorporated in the Federal Contract Compliance Manual
(FCCM). Consequently, the regulations in which the procedures are
published no longer are needed. However, those portions of part 60-60
that are regulatory in nature were proposed to be transferred to part
60-1. Thus, as previously has been discussed, Sec. 60-1.20 of the final
rule incorporates the substantive provisions in the current part 60-60
concerning submission of the AAP and support data (Sec. 60-60.2(a)),
nationwide AAP formats (Sec. 60-60.3(a)(3)), off-site analysis of
contractor data (Sec. 60-60.3(d)), and confidentiality and relevancy of
information (Sec. 60-60.4 (a) through (d)).
One commenter from the contractor community objected to the
elimination of part 60-60. This commenter argued that the entire
provision should be retained and expanded to include detailed
descriptions of the procedures that will be used to implement the new
compliance evaluation provisions in Sec. 60-1.20. According to this
commenter, a regulatory provision devoted to evaluation procedures
would ensure consistency in operations across OFCCP offices.
Other commenters from the contractor community objected to the
removal of particular provisions in Part 60-60. One contractor was
concerned that the elimination of Sec. 60-60.3(c) would result in a
change of the current agency practice of reviewing a contractor
establishment no more frequently than once every 24 months. Section 60-
60.3
[[Page 44187]]
currently provides that an on-site review need not be conducted where
the AAP is determined to be acceptable at desk audit, an on-site review
has been conducted within the preceding 24 months, and the
circumstances of the previous onsite review have not substantially
changed. This regulatory provision, however, is not the basis for the
current practice regarding the scheduling of compliance reviews.
Detailed procedures for implementing the regulatory provisions
should be treated in agency guidance, not in the regulations. OFCCP
already has issued guidance on the procedures for selecting and
scheduling supply and service contractors for compliance reviews. That
guidance provides that contractor establishments which have been
reviewed in the last two years are not to be reviewed again unless
certain very specific criteria are met and the Regional Director
approves the scheduling of the review (OFCCP Order No. ADM 92-1/SEL).
No plans are under consideration to change current scheduling
practices; contractors may continue to expect that a compliance review
usually will occur no more frequently than once every two years.
Other commenters objected to the proposed elimination of Sec. 60-
60-7, which prescribes a 60-day time frame for the completion of a
compliance review. Again, the time frame for completing a compliance
evaluation is an appropriate subject for agency guidance, not the
regulations. The Compliance Manual currently states that substantial
effort will be made to complete a compliance review within 60 days,
although completion within that period is not a procedural prerequisite
to an enforcement action (See FCCM 2C04). Contractors should not be
concerned that the elimination of the regulatory provision in Sec. 60-
60.7 will mean an end to established schedules for completing
evaluations of contractor compliance. OFCCP's subregulatory guidance
will continue to reference the 60-day time frames even after the final
rule is effective.
The final rule deletes the provisions of part 60-60 in accordance
with the proposal.
Regulatory Procedures
Executive Order 12866
The Department is issuing this final rule in conformance with
Executive Order 12866. This rule has been determined to be significant
for purposes of Executive Order 12866 and therefore has been reviewed
by OMB. This rule does not meet the criteria of section 3(f)(1) of
Executive Order 12866 and therefore the information enumerated in
section 6(a)(3)(C) of that Order is not required.
In accordance with section 6 of Executive Order 12866, an
assessment of the potential costs and benefits of this rule has been
made. Although difficult to quantify, OFCCP believes that the economic
impact of this rule will be positive. The compliance evaluation
regulation adopted in this rule will streamline procedures for
assessing contractor performance, and thereby reduce compliance costs
and paperwork burdens on contractors, particularly when there are no
indicators of noncompliance. In addition, the changes made by this rule
to the provisions concerning preaward compliance evaluations will
significantly decrease the administrative burdens and costs incurred by
contracting agencies in processing requests for preaward clearance
during the procurement process. Further, the compliance evaluation and
preaward clearance regulations will reduce administrative costs and
burdens on OFCCP, permit the agency greater flexibility in deploying
its enforcement resources, and improve the agency's overall efficiency
in administering the Federal contract compliance program.
As discussed below in the sections concerning the Regulatory
Flexibility Act and the Paperwork Reduction Act, the record retention
provisions adopted in this rule will promote efficiency in OFCCP's
enforcement of the Executive Order by ensuring the availability of
information needed to evaluate the compliance status of Government
contractors. Further, the final rule will eliminate confusion about
record retention requirements under Executive Order 11246 and ensure
consistency with the record retention requirements under section 503 of
the Rehabilitation Act, while imposing only a de minimis increase in
burden on contractors. OFCCP believes the benefits provided by express
record retention requirements to the agency's enforcement of the
Executive Order will outweigh the minimal increase in contractor
burdens. Finally, the elimination of the requirement for a written
certification regarding the maintenance of non-segregated facilities
will result in a reduction in contractor paperwork burdens.
In the NPRM, OFCCP stated that its goal in proposing regulatory
changes is to make both contractor compliance and agency enforcement
more efficient and cost effective. OFCCP invited comments on additional
ways to reduce compliance burdens such as simplified compliance
procedures for small contractors. However, no comments were received in
response to this request.
Regulatory Flexibility Act
All entities, regardless of size, will benefit from the repeal of
the written certification regarding the maintenance of non-segregated
facilities in this final rule. The record retention requirements
adopted in this final rule might result in a minimal increase in the
burden associated with storage of records for some small entities.
However, in the agency's estimation, any increase in the corresponding
storage costs would be negligible. Consequently, under the Regulatory
Flexibility Act, as amended, 5 U.S.C. 605(b), the Secretary of Labor
certifies that this rule will not have a significant economic impact on
a substantial number of small entities.
Paperwork Reduction Act
The changes to the Executive Order regulations made by the final
rule published today impact the information collection requirements
currently approved by OMB under the Paperwork Reduction Act (44 U.S.C.
3501, et seq.). The record retention provisions adopted in Sec. 60-1.12
of the final rule affect the approved record retention requirements for
both supply and service (OMB Control No. 1215-0072) and construction
contractors (OMB Control No. 1215-0163).
The new record retention requirements contained in this final rule
have been submitted to OMB for clearance under the Paperwork Reduction
Act. The new record retention requirements are not effective until
OFCCP displays currently valid OMB control numbers. When OMB completes
its review, OFCCP will publish a notice in the Federal Register
regarding the control numbers.
The elimination of the certification regarding non-segregated
facilities does not affect OFCCP's existing information collection
requirements. Although the certification imposed paperwork burdens on
contractors, such certifications were exempt under the Paperwork
Reduction Act of 1980.
OFCCP predicted in the NPRM that the adoption of a two-year record
retention requirement for larger contractors--those with 150 or more
employees and a Government contract of at 150,000--would result in only
a minimal increase in burden. OFCCP asserted that the one-year record
retention period prescribed for smaller contractors (those that have
fewer than 150 employees or that do not have a Government contract of
$150,000) would not increase the existing burden
[[Page 44188]]
on these contractors because they already are subject to this
obligation under Title VII. Although the obligation to retain
employment records for a year would be new for the small number of
Government contractors that are not subject to Title VII (i.e., those
with fewer than 15 employees), OFCCP opined that any increase in burden
associated with filing and storing employment records would be
negligible for this group.
OFCCP invited the public to comment on the accuracy of the agency's
estimates regarding the burdens posed by the proposed revisions to the
information collection requirements, and to suggest ways of minimizing
the burden and enhancing the quality and utility of the information
collected. Two commenters--a consultant to Government contractors and a
contractor association which represents small agricultural firms--
responded to this request for comments. Several commenters from the
contractor community, however, expressed opinions about the burdens
associated with the record retention requirements in their comments on
the regulatory provision.
Both the consultant and the contractor association contended that
the proposed regulations would cause an overall increase in paperwork.
According to the consultant, the two-year record retention period would
be particularly burdensome for larger employers that routinely receive
thousands of pages of applicant materials over the course of the year.
The consultant asserted that retention of these materials for an
additional year would require substantial time and effort from
personnel and material handling staffs, and significant amounts of
storage space as well. Comments received from two contractor
associations in response to proposed Sec. 60-1.12 expressed similar
opinions about the increased storage burden for larger contractors. The
contractor association contended that the proposed regulatory revisions
would generate substantially more paperwork for the small agricultural
companies it represents.
OFCCP recognizes that the volume of records subject to the
retention requirement and the storage burdens will vary among
contractors. However, OFCCP still maintains that, on average, the
increase in burdens associated with the two-year retention period will
be minimal.
OFCCP stated in the NPRM that the elimination of the written
certification regarding non-segregated facilities would reduce
compliance burdens by roughly 850,000 hours. Accordingly to the
consultant, the time and expense involved in preparing certifications
have been reduced significantly by technological advances in personnel
and purchasing offices, and as a result, elimination of the
certification would save at most one-half of the hours that OFCCP had
estimated. Even if the consultant is correct and certifications do not
involve the amount of time the agency's estimate assumes, OFCCP
believes the elimination of the requirement will yield a significant
reduction in contractor burdens.
Unfunded Mandates Reform Act
This final rule does not include any Federal mandate that may
result in the expenditures by state, local and tribal governments in
the aggregate, or by the private sector, of $100,000,000 or more in any
one year.
List of Subjects
41 CFR Part 60-1
Administrative practice and procedure, Civil rights, Employment,
Equal employment opportunity, Government contracts, Government
procurement, Investigations, Reporting and recordkeeping requirements.
41 CFR Part 60-60
Equal employment opportunity, Government procurement, Reporting and
recordkeeping requirements.
Signed at Washington, DC, this 12th day of August 1997.
Alexis M. Herman,
Secretary of Labor.
Bernard E. Anderson,
Assistant Secretary for Employment Standards.
Shirley J. Wilcher,
Deputy Assistant Secretary for Federal Contract Compliance.
Accordingly, Part 60-1 of the rule amending 41 CFR Chapter 60
published on December 30, 1980 (45 FR 86216), which was delayed
indefinitely at 46 FR 42865, and under the authority of Executive Order
11246, as amended, Title 41 of the Code of Federal Regulations, Chapter
60, is amended as follows:
PART 60-1--[AMENDED]
1. The authority citation for Part 60-1 is revised to read as
follows:
Authority: Sec. 201, E.O. 11246 (30 FR 12319), as amended by
E.O. 11375 (32 FR 14303) and E.O. 12086 (43 FR 46501).
2. Section 60-1.3 is amended by removing the definition of
Director, by revising the definitions of Contract, Government contract,
Subcontract and United States, and by adding, in alphabetical order,
the definitions of Compliance evaluation and Deputy Assistant Secretary
to read as follows:
Sec. 60-1.3 Definitions.
* * * * *
Compliance evaluation means any one or combination of actions OFCCP
may take to examine a Federal contractor or subcontractor's compliance
with one or more of the requirements of Executive Order 11246.
* * * * *
Contract means any Government contract or subcontract or any
federally assisted construction contract or subcontract.
* * * * *
Deputy Assistant Secretary means the Deputy Assistant Secretary for
Federal Contract Compliance, United States Department of Labor, or his
or her designee.
* * * * *
Government contract means any agreement or modification thereof
between any contracting agency and any person for the purchase, sale or
use of personal property or nonpersonal services. The term ``personal
property,'' as used in this section, includes supplies, and contracts
for the use of real property (such as lease arrangements), unless the
contract for the use of real property itself constitutes real property
(such as easements). The term ``nonpersonal services'' as used in this
section includes, but is not limited to, the following services:
Utilities, construction, transportation, research, insurance, and fund
depository. The term Government contract does not include:
(1) Agreements in which the parties stand in the relationship of
employer and employee; and
(2) Federally assisted construction contracts.
* * * * *
Subcontract means any agreement or arrangement between a contractor
and any person (in which the parties do not stand in the relationship
of an employer and an employee):
(1) For the purchase, sale or use of personal property or
nonpersonal services which, in whole or in part, is necessary to the
performance of any one or more contracts; or
(2) Under which any portion of the contractor's obligation under
any one of more contracts is performed, undertaken or assumed.
* * * * *
United States, as used herein, shall include the several States,
the District of Columbia, the Virgin Islands, the Commonwealth of
Puerto Rico, Guam, American Samoa, the Commonwealth of
[[Page 44189]]
the Northern Mariana Islands, and Wake Island.
3. Section 60-1.8 is revised to read as follows:
Sec. 60-1.8 Segregated facilities.
To comply with its obligations under the Order, a contractor must
ensure that facilities provided for employees are provided in such a
manner that segregation on the basis of race, color, religion, sex or
national origin cannot result. The contractor may neither require such
segregated use by written or oral policies nor tolerate such use by
employee custom. The contractor's obligation extends further to
ensuring that its employees are not assigned to perform their services
at any location, under the contractor's control, where the facilities
are segregated. This obligation extends to all contracts containing the
equal opportunity clause regardless of the amount of the contract. The
term ``facilities,'' as used in this section, means waiting rooms, work
areas, restaurants and other eating areas, time clocks, restrooms, wash
rooms, locker rooms, and other storage or dressing areas, parking lots,
drinking fountains, recreation or entertainment areas, transportation,
and housing provided for employees; Provided, That separate or single-
user restrooms and necessary dressing or sleeping areas shall be
provided to assure privacy between the sexes.
4. A new Sec. 60-1.12 is added to Subpart A to read as follows:
Sec. 60-1.12 Record retention.
(a) General requirements. Any personnel or employment record made
or kept by the contractor shall be preserved by the contractor for a
period of not less than two years from the date of the making of the
record or the personnel action involved, whichever occurs later.
However, if the contractor has fewer than 150 employees or does not
have a Government contract of at least $150,000, the minimum record
retention period shall be one year from the date of the making of the
record or the personnel action involved, whichever occurs later. Such
records include, but are not necessarily limited to, records pertaining
to hiring, assignment, promotion, demotion, transfer, lay off or
termination, rates of pay or other terms of compensation, and selection
for training or apprenticeship, and other records having to do with
requests for reasonable accommodation, the results of any physical
examination, job advertisements and postings, applications and resumes,
tests and test results, and interview notes. In the case of involuntary
termination of an employee, the personnel records of the individual
terminated shall be kept for a period of not less than two years from
the date of the termination, except that contractors that have fewer
than 150 employees or that do not have a Government contract of at
least $150,000 shall keep such records for a period of not less than
one year from the date of the termination. Where the contractor has
received notice that a complaint of discrimination has been filed, that
a compliance evaluation has been initiated, or that an enforcement
action has been commenced, the contractor shall preserve all personnel
records relevant to the complaint, compliance evaluation or enforcement
action until final disposition of the compliant, compliance evaluation
or enforcement action. The term ``personnel records relevant to the
complaint,'' for example, would include personnel or employment records
relating to the complainant and to all other employees holding
positions similar to that held or sought by the complainant and
application forms or test papers submitted by unsuccessful applicants
and by all other candidates for the same position as that for which the
complainant unsuccessfully applied. Where a compliance evaluation has
been initiated, all personnel and employment records described above
are relevant until OFCCP makes a final disposition of the evaluation.
(b) Affirmative action programs. A contractor establishment
required under Sec. 60-1.40 to develop a written affirmative action
program (AAP) shall maintain its current AAP and documentation of good
faith effort, and shall preserve its AAP and documentation of good
faith effort for the immediately preceding AAP year, unless it was not
then covered by the written AAP requirement.
(c) Failure to preserve records. Failure to preserve complete and
accurate records as required by paragraphs (a) and (b) of this section
constitutes noncompliance with the contractor's obligations under the
Executive Order and this Part. Where the contractor has destroyed or
failed to preserve records as required by this section, there may be a
presumption that the information destroyed or not preserved would have
been unfavorable to the contractor: Provided, That this presumption
shall not apply where the contractor shows that the destruction or
failure to preserve records results from the circumstances that are
outside of the contractor's control.
(d) Effective date. The requirements of this section shall apply
only to records made or kept on or after September 18, 1997.
5. In Sec. 60-1.20, the section heading and paragraphs (a) and (d)
are revised and paragraphs (e), (f) and (g) are added to read as
follows:
Sec. 60-1.20 Compliance evaluations.
(a) OFCCP may conduct compliance evaluations to determine if the
contractor maintains nondiscriminatory hiring and employment practices
and is taking affirmative action to ensure that applicants are employed
and that employees are placed, trained, upgraded, promoted, and
otherwise treated during employment without regard to race, color,
religion, sex, or national origin. A compliance evaluation may consist
of any one or any combination of the following investigative
procedures:
(1) Compliance review. A comprehensive analysis and evaluation of
the hiring and employment practices of the contractor, the written
affirmative action program, and the results of the affirmative action
efforts undertaken by the contractor. A compliance review may proceed
in three stages:
(i) A desk audit of the written AAP and supporting documentation to
determine whether all elements required by the regulations in this part
are included, whether the AAP meets agency standards of reasonableness,
and whether the AAP and supporting documentation satisfy agency
standards of acceptability. The desk audit is conducted at OFCCP
offices, except in the case of preaward reviews. In a preaward review,
the desk audit normally is conducted at the contractor's establishment.
(ii) An on-site review, conducted at the contractor's establishment
to investigate unresolved problem areas identified in the AAP and
supporting documentation during the desk audit, to verify that the
contractor has implemented the AAP and has complied with those
regulatory obligations not required to be included in the AAP, and to
examine potential instances or issues of discrimination. An on-site
review normally will involve an examination of the contractor's
personnel and employment policies, inspection and copying of documents
related to employment actions, and interviews with employees,
supervisors, managers, hiring officials; and
(iii) Where necessary, an off-site analysis of information supplied
by the contractor or otherwise gathered during or pursuant to the on-
site review.
(2) Off-site review of records. An analysis and evaluation of the
AAP (or any part thereof) and supporting
[[Page 44190]]
documentation, and other documents related to the contractor's
personnel policies and employment actions that may be relevant to a
determination of whether the contractor has complied with the
requirements of the Executive Order and regulations;
(3) Compliance check. A visit to the establishment to ascertain
whether data and other information previously submitted by the
contractor are complete and accurate; whether the contractor has
maintained records consistent with Sec. 60-1.12; and/or whether the
contractor has developed an AAP consistent with Sec. 60-1.40; or
(4) Focused review. An on-site review restricted to one or more
components of the contractor's organization or one or more aspects of
the contractor's employment practices.
* * * * *
(d) Preaward compliance evaluations. Each agency shall include in
the invitation for bids for each formally advertised nonconstruction
contract or state at the outset of negotiations for each negotiated
contract, that if the award, when let, should total $10 million or
more, the prospective contractor and its known first-tier
subcontractors with subcontracts of $10 million or more shall be
subject to a compliance evaluation before the award of the contract
unless OFCCP has conducted an evaluation and found them to be in
compliance with the Order within the preceding 24 months. The awarding
agency will notify OFCCP and request appropriate action and findings in
accordance with this subsection. Within 15 days of the notice OFCCP
will inform the awarding agency of its intention to conduct a preaward
compliance evaluation. If OFCCP does not inform the awarding agency
within that period of its intention to conduct a preaward compliance
evaluation, clearance shall be presumed and the awarding agency is
authorized to proceed with the award. If OFCCP informs the awarding
agency of its intention to conduct a preaward compliance evaluation,
OFCCP shall be allowed an additional 20 days after the date that it so
informs the awarding agency to provide its conclusions. If OFCCP does
not provide the awarding agency with its conclusions within that
period, clearance shall be presumed and the awarding agency is
authorized to proceed with the award.
(e) Submission of Documents; Standard Affirmative Action Formats.
Each prime contractor or subcontractor with 50 or more employees and a
contract of $50,000 or more is required to develop a written
affirmative action program for each of its establishments (Sec. 60-
1.40). If a contractor fails to submit an affirmative action program
and supporting documents, including the workforce analysis, within 30
days of a request, the enforcement procedures specified in Sec. 60-
1.26(b) shall be applicable. Contractors may reach agreement with OFCCP
on nationwide AAP formats or on frequency of updating statistics.
(f) Confidentiality and relevancy of information. If the contractor
is concerned with the confidentiality of such information as lists of
employee names, reasons for termination, or pay data, then alphabetic
or numeric coding or the use of an index of pay and pay ranges,
consistent with the ranges assigned to each job group, are acceptable
for purposes of the compliance evaluation. The contractor must provide
full access to all relevant data on-site as required by Sec. 60-1.43.
Where necessary, the compliance officer may take information made
available during the on-site evaluation off-site for further analysis.
An off-site analysis should be conducted where issues have arisen
concerning deficiencies or an apparent violation which, in the judgment
of the compliance officer, should be more thoroughly analyzed off-site
before a determination of compliance is made. The contractor must
provide all data determined by the compliance officer to be necessary
for off-site analysis. Such data may only be coded if the contractor
makes the key to the code available to the compliance officer. If the
contractor believes that particular information which is to be taken
off-site is not relevant to compliance with the Executive Order, the
contractor may request a ruling by the OFCCP District/Area Director.
The OFCCP District/Area Director shall issue a ruling within 10 days.
The contractor may appeal that ruling to the OFCCP Regional Director
within 10 days. The Regional Director shall issue a final ruling within
10 days. Pending a final ruling, the information in question must be
made available to the compliance officer off-site, but shall be
considered a part of the investigatory file and subject to the
provisions of paragraph (g) of this section. The agency shall take all
necessary precautions to safeguard the confidentiality of such
information until a final determination is made. Such information may
not be copied by OFCCP and access to the information shall be limited
to the compliance officer and personnel involved in the determination
of relevancy. Data determined to be not relevant to the investigation
will be returned to the contractor immediately.
(g) Public access to information. The disclosure of information
obtained from a contractor will be evaluated pursuant to the public
inspection and copying provisions of the Freedom of Information Act, 5
U.S.C. 552, and the Department of Labor's implementing regulations at
29 CFR Part 70.
6. Section 60-1.26 is revised to read as follows:
Sec. 60-1.26 Enforcement proceedings.
(a) General. (1) Violations of the Order, the equal opportunity
clause, the regulations in this chapter, or applicable construction
industry equal employment opportunity requirements, may result in the
institution of administrative or judicial enforcement proceedings.
Violations may be found based upon, inter alia, any of the following:
(i) The results of a complaint investigation;
(ii) The results of a compliance evaluation;
(iii) Analysis of an affirmative action program;
(iv) The results of an on-site review of the contractor's
compliance with the Order and its implementing regulations;
(v) A contractor's refusal to submit an affirmative action program;
(vi) A contractor's refusal to allow an on-site compliance
evaluation to be conducted;
(vii) A contractor's refusal to provide data for off-site review or
analysis as required by the regulations in this Chapter;
(viii) A contractor's refusal to establish, maintain and supply
records or other information as required by the regulations in this
chapter or applicable construction industry requirements;
(ix) A contractor's alteration or falsification of records and
information required to be maintained by the regulations in this
chapter; or
(x) Any substantial or material violation or the threat of a
substantial or material violation of the contractural provisions of the
Order, or of the rules or regulations in this chapter.
(2) OFCCP may seek back pay and other make whole relief for victims
of discrimination identified during a complaint investigation or
compliance evaluation. Such individuals need not have filed a complaint
as a prerequisite to OFCCP seeking such relief on their behalf.
Interest on back pay shall be calculated from the date of the loss and
compounded quarterly at the percentage rate established by the Internal
Revenue Service for the under-payment of taxes.
(b) Administrative enforcement. (1) OFCCP may refer matters to the
[[Page 44191]]
Solicitor of Labor with a recommendation for the institution of
administrative enforcement proceedings, which may be brought to enjoin
violations, to seek appropriate relief, and to impose appropriate
sanctions. The referral may be made when violations have not been
corrected in accordance with the conciliation procedures in this
chapter, or when OFCCP determines that referral for consideration of
formal enforcement (rather than settlement) is appropriate. However, if
a contractor refuses to submit an affirmative action program, or
refuses to supply records or other requested information, or refuses to
allow OFCCP access to its premises for an on-site review, and if
conciliation efforts under this chapter are unsuccessful, OFCCP may
immediately refer the matter to the Solicitor, notwithstanding other
requirements of this chapter.
(2) Administrative enforcement proceedings shall be conducted under
the control and supervision of the Solicitor of Labor and under the
Rules of Practice for Administrative Proceedings to Enforce Equal
Opportunity under Executive Order 11246 contained in part 60-30 of this
chapter and the Rules of Evidence set out in the Rules of Practice and
Procedure for Administrative Hearings Before the Office of
Administrative Law Judges contained in 29 CFR part 18, subpart B:
Provided, That a Final Administrative Order shall be issued within on
year from the date of the issuance of the recommended findings,
conclusions and decision of the Administrative Law Judge, or the
submission of any exceptions and responses to exceptions to such
decision (if any), whichever is later.
(c) Referrals to the Department of Justice. (1) The Deputy
Assistant Secretary may refer matters to the Department of Justice with
a recommendation for the institution of judicial enforcement
proceedings. There are no procedural prerequisites to a referral to the
Department of Justice. Such referrals may be accomplished without
proceeding through the conciliation procedures in this Chapter, and a
referral may be made at any stage in the procedures under this Chapter.
(2) Whenever a matter has been referred to the Department of
Justice for consideration of judicial enforcement, the Attorney General
may bring a civil action in the appropriate district court of the
United States requesting a temporary restraining order, preliminary or
permanent injunction (including relief against noncontractors,
including labor unions, who seek to thwart the implementation of the
Order and regulations), and an order for such additional sanctions or
relief, including back pay, deemed necessary or appropriate to ensure
the full enjoyment of the rights secured by the Order, or any of the
above in this paragraph (c)(2).
(3) The Attorney General is authorized to conduct such
investigation of the facts as he/she deem necessary or appropriate to
carry out his/her responsibilities under the regulations in this
Chapter.
(4) Prior to the institution of any judicial proceedings, the
Attorney General, on behalf of the Deputy Assistant Secretary, is
authorized to make reasonable efforts to secure compliance with the
contract provisions of the Order. The Attorney General may do so by
providing the contractor and any other respondent with reasonable
notice of his/her findings, his/her intent to file suit, and the
actions he/she believes necessary to obtain compliance with the
contract provisions of the Order without contested litigation, and by
offering the contractor and any other respondent a reasonable
opportunity for conference and conciliation, in an effort to obtain
such compliance without contested litigation.
(5) As used in the regulations in this Part, the Attorney General
shall mean the Attorney General, the Assistant Attorney General for
Civil Rights, or any other person authorized by regulations or practice
to act for the Attorney General with respect to the enforcement of
equal employment opportunity laws, orders and regulations generally, or
in a particular matter or case.
(6) The Deputy Assistant Secretary or his/her designee, and
representatives of the Attorney General may consult from time to time
to determine what investigations should be conducted to determine
whether contractors or groups of contractors or other persons may be
engaged in patterns or practices in violation of the Executive Order or
these regulations, or of resistance to or interference with the full
enjoyment of any of the rights secured by them, warranting judicial
proceedings.
(d) Initiation of lawsuits by the Attorney General without referral
from the Deputy Assistant Secretary. In addition to initiating lawsuits
upon referral under this section, the Attorney General may, subject to
approval by the Deputy Assistant Secretary, initiate independent
investigations of contractors which he/she has reason to believe may be
in violation of the Order or the rules and regulations issued pursuant
thereto. If, upon completion of such an investigation, the Attorney
General determines that the contractor has in fact violated the Order
or the rules and regulations issued thereunder, he/she shall make
reasonable efforts to secure compliance with the contract provisions of
the Order. He/she may do so by providing the contractor and any other
respondent with reasonable notice of the Department of Justice's
findings, its intent to file suit, and the actions that the Attorney
General believes are necessary to obtain compliance with the contract
provisions of the Order without contested litigation, and by offering
the contractor and any other respondent a reasonable opportunity for
conference and conciliation in an effort to obtain such compliance
without contested litigation. If these efforts are unsuccessful, the
Attorney General may, upon approval by the Deputy Assistant Secretary,
bring a civil action in the appropriate district court of the United
States requesting a temporary restraining order, preliminary or
permanent injunction, and an order for such additional sanctions or
equitable relief, including back pay, deemed necessary or appropriate
to ensure the full enjoyment of the rights secured by the Order or any
of the above in this paragraph (d).
(e) To the extent applicable, this section and part 60-30 of this
chapter shall govern proceedings resulting from any Deputy Assistant
Secretary's determinations under Sec. 60-2.2(b) of this chapter.
7. Section 60-1.27 is revised to read as follows:
Sec. 60-1.27 Sanctions.
(a) General. The sanctions described in subsections (1), (5), and
(6) of section 209(a) of the Order may be exercised only by or with the
approval of the Deputy Assistant Secretary. Referral of any matter
arising under the Order to the Department of Justice or to the Equal
Employment Opportunity Commission shall be made by the Deputy Assistant
Secretary.
(b) Debarment. A contractor may be debarred from receiving future
contracts or modifications or extensions of existing contracts, subject
to reinstatement pursuant to Sec. 60-1.31, for any violation of
Executive Order 11246 or the implementing rules, regulations and orders
of the Secretary of Labor. Debarment may be imposed for an indefinite
term or for a fixed minimum period of at least six months.
8. Section 60-1.30 is revised to read as follows:
Sec. 60-1.30 Notification of agencies.
The Deputy Assistant Secretary shall ensure that the heads of all
agencies are
[[Page 44192]]
notified of any debarment taken against any contractor.
9. Section 60-1.31 is revised to read as follows:
Sec. 60-1.31 Reinstatement of ineligible contractors.
A contractor debarred from further contracts for an indefinite
period under the Order may request reinstatement in a letter filed with
the Deputy Assistant Secretary at any time after the effective date of
the debarment. A contractor debarred for a fixed period may request
reinstatement in a letter filed with the Deputy Assistant Secretary 30
days prior to the expiration of the fixed debarment period, or at any
time thereafter. The filing of a reinstatement request 30 days before a
fixed debarment period ends will not result in early reinstatement. In
connection with the reinstatement proceedings, all debarred contractors
shall be required to show that they have established and will carry out
employment policies and practices in compliance with the Order and
implementing regulations. Before reaching a decision, the Deputy
Assistant Secretary may conduct a compliance evaluation of the
contractor and may require the contractor to supply additional
information regarding the request for reinstatement. The Deputy
Assistant Secretary shall issue a written decision on the request.
10. Section 60-1.32 is revised to read as follows:
Sec. 60-1.32 Intimidation and interference.
(a) The contractor, subcontractor or applicant shall not harass,
intimidate, threaten, coerce, or discriminate against any individual
because the individual has engaged in or may engage in any of the
following activities:
(1) Filing a complaint;
(2) Assisting or participating in any manner in an investigation,
compliance evaluation, hearing, or any other activity related to the
administration of the Order or any other Federal, state or local law
requiring equal opportunity;
(3) Opposing any act or practice made unlawful by the Order or any
other Federal, state or local law requiring equal opportunity; or
(4) Exercising any other right protected by the Order.
(b) The contractor, subcontractor or applicant shall ensure that
all persons under its control do not engage in such harassment,
intimidation, threats, coercion or discrimination. The sanctions and
penalties contained in this part may be exercised by OFCCP against any
contractor, subcontractor or applicant who violates this obligation.
11. In Sec. 60-1.34, paragraph (a)(4) is added to read as follows:
Sec. 60-1.34 Violation of a conciliation agreement or letter of
commitment.
(a) * * *
(4) In any proceeding involving an alleged violation of a
conciliation agreement OFCCP may seek enforcement of the agreement
itself and shall not be required to present proof of the underlying
violations resolved by the agreement.
* * * * *
12. Section 60-1.42 is amended by revising paragraph (a) to read as
follows:
Sec. 60-1.42 Notices to be posted.
(a) Unless alternative notices are prescribed by the Deputy
Assistant Secretary, the notices which contractors are required to post
by paragraphs (1) and (3) of the equal opportunity clause in Sec. 60-
1.4 will contain the following language and be provided by the
contracting or administering agencies:
Equal Employment Opportunity is the Law--Discrimination is Prohibited
by the Civil Rights Act of 1964 and by Executive Order No. 11246
Title VII of the Civil Rights Act of 1964--Administered by:
The Equal Employment Opportunity Commission
Prohibits discrimination because of Race, Color, Religion, Sex,
or National Origin by Employers with 15 or more employees, by Labor
Organizations, by Employment Agencies, and by Apprenticeship or
Training Programs
Any person
Who believes he or she has been discriminated against
Should Contact
-----------------------------------------------------------------------
The Equal Employment Opportunity Commission
1801 L Street NW., Washington, DC 20507, Executive Order No. 11246--
Administered by:
The Office of Federal Contract Compliance Programs
Prohibits discrimination because of Race, Color, Religion, Sex,
or National Origin, and requires affirmative action to ensure
equality of opportunity in all aspects of employment.
By all Federal Government Contractors and Subcontractors, and by
Contractors Performing Work Under a Federally Assisted Construction
Contract, regardless of the number of employees in either case.
Any person
Who believes he or she has been discriminated against
Should Contact
-----------------------------------------------------------------------
The Office of Federal Contract Compliance Programs
U.S. Department of Labor, Washington, DC 20210
* * * * *
13. Section 60-1.43 is revised to read as follows:
Sec. 60-1.43 Access to records and site of employment.
Each contractor shall permit access during normal business hours to
its premises for the purpose of conducting on-site compliance
evaluations and complaint investigations. Each contractor shall permit
the inspecting and copying of such books and accounts and records,
including computerized records, and other material as may be relevant
to the matter under investigation and pertinent to compliance with the
Order, and the rules and regulations promulgated pursuant thereto by
the agency, or the Deputy Assistant Secretary. Information obtained in
this manner shall be used only in connection with the administration of
the Order, the Civil Rights Act of 1964 (as amended), and any other law
that is or may be enforced in whole or in part by OFCCP.
PART 60-60--[REMOVED]
14. Part 60-60 is removed.
[FR Doc. 97-21782 Filed 8-18-97; 8:45 am]
BILLING CODE 4510-27-M
