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Contract Management January 2015 DATA RIGHTS ASSERTIONS GIVE CLARITY— AFFIRMATIVE ACTION PLANS: YOUR WITHOUT ONE, YOU HAVE NO CLUE COMMON QUESTIONS ANSWERED January 2015 | $12.00 Voice of the Professional Contract Management Community www.ncmahq.org Check out the NEW upgraded digital edition of the magazine! User-friendly and easy to read on any device! 42 Contract Management | January 2015 Contract Management | January 2015 43 AFFIRMATIVE ACTION PLANS—YOUR COMMON QUESTIONS ANSWERED or contractors doing What is Affirmative Action? What is an AAP? business with the U.S. “Affirmative action” brings to mind “quo- tas”—hiring an individual based upon his or federal government, her race or gender to meet some required “quota,” and an AAP must be a plan to do “affirmative action” exactly that, right? In fact, that is not what F affirmative action means nor is that what is a lawfully required process. an AAP is designed to do. But what does “affirmative action” Affirmative action, at least as called for by Executive Order 11246 and the associated even mean? Is your company additional legislation affecting government required to prepare an “affirmative contractors,1 is really designed to require federal contractors to: action plan” (AAP)? And what is Evaluate the racial and gender makeup an AAP exactly? What access does of their workforce as compared to the makeup of the pool from which each the U.S. federal government have employee is either hired or promoted and consider whether there is any to HR processes once a company disparity between the two that would suggest that unlawful discrimination prepares an AAP? might have occurred, and 44 Contract Management | January 2015 AFFIRMATIVE ACTION PLANS—YOUR COMMON QUESTIONS ANSWERED Evaluate the hiring, promotion, and But certainly, the OFCCP will use the analy- fairs focused on opportunities for women in termination decisions that occurred ses performed by the contractor as a jump- an effort to increase the applicant pool in during the past year and consider ing off point for investigating as to whether underrepresented groups. whether any particular racial or gender or not unlawful discrimination has occurred. group appears to be overrepresented Make no mistake, becoming a federal Affirmative action does not require the with the respect to such actions based contractor subject to the requirement of employer to hire applicants based on their on a comparison of the race and gender preparing an AAP opens up an employer to race or gender in order to remedy what of the applicants with those hired or an extraordinary amount of scrutiny with appears to be underrepresentation in the the pool of current employees from respect to its various employment practices. workforce. To do so obviously would be an whom employees were selected for act of unlawful discrimination—failing to either termination or promotion. hire other applicants because of their race What Does Affirmative or gender. If an employer’s analysis suggest Such a comparison, by itself, clearly does Action Mean? the possibility of discrimination in hiring or not establish whether or not unlawful dis- If an employer’s workforce does not mir- terminations, then the employer is called crimination occurred, nor does the Office of ror the racial and gender makeup of the upon to review the processes used in both Federal Contract Compliance Programs pool out of which the workforce has been and determine how to address what has (OFCCP)2 take the position that it does. The selected, then the employer is required to happened—but not to engage in unlawful idea behind the analyses required when pre- take “affirmative action” to ensure that the discrimination in an attempt to remedy such paring an AAP is not to convict the employer underrepresented groups of individuals discrimination that occurred previously. of having engaged in unlawful discrimina- have the opportunity to apply for and obtain tion, but rather to encourage some respon- jobs—but on the same terms as all other sive action if there is, at a very high level, applicants. For example, the OFCCP will some indication of possible discrimination. look for documentation that the employer At least, that is the position of the OFCCP. has participated in minority job fairs or job Contract Management | January 2015 45 AFFIRMATIVE ACTION PLANS—YOUR COMMON QUESTIONS ANSWERED Who Has to Prepare an AAP? A federal contractor that employs at least 50 employees and has a contract with the federal government of $50,0003 or more must prepare an AAP. A covered federal subcontractor is an employer with at least 50 employees and a subcontract of at least $50,000 with a federal contractor, and the subcontract is to either perform a portion of the prime contractor’s federal contract or to provide services or equip- ment that are necessary for the federal prime contractor to fulfill its federal contract. What about Medicare/ Medicaid Reimbursement? TRICARE Participation? In recent years, the OFCCP has sought to expand its jurisdiction to the fullest extent possible. In a 2010 directive, the OFCCP as- serted that healthcare entities that provide services to a federal contractor receiving funds under a contract with Medicare Part C or Part D may be considered “federal subcontractors” and, thus, subject to Executive Order 11246. Similarly, the OFCCP has successfully assert- ed that healthcare entities that contract to provide medical services to beneficiaries under TRICARE or the Federal Employees Health Ben- Note that the moratorium does not extend do not themselves have federal contracts in efits Program may also be considered federal to healthcare providers who are subcontrac- excess of $50,000, then the company must subcontractors,4 despite congressional efforts tors only under Medicare Parts C and D or the determine whether to contest the reach by to limit the OFCCP’s regulatory scope.5 Federal Employees Health Benefits Program. the OFCCP to cover all of the facilities. If the company determines to contest that issue, On May 7, 2014, in response to pressure then the employer would simply refuse to from Congress, the OFCCP issued a five-year Are All of My Facilities participate in audits of those facilities that do enforcement moratorium applicable to Covered? not themselves have covered contracts. That healthcare entities that: Many companies have multiple facilities would require the OFCCP to file an adminis- across the country and it is not uncommon trative complaint alleging jurisdiction and Participate in TRICARE only as for one (or less than all) of the facilities to there would be an administrative trial regard- subcontractors, have a federal contract in excess of $50,000 ing whether there is jurisdiction, potentially while the remaining facilities do not. Is an for each separate facility,6 within 60 days. Participate in TRICARE as subcontrac- AAP required for every facility owned by the tors and as subcontractors under any company? That question is addressed by the The employer may likely face an uphill Medicare program, “single entity” doctrine. If one facility has a battle with respect to that issue before a covered contract, then all of the company’s Department of Labor administrative law Participate in TRICARE as subcontrac- facilities may be covered if the corporate judge. Assuming an adverse decision by the tors and as subcontractors under the headquarters exercises enough control over judge, the company would then have to Federal Employees Health Benefits the individual facilities such that the govern- file an appeal to the Administrative Review Program, and ment can effectively argue that the company Board, where again the employer may have is a “single entity” for jurisdictional purposes. difficulty in obtaining a decision overturn- Participate in TRICARE as subcontrac- ing a finding of jurisdiction. Once the board tors and as subcontractors under any If a company receives an audit notification supports the finding of jurisdiction, the other federal health program. from the OFCCP that includes facilities that OFCCP would issue an order that the facility 46 Contract Management | January 2015 AFFIRMATIVE ACTION PLANS—YOUR COMMON QUESTIONS ANSWERED comply with its request to review the AAP What is in the AAP? position by job group. The contractor must for the facility within 30–90 days or the An AAP is designed to require an employer then determine the “reasonable recruitment employer will face debarment as a federal to engage in a process of auditing its hiring, area” out of which the employees in each job contractor. The employer would then have promotion, and firing processes to deter- group were hired or promoted. For example, to appeal the issue to a federal district mine whether there is any indication of po- some entry level jobs may be hired entirely court, and also file a motion for a tempo- tential unlawful discrimination and whether from the immediate county in which the rary restraining order seeking to stay the affirmative action is necessary. contractor is located. Then, data must be order of the OFCCP regarding compliance obtained regarding the racial and gender and debarment. A loss at the federal district An AAP includes an “organizational profile” makeup of the qualified individuals within court level would again be followed by an that is typically a “workforce analysis” in the reasonable recruitment area (often using order to comply within 30–90 days with the which every position in the facility is listed census data) for each of the employer’s job OFCCP directives regarding preparing an by department, and then information is pro- groups. The contractor then compares the ra- AAP, etc., or face debarment, at which time vided regarding the gender and race for every cial and gender makeup of the applicant pool the employer must determine whether to employee in that position. For example, part against the racial and gender makeup of the appeal to a federal court of appeals.
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