Supply and Service Federal Contractors and Subcontractors Should Immediately Review the OFCCP’s Second 2023 Pre-Audit Corporate Scheduling Announcement List

At a Glance

• On September 8, 2023, the Office of Federal Contract Compliance Programs (OFCCP) released its second Corporate Scheduling Announcement List (CSAL) of the year.
• Federal contractors should immediately review the 2023 CSAL because it serves as the only advance notification to contractors of upcoming audits.

On September 8, 2023, the Office of Federal Contract Compliance Programs (OFCCP) released its second 2023 Corporate Scheduling Announcement List (CSAL) of the year. The CSAL notifies 1,000 supply and service establishments (locations) of upcoming audits. Federal contractors should immediately review the 2023 CSAL because it serves as the only advance notification to contractors of upcoming audits.

The CSAL specifies the type of audit the contractor will undergo: Full Compliance Review (Establishment Review), Corporate Management Compliance Evaluation (CMCE), University or Functional Affirmative Action Program (FAAP) Review. According to the OFCCP’s concurrently published methodology, the agency selected contractors and subcontractors engaged in “low-wage industries” for its establishment-based reviews. The OFCCP also identified non-construction industries that received the highest frequency of contracts awarded through the bipartisan Infrastructure Bill.

Although rare, federal contractors not identified on the CSAL still may be selected for an audit in certain circumstances, such as “a complaint, contract award notice, or as a result of a conciliation agreement or consent decree progress report monitoring.” Furthermore, the OFCCP’s issuance of its most recent CSAL does not impact those contractors from prior CSALS who have not received their audit letters yet.

In selecting the contractors for the list, the OFCCP began by downloading federal contracts valued at $50,000 or more from the U.S. spending database. The OFCCP further refined the pool by retaining contractor and subcontractor establishments with the highest employee count in each district office. The OFCCP explained that it applied the following criteria in selecting establishments for the CSAL:

• The OFCCP selected five CMCE reviews per region with the highest employee count in a district office.
• The OFCCP selected establishments with the highest employee count in each district office for establishment reviews and did not include more than two establishments of any parent company.
• The OFCCP selected six functional units per region that had the highest employee count between 200 and 400 in each district office and did not select more than three functional units of any parent company.
• Two financial institutions per region with the highest employee count in each region were selected.
• Two colleges/universities per region with the highest employee count in each region were selected.
• Contracts awarded to federal, state, local, municipal, tribal, city, and foreign governments, school districts, and construction companies were removed.
• Healthcare contracts that fall under OFCCP’s Final Rule: Affirmative Action and Nondiscrimination Obligations of Federal Contractors and Subcontractors: TRICARE Providers, 85 FR 39834 (July 2, 2020), and OFCCP’s Extending the Scheduling Moratorium for Veterans Affairs Health Benefits Program Providers Directive (DIR 2021-01) were removed.
• Contract records expiring on or before December 31, 2023, were also removed, as well as establishments or functional units that were: (1) currently under review; (2) currently in a monitoring period pursuant to a conciliation agreement; (3) currently within the exemption period following a closed review; (4) currently pending scheduling for review from a prior scheduling list; or (5) have an active separate facilities waiver.

As noted above, the CSAL is the only warning selected contractors will receive before the audit begins. Selected contractors will be notified that the audit has commenced by receiving a Scheduling Letter — which can come at any time. Once a contractor receives the Scheduling Letter, the contractor usually has only 30 days to submit their Affirmative Action Programs (AAPs) and contractor records to the OFCCP. Accordingly, contractors identified on the CSAL immediately should ensure their AAPs are legally compliant and evaluate any additional compliance efforts required by federal regulations.

Importantly, the OFCCP recently updated its Supply and Service Scheduling Letter and Itemized Listing. The new changes significantly expanded the audit scope and will require selected contractors who receive the revised Scheduling Letter to prepare additional materials beyond those previously required of an initial audit response.

If you have any questions about the CSAL or other OFCCP compliance issues, please contact one of the Faegre Drinker professionals below.