Supply and Service Contractors and Subcontractors Should Immediately Review the OFCCP’s Pre-audit Corporate Scheduling Announcement List, Released on November 20, 2024

At a Glance

• In line with its methodology from the June 2024 Corporate Scheduling Announcement List (CSAL), the Office of Federal Contract Compliance Programs (OFCCP) targeted contractors with large employee populations.
• 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 and contractor records to the OFCCP.
• The OFCCP may begin scheduling these reviews immediately, and contractors listed on the CSAL should expect that all establishments noticed on the list will be scheduled for an audit. Any unscheduled reviews from the prior scheduling list are also still eligible for a compliance review.

On November 20, the Office of Federal Contract Compliance Programs (OFCCP) released its Fiscal Year (FY) 2025 Corporate Scheduling Announcement List (CSAL). The CSAL notifies 2,000 supply and service establishments (locations) of upcoming audits. Federal contractors should immediately review the CSAL, as it is 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 Review, or Functional Affirmative Action Program (FAAP) Review.

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 that have not received their audit letters yet.

According to the OFCCP’s concurrently published methodology, the agency created the pool of eligible contractors for this list by downloading federal contracts valued at $50,000 or more from the USAspending.gov database. The OFCCP further refined the pool by prioritizing contractor and subcontractor establishments with the highest employee counts in each district office’s jurisdiction. Using 2022 EEO-1 filings for employee counts, for each parent company with at least one contract of $50,000 anywhere in the organization, all U.S. establishments with at least 400 employees and U.S. territories with at least 50 employees were included in the eligible pool of contractors. This selection criteria are similar to those used by the agency for its June 2024 CSAL.

The OFCCP explained that it applied the following criteria in selecting establishments for the CSAL:

• The OFCCP selected the establishments and CMCEs with the highest employee counts in each district office.
• The OFCCP did not include more than 10 establishments of any parent company, which is a dramatic increase from the prior limit of two establishments per parent company.
• The OFCCP selected 10 CMCE reviews of contractors that did not have more than 10 establishments per OFCCP region.
• The OFCCP selected one hospital for review per OFCCP region.
• The OFCCP selected two colleges/universities for review per OFCCP region.
• The OFCCP selected eight functional units with the highest employee count in each OFCCP region for FAAP Reviews, but limited its review to a maximum of four FAAP units of any parent company.
• Contracts awarded to federal, state, local, municipal, tribal, city and foreign governments, school districts, and construction companies were removed, as well as companies only engaged in construction contracts with the federal government.
• Health care 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.
• Establishments and FAAP units were removed if: (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.

Please note that the OFCCP may begin scheduling these reviews immediately, eliminating the typical grace period that contractors may have been given in the past. Contractors listed on the CSAL should also expect that  all establishments noticed on the list will be scheduled for an audit, unless there is a basis for administrative closure. Further, as the OFCCP reiterated in its methodology, the agency does not purge unscheduled cases from prior lists before releasing a new scheduling list. As such, any contractors still awaiting scheduling for review based on the OFCCP’s June 2024 list are still eligible for a compliance review.

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 updated its Supply and Service Scheduling Letter and Itemized Listing in 2023, with the new changes significantly expanding the audit scope. Selected contractors who receive the revised Scheduling Letter are now required to prepare additional materials beyond those historically required of an initial audit response. Contractors who have not been selected for audit under the revised Schedule Letter should take note of the additional requirements to ensure they are fully compliant.