Supply and Service Contractors and Subcontractors Should Immediately Review the OFCCP’s First 2024 Pre-audit Corporate Scheduling Announcement List

At a Glance

• In a departure from the 2023 methodology, the Office of Federal Contract Compliance Programs (OFCCP) targeted contractors with large employee populations.
• The OFCCP updated its Supply and Service Scheduling Letter and Itemized Listing last year. 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.
• The Corporate Scheduling Announcement List (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.

On June 7, the Office of Federal Contract Compliance Programs (OFCCP) released its first 2024 Corporate Scheduling Announcement List (CSAL). The CSAL notifies 500 supply and service establishments (locations) of upcoming audits. Federal contractors should immediately review the 2024 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 who 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 database. The OFCCP further refined the pool by prioritizing contractor and subcontractor establishments with the highest employee count in each district office’s jurisdiction. The 2024 selection criteria is a departure from the 2023 methodology that focused on low-wage industries and contractors with the highest frequency of awarded contracts.

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 four FAAP units per OFCCP region, prioritizing those with the highest employee count in each district office’s jurisdiction and did not select more than two FAAP units of any parent company.
• The OFCCP selected two financial institutions per region, prioritizing those with the highest employee count in each region.
• The OFCCP selected one college/university per region, prioritizing those with the highest employee count in each region.
• Contracts awarded to federal, state, local, municipal, tribal, city and foreign governments, school districts and construction companies were removed.
• 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.
• 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 updated its Supply and Service Scheduling Letter and Itemized Listing last year. 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.