One of the requirements that growing small businesses in the federal contracting arena may overlook is the requirement to have a written Affirmative Action Plan (AAP). The requirement for various written plans always seems to apply only to large businesses, doesn’t it? But not this time. This one applies to virtually any business of any size (50 or more employees) who is successful in winning and performing contracts (totaling just $$50,000) with the federal government. And that includes subcontracts under federal contracts as well.
But that’s not all. The Federal Acquisition Regulation (FAR) 22.804-1 states the following requirements for written Affirmative Action Plans (AAP) for non-construction firms:
Except as provided in 22.807, each non-construction prime contractor and each subcontractor with 50 or more employees and either a contract or subcontract of $50,000 or more, … is required to develop a written affirmative action program for each of its establishments. Each contractor and subcontractor shall develop its written affirmative action programs within 120 days from the commencement of its first such Government contract, subcontract, or Government bill of lading.
There are a few exemptions that apply even though a contract or subcontract contains the Equal Opportunity clause, so if you’re performing work outside the US or near an Indian reservation within the US, check out the exceptions noted in FAR 22.807. If you are performing construction contracts, different rules apply, as noted in FAR 22.804 which you should read in detail to get an understanding of how this requirement applies to your company.
An Affirmative Action program includes those policies, practices, and procedures that the contractor implements to ensure that all qualified applicants and employees are receiving an equal opportunity for recruitment, selection, advancement, and every other term and privilege associated with employment. Not only that, a written AAP must usually be developed for each of your establishments. That means if you have an office in Tampa, Florida, and an office in Denver, Colorado, you have to have an AAP for each of those locations specifically.
The Department of Labor (DOL) provides sample AAPs at https://www.dol.gov/ofccp/regs/compliance/aaps/aaps.htm. While these are provided strictly as guidance, they do provide a good jumping off point for developing your own AAP. But make no mistake, this is not a requirement for a simple document that you can just sit down and knock out in a couple of hours. It requires analysis of the labor markets surrounding your establishments; an analysis of your company’s staff by gender, racial group and positions; and knowledge of the associated DOL requirements for hiring minority, non-minority, and women employees in that particular area.
There are of course requirements for maintaining documentation in support of your AAP. In addition, the DOL website recommends keeping materials evidencing its affirmative action efforts, such as copies of documents that indicate employment policies and practices; copies of letters sent to suppliers and vendors stating the company’s Equal Employment Opportunity (EEO)/Affirmative Action policy; copies of letters sent to recruitment sources; and copies of contract language incorporating the regulations and EEO clauses.
Keep in mind that the Contracting Officer is required to obtain a pre-award clearance from the DOL’s Office of Federal Contract Compliance Program (OFCCP) for each proposed contract and each proposed first-tier subcontract of $10 million or more prior to making any contract award of $10 million or more.
That means that while you might fly under DOL’s radar for a while, eventually you are going to be paid a visit by the OFCCP to audit your Affirmative Action Program for compliance with federal regulations. An allegation by a disgruntled employee can get you unwanted DOL attention earlier than that. Next to the Internal Revenue Service (IRS), the DOL is the one agency you do not want to have “helping” you to comply with established EEO and Affirmative Action requirements throughout your federal contracting life. So make sure that when you put an X in the block stating that you have an EEO/Affirmative Action Program in your representations and certifications that you have taken the time to do it right the first time.