Breaking OFCCP News

Directive (DIR) 2018-08 addresses transparency by the OFCCP in all stages of compliance activities to help contractors comply with their obligations and understand their expectations during a compliance evaluation. The Directive instructs OFCCP staff, from the regional level to the national office, to take measures to be as transparent as possible during each stage of the evaluations, beginning with the scheduling and ending with the conciliation efforts.  For a copy of this Directive, click here.

Directive (DIR) 2018-09 reveals a plan to implement an Ombud Service in the OFCCP’s national office to facilitate the “fair and equitable resolution” of specific types of concerns raised by external stakeholders, which would include federal contractors and subcontractors and law firms. This plan stems from feedback received by the various stakeholders during the past year and is an effort by the OFCCP to increase transparency and improve communication. For a copy of this Directive, click here.

OFCCP Issues CSALs & New Extension Requirements

On September 7, 2018, OFCCP announced that it mailed 750 new Corporate Scheduling Announcement Letters (“CSALs”) to federal contractors as a supplement to the Fiscal Year 2018 Scheduling List released on March 19, 2018.  The agency stated that the CSALs are a “45-day” courtesy notice prior to sending the OMB-approved scheduling letters. Once the scheduling letters are received, contractors will have 30 days in which to submit their Affirmative Action Plans (AAPs) and the other items required by the scheduling letter and itemized listing. Therefore, according to OFCCP, “all contractors on the current list are receiving a minimum of 75 days advance notice to have their AAPs ready.”

In a change outlined in an FAQ entitled “Requesting Extensions to Submit AAP(s) and Supporting Data,”

OFCCP reinforced that contractors are obligated to submit their EO 11246, VEVRAA and Section 503 AAPs and supporting data within 30 days of the receipt of the Scheduling Letter and Itemized Listing.  In order to facilitate a timely submission, the assigned compliance officer will contact the contractor within 15 days of the contractor’s receipt of the Scheduling Letter to offer technical assistance and explain allowable extensions for the AAPs and supporting data.

With respect to allowable extensions, OFCCP will grant a one-time 30-day extension for supporting data related to the EO 11246, VEVRAA and Section 503 AAPs, provided the contractor:

  1. Requests the extension prior to the initial 30-day due date for the AAPs; and
  2. Timely submits the basic EO 11246, Section 503 and VEVRAA AAPs within the 30-day period after receiving the Scheduling Letter and Itemized Listing.

The FAQ makes clear that OFCCP will generally not allow extensions for the submission of EO 11246, Section 503 and VEVRAA AAPs, or allow extensions for supporting data if requested after the submission date for the AAPs has passed although it reserves discretion to grant such extensions in extraordinary circumstances.  Failure to submit AAPs and/or supporting data timely, with approved extensions, will result in an immediate Show Cause Notice.

In a separate release, the OFCCP provided an updated version of its Methodology for Developing the Supplement to the FY 2018 Supply & Service Scheduling List.

Please contact your FortneyScott attorney or send an email to for more information on this new extension policy or for assistance in preparing AAPs and responses to Scheduling Letters.

Bid Protests: A Way To Raise Your Procurement Concerns

September 30th is the end of the Federal government’s fiscal year.  Federal agencies spend significant portions of their annually appropriated funds entering into new contracts and exercising options on existing ones during the last quarter of its fiscal year.  Government contracting rules require that Federal agencies conduct these procurements in accordance with the stated terms of the specific solicitation.  The terms of the solicitation must be based on the procuring agency’s true needs and must not contain requirements that would unfairly restrict competition.  The agency’s designated contract and evaluation officials must act in a fair and objective manner, free from any impermissible conflict of interest, when making determinations during the procurement process.  Their evaluations and the ultimate award decision must be in accordance with the procurement’s stated evaluation and award criteria.

Because the Federal government wants to ensure that its procurements are fairly and properly conducted, it affords actual or potential offerors the opportunity to protest specific matters relating to the agency’s procurement.  For example, if you are a potential offeror who believes the terms of a solicitation are defective or unduly restrictive, you may have grounds to file a preaward bid protest to challenge the terms of the solicitation.  If you are an actual bidder or offeror who believes that you have not been fairly evaluated and considered for award in accordance with the terms of the solicitation, or that the decision to award the contract to another offeror was defective, then you may have grounds to file a post award bid protest.

If you are eliminated from the competitive range or not awarded the contract, you also may have the right to request a required debriefing to obtain more information prior to protesting.

Small businesses also have protest rights to challenge small business set-aside procurement size standards or the size or eligibility of an actual or proposed small business awardee under a small business set-aside procurement.

Bid protests can only be filed by interested parties, in specified forums, and within specified times in the procurement process.  Depending on the circumstances and timing of the protest, you may be able to obtain a stay of the procurement pending the disposition of the protest.

Key takeaways:

  • There are a number of rules governing debriefings, pre and post award bid protests, and size protests.  Consult counsel if you have questions regarding your rights, potential protestable issues, options, and timing requirements.
  • If you were eliminated from the competitive range or did not receive an award, you may be able to request a required debriefing to obtain information that may address your concerns, or provide more concrete information upon which to raise a protest.  At a minimum, learning what you did right or wrong can help you be a better competitor the next time.
  • If you have concerns, you need to raise them in a timely fashion in the right place to avoid losing the opportunity to exercise your rights.  Deadlines for seeking a required debriefing, filing a procurement integrity concern, filing a bid or size protest, are short.
  • On the flip side, if you are awarded a contract and there is a protest, you may want to retain counsel to defend your interests in the protest.

The rules governing procurements, debriefings and protests are myriad.  If you have concerns about a particular procurement, find out your rights and options.  Well-articulated concerns, timely raised with the appropriate official and forum, can help ensure your challenge is appropriately considered. FortneyScott will be hosting a bid protest lunch and learn webinar in September.   If you have questions about how to raise your concerns in a procurement, debriefing or protest, or are interested in learning more about this upcoming webinar, contact Susan Warshaw Ebner or your FortneyScott counsel.

OFCCP Issues New Compensation, Recognition and Certification Directives

On August 24, 2018, OFCCP issued three new Directives, the most important of which rescinded the Obama Administration’s Directive 307, “Procedures for Reviewing Contractor Compensation Systems and Practices.”  The agency also issued Directives creating a program to certify that contractors have prepared an Affirmative Action Plan (AAP) and are in compliance with federal affirmative action program requirements, and an initiative establishing a recognition program for contractors with high-quality and high-performing compliance programs and initiatives.

According to the agency, these Directives are part of the Department’s efforts to maximize the effectiveness of compliance assistance outreach.

  • Clear Guidance for Contractor Compensation Practices:  The new Compensation Directive, Directive 2018-05, rescinds Directive 307 (which had been renamed as 2013-03). Principally, the agency’s compensation analysis will now “mirror a contractor’s compensation system” when the contractor provides sufficient information.  The Directive provides transparency to contractors on OFCCP’s approach to conducting compensation evaluations by further outlining the agency’s practices and approaches to similarly-situated employees, creating pay analysis groups, conducting statistical analysis and modeling, and other analytical matters relevant to conducting sound, compensation compliance evaluations and contractors’ self-audits. The Directive also emphasizes that where OFCCP “believes there are indicators of disparate impact in compensation, it will work collaboratively with the contractor to understand any defense that a policy or practice that caused the disparate impact is job-related and consistent with business necessity, and will fully consider supporting evidence the contractor provides.”  The Directive takes effect for “all reviews scheduled on or after August 24, 2018 and they apply to open reviews to the extent they do not conflict with OFCCP guidance or procedures existing prior to the effective date.”  Directive 2018-05 specifically outlines when information provided to OFCCP will be released as there have been some unauthorized releases of information about ongoing audits.  Specifically, Paragraph 8 states “OFCCP does not release data obtained during the course of a compliance evaluation until the investigation and all subsequent proceedings, if any, are complete.”
  • Affirmative Action Program Verification Initiative: Directive 2018-07 implements a verification process with the objective of ensuring that all covered federal contractors are meeting the most basic equal employment opportunity (EEO) regulatory requirement, namely, the preparation of a written AAP and annual updates to that program.
  • Contractor Recognition ProgramsDirective 2018-06 is re-establishing its contractor recognition program that will now include awards that highlight implementable best or model contractor practices, a contractor mentoring program that uses contractors to help their peers improve compliance, and other initiatives that provide opportunities for contractors to collaborate or provide feedback to OFCCP on its compliance assistance efforts.

The team at FortneyScott is reviewing these Directives in detail and determining what impact these new policies will have on federal contractor compliance and, more importantly, what next steps contractors should take to ensure compliance with the three new directives. Please contact your FortneyScott attorney or send an email to for more information.

OFCCP Issues Two New Directives Addressing Religious Freedom Protections and Announcing New Focused Reviews

On August 10, 2018, OFCCP’s Acting Director Craig Leen issued two new policy directives aimed at protecting Americans’ religious freedom and announcing new focused reviews. The directives call for protecting the rights of religion-exercising organizations and individuals and more comprehensive reviews of contractor compliance, respectively.

Directive (DIR) 2018-03 instructs OFCCP staff to take into account recent U.S. Supreme Court decisions and White House Executive Orders that protect religious freedom and afford broad anti-discrimination protections to religion-exercising organizations and individuals under the United States Constitution and federal law. The Directive incorporates recent developments in the law regarding religion-exercising organizations and individuals. OFCCP staff are instructed to take these legal developments addressing religious freedoms into account in all their relevant activities, including when providing compliance assistance, processing complaints, and enforcing the requirements of E.O. 11246. For a copy of this Directive, please click here.

Directive (DIR) 2018-04 provides that the OFCCP will conduct focused reviews of contractor compliance with (1) Executive Order 11246, (2) Section 503 of the Rehabilitation Act of 1973 (Section 503), and (3) the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA). To ensure compliance, OFCCP will conduct the focused reviews by going onsite and performing a comprehensive review of the particular authority at issue. For example, if it is a Section 503 focused review, the compliance officer would review policies and practices of the contractor solely related to Section 503 compliance. The review would include interviews with employees affected by the policies, as well as those responsible for equal employment opportunity and compliance. OFCCP would also look to evaluate hiring and compensation data. This type of review would be used in each of the three types of focused reviews to ensure compliance with anti-discrimination obligations and equal employment opportunity. For a copy of this Directive, please click here.

The OFCCP’s News Release can be found here. The team at FortneyScott is reviewing these directives in detail and determining what impact these new policies will have on federal contractor compliance and, more importantly, what next steps contractors should take to ensure compliance with the two new directives. Please contact your FortneyScott attorney or send an email to for more information.

OFCCP Director Ondray Harris Leaves – What to Expect from OFCCP Next?

As July was coming to an end, the U.S. Department of Labor announced that Ondray Harris would leave his role as OFCCP Director, effective July 27.  Thereafter, Deputy Director, Craig Leen, was appointed the Acting Director of OFCCP.  The news came a week before federal contractors and OFCCP representatives gathered in Anaheim, California at the 2018 Industry Liaison Group National Conference. Acting Director Leen took center stage and was the lead spokesperson for the agency at the National ILG Conference.

Acting Director Leen opened the Conference by outlining the agency’s four areas of focus: Transparency, Certainty, Efficiency, and Recognition.  He provided some detail with respect to these general areas.  Leen also discussed his commitment to affirmative action generally.  However, as a strong advocate for individuals with disabilities, he announced that in 2019, the agency will begin conducting focused reviews of contractors’ compliance with Section 503’s affirmative action requirements.  Leen also discussed the contractor’s “Bill of Rights,” which OFCCP issued on August 1.  The Bill of Rights constitutes a significant change in the agency’s stance toward contractors, giving substance to prior promises of greater transparency and consistency and signals an end to the OFCCP’s adversarial approach to compliance evaluations.  Additionally, Leen confirmed that pay equity remains a focus of the agency, announced that OFCCP is in the process of implementing an annual AAP certification, and is considering re-instituting a contractor award program.  Finally, Leen committed to moving compliance reviews more quickly.

Stay tuned for more FortneyScott updates, specifically with regard to official confirmation of a new OFCCP Director, and any further updates on the direction the agency will take moving forward.

Be Sure To Exercise Care In Vetting Your Supply Chain

Now, more than ever before, contractors need to employ good contracting and subcontracting practices to secure their supply chains.  Government contractors are required to deliver what they promise in their proposals and, ultimately, under their contracts.  As a prime contractor, or higher tier subcontractor, you are responsible for the integrity and compliance of your supply chain.  Recent developments may make that supply chain a potential trap for the unwary unless you are taking adequate steps to vet your suppliers:

  • Supply Chain Risk clauses: Department of Defense (DoD) is including several clauses in acquisitions and contracts that warrant your increased attention. DFARS 252.239-7018 Supply Chain Risk clause is being included in DoD information technology procurements. This clause allows DoD to decide not to award a contract, or to cancel one that has been awarded, if DoD considers the prime contractor or its supply chain to pose “the risk that an adversary may sabotage, maliciously introduce unwanted function, or otherwise subvert the design, integrity, manufacturing, production, distribution, installation, operation, or maintenance of a national security system… so as to surveil, deny, disrupt, or otherwise degrade the function, use, or operation of such system.”  DFARS 252.246-7007 Contractor Counterfeit Electronic Part Detection and Avoidance System and DFARS 252.246-7008 Sources of Electronic Parts require contractors to protect against counterfeit electronic parts in all tiers of their supply chain.  Contractors and subcontractors must employ trusted sources, maintain traceability, and report on actual or suspect counterfeit parts. FAR 52.204-21 Basic Safeguarding of Covered Contractor Information Systems, as well as DFARS 252.204-7012, Safeguarding Covered Defense Information and Cyber Incident Reporting, require contractors and their subcontractors to comply with specific cyber security controls and cyber incident reporting requirements.
  • DHS Binding Operational Directive (BOD) Ban on Products: The Department of Homeland Security (DHS) has authority to ban the use of certain products that pose risks to the national security. In Fall 2017, DHS issued its first BOD 17-01, requiring government agencies to take steps to scan, identify and remove/replace Kaspersky products in their systems.
  • Other Legal Bans on Products: In December 2017, Congress passed the National Defense Authorization Act for FY 2018, prohibiting the use of any software platform developed in whole, or in part, by Kaspersky Lab. Effective July 16, 2018, FAR 52.204-23 Prohibition on Contracting for Hardware, Software, and Services Developed or Provided by Kaspersky Lab and Other Covered Entities will be included in procurements and resultant contracts; the clause also may be added to existing contracts through a bilateral amendment.
  • Tariffs and Other Actions: President Trump’s National Security Strategy issued in December 2017 identified national security risks posed by certain economic activities of foreign countries. Tariffs and other actions are being taken to address these concerns.
  • Private Lawsuits and Government Investigations: Counterfeit parts continue to infiltrate the market. Counterfeit parts may involve the theft of a company’s intellectual property, and result in the loss of sales and good will for the company’s brand.  In addition, counterfeit parts that do not work as intended pose significant safety and security risks to the United States, other countries, and our citizens. Private companies as well as the Government are seeking to address this problem. For example, in 2018, CISCO Systems filed a lawsuit against two Florida companies for importing and selling counterfeit electronic parts.  One of these companies is a government contractor and is now under investigation by the Defense Logistics Agency.

Key Takeaways –

  • Failing to adequately protect the integrity of your supply chain has untold costs. Take steps to protect your supply chain by vetting your suppliers and their products throughout the procurement lifecycle.
  • Track notices of product and supplier risks and bans to reduce your supply chain risks.
  • Negotiate and include appropriate clauses in your contracts to assure supply chain integrity and to identify appropriate processes and remedies for reporting, correcting and obtaining recourse in the event of a problem.
  • Identify your incident response team members and develop a plan so you can take the necessary steps to prepare for and address any detected quality or performance problem, actual or suspected counterfeit part or cyber incident.


A safe and secure supply chain is in everyone’s interest.  If you are a government contractor or subcontractor and have questions about your supply chain responsibilities, or the impact of these supply chain risk rules and requirements, contact Susan Warshaw Ebner, or your FortneyScott contact, for assistance.

Supreme Court Rules in Favor of Cake Baker in Landmark LGBT Case… But Fails to Provide New Guidance

The U.S. Supreme Court ruled in favor of a baker in Colorado who refused to bake a wedding cake for a same-sex couple based on his Christian beliefs in a 7 to 2 decision issued on June 4.  In Masterpiece Cakeshop, Ltd. v Colorado Civil Rights Commission, the majority opinion written by Justice Kennedy concluded that the wedding cake baker did not get a fair hearing on his complaint in the state proceedings, and specifically ruled that there was improper bias by the Colorado Civil Rights Commission.  Although the Supreme Court discussed the tension between the two legal rights – the EEO protections for gay persons on the one hand versus the sincerely-held individual religious beliefs on the other hand – the Court did not rule on the ultimate question as to how such conflicts are to be resolved.  Although the ruling fails to provide any new criteria under which there may be an exemption to the general anti-discrimination laws based on an individual’s sincerely held religious views, the Court reaffirmed that the First Amendment’s protections of religious rights also protects individuals during the proceedings for resolving discrimination claims.

The highly anticipated ruling in Masterpiece Cakeshop comes after years of litigation.  In 2012, David Mullins and Charlie Craig met with bakery owner Jack Phillips to order a custom wedding cake for their reception.  Phillips refused to make them a cake and indicated that the bakery would not sell wedding cakes to same-sex couples.  Subsequently, Mullins and Craig filed complaints with the Colorado Civil Rights Commission, which enforces the Colorado Anti-Discrimination Act (CADA) alleging sexual orientation discrimination.  The Commission then determined that the bakery had violated CADA and Phillips appealed.  In 2015, the Colorado Court of Appeals affirmed the Commission’s ruling over Phillips’ arguments that he had a constitutional right to refuse to bake the cake based on his First Amendment rights.  The Supreme Court granted certiorari on June 26, 2017.

Justice Kennedy, writing for the majority, emphasized that Phillips was entitled to a neutral decision-maker who would give full and fair consideration to his religious objection.  The Court did not discount the impact and significance of CADA but instead, focused on the importance of providing a fair and neutral forum for resolving the claims.  Justice Kennedy noted that it is unexceptional that the CADA “…can protect gay persons in acquiring products and services on the same terms and conditions that are offered to other members of the public, the law must be applied in a manner that is neutral toward religion.”  The Court concluded that the Commission’s treatment of Phillips’ case violated the state’s duty under the First Amendment not to base laws or regulations on hostility to a religion or religious viewpoint.

In the dissent, Justice Ginsburg emphasized that these circumstances do not evidence hostility to religion of the kind the Court has previously held to signal a free-exercise violation.  Additionally, the dissent argued that any comments signaling any sort of hostility cannot justify reversing the judgment below.

While a victory for the baker in this case, the ruling is fact-intensive and based on narrow and unusual facts. Justice Kennedy recognized the narrowness of the ruling stating that, “[T]he outcome of cases like this in other circumstances must await further elaboration in the courts, all in the context of recognizing that these disputes must be resolved with tolerance, without undue respect to sincere religious beliefs, and without subjecting gay persons to indignities when they seek goods and services in an open market.” Indeed, there already are appeals pending, including one before the Supreme Court from a florist in Washington who has appealed a state ruling that found she violated state law for refusing to provide the wedding flowers for a same-sex couple.  We will stay tuned.

For the full update on the Supreme Court’s ruling, click here.

Supreme Court Rules Class Arbitrations Can Be Barred By Agreement

The Supreme Court today ruled that employers may insist on and enforce mandatory arbitration agreements with employees that bar class actions against the employers.  This remains true even if signing such agreements is a condition of employment. The case is Epic Systems Corp. v. Lewis.

The issue before the Court has been brewing since the NLRB’s D.R.Horton ruling in 2012.  In a break with precedent, the Board ruled that class action prohibitions in arbitration agreements violated Section 7 of the National Labor Relations Act’s (“NLRA”) guarantee of collective action and, thus, was a valid exception to the strict requirement of the federal Arbitration Act (“FAA”).  The FAA, a law otherwise broadly supporting arbitrations, includes a “saving clause,” which permits courts to refuse to enforce arbitration agreements “upon such grounds as exist at law or in equity for the revocation of any contract.” §2.  Appeals courts have split on whether D.R.Horton expressed the proper application of the FAA in class arbitration cases and the matter was ultimately brought to the Supreme Court.

The Court majority found little ambiguity in the applicable laws.  Among the rationales upon which the majority based its ruling were its conclusions that the saving clause was intended to save defenses arising from state law and federal statutes and, as a law of general application, saving clause in the FAA “permits agreements to arbitrate to be invalidated by ‘generally applicable contract defenses, such as fraud, duress, or unconscionability,'” (citing AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011).  The Court noted “this means the saving clause does not save defenses that target arbitration either by name or by more subtle methods, such as by ‘interfer[ing] with fundamental attributes of arbitration.'” Id., at 344.

Thus, the lengthy judicial – and philosophical – battle among jurists and workplace participants has ended.  The “saga” of D.R.Horton has ended and arbitration agreements prohibiting class actions are licit.

The Court also rejected the argument that the NLRA, passed subsequently to the FAA, implicitly “amended” the prior statute or otherwise altered its effect.  Commenting that the NLRA focuses on the right to form unions and bargain collectively, the Court pointedly notes that the NLRA is silent with respect to arbitration and shows no intent to modify the FAA.  The Court dryly states

Our rules aiming for harmony over conflict in statutory interpretation grow from an appreciation that it’s the job of Congress by legislation, not this Court by supposition, both to write the laws and to repeal them. Slip Op.  at 10

and goes on to note that the Supreme Court has consistently rejected attempts to “conjure” conflicts between the FAA and other states.

No report of this decision can be complete without noting the acerbity of the language in both the majority decision and the lengthy dissent.  The 5-4 decision once again split the High Court along ideological grounds and the “battle lines” were once again distinctly drawn: the role of legislative history, the importance of legislative intent, the extent of judicial “activism” or “restraint” on behalf of whom.  Justice Gorsuch also took this opportunity to articulate his position on the limits of the Chevron decision in parsing asserted “statutory ambiguities.”

In sum, Epic Systems can be read as a simple and straight-forward decision permitting the use of arbitration agreements that prohibit class actions.  To careful readers, this decision indicates that a number of battles have yet to be waged on issues of workplace practice and social policy.  And the make-up of the Court may be a chief determinant of the outcomes.

New Jersey Passes Landmark Equal Pay Act

On April 25, New Jersey joined a growing list of states to enact robust equal pay laws.  The Diane B. Allen Equal Pay Act, which takes effect on July 1, 2018, amends the New Jersey Law Against Discrimination in several ways.  The amendments provide broader protections than the federal Equal Pay Act (EPA).

While the EPA prohibits discrimination based exclusively on gender, the New Jersey law extends its protection to workers denied equal pay based on race, creed, color, national origin, nationality, marital status, sexual orientation, gender identity, disability, and age, among others.

The New Jersey law prohibits employers from providing members of a protected class a lower rate of pay “for substantially similar work, when viewed as a composite of skills, effort and responsibility,” a broader standard than the federal EPA’s “equal work” standard.

Like the EPA, the New Jersey law includes specific affirmative defenses, but the defenses under the new law are narrower and may be more difficult for employers to demonstrate.  Specifically, a difference in pay is permitted under the New Jersey law only if it is the result of a bona fide seniority or merit system or the employer can justify a pay difference by demonstrating that:

  • it is based on legitimate factors unrelated to characteristics associated with the employee’s protected status such as training, education or experience, or the quantity or quality of production;
  • the factors are not based on and do not perpetuate a pay differential based on a protected characteristic;
  • all factors are applied “reasonably”;
  • one or more factors explain the entire pay differential; and
  • the factors are job related, based on business necessity and there are no alternatives with less of an impact on pay.

This final catch-all exemption is narrower than the EPA’s catch-all exemption – the pay differential is based on a factor other than sex.

The New Jersey law also provides more generous damages than the EPA.  Prevailing employees are entitled to three times the amount of the pay differential for the entire violation period, which can extend as far back as six years.  In comparison, the liability period under the EPA is two years.

New Jersey joins Massachusetts, Oregon, and Washington in passing comprehensive equal pay legislation that become effective by January 1, 2019 or sooner.  It is critical that employers, particularly those operating in multiple states, quickly get up to speed on their varying obligations.  Moreover, proactive pay audits under the protection of attorney-client privilege and, where appropriate, pay adjustments, will put employers in the best possible position to defend against what we expect will be an increase in complaints of compensation discrimination.

FortneyScott’s Pay Equity practice is dedicated to guiding employers through the changing and challenging world of pay equity. Please reach out to us if we can help you think through these increasingly complex matters, to provide strategic and practical legal advice and counsel, and to help you get pay equity “right.”