Associated Builders and Contractors (ABC) Aug. 8 met with White House Office of Management and Budget (OMB) officials to voice concerns about two anticipated final rules from the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) that drastically alter existing affirmative action and nondiscrimination obligations regarding individuals with disabilities and veterans. The rules are under the final stages of review by OMB and would:
  • Update Section 503 of the Rehabilitation Act by mandating arbitrary quotas (referred to as “goals”) for hiring disabled workers for all contractors with a government contract/subcontract of $50,000 or more and 50 or more employees. The proposal also requires construction contractors for the first time to file written utilization analyses – documentation of a contractor’s workforce statistics to determine whether the percentage of “protected” employees meets affirmative action requirements for federal projects.
  • Amend the Vietnam Era Veterans' Readjustment Assistance Act to require federal contractors and subcontractors to conduct more substantive analyses of recruitment and placement actions and to benchmark the effectiveness of affirmative action efforts, in addition to revising recordkeeping requirements.  
During the meeting, ABC reiterated that its members support and comply with OFCCP’s existing objectives under these statutes to address employment discrimination against individuals with disabilities and veterans, but noted serious concerns regarding specific requirements in the new proposals. 

ABC cautioned that OFCCP’s rules, as proposed, will introduce numerous, burdensome new data collection and reporting provisions and set infeasible compliance requirements for federal construction contractors. ABC cited various studies that illustrate the expected high costs of compliance—for all contractors and specifically for the construction industry—and the lack of evidence that federal contractors fail to meet their obligations in hiring persons with disabilities and veterans. 

ABC stressed to OMB that OFCCP did not take into account the unique nature of construction hiring and work practices when developing the rules. According to OFCCP itself, the construction workforce is “fluid” and “transitory,” which has historically warranted a different approach toward compliance. 

As a result of improperly assessing the rule’s impact on the construction industry, OFCCP also failed to accurately and adequately measure the costs of compliance—estimated by the agency to be a mere nine hours and $560 per contractor for the veterans rule, and 7.8 hours and $473 per contractor for the disability rule. 

OMB has up to 60 days to approve the rules or send them back to OFCCP for further review. However, it is believed that DOL is pressuring the White House to fast track them. Accordingly, ABC expects finalization and implementation in the near future. 

In addition, OFCCP and the General Services Administration have lowered the contract threshold for projects to be considered “mega” from $50 million to $25 million and OFCCP plans to impose additional affirmative action requirements on the construction industry in a forthcoming rulemaking proposal, expected later this year. 

ABC will continue to monitor and OFCCP’s rulemakings, advocate for federal contractors and provide updates as new information becomes available.