December 22, 2017

GAO Recommendations for OFCCP: Disaggregated AAP Placement Goals

In its recent report on Diversity in the Technology Sector, the GAO made a recommendation that OFCCP take steps toward requiring contractors to set separate placement goals for individual race/ethnicity groups in their AAPs, rather than setting a single goal for all minorities.

OFCCP has considered the idea before: during the rulemaking process that produced the last major revision to the AAP regulations in 41 CFR 60-2 (published in November, 2000), OFCCP sought comments and discussed the feedback received:
“In the NPRM, OFCCP requested comments concerning whether contractors should be required to compute availability separately for individual minority subgroups as a general rule. Five commenters—two law firms, a contractor, a contractor representative, and an individual consultant— expressed opposition to computing availability separately for individual minority subgroups. One of these commenters expressed concern that it would cause confusion in that employees or applicants could identify themselves with multiple ethnic or racial characteristics. A law firm indicated that it would create rivalry between minority subgroups…The regulation retains the requirement that contractors determine the availability of total minorities. The language in the proposal, which does not require calculating availability separately by individual minority subgroup, was not modified and has been adopted in the final rule.” (emphasis added)
“Two commenters representing a number of contractors raised a concern about the statement at § 60–2.16(d) that ‘‘In the event of a substantial disparity in the utilization of a particular minority group, a contractor may be required to establish separate goals for those groups.’’ The commenter was concerned because the term ‘‘substantial disparity’’ is not defined and feared that the requirement ‘‘will have the practical result of producing quotas and will, no doubt pit one minority group against another.’’ As indicated in § 60–2.16(d), setting a single goal for all minorities is expected to continue to be the norm for most contractors. The purpose of the additional language concerning substantial disparities for a particular group is intended to address specific situations where a particular minority group, or men and women of a particular minority group, are substantially underutilized. This approach is taken directly from OFCCP’s current regulations at § 60– 2.12(l). In appropriate circumstances, OFCCP will continue to require separate goals for particular minority groups or by gender within minority groups. It is not intended to represent a change. Therefore, OFCCP has not changed this language in the final rule.” (emphasis added)
After consideration, OFCCP rejected the concept of requiring minority subgroups in determining availability and setting placement goals.
In a similar (but even less controversial) scenario almost a decade ago, OFCCP officially chose to stay out of the rulemaking process rather than reconcile its AAP regulations with the updated EEO-1 race/ethnicity categories that debuted with the 2006 filing. In August, 2008, OFCCP published Directive 283 (later renumbered as the current DIR 2008-02), which told contractors that they could use either the five old EEO-1 race/ethnicity categories (listed in 41 CFR 60-2.11) or the updated seven categories in their AAPs and supporting records. By doing so, OFCCP avoided a lengthy and resource-intensive rulemaking endeavor that would have produced little additional benefit to either contractors or the agency’s enforcement efforts.
With that history in mind, consider OFCCP’s comments to GAO included in the report:
“The agency appreciates the recommendation that it require disaggregation of demographic data for setting goals. However, this would require a regulatory change with little immediate benefit resulting at the current time.” (emphasis added) (GAO-18-69 Diversity in the Technology Sector, p. 68)
“OFCCP officials said that they would need to amend their regulations in order to require disaggregated race/ethnicity information for placement goals on AAPs…However, they have not pursued this regulatory change because of competing priorities on their regulatory agenda.” (emphasis added) (GAO-18-69 Diversity in the Technology Sector, p. 41)
The takeaway is that OFCCP has no interest in initiating a regulatory change that would take 2-3 years, tie up agency resources, likely produce vocal opposition from all sides, and require retraining of agency staff and revisions to the FCCM—all while facing budget and staffing reductions.
This should be viewed as encouraging, because in practice, the proposed solution would not fix the problems identified in the report. The GAO report seems to include a misunderstanding of the purpose and application of AAP placement goals. Historically, OFCCP’s position—in regulations, public directives, and enforcement activity—consistently has been that placement goals are not intended to achieve proportional representation or equal results; rather, the goal-setting process in affirmative action planning is used to target and measure the effectiveness of affirmative action efforts to eradicate or prevent barriers to equal employment opportunity.
The GAO report assumes that “aggregated minority” goal-setting in the AAP allows contractors to avoid undertaking good faith efforts targeting particular race/ethnicity groups. However, this assumption misses the following common phenomena:

  • When undertaking good faith efforts to address “aggregated minority” placement goals, contractors frequently partner with multiple organizations and venues that represent and serve specific race/ethnicity groups. Such organizations/venues often can be highly effective resources for reaching qualified potential jobseekers of a particular race/ethnicity group.
  • There are cases where aggregation and statistical power can increase the probability of a required goal for minorities as a whole where separate race/ethnicity goals would not be required (aka Simpson’s paradox). An AAP job group may have insignificant gaps between incumbency and availability for each separate race/ethnicity group (and, therefore, no placement goals), but the aggregated gap for minorities as a whole is significant (therefore, a placement goal is set). Because the “aggregated minority” goal by definition includes all of the separate race/ethnicity groups, opportunities to reach members of each separate group through good faith efforts would now exist, where they would not have existed under the separate goal-setting methodology.

The technology sector only represents a portion of the Federal contractor community covered by OFCCP’s affirmative action regulations. Without additional evidence showing that the same diversity issues described in the GAO report also apply uniformly to other sectors, the recommendation that OFCCP should change AAP requirements for the entire contractor community regarding placement goal-setting seems like a draconian solution.
Even if OFCCP were able to find the “secret potion” for curing all ills related to diversity in the technology sector through regulatory and enforcement activity, the agency’s reach is too limited to be the sole agent for change in this area. Only about a quarter of the U.S. workforce falls under OFCCP’s jurisdiction, and the agency only reviews roughly 2% of that sample in any given year. Numerous small technology firms may never reach the employee count and/or contract amount thresholds at which OFCCP’s requirements kick in, yet they still face many of the same conditions described in the GAO report.
Interestingly, the GAO report referenced the best potential solution to the diversity challenges in the technology sector—and it was not part of the recommendations section:
“A diversity and inclusion officer we interviewed from one large technology contractor noted that…the company does not count Asian workers in setting the company’s diversity goals because Asians are well represented and the company believes it should set a placement goal for groups for which the company knows it needs to make progress.” (GAO-18-69 Diversity in the Technology Sector, p. 41, emphasis added)
Voluntary, robust, analytical diversity and inclusion programs would be more effective than OFCCP or EEOC actions for effecting change on a wider scale, because they allow technology companies of any size to use available data and institutional knowledge to develop a plan that both fits their situation and can solve an identified problem.
By Fred Satterwhite, Director of Software at DCI Consulting Group



DCI Consulting is a risk management human resources consulting firm strategically located in Washington, D.C.

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