Office of Federal Contract Compliance Programs (OFCCP)

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Federal Contract Compliance Manual (FCCM)

Chapter 2 — Desk Audit Review

TABLE OF CONTENTS

• 2A INTRODUCTION
  • 2A00 CONTENTS OF CHAPTER
  • 2A01 PURPOSE OF DESK AUDITS
  • 2A02 PURPOSE AND PRINCIPLES OF AAPS
  • A03 RELATIONSHIP TO THE STANDARD COMPLIANCE REVIEW REPORT (SCRR)
• 2B PRE-DESK AUDIT ACTIONS
  • 2B00 COMPLIANCE REVIEW INFORMATION SYSTEM (CRIS)
  • 2B01 MAINTENANCE OF CASE CHRONOLOGY
  • 2B02 INITIAL CONTACT WITH CONTRACTOR
  • 2B03 SCHEDULING LETTER
  • 2B04 FOLLOW-UP CONTACT WITH CONTRACTOR
  • 2B05 CONTACT WITH EEOC, STATE AND LOCAL FEP AGENCIES AND VETS
  • 2B06 REVIEW OF COMMUNITY RESOURCE FILES
  • 2B07 STANDARD AFFIRMATIVE ACTION FORMATS
  • 2B08 REVIEW OF PREVIOUS COMPLIANCE ACTIONS
  • 2B09 INFORMATION ON COMPLAINTS
  • 2B10 RELATIONSHIP OF OFCCP COMPLIANCE ACTIVITIES TO EEO LITIGATION OR COURT ORDERS
• 2C SUBMISSION OF AAPS FOR DESK AUDIT
  • 2C00 DELAYED RECEIPT OF AAPS
  • 2C01 NON-RECEIPT OF EXECUTIVE ORDER AAP
  • 2C02 NON-RECEIPT OF SECTION 503/38 USC 4212 AAPS
  • 2C03 EVALUATION PERIOD
  • 2C04 TIMEFRAME FOR COMPLETION OF COMPLIANCE REVIEW
  • 2C05 REVIEWS OF CORPORATE HEADQUARTERS, REGIONAL AND DISTRICT OFFICES
• 2D INITIAL REVIEW OF AAP AND SUPPORT DATA — GENERAL
  • 2D00 CONTENTS OF INITIAL REVIEW
  • 2D01 RECORDING RESULTS OF INITIAL REVIEW
• 2E REVIEW FOR CURRENCY AND COMPLETENESS
  • 2E00 ACTION WHEN AAP NOT CURRENT
  • 2E01 COMPLETENESS
  • 2E02 CENTRAL EXECUTIVE ORDER AAP ELEMENT MISSING
• 2F REVIEW OF EXECUTIVE ORDER AAP FOR REASONABLENESS
  • 2F00 WORKFORCE ANALYSIS
  • 2F01 UTILIZATION ANALYSIS
  • 2F02 GOALS
  • 2F03 ACTION FOR UNREASONABLE SUBMISSION
• 2G REVIEW OF EXECUTIVE ORDER AAP FOR ACCEPTABILITY
  • 2G00 GENERAL
  • 2G01 WORKFORCE ANALYSIS
  • 2G02 JOB GROUPS
  • 2G03 AVAILABILITY ANALYSIS — GENERAL
  • 2G04 AVAILABILITY ANALYSIS — DEFINING LABOR AREAS
  • 2G05 AVAILABILITY ANALYSIS — EIGHT FACTORS
  • 2G06 IDENTIFICATION OF UNDERUTILIZATION
  • 2G07 GOALS
  • 2G08 ADOPTING AN EEO POLICY
  • 2G09 DISSEMINATION OF THE POLICY
  • 2G10 RESPONSIBILITY FOR IMPLEMENTATION
  • 2G11 IDENTIFICATION OF PROBLEM AREAS
  • 2G12 ESTABLISHMENT OF GOALS AND OBJECTIVES — GOALS BY ORGANIZATIONAL UNIT
  • 2G13 DEVELOPMENT AND EXECUTION OF ACTION - ORIENTED PROGRAMS
  • 2G14 INTERNAL AUDIT AND REPORTING
  • 2G15 SEX DISCRIMINATION GUIDELINES
  • 2G16 SUPPORT OF COMMUNITY ACTION PROGRAMS
  • 2G17 CONSIDERATION OF MINORITIES AND WOMEN NOT CURRENTLY IN THE WORKFORCE
• 2H REVIEW OF EXECUTIVE ORDER SUPPORT DATA FOR ACCEPTABILITY
  • 2H00 REPORT ON GOALS
  • 2H01 PERSONNEL ACTIVITY DATA
• 2I REVIEW OF SECTION 503 AND 38 U.S.C. 4212 AAP(S) FOR ACCEPTABILITY
  • 2I00 GENERAL
  • 2I01 ITEMS TO BE INCLUDED
  • 2I02 POLICY STATEMENT
  • 2I03 REVIEW OF PERSONNEL POLICIES FOR PROPER CONSIDERATION OF QUALIFICATIONS
  • 2I04 PHYSICAL AND MENTAL QUALIFICATIONS
  • 2I05 REASONABLE ACCOMMODATION TO PHYSICAL AND MENTAL LIMITATIONS
  • 2I06 COMPENSATION
  • 2I07 OUTREACH, POSITIVE RECRUITMENT, EXTERNAL DISSEMINATION OF POLICY
  • 2I08 ADDITIONAL AAP INGREDIENTS
• 2J SUMMARY OF PROBLEMS WITH AAP AND SUPPORT DATA AND DEVELOPMENT OF ONSITE PLAN
  • 2J00 ITEMS RESOLVED AT DESK AUDIT
• 2J01 ITEMS TO BE RESOLVED ONSITE — ONSITE PLAN
• 2K OVERVIEW OF PERSONNEL ACTIVITY, EEO TRENDS AND WORKFORCE STRUCTURE/PERSONNEL PRACTICES
  • 2K00 PERSONNEL ACTIVITY (SUMMARY)
  • 2K01 EEO TREND ANALYSIS
  • 2K02 WORKFORCE STRUCTURE, PERSONNEL PRACTICES
• 2L GOALS PROGRESS AND GOOD FAITH EFFORTS
  • 2L00 ANALYSIS OF GOALS PROGRESS
  • 2L01 EVALUATION OF GOOD FAITH EFFORT
  • 2L02 ONSITE PLAN FOR EVALUATION OF GOOD FAITH EFFORT
• 2M POTENTIAL DISCRIMINATION ANALYSES — GENERAL
  • 2M00 TITLE VII PRINCIPLES
  • 2M01 USE OF TERM "MINORITIES"
• 2N REVIEW OF THE WORKFORCE ANALYSIS
  • 2N00 GENERAL
  • 2N01 MINORITY GROUP ANALYSIS
  • 2N02 UNDERREPRESENTATIONS AND CONCENTRATIONS
  • 2N03 DETERMINING THE RELEVANT WORKFORCE SECTOR AND JOB AREAS
• 2O AUDIT OF PERSONNEL ACTIVITY - IMPACT RATIO ANALYSIS
  • 2O00 DEFINITION
  • 2O01 CALCULATING THE IRA
  • 2O02 MINORITY GROUP ANALYSIS
  • 2O03 PROPER USE OF THE IRA
  • 2O04 IRA SUMMARY AND ONSITE PLAN
• 2P COMPENSATION ANALYSIS
  • 2P00 GENERAL
  • 2P01 WAGE AND SALARY DATA
  • 2P02 IDENTIFICATION OF JOB TITLES FOR COMPARISON
  • 2P03 METHODS USED TO DETERMINE PAY
• 2Q SUMMARY OF POTENTIAL DISCRIMINATION PROBLEMS AND ONSITE INVESTIGATIVE PLAN
  • 2Q00 FOCUS ON PROBLEM
  • 2Q01 ONSITE PLAN
• 2R PREPARING FOR THE ONSITE
  • 2R00 DECISION TO GO ONSITE
  • 2R01 SCOPE OF ONSITE
  • 2R02 ONSITE PLAN — RESULTS OF DESK AUDIT
  • 2R03 OTHER ONSITE INGREDIENTS — GENERAL
  • 2R04 IMPLEMENTATION OF GUIDELINES ON RELIGION AND NATIONAL ORIGIN AND SEX DISCRIMINATION GUIDELINES
  • 2R05 IMPLEMENTATION OF SECTION 503 AND 38 U.S.C. 4212 REQUIREMENTS
  • 2R06 TECHNICAL REQUIREMENTS
• 2S NOTICE OF ONSITE REVIEW
  • 2S00 TELEPHONE NOTICE
  • 2S01 WRITTEN CONFIRMATION OF ONSITE

FIGURES

2-1 CASE CHRONOLOGY LOG (CC-53)

2-2 SCHEDULING LETTER REQUESTING AAP AND SUPPORT DATA

2-2a ITEMIZED LISTING

2-3 STANDARD INQUIRY LETTER FOR REQUESTING COMPLAINT DATA FROM EEOC, STATE AND LOCAL FEPS

APPENDICES

2A-1 STANDARD COMPLIANCE REVIEW REPORT (SCRR) FORM

2A-2 SCRR INSTRUCTIONS

2B SOURCES FOR OBTAINING AVAILABILITY STATISTICS FOR USE IN PREPARING AFFIRMATIVE ACTION PROGRAMS

INDEX

CHAPTER 2 — DESK AUDIT

2A INTRODUCTION

2A00 CONTENTS OF CHAPTER

Chapter 2 outlines the procedures to be used in conducting the desk audit portion of the compliance review whether it is conducted in the office or onsite. In a preaward review, the desk audit is normally conducted onsite (also see Section 3C).

2A01 PURPOSE OF DESK AUDITS

Desk audits are a major component of compliance reviews. By careful and systematic review of the documents and materials provided by covered contractors and subcontractors, the Equal Opportunity Specialist (EOS) can begin to determine whether they are complying with relevant provisions of 41 CFR Chapter 60, are not discriminating and are taking affirmative action to ensure equal employment opportunity without regard to race, color, religion, national origin, sex, disability, or status as a special disabled or Vietnam era veteran. Desk audits enable the EOS to review a contractor's compliance with its affirmative action and equal opportunity obligations at a particular establishment, and specifically to:

1. Workforce Structure, Personnel Policies and Procedures: Examine the contractor's basic organizational structure, personnel policies and procedures.
2. Good Faith Efforts: Identify areas: (1) where there has been a lack of goals progress and further information is needed onsite to evaluate the contractor's good faith effort, including the development and implementation of programs designed to improve opportunities for minorities and women.
3. Potential Discrimination: Identify areas for an in-depth investigation of potential discrimination: (1) where minorities and women are underrepresented and concentrated in the workforce; (2) where employment activity has been disadvantageous to minorities or women; and (3) where there may be problems in the compensation of minorities or women vs. others.

2A02 PURPOSE AND PRINCIPLES OF AAPS

Desk audits should be conducted with the following AAP principles as points of reference:

1. Equal Employment Opportunity: Equal employment opportunity requires that a contractor eliminate and remedy all discrimination. A contractor's personnel policies and practices must not discriminate against any persons because of their race, color, religion, national origin, sex, disability or covered veteran status.
2. Affirmative Action: An affirmative action program is a set of specific and result-oriented policies and procedures to which a contractor commits itself to apply every good faith effort. The objective of those procedures plus such efforts is equal employment opportunity.
3. Completeness, Reasonableness, Acceptability: The affirmative action program will be judged for its completeness, reasonableness, and acceptability.

2A03 RELATIONSHIP TO THE STANDARD COMPLIANCE REVIEW REPORT (SCRR)

The Standard Compliance Review Report (SCRR) and its instructions (Appendix 2A) constitute a framework for conducting the desk audit and developing and implementing an onsite investigative plan. The organization of this Chapter generally parallels that of the SCRR, and it should be read in conjunction with the SCRR instructions.

1. Organization of the SCRR: The SCRR is organized into three parts:
   1. Part A: Preparation: Part A covers preparation for the desk audit, including such areas as the contractor's past review history, overall EEO trends in its workforce, its organizational structure, and the initial review of its AAP and support data for completeness, reasonableness, and acceptability.
   2. Part B: Affirmative Action: Part B summarizes problems with the AAP and support data; provides for analysis of affirmative action progress and identification of areas where additional information is needed to determine good faith effort; and covers implementation of other affirmative action obligations. For each affirmative action problem unresolved at the conclusion of desk audit, the SCRR provides for an onsite plan.
   3. Part C: Potential Discrimination: Part C includes review of the workforce analysis for concentrations/under representations, impact ratio analyses, and compensation analyses. For each potential discrimination problem unresolved at the conclusion of desk audit, the SCRR provides for an onsite investigative plan.
2. SCRR Potential Discrimination Worksheets: The SCRR also includes a series of Potential Discrimination Worksheets designed to illustrate the steps normally necessary to establish particular types of discrimination. These Worksheets and their instructions are in Appendix A to Chapter 3. Their use, although encouraged, is optional. However, the "Key Factors" highlighted at the beginning of the instructions for each Worksheet must be addressed in an analysis if the Worksheet applies to the type of potential discrimination problem involved. In developing an onsite plan for the investigation of potential discrimination issues, therefore, the EOS may find it useful to review at least the "Key Factors" for the initial onsite step of data refinement (Worksheets 17-1 and 17-2).

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2B PRE-DESK AUDIT ACTIONS

2B00 COMPLIANCE REVIEW INFORMATION SYSTEM (CRIS)

CRIS is used to record basic information about the contractor, to track major review events, and to summarize violations found and remedies obtained. To enter a contractor into CRIS, the Area Office completes CRIS Form 100 and sends it to Region. The Region then generates a CRIS Form 100a, which is the first page of the SCRR. Full instructions for completing the 100a are given in the CRIS Manual.

2B01 MAINTENANCE OF CASE CHRONOLOGY

The EOS should prepare a case chronology (CC-53; see Figure 2-1) for each compliance review. It should cover events occurring from the date of initial contact with the contractor to the date case closing documents are prepared and approved. All telephone conversations, correspondence and meetings associated with the review should be recorded, indicating the date, nature of contact, person contacted, summary of discussion or actions taken, and EOS' name. Events should be logged in as they occur, since it is difficult to reconstruct these after a review is completed. The case chronology is an integral part of the case file and will be an invaluable tool if enforcement action is necessary. All notes and logs should be legible (preferably typed).

2B02 INITIAL CONTACT WITH CONTRACTOR

1. Identifying Information: Identifying information should be obtained by contacting the contractor before the start of the compliance review. The name of the establishment chief executive officer (CEO), the name of the person responsible for preparation/implementation of the AAP, and the correct mailing address for the establishment should be obtained. If the establishment is part of a larger entity, the name of the corporate CEO, the name of the corporate person responsible for Equal Employment Opportunity/Affirmative Action matters, and the correct corporate mailing address should also be obtained. This basic identifying information should be entered on page 2 of the SCRR, along with contract data, labor force information, and the other items specified in the SCRR instructions.
2. Representation by Counsel: If the contractor indicates, at this point in the review or later, that an outside counsel or consultant will represent the company, the contractor will be asked to provide written confirmation of representation, including: (1) the representative's name, address and phone number; (2) the scope of the representative's authority (including whether he/she is authorized to negotiate settlement for the contractor); (3) whether all contacts, including routine ones to make appointments or to clarify submitted data or other information, should be made through the representative; and (4) whether all correspondence should be mailed only to the representative or if copies should also be mailed to the contractor. Upon receipt of this written confirmation, contacts and correspondence will be handled accordingly for the duration of the review (unless the contractor specifies a different time period). NOTE: This same written confirmation should be obtained from the contractor if OFCCP is contacted by a person who indicates that he/she represents the contractor.
3. Special Circumstances: The EOS should also determine if there is any information which would preclude selection of the contractor for a compliance review (e.g., bankruptcy, debarment, closure of the establishment), or would influence the timing of the review (i.e. vacation shutdown, strike, lockout, heavy layoffs, etc.).

2B03 SCHEDULING LETTER

The notice used to schedule a compliance review and request the Affirmative Action Program (AAP) and supporting documentation is called a Scheduling Letter (Figure 2-2). This letter will be sent, by certified mail with return receipt requested, to the top official at the contractor's establishment with a copy to the chief executive officer at the corporate address (unless the establishment and corporate office are the same). Scheduling Letters shall be signed by the AOD or FOD. Letters should include the name and telephone number of the EOS who will be conducting the review and/or the appropriate Module Chief.

2B04 FOLLOW-UP CONTACT WITH CONTRACTOR

Within fifteen working days after sending the Scheduling Letter, the EOS should contact the contractor to ensure that the contractor's representatives fully understand the requirements outlined. The EOS should also make sure there have been no special circumstances which may require postponing or cancelling the scheduled review (see 2B02(c) above).

2B05 CONTACT WITH EEOC, STATE AND LOCAL FEP AGENCIES AND VETS

1. EEOC and State and local Fair Employment Practices (FEP) Agencies: Simultaneously with the Scheduling Letter, the standard inquiry letter (Figure 2-3) should be sent to the district office of the EEOC and to State and local FEP agencies, requesting information on complaints filed against the contractor and any other information that may be pertinent to assessing the contractor's EEO posture. If after 15 days no response is received, the EOS should follow-up by telephone.
2. Veterans Employment and Training Service (VETS): The EOS must contact the VETS representative at the appropriate State Employment Security office to request information he or she may have which could be pertinent to the review. This contact must be recorded in the case chronology record.

2B06 REVIEW OF COMMUNITY RESOURCE FILES

Each AO or FO should maintain resource files on the communities within its geographic area. For each community, these files should contain at least: (1) basic data on minority/female availability; (2) information on public transportation systems; and (3) identification of local organizations representing covered group members. The EOS should review the resource file for the community where the contractor is located, with particular attention to organizations which can be helpful in evaluating the contractor's compliance posture. If the contractor is located near an Indian reservation, the EOS should contact the reservation's Tribal Employment Rights Council (TERO).

2B07 STANDARD AFFIRMATIVE ACTION FORMATS

If the contractor scheduled for review has an approved Standard Affirmative Action Format (SAAF), the Module Chief should obtain a copy of the format and provide it to the EOS conducting the review. The EOS should become familiar with the provisions of the SAAF, preparatory to evaluating the contractor's AAP.

2B08 REVIEW OF PREVIOUS COMPLIANCE ACTIONS

When scheduling the contractor for a compliance review, the EOS should determine whether the contractor has previously been audited. If so, the EOS should examine at least the previous case file for problem areas, with particular attention to commitments made in a Conciliation Agreement or Letter of Commitment. The EOS also should determine whether the contractor has been subject to an OFCCP complaint investigation and, if so, review the file for any problems identified. Problems in these past compliance actions should be recorded on page 3 of the SCRR. As the review progresses, the EOS should be alert to any indications that past problems have remained unremedied or have recurred.

2B09 INFORMATION ON COMPLAINTS

1. Response to the Standard Inquiry Letter: The EOS should carefully examine all information on complaints received from Federal, State, and local agencies in response to the Standard Inquiry Letter. Basic information on these com- plaints should be entered on page 3 of the SCRR, including the agency with which the complaint was filed, the basis, issue, current status, and the area of the contractor's workforce involved in the complaint.
2. Relationship to Desk Audit: The EOS should note any patterns in the types of complaints filed, particularly ones that might indicate potential systemic discrimination problems. For example, there may be a clustering of complaints filed by employees in certain job areas, or by applicants or employees from a particular race, religion, ethnic group, or sex, or by covered veterans or individuals with disabilities. As the review progresses, the EOS should cross reference complaints to potential problem areas identified. For example, there may be indications of lack of good faith efforts, adverse IRA's, and/or concentrations/underrepresentations in areas where complaints have been filed.
3. Review of Case Files: Where appropriate, the EOS should contact the appropriate EEOC office or State or local fair employment agency to arrange to review case files as part of the compliance review. This can be useful when, as a result of the desk audit, potential systemic problems are indentified in complaint areas.
4. Contractor Complaint Information: Upon receipt of the AAP and supporting data, any information provided by the con- tractor with respect to current or past complaints should be compared to the information received from the agencies. Discrepancies and/or information not provided by the contractor should be noted by the EOS for particular attention during the review.

2B10 RELATIONSHIP OF OFCCP COMPLIANCE ACTIVITIES TO EEO LITIGATION OR COURT ORDERS

If, during the conduct of a compliance review, the EOS finds that the contractor is involved in litigation or is under a court order on EEO matters, he/she should identify the EEO issues involved, the court, the parties, the case name and number, and bring the matter to the attention of the AOD (or FOD, where appropriate). The AOD/FOD, in consultation through channels with the Regional Solicitor's Office, will determine whether there are any limitations which may be imposed on the conduct of the compliance review by the litigation or court order.

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2C SUBMISSION OF AAPS FOR DESK AUDIT

2C00 DELAYED RECEIPT OF AAPS

If current AAPs are not received by the 30th calendar day after the contractor received the notification of the scheduled review, the EOS should telephone the contractor to determine whether the AAPs have been mailed. If the contractor advises that they are en route, a reasonable period of time, not to exceed five (5) calendar days, will be allowed for receipt.

2C01 NON-RECEIPT OF EXECUTIVE ORDER AAP

If there is no reason to believe that the AAP is en route, or if an AAP reported en route has not been received at the end of 5 calendar days following the 30th day, a show cause notice should generally be issued (see Chapter 8). However, the regulations at 41 CFR 60-1.26(a)(2) give the Director, OFCCP the discretion to go directly to administrative enforcement where a contractor refuses to submit an AAP and efforts to conciliate the matter are unsuccessful.

2C02 NON-RECEIPT OF SECTION 503/38 U.S.C. 4212 AAPS

A Section 503 and 38 U.S.C. 4212 AAP may be included in an Executive Order AAP, may be combined in one document, or may be submitted as separate documents. Action to be taken where Section 503 and/or 38 U.S.C. 4212 AAP(s) are not submitted may take either of two forms, depending on circumstances:

1. Concurrent Failure to Submit EO 11246 AAP or Submission of Unreasonable EO 11246 AAP: If the contractor failed to submit both an Executive Order AAP and the AAP(s) for Section 503/38 U.S.C. 4212, or if the Executive Order AAP is determined to be an unreasonable submission (see Section 2F below) and no Section 503/38 U.S.C. 4212 AAP(s) was submitted, then the Show Cause Notice being issued for the Executive Order violation will include the failure to submit the Section 503/38 U.S.C. 4212 AAP and offer the contractor a concurrent 30-day period to submit that AAP (see Sections 8B01(b) and 8D00(b) and Figures 8-1 and 8-2).
2. Reasonable EO 11246 AAP Submitted: If the contractor's Executive Order AAP has been received and is determined to be reasonable, but no Section 503/38 U.S.C. 4212 AAP(s) was received, the EOS will telephone the contractor to request that the missing AAP(s) be provided. If the materials are received before the end of the desk audit, they will be reviewed for completeness and acceptability (see Sections 2E01 and 2I below) as part of the desk audit. If they are not received before the end of the desk audit, they will be reviewed onsite. If, however, it is determined onsite that the contractor did not have Section 503 and/or 38 U.S.C. 4212 AAPs in place in accordance with the regulations, this will be cited as a major problem, and its resolution addressed in a Conciliation Agreement.

2C03 EVALUATION PERIOD

1. General: The EOS should evaluate the contractor's performance (e.g., goals progress, good faith efforts, personnel activity, etc.) for at least the last full AAP year. Current year performance should also be examined if the contractor is six months or more into its current AAP year. For example, if the AAP is established on a calendar year basis, and the compliance review is scheduled for August 1988, the EOS would evaluate the contractor's performance from January 1, 1987 through June 30, 1988 (1/1/87 through 12/31/87 under the prior AAP, and 1/1/88 through 6/30/88 under the current AAP).
2. When Discrimination Found: Note, however, that if potential discrimination is found, analysis of personnel activity/policy implementation should be extended to cover the normal liability period (providing coverage can be established during the full normal liability period). The normal liability period for a compliance review is the full two years preceding the date the contractor received the Scheduling Letter. Additionally, where the alleged discrimination involves a continuing violation, the analysis may be extended further (see Chapters 3 and 7).

Revised 5-25-90

2C04 TIMEFRAME FOR COMPLETION OF COMPLIANCE REVIEW

The 60-day period for completing the compliance review (refer to 41 CFR 60-60.7) begins when the AAP and support data (whether reasonable or not) are received in the AO/FO. While completion of the review within the 60-day period is not a procedural prerequisite to an enforcement action, substantial effort should be made to complete the review within that period of time. Should it become apparent that a review cannot or will not be completed within 60 days of receipt of the AAP and support data (irrespective of whether a Show Cause Notice has been issued), the EOS should request an extension through his or her Module Chief. All extension requests must be made sufficiently in advance to allow for necessary processing and entry into the CRIS.

2C05 REVIEWS OF CORPORATE HEADQUARTERS, REGIONAL AND DISTRICT OFFICES

1. Maintenance of Establishment AAPs: When reviewing corporate headquarters, the EOS should review documentation that the corporation's establishments have developed AAPs.
2. Corporate-Level Selection Decisions: The EOS should ensure that the workforce analysis, utilization analysis and goals in the corporate headquarter's AAP include all positions filled by headquarters decision-makers, regardless of where those jobs are physically located. For example, mid- and upper-level management jobs at establishments other than headquarters must be included in the corporate AAP if the selection decisions for those jobs are made at the corporate level.

   Where because of informal or fluctuating managerial appointment authorities, the appropriate level for job title placement cannot be clearly or consistently defined, the managerial and other appropriate titles should be placed in the AAP of the highest organizational level where ultimate approval authority may reside. As a result, there may be instances when the majority of mid- and upper-level management and other titles should appropriately be placed in the corporate headquarters AAP, notwithstanding personnel responsibility at intermediate organizational levels. Management should be given substantial discretion in determining proper organizational levels for job title placement provided such placement is not inconsistent with the purpose of this Section.

3. (c) Regional or District-Level Selection Decisions: Similarly, if a regional or district office has decision-making authority over positions in a lower-level establishment unit, the regional or district office AAP should include those positions in its workforce analysis, utilization analysis and goals.

   Revised 5-25-90

4. Establishments with Positions Filled by Higher-Level Decision Making: When reviewing establishments which are subordinate to a higher-level establishment in the contractor's organization, the EOS will ensure that all positions in the workforce of the lower-level establishment for which the selection decisions are made at a higher corporate level are excluded from the utilization analysis and goal setting of the establishment under review. Such positions, however, must be shown in the lower-level establishment's workforce analysis (in order that the complete workforce structure of that establishment is readily apparent).

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2D INITIAL REVIEW OF AAP AND SUPPORT DATA — GENERAL

2D00 CONTENTS OF INITIAL REVIEW

Upon receipt of an AAP and support data, the EOS should immediately review the material to make sure that it provides an adequate basis for conducting desk audit analyses of both affirmative action and potential discrimination issues. This initial review includes a determination of the completeness, reasonableness and acceptability of the AAP(s) and support data as described in the sections which follow.

2D01 RECORDING RESULTS OF INITIAL REVIEW

The results of this initial review are recorded on page 4 of the SCRR. Where problems are identified, each specific problem should be described on page 9 of the SCRR (Problems with AAP and Support Data), along with the actions the EOS plans to take to resolve it. Where the matter is unresolved at the conclusion of desk audit, page 9 will constitute the onsite plan for resolution of AAP and support data problems.

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2E REVIEW FOR CURRENCY AND COMPLETENESS

2E00 ACTION WHEN AAP NOT CURRENT

Upon receipt of an AAP for desk audit, the EOS should first determine whether the AAP is current. If it is not, the submission should be treated as if the contractor had failed to submit an AAP. See Section 2C01 above.

2E01 COMPLETENESS

If the AAP is current, the EOS should review the AAP and support data for completeness. To do so, the EOS should first determine whether all materials requested in the Scheduling Letter and itemized listing, including the Section 503 and 38 U.S.C. 4212 AAPs, have been submitted. Then the EOS should determine if the Executive Order and Section 503 and 38 U.S.C. 4212 AAPs contain all ingredients required by the regulations:

• Executive Order AAP ingredients required by 41 CFR 60-2.11 and 2.13(a) through (j);
• Required Executive Order support data, including the report of prior year goal progress required by 41 CFR 60-1.40(b) and (c); and
• Section 503 and 38 U.S.C. 4212 AAP ingredients required by 41 CFR 60-741.6(a) through (f) and 41 CFR 60-250.6 (a) through (f) respectively.

2E02 CENTRAL EXECUTIVE ORDER AAP ELEMENT MISSING

If one or more of the following central Executive Order AAP ingredients is missing, the submission is automatically considered unreasonable and the desk audit should be suspended and a show cause notice issued:

• A workforce analysis;
• A utilization analysis, including its component parts of job group formation, availability estimates and, as appropriate, identification of underutilization; and
• Goals for areas declared underutilized.

If these central ingredients are included, the EOS should then evaluate them for reasonableness.

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2F REVIEW OF EXECUTIVE ORDER AAP FOR REASONABLENESS

For a submission to be considered a reasonable effort to meet the requirements of 41 CFR Part 60-2, the central Executive Order AAP ingredients of workforce analysis, utilization analysis and goals development must meet the following standards:

2F00 WORKFORCE ANALYSIS

The submission must contain a workforce analysis which lists all jobs at the establishment by title (not EEO-1 category, job group or some other combination of job titles) and by organizational unit, showing at least total employees, total women and total minorities for each job title.

2F01 UTILIZATION ANALYSIS

In the following components of the utilization analysis, the submission must show:

1. Job Groups: An attempt to combine job titles into job groups (defined as one or more jobs with similar content, wage rates, and opportunities).
2. Availability Analyses: An attempt to establish separate availability estimates for minorities and for women for each job group.
3. Underutilization Determination: A comparison of availability to current incumbency to determine the existence of underutilization.

2F02 GOALS

The submission must show an attempt to establish goals for those job groups identified as underutilized.

2F03 ACTION FOR UNREASONABLE SUBMISSION

If the Executive Order AAP does not meet one or more of these standards for reasonableness, the desk audit should be suspended and a show cause notice issued (see Chapter 8). If the Executive Order AAP is considered reasonable, the EOS should evaluate the submission for acceptability.

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2G REVIEW OF EXECUTIVE ORDER AAP FOR ACCEPTABILITY

2G00 GENERAL

Having determined that the elements necessary to proceed with the desk audit — the workforce analysis, utilization analysis and current goals — are included in the contractor's submission and are reasonable, the desk audit proceeds with an evaluation of the acceptability of each required ingredient. The determination of the acceptability of the items listed on page 4 of the SCRR will be limited to the evaluation which can be conducted during the desk audit. This is different from an evaluation of a contractor's implementation of the requirements, which in most instances cannot be determined without further investigation onsite (see Chapter 3).

2G01 WORKFORCE ANALYSIS

An acceptable workforce analysis is one which meets the requirements of 41 CFR 60-2.11(a). It must contain:

• A listing of each job title, as it appears in applicable collective bargaining agreements or payroll records;
• In wage rate or salary range order;
• Within each department or other similar organizational unit, including unit supervision; and
• Where there are separate work units or lines of progression within the department or organizational unit, a separate listing must be provided.

More specifically:

1. Information by Job Title: Each job title listed must show the total number of persons in the job title, the total number of men and of women, and the total number of men and of women in each of the following groups: Blacks, Hispanics, Asian/Pacific Islanders, and American Indians/Alaskan Natives. All job titles, including managerial job titles, must be listed. Positions which are filled above the establishment level must be included in an establishment's work-force analysis even though they may be included for goal-setting purposes in a corporate or mid-level AAP. In deter-mining whether jobs are listed by title, the EOS should be alert for the use of plurals in job titles; broad, general titles, such as "Manager" or "Machine Operator;" or inclusion of multiple pay ranges for one job title. The presence of any of these suggests that jobs may not be listed by title.
2. Wage Rate:
   1. General: The wage rate or salary range for each job title must be given (although this information may be coded--see (2) below). Titles must be listed in wage rate or range order within department or other similar organizational units. The listing may either be from highest to lowest paid or from lowest to highest paid.
   2. Coded Data: Where wage rate or salary range are coded, the contractor must provide the key to the code onsite. Any codes must be consistent across department/unit lines (i.e. a job with a salary code "57" in Department A, pays the same as one coded "57" in Department B) and in wage rate or salary range order within each department or other similar organization unit. Also, the submission should include a list of the codes used in wage/salary order with the highest and lowest codes so labeled.
3. Organizational Unit: The organizational units used in the workforce analysis should be identifiable, and should reflect the contractor's organizational structure. If an organizational chart is provided as part of the supporting documentation, it should be compared to the units used in the workforce analysis.
4. Lines of Progression: Lines of progression or usual promotional sequences must show the order of jobs in the line through which an employee moves to reach the top of the line. Lines of progression or promotional sequences may be identified from collective bargaining agreements as well as from organizational charts. If this information is not available at desk audit, a final determination of acceptability cannot be made until after the onsite review.

2G02 JOB GROUPS

Job groups, to be acceptable, must consist of a group of jobs having similar content, wage rates, and opportunities.

1. List of Titles in Each Group: In order for the EOS to assess job group acceptability, the AAP must include, for each job group, a listing of the job titles which make up that group. If such lists have not been provided, the EOS should immediately contact the contractor and request that such lists be provided for desk audit.
2. Criteria for Acceptability: The following criteria are to be used in assessing the acceptability of job groups:
   1. Similar work content: Similarity of work content refers to the duties and responsibilities of the job titles which make up the job group. While it is difficult to confirm similarity without reference to position descriptions, some steps can be taken during the desk audit to make at least a preliminary assessment of acceptability of work content. For example:
      • Appropriate EEO Category: The EOS should review the establishment's job titles that make up each of the job groups to verify they are within the proper EEO-1 categories. Job titles in each job group normally would be within the same EEO-1 category.
      • Use of Dictionary of Occupational Titles: The Dictionary of Occupational Titles can be referred to, as well as labor agreements, organizational charts, and other data provided by the contractor, in evaluating the manner in which the contractor has formulated job groups. The Dictionary of Occupational Titles lists standard job titles for most positions, and codes them based on their duties, requirements, and other factors. Descriptions of job duties and commonly required qualifications are also given.
   2. Similar rates of pay: Pay rates should be reviewed in conjunction with job content. Large apparent differences in pay, when associated with differences in job title and/or location within an organization, suggest an unacceptable job grouping.
   3. Similar opportunities: Opportunity refers to the ability to take advantage of training opportunities, transfers, promotions, mobility to desirable wage/ salary situations, and other employment benefits. Most often, it refers to upward mobility. Ideally, each job within a job group should offer the same opportunities as any other job title within that job group. As a result:
      • Jobs in Separate Unions: Jobs in separate unions, or jobs in different departments when interdepartmental mobility is impossible, should not be grouped together. For example, nonunion clerical jobs and clerical jobs which are covered by a collective bargaining agreement should not normally be grouped together.
      • Jobs in Lines of Progression: Jobs that are in lines of progression should be separated from those that are not. Where transfer or hire into jobs above entry level is rare, each line of progression should be analyzed separately. Where there are lines of progression governed by strict seniority, the job titles in lines should be considered as a single job group.
3. Job Groups Must Not Obscure Underutilization: Job groups which combine jobs with different content, wages, or opportunities may obscure underutilization and are not acceptable. Any job groups that combine jobs in which minorities or women are concentrated with jobs in which they are under-represented should be targeted for special scrutiny onsite. Such job groups often unacceptably include jobs with different content, wages, or opportunities.
4. Effects of Size of Contractor's Workforce: In assessing the acceptability of the contractor's job groups, the EOS must remember that the size of the contractor's workforce is a major factor in determining how well these three criteria will be met.
   1. Job Groups Must Permit Meaningful Analyses: Job groups should have enough incumbents to permit meaningful utilization analyses and goal setting. Optimally, if a job group is identified as underutilized, it should be large enough so that a goal of at least one whole person can be established. No minimum size has been established for this purpose, however, since it is dependent not only on the size of the job group, but also on the size of the availability percentage and the number of minorities or women already in the job group.
   2. Job Groups Should Not Normally Cross EEO Categories: Because of the minimum size of a contractor subject to written AAP requirements, it may not be possible for any of a smaller contractor's job groups to meet this guideline. While there are usually two or more job groups within each EEO-1 or EEO-6 category, for smaller contractors some or all of their job groups may correspond to those categories. In any event, when job titles are combined to maintain minimal job group size, EEO category lines should not normally be crossed.
5. Relationship Between Job Groups and Availability: The organization of jobs into groups allows contractors to tie specific jobs to availability statistics in order to assess the degree to which their own workforce representation approximates availability.

2G03 AVAILABILITY ANALYSIS — GENERAL

1. Standard for Acceptability: The reasonable submission test requires only that a contractor make an attempt to develop availability estimates. For the availability analysis to be found acceptable, however, it must contain a proper definition of labor area and must show consideration of each of the eight factors at 41 CFR 60-2.11(b)(1) and (2).
2. Principles for Evaluation: In evaluating the acceptability of the availability analysis, the EOS should be guided by two principles. First, the contractor's consideration of each of the factors should reflect its actual recruitment and employment practices. Second, the contractor's recruitment and employment practices should demonstrate the con- tractor's compliance with its affirmative action and non-discrimination obligations.
3. Professional Judgment: The audit of the availability analysis for acceptability is as much an art as a science. There are no hard-and-fast, "mechanical" methods for evaluating the availability analysis. The EOS must make a professional judgment as to the adequacy of the contractor's analysis. This requires familiarity with the quality and variety of data available, with industry and contractor personnel practices, and knowledge of available recruitment sources.

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2G04 AVAILABILITY ANALYSIS — DEFINING LABOR AREAS

1. Importance of Labor Area Definition: Six of the eight fac-tors for assessing minority or female availability are tied to the contractor's definition of labor areas. How the con-tractor defines its immediate labor area determines the data used for population, workforce, unemployment/seeking work, and requisite skills within that immediate area. How the contractor defines its reasonable recruitment area determines the data used for requisite skills within that area. Definition of both these areas, therefore, heavily impacts the results of the contractor's availability analysis. A critical first step in evaluating the contractor's availability analysis is to assess the acceptability of both immediate labor area and reasonable recruitment area.
2. Immediate Labor Area: In evaluating the contractor's determination of its immediate labor area, the EOS should consider the following:
   1. Definition: The immediate labor area is that geographic area from which employees may reasonably commute to the contractor's establishment. It may include one or more contiguous cities, counties or Metropolitan Statistical Areas (MSAs) or parts thereof, in which the establishment is located. For example, it may be defined as the major city in or near which the establishment is located; the county(ies) surrounding the establishment; the MSA in which the establishment is located or which borders the establishment; or a combination of any of the three. (Note, however, that if the contractor chooses to combine figures from more than one area, it must be prepared to provide the raw numbers used to produce the final percentage, since the percentages themselves cannot be added together). However defined, the immediate labor area is normally the same for all job groups.
   2. Must Not Underestimate Availability: In reviewing the contractor's definition of immediate labor area, the EOS must ensure that the contractor has not defined that area in a way that underestimates minority or female availability. For example, the definition should not exclude a nearby area with a large minority workforce.
   3. Commuting Patterns: In assessing the immediate labor area definition, the EOS needs to consider commuting patterns, including the availability of public transportation, approximate normal driving times, etc. in the labor area.
   4. Relationship to EEO/AA Obligations: The immediate labor area definition should be consistent with the contractor's nondiscrimination and affirmative action obligations. For example, if a contractor's workforce is largely nonminority and it recruits primarily by word of mouth, defining the immediate labor area based on the source of applicants may reflect its actual recruitment practices, but does not meet the contractor's affirmative action obligations (and could, in fact, be found to be discriminatory). Similarly, defining the immediate labor area based on residence patterns of current, nonminority employees, whether as of the time of hire or the time of the review, may also artificially lower availability for minorities.
   5. Need for Further Investigation: If the EOS disagrees with the contractor's definition of the immediate labor area because it appears to artificially lower the availability of minorities and women, the EOS should investigate further onsite to determine whether the contractor, in fact, does recruit from an area with higher minority/female availability and/or whether the contractor could expand its area to increase the numbers of minority group persons and women in the percentage of available workers. In this evaluation, the EOS, based on his or her review experience, may consider where other nearby employees with similar jobs normally obtain workers.
   6. Sources of Data: As noted earlier, immediate labor area data are normally used for factors on population, unemployment/seeking work and workforce. For these factors, the contractor should use the best data available. Resources for this data include the Research Division of each State's Division of Employment Security (DES). This DES Division annually updates data on population, unemployment/seeking work and workforce for its State and for MSAs and counties within its State (See Appendix 2B for other information available from DES). For a discussion of data on requisite skills in the immediate labor area, and considerations in their use, see Section 2G05(e) below.
3. Reasonable Recruitment Area: The definition of the reason-able recruitment area is very important in assessing the proportion of minorities and women available for employment. It influences the number or proportion of minorities or women who could--at least theoretically--get through the contractor's door (be hired) if minority group membership and sex were not taken into consideration in employment decisions. In assessing how the contractor has defined reasonable recruitment area, the EOS should consider the following factors:
   1. Relationship to Immediate Labor Area: The reasonable recruiting area represents the area from which the contractor usually seeks or reasonably could seek workers for a particular job group. It may coincide with the immediate labor area, or it may cover a larger area (state, region, or nation). Thus, while the immediate labor area is normally the same for all job groups, the reasonable recruitment area will vary depending on the types of jobs in the job group.
   2. Pay and Skill Levels: Generally, the scope of the reasonable recruitment area is closely related to pay, based on the assumption that the more a job pays, the farther people are willing to go to apply for it. Also, because there is often a relationship between pay levels and skill levels, for job groups containing jobs with minimal to intermediate skill requirements, the reasonable recruiting area will often be the same as the immediate labor area. As pay levels and skill requirements increase, however, the likelihood that recruiting will expand beyond the immediate labor area also increases.
   3. Supply and Demand: In addition to pay and skills, supply and demand plays a part in defining the scope of the reasonable recruiting area. For example, at times when nurses are in short supply, it may be necessary to expand recruitment efforts beyond the immediate labor area. At other times, the supply of nurses available in the immediate labor area exceeds the demand, and may reduce the reasonable recruiting area. Supply and demand can also be influenced by the specificity of skills required by the contractor. For example, while the supply of teachers generally may exceed demand, the demand for teachers with specific skills, such as math or science, may exceed the supply and result in an expansion of the recruitment area. Further, high unemployment in one area may create a labor surplus which effectively expands the "reasonable recruitment area" elsewhere. For example, when unemployment is high, persons often search for work in a wider area, becoming more willing to either relocate or to commute further to a job than they normally would. As a result, the "reasonable recruitment area" for other areas expands.
   4. Summary: As a result, while in most instances job groups in the Service Worker, Laborer, Operative, Office and Clerical and retail Sales categories tend to have reasonable recruitment areas which are the same as the immediate labor area, this will not always be the case. Jobs in the Crafts and Technicians categories are often particularly susceptible to supply and demand factors related to level and specificity of skill required. Therefore, while in most instances, such jobs tend to have reasonable recruitment areas which coincide with the immediate labor area, some job groups within the categories may have a broader recruitment area. Similarly, while job groups in the Sales (non-retail), Professional, and Officials and Managers categories usually have reasonable recruitment areas which are larger than the immediate labor area (and often significantly larger, e.g. national), this will not always be the case.
   5. Sources of Data: See Section 2G05(e) below.

2G05 AVAILABILITY ANALYSIS — EIGHT FACTORS

The contractor's AAP must show, for each job group, consideration of each of the eight factors for minorities and each of the eight factors for women. All factors are expressed as the percentage that minorities or women are among all persons who meet the factor. These factors are as follows:

1. The minority population of the labor area surrounding the facility (Refer to 41 CFR 60-2.11(b)(1)(i)): The extent to which this factor is given consideration in determining the final availability factor for a given job group will depend on whether or not that job group contains entry level positions which are filled primarily through outside hire and which require minimal or no prior skills. Job groups which fall into the Service Worker, Laborer, and to some extent, Operatives EEO-1 categories will be more likely to incorporate minority population percentages into the final availability estimate than would job groups requiring more specialized skills, such as those falling into the Technician or Professional categories.
2. The availability of women seeking employment in the labor or recruitment area of the contractor (Refer to 41 CFR 60-2.11 (b)(2)(v): The figure used may be based on the percentage that unemployed women are among all unemployed persons in the labor area (41 CFR 60-2.11(b)(2)(i)), since that rate includes only persons actively seeking work; the percentage of women applying for work at the local unemployment service office in job categories comparable to those in the contractor's job groups; or the contractor's prior year applicant flow for women for that job group. Generally, the highest figure should be used. As with minority population, inclusion of this figure in developing final availability estimates for a particular job group will depend on whether or not the job group is entry level, is filled through outside hire, and requires little or no prior skills or experience. The less skill required, the more consideration this factor should receive.
3. The size of the minority/female unemployment force in the labor area surrounding the facility (Refer to 41 CFR 60-2.11(b)(1)(ii) and 41 CFR 60-2.11(b)(2)(i)): The figure used should be the percentage that unemployed minorities (or women) are among all unemployed persons in the labor area. Please note that this is not the same as unemployment rate, which is generally expressed as the percentage of a given group that is unemployed — e.g., the percentage that unemployed minorities are among all minorities in the workforce (employed plus unemployed). As with minority population and women seeking employment, the size of the minority/female unemployment force should receive greater consideration where job groups are entry level, filled by outside hire, and require little or no skill or experience. The factor will receive less consideration where job groups are above entry level, require more skill or are filled solely or primarily through internal placement.
4. The percentage of the minority/female workforce as compared with the total workforce in the immediate labor area (Refer to 41 CFR 60-2.11(b)(1)(iii) and 41 CFR 60-2.11(b)(2)(ii)): The percentage of minorities/females in the workforce will have greater applicability for those job groups which draw from a larger recruiting pool (entry level, filled through external hire, and requiring few or no skills). For those job groups which draw from a smaller recruiting pool (those above entry level, with higher skill requirements, and/or filled solely or primarily through internal placement), this factor is likely to have less importance. (Note: The term workforce is used elsewhere in the regulations to mean the incumbent employees of the contractor (e.g., workforce analysis). However, as used here in the availability analysis, the term workforce is synonymous with the term "labor force" as defined by the Census Bureau and other government agencies — e.g., as those persons in the population, aged 16 and older who are either employed or unemployed (unemployed is further defined as actively seeking employment).
5. Requisite Skills:
   • The general availability of minorities/women having requisite skills in the immediate labor area (Refer to 41 CFR 60-2.11(b)(1)(iv) and 41 CFR 60-2.11(b)(2) (iii));
   • The availability of minorities/women having requisite skills in an area in which the contractor can reasonably recruit (Refer to 41 CFR 60-2.11(b)(1)(v) and 41 CFR 60-2.11(b)(2)(iv));

   In assessing these factors, contractors should use the best data available. While the most recent decennial census data normally provide the most detailed information on requisite skills, they become increasingly outdated the more years it has been since the census was conducted. Also, the decennial census shows only persons employed in a given occupation at the time the census was conducted, rather than those with the skills to be employed in that occupation. Therefore, the following adjustments to decennial census data are normally needed:

   1. Adjustment for Time Since the Last Decennial Census: Some State Divisions of Employment Security continue to publish periodic updates of decennial census data on occupations of persons employed in labor areas within their State. While these updates are often for fairly broad job categories, they provide a reliable means of update for job categories where skills are normally not very specialized (i.e. service workers, laborers, operatives, entry-level clerical, retail sales), and at least an indication of overall trends in job categories where skills often are specialized (see Section 2G05(e) (4) below). Additionally, for job groups which do have legitimate specialized education requirements, any available data on the percentage of minority and/or female graduates at the level (Associates, Bachelor's, etc.) and in the field involved may be used to update census data. Since, in many fields, minority and female enrollment has risen since the last decennial census, these data are often considerably more accurate than the census as a measure of requisite skills for: (1) entry-level jobs which legitimately require a particular level and type of post-high school degree; and (2) such jobs above entry (i.e. with legitimate experience as well as degree requirements), if the data are corrected for the year of degree.
   2. Adjustment for Employment vs. Requisite Skills: The adjustment discussed immediately above for recent graduates also provides some correction for the census' focus on persons employed in a given occupation when the census was conducted. Additionally, however, care must be taken to ensure that such census data do not, in effect, perpetuate past discrimination against minorities or women in certain occupations and/or out-dated "job applied for" patterns. This is particularly important for jobs in which, in terms of basic skill requirements, the availability of minorities and/or women has long been considerably better than their representation--for example, some management, professional and sales training programs in which the major legitimate requirement is a college degree. Similarly, in entry-level blue collar jobs where the contractor provides training--and the major skill requirement, therefore, is "trainability"-- past employment patterns may simply reflect who employers in the area choose to train rather than true availability (which in this situation should normally approximate labor area workforce representation).
   3. Match Between Data and Skills: The particular requisite skills classification(s) from which the data are obtained should closely approximate the skills required for performance in the job group. The closeness of the match between data and skills will depend on how much job content varies within the job group and the degree of detail in the source data for requisite skills.
      1. Varied Job Content: Where job content is quite varied (i.e. a Scientist I job group composed of Chemists and Physicists), the contractor may either refine the job group further, where appropriate, or combine requisite skills data for the two or more types of jobs in the group. Where the data are combined, the contractor should have available the raw numbers from which the average percentage was derived.
      2. Degree of Detail in Data: The most refined data available are usually those contained in the most recent decennial census. Detailed census data are available from, among other sources, the National Technical Information Service (NTIS) of the U.S. Department of Commerce (see Appendix 2B). The NTIS's Report #5, "Equal Employment Indicators," contains decennial census information on the employment of minorities and women in 503 job classifications. Data from other sources may be considerably broader. For example, State Divisions of Employment Security that continue to update occupational data usually do so for a limited number of job categories, similar to but not the same as EEO categories. In the case of either very broad or very refined data, some adjustment may be needed to approximate requisite skills for a particular job group.
   4. Adjustment for Broad Data: Data based on broad job categories (e.g. "Professionals") may either overstate or understate availability. For example, if the job group consists of engineering titles, using data for "all Professionals" (which includes primary and secondary school teachers) will usually overstate minority and female availability. On the other hand, if the job group is nurses, data on "all Professionals" will substantially understate female availability. Thus, while the contractor may make adjustment for broad data, the EOS should evaluate the direction and degree of adjustment made given the job group involved.
   5. Adjustment for Narrow Data: Where data based on narrow job categories are used, they may sometimes show no minorities or women for particular job titles (either because there were none at the time the census was taken, or because the actual number was so low as to cause the number to be "suppressed." Where this occurs, contractors should be encouraged to broaden the area of consideration to include other, related categories, which do show minorities and/or women.
6. The availability of promotable and transferable minority/fe-male employees within the contractor's organization (Refer to 41 CFR 60-2.11(b)(1)(vi) and 41 CFR 60-2.11(b)(2)(vi)).

   This is the percentage of minorities/women who are in feeder job groups and who are (at the start of the AAP year) or who will become (during the AAP year) promotable or transferable from those job groups into the job group under consideration.

   In evaluating this factor for acceptability:

   1. Determine the Accuracy of Feeder Job Groups: The EOS should identify the feeder job groups, if any, from which individuals are, or reasonably could be, promoted or transferred to the job group under consideration.
      • The EOS can determine actual feeder job groups by examining where persons who were promoted or transferred into the job group under consideration came from. This may be done by identifying the previous job group of persons who entered the target job group during the last AAP year and/or — where that activity has been too limited to be representative — through examination of the work histories of persons in the target job group to determine their immediately preceding job group. Feeder groups may also be identified through review of labor agreements and/or written promotion/transfer policies.
      • The EOS, however, should be observant of any indications that the skills brought by promotees/transferees to the target job group are similarly available in other potential feeder groups, particularly if those other potential feeder groups have substantially better representation of minorities or women. Where this is the case, the contractor should broaden its feeder group definition, consistent with its affirmative action obligations.
   2. Percentage of Minorities/Women: The contractor may conclude that the percentage of promotable minorities/ women in the feeder job groups is approximately equivalent to their representation in those groups. Where, however, there are legitimate seniority or special qualification requirements for promotion/transfer to the target job group, the contractor may identify those persons who are or will become qualified during the AAP year and the percentage that minorities/women represent among those persons (for a discussion of "legitimate" qualification requirements, see Chapters 3 and 7). Where the contractor identifies specific promotable/ transferable persons, this can be verified by identifying the legitimate criteria used in determining who is promotable or transferable, and by reviewing the employment histories of persons in the feeder job groups.
   3. Relevance of Factor: The importance of this factor will be related to whether the contractor normally fills jobs in the target job group by promotion from within or by hire. Review of employment activity for the prior AAP year will show the proportion of placements which resulted from internal movement as opposed to new hire. Where this activity has been too limited to be representative, the work histories of persons in the target group may be reviewed to determine the proportion who came via promotion or transfer vs. by new hire. In addition, labor agreements often contain rules governing promotion and transfer for jobs in certain sectors of the workforce.
7. The existence of training institutions capable of training persons in the requisite skills (Refer to 41 CFR 60-2.11(b) (1)(vii)and 41 CFR 60-2.11(b)(2)(vii)): This may be the percentage of minorities and women enrolled in those educational and training institutions serving the contractor's recruitment needs.
   1. Sources of Data: Contractors should contact those educational and training institutions with programs which match their employment needs. These can range from local high schools with business or vocational programs through local technical schools to colleges nationwide. Such institutions should be able to provide data on the number and percentage of minorities and women enrolled in programs appropriate to the contractor's employment needs.
   2. Relevance of Factor: The extent to which the contractor considers this factor will depend on the degree to which new graduates of such programs are or can be utilized in making placements to a particular job group. For example, a contractor filling positions in an entry-level clerical job group may hire new graduates from local high schools and business colleges, but may hire only experienced persons for a non-entry level clerical job group.
8. The degree of training which the contractor is reasonably able to undertake as a means of making all job classes available to minorities/women (Refer to 41 CFR 60-2.11(b) (1)(viii) and 41 CFR 60-2.11(b)(2)(viii)): This factor requires the contractor to make an assessment of the number of employees who could, with appropriate training, become promotable or transferable during the AAP year, and to determine what percentage minorities/women constitute of that number.
9. Data Used Must Be Accurate: Data used for each availability factor must be accurate and up-to-date. Sources of data must be identified in the AAP.
10. Consideration of Each Factor: The contractor must consider each factor and must explain in its AAP how it has done so. It may not be necessary, however, for the contractor to make each factor a part of any final availability estimate. Only those factors which are relevant to the actual availability of the job group under evaluation need be used. Moreover, contractors may give differential consideration (e.g., by mathematical weighting or by other means) to some or all of the individual factors in determining final availability estimates for each job group. Where a contractor gives such differential consideration to factors, the AAP should specifically identify the weights applied or other methods used. If the AAP contains no explanation of how the contractor has considered each factor, or if an explanation is provided but further investigation and verification is needed (e.g., if the AAP states that certain job groups are filled solely by internal means, and this cannot be verified from the AAP), the EOS should plan to address the matter onsite.
11. Summary Guidelines For Audit of Acceptability: In summary, in evaluating a contractor's final availability estimates for acceptability, the following general guidelines can be used:
    1. Entry Level Jobs, No Special Skills/Experience: For entry level jobs which do not require any special skills or experience, availability for minorities and women should be close to their workforce participation rates;
    2. Entry Level Jobs, Some Skills/Experience: For entry level jobs which require some skills (education and/or experience), availability for minorities and women should be at least equal to the requisite skills figure for either the reasonable recruiting area or immediate recruiting area, whichever figure is larger;
    3. Jobs Filled Through Internal Means Only: For jobs which are filled solely through internal means, availability should normally be at least equal to the percentage which minorities and women represent in all appropriate feeder job groups.

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2G06 IDENTIFICATION OF UNDERUTILIZATION

The regulations at 41 CFR 60-2.11(b) define underutilization as "...having fewer minorities or women in a particular job group than would reasonably be expected by their availability." Contractors are required in the AAP to compare availability to incumbency for each job group, and to identify those job groups which are underutilized. In evaluating the acceptability of the method used by a contractor to determine underutilization, EOSs must ensure that the method used conforms to the requirements of the regulations, that it is appropriate, and that it has been accurately applied.

2G07 GOALS

Having identified a job group as underutilized for minorities and/or women, the contractor must establish employment goals and exert every good faith effort toward meeting them. Such goals must be established separately for minorities and women. In setting goals, the contractor should consider:

1. Level of Goals: Goals for an underutilized job group must be at least equal to the percentage availability of minorities or women (as appropriate) for the job group, as determined by a properly developed utilization analysis which considers at least those factors discussed in section 2G05 above (see 41 CFR 60-2.11(b)).
2. Goals Are not Quotas: 41 CFR 60-2.12(e) indicates that goals ". . . may not be rigid and inflexible quotas which must be met, but must be targets reasonable attainable by means of applying every good faith effort to make all aspects of the entire affirmative action program work."
3. Separate Goals by Particular Minority Group: Where appropriate, separate goals may also be required by particular minority group(s) or by sex within a particular minority group if there is a substantial disparity in the utilization of a particular minority group or of men or women of a particular minority group. Where the EOS identifies such a substantial disparity (see Section 2K01(d) and the instructions for SCRR page 7) and the contractor has not established a separate goal, the EOS will first determine if the disparity represents potential discrimination. If potential discrimination is not found, separate affirmative action goals to eliminate the disparity may be required (see 41 CFR 60-2.12(l)). In order to ensure that such goals are reasonable, they should be based on a separate availability analysis for the minority group (or men or women of the minority group) involved in the job group(s) where the disparity is observed.

2G08 ADOPTING AN EEO POLICY

41 CFR 60-2.13(a) requires that a contractor commit itself, in writing, to a policy of equal employment opportunity in all personnel actions. The policy statement must be in the AAP. It should be signed by the top establishment official and dated. It must be reaffirmed annually. 41 CFR 60-2.20 provides guidance for evaluating the content of the contractor's EEO policy statement.

2G09 DISSEMINATION OF THE POLICY

41 CFR 60-2.13(b) requires that the AAP provide for formal internal and external dissemination of the contractor's policy. To be acceptable, the AAP must address how the policy is disseminated, internally and externally. 41 CFR 60-2.21 provides guidance for evaluating dissemination of the policy. For example, the AAP may state that the policy is posted in conspicuous places accessible to employees and applicants for employment, and that the policy is discussed with management employees having responsibility for making employment decisions. External dissemination may include notifying recruitment sources, community organizations, subcontractors and labor unions, where applicable, of its policy on equal employment opportunity and affirmative action.

2G10 RESPONSIBILITY FOR IMPLEMENTATION

Under 41 CFR 60-2.13(c), contractors are required to provide for the implementation of the AAP. To be acceptable, the AAP must identify the person who is responsible for implementation of the policy and must describe how the policy is implemented, in sufficient detail for the EOS to be able to audit compliance. Guidance as to the types of actions a contractor may take to implement this requirement is provided at 41 CFR 60-2.22. For example, an EEO officer is central to the success of the affirmative action program, since he or she is responsible for ensuring that the contractor takes steps to implement the AAP. The AAP should identify the EEO Officer by name and/or title, and may describe his or her duties and responsibilities as well as those of line managers with respect to EEO.

2G11 IDENTIFICATION OF PROBLEM AREAS

41 CFR 60-2.13(d) requires that problem areas (or deficiencies) be identified by organizational unit and by job group. 41 CFR 60-2.23 provides additional guidance on some types of self-analyses which contractors may conduct in identifying problem areas. To be acceptable, the AAP must provide evidence that the contractor has addressed the following:

1. Employment Processes: The contractor must examine its basic employment processes (recruitment, hiring, training, promotion, transfer, termination) to identify any impediments to the full utilization of minorities and women. To do so, in its AAP, the contractor may use any analysis that measures how these processes affect minorities and women. For example, the contractor may use Impact Ratio Analyses (NOTE: Please also see Sections 2H01(a) and 2O04 of this Chapter for the contractor's obligations under 41 CFR Part 60-3 to maintain employment activity data and analyze them for adverse impact. While not a required AAP ingredient, the contractor may choose to use this analysis as a tool for problem identification in this section of its AAP).
2. Organizational Unit: The contractor must examine the distribution of minorities and women among its organization-al units. To do so, the contractor may use any analysis that identifies any problem areas in such distribution, for example, the contractor may use a Job Area Acceptance Range (JAAR) type analysis to identify areas of minority or female concentration/underrepresentation) and/or a utilization analysis applied to job groups within such units.

2G12 ESTABLISHMENT OF GOALS AND OBJECTIVES — GOALS BY ORGANIZATIONAL UNIT

41 CFR 60-2.13(e) requires that goals and objectives by organizational unit as well as job group be established to correct identifiable deficiencies. Goals by organizational unit, however, refer to action-oriented efforts rather than percentage goals. Where problem areas by organizational unit have been identified in accordance with 41 CFR 60-2.13(d), the AAP must include a description of the efforts which the contractor has taken or will take to correct those problem areas. This corrective action may be addressed in the AAP section on Development of Action-Orientated Programs (below), and may include goals for the improvement of recruitment efforts, dissemination of additional information on job openings (e.g., pay, opportunities, duties), encouraging transfers and promotions, creating training opportunities, etc.

2G13 DEVELOPMENT AND EXECUTION OF ACTION-ORIENTED PROGRAMS

41 CFR 60-2.13(f) requires the development and execution of action-oriented programs to correct identified problem areas and to attain established goals and objectives. 41 CFR 60-2.24 provides suggested standards which the EOS can use to assess the contractor's compliance with this requirement. For example, the contractor may commit to increasing the number of qualified minorities and women in the appropriate candidate pool, since with more women and minorities in the candidate pool, the logical outcome, absent discrimination, is an increase in the number of minorities and women hired, promoted, etc.

1. Contractor Responsibility: It is the contractor's responsibility to both develop and execute action-oriented programs. However, it is the EOS' responsibility to make a professional judgment as to:
   1. Specificity: Whether the action-oriented programs are sufficiently specific and result-oriented to accomplish the aims for which they were created; and
   2. Execution: Whether the action-oriented programs were properly executed.
2. Specific Action-Oriented Programs: A specific action-oriented program is one that indicates what the action is, who will accomplish it, how it will be accomplished and when it will be accomplished. An action-oriented program without any one of these ingredients cannot be considered specific. Action-oriented programs designed to increase candidate pools can be developed in two stages, (1) steps to be taken immediately to develop internal pools and to establish a link with potential external pools; and (2) steps to be taken each time a vacancy occurs in an underutilized area.
3. Results-Oriented Programs: A results-oriented action program is one tailored in such a way that proper execution will result either in an increase in the minority group/female representation in the job group, if vacancies occur, or clear documentation of contractor action sufficient to constitute good faith effort. An action-oriented program that does not meet this standard cannot be considered results-oriented.
4. Acceptability of Action Items: The AAP's action items must be sufficient, if implemented in good faith, to ensure that each of its specific objectives and the overall intent of equal employment opportunity are achieved.

2G14 INTERNAL AUDIT AND REPORTING

41 CFR 60-2.13(g) requires the contractor to design and implement internal audit and reporting systems which measure the effectiveness of its total affirmative action program. This system must be detailed in its AAP. The system must permit adequate monitoring of progress made toward goal accomplishment and implementation of other affirmative action commitments.

1. Guidelines for Assessing Acceptability: The regulations at 41 CFR 60-2.25 provide guidance for assessing the acceptability of a contractor's internal audit and reporting system. An acceptable audit and reporting system is one which allows the contractor to measure the effectiveness of its total program. Such a system should include specific procedures for monitoring goals progress and analyzing employment activity.
2. Monitoring Goals Progress: Since utilization and availability analyses are conducted by job group, and where problems are identified, goals are established by job group, monitoring of goals progress should be at least by job group. The importance of effective internal audit and reporting systems in goal areas is further underscored by 41 CFR 60-1.40(c), which requires that the results of the AAP shall be compiled annually (see Section 2H00 below).
3. Monitoring Personnel Activity: Audit and reporting systems should also monitor personnel activity (e.g., hires, promotions/transfers, terminations, and other activity) at least by job group and, where appropriate, by organizational unit. The regulations at 41 CFR 60-1.40(b) require that a contractor's analysis include hiring practices, upgrading, transfer and promotion for the past year.
4. Information to be Maintained: The regulations at 41 CFR 60-3.4 and 60-3.15A require that contractors with 100 or more employees: (1) maintain and have available for each job, records sufficient to disclose the impact of the selection process for that job on women and on each minority group for whom EEO-1 reporting is required; and (2) conduct adverse impact analyses for women and for each minority group that constitutes 2% or more of the relevant labor area or of the applicable internal workforce. Where a contractor determines that a selection process has an adverse impact, evidence of validity, as described in 41 CFR Part 60-3 must also be maintained and made available. Contractors with fewer than 100 employees must maintain the records set forth in 41 CFR 60-3.15A(1) — e.g. the number of applicants and persons hired, promoted and terminated by sex and by each minority group (as defined in (d)(1) above) which constitutes 2% or more of the labor force in the relevant labor area. Such small employers, however, are not required to conduct adverse impact analyses of these data. See further discussion under Sections 2H01(a) and 2O04 below and in Questions and Answers Nos. 82-88 of Adoption of Questions and Answers to Clarify and Provide a Common Interpretation of the Uniform Guidelines on Employee Selection Procedures.

2G15 SEX DISCRIMINATION GUIDELINES

The regulations at 41 CFR 60-2.13(h) require that the AAP contain evidence of the contractor's compliance with the Sex Discrimination Guidelines at 41 CFR Part 60-20. The requirements of the Executive Order are deemed to preempt any State or local laws restricting the employment of women. See 41 CFR 60-2.31 and 41 CFR 60-20.3(f).

To be acceptable, the AAP must address each of the required subitems listed in the regulations; specifically 41 CFR 60-20.2 through 60-20.6. The contractor should delineate in the AAP how each subitem is being implemented. These subitems include, but are not limited to:

1. Conditions of Employment (Refer to 41 CFR 60-20.3, 60-20.4, 60-20.5 and 60-20.6): A contractor must not make a distinction based on sex in conditions of employment. Where State laws provide special minimum wages, overtime pay, or brief rest periods for women, these benefits must also be given to men. In addition, contractors may not use these laws as bases for refusing to hire women or for limiting their hours of work, etc. AAPs must provide for the elimination of any policies, procedures, or working conditions inconsistent with the requirement of equal treatment.
2. Distinctions Based on Marital Status (Refer to 41 CFR 60-20.3(d)): Any distinction between married and unmarried persons must apply equally to both sexes. For example, a contractor cannot refuse to hire women with young children unless it applies the same exclusionary policy to men.
3. Bona Fide Occupational Qualification (BFOQ) (Refer to 41 CFR 60-20.3(b)): A contractor must consider women as well as men for all jobs, unless sex is a bona fide occupational qualification (BFOQ). Under Title VII, sex has been found to be a BFOQ for a job only in extremely rare instances. Among these have been:
   1. Authenticity: Jobs involving a need for authenticity or genuineness, such as actors or models.
   2. Personal Privacy: Jobs where the performance of essential job elements would entail substantial invasion of personal privacy (for example, a permanent restroom attendant). This is limited to situations where the normal operation of the contractor's business depends on the employee being of the same sex as its employees or customers and there is no other way that privacy could be ensured. IMPORTANT: This is different from customer preference. For example, a contractor cannot refuse to hire female salespersons in the belief that they will not be as well accepted by customers as males.
4. Employment Opportunities (Refer to 41 CFR 60-20.3(b), 3(c) and 5(b):
   1. Hazardous Jobs: A contractor may not exclude women from a job it may believe is dangerous or unsuitable for women to perform unless sex is a BFOQ (see Section 2G15(c) above).
   2. Reproductive Hazards: OFCCP follows Title VII principles when determining whether a policy excluding women from a job because of a concern about reproductive hazards is discriminatory. If a question relating to reproductive hazards arises during a compliance review, the EOS should consult, through appropriate channels, with the Regional Solicitor's Office.
5. Wage Discrimination (Refer to 41 CFR 60-20.3(c) and 41 CFR 60-20.5(a)and (b)): A contractor must compensate employees without regard to sex. The most obvious form of wage discrimination occurs when men and women are paid different wages for performing the same jobs, or jobs which are substantially equal.
6. Employment Advertising (Refer to 41 CFR 60-20.2(b)): A contractor's advertisements in newspapers or other media must not express a sex preference unless the job is one for which sex is a BFOQ (see Section 2G15(c) above). The placement of ads in columns headed "male" or "female" (or "male interest" or "female interest") or which otherwise indicate an orientation with regard to sex is considered an expression of preference, limitation, or specification based on sex and is prohibited.
7. Employee Benefits: Refer to discussion of this issue in Chapter 3.
8. Maternity Leave: Refer to discussion of this issue in Chapter 3.

2G16 SUPPORT OF COMMUNITY ACTION PROGRAMS

The AAP must address the contractor's active support of local and national community action programs and community service programs which are designed to improve the employment opportunities of minorities and women, as required by 41 CFR 60-2.13(i). The regulations at 41 CFR 60-2.26 provide guidance on the types of activities which demonstrate active support of local and national community action and community service programs. Among these are the appointment of key members of management to serve on the boards of such organizations, and active participation in programs for youth sponsored by the National Alliance of Businessmen. To be acceptable, the AAP should identify the programs supported, and indicate the type of support (i.e., personnel, equipment, etc.) given to local and national programs designed to improve employment opportunities for minorities and women. The EOS should be familiar with the types of programs available, both locally and nationally. The types of programs, and the degree of support provided, should be consistent with the nature of the problems identified in the AAP, and may form a component part of the contractor's organizational goals and development of action programs.

2G17 CONSIDERATION OF MINORITIES AND WOMEN NOT CURRENTLY IN THE WORKFORCE

The regulations at 41 CFR 60-2.13(j) require that the AAP address the contractor's consideration of minorities and women not currently in the workforce having requisite skills who can be recruited through affirmative action measures. To be acceptable, the AAP should specify the contractor's involvement with programs which facilitate the employment of minorities and women. Programs offered by the contractor could include providing part-time employment, flexible hours (flexitime) or dependent care benefits, as well as participating in high school or college co-op programs, particularly with educational institutions with significant minority and/or female enrollments.

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2H REVIEW OF EXECUTIVE ORDER SUPPORT DATA FOR ACCEPTABILITY

2H00 REPORT ON GOALS

41 CFR 60-1.40(c) requires that the contractor prepare a report of results of its prior year AAP. This report is part of the support data for the AAP, and is requested on the itemized listing enclosed with the Scheduling Letter (Figure 2-2a, paragraph f). The listing requests summary data and information indicating the numerical and other results of affirmative action goals for each job group for the current year and for the preceding year. For each goal not attained (prior year) or not being attained (current year), the contractor is requested to describe its good faith efforts. Prior year data should always be submitted, unless the contractor was not previously covered by 41 CFR

Part 60-2; current year data should be provided at least where the contractor is six months or more into its current AAP year at the time it receives the Scheduling Letter.

1. Data Required: As noted above, the contractor must provide summary data indicating the numerical results of affirmative action goals for each job group.
   1. Information on Job Groups with Goals: To measure results of goals, one must first know for which job groups goals were established and what those goals were. The contractor's current AAP submitted for desk audit will show this information for current year goals. Where the contractor's report on prior year goals does not specifically state what the prior year goals were, the EOS will contact the contractor and request that a copy of the goals section of its prior year AAP be forwarded to permit evaluation of prior year goals progress.
   2. Information on Placements into Job Groups with Goals: Since an annual goal is established in terms of a percentage placement rate, evaluating progress towards it requires knowledge of the total number of placements into the job group and the number of minority or female placements, as appropriate. If the contractor's progress report does not give this information or gives it only in part (i.e., the number of minority/female but not total placements, etc.), the EOS will determine if the information can be extracted from the contractor's submission of personnel activity data. If it cannot be so extracted, the EOS will contact the contractor and ask that it forward a copy of reports on goals progress prepared under its internal audit and reporting systems (41 CFR 60-2.13(g)) and/or, if the contractor employs 100 or more persons, a copy of the underlying data it used for its adverse impact determinations on hires, promotions and any other placements into job titles within the job group (see Section 2H01(a)(2) below).
2. Good Faith Effort: Where the contractor's report does not describe its good faith efforts in a job group where a goal was established but not attained, or does not describe those efforts in sufficient detail for the EOS to evaluate their adequacy, the EOS will include the job group as part of the onsite plan for evaluation of good faith effort (SCRR page 11).

2H01 PERSONNEL ACTIVITY DATA

The itemized listing enclosed with the Scheduling Letter requests information on personnel activities (e.g., selection — applicant flow and hiring, promotion and transfer, and terminations) for the prior and current "goal" (AAP) years. The listing requests that the data be provided by race (meaning by each minority group for whom EEO-1 reporting is required) and sex for each job group, but permits a contractor to submit the information "...in the form in which it is available."

1. When Data Are Not Submitted: If, in response to the Scheduling Letter, the contractor does not submit any personnel activity data, or does not submit data for one or more of the activity elements of applicants, hires, promotions or terminations, a Show Cause Notice should be issued.
   1. If a Show Cause Notice is being issued at desk audit for other reasons (e.g., see Sections 2C01 and 2F), the failure to submit the activity data will be included in that Notice.
   2. If the only reason a Show Cause Notice is being issued is failure to submit the activity data, see Chapter 8, Figure 8-3.

      Revised 5-25-90

2. Regulatory Citations:
   1. General Data Requirements under the Uniform Guidelines on Employee Selection Procedures (41 CFR Part 60-3):

      41 CFR 60-3.4(A) requires that each contractor ". . . maintain and have available for inspection records or other information which will disclose the impact which its . . . selection procedures have upon the employment opportunities of persons by identifiable race, sex, or ethnic groups. . ." Such identifiable groups are defined by 41 CFR 60-3.4(B) as those groups for whom EEO-1 reporting is required — i.e., Blacks, Hispanics, Asian/Pacific Islanders, American Indians/Alaskan Natives — along with Whites and totals.

   2. Data Requirements under 41 CFR Part 60-3 for Contractors with 100 or More Employees*: Contractors with 100 or more employees are more specifically required by 41 CFR 60-3.15A(2) to maintain and have available records for each job on applicants, hires, promotions and terminations (and any other selection decisions) by sex and by each minority group for whom EEO-1 reporting is required (also see Sections 2G14(d) and 2O04(a)).
   3. 41 CFR Part 60-2 Requirements: In addition to the basic record keeping requirements in 41 CFR 60-3.4 and 60-3.15, the requirements discussed earlier in this Chapter that the AAP identify problem areas (41 CFR 60-2.13(d)) and include internal audit and reporting systems (41 CFR 60-2.13(g)) may be cited because they cannot be acceptably implemented without maintenance and analysis of the basic data on employment activity required by 41 CFR 60-3.4 and 60-3.15. Failure to submit specific types of employment activity may be cited as follows:
      1. Applicant Flow and Hires: 41 CFR 60-2.12(m) requires that the AAP contain, as part of the supporting data, applicant flow data and applicant rejection ratios (hiring IRAs) indicating minority and sex status. Such applicant rejection ratios cannot be computed without data on hires by minority group and sex. Also, 41 CFR 60-1.40(b)(2) requires that the AAP contain an analysis of hiring practices for the past year (including recruitment sources and testing).

         __________

         *Simplified record keeping requirements for employers of under 100 persons are described at 41 CFR 60-3.15A(1), and summarized in 2G14(d). They are not reiterated here because OFCCP only occasionally reviews supply and service contractors with under 100 employees.

         Revised 5-25-90

      2. Promotions (Transfers, Upgrading Generally): 41 CFR 60-1.40(b)(3) requires that the AAP include an analysis of upgrading, transfer, and promotion for the past year.
      3. Review of Data Submitted for Acceptability
         1. Data Format: To be acceptable for desk audit, the data must be presented either by job group (as requested in the Scheduling Letter) or by job title (as required by 41 CFR Part 60-3; see Section 2H01(b)(1) and (2) above. If data are submitted in some larger aggregation than job group, see Section 2H01(d) below. For example, data by total workforce are not acceptable, nor are data by EEO category, unless a category legitimately constitutes a job group at the particular establishment (see Section 2G02).
         2. Information to be Included: For each job group or job title, support data in each major area (applicant flow, hires, promotions and terminations) must include at least: the total number of actions, the total number of actions for women, and the total number of actions for each minority group (as specified in 2H01(a)(1) above). For example, applicant flow for a job group or job must include at least total applicants, total female applicants and total applicants of each minority group; hires for a job group or job title must include at least total hires, total female hires and total hires of each minority group, etc.
         3. Period To Be Covered: Generally, the longer the period covered the better, because the data are more likely to reflect the contractor's usual way of operating. At minimum, however, the data must cover the prior AAP year and, if the contractor is six months or more into its current AAP year when it receives the Scheduling Letter, the data must also at least cover the first six months of the current AAP year.
      4. Action When Data Are Unacceptable: If employment activity data are submitted, but are not acceptable (are, as noted immediately above, in aggregations larger than job group; are not provided by sex and/or by each minority group, etc.), the EOS should call the contractor and request that the appropriate changes be made and the data resubmitted within 10 calendar days. If, at the end of 10 calendar days, the data have not been received in a form that is acceptable, a Show Cause Notice should be issued which itemizes the regulatory sections with which the contractor has been found in violation. (see Section 2H01(b)(1) and (2) and Figure 8-4).

         Revised 5-25-90

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2I REVIEW OF SECTION 503 AND 38 U.S.C. 4212 AAP(S) FOR ACCEPTABILITY

2I00 GENERAL

As with an Executive Order AAP, the determination of the acceptability of items listed on page 4 of the SCRR for Section 503 and 38 U.S.C. 4212 AAPs is limited to the evaluation which can be conducted at desk audit. This is different from an evaluation of the contractor's implementation of these items which normally is done onsite (see Chapter 3). Additionally, the Section 503 and 38 U.S.C. 4212 regulations require a number of contractor actions that, while they need not be addressed in the AAP (although most contractors choose to do so) must be carried out. These additional requirements are covered on SCRR page 13, which is nor-m ally completed onsite.

2I01 ITEMS TO BE INCLUDED

The regulations at 41 CFR 60-741.5(a) require that a Section 503 AAP set forth the contractor's policies, practices, and procedures in accordance with 41 CFR 60-741.6. To be acceptable, a contractor's Section 503 AAP must address at least those items listed in 41 CFR 60-741.6(a) through (f). Similarly, the regulations at 41 CFR 60-250.5(a) require that a 38 U.S.C. 4212 AAP set forth the contractor's policies, practices and procedures in accordance with 41 CFR 60-250.6. Therefore, to be acceptable, a contractor's 38 U.S.C. 4212 AAP must address at least those items listed in 41 CFR 60-250.6(a) through (f). Since these items — (a) through (f) — are similar in both regulations, they are discussed together below (where there are differences, it is pointed out).

2I02 POLICY STATEMENT (Refer to 41 CFR 60-250.4(a) and 250.6(a) and 41 CFR 60-741.4(a) and 741.6(a).)

Contractors are required to take affirmative action to employ and advance in employment qualified special disabled veterans, veterans of the Vietnam era, and individuals with disabilities. The con-tractor must affirm its commitment to this affirmative action requirement by incorporating it in a policy statement included in its AAP(s).

2I03 REVIEW OF PERSONNEL POLICIES FOR PROPER CONSIDERATION OF QUALIFICATIONS (Refer to 41 CFR 60-250.6(b) and 41 CFR 60-741.6(b).)

To be acceptable, the AAP(s) must affirm that the contractor has reviewed its personnel processes to determine whether its present procedures ensure careful, thorough, and systematic consideration of the job qualifications of known individuals with disabilities, special disabled veterans, and Vietnam era veterans who are applicants for job vacancies filled by employment or promotion, and for all training opportunities offered or available.

1. Use of Appendices B and C: The procedures described at 41 CFR Part 60-250, Appendix B and/or 41 CFR Part 60-741, Appendix C may be utilized in fulfillment of this requirement. Those procedures describe how the applications or personnel forms of covered veterans and persons with disabilities may be annotated regarding consideration for employment opportunities.
2. Additional Requirement Under 41 CFR Part 60-250: 41 CFR 60-250.6(b) also requires the contractor to limit its consideration of a covered veteran's military record to only the portion of that record which is relevant to the specific job qualifications for which the veteran is being considered. This should be affirmed in the AAP.
3. Adequacy of Present Procedures: If the contractor asserts that its present procedures are adequate, this is acceptable if the EOS' investigation shows that individuals with disabilities and covered veterans are afforded hire, promotion and training opportunities.

2I04 PHYSICAL AND MENTAL QUALIFICATIONS (Refer to 41 CFR 60-250.6(c)(1) and 41 CFR 60-741.6(c)(1).)

The AAP must contain the contractor's schedule for the review of all physical and mental job qualification requirements.

1. Scheduled Review: To be acceptable, the AAP must either affirm that the review of physical and mental job qualifications requirements has been completed, or provide a specific time schedule by which jobs are to be reviewed. Where the AAP indicates that the review has been completed, the contractor is not required to review those physical and mental job qualification requirements again un