The regulations at 41 CFR 60-2.1(d)(4) permit federal supply and service contractors to develop AAPs organized around distinct business functions or lines of business, rather than AAPs based on the contractor’s establishments. A contractor is permitted to develop AAPs for its functional or business units, referred to as FAAPs, only after reaching a FAAP agreement with OFCCP.293 This chapter provides guidance on evaluating a contractor’s compliance with its nondiscrimination and affirmative action obligations when the contractor has entered into a FAAP agreement.294
293. A FAAP agreement addresses only the development of AAPs along functional lines. It does not address how OFCCP will conduct its compliance evaluations.
294. For further guidance, see OFCCP Directive 2013-01 Revision 2, “Functional Affirmative Action Programs.”
This chapter applies only to contractors with FAAP agreements approved by the OFCCP Director, or designee. Ongoing compliance evaluations of establishments will not be affected by a contractor’s request to enter into a FAAP Agreement. Contractor establishments scheduled for a compliance evaluation during the FAAP agreement application process, or prior to the implementation of its FAAPs following the approval of a FAAP agreement effective date, will be completed as establishment-based evaluations if the scheduling letter was received by the contractor prior to the FAAP agreement’s effective date.
FAAPs are designed to provide contractors the option of creating AAPs that better fit their business needs. Any supply and service contractor subject to AAP requirements may request an agreement with OFCCP that allows for the development and use of FAAPs. Some contractors may find it appropriate to develop only FAAPs, while others may elect to use a combination of FAAPs and establishment-based AAPs. Participation in the FAAP program is voluntary for contractors. The FAAP Agreement cannot be construed to limit or restrict how OFCCP conducts its compliance evaluations.
The FAAP agreement is a written agreement between the contractor and OFCCP, approving the contractor to use FAAP(s) in lieu of, or in combination with, establishment-based AAPs. The agreement is issued for a five-year term and outlines the contractor’s legal obligations and the procedures for maintaining the FAAP agreement. The FAAP agreement includes an addendum that identifies all of the contractor’s approved functional or business units, including a description of each unit, contact information for each unit and the employee count for each unit.295 If a contractor maintains both functional and establishment-based AAPs, the FAAP agreement will include an “Addendum B” that identifies all of the establishments that will maintain establishment-based AAPs. In the FAAP agreement, the contractor also agrees that, during a FAAP compliance evaluation, they will submit personnel activity in a readable and usable electronic format when requested to do so. FAAP agreements are maintained by OFCCP’s national office and become effective on the date of the OFCCP Director’s, or designee’s, final signature. Contractors will have up to 120 calendar days following the effective date to implement its FAAPs, and they must notify OFCCP when the FAAPs are implemented. A FAAP must include the components that are prescribed in 41 CFR Part 60-2 and, if appropriate, Subpart C of 41 CFR 60-300 and Subpart C of 41 CFR 60-741.
295. The employee count specified in the FAAP agreement represents the employees that were present when the FAAP request was submitted as a part of the agreement application process. The employee count in the FAAP agreement may differ from the number of employees reported when the FAAP is submitted during a compliance evaluation due to staff departures, hires or promotions.
A FAAP compliance evaluation is a full compliance review that includes all aspects of a standard compliance evaluation. However, all AAP components are based on the functional or business unit that is the subject of the AAP, rather than an establishment. If OFCCP selects a corporate headquarters unit under a FAAP Agreement for review, the FAAP compliance evaluation may be designated a CMCE. The CO responsible for conducting FAAP compliance evaluations must follow the procedures in Chapter 1 of this Manual on the procedures for conducting a desk audit, Chapter 2 on conducting an on-site review and Chapter 4 on conducting a CMCE, but with only a few differences. These differences are explained below in Sections 5B through 5E.
The CO must complete all applicable sections of the SCER to identify the functional or business unit under review, include the results of the desk audit, findings from the on-site review, and off-site analysis. Some sections of the SCER may not be applicable in every compliance evaluation.296
296. See Appendices A-1: SCER and A2: SCER Instructions.
OFCCP conducts FAAP compliance evaluations under the national office’s direction and oversight. The national office’s FAAP Branch sends the Scheduling Letter for all FAAP compliance evaluations, and then transfers the evaluations to the appropriate regional office. Contractors send their FAAPs directly to the regional office identified in the Scheduling Letter. The regional office has full responsibility for completing the FAAP compliance evaluation with assistance from the national office, as needed. The national office can assist the regional office in coordinating on-site reviews that need to occur at multiple facilities or within other regions.