On June 14, 2011, the Office of Federal Contract Compliance Programs (OFCCP) issued Directive 296 which outlines the procedures for requesting, renewing, modifying, and terminating Functional Affirmative Action Plans (FAAPs) agreements. The new directive supersedes the guidance set forth in Directive 254, which was issued in 2002. The new directive can be found at: http://www.dol.gov/ofccp/regs/compliance/directives/dir296.pdf.
FAAPs are affirmative action plans that are based on functional or business units. The required components of a FAAP are essentially the same as an establishment-based AAP. Most contractors will continue to prepare establishment based AAPs. However, those that wish to include their entire workforce or even just a portion of their workforce in a FAAP must get approval from the OFCCP. To be considered for a FAAP agreement, the functional or business units must: (1) currently exist and operate autonomously; (2) include at least 50 employees; (3) have its own managing official; and (4) have the ability to track and maintain its own personnel activity.
To request a FAAP agreement, the contractor must send a written request to the OFCCP explaining why the use of a FAAP(s) would be most appropriate. The explanation should describe how the proposed functions or business units correlate to its organizational structure. The request must also describe how the process and timeframes associated with the transition from establishment-based AAPs to functional AAPs. This request must be received no later than 120 calendar days prior to the expiration of the current corporate headquarters AAP.
The OFCCP will then set up a FAAP Conference to discuss the rationale for the proposed FAAP agreement. Additional information including but not limited to the contractor’s organizational structure, federal contracts, workforce composition, job groups, recruitment areas, locations, and personnel policies & procedures will be requested before and during the conference. The OFCCP will also review information from past compliance evaluations and consider whether past violations have been corrected, as well as any ongoing or past violations from local, state and federal agencies (over the last three years). Once the contractor and the FAAP Unit reach an agreement, the agreement is presented to the OFCCP Director. If no other questions arise, final approval is granted and a copy of the final agreement is provided to the contractor. A FAAP agreement is good for three years.
Contractors with a FAAP agreement must notify the OFCCP of any significant changes that impact the contractor’s structure within 30 days of the change. Significant changes may be due to mergers, acquisitions, downsizing, etc. The notification must include sufficient information to determine whether an approved agreement should be modified or amended. If the contractor fails to notify the OFCCP of changes, the OFCCP may terminate the FAAP agreement.
Contractors with a FAAP agreement are required to report annually, within 30 days after the anniversary of an agreement. The report should include any minor changes to the FAAP, such as changes to the managing official, contact information, or updated federal contracts. If the contractor fails to submit an annual update, the OFCCP may schedule the contractor for a compliance evaluation.
Existing FAAP agreements can be renewed for an additional three year term by submitting a renewal request to the OFCCP Director no later than 120 calendar days prior to the expiration of the current FAAP. However, FAAP agreements can be terminated by the OFCCP or the contractor upon 90 days written notice. The notice will provide the reason for the termination and the effective date of the termination. The contractor will then have 120 days to prepare establishment-based AAPs.
Please contact us by calling (732) 446-2529 or sending us an e-mail at glennbarlett@gbcs.net if you are interested in additional information regarding Functional AAPs.