Tuesday, May 17, 2016

OFCCP Publishes Revised Functional Affirmative Action Plans

Dana Halvorson

According to a May 16, 2016, legal alert from Ford & Harrison LLP, the Office of Federal Contract Compliance Programs (OFCCP) has published a revised directive regarding the use of Functional Affirmative Action Plans (FAAPs). A FAAP requires specific OFCCP approval and is a departure from the typical ‘establishment-based’ AAP structure for multi-establishment facilities, using an AAP structure that is more in line with the business functions or business units of the contractor.

A functional or business unit refers to a component within an organization that operates autonomously in the ordinary course of the organization's business. To be considered suitable for a FAAP, the functional or business unit must: 1) currently exist and operate autonomously; 2) include at least 50 employees; 3) have its own managing official; 4) have the ability to track and maintain its own personnel activity.

The alert goes on to include that “the OFCCP had issued guidance establishing procedures for approving such requests, most recently in 2012. The 2016 publication revises the FAAP directive to clarify the requirements of the program. Revisions include:

· Contractors are no longer required to provide a copy of a qualifying federal contract. Instead, the agency requires the contractor to provide specific information about contract coverage, including the contract number from a qualifying contract and that contract's dollar amount, contract period, and the name of the prime contractor (if applicable).

· Contractors are now required to provide information related only to subsidiaries that will be included in the FAAP, rather than all subsidiaries as previously required.

· The FAAP Branch will make every effort to gather sufficient information regarding the contractor's corporate structure to process the FAAP agreement request; however, the agency states that it may be necessary to meet with the contractor to make a final determination on the request.

· Contractors with approved FAAP agreements will undergo at least one compliance evaluation during the term of their FAAP agreement.”

This new directive became effective on April 28, 2016. The full legal alert on it from Ford & Harrison LLP can be found here. Medicare (Parts A and B) or Medicaid providers are not considered to be federal contractors. However, if a provider currently has VA patients and a VA contract, they are considered to be a federal contractor.

AHCA continues to work with our Congressional champions on getting VA provider agreements across the finish line, and taking those with VA contracts out of the scope of being deemed a federal contractor. 

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