Developing an Affirmative Action Plan (AAP) is an ongoing expense for federal contractors. For all but the largest companies, developing the in-house expertise required to prepare and conduct statistical analyses keeping up with invasive and expanding regulations, as well as designing, implementing, updating, and defending the company’s affirmative action program cannot be justified.
The AAP process can be overwhelming if you are not familiar with all of the foreign sounding reports, statistical analyses, legal terms, and never ending federal regulations; including the expectations in the event of an unavoidable OFCCP audit. Many contractors have said that the AAP process made them feel confused and overwhelmed. Our goal is to simplify the process for our clients.At Career Resources, we believe that our clients should clearly understand that having an AAP, in and of itself, does not make them compliant. Rather, the determination of whether or not a company is compliant and will pass an OFCCP audit or face administrative and/or financial penalties is based on whether the commitments made in the AAP are implemented through the company’s systems, processes, and actions of managers. While teaming up with you on your AAP project, we will work with you to evaluate whether your systems and processes are compliant. If your systems and processes are compliant, your AAP will naturally be compliant.When selecting a consultant, pricing is an important factor to consider. With tight corporate budgets, a human resources department can find itself with limited financial resources and may select a consultant based only on the lowest quote. Unfortunately, the quotes you will receive from affirmative action consultants can be all over the board making it difficult to use cost as a gauge in determining quality. As a rule, if the consultant is focused on selling you an Affirmative Action Plan which is guaranteed to be compliant, you should stay clear.Other options when determining the best method of preparing your AAP include using an attorney or purchasing software to prepare the AAP yourself. As for using an attorney to prepare your AAP, the cost can be prohibitive. As for purchasing and using a software package, the cost, time, and lack of support and guidance are factors to consider. In addition, a software package cannot advise you in an audit or work with you to determine best practices. When selecting your AAP consultant,consider what the OFCCP focuses on in an audit as well as what your consultant is offering.
The best place to start is with the regulations themselves and the ultimate consequences for not having an affirmative action plan.
According to the OFCCP, a service and supply contractor or subcontractor must develop an affirmative action plan/program for each of its establishments that have 50 or more employees and has a contract of $50,000 or more or has government bills of lading which total or can be expected to exceed (in any 12 month period) $50,000 or more. If your company serves as a depository of Government funds in any amount or is a financial institution that is a paying agent or issuing agent of savings bonds and savings notes in any amount.
Your affirmative action plan/program must be developed within 120 days after the criteria above have been met and must be updated annually.
Non compliance can mean many things and come in the form of both administrative and financial penalties, with the ultimate sanction being debarment from biding on future federal contracts.
There are both hidden and realized costs associated with the EEO and Affirmative Action efforts of a company. Realized costs are easy to identify and for the most part are manageable. They are represented in time, effort and money spent on consultants, attorneys, and software. Hidden costs are represented by financial penalties associated with not strategically using your time, effort, and money and in the long run far outweigh your realized cost.