OFCCP Has Formally Proposed to Resurrect Monthly CC-257 Employment Utilization Reports for Construction Contractors to Give OFCCP a New Way to Select Construction Contractors for Audit

Proposed Version of Reinstated Form Would Have Multiple Changes

In a move perhaps akin to a vampire or zombie story, OFCCP is seeking public comments regarding its sudden proposal (not mentioned in its Semi-Annual Regulatory Reports) to obtain approval from the Office of Management and Budget (“OMB”) to resurrect, with changes, a so-called Monthly Employment Utilization Report (CC–257) for construction contractors. The Clinton OFCCP discontinued these reports almost 30 years ago. No other Republican or Democrat Administration since then has thought the CC-257 reports worthwhile and all thought them too expensive for construction contractors and for OFCCP itself to process. (Thousands of them used to monthly stack up in agency hallways in boxes, unread.)

Note: Please read this story in conjunction with the following story discussing OFCCP’s simultaneous requests to OMB for it to approve a new construction contractor audit Scheduling Letter and attached Itemized Listing and to continue the use, for another three years, of a Construction Contract Award Notification Form (Form CC–314). OFCCP requires covered federal Government construction contractors to complete and file the Form CC-314 with OFCCP disclosing the contractor’s covered federal Government “subcontractors.”

In a Federal Register Notice, the agency explained that “covered construction contractors previously submitted [Form CC-257] to OFCCP on a monthly basis and [it] included information on employee work hours by race/ethnicity, gender, and trade in the covered area.” You may download a copy of the previous version of the form here. OFCCP discontinued the use of Form CC-257 on December 8, 1995. Comments on the proposal are due by April 23, 2024. You may submit them here or here.

OFCCP attached links to the Proposed CC-257 Form and Proposed CC-257 Form Instructions to the electronic version of the Federal Register Notice and on Regulations.gov (search for Docket (OFCCP-2024-0001)). As of our publication deadline, OMB has not yet posted its “Abstract” (i.e., OMB’s file dashboard on this OFCCP request) for OFCCP-2024-0001.

The text of the Notice itself simply states that, under the proposed changes, construction contractors would “provide information on employee work hours and employee count by race/ethnicity, gender, and trade in the covered area.” A corresponding 17-page Supporting Statement, attached to the Notice and posted on Regulations.gov, provides more detail.

OFCCP is in a Fast Hurry to Implement this New Reporting Requirement

“OFCCP plans to implement the re-instated CC-257 report upon OMB approval. OFCCP will provide stakeholder education on the collection and inform stakeholders of the implementation dates through its stakeholder messaging or other means.”

This statement ignores that requiring a new report from contractors must undergo not only OMB review pursuant to the Paperwork Reduction Act, but also Notice and Comment pursuant to the Administrative Procedure Act detailing the proposal, supplying definitions, and inviting review as to whether the proposal is either “arbitrary and capricious” and whether there is Congressional statutory authorization for the proposed CC-257 Report. 

OFCCP’s statement also communicates a sense of informal treatment of this proposal despite the fact that, if implemented, the proposal will have grave repercussions within the construction contractor community.

OFCCP’s statement also ignores the reality that even if the re-inflated and revised CC-257 Report met legal muster in all respects that most construction contractors (especially construction contractors) do not have the HR infrastructure in place today to generate these reports any time soon. Most construction contractors would need 3-6 months, at least, to design the called-for data collection, create the data array and reporting systems…and more time to implement would be needed if they had to first hire staff to respond to this new reporting requirement (as many would have to do, especially those companies with small HR groups).

Electronic Submission Will Improve Efficiency, OFCCP Asserts

OFCCP discontinued the collection in 1995 because “reviewing the paper reports required extensive agency resources,” it said in the Supporting Statement.

Editor’s Note: Indeed, OFCCP at that time had an entire 6-employee Branch (a specialized subcomponent of a “Division”) and a full-time manager very knowledgeable about construction projects and processes assigned to manage OFCCP’s construction contractor policies and programs. In addition, OFCCP had construction specialists also assigned in OFCCP’s National Office Operations Division to assist OFCCP District Offices during construction audits and to review the mountain of CC-257 Reports which flowed in monthly by the thousands. However, those resources (deemed insufficient in 1995) have not existed at OFCCP for the last quarter century. Moreover, OFCCP’s historic “construction brain trust” is gone.

The proposed reinstatement allows for (but does not require) electronic submission of the new CC-257 report. See page 12 of OFCCP’s “Supporting Statement” (linked above) and footnote 30:

“Contractors will also be encouraged to submit the CC-257 form electronically. If contractors choose not to submit the CC-257 form electronically, they may submit the form via one of the other approved methods.” [fn 30 omitted].

Footnote 30 reads: “Contractors will also have the option to send their monthly reports via mail, email, and facsimile.”

According to OFCCP, those contractors which elect to submit their CC-257 reports by electronic submission “will reduce the burden on the agency, allow for more efficient submission for contractors, and improve the agency’s ability to efficiently review and analyze the submitted data” (see pages 8-9 of the Supporting Statement). Monthly CC-257 reporting is necessary, according to OFCCP, because jobs in the construction industry are often temporary and project-based (Supporting Statement, page 13).

Resurrection of Form Would Improve Construction Contractor Audit Scheduling & Strengthen Construction Program, Agency Argues

In both the Federal Register Notice and the Supporting Statement, OFCCP asserts that reinstatement of the form would help strengthen its construction program by using the collected information to inform compliance assistance efforts and track the progress of contractor outreach efforts and the agency’s Megaproject Program. The collected information would also improve OFCCP’s scheduling of compliance evaluations of covered construction contractors, as the reports will provide relevant information on which projects are currently active and current employee counts (see page 13749 of the Notice and pages 9 – 10 of the Supporting Statement)

OFCCP’s current primary method to select construction contractors for audit is to review those contractors and subcontractors working on selected so-called “Mega Construction Projects.” (For Fiscal Year 2024, OFCCP identified in October, 2023, 12 Mega Construction Projects it would be auditing, meaning the General Contractor and all of its subcontractors to the limit of OFCCP’s resources. (Sometimes OFCCP will not get to audit the end-of-project subcontractors for want of resources. In the same way, OFCCP may miss some of the early-stage subcontractors because they might have already finished their work on the Project and left the job site before OFCCP has a chance to mobilize and audit the at-issue Mega Construction Project).

OFCCP’s proposed expansion to add a second construction contractor auditing scheme now adds another layer of uncertainty as to which federal construction contractors OFCCP will be auditing. That information will now not be known until OFCCP publishes its periodic CSALs (Corporate Scheduling Announcement Lists) for construction contractors. We discussed the last OFCCP Construction CSAL in a Week In Review story we published on June 12, 2023.

Items Retained from Previous Version (Supporting Statement, page 10)

The proposed CC-257 form version would contain many of the items from the prior form, including:

• Name, Employer Identification Number (EIN), and location of contractor/subcontractor
• Standard Metropolitan Statistical Area (SMSA) or Economic Area (EA) where the work was performed (“covered area”)
  • EDITOR’S NOTE: In 1983, the United States Bureau of the Census replaced and retired the reference to and use of SMSAs with a new name and a slightly different definition for a new concept called “Metropolitan Statistical Area” (“MSA”). MSA usage became effective and in use beginning with the 1990 Decennial Census. OFCCP does not mean “SMSA” and has no power or authority to also bring back SMSAs from the dead. The agency undoubtedly means to say “MSA.”
• Reporting period
• Federal funding agency
• Work hours for construction trade employees by race and gender
• Signature, title, and telephone number of the company official certifying the information and the date the report is signed

Proposed Revisions for Reinstated Form (Supporting Statement, pages 10-12)

OFCCP’s proposed revisions to the CC-257 form include:

• Adding a field for the contractor to provide its Unique Entity ID (UEI) or Data Universal Numbering System (DUNS) Number. As noted above, OFCCP uses the UEI to identify businesses and other entities that do business with the Federal Government. Although UEIs have replaced DUNS numbers, OFCCP nonetheless proposes including the option to allow for use of a DUNS Number to accommodate those contractors which may have not yet completed the transition to UEI.
• Adding a field for the contractor to identify the number of covered areas (SMSA/EAs) with projects during the reporting period. The contractor must provide employee count and work hours information for each SMSA/EA with projects during the reporting period.
• Adding the name and email address of the company official certifying the information. Adding this information will ensure that OFCCP receives accurate and current contact information for the certifying official.
• Adding a question that asks whether the entity providing the information is a prime contractor, subcontractor, or both in the SMSA/EA. This information can be used in OFCCP’s scheduling process and for OFCCP to confirm submission of the required subcontract award notification.
• Removing the requirement for the contractor to list the current goals for the covered area.
• Adding a question for the contractor to identify whether the company performed work on a project designated by OFCCP as a Megaproject in the SMSA/EA.
  • Through OFCCP’s Megaproject program, OFCCP focuses its resources on large construction projects that have the greatest potential to make a positive economic difference in a community. Identification of all contractors working on Megaprojects supports OFCCP’s program efforts. OFCCP can use the data on employment and work hours in construction trades on Megaprojects to track the effectiveness of outreach efforts and inform decisions regarding Megaproject resource allocation, program emphasis, and training efforts.
• Revising the chart used to report the number of work hours for construction trade employees. Specifically, OFCCP proposes to:
  • Add an additional classification (foreperson) to capture the hours of working forepersons in the covered area. Although they are also performing construction trade work, and thus fall within part 60-4, the foreperson classification is typically higher paid than the other classifications. Monitoring work hours ensures that all forepersons are given equal opportunity as to work hours and pay.
  • Revise the race group categories on the chart to align with the EEO-1 race and ethnicity categories. Many contractors are already familiar with the EEO-1 Report categories and are already obligated to track workforce demographics using the EEO-1 Report categories, OFCCP points out. As such, using EEO-1 categories will minimize contractor burden and promote uniformity across collections.
  • Add an “All” column to the totals. This will assist in confirming accurate totals (i.e., the sum of the total male and female hours should match the “all” total).
    • Editor’s Note: OFCCP seems to have forgotten reporting of “gender binary” employees who are neither male nor female.
• Adding a requirement for contractors to identify the number of employees in each trade, by racial group, gender, and classification (foreperson, journey workers, apprentices, and trainees), who performed work in the SMSA/EA during the reporting period.
  • The prior CC-257 form only requested information on work hours in the construction trades, which limited the utility of the prior collection. Identifying the number of construction trade employees provides context to the reported work hours information, where OFCCP can better understand how the work hours are allocated across the workforce. In this way, OFCCP can better identify if there are potential hiring or job assignment issues that warrant further investigation during a compliance evaluation.
• Adding an optional comment field. Contractors may use this optional field to share any additional context on their submission.

Purported Information Collection Burden (Supporting Statement pages 14-16)

OFCCP based its reporting burden calculations on the 9,982 construction contractors it says are subject to its regulatory requirements. The agency asserts that these almost 10,000 contractors would have no additional recordkeeping burden requirements associated with this CC-257 Information Collection proposal since the CC-257 Report is already covered in OFCCP’s November 2022 construction Information Collection proposal known as OMB 1250-0001. See page 15, second sentence from the top, of OFCCP’s Supporting Statement.

Editor’s Note: OMB Information Request Control Number 1250-0001 does not, however, require (or even speak to) construction contractor collection of construction employee work hours by race, sex, and national origin, or by trade (journeyman, etc.), or contractor reporting of same to OFCCP or any other federal agency, or to a CC-257 Report. To discover the OFCCP Federal Register Notice supporting and explaining OFCCP’s request to OMB in OMB Control Number 1250-0001(the OFCCP Information Collection Request OFCCP believes ALSO authorized—in 2022—the agency’s currently proposed use of the CC-257 file):

• click on the above link (to OMB Control Number 1250-0001) which will take you to what OMB calls an “Abstract” (which is a summary dashboard chart in electronic form which houses “check boxes” you may click on to activate links to many other documents in the OMB file);
• then click on the box allowing the link to expand and further report “FR Notices/Comments;”
• then review the bottom of the page reporting both of OFCCP’s Federal Register Notices explaining its 2022 request for OMB approval of OMB Control Number 1250-0001;
• then copy and paste the latest Federal Register Notice page number (85 FR 68933: the so-called “60-day” Notice) into your Internet browser to connect to the 2022 two-page Federal Register Notice of interest. (Or you may just click on the link we provide below in the next paragraph for convenience).

Rather than for OFCCP to have already obtained OMB approval to seek hours-worked reports parsed by race/sex/national origin and trades classifications, as OFCCP asserts, OMB 1250-0001 merely approved an OFCCP request to continue to be allowed to impose burdens on covered federal Government construction contractors to report what OFCCP described in its October 30, 2020 Federal Register “Notice” at 85 FR 68933-34 as follows:

“OFCCP seeks to renew its existing Construction Contract Award Notification Form (Form CC–314) and introduce a new batch upload feature that would enable the submission of multiple notifications at once. Additionally, the instruments associated with Collection 1250–0011 (Construction Compliance Check Letters) have been moved to this collection to centralize the recordkeeping and reporting burden of the two ICRs.”

As a result, OFCCP does not project ANY additional burden hours for covered federal Government construction contractors to comply with OFCCP’s CC-257 reporting requirement, if approved, other than the time (OFCCP estimates to be 1.5 hours) to submit the monthly reports.

Specifically, the OFCCP estimates it would take 1.5 hours to identify the needed information and send the notification to OFCCP. Therefore, OFCCP estimates this reporting burden (collectively, across almost 10,000 covered federal Government construction contractors and “subcontractors”) at 179,676 hours (9,982 contractors x 1.5 hours x 12 monthly reports). It estimates a total annual cost to covered federal Government construction contractors of $13,675,140 (over $13 Million Dollars) (179,676 hours x $76.11) associated with these requirements.

OFCCP’s Supporting Statement (pages 15 – 17) estimates a total annual operating cost of $24,914 ($16,769 (to copy and print @20 cents/page) + $8,145 (annual mailing costs)).

Editor’s Note: What OFCCP has confused is its Rules at 41 CFR Section 60-1.12(c)(1) which require contractors, including construction contractors, to keep records by “gender, race, and ethnicity of each employee” on the one hand and the burden to respond to OFCCP’s demand that contractors submit CC-257 Reports containing information taken from those records and arrayed in a unique format OFCCP has prescribed in its revised CC-257 reporting form.

So, here is a unique case in which OFCCP has the ostensible legal authority pursuant to its Rules to require a report like a CC-257 report, but ALSO must obtain permission from OMB pursuant to its authority to deny regulatory burdens pursuant to the Paperwork Reduction Act (“PRA”). A critical element of an OMB PRA review, however, is the projected cost burdens for the regulated community to comply with the agency’s proposal. And, by submitting cost burden estimates only to mail in copies, e-mail in PDFs, or fax in PDFs, or electronically submit the proposed information OFCCP seeks to collect, the agency has completely ignored the ADDITIONAL costs for the contractor (beyond just transmitting the data) to:

1. design a monthly data collection system based on the data parameters OFCCP’s CC-257 report will require, including division of and reporting of the data by “trade” and sorted and collectively reported by race, sex, and national origin;
2. collect the responsive data via either or both electronic and/or paper reporting systems;
3. array each month the responsive data in the precise format of OFCCP’s CC-257 Report;
4. report forward the responsive data from all job sites in the company to a central reporting point within the company; and
5. quality control check the responsive data to ensure that the company’s CC-257 reports are complete and accurate.

OFCCP’s proposal to OMB is written as though contractors have data lying in their paper and electronic files formatted to the coming CC-257 Report and ready just to scoop up and shovel into a box to be mailed to OFCCP or put into high-speed imaging equipment for fax or e-mail delivery to OFCCP, or collected via computer programming code which does not exist for electronic transmission each month to OFCCP.

Here is what 41 CFR Section 60-1.12(c)(1) says exactly:

“(c) Contractor identification of record.

1. For any record the contractor maintains pursuant to this section, the contractor must be able to identify:
   1. The gender, race, and ethnicity of each employee; and….”

This Rule merely says that the contractor must be able to “identify” gender, race, and “ethnicity” for each of its employees but does not prescribe how, let alone prescribe a report to be prepared, let alone monthly, in the format of the CC-257 report. That is where OMB’s PRA and burden authority comes in. So, OFCCP’s burden hour projections are woefully incomplete to allow OMB to properly assess the costs and measure them against the benefit to OFCCP using a further burdened report that four prior Administrations (including two Democrat Administrations: Clinton & Obama) deemed unnecessary and too expensive. OFCCP’s proposal will be a subject of great concern to the construction contractor community.

THIS COLUMN IS MEANT TO ASSIST IN A GENERAL UNDERSTANDING OF THE CURRENT LAW AND PRACTICE RELATING TO OFCCP. IT IS NOT TO BE REGARDED AS LEGAL ADVICE. COMPANIES OR INDIVIDUALS WITH PARTICULAR QUESTIONS SHOULD SEEK ADVICE OF COUNSEL.