1F04 Additional Required Elements of an Executive Order AAP

This subsection, focusing on 41 CFR 60-2.17, covers the designation of responsibility for the AAP, identification of problem areas, creation of action-oriented programs, reporting system and internal audit, and reviewing the results of the report.

a. Designation of Responsibility. Under 41 CFR 60-2.17(a), contractors must provide for the implementation of EEO obligations and the AAP by assigning responsibility and accountability to an official of the organization. These officials must have sufficient authority and resources, and must also have the support of, and access to, top management to ensure the effective implementation of the contractor’s EEO obligations and AAP. To be acceptable, the AAP should contain, at a minimum, a narrative description of the positions or job titles, or both, that the contractor designates to direct or manage its AAP and a description of the incumbent’s duties.

b. Identification of Problem Areas. 41 CFR 60-2.17(b) requires that contractors perform an in-depth analysis of their total employment process to determine whether or where impediments to EEO exist. They must evaluate the following:

• Organizational Structure. The contractor must examine its workforce by organizational unit and job group to determine whether there are problems of minority or female utilization, or of minority or female distribution.
• Personnel Activity. The contractor must examine applicant flow, hires, recruitment, referral, terminations, promotions, transfers and other personnel activities to determine whether there are selection and termination disparities.
• Compensation. The contractor must determine whether there are gender, race or ethnicity disparities in its compensation system.
• Personnel Procedures. The contractor must determine whether its selection, recruitment, referral, and other procedures result in disparities in the employment or advancement of minorities or women and their resulting pay.
• Other Areas. The contractor must evaluate any other areas that might affect the success of the AAP. Examples include seniority practices, leave policies, time off policies, policies regarding part-time work, the conduct of company-sponsored social events, apprenticeship program practices, workforce environment, and compliance with posting and union notification requirements.

c. Action-Oriented Programs. 41 CFR 60-2.17(c) requires that contractors develop and execute action-oriented programs designed to correct problem areas and to attain established goals and objectives. To be effective, contractors must ensure that their action-oriented programs consist of more than following the same procedures that previously produced inadequate results. Action-oriented programs should be “specific” and “result-oriented.”

By “specific,” OFCCP requires that the programs describe in some detail what action the contractor will take, who is responsible for taking the action and when the action will be accomplished. “Result-oriented” programs are those where proper execution of the program will likely lead to an increase in minority or female participation, or both, in the department, job group, training program or other identified problem area. The action-oriented programs must be sufficient, if successfully implemented, to achieve their stated objectives. Contractors must describe these programs in the AAP.

For example, if a contractor identifies a lack of women in a job as a problem area, the contractor should also identify the reasons for the absence of women. The reasons identified could include the rigid work hours, the impact or application of leave policies, the lack of recruitment, the lack of training, the absence of a career path or ladder leading to the job, a working environment hostile to women or hiring discrimination. To remedy an identified problem area, the contractor should establish action-oriented programs to eliminate or minimize the reasons women are adversely affected. The action-oriented programs, when fully implemented, should result in an increase in the representation of women in the job identified as a problem area. To be an acceptable submission, contractors must provide documentation demonstrating the development of these action-oriented programs.

d. Internal Audit and Reporting System. 41 CFR 60-2.17(d) requires contractors to design and implement an internal auditing system that periodically measures the effectiveness of its total AAP. This system must be detailed in the AAP, and the internal audit and reporting system must:

• Monitor Records. The internal audit and reporting system must monitor records of all personnel activity, including referrals, placements, transfers, promotions, terminations and compensation, at all levels.
• Require Internal Reporting. The contractor produces an internal report on the effectiveness of the AAPs on a regularly scheduled basis. While the regulations do not specify a particular time period, the reports must be produced on a scheduled basis.
• Review Report Results. Top management is advised of the program’s effectiveness and any deficiencies, and management at all levels reviews the results of these reports.

The AAP should contain a narrative description of every aspect of the internal audit and reporting system. This description should specify the frequency of reports and audits. It should also state that, as problems are discovered, the contractor is taking the necessary corrective actions. The description should also designate the contractor officials responsible for taking these corrective actions. Lastly, the contractor should state how and when it reviews program results and effectiveness with management at all levels of the company.