AGC Continues Efforts to Stop or Limit Costly Affirmative Action Rules

On Tuesday, Aug. 6, AGC met with the Office of Management & Budget (OMB) to discuss the Office of Federal Contract Compliance Programs (OFCCP) proposed rules that will govern federal contractors’ employment of veterans and people with disabilities. These rules will require direct federal contractors and their subcontractors to put in place many new recruiting and reporting measures and all but establish hiring quotas company-wide.  Click here for more background. While progress on the rules stalled last year after AGC raised a number of concerns about the cost and justification for these measures, it appears that the Obama administration is on the brink of completing both measures.  Just last week, the OFCCP formally transmitted both rules to OMB for final review.  That is the last step in the regulatory process before the rules are finalized and go into effect.  AGC met with OMB to once again explain why these costly new mandates are not necessary. In addition to citing federal enforcement data that shows fewer than 0.02 percent of all federal contractors may have discriminated against veterans or the disabled in the past eight years, AGC also shared a new analysis of federal employment data showing that the annual average unemployment rate for all veterans in 2012 was 7.0 percent, lower than the 7.9 percent rate for non-veterans, while a higher share of employed veterans than non-veterans work in the construction industry.  In addition, people with disabilities are as likely to be employed by construction firms as people without disabilities.  These facts make our point that the rules are solutions in search of problems. AGC formally asked the administration to reopen the record on both of these proposed rules and determine whether there is sufficient justification for imposing an estimated $6 billion in new annual regulatory compliance costs on the federal contracting community.  AGC believes there is a clear and compelling case for not imposing these mandates.  However, given the administration’s regulatory approach to date, we are not overly optimistic that reason and data will prevail. AGC will continue to alert its members on any new developments with these rules and any additional steps that may have to be taken to protect our federal contractor members from these costly and unnecessary new hiring mandates. For more information, please contact Tamika Carter at (703) 837-5382 or cartert@agc.org.