[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
FEDERAL CONTRACTOR COMPLIANCE
=======================================================================
HEARING
before the
SUBCOMMITTEE ON ECONOMIC OPPORTUNITY
of the
COMMITTEE ON VETERANS' AFFAIRS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
MAY 14, 2009
__________
Serial No. 111-20
__________
Printed for the use of the Committee on Veterans' Affairs
----------
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Washington, DC 20402-0001
COMMITTEE ON VETERANS' AFFAIRS
BOB FILNER, California, Chairman
CORRINE BROWN, Florida STEVE BUYER, Indiana, Ranking
VIC SNYDER, Arkansas CLIFF STEARNS, Florida
MICHAEL H. MICHAUD, Maine JERRY MORAN, Kansas
STEPHANIE HERSETH SANDLIN, South HENRY E. BROWN, Jr., South
Dakota Carolina
HARRY E. MITCHELL, Arizona JEFF MILLER, Florida
JOHN J. HALL, New York JOHN BOOZMAN, Arkansas
DEBORAH L. HALVORSON, Illinois BRIAN P. BILBRAY, California
THOMAS S.P. PERRIELLO, Virginia DOUG LAMBORN, Colorado
HARRY TEAGUE, New Mexico GUS M. BILIRAKIS, Florida
CIRO D. RODRIGUEZ, Texas VERN BUCHANAN, Florida
JOE DONNELLY, Indiana DAVID P. ROE, Tennessee
JERRY McNERNEY, California
ZACHARY T. SPACE, Ohio
TIMOTHY J. WALZ, Minnesota
JOHN H. ADLER, New Jersey
ANN KIRKPATRICK, Arizona
GLENN C. NYE, Virginia
Malcom A. Shorter, Staff Director
______
SUBCOMMITTEE ON ECONOMIC OPPORTUNITY
STEPHANIE HERSETH SANDLIN, South Dakota, Chairwoman
THOMAS S.P. PERRIELLO, Virginia JOHN BOOZMAN, Arkansas, Ranking
JOHN H. ADLER, New Jersey JERRY MORAN, Kansas
ANN KIRKPATRICK, Arizona GUS M. BILIRAKIS, Florida
HARRY TEAGUE, New Mexico
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
hearing records of the Committee on Veterans' Affairs are also
published in electronic form. The printed hearing record remains the
official version. Because electronic submissions are used to prepare
both printed and electronic versions of the hearing record, the process
of converting between various electronic formats may introduce
unintentional errors or omissions. Such occurrences are inherent in the
current publication process and should diminish as the process is
further refined.
C O N T E N T S
__________
May 14, 2009
page
Federal Contractor Compliance.................................... 1
OPENING STATEMENTS
Chairwoman Stephanie Herseth Sandlin............................. 1
Prepared statement of Chairwoman Herseth Sandlin............. 29
Hon. John Boozman, Ranking Republican Member..................... 2
Prepared statement of Congressman Boozman.................... 30
WITNESSES
U.S. Department of Labor, Lorenzo Harrison, Acting Deputy
Assistant Secretary, Office of Federal Contract Compliance
Programs....................................................... 19
Prepared statement of Mr. Harrison........................... 39
U.S. Department of Veterans Affairs, Jan R. Frye, Deputy
Assistant Secretary for Acquisition and Logistics.............. 23
Prepared statement of Mr. Frye............................... 44
______
American Legion, Joseph C. Sharpe, Jr., Director, National
Economic Commission............................................ 9
Prepared statement of Mr. Sharpe............................. 36
American Veterans (AMVETS), Christina M. Roof, National Deputy
Legislative Director........................................... 7
Prepared statement of Ms. Roof............................... 33
DirectEmployers Association, Inc., Indianapolis, IN, Sergeant
First Class Chad Sowash, USAR, Vice President of Business
Development.................................................... 6
National Association of State Workforce Agencies, Thomas S.
Whitaker, President, and Deputy Chairman/Chief Counsel, North
Carolina Employment Security Commission, Raleigh, NC........... 4
Prepared statement of Mr. Whitaker........................... 31
Vietnam Veterans of America, Richard F. Weidman, Executive
Director for Policy and Government Affairs..................... 10
Prepared statement of Mr. Weidman............................ 38
SUBMISSIONS FOR THE RECORD
National Veteran-Owned Business Association, statement........... 45
MATERIAL SUBMITTED FOR THE RECORD
Post-Hearing Questions and Responses for the Record:.............
Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on
Economic Opportunities, Committee on Veterans' Affairs, to
Thomas S. Whitaker, President, National Association of
State Workforce Agencies, letter dated May 20, 2009, and
Mr. Whitaker's responses................................... 47
Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on
Economic Opportunities, Committee on Veterans' Affairs, to
James King, Executive Director, AMVETS, letter dated May
20, 2009, and Christina M. Roof, National Deputy
Legislative Director, AMVETS' response..................... 48
Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on
Economic Opportunities, Committee on Veterans' Affairs, to
Peter Gaytan, Executive Director, American Legion, letter
dated May 20, 2009, and Joseph C. Sharpe, Jr., Director,
National Economic Commission, American Legion's, response
letter dated July 1, 2009.................................. 51
Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on
Economic Opportunities, Committee on Veterans' Affairs, to
Lorenzo Harrison, Acting Deputy Assistant Secretary for the
Office of Federal Contract Compliance Programs, U.S.
Department of Labor, letter dated May 20, 2009, and Mr.
Harrison's response letter dated July 17, 2009............. 52
Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on
Economic Opportunities, Committee on Veterans' Affairs, to
Jan R. Frye, Deputy Assistant Secretary for Acquisition and
Logistics, U.S. Department of Veterans Affairs, letter
dated May 20, 2009, and VA responses....................... 55
FEDERAL CONTRACTOR COMPLIANCE
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THURSDAY, MAY 14, 2009
U.S. House of Representatives,
Committee on Veterans' Affairs,
Subcommittee on Economic Opportunity,
Washington, DC.
The Subcommittee met, pursuant to notice, at 1:30 p.m., in
Room 334, Cannon House Office Building, Hon. Stephanie Herseth
Sandlin [Chairwoman of the Subcommittee] presiding.
Present: Representatives Herseth Sandlin, Adler, Teague,
Boozman, and Moran.
OPENING STATEMENT OF CHAIRWOMAN HERSETH SANDLIN
Ms. Herseth Sandlin. Good afternoon ladies and gentlemen.
The Committee of Veterans' Affairs Subcommittee on Economic
Opportunity Hearing on Federal Contractor Compliance will come
to order.
Before I begin with my opening statement I would like to
state that Mr. Scott Denniston, Director of Programs for the
National Veteran-Owned Business Association (NaVOBA), has asked
to submit a written statement for the hearing record. If there
is no objection I ask unanimous consent that his statement be
entered for the record. Hearing no objection, so entered.
[The prepared statement of NaVOBA appears on p. 45.]
Ms. Herseth Sandlin. Providing our servicemembers and
veterans with employment opportunities is indeed a way of
investing in our brave men and women of the Armed Forces for
the sacrifices they have made while serving our country.
Providing them with opportunities and establishing equity in
employment opportunities can help veterans become gainfully
employed.
The U.S. Department of Labor's (DOL's) Office of Federal
Contract Compliance Program (OFCCP) plays an important role in
protecting veterans by ensuring that they are not discriminated
against and are given equal employment opportunity.
While OFCCP provides certain veterans protection against
discrimination, it also requires that contractors are actively
involved in providing employment or advancement opportunities
by providing outreach, recruitment, and training.
In addition, contractors must make good faith efforts to
maximize their current qualified workforce, develop and update
affirmative action plans, and submit an annual report to the
Department of Labor.
The Vietnam Era Veterans' Readjustment Assistance Act of
1974, also known as VEVRAA, and section 4212 of title 38,
provide legal authority to enforce veterans' equal employment
opportunities.
VEVRAA provides enforcement for Federal contracts to
provide equal employment opportunities for special disabled
veterans and veterans of the Vietnam Era. This provision would
apply to prime contractors and subcontractors who engage in
personal property and non-personal services, including
construction. All employment is required to be listed in the
Federal Contractor Job Listing (FCJL) Program which gives
priority referral to qualified disabled veterans and Vietnam
Era veterans.
Currently, the OFCCP provides enforcement measures for
compliance. For example, compliance reviews are conducted to
ensure that employers are following their affirmative action
program established as a prerequisite for reaching a contract
threshold. To assist in this effort, OFCCP provides training,
consultations, and technical assistance to contractors.
I have become deeply concerned over reports of Federal
contractors not complying with Federal regulations. This is
especially troubling considering the increased number of
servicemembers returning to the civilian workforce. It is also
disturbing when I hear that disabled veterans hiring practices
are inadequate, coupled with the lack of effort by contractors
to employ disabled veterans.
Federal contractors and subcontractors have the opportunity
to work with the U.S. Department of Veterans Affairs' (VA's)
Vocational Rehabilitation and Employment Program, or the
Department of Labor's Veterans' Employment and Training Service
(VETS), both of which are equipped to assist veterans gain
employment. These resources, along with the Local Veteran's
Employment Representatives (LVERs) and Disabled Veterans
Outreach Program Specialists (DVOPs), should provide for
contractor compliance.
I am hopeful that today we can determine to what extent
these enforcement measures are beneficial, if they lack
incentives for compliance, or if there is a need for stricter
enforcement measures.
I look forward to exploring the options to assist employers
who are making good faith effort in hiring and promoting
qualified disabled veterans in the workforce.
This Subcommittee is fully committed to protecting our
veterans and providing protections against employment
discrimination.
Finally, today's hearing is an important one. It is the
first time this Subcommittee has held a hearing on Federal
Contractor Compliance; therefore, we hope that we are able to
learn more about the issue while conducting oversight and
gaining from the insight provided to us by our witnesses on the
topic.
I now recognize our distinguished Ranking Member,
Congressman John Boozman, for any opening remarks he may have.
[The prepared statement of Chairwoman Herseth Sandlin
appears on p. 29.]
OPENING STATEMENT OF HON. JOHN BOOZMAN
Mr. Boozman. Thank you very much, Madam Chair.
The current recession is affecting veterans just like the
rest of the American labor force. According to the Bureau of
Labor Statistics (BLS), the unemployment rate among adult men
was 9.4 percent, and adult women was 7.1 percent.
Interestingly, the Bureau of Labor Statistics does collect data
on veterans in its monthly report, but does not publish the
data.
One would think that given the current War on Terror and
the recognition that veterans are an important sector of
society, veterans would be included in any national level
unemployment report.
The following table from the Veterans' Employment and
Training Service illustrates today's employment challenges to
veterans, and as you will see things are not good.
Everything is working, our slide is up there. I am
impressed.
Using 2008 national data for comparison it appears that
veterans in general continue to have lower unemployment rates
than their non-veteran counterparts. However, that same data
shows that younger veterans still experience significantly
higher unemployment rates than older veterans and non-veterans.
But veterans are supposed to have some advantages in seeking
employment in the private sector, especially by companies that
are Federal contractors.
Title 38, section 4212, requires Federal contractors to
take affirmative action to hire veterans and task State
employment services in the Department of Labor with its roles
in promoting hiring by Federal contractors. I believe each of
those bear some responsibility in achieving the goals of
section 4212.
While there are many reasons for higher unemployment among
younger veterans, lack of attention to veterans in general by
the Federal Government should not be among those reasons.
For example, in addition to not be identified in BLS data,
section 4212(c) of title 38 requires the Department of Labor to
report annually on veteran hiring by Federal contractors.
Included in that report the law requires the following data.
The number of complaints filed against Federal contractors,
the actions taken by the Department on those complaints, the
results of the Department's actions on those complaints, the
number of contractors listing job openings, the nature and
types of positions, the number of veterans given priority
referral by the local employment services.
If one looks at this section on Federal Contractor
Compliance on pages 20 and 21 in the most recent DOL report,
there is no data on actions taken to investigate complaints
regarding contractor's affirmative action to hire veterans. I
hope the office of Federal Contractor Compliance can explain to
us this lack of focus for us today.
Section 4212 also includes several requirements for
information to be supplied annually by Federal contractors
which are included in the VETS-100 Report, which should form
the basis for the Department's annual report to Congress.
I have a feeling that the only time anyone looks at the
VETS-100 Report is when DOL receives a Congressional inquiry.
Finally, the question of enforcement raises an issue of
common sense. We hear suggestions of failure to have an
affirmative action plan or submit the VETS-100 Report should be
grounds for debarring a company from doing business with the
Federal Government. While I fully support affirmative hiring
under section 4212, it is not really--we really don't think
that the Federal Government is going to debar a contractor like
Lockheed or IBM, Pfizer or Boeing. The only alternative is to
fine such companies, and there is no provision in the current
law.
I also believe we should take a close look at whether
placing the investigation responsibility with OFCCP is the
right thing to do, and whether that responsibility should more
promptly reside in VETS.
Madam Chair, the situation surrounding section 4212 is less
than optimal, and I hope that we can all work together to fix
it. And I yield back my time.
[The prepared statement of Congressman Boozman appears on
p. 30.]
Ms. Herseth Sandlin. Thank you, Mr. Boozman.
We do have a vote pending. There are about 11 minutes
remaining, so we will invite the first panel up and recognize
our first witness, and then we will have to take a short recess
to vote.
I would like to welcome the first panel with us at the
Subcommittee today. Joining us is: Mr. Thomas Whitaker,
President of the National Association of State Workforce
Agencies (NASWA) and Deputy Chairman/Chief Counsel of the North
Carolina Employment Security Commission, accompanied by Mr.
Chad Sowash; Ms. Christina Roof, National Legislative Deputy
Director for AMVETS; Mr. Joe Sharpe, Director of the National
Economic Commission for the American Legion; and Mr. Rick
Weidman, Executive Director for Policy and Government Affairs
for the Vietnam Veterans of America (VVA). He is on his way I
am told.
We only have 10 minutes now, Mr. Whitaker, is your
presentation longer than 5 minutes? If so, I will recognize Ms.
Roof and you will be next when we come back. If you can keep it
to 5 minutes, you are recognized.
Thank you, Mr. Whitaker.
STATEMENT OF THOMAS S. WHITAKER, PRESIDENT, NATIONAL
ASSOCIATION OF STATE WORKFORCE AGENCIES, AND DEPUTY CHAIRMAN/
CHIEF COUNSEL, NORTH CAROLINA EMPLOYMENT SECURITY COMMISSION,
RALEIGH, NC; ACCOMPANIED BY SERGEANT FIRST CLASS CHAD SOWASH,
USAR, VICE PRESIDENT OF BUSINESS DEVELOPMENT, DIRECTEMPLOYERS
ASSOCIATION, INC., INDIANAPOLIS, IN; CHRISTINA M. ROOF,
NATIONAL DEPUTY LEGISLATIVE DIRECTOR, AMERICAN VETERANS
(AMVETS); JOSEPH C. SHARPE, JR., DIRECTOR, NATIONAL ECONOMIC
COMMISSION, AMERICAN LEGION; AND RICHARD F. WEIDMAN, EXECUTIVE
DIRECTOR FOR POLICY AND GOVERNMENT AFFAIRS, VIETNAM VETERANS OF
AMERICA
STATEMENT OF THOMAS S. WHITAKER
Mr. Whitaker. Good afternoon, Chairwoman Herseth Sandlin
and Representative Boozman.
On behalf of the National Association of State Workforce
Agencies I want to thank you for the opportunity to speak to
you today on Federal contractors hiring practices and the
performance of the U.S. Department of Labor, OFCCP, and
monitoring Federal contractor job listing compliance.
NASWA's members are the State leaders of the publicly
funded workforce system vital to meeting the employment needs
of veterans through the Disabled Veterans Outreach Program
known as DVOP and the Local Veteran's Employment
Representatives, or LVER programs.
In 2007, NASWA offered its members a new and free online
labor exchange service called Job Central National Labor
Exchange. We refer to that as the NLX. The NLX is a
sophisticated job search engine, which is the result of a
partnership between NASWA and the DirectEmployers Association,
DEA, a trade association of over 485 Fortune 500 companies.
State job banks across the United States can now transmit
job orders to each other, plus receive thousands of job orders
via electronic download from DEA members. Job orders are
updated daily, avoiding duplication and thus ensuring job
opportunities are open for veterans in a very timely manner.
FCJL compliance is provided through VETS Central, a sister site
of the National Labor Exchange.
OFCCP regional staff have recently been providing
inconsistent guidance to States and employers about VET
Central's validity as a compliance mechanism.
The situation was quickly addressed when national OFCCP, at
the urging of NASWA, responded offering guidance to their field
staff.
We are hopeful that the OFCCP's response will meet the
needs of our members, the employers, and ultimately provide
veterans with additional job opportunities.
Based on our experience with VET Central and OFCCP, as well
as available feedback received from the State workforce
agencies, we would like to offer the following recommendations.
Number one, Federal contractor list. NASWA's first
recommendation is for OFCCP to develop and maintain an official
list of Federal contractors who fall within Federal contractor
job listing requirements. This list should be shared with State
workforce agencies who, per regulation, have a legal
responsibility to refer only eligible veterans to Federal job
listing contractors.
As an example, in the last 9 months, my department in North
Carolina has made almost 500 veteran job development contacts
to companies considered to be Federal contractors, but without
an official list my agency cannot ever be sure whether they are
speaking with FCJL contractors or not.
Number two, increase staff. Our second recommendation is
for additional OFCCP staff. In North Carolina, my agency was
told that it would take up to 6 months for OFCCP to arrange a
meeting with my agency and employers. It is common in many
States to have no contact between State workforce personnel and
OFCCP staff. That is unacceptable.
Number three, training. Our third recommendation is for a
comprehensive training of OFCCP's field staff to ensure laws
and regulations are administered properly and uniformly.
Number four, clarify and communicate roles of all involved.
Our final recommendation is for the U.S. Department of Labor to
clarify and communicate the appropriate roles and
responsibilities of all involved Federal agencies and State
entities. NASWA would be pleased to assist in this effort by
initiating a meeting between our members and the relevant U.S.
Department of Labor agencies and possibly employers.
Thank you again for the opportunity to comment, and we
stand ready to work on these issues.
[The prepared statement of Mr. Whitaker appears on p. 31.]
Ms. Herseth Sandlin. Thank you, Mr. Whitaker. Did you have
a presentation to make at this point?
Sergeant Sowash. Yes.
Ms. Herseth Sandlin. About how long does that take?
Sergeant Sowash. It will take 5 minutes.
Ms. Herseth Sandlin. That will bring us down to zero time
remaining on the vote. So while we will have 15 minutes after
that, I know the Majority Leader is interested in trying to
address this issue sooner rather than later. We will have to
come back for the presentation because we don't want to rush
you. We do need to head over to the Capitol now.
We will recess for about 30 minutes and we will return.
Thank you.
[Recess.]
Ms. Herseth Sandlin. Thank you for waiting on us. And now
we will look forward to getting the presentation from Sergeant
First Class Sowash. Thank you for being here and thanks for the
work that you are doing. You are recognized for 5 minutes.
STATEMENT OF SERGEANT FIRST CLASS CHAD SOWASH
Sergeant Sowash. Thank you, good afternoon Chairwoman and
the rest of Committee.
I am Sergeant First Class Sowash, I am a U.S. Army
Reservist, and I am sure you all know Army reservists are also
civilians with jobs on the outside, so I am also Vice President
of Business Development for DirectEmployers Association, and
would like to share with you parts of the National Labor
Exchange that actually focuses on getting veterans job, which
is very near and dear to my heart.
So first thing we do is we go to the National Labor
Exchange and we have got areas of interest, or you can actually
just come over here for the actual veterans JPEG and it will
take you to our VET Central site.
Now this site is focused on being able to help veterans to
find jobs, and also to be able to single out Federal
contractors for veterans. You can search via a keyword, which
is very common on the Internet, but you can also search--if you
are in the military, you can search by your military
occupational specialty (MOS) or your military occupation (MOC)
or what have you. So if you actually put in--let us say for
instance 63 Juliet enlisted in the Army, I am just going to do
an open search with that, then you will actually see that that
MOS actually crosses over and pushes out civilian jobs that are
comparable to the tasks, or I should say is skill sets, that
that military person actually had. So as opposed to them trying
to think of different key words that would fit them, they can
just put their MOS in and they can see different jobs that
focus on what they have done and their experience.
As you can see, little American flags, those denote Federal
contractors. Obviously who give preference to veterans, which
is obviously very important. If a veteran wants to only see
jobs from Federal contractors, all they have to do is press
this link right here and all that will show are jobs that are
Federal contractor jobs.
One thing that is extremely important that we believe from
DirectEmployers Association is we actually--we have the best
interest of our member companies in mind, because we are a non-
profit and we represent close to 500 of the Fortune 500
companies. So what we do is we send the veteran, we send the
job seeker directly to the job on the corporate site. So this
allows the job seeker to apply directly to the company as
opposed to a third party, and it makes it much easier for the
job seeker to get into the corporate database as opposed to
applying to a third-party database. So again, trying to be more
efficient and help with labor market efficiencies, as obviously
on the other side of the ball trying to get veterans jobs as
quick as humanly possible.
We back out to just the home site, you can see again, you
can do any sort of keyword type of search, look for mechanic in
Iowa, and once again you will see the Federal contractors jobs
and you can go ahead and just focus on the Federal contractor
jobs and click right through to the corporate site. This job is
actually on the corporate site, so when I am applying right
here I am applying to that company, I am not applying off to a
job order or what have you.
Do this real quick, and I will actually give you an idea of
the companies that comprise DirectEmployers Association. And
again, these companies, when America's Job Bank (AJB) went
away, wanted to, needed to, had to get their jobs down to the
local level so that veterans could have an opportunity to
actually see their jobs. So this is one of the mechanisms that
was used was a Web interface was VET Central.
The main mechanism that is actually used is e-mail. We e-
mail well over 3,500 different local veterans representatives
and different local Wagner Pfizer locations with opportunities
on a daily basis. So when a veteran walks through the door, and
obviously a vet rep have these e-mails sent to them on a daily
basis, they will have new and fresh jobs available to them. I
appreciate the time.
Ms. Herseth Sandlin. Thank you for the presentation.
Sergeant Sowash. Thank you.
Ms. Herseth Sandlin. Very helpful.
Ms. Roof, you are now recognized. Welcome back to the
Subcommittee.
STATEMENT OF CHRISTINA M. ROOF
Ms. Roof. Thank you, very much glad to be back.
Madam Chairwoman, Ranking Member Boozman, and distinguished
Members of the Subcommittee, on behalf of AMVETS I extend our
gratitude for being given the opportunity to discuss and share
with you our views and recommendations on Veterans' Affairs
contracting policies relating to title 38, section 4212.
AMVETS believes that the use of qualified veterans in
Federal contracts is vital to the reintegration and business
success of our veteran community.
AMVETS also believes that our veterans deserve the full
opportunity to participate in the economic system sustained by
their service.
The Committee has my complete statement for the record, and
in my oral statement today, I would like to focus on compliance
auditing ensuring title 38, section 4212, law is withheld in
all VA contracts.
Contractors are required to develop and implement an
affirmative action plan that complies with regulations that
support three separate Federal laws as we are discussing today.
These are Executive Order 11246, amended, the Rehabilitation
Act of 1973, and VEVRAA.
Aside from VA, there are two agencies in place to perform
the oversight of these laws. The DOL and their OFCCP.
The OFCCP is charged with monitoring Federal Contracts for
Compliance to these three laws, as well as investigating any
complaints against employers bound to these laws by a Federal
contract.
It is important to remember these laws encompass both
contractors and subcontractors involved in any procurement
process with the government.
Performing audits and compliancy testing of Federal
contracts are important tools to ensure that the purpose for
the agreement and the performance of the contract actually
occurs, and that all title 38, section 4212, compliance is
maintained throughout the entire contract.
VA lacks reasonable assurance, at minimum, that it is
receiving services that it has paid for and that contractors
are taking all necessary steps to ensure our veterans' rights
under title 38 are protected.
To AMVETS knowledge, VA rarely performs any compliance
audits of completed projects. In non-government owned and
operated businesses, audits of contracts often occur up to 5
years upon contract completion.
AMVETS recommends that VA include and enforce more
uniformly this practice, as well as contractor's performance
under the contract. This provides validation to VA that all
terms of the contract, and most importantly ones regarding
title 38, section 4212, were met and completed in the agreed
manner.
AMVETS believes compliance audits are essential to the
stability of a contracting system. It is in the opinion of
AMVETS that a major impediment to current VA contracting policy
is that of reactionary audits or audits that occur after a
problem is identified.
Over the past few years, VA, OFCCP, and DOL audits have
shifted from enforcement to more reactionary compliance audits.
Enforcement audits will allow VA to accurately validate and
measure the current processes in place, identify those that
need enhancement, and isolate weak processes that lead to
fraud, collusion, and most importantly infringements to the
title 38, section 4212, which protect our veteran population's
business success.
AMVETS recommends the re-implementation and regular use of
enforcement based audits.
AMVETS believes that a contributing factor in the failure
of current compliance testing methods is on the overall process
itself.
VA and OFCCP compliance auditing methods are unnecessarily
lengthy in our opinion and lack accountability in uniformity.
This reactionary style of auditing Federal contracts has proven
ineffective to OFCCP because of the challenges it faces in
locating former employees and records to substantiate the
allegations of discrimination.
These types of audits usually result in small settlements.
Unfortunately, the small settlement option not only costs VA
millions of dollars every year, but more importantly, it costs
our veterans their due entitlements sustained by their service.
Madam Chairwoman, Members of the Subcommittee, AMVETS
thanks you for inviting us to partake in this discussion and is
available for questions.
[The prepared statement of Ms. Roof appears on p. 33.]
Ms. Herseth Sandlin. Thank you for your testimony.
Mr. Sharpe, you are now recognized for 5 minutes.
STATEMENT OF JOSEPH C. SHARPE, JR.
Mr. Sharpe. Madam Chairman and Ranking Member Boozman, and
Members of the Subcommittee, thank you for the opportunity to
appear before you to discuss Federal Contract Compliance.
In the Federal Register of August 8, 2007, OFCCP
significantly expanded the responsibilities of Federal
contractors concerning their affirmative action plan for
veterans.
The Federal Register noted that Federal contractors are
required to conduct active outreach to find veterans; going far
beyond posting their Internet listings.
Persons and organizations that Federal contractors are
directed to partner with to ensure appropriate outreach for
eligible veterans are the Local Veteran's Employment
Representative, the Department of Veterans Affairs Regional
Office, veteran counselors and coordinators on college
campuses; and the service officers of the national veterans'
groups active in the area of the contractor's establishment.
Based upon dialog with Local Veteran's Employment
Representatives, veterans, and other organizations across the
country, the American Legion found that Federal contractors
have not consistently enlisted the assistance and support of
the above mentioned persons and organizations in recruiting and
developing on-the-job training opportunities for qualified
disabled veterans, recently separated veterans, other protected
veterans, and Armed Forces service medal veterans to fulfill
its commitment to provide meaningful employment opportunities
to such veterans.
The American Legion recommends that a VETS-100 Report
should no longer be filed electronically, because it goes
around the laws intent of bringing employers and the One-Stop
Career Centers together to discuss and develop employment
opportunities for veterans. The American Legion also recommends
VETS-100 be amended to measure direct compliance with OFCCP
regulations. And additionally, the American Legion recommends
that the Federal Contractor Veterans Employment Program
presently under OFCCP should be placed under the direction of
the Department of Labor's Veterans' Employment and Training
Service so this program can receive proper oversight, as well
as input and guidance from stakeholders.
It is vital that eligible veterans to receive a fair and
proportionate amount of Federal employment from Federal
contractors so these veterans can build and maintain a quality
of life while they contribute to the United States economy.
Madam Chairman, that concludes my statement.
[The prepared statement of Mr. Sharpe appears on p. 36.]
Ms. Herseth Sandlin. Thank you, Mr. Sharpe.
Mr. Weidman, welcome back to the Subcommittee. You are now
recognized for 5 minutes.
STATEMENT OF RICHARD F. WEIDMAN
Mr. Weidman. Thank you, Madam Chairwoman. Mr. Boozman, Mr.
Moran good to see you again, and Mr. Teague.
The FCJL started in the Readjustment Act of 1973, and it
was an effort by many Members of Congress to do something for
Vietnam veterans who were struggling in a terrible job market
when we came home in the early seventies, which was only
compounded by the OPEC induced gas shortage, which only drove
that in recession to be much longer and much deeper than
anybody anticipated. It was a well meaning thing, but any kind
of law that is passed without a mechanism for enforcement and
implementation and compliance simply begs the question.
Unfortunately, OFCCP is full of terrific people, like the
gentleman who has sent up his sacrificial lamb this morning,
Lorenzo Harrison and Mr. Teague, he is a born again New Yorker.
As soon as he could leave Teaneck, New Jersey, he moved to the
city, so be easy on him.
The problem is, is they are not set up to be able to do
their job. They don't do their job for women, they don't do
their job for ethnic minorities, and they don't do it for vets,
simply because they do not have the tools.
In about 2000, 2001, my good friend Congressman Jerry
Solomon from Upstate New York, pushed hard to have improvements
made to the VETS-100 Report, and that was then incorporated in
the Jobs for Veterans Act as well, and then it took 5 years,
plus to finally get the regulations in 2007, which have mostly
been observed in a breach.
The question is, what do you do with the information and
who enforces it? Perhaps moving it to VETS would help, but
frankly we doubt it.
The entire set of tools, whether that in the Public Labor
Exchange model of the DVOPs, LVERs, OFCCP, Federal contract job
listings, and every other tool that we have depends upon a
Public Labor Exchange that works, and I would submit to you to
this distinguished body today that we do not have a Public
Labor Exchange that works probably, and certainly does not work
probably for veterans.
I have recommended a number of steps on behalf of Vietnam
Veterans of America that would take us to a point where perhaps
we could do this, have something that actually worked for the
young people coming home.
First, and foremost, we urge that you federalize the DVOPs
and LVERs and have them report directly to the Directors for
Veterans' Employment (DVETs) across the country.
In many cases where the labor exchange actually does work,
and there are States like South Dakota, and you are fortunate
Madam Chairwoman that you have a State where it does work
pretty well and it works pretty well for vets too, but in most
States like New York, it doesn't work well at all. And so, on a
memorandum of agreement, those now Federal employees, DVOPs and
LVERs, could go right back into the same office on a memorandum
of understanding, if in fact, it is an atmosphere that is truly
practicing priority of service to veterans and in fact it is
conducive to assisting veterans, particularly disabled and
recently separated veterans. So it is a tool that would allow
us to continue where it is working, and where it is not working
to have alternatives to make it work.
Secondly, we now have a Secretary of Labor who is deeply
committed to veterans, and her track record in the Congress
suggests that she will in fact take steps to do it. But we also
need an Assistant Secretary for Employment and Training who is
committed. That is where the power lies and that is where the
money lies at the Department of Labor. And until we have an
Assistant Secretary of Employment and Training who is as
committed to veterans as the Assistant Secretary for Veterans'
Employment and Training, as well as a Secretary and a Deputy
Secretary, we are not going to get much head way.
Thirdly, there needs to be a significant increase in the
funding for the DVOP/LVER program to at least $200 million
fiscal year 2010.
Fourth, the Secretary of Labor needs to commit significant
amounts of discretionary Workforce Investment Act funds to
reward the States that do the best job in providing actual
employment and training services.
Fifth, employers who are Federal contractors who--and if
you do all those we will start to have an effective DVOP/LVER
system again. And then if you have employers who are Federal
contractors who want to do the right thing and who now need to
have a signature from the Local Veteran's Employment
Representative that in fact they have listed their jobs in that
State where that location is, and at that point without that
then they would be barred from seeking further contracts or
securing contract extensions.
If there are no teeth there might as well not do the law.
There has to be some mechanism for enforcement that is not over
labor intensive; no pun intended.
And sixth, since OFCCP is not now, nor has it ever been
effective, VVA proposes that veterans be given a right to sue
Federal contractors for discrimination when they do not hire
veterans, with up to $300,000 punitive damages in addition to
any actual damages, plus attorneys' fees.
It will only take a very few cases and the rest of the
contractors will be coming and beating their way to the LVER's
door to get signed up and to list jobs and to follow through
with a proper plan to seek and hire qualified veterans,
particularly those young people coming home today and those who
are disabled veterans.
I thank you. I see my 5 minutes is up. And thank you for
the opportunity to share these thoughts with you today, Madam
Chairwoman.
[The prepared statement of Mr. Weidman appears on p. 38.]
Ms. Herseth Sandlin. Thank you, Mr. Weidman. What value do
you place on the VETS-100 Report?
Mr. Weidman. In the absence of an effective mechanism in
order to do job matching, we don't place a lot.
I must admit I was surprised today because I know of most
of the military job boards and I had never heard of VETS
Connect, so I apologize to the distinguished vice president of
that outfit for never having heard of it, and there has to be a
way to get the listing of jobs to the individual.
The first Public Labor Exchange was in New York City
founded in 1935 because it became too big for the Village Green
to work anymore. And similarly in our country, the reason why
we have veterans' preference, the reason why we have service
disabled veteran businesses set aside, and the reason why we
have OFCCP for Federal contractors is because we don't have
bounty lands to give away to veterans as a reward for service
and sacrifices made.
And so we need a mechanism, whereby first dibs on jobs,
either in the Federal workforce or in the Federal contractor
workforce, can go to qualified veterans. And we need some kind
of mechanism to close that gap, ma'am, and we don't have that
mechanism today.
Ms. Herseth Sandlin. Your response, what you just said in
terms of not being aware of the VETS Central Web site was going
to be a question I was going to ask the sergeant, but let me
just ask each of you a question related to this.
Mr. Weidman, do you think it was a mistake to terminate
America's Job Bank? And what is your opinion of its private
sector successor, Job Central, with the technical operations
being conducted by DirectEmployers Association and the Web site
that they have created that you saw today?
And then my question, Sergeant, is how do veterans learn of
this Web site?
Mr. Weidman, if you could answer first.
Mr. Weidman. At the risk of reliving and reviving bad
history, I thought that the way in which and the fact of ending
the Public Labor Exchange and America's Job Bank, given the
number of States that depended on that mechanism was highly
irresponsible and a shameful decision and a shameful action.
The transfer over, if you will, to VET Central, as you
might well imagine, Madam Chairwoman, I keep up on a lot of
stuff when it comes to economic affairs and veterans, and was
not aware of Job Central--VET Central and what they were doing
in the same way, and I do not believe that it has replaced what
we had 15 years ago when we had at least something that
approached an effective Public Labor Exchange on a national
basis.
Sergeant Sowash. Thank you, Madam Chairwoman.
When America's Job Bank did go away, the employers
mobilized to be able to create something that would replace it,
especially with regard to getting jobs down to veterans at the
local level. And I am assuming after this session we will have
an opportunity to actually speak and get you a little bit more
educated about the National Labor Exchange the way it is today.
Because there are actually more--we have 48 States that are
actually participating in the National Labor Exchange, which
actually is more than America's Job Bank had when it went away,
which is very surprising to me right out of the gate with
regards to uploads of jobs and downloads of jobs.
When we created the National Labor Exchange, along with our
partners NASWA, we actually went down to the State level and we
asked them what they liked about AJB and what they didn't like
about AJB, and that is where we started. That was ground zero
for us in creating a new National Labor Exchange, and actually
creating relationships with North Carolina and other States,
and being able to understand what happens at the local level so
that we can get jobs down to the local level and we can ensure
that when veterans come through the door, they have jobs
available to them.
So I think this is actually more of an awareness for maybe
this whole room and maybe even more, that the National Labor
Exchange is actually a lot bigger than America's Job Bank was
with regard to participation when it went away.
Ms. Herseth Sandlin. Thank you. Mr. Whitaker, what was your
experience with America's Job Bank, and what was that
experience in relationship to now working with DirectEmployers
Association and VET Central?
Mr. Whitaker. We had an experience with the America's Job
Bank, and I think it--when it started it was new and novel and
provided a different layer and a different way to provide
service too, but over a period of time, it lost some of that
extra service that it could provide.
There were issues with the America's Job Bank with funding
and being able to continue, because a lack of funding and some
commitment from a number of States and other areas to be able
to keep up with the new technology in providing service as
customers expected that, and providing service in a very
effective way.
So when the America's Job Bank ended there was certainly--
or when it was coming to an end, there certainly was a vacuum.
And NASWA, as a representative of the State workforce agencies,
was aware of that issue, and we received a number of proposals
from entities desiring to replace the America's Job Bank.
We selected Job Central and VET Central because of their
proposal, because it is a free service to the States, it is a
free service to veterans, and we believe it is working very
effectively to replace the America's Job Bank and it is getting
better every day.
Ms. Herseth Sandlin. Thank you. Mr. Boozman.
Mr. Boozman. Thank you, Madam Chair. I would like to go
ahead, with your permission, to pass my time in this round or
to skip me and to go to Mr. Moran. He has an appointment in the
future.
Ms. Herseth Sandlin. Mr. Moran.
Mr. Moran. Thank you, Mr. Boozman and Madam Chairwoman.
Mr. Weidman, you mentioned in your testimony, perhaps kind
of offhand about how South Dakota has a good program and New
York less so. Is there some objective standard, or is there
something that I as a Member of Congress ought to be paying
attention to, looking at, that would give me a clue as to how
the programs are fairing across the country and particularly in
my State of Kansas?
Mr. Weidman. The smaller States tends to do much better,
Mr. Moran, and from that point on having said that, it has to
do with acculturation and a corporate culture that is built up
around the State workforce development agency in that
particular State.
So, that as an example, New Hampshire had a very strong
veteran influence and always has been very good and has always
worked very closely with VA voc rehab and State rehab
particularly on dealing with disabled vets. South Carolina is
very good. North Carolina is pretty good. Both the Dakotas are
pretty good. In western Kansas where you are from, it is
actually pretty good. It is tougher in the more urbanized
eastern part of the State. And that pattern pretty much follows
around the country. Is the more urbanized the area, the more
difficult it is for a number of reasons. When it comes for
veterans employment I am talking about.
Part of that has to do with the structure of the DVOP/LVER
Program. You can attract people in a less urbanized area for
what they are able to pay, and so that has partly to do with
it, and part of it has to do with simply the sociological
culture and the respect for veterans that you find are often in
the more rural areas.
Mr. Moran. Thank you very much.
Let me ask you an additional question, a more specific one.
You suggest barring Federal contractors who do not comply with
section 4212. Do you worry about with all the consolidation
that has gone on in recent years, that such a move would put
veterans who are working at those companies at a greater risk?
Are there consequences for the veterans in barring those
Federal contractors?
Mr. Weidman. You have to have a way for people to
reasonably get listed first and foremost, and you have to have
a way to get the listing to people. VET Central may be one of
those means. There are a number of private job boards. The most
effective one, which we found we endorse in the VVA, and also
others endorse, is VET Jobs.
So as long as it is clear to the employer community and to
the Federal contractor community what the requirement is and
how to satisfy it, I do not see it as placing veterans at a
disadvantage.
What often has happened in my experience over the years,
and unfortunately, Mr. Moran, I am an old guy, I have been at
that for a long time, since 1973 dealing with veterans
employment when I was doing it as a volunteer while teaching
full-time at one of the Vermont State colleges, and once you
get veterans through the door then they prove themselves and
that employer generally says okay, I want to hire some more of
those folks. They show up on time, they work hard, they are
drug free, and they do whatever needs to be done to get the job
done and out the door. And if that means staying an extra hour,
they will do it and don't even blink an eye.
So the question is getting a leg up to get in the door. So
I don't see it for those who are already working for Federal
contractors as being an impediment to their future.
Mr. Moran. Because they have proven themselves.
Mr. Weidman. Because they have proven themselves, and
frankly, set a good example.
Mr. Moran. Right.
Mr. Weidman. And a smart employer. Ross Perot became a
billionaire hiring only veterans. It is useful to remember.
Mr. Moran. Let me ask Mr. Sharpe. You suggest moving the
Office of Contract Compliance to the VA. I want to see if
others agree with you. I am sorry, the Veterans' Employment and
Training Service, not the VA. Do you agree with the Vietnam
Veterans Association, that disabled vet outreach program
specialists and local vet employment representatives should be
federalized?
Mr. Sharpe. We do believe that it should be moved to the
Veterans' Employment and Training Service. That seems to be the
consensus that we receive from those that work in that
particular office all across the country. Many of them feel
like the program is not working. There is a communication
problem. Very little oversight. And we believe the only way
that we could really improve the program overall is for it to
be in the Veterans' Employment and Training Service Program.
It just seems logical that, you know, they are already
looking at Uniformed Services Employment and Reemployment
Rights Act, they already have the job of finding employment for
veterans. That should be another component instead of it being
spread out in so many different offices.
And as far as federalizing, that is the only way that we
see that the Department of Labor can adequately monitor the
money that is being sent to the States.
Right now there is very little compliance. The monitoring
is not there. There is no way to actually track where the money
is actually going. Every State that we have talked to, I mean,
the complaints are, you know, are just astronomical.
Mr. Moran. Do you mean complaints by veterans?
Mr. Sharpe. Complaints by veterans, complaints by DVOPs,
LVERs, DVETs. They feel like the program is not being properly
administered and that veterans are not receiving their
preferences, their priority in job services, and we just feel
like if it is federalized then Washington can really keep track
of where the money is going, how is it being spent, and how is
it being used.
Mr. Moran. Thank you very much. Thank you Mr. Chairman.
Mr. Adler [presiding.] Mr. Teague.
Mr. Teague. Yes, thank you, Mr. Chairman, Ranking Member.
I would like to thank the panel for being here today and
all of the information that you have given, the time that you
have given. But I am a little concerned that we have--everybody
seems to be in agreement that people are ignoring the rules and
just being able to slide by. And you said, Mr. Sharpe, that you
think it should be federalized. Has anybody done any scoring or
anything to see what the cost of that would be?
Mr. Sharpe. Not that I am aware of.
Mr. Teague. Do you have any idea how many people it would
take it to do it or anything?
Mr. Weidman. May I?
Mr. Teague. Sure, please do, yes.
Mr. Weidman. The administrative overhead of indirect costs
that goes to States now, out of the $162 million that is
currently there fiscal year going out to the States, our
scientific wild guesstimate is probably about $50 million worth
of services. The administrative overhead indirect costs runs as
high as 37 percent of that. For somebody who is making $35,000
a year, in some cases it is costing the Federal Government in
excess of $70,000 by the time you add direct and indirect
additional costs having to do with medical, insurance, et
cetera, plus what the State is giving out.
We hear from DVOPs and LVERs that part of the direct
administrative cost, which is travel moneys, and other kinds of
supportive services, is not made available particularly when it
gets to be in a budget crunch in that particular State. But the
States aren't giving the money back to the feds.
So you have to ask the question here, are we getting the
bang for the buck, and are we doing the right thing by the
young men and women coming home? Not everybody is going to need
a Vet Center, not everything is going to need medical care, but
everybody is going to need a job, whether they are guard,
reservists, or returning active duty from the wars, and it is
the key readjustment program, and it is the flash point of the
whole readjustment process, is the ability to obtain and
sustain meaningful employment.
And so that is why, sir, that we believe that $162 million
would be enough to start, but with the cost of federalization,
and it would be probably higher pay in certainly some
localities, that is why we recommended at least $200 million
for fiscal year 2010 to handle those transitional costs. Those
who wanted to stay as State employees who didn't have the
opportunity in most States under their own Civil Service laws
to transfer and become regular employment counselors within the
office. Those who wanted to commit to working with vets would
then go with the feds.
Mr. Teague. I think probably the answer to both of the
questions that you asked about, how good a job we are doing for
our veterans, is probably no, we are not doing a very good job.
But I also heard you make a statement earlier in your
testimony that you thought the programs work better in rural
than urban areas because they were willing to work for the
price that people paid. Would you explain that a little
further?
Mr. Weidman. I will give you an example, sir. Under
Governor Cuomo I had returned to New York State and ran the
State Veterans Employment and Training Program for 9 years. The
person that you could attract in Watertown, New York, or in
Massena, New York, in the north country for what I could pay as
a beginning DVOP or LVER, which was about $35,000 a year, that
is a pretty good job up there. In New York City, $35,000 you
can't live without doing a second job.
So I had DVOPs in New York City 15 years ago who were
working three jobs in order to be able to feed their kids and
pay the rent. So that is why I say if we transitioned over to
Federal employment, paid people decently, and with the
differentials that are paid, depending on locality and Federal
pay, we would be able to hold our people and not have them
working themselves to death by working a second and third job
just because they want to work with vets during the day.
Mr. Teague. Okay, thank you. Thank you, Mr. Chairman.
Mr. Adler. I would like to hear Ms. Roof for a second.
VEVRAA requires Federal contractors and subcontractors to
compile and submit annual reports on the number of employees
who are veterans. Has there been any concern about the lack of
reporting and what happens when a Federal contractor or
subcontractor does not submit a report, and who reviews the
reports?
Ms. Roof. You know, I am really glad you brought that up,
that was one of my and AMVETS main concerns when going through
this as I am calling compliancy auditing process.
There is not enough information out there, and if there is
we were unable to find it.
Also could you ask your first part the question, I would
like to address each point of it.
Mr. Adler. Is there a requirement in VEVRAA to file and
submit reports? Contractors and subcontractors. Are they doing
it? If so, who gets access to the information? Is the
information adequate? Because it seems to me the essence of
this is trying to get veterans jobs. And if we have this
information in the system we should be able to access it. So is
the information in the system and who is using the information
and how?
Ms. Roof. And again, I think the VA is doing a good job
getting the information into the system to a certain extent,
but I think that is where it stops.
There is no compliancy auditing to check on these
companies. To make sure that the information they submitted was
not just an initial submission to get a contract, but that the
veterans are actually being used. I think that is where the
OFCCP comes in.
Again, that's why I touched on doing more audits, because
things can look great on the front end, and I am going to
submit all the information, it is going to go into the system,
but now who is going to hold me accountable to that, to what I
submitted?
And as far as who has access, I am not really sure to be
quite honest with you. I can look into that and get back to
you.
Mr. Adler. I would ask if any of the other panelists know.
I have certainly asked the VA the same question. Do any other
panelists know what happens with the VEVRAA information? Does
it come in? Are contractors and subcontractors complying? And
are people getting access to the information?
Mr. Weidman. If you mean does the average DVOP and LVER in
a local office have access to this Federal contractor list the
answer is I don't believe so.
Mr. Adler. Anybody else?
All right, thank you. I thank all the panelists for your
testimony this afternoon. Oh, I am sorry, you have got more?
Mr. Boozman, please proceed.
Mr. Boozman. I have just got a couple.
On the, and I made reference to it in my opening statement,
on the VETS-100 Report how do you think we should disseminate
that information? Evidently it is not getting out. Have you got
any sort of advice as to an appropriate way to get the
information out?
Mr. Weidman. Well putting it online is one way and let
veterans market themselves. Essentially the vets who are
getting jobs today more and more are on their own, and that is
despite the fact there are some wonderful DVOPs and LVERs out
there and people can't get to them or they don't have time to
see the number of people that need help within their community.
So veterans are having to market themselves more and more.
If, in fact, you had those listings online, the only place
where I know there is a complete list that is searchable by
State, by zip code, is through the small business that I talked
about in Montpelier, Vermont, but there may be other ways. And
then you have voluntary efforts, such as put together by
DirectEmployers apparently, is one way to do it.
But if you put it online and we give veterans some
additional tools--as an example, there is for all disabled
veterans a tax credit of $6,000 that the employer gets back for
the first $12,000 paid to any disabled vet. Instead of leaving
it all up to the employer to do that, give the vet a
certificate, simplify that program where he can walk into your
office in Arkansas and say I have a certificate, I am skilled
as an optician, optician assistant, you hire me and you get
back the first $6,000 of the first--$6,000 of the first $12,000
paid you can take off what you owe the feds. So you let
veterans go market themselves. And the more you put the things
out there, then you will have other services like
DirectEmployers, like VET Jobs, and others who will work with
the individual veterans to market themselves.
But that begs the question of does there need to be a
publicly funded mechanism to accomplish the most important task
in the readjustment process for our younger veterans who are
returning home? And we don't have an effective mechanism and we
need to create one, and we stand ready to work with you, Mr.
Boozman, with Chairwoman Herseth Sandler, and with Mr. Adler,
and with all other Members of the Committee to create a new
paradigm that works.
Mr. Boozman. A few years ago we allowed the ability for
part-time DVOPs and LVERs. Is that a good idea or bad idea?
Mr. Weidman. With all due respect, VVA never supported the
part-time DVOPs. I mentioned that for 9 years I ran what at
that time was the second largest program in the country and
eliminated part-time LVERs, even though it meant at some of the
smaller offices LVERs had to split their time between two
separate small offices because you didn't get 100 percent of
the person. It is supposed to be 50 percent DVOPs. You are
lucky if you get the equivalent of 1 day a week, and that is
just the plain fact, and that is not just from me. You can talk
to folks right across the country and you will get the same
answer. It was not a good idea, sir.
Mr. Boozman. Gentlemen, would you like to comment?
Mr. Sharpe. We also agree that it is not a good idea. We
hear from DVOPs and LVERs again from all over the country. They
have been complaining about this program ever since it was
enacted. Many of them complain that they are not working with
veterans, they are forced to do other duties, other clerical
type activities, and that was not the intention.
We were also told that the DVETs are being told not to
visit the One-Stop offices as they used to, so it is very
difficult for them to monitor and ensure that those offices are
in compliance. And because of that we have been against it.
Mr. Boozman. Thank you guys for being here. As always you
are very, very helpful. Yield back.
Mr. Adler. I also thank all of you for taking the time to
be with us and for your service to our country. Thank you so
very much. You are excused with our gratitude.
We have a second panel. We now invite panel number two to
the witness table.
Joining us on our second panel are Mr. Lorenzo Harrison,
Acting Deputy Assistant Secretary for the Office of Federal
Contract Compliance Programs, United States Department of
Labor; and Mr. Jan Frye, Deputy Assistant Secretary for
Acquisition and Logistics, United States Department of Veterans
Affairs.
Mr. Harrison, welcome, you are recognized for 5 minutes.
STATEMENT OF LORENZO HARRISON, ACTING DEPUTY ASSISTANT
SECRETARY, OFFICE OF FEDERAL CONTRACT COMPLIANCE PROGRAMS, U.S.
DEPARTMENT OF LABOR; AND JAN R. FRYE, DEPUTY ASSISTANT
SECRETARY FOR ACQUISITION AND LOGISTICS, U.S. DEPARTMENT OF
VETERANS AFFAIRS
STATEMENT OF LORENZO HARRISON
Mr. Harrison. Thank you Chairman, Mr. Boozman, and Members
of the Subcommittee. Thank you for this opportunity to testify
on Federal Contract Compliance.
The Office of Federal Contract Compliance Programs has an
important and unique role in the enforcement arena in
protecting veteran's rights, ensuring that covered veterans are
provided with equal employment opportunities, and that
companies doing business with the Federal Government take
affirmative action to recruit, hire, and promote qualified
veterans.
OFCCP is one of three agencies within the Department of
Labor with responsibilities for administering the affirmative
action provisions of the Vietnam Era Veterans' Readjustment
Assistance Act (VEVRAA).
The Employment and Training Administration oversees
priority referrals for veterans seeking employment, and the
Veterans' Employment and Training Service oversees the VETS-100
and VETS-100A Reports.
Under VEVRAA, Federal contractors are required to list most
job openings with the appropriate employment service delivery
system, and protected veterans are entitled to receive priority
in referrals to the job openings that Federal contractors are
required to list. However, VEVRAA does not require Federal
contractors to give veterans a special preference in hiring.
That is, VEVRAA does not require Federal contractors to give
veterans a special preference in hiring.
On average, OFCCP conducts approximately 4,000 compliance
evaluations and 900 compliance assistance events annually for
Federal contractors and subcontractors in supply and service
and construction industries.
During the compliance evaluation, OFCCP will verify that
Federal contractors are listing appropriate job openings with
the Employment Service Delivery System so that veterans may be
given priority in referral. That is, priority in referral, not
preference.
So far in fiscal year 2009, roughly 15 percent of all on-
site reviews conducted by OFCCP have found violations of the
mandatory job listing requirement by Federal contractors and
subcontractors, as we witness the application of private
entities like DirectEmployers.
OFCCP also receives approximately 500 to 700 complaints
each year, of which 15 to 20 percent of these are filed under
VEVRAA. During fiscal year 2008, OFCCP received 83 complaints
filed by veterans. Over the past 5 fiscal years, 19 complaints
resulted in $399,926 in benefits being provided to veterans.
Where voluntary compliance cannot be achieved, OFCCP may
continue to use conciliation efforts with the contractor, refer
the matter to the Solicitor of Labor to institute formal
administrative enforcement proceedings, or refer the case to
the Attorney General for litigation, as appropriate.
OFCCP does not presently have formal agreements to share
such information with other Federal agencies. We treat
information received from Federal contractors during a
compliance evaluation as confidential.
The Subcommittee also asked about the most important
analysis of the VETS-100 Report and associated result.
Previously, OFCCP did not analyze VETS-100 and VETS-100A
Reports, but only verified that these forms were submitted to
VETS.
Recently, OFCCP met with VETS and secured access to the
VETS-100 database.
In 2008, we established an incentive program called The
Good-Faith Initiative For Veterans Employment, affectionately
known as G-FIVE, and it recognizes the good efforts of
contractors in the area of veterans employment.
In summary, although we have made progress in addressing
equal employment opportunities for veterans among Federal
contractors and subcontractors, we know that there is still
work to be done to increase the employment of covered veterans.
OFCCP looks forward to working with our new Deputy
Assistant Secretary once that person is announced and on board,
and with Members of this Committee, in order to improve
opportunities for veterans with Federal contractors.
This concludes my oral statement, and I would be more than
happy to answer the questions of this Committee.
[The prepared statement of Mr. Harrison appears on p. 39.]
Mr. Adler. Mr. Harrison, thank you. Let me start with
something you said toward the end. You said, ``There is still
work to be done.'' Talk to us for a moment about that. What
should be done? What should your Department do? What should
Congress do? What should Federal agencies do collectively,
cooperatively to help our veterans get placed?
Mr. Harrison. One is to hopefully have President Obama and
Secretary Solis' 2010 budget ratified so that we can go about
bringing on 213 new Equal Opportunity Specialists, which would
increase considerably, definitively, compliance of contractors
under VEVRAA.
Two, we should be committed to working with the
DirectEmployers, National Association of State Workforce
Agencies, and other important stakeholders like the ones you
have just heard from, to ensure that veterans are being helped
and they are getting job prioritization, and that veterans are
getting assisted.
Mr. Adler. Let me follow up with the second one first. Why
hasn't there been that sort of effort with the panelist from
the previous panel to reach that sort of positive result in the
past?
Mr. Harrison. I believe there have been efforts in the past
to work with various stakeholders. OFCCP has been in operation
for 30 years. In recent years, there has been an emphasis,
systemic discrimination, that is on focusing on classes of
individuals who could have been harmed by personnel practices
that in some ways de-emphasized focus on VEVRAA.
Mr. Adler. So I just want to understand. We hire 213 more
people that are specialists----
Mr. Harrison. We haven't hired----
Mr. Adler. No, we do that. That is one of the things we do.
Tell me what else we should be doing going forward to enhance
the cooperation among agencies and with the various entities
that were represented by the panelists in the previous panel. I
just want to get a better sense of what we should be doing
collectively to address the needs of our veterans who want to
work.
Mr. Harrison. I mean, very simply stated, Congressman
Adler, a commitment to reaching out. Very simply stated, sir. A
commitment to reaching out to the panelists, to the diverse
stakeholder community on these issues, and a commitment to
following up on matters that are distilled in those kinds of
discourses, and, generally speaking, a commitment to reach out.
Mr. Adler. Let me just still understand. The commitment to
reaching out, does it come from the Department of Labor? Does
it come from some other entity?
Mr. Harrison. It comes from all of us that are involved in
seeing to it that veterans are treated as they should be. Those
of us interested in ensuring that VEVRAA is enforced to the
fullest extent. Those of us who are committed to veterans
getting the benefits again that they deserve. Most certainly it
includes a commitment from the OFCCP.
Mr. Adler. It is hard for me to quantify what that means, a
commitment to reaching out. I believe in it, I think everyone
in the room believes in it----
Mr. Harrison. Well, we have----
Mr. Adler. Let me just finish my question to you. Do you
have a sense in fact there is a commitment to reaching out on
the part of the Department of Labor at this point?
Mr. Harrison. I most certainly do, Congressman Adler.
We are, between now and next fall, that would be fall of
2010, going to conduct some 20 odd public forums that would
provide a platform like has not existed in recent years for
these issues to be further discussed, and commitments and
potential commitments made.
There will be over 1,000 compliance assistance events that
are non-enforcement driven opportunities--safe havens--for
partnerships to be made, opportunities to be distilled and
defined that would be beneficial to veterans.
Mr. Adler. I am truly gratified by the enthusiasm you speak
about in terms of trying to reach out to the veterans.
Do you have a sense there are other entities in Washington
within the Federal Government that don't share the Department
of Labor's commitment to reaching out, and how can we infuse
them with your enthusiasm?
Mr. Harrison. Well, I would hope that some of them are
sitting as witnesses in the gallery; otherwise, I don't know of
any, sir, that would be certainly against this kind of
collaboration.
We have strong partnerships with the Veterans' Employment
and Training Service and we have a strong commitment to
collaboration with the Office of Disability Employment Policy
at the United States Department of Labor. And as you know,
Secretary Solis is very committed to having a rigorous
enforcement program that would be beneficial to veterans in
this country when many men and women are returning from these
wars overseas.
Mr. Adler. I thank you for your testimony and for your
commitment. Mr. Boozman.
Mr. Boozman. Thank you, Mr. Chairman, we appreciate you
guys being here.
Mr. Harrison, you testified that 15 percent of on-site
reviews in 2009 have found violation of the job listing
requirements, as well as numerous cases where veterans claim
violations of section 4212. Assuming that OFCCP found similar
and other violations in past years, can you explain the lack of
any such data in the annual report required by 38 U.S.C.
4107(c)?
Mr. Harrison. No, I am unable to explain that, sir. Except
that I can say that those data will be publicly available in
the report that is going through clearance currently.
Mr. Boozman. Okay. I guess the next question, which we like
to know up here is, is when could we expect that?
Mr. Harrison. I would have to get back to you with that for
the record for the Subcommittee.
[The DOL subsequently provided the following information:]
Section 4212(c) requires that the annual report prescribed in
Section 4107(c) include information on the number of complaints
filed alleging that a contractor has failed or refused to
comply with its contractual obligations relating to the
employment of protected veterans. Accordingly, the U.S.
Department of Labor Veterans' Employment and Training Service's
(VETS) Annual Report to Congress for Fiscal Year (FY) 2008
included information on the number of complaints filed with
OFCCP involving claims by veterans. Although section 4212(c)
does not require the Secretary to provide information on
violations of VEVRAA uncovered during compliance reviews, such
as violations of the mandatory job listing requirement, that
information will be included in the FY 2009 Annual Report to
Congress and in future reports.
Mr. Boozman. Okay. Counsel reminds me that it was due in
February.
NASWA has mentioned several concerns about inconsistent
application of the laws and regulations by OFCCP field staff.
For example, e-mail posting are not considered compliant,
third-party posting are not allowed, many States lack the
technology demanded by field staff. More specifically, NASWA
members cited a lack of a comprehensive, official, and accurate
Federal contractor list, a lack of standardized communication
protocol, during and after audits, and minimal contact between
State and regional OFCCP staff. Can you comment on that?
Mr. Harrison. What I would say to you as was indicated by
Mr. Whitaker, as is reflected in the correspondence I shared
with Mr. Whitaker, we are absolutely committed to having a
topnotch professional core of Equal Opportunity Specialists
that abide by our guidelines and regulations. Those that were
distilled under the Jobs for Veterans Act, which amended VEVRAA
in 2002, it provides a tremendous amount of flexibility to all
of us who would have openings made available in an efficient
and effective manner for veterans.
Mr. Boozman. We are being told that DOL canceled the
Federal contractor job bank shortly after passage of the Jobs
for Veterans Act. Can you tell us why?
Mr. Harrison. No, I am unable to. I am unable to tell you
why, sir. I was not functioning in this capacity at that time.
Mr. Boozman. Okay. And as you have heard earlier, I think
there has been concern on our part. I mentioned in my opening
statement about really not using the VETS-100 data. I guess, a
question is, when was the last time that we really analyzed
that data? How is it being used?
Mr. Harrison. Well, as I mentioned, there will be detail in
this upcoming annual report. And I am encouraged that we may
find, via technological advancement, ways that were not
available prior to now in utilizing information provided by the
VETS-100 Reports to hopefully improve our evaluations of VEVRAA
and investigations of VEVRAA.
Mr. Boozman. Just one more thing. Is there a central
database of Federal contractors?
Mr. Harrison. No. Not all encompassing, sir. There are
various databases that we utilize to identify contractors.
Mr. Boozman. Is that something that we need to do? Would
that be helpful? And I guess the next question would be, if so,
who should maintain?
Mr. Harrison. The Department hasn't really arrived at a
position on that. I wouldn't want to misspeak about that. It
seems like that might be a policy related matter. I would have
to leave it there, Mr. Boozman.
Mr. Boozman. Okay, very good. Again, thank you for being
here and we appreciate your testimony.
Mr. Harrison. Thank you. It is an honor and privilege.
Mr. Adler. Mr. Frye, you are now recognized for 5 minutes.
STATEMENT OF JAN R. FRYE
Mr. Frye. Thank you, Mr. Chairman, Members of the
Subcommittee, thank you for the opportunity to appear before
you today to discuss VA's acquisition operations with regards
to Federal Contractor Compliance.
It is a privilege for me to represent the many dedicated
and hardworking acquisition and logistics professionals
throughout the Department that provide mission-critical support
every day to ensure quality care and benefit delivery for our
Nation's most special citizens, our veterans.
I have been asked specifically to address the issue of
Federal Contractor Compliance with regard to employment of
veterans in Federal contracting. The Committee requested that
VA respond to four questions, and I would like to take this
opportunity to do so.
The first question centers on how VA monitors contractor
compliance with 38 U.S.C. 4212.
VA contracting officers comply with the Federal Acquisition
Regulation (FAR). They are required to verify vendor compliance
prior to the award or modification of a contract. They may
accomplish this by several appropriate means, but in all cases
they rely on the Department of Labor's Veterans' Employment and
Training Service-100 or VETS-100 database to ensure that
apparent successful officers have completed the required
reporting for the appropriate reporting year.
To improve VA's oversight and ensure vendors doing business
with the VA are complying with the requirements I have
instituted two significant changes.
The first will be the issuance of an information letter to
VA's heads of contracting activities reinforcing that
contracting officers must be aware of this important
requirement and their responsibilities to query the VETS-100
database.
Second, to establish an electronic record of the
contracting officer's compliance with the policy I have
directed that VA's contract writing system be modified to add a
mandatory feature to require contracting officers to record
electronically the execution of a VETS-100 database query prior
to award or the exercise of contract options. This feature will
create the electronic record that VA will be able to use to
monitor compliance on a recurring basis in the future.
The second question from the Subcommittee inquired as to
how many VA contractors are non-compliant.
In response to the Subcommittee's request, we conducted a
review of a statistically significant, randomly selected sample
of contract files throughout VA.
All contracts in the sample had the appropriate FAR Part 52
contract clauses in place, and all contractors were fully
compliant with the Department of Labor's reporting
requirements.
Third, the Subcommittee requested information on any action
VA takes to address non-compliant contractors.
And last, whether noncompliance affects a company's ability
to do business with VA.
At this time, we are not aware of vendors who are non-
compliant. Non-compliance would affect a company's ability to
contract with VA. For those contractors deemed to be non-
compliant, VA will take action as set forth in FAR Part 22.
The first step of course would be to notify the Department
of Labor and then make efforts to negotiate a mutually
acceptable remedy. Failure to reach a remedy could result in
termination of the contract for default.
Mr. Chairman, I would like to close by thanking you for the
opportunity to discuss VETS-100 Reporting, and the Federal
Contractor Compliance program at VA. We will continue to work
diligently to improve and set a standard worthy of emulation
throughout the Federal acquisition community.
I would be pleased to respond to any questions you or the
Subcommittee's Members may have.
[The prepared statement of Mr. Frye appears on p. 44.]
Mr. Adler. Mr. Frye, thank you.
You heard from witnesses on the first panel that said there
wasn't really a problem with vendor compliance prior to the
award or modification of a contract, but at least a couple of
the witnesses were suggesting there was a problem with
compliance after a contract had been awarded or modified. Do
you care to comment on that?
Mr. Frye. Yes, I would. My view is that the contracting
officer's job is to ensure that the required FAR clauses are in
the solicitation, and that those required clauses are then
incorporated into the contract award.
Secondly, contracting officers have to ensure that the
contractors have submitted reports to the Department of Labor
prior to the contract being awarded.
And thirdly, contracting officers take actions if the
Department of Labor was notified by a veteran of noncompliance,
the Department of Labor I assume would conduct an investigation
and provide VA with information, and VA would then take action
contractually against that contractor.
But as far as contracting officers doing anything beyond
that, I don't see that as part of the contracting officer's
role.
Mr. Adler. Is there a discrepancy here? We heard the
panelists say that somehow it is just not happening. Is it in
fact not happening, or is it in fact somewhere along the system
there is a break down that is preventing the compliance or the
termination of contracts or some sort of sanction for those
vendors that are not complying?
Mr. Frye. Well, I would respond by saying that I have no
knowledge of noncompliance.
In the last 3\1/2\ years during my tenure with the VA, I
don't know of a single instance of reported noncompliance.
We did query the Department of Labor to find out if we
could get specific examples of contractor noncompliance prior
to my testimony here today, we were unable to get a report that
was specifically related to the VA. In other words, they
weren't able to sort their database for noncompliance specific
to the VA.
So again, I have not heard of any noncompliance in the last
3\1/2\ years that I have been at VA, and certainly we would
aggressively tackle noncompliance if it were related to VA.
Mr. Adler. Let me again understand jurisdictionally who
monitors the compliance. Is it the Department of Labor that
tells you, or do you have your own system of monitoring
contract compliance?
Mr. Frye. Again, we monitor contract compliance by making
sure the required clauses are in the contract. We also monitor
contract compliance by making sure that the required reports
have been issued with Department of Labor, but it is Department
of Labor's job to handle any complaints that might come
forward. If those complaints were related to a contracting
officer from a veteran, we would refer those complaints to the
Department of Labor who would conduct the investigation, and we
would take action accordingly based upon the Department of
Labor's recommendations.
Mr. Adler. Okay. Maybe I could jump back to Mr. Harrison
for a second.
Is it your sense that the Department of Labor is hearing
complaints and handling them properly and when appropriate
referring those concerns as well to the Department of Veterans
Affairs?
Mr. Harrison. I believe so. I am not quite sure how much,
if I am hearing you clearly, Congressman Adler, have come from
Veteran Affairs. You know, we have had 530 veterans' complaints
filed with us over the past 5 fiscal years, 83 last year.
Mr. Adler. So I guess I heard from at least one of the
panelists from the previous panel that there was a multitude of
concerns of veterans not being given the opportunity to have
employment and may be the real break down in the compliance.
Is there such a break down, or you don't think there is a
break down in compliance? And maybe there was an exaggeration
by a previous panelist.
Mr. Harrison. Well, as I have already stated, 15 percent of
the on-site evaluations of the 850 some odd on-site evaluations
we conducted this past fiscal year, fiscal year 2008, showed
mandatory job listing violations. That would be, I think, 150,
if my arithmetic is correct, of the 800 on-sites, or close to
that amount anyway. My arithmetic I suppose is a little off.
You know, showed mandatory job listing violations.
Mr. Adler. Do we have adequate sanctions in place to punish
those employers or vendors that are not complying?
Mr. Harrison. What we do is make certain that a
conciliation agreement is made to ensure that that company,
that contractor, reports to the Department of Labor and is
underneath a monitoring process that is carried out by the
OFCCP until they come into compliance.
Mr. Adler. Is there any consideration of stronger sanctions
than this sort of probation period? I heard a previous panelist
talk about maybe banning such violators from access to future
government contracts for some period of time.
Mr. Harrison. Well OFCCP, the Department of Labor, has not
made a position on that.
Mr. Adler. Mr. Frye, does the Department of Veterans
Affairs have any concern in that regard?
Mr. Frye. Certainly. I think one of the things that could
be done for noncompliance or repeated noncompliance is debar
the contractor, eliminate their ability to contract with the
government. That is certainly a contractual action that can be
taken.
Mr. Adler. I would think that would be an obvious
conclusion. I thank you both for your testimony.
Mr. Boozman.
Mr. Boozman. Thank you, Mr. Chairman.
Are the requirements of section 4212, are they included in
the curriculum at the Acquisition Academy of Frederick?
Mr. Frye. I can't answer that now. But I will take that for
the record and get you a statement.
[The VA subsequently provided the following information:]
This topic is addressed in SBLD 013B--Federal Acquisition
Regulation (FAR) /Veterans Affairs Acquisition Regulation
(VAAR) and VA Regulation Workshop; a 2nd year skill building
and knowledge retention workshop in the VA Acquisition Academy
Internship Program.
Type of training: Classroom setting
How in-depth the training is: Approximately 2 to 4 hours in
duration. Overview of subject and FAR language, introduction to
the VETS-100 form, database and reporting system, and what
contracts the Act applies to.
Who receives the training: VA Acquisition Academy Interns
This training can be revised, as required, to meet VA needs.
The VA Acquisition Academy also includes this in its Federal
Acquisition Certification--Contracting (FAC-C) curriculum
taught to the VA Acquisition Team.
Mr. Boozman. Okay.
Let us go back a little bit. You mentioned the compliance
with clauses required by FAR 52. It appears that there are over
250 different clauses in that regulation. Which clause or
clauses are you referring to relative to compliance with
section 4212?
Mr. Frye. There are two required clauses. First is FAR
clause 52.222-35, and it is entitled ``Equal Opportunity for
Special Disabled Veterans.'' And the second required clause is
FAR clause 52.222-37, and it is entitled ``Employment Reports
on Special Disabled Veterans.''
There are some variant clauses, for instance a legal cause
that you would put in if these are not commercial items that
you are buying, but those two clauses that I just gave you are
the two primary clauses that are required.
Mr. Boozman. If there isn't an administered list of Federal
contractors how can we be confident that all the contractors
are submitting the VETS-100 Report?
Mr. Frye. If you could repeat the question again.
Mr. Boozman. If there is no list of Federal contractors--a
master list--how can we be confident that all the contractors
are submitting the VETS-100 Report?
Mr. Frye. Again, our requirement, the contracting officer's
requirement is to query the database in DOL and they can do
that in two ways. They can directly query the database or they
can send an e-mail to DOL to find out if that particular
contractor has submitted the report.
Mr. Boozman. Okay. Mr. Harrison.
Mr. Harrison. I would have to check back with my
colleagues. I just don't know.
[The DOL subsequently provided the following information:]
The Department is not able to determine whether every
contractor subject to the reporting requirement in section
4212(d) submits the required veterans' employment report.
However, the Department does monitor compliance with VEVRAA's
reporting requirement through audits of contractors selected by
the Federal Contractor Selection System (FCSS). When a
contractor is selected for a compliance review, OFCCP checks to
see whether the contractor has filed the VETS-100 Report (or
the VETS-100A Report after October 2009). If it is determined
that the contractor failed to file the required veterans'
employment report, OFCCP will notify VETS as outlined in 41 CFR
250.60(c) and 41 CFR 300.60(c). In addition, VETS maintains a
database of contractors that file the VETS-100 Report that is
available to Federal contracting officers who are required by
31 U.S.C. 1354 and 48 CFR 22.1302 to verify that a prospective
contractor subject to the reporting requirements in Section
4212(d) filed the required report in the prior fiscal year.
Mr. Boozman. Okay, very good. Thank you all again for being
here, and we do appreciate your hard work.
Mr. Adler. I join Mr. Boozman in thanking you. We
appreciate your testimony today that we have heard with great
insight and interest of the topic. Today's hearings provides us
with an opportunity to learn more about the ongoing problems
facing disabled veterans seeking out equal employment
opportunities and Federal contractor compliance.
This hearing stands adjourned.
[Whereupon, at 3:36 p.m., the Subcommittee was adjourned.]
A P P E N D I X
----------
Prepared Statement of Hon. Stephanie Herseth Sandlin,
Chairwoman, Subcommittee on Economic Opportunity
Providing our servicemembers and veterans with employment
opportunities is indeed a way of investing in our brave men and women
of the Armed Forces for the sacrifices they have made while serving our
country. Providing them with opportunities and establishing equity in
employment opportunities can help veterans become gainfully employed.
The U.S. Department of Labor's (DOL) Office of Federal Contract
Compliance Program (OFCCP) plays an important role in protecting
veterans by ensuring that they are not discriminated and are given
equal employment opportunity. While OFCCP provides certain veterans
protection against discrimination, it also requires that contractors
are actively involved in providing employment or advancement
opportunities by providing outreach, recruitment, and training. In
addition, contractors must make good faith efforts to maximize their
current qualified workforce, develop and update affirmative action
plans, and submit an annual report to DOL.
The Vietnam Era Veterans' Readjustment Assistance Act of 1974 also
known as VEVRAA and section 4212 of Title 38, provide legal authority
to enforce veterans' equal employment opportunities. VEVRAA provides
enforcement for Federal contracts to provide equal employment
opportunities for special disabled veterans and veterans of the Vietnam
Era. This provision would apply to prime contractors and subcontractors
who engage in personal property and non-personal services, including
construction. All employment is required to be listed in the Federal
Contractor Job Listing Program which gives priority referral to
qualified disabled veterans and Vietnam Era veterans.
Currently, the OFCCP provides enforcement measures for compliance.
For example, compliance reviews are conducted to ensure that employers
are following their affirmative action program established as a
prerequisite for reaching a contract threshold. To assist in this
effort, OFCCP provides training, consultations, and technical
assistance to contractors.
I have become deeply concerned over reports of Federal contractors
not complying with Federal regulations. This is specifically troubling
considering the increased number of servicemembers returning to
civilian workforce. It is also disturbing when I hear that disabled
veterans hiring practices are inadequate coupled with the lack of
effort by contractors to employ disabled veterans. Federal contractors
and subcontractor have the opportunity to work with the Department of
Veterans Affairs' Vocational Rehabilitation and Employment Program, or
Department of Labor's Veteran Employment and Training Service, both of
which are equipped to assist veterans gain employment. These resources
along with the LVERs and DVOPs should provide for contractor
compliance.
I am hopeful that today we can determine to the extent that these
enforcements are beneficial, if they lack incentives for compliance, or
if there is a need for stricter enforcement measures. I look forward to
exploring the options to assist employers who are making good faith
effort in hiring and promoting qualified disabled veterans in the
workforce. This Subcommittee is fully committed to protecting our
veterans and providing protections against employment discrimination.
Finally, today's hearing is an important one. It is the first time
this Subcommittee has held a hearing on Federal contractor compliance;
therefore, we hope that we are able to learn more about the issue while
conducting oversight and gaining from the insight provided to us by our
witnesses on the topic.
Prepared Statement of Hon. John Boozman, Ranking Republican Member,
Subcommittee on Economic Opportunity
Good afternoon.
Madam Chair, the current recession is affecting veterans just like
the rest of American labor force. According to the Bureau of Labor
Statistics, the unemployment rate among adult men was 9.4 percent and
adult women was 7.1 percent. Interestingly, BLS does collect data on
veterans in its monthly report but does not publish the data. One would
think that given the current War On Terror and the recognition that
veterans are an important sector of society, veterans would be included
in any national level unemployment report. The following table from the
Veterans Employment and Training Service illustrates today's employment
challenges to veterans and as you will see, things are not good.
Veteran and Non-veteran Unemployment Rates for the First Seven Months of FY 2009 and FY 2008
(May 11, 2009)
----------------------------------------------------------------------------------------------------------------
ALL AGES AGES 18-24
FISCAL YEAR -----------------------------------------------------
Veteran Non-veteran Veteran Non-veteran
----------------------------------------------------------------------------------------------------------------
FY 2009 7.1% 7.8% 18.3% 14.0%
(10/1/08-4/30/09)
FY 2008 4.1% 4.7% 14.9% 9.9%
(10/1/07-4/30/08)
----------------------------------------------------------------------------------------------------------------
Using 2008 national data for comparison, it appears that veterans
in general continue to have lower unemployment rates than their non-
veteran counterparts. However, that same data shows that younger
veterans still experience significantly higher unemployment rates than
older veterans and non-veterans. But veterans are supposed to have some
advantage in seeking employment in the private sector, especially by
companies that are Federal contractors.
Title 38 section 4212 requires Federal contractors to take
affirmative action to hire veterans and tasks state employment services
and the Department of Labor with roles in promoting hiring by Federal
contractors. I believe each of those bear some responsibility in
achieving the goals of section 4212.
While there are many reasons for higher unemployment among younger
veterans, lack of attention to veterans in general by the Federal
Government should not be among those reasons. For example, in addition
to not being identified in BLS data, section 4212(c) of title 38
requires the Department of Labor to report annually on veteran hiring
by Federal contractors. Included in that report, the law requires the
following data:
The number of complaints filed against Federal
contractors
The actions taken by the Department on those complaints
The results of the Department's actions on those
complaints
The number of contractors listing job openings
The nature and types of positions
The number of veterans given priority referral by the
local employment services
If one looks at the section on Federal contractor compliance on
pages 20 and 21 in the most recent DoL report, there is no data on
actions taken to investigate complaints regarding contractors'
affirmative action to hire veterans. I hope the Office of Federal
Contractor Compliance can explain this lack of focus to us today.
Section 4212 also includes several requirements for information to
be supplied annually by Federal contractors which are included in the
VETS 100 report which should form the basis for the Department's annual
report to Congress. I have a feeling that the only time anyone looks at
the VETS 100 report is when DoL receives a congressional inquiry.
Finally, the question of enforcement raises an issue of common
sense. We hear suggestions that failure to have an affirmative action
plan or submit the VETS 100 report should be grounds for debarring a
company from doing business with the Federal Government. While I fully
support affirmative hiring under section 4212, do we really think the
Federal Government would debar a major contractor like a Lockheed or
IBM or Pfizer or Boeing? The only alternative is to fine such companies
and there is no such provision in current law. I also believe we should
take a close look at whether placing the investigation responsibility
with OFCCP is the right thing to do and whether that responsibility
should more properly reside in VETS.
Madam Chair, the situation surrounding section 4212 is less than
optimal to put it kindly and I want to work with you to fix it.
Prepared Statement of Thomas S. Whitaker,
President, National Association of State Workforce Agencies, Deputy
Chairman/Chief Counsel, North Carolina Employment Security Commission,
Raleigh, NC
Chairwoman Herseth Sandlin, Representative Boozman, and Members of
the Subcommittee, on behalf of the National Association of State
Workforce Agencies (NASWA), I thank you for the opportunity to submit
written testimony addressing Federal contractors' hiring practices and
the performance of the U.S. Department of Labor (USDOL), Office of
Federal Contractor Compliance Program (OFCCP) in monitoring the
compliance of Federal Contractor Job Listings (FCJL). NASWA and its
members are strong proponents of activities benefiting the employment
of qualified veterans through programs such as those under the
Subcommittee's jurisdiction.
The members of our association constitute State leaders of the
publicly funded workforce investment system vital to meeting the
employment needs of veterans through the Disabled Veterans' Outreach
Program (DVOP) and the Local Veterans' Employment Representatives
(LVER) programs. The mission of NASWA is to serve as an advocate for
State workforce programs and policies, a liaison to Federal workforce
system partners, and a forum for the exchange of information and
practices. Our organization was founded in 1937. Since 1973, it has
been a private, non-profit corporation, financed primarily by annual
dues from member State agencies.
Starting in 2007, NASWA began offering its State workforce agency
members a new and free service called JobCentral National Labor
Exchange (NLX). NLX is a labor exchange solution which also includes a
FCJL compliance mechanism. In addition to our members programs and
activities targeted to veterans, this mechanism has given NASWA and its
partners a more direct involvement with OFCCP. In our experience most
employers want to not only fulfill their obligations under OFCCP
requirements, but also fulfill the intent of the legislation.
NLX's technical operations are headed by DirectEmployers
Association (DEA), a trade association of over 485 Fortune 500
companies represented by their human resource directors. DEA's flagship
service is JobCentral, a sophisticated job-search engine which NASWA
endorsed as the successor to America's Job Bank (AJB, a national public
labor exchange defunded by USDOL in 2007). Today a total of 48 State
workforce agencies have signed participation agreements creating
JobCentral National Labor Exchange (NLX). Talks are underway with the
remaining States to join this alliance. DEA provides all online labor
exchange services to State workforce agencies and States' employer and
jobseeker customers for free. State job-banks across the United States
can transmit job orders to each other, plus, receive thousands of job
orders via electronic download from DEA's members. Job orders are
updated daily, avoiding duplication and ensuring job opportunities are
still open.
This public-private alliance has created a cost-effective system
dedicated to improving labor market efficiency and reflecting our
Nation's diverse workforce. The initiative uses no Federal funds toward
its operations and its research and development; rather it leverages
private, non-profit-owned technology with existing State workforce
agency resources.
The NLX's FCJL compliance mechanism is a sister-site called
VetCentral. VetCentral was designed to provide employers OFCCP
compliance with the Vietnam Era Veterans' Readjustment Assistance Act
(VEVRAA) as amended by the Jobs for Veterans Act (JVA). VetCentral
sends daily emails of FCJL jobs to the appropriate local employment
service delivery system. The emails are directed to LVERs and DVOPs.
The emails contain links to the FCJL job orders, a ``how to apply''
link, and are very user-friendly. The NLX has received positive
responses from the field-staff who use these emails every day in
referring veterans. State workforce agencies designate who receives
emails, and also review and correct current email addresses used by
VetCentral. In addition to VetCentral emails, FCJL jobs are also
directly being downloaded into many States' job-banks through the
broader NLX initiative.
We believe current regulations published in 41 CFR Part 60-300
create a process that brings increased opportunities to our Nation's
veterans, while simultaneously allowing affected employers to meet
their responsibilities under the JVA.
I want to preface the following discussion by stating our
appreciation for the response by and interaction with the Office of
Federal Contractor Compliance Program (OFCCP). Without their clear
guidance and strong communication significant problems would escalate.
Recently, DEA and State workforce agency officials informed
NASWA of major discrepancies in how some regional OFCCP staff
members were handling compliance audits. The way some OFCCP
regional staff members were interpreting Jobs for Veterans Act
(JVA) regulations on FCJL jobs we believe was inconsistent with
the law and regulations. Some regional OFCCP staff had informed
several States and employers that emails of FCJL jobs to the
appropriate local employment service delivery system would not
constitute compliance. Also, they were told that third parties
could not list FCJL jobs for employers in State job banks.
Finally, State workforce agencies were told that accepting an
FCJL jobs-download from NLX would not give employers compliance
unless the State could produce a historical report
demonstrating that jobs had been posted. Most States do not
have the ability to keep such historical records unless they
invest in new technologies. Some States can store and provide
such historical records, but this would require employers to
register and follow each State's separate registration
process--a costly approach, and also contrary to the spirit of
flexibility outlined in pertinent regulations.
Such an interpretation would shift the burden of compliance
from employers to State workforce agencies and create an undue
burden for both. Most importantly, this type of interpretation
would reduce the number of job openings available to veterans,
ultimately harming the very customer legislation and
regulations aim to benefit. The employers involved are DEA
members who have been regularly forwarding job openings to
local offices via emails, automatically downloading job orders
to State job banks, or both. Employers that are not DEA members
can also use the system to download FCJL jobs to State job
banks and have these jobs automatically emailed to the local
level, also at no cost.
In response, NASWA sent a request to Mr. Lorenzo Harrison, Acting
Director, at the national OFCCP office. NASWA has received written
communication from the department that reaffirms the validity of the
VetCentral process. The letter also indicates the Department will be
communicating to field staff reinforcing the same message. This will
allow State workforce agencies to receive FCJL jobs in a flexible
manner without incurring added costs and give them the opportunity to
make more referrals. It also will give employers a cost-effective means
to meet and exceed compliance. And it will increase the number of real
jobs available to veterans.
NASWA is pleased with the Department's attention to this matter and
appreciates its quick response. NASWA looks forward to partnering
further with USDOL, Veterans' Service Organizations, employers, and
others to help inform veterans, State workforce agency staff, Federal
staff, and businesses of the appropriate roles and responsibilities of
involved stakeholders.
In crafting this testimony, NASWA also queried its members on OFCCP
compliance issues. Their responses are summarized below. It is
important to note, our members are the State workforce agencies who,
through the Wagner-Peyser (employment services) DVOP and LVER programs,
have been working with OFCCP's FCJL requirements for a long time under
Title 38, and other Federal legislation and regulations. This long-term
involvement in FCJL implementation, and the State workforce agencies'
priority of service to veterans' requirement, uniquely positions our
members to comment on compliance issues.
Several State workforce agencies expressed frustration over the
lack of a comprehensive, official and accurate Federal contactor list.
State workforce agencies believe the compilation of such a list by
OFCCP would enable States' LVER and DVOP staff to contact Federal
contractors in their areas and build strong alliances to put veterans
to work. Should the Federal Government create such a list, States can
request the NLX copy electronic job orders appearing on Federal
contractors' corporate websites and import them into State job banks at
no cost. Overall, State workforce agencies believe this can be an
opportunity for improved Federal-state coordination and an opportunity
to educate employers about the valuable services provided through the
publicly funded workforce development system.
State workforce agencies also are interested in standardizing
communication protocols with OFCCP during and at the conclusion of the
employer audit process. Ideally, State workforce agencies indicate
OFCCP would send official notification to the appropriate State
officials when initiating monitoring reviews. State workforce agencies
would also want to receive an outcome report at the conclusion of
employer audits. This practice would allow States to assist Federal
contractors and ultimately lead to veterans gaining employment and
career opportunities. NASWA is willing to facilitate making the
necessary connections between OFCCP and appropriate State level
officials.
Some States indicated minimal contact between State and regional
OFCCP staff and expressed frustration in not being able to get
questions answered. Further, LVERs and DVOPs are particularly
frustrated when they have knowledge of Federal contractors who will not
list with the employment service but cannot get Federal action
initiated. State workforce agency officials acknowledge that the lack
of a standard communications protocol or the lack of contact between
State workforce staff and OFCCP are partly a result of OFCCP
understaffing and are hopeful this will be changed in the near future.
Overall, our members support the addition of more OFCCP personnel to
help resolve issues and further working relationships.
The workforce system remains dedicated in promoting veterans'
employment and in helping employers expand their pool of veteran
applicants. Some larger States have indicated OFCCP is placing the
burden of compliance reporting on the State workforce agencies instead
of the employers. Many times OFCCP audit procedures involve in-depth
querying of State staff and systems for detailed information on job
postings, referrals, applicant information, specific interview dates,
start work dates, interview outcomes, etc.
While State workforce agencies do maintain some of these data at
various levels of detail, the primary responsibility to maintain and
provide such information does not rest with the States. Such
information is known best by the employer but seldom, if ever, is it
communicated back to State workforce agencies. Even if States had this
information it will not accurately reflect reality, if the employer
does not exclusively recruit through that State's labor exchange
system. Finally, this type of expectation often requires allocation of
resources in both staff time and IT systems that might otherwise be
used in more direct service delivery-related capacities to veterans.
Based on the concerns outlined above, NASWA and its employer
partner, DirectEmployers Association, would be supportive of a
coordinated educational initiative. This initiative should be targeted
to all involved stakeholders and seek to clarify the policy and
operational roles of the State workforce agencies and USDOL agencies
including: OFCCP, Veterans' Employment and Training Service (VETS), and
the Employment and Training Administration (ETA). The initiative should
also better communicate the OFCCP requirements and expectations for
FCJL employers. This will ultimately result in better use of available
funds, staff, and IT resources, and bring better customer service and
more job opportunities to our Nation's deserving veterans.
NASWA and its members remain dedicated to enhancing the delivery of
employment services to our Nation's veterans. We are willing to assist
the Subcommittee and the U.S. Department of Labor in any way possible.
Thank you for the opportunity to address these important issues.
Prepared Statement of Christina M. Roof,
National Deputy Legislative Director, American Veterans (AMVETS)
Madam Chairwoman, Ranking Member Boozman, and distinguished Members
of the Subcommittee, on behalf of AMVETS, I extend our gratitude for
being given the opportunity to discuss and share with you our views and
recommendations on Veterans Affairs contracting policies relating to
title 38, sec. 4212. AMVETS believes that the use of qualified veterans
in Federal contracts is vital to the reintegration and business success
of our veteran community.
AMVETS is privileged in having been a leader, since 1944, in
helping to preserve the freedoms secured by the United States Armed
Forces. Today our organization prides itself on the continuation of
this tradition, as well as our undaunted dedication to ensuring that
every past and present member of the armed forces receives all of their
due entitlements. These individuals, who have devoted their lives to
upholding our values and freedoms, deserve nothing less.
President Clinton signed Executive Order 12985 in 1996. The Order
established the Armed Forces Service Medal with accompanying ribbons
and appurtenances, for award to members of the Armed Forces of the
United States who, on or after June 1, 1992, in the opinion of the
Joint Chiefs of Staff: (a) participate, or have participated, as
members of United States military units in a United States military
operation in which personnel of any Armed Force participate that is
deemed to be significant activity. The Order added anyone receiving
this medal to the categories of veterans covered by the regulations set
forth by title 38, sec 4212, established to require employers to take
affirmative action in employing qualified special disabled veterans,
Vietnam Veterans, and any other veteran who served on active duty
during a war or in a campaign or expedition for which a campaign badge
has been authorized, to include any veteran during the 1 year beginning
date of such veteran's discharge or release from active duty.
The Vietnam Era Veterans' Readjustment Assistance Act (VEVRAA)
requires covered Federal Government contractors and a subcontractor to
take affirmative action to employ and advance in employment specified
categories of veterans protected by the Act and prohibits
discrimination against such veterans. In addition, VEVRAA requires
contractors and subcontractors to list their employment openings with
the appropriate employment service delivery system, and that covered
veterans receive priority in referral to such openings. Further, VEVRAA
requires Federal contractors and subcontractors to compile and submit
annually a report on the number of current employees who are covered
veterans. The Employment Standards Administration's Office of Federal
Contract Compliance Programs (OFCCP) within the U.S. Department of
Labor (DOL) enforces the affirmative action and mandatory job-listing
provisions of VEVRAA. DOL's Veterans Employment and Training Service
(VETS), which was established to provide veterans and transitioning
servicemembers with the resources to succeed in the 21st century
workforce by maximizing their employment opportunities, protecting
their employment rights and meeting labor-market demands with qualified
veterans, administer the veterans' employment reporting requirement.
VETS-100--Federal contractors and subcontractors with a Federal
contract of $25,000 or more, entered into before December 1, 2003, are
required to complete an annual report showing the numbers of qualified
special disabled veterans, veterans of the Vietnam era, and any other
protected veterans hired or employed during the reporting period. Note
that the Job for Veterans Act (JVA) has amended VEVRAA, changing the
VETS-100 Reporting requirements for contracts entered into on or after
December 1, 2003. These changes (1) raise the reporting threshold from
$25,000 to $100,000, and (2) modify the categories of covered veterans
in the report. Any contractor or subcontractor whose only Federal
contract is a contract of $100,000 or more entered into on or after
December 1, 2003, is not required to file a VETS-100 Report until new
regulations are published by DOL's VETS implementing these changes.
Prior to amendments made by the JVA, VEVRAA applied to contracts in the
amount of $25,000 or more, and covered other categories of veterans.
The JVA amendments apply only to contracts entered into on or after
December 1, 2003. For contracts or subcontracts of $25,000 or more,
entered into before December 1, 2003, VEVRAA requires contractors to
employ and advance in employment qualified disabled veterans, veterans
of the Vietnam era, recently separated veterans (veterans within 1 year
of their discharge or release from active duty), and other protected
veterans. Only employers with Federal contracts valued at $100,000 or
more entered into on or after December 1, 2003 will be required to file
the VETS-100A report. Modifications made on or after December 1, 2003
of pre-December 2003 Federal contracts create new contracts and are
subject to the $100,000 threshold. Therefore, contractors would no
longer be required to file the VETS-100 Report for these modified
contracts and would only be required to file the VETS-100A report if
the modified contract meets the $100,000 threshold.
Federal contractors are required to preserve any personnel or
employment records made or kept by the contractor for 2 years from the
date of the making of the personnel record or the personnel action,
whichever occurs later. Examples of records that must be maintained
include but are not limited to job postings and advertisements, records
of job offers, applications and resumes and personnel files.
Contractors with fewer than 150 employees or who do not have a
government contract of at least $150,000 only need to keep records for
1 year. OFCCP enforces Executive Order 11246 and other laws that
prohibit employment discrimination by Federal contractors. The agency
monitors Federal contractors to ensure that they provide equal
employment opportunities without regard to race, gender, color,
religion, national origin, disability or veteran status.
Performing audits and compliancy testing of Federal contracts are
important tools to ensure that the purpose for the agreement or the
performance of the contract actually occurs. As AMVETS has discussed
before VA has increasingly had reason for concern regarding controls
over performance monitoring and contract compliancy testing. The Office
of Inspector General reported that on small contracts alone, this would
result in the avoidance of contract fraud, more efficient verification
processes, and an estimated savings of $47.4 million.\1\ VA's
difficulties in some areas of contract administration illustrate that
VA's major challenge lies in monitoring performance of previously
awarded contracts.
---------------------------------------------------------------------------
\1\ Office of Inspector General, Department of Veterans Affairs
Statement before the Subcommittee on Military Construction, Veterans
Affairs, and Related Agencies. Committee on Appropriations United
States House of Representatives. Hearing on Department of Veteran
Affairs Challenges; March 12, 2009
---------------------------------------------------------------------------
AMVETS believes that this is due to VA not having a centralized and
uniform contracting system in place. VA lacks reasonable assurance, at
minimum, that it is receiving the services it paid for and that
contracts are being closed within the designated period and all work is
completed to contract terms. To AMVETS knowledge, VA rarely performs
any audits of completed projects. In non-government owned and operated
businesses audits of contracts often occur up to 5 years of contract
completion. Most of these types of contracts contain a clause that
allows organizations to perform and stipulate what will be re-inspected
and what can be randomly inspected.
AMVETS recommends that VA include and enforce more uniformly these
aspects as well as a contractor's performance under the contract,
including but not limited to its billings, certified payroll records
and any other document showing expenditures. This provides validation
to the award/contract grantor that all terms of the contract were met
and completed in the agreed manner. The audit clause should also
specify complete corporation on the part of the contractor whom
preformed the work, as well as specifying how long the contractor
should retain all records relating to the contract.
Audits are essential to the stability of a contracting system.
Audits validate and measure the current processes in place, identify
those that need enhancement, and isolate the weak processes that lead
to fraud, collusion, and most importantly to infringements of title 38,
section 4212 which protect our veteran population's business successes.
Contract compliance monitoring is as necessary an element to maintain
an open and fair procurement process, as the implementation of ethics
policies.
It is in the opinion of AMVETS that a major impediment to current
VA contracting policies is that of ``reactionary'' audits or audits
that occur after a problem is identified. Over the past few years VA,
Office of Federal Contracting Compliance, and Department of Labor
compliance audits have shifted from enforcement to reactionary
compliance reviews. Reactionary measures can never be as successful as
random enforcement audits. Once an agency is contacted by an individual
to report a violation of Executive Order 11246 as amended, 503 amended,
or VEVRAA the probability of this violation being a companies' first or
only non-compliant act is extremely low. This means that it will never
be known how many veterans have lost work and financial means due to
infringement of their legal rights.
Currently, only initial or pre-contract verification processes are
in place for most contracts. During the initial and often only review
of a company's bid, the company will present all required
documentation, including evidence that they will use veterans as
employees or subcontractors to fulfill the title 38, sec. 4212
qualifications; or they themselves may qualify as veteran preference
contractors and then will be granted the award. After being awarded
contracts on these terms, the verification process ceases and VA is
using no means to guarantee that the contractor continues to stay
compliant.
AMVETS believes that a contributing factor in the failure of
current compliance testing methods is the overall process of current VA
and OFCCP auditing methods are unnecessarily lengthy and lack
accountability and uniformity. Currently to prevent duplication of
efforts the DOL and OFCCP will decide whether this is an individual
complaint or a class complaint. Once the proper agency takes
jurisdiction, the primary request for audit documentation occurs.
Again, this is an example of reactionary auditing which has proven to
be ineffective. Numerous field offices that AMVETS contacted reported
major problems in the execution and timely completion with these types
of compliance investigations. The common problem that was repeatedly
brought to the attention of AMVETS, by numerous OFCCP personnel, was
that when allegations of infringements of Executive Order 11246, title
38, sec 4212, or VEVRAA were reported to them for investigation it was
very hard to locate former employees and records to substantiate the
allegations, thus resulting in small settlements by the contractor or
company in question to avoid formal audit processes. Unfortunately,
this option not only costs VA millions of dollars every year, more
importantly it cost our veterans the due entitlements that VA, OFCCP,
and DOL have worked so hard on providing to them.
AMVETS believes VA professionals should partner with OFCCP to
prevent further fraud of VA and discrimination among our veteran
community. OFCCP is equipped with an arsenal of employees and tools to
address these problems nationwide. OFCCP is present in every state and
has the manpower to start doing enforcement audits of VA contracts and
help steer VA contracts back to full compliancy, saving VA money, time,
and guaranteeing the integrity VA contracts.
AMVETS also most respectfully asks the Committee to mandate a
uniform contract compliance standard to which every VA contract is held
accountable to.
In closing, AMVETS believes that a return to enforcement audits, a
stronger partnering of VA with OFCCP and DOL, and uniformed contract
compliance codes will help assure the integrity of VA awarded contracts
and protect the rights of our veterans.
Madam Chairwoman and Members of the Committee, AMVETS thanks you
for inviting us to address this important matter and share our
recommendations with you. This concludes my testimony and I can now
address any questions you may have for me.
Prepared Statement of Joseph C. Sharpe, Jr.,
Director, National Economic Commission, American Legion
Madame Chairwoman, Ranking Member Boozman and Members of the
Subcommittee:
Thank you for the opportunity to present The American Legion's
views on Federal Contractor Compliance.
The Department of Labor (DOL), Office of Federal Contract
Compliance Program (OFCCP) ensures employers comply with
nondiscrimination and affirmative action laws and regulations when
doing business with the Federal Government. The Vietnam Era Veterans'
Readjustment Assistance Act of 1974, as amended, section 4212, title
38, United States Code (USC), states that covered contracts entered
into by any department or agency for the procurement of personal
property and non-personal services (including construction) for the
United States, shall contain a provision requiring that the party
contracting with the United States shall take affirmative action to
employ and advance in employment qualified special disabled veterans,
veterans of the Vietnam era and any other veterans who served on active
duty during a war or in a campaign or expedition for which a campaign
badge has been authorized.
In the Federal Register of August 8, 2007, OFCCP significantly
expanded the responsibilities of Federal contractors concerning their
affirmative action plan for veterans. The Federal Register noted that
Federal contractors are required to conduct active outreach to find
veterans; going far beyond posting their Internet listings. Listed are
persons and organizations that Federal contractors are directed to
partner with to ensure appropriate outreach for eligible veterans.
The Local Veterans' Employment Representative in the
local employment service office nearest the contractor's establishment;
The Department of Veterans Affairs Regional Office
nearest the contractor's establishment;
The veterans' counselors and coordinators (Vet-Reps) on
college campuses;
The service officers of the national veterans' groups
active in the area of the contractor's establishment; and
Local veterans' groups and veterans' service centers near
the contractors establishment.
Based upon dialog with Local Veterans' Employment Representatives
(LVERs), veterans, and other organizations across the country, The
American Legion found that Federal contractors have not consistently
enlisted the assistance and support of the above mentioned persons and
organizations in recruiting, and developing on-the-job training
opportunities for, qualified disabled veterans recently separated
veterans, other protected veterans, and Armed Forces service medal
veterans, to fulfill its commitment to provide meaningful employment
opportunities to such veterans. In 2005, the Government Accountability
Office (GAO) reported that State workforce administrators cited lack of
Federal contractor compliance with the law's provisions as most likely
to have limited veterans' employment opportunities. Currently, Federal
contractors are listing Internet openings without discussion with state
staff or LVERs within the One-Stop Career Centers.
America has benefited immeasurably from the service of its 23.4
million living veterans, who have made great sacrifices in the defense
of freedom, preservation of democracy, and the protection of the free
enterprise system. The current Global War on Terror has had a
devastating impact on the Armed Forces and has contributed to
exacerbating this country's veterans' unemployment problem, especially
within the Guard and Reserve components of the military. According to
DOL, the present unemployment rate for recently discharged veterans is
an alarming 20 percent, and one out of every four veterans who do find
employment earn less than $25,000 per year.
Small business creates an estimated 60 percent to 80 percent of net
new jobs, therefore providing a central element for strong economic
growth. One way of combating high unemployment among veterans is
through the creation of new jobs through Federal contractors.
Currently, too many military families are suffering financial hardship
while their loved ones are recuperating in military hospitals around
the country. Spouses are leaving their jobs to be with that disabled
servicemember only to watch their family finances deteriorate. Seamless
transition, in many cases, is just a wishful thought; however, if
Federal contractors/subcontractors would hire a suitable amount of
veterans, it would have a significant impact on veterans' unemployment
rate and overall morale of the country.
Listed below are several states with Federal contractors who
obtained contracts with the Federal Government in excess of $100,000
for April 2009.
----------------------------------------------------------------------------------------------------------------
OTHER BLUE
STATE TOTAL FEDERAL CITIES MANUFACTURING CONSTRUCTION COLLAR
CONTRACTORS CONTRACTORS CONTRACTORS CONTRACTORS
----------------------------------------------------------------------------------------------------------------
SOUTH DAKOTA 115 34 16 21 5
ARKANSAS 201 67 41 41 8
VIRGINIA 3,029 179 304 148 39
ARIZONA 577 64 101 61 27
NEW JERSEY 858 270 250 81 15
NEW MEXICO 365 59 37 54 11
FLORIDA 1,486 207 383 142 35
KANSAS 289 56 61 38 5
NEW YORK 1,417 341 79 96 31
CALIFORNIA 3,800 499 932 339 64
----------------------------------------------------------------------------------------------------------------
The above mentioned figures show measurable opportunities for small
businesses that obtain Federal contracts to hire qualified veterans.
RECOMMENDATIONS
The American Legion believes veterans should be considered and
hired first by these contractors and subcontractors who receive
contracts from the Federal Government. It was the veteran who
volunteered to defend this nation, the veteran who continues to keep
this democracy intact, and the veteran who deserves the right to
participate in rebuilding America's infrastructure and other necessary
projects.
Every contractor and subcontractor has the requirement to file a
Vets- 100 report to measure compliance for the year. Many LVERs,
Disabled Veterans' Outreach Program (DVOPs) Specialists, state
veterans' staff, and veterans' advocates believe non-compliance with
the filing of the Vets-100 is rampant since there is little if any
consequence to non-compliance in the program. The American Legion
recommends that Vets-100 report should no longer be filed
electronically, because it goes around the law's intent of bringing
employers and the One-Stop Career Centers together to discuss and
develop employment opportunities for veterans. The American Legion also
recommends Vets- 100 be amended to measure direct compliance with OFCCP
regulations. Listed are two suggestions in relation to this issue:
The Vets-100 should require the signature of a LVER to
ensure that businesses are performing their required outreach at least
once a year.
The completed Vets- 100 submitted to the LVER for
signature should have the name, signature, title, and phone number of
the required affirmative action officer so the LVER has the optimal
company contact information for veterans.
Additionally, The American Legion recommends that the Federal
Contractor Veterans Employment Program presently under OFCCP should be
placed under the direction of the DOL's Veterans and Employment
Training Service (DOL-VETS), so this program can receive proper
oversight, as well as input and guidance from stakeholders.
The mission of The American Legion's National Economic Commission
is to take actions that affect the economic well-being of veterans,
including issues relating to veterans' employment, home loans,
vocational rehabilitation, homelessness, and small business owned by
veterans, especially those with service-connected disabilities. It is
vital that eligible veterans receive a fair and proportionate amount of
Federal employment from Federal contractors so these veterans can build
and maintain a quality-of-life, while they contribute to the United
States economy.
We look forward to continue working with the Subcommittee to
enhance employment among America's veterans. The American Legion
appreciates the opportunity to present this statement for the record.
Again, thank you Madame Chairwoman, Ranking Member Boozman and
Members of the Subcommittee for allowing The American Legion to present
its views on this very important issue.
Prepared Statement of Richard F. Weidman, Executive Director for
Policy and Government Affairs, Vietnam Veterans of America
Good afternoon, Madame Chairwoman, Ranking Member Boozman and
distinguished Members of the Subcommittee. Thank you for giving Vietnam
Veterans of America (VVA) the opportunity to offer our comments on a
Federal Contract Job Listing (FCJL), whether this program as it is
currently being operated is effective in producing job opportunities
for veterans, and whether the authority for this program should be
modified or expanded.
The intent of this program, first established in the early
seventies to assist with very high unemployment of young Vietnam
veterans (we were actually young then, hard as that is to believe now)
coming back from military service into a severe recession made much
worse by the OPEC-caused gas shortage. The FCJL program was one of many
measures that very well intentioned Members of Congress established in
order to help veterans get started on civilian careers.
FCJL was never a particularly well run program, for anyone. It was
not particularly effective for women or minority citizens or for
Vietnam veterans. Merely putting the law on the books without any
enforcement or implementation mechanisms made a difference only with
those employers/Federal contractors who would have probably done the
right thing anyway in their employment practices.
From 1999 to 2002 this Committee labored long and hard to achieve
significant reform in the ability of the public labor exchange to
assist veterans, particularly disabled veterans and recently separated
veterans, receive meaningful assistance with securing work. One of
those changes was making the VETS-100 Report mandatory. Those efforts
mostly came to naught for a variety of reasons, mostly countervailing
political pressure generated by the State workforce development
agencies. Finally, in 2002, Congress passed the ``Jobs for Veterans''
bill that made some significant changes.
As VVA has noted numerous times in the past 6\1/2\ years, the U.S.
Department of Labor only implemented the parts of that legislation that
gave increased ``latitude'' to the State workforce development agencies
in how they employed DVOP and LVER personnel. Some even went so far as
to say that this legislation, which was largely opposed by VVA, was to
give managers of local one-stop offices virtual license to use the
supposedly dedicated-to-veterans-only staff in any way they pleased,
particularly because the funds for even doing on site or remote audits
by the USDOL VETS staff was dramatically reduced.
Parts of the Jobs for Veterans Act that were of little interest to
USDOL and the states were the elements that would enable the DVOPs,
LVERs, and others to do a better job of securing job openings and
actually placing veterans. One of those elements was the FCJL program
and generating the VETS-100 Report for use by the LVER to secure job
listings from Federal contractors, which was supposedly mandatory.
The military dictum is that ``A unit does well that which a
Commander checks well.'' But nobody at USDOL was checking as to whether
the reports were being generated, the jobs being listed, etc. In fact,
the last Administration even went so far as to basically eliminate the
public labor exchange altogether, and to actually close down
``America's Job Bank.''
So, where are we today? There is a very good compilation of the
contractors that has been done by a private small business in Vermont
that is available, and who is committed to working with this
distinguished Subcommittee and your staff toward a plan for making
those reports more complete. One suggestion they had is that the LVER
must sign off on the VETS-100 Report, and that contractors that do not
have a valid signature of the Local Veterans Employment Representative
that they have listed all jobs and actually have a plan for hiring
veterans, particularly recently separated and disabled veterans, that
is truly being implemented be barred from either receiving new Federal
contracts or extending current contracts.
For the above to work, VVA suggest that a number of other changes
need to be made:
First, Congress must ``federalize'' the DVOP and LVER positions,
and have them report directly to the USDOL Director, Veterans
Employment & Training Service (DVET). In some cases it may mean that
the same personnel are located in the same one stop centers, but only
on an MOU under the control of the DVET for that State. If an office is
in fact practicing priority of service for veterans, then that good
relationship can continue. If not, then the DVET can place his or her
staff in more conducive locations. In any case, they will be serving
the needs of veterans.
Second, as we now have a Secretary of Labor who is apparently very
concerned about veterans, particularly the veterans of our current
conflicts, we need to ensure that we also get an Assistant Secretary of
Labor for Employment & Training who is as committed to veterans'
priority of service as this Committee is. It is not enough to have a
decent Assistant Secretary of Labor of Veterans Employment & Training,
as the real money, and the real power to affect behavior at the local
level, resides with the Employment and Training Administration. It will
take all of these three officials, plus the Deputy Secretary of Labor
(as the Chief operating officer of USDOL) being committed to making
this work for veterans for it to be effective.
Third, there needs to be a significant increase in the funding for
the DVOP/LVER program, to at least $200 million for FY 2010.
Fourth, the Secretary of Labor needs to commit significant amounts
of her discretionary Worker Investment Act (WIA) funds to reward the
states who do the best job in providing actual employment and training
services to veterans that measurably result in meaningful employment at
a living wage.
Fifth, employers who are Federal contractors who consistently do
not hire and promote veterans, especially disabled veterans and
recently separated veterans, need to be barred from seeking or securing
contract extensions or new contracts.
Sixth, since the OFCCP is not now nor has it ever been effective,
VVA proposes that veterans be given the right to sue Federal
contractors for discrimination when they do not hire veterans, with up
to $300,000 punitive damages in addition to any actual damages, and
attorney's fees. It will only take a very few cases and all Federal
contractors will get with the program and modify their behavior. The
analogy that is apt in this instance is our ``voluntary'' system of
paying Federal Income Tax.
Will all of these steps lead to effective tools and mechanisms to
assist veterans, especially disabled veterans and recently separated
veterans to seek and secure meaningful employment at a living wage? All
or at least some of these steps would lead in very short order to
something that is far better than we have today, which really is a
total mess.
Thank you for the opportunity to share our views here today. I will
be happy to answer any questions.
Prepared Statement of Lorenzo Harrison, Acting Deputy Assistant
Secretary, Office of Federal Contract Compliance Programs,
U.S. Department of Labor
Chairwoman Herseth Sandlin, Ranking Member Boozman, and Members of
the Subcommittee:
Thank you for the opportunity to testify on ``Federal Contractor
Compliance'' as authorized by the affirmative action provisions of the
Vietnam Era Veterans' Readjustment Assistance Act of 1974 (``VEVRAA'';
or ``Section 4212''), as amended, 38 U.S.C. 4212. Your invitation
letter asked for an in-depth look into how the Department of Labor's
(DOL) - Office of Federal Contract Compliance Programs (OFCCP) monitors
compliance, what steps it takes to provide affirmative employment
opportunities to covered veterans, and how it ensures that the laws are
enforced. Further, your invitation listed several specific questions
concerning veteran complaints, sharing of Federal contractor
information among other Federal agencies, Federal contractors'
compliance, OFCCP's use of penalties and incentives to increase
compliance, and the results of the most recent analysis of the VETS-100
Report.
OFCCP is one of four programs within the Department of Labor's
Employment Standards Administration. It has a staff of approximately
585 employees, most of whom are Compliance Officers. OFCCP has six
Regional Offices and more than 45 district and area offices nationwide.
As you are aware, OFCCP enforces three equal employment opportunity
laws: Executive Order 11246, as amended (Executive Order); section 503
of the Rehabilitation Act of 1973, as amended; and VEVRAA. Taken
together these laws require affirmative action and prohibit Federal
contractors and subcontractors from discriminating on the bases of
race, color, religion, sex, national origin, or status as a qualified
individual with a disability or protected veteran.
VEVRAA and its implementing regulations originally prohibited
Federal contractors from discriminating in employment and required them
to take affirmative action to employ and advance in employment
qualified special disabled veterans and veterans of the Vietnam era.
Statutory amendments made in 1998, 2000, and 2002 modified VEVRAA's
coverage to include other protected veterans (veterans who served on
active duty or in a campaign or expedition for which a campaign badge
has been authorized, recently separated veterans, Armed Forces Service
Medal veterans, and all veterans with service-connected
disabilities).\1\
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\1\ The Veterans Employment Opportunities Act of 1998, the Veterans
Benefits and Health Care Improvement Act of 2000, and the Jobs for
Veterans Act enacted in 2002.
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VEVRAA requires Federal contractors to take special steps to
recruit, hire, train, and promote qualified protected veterans. In
addition, to implement the affirmative action requirement, VEVRAA and
its implementing regulations found at 41 C.F.R. Parts 60-250 and 60-
300, require contractors to list most job openings with the appropriate
employment service delivery system and each such employment service
delivery system is to provide protected veterans who are qualified
priority referrals to those job openings.
VEVRAA does not require Federal contractors to give veterans a
special preference in hiring. Under VEVRAA, protected veterans are
entitled to receive priority in referrals to the job openings that
Federal contractors are required to list with the appropriate
employment service delivery system.
OFCCP is one of three agencies within the Department of Labor (DOL)
with responsibilities for administering the affirmative action
provisions of VEVRAA. The other agencies with responsibilities under
VEVRAA are the Employment & Training Administration (ETA) and the
Veterans' Employment and Training Service (VETS). ETA oversees priority
referrals for veterans seeking employment, and VETS oversees the VETS-
100, and VETS-100A Reports.
OFCCP is responsible for ensuring compliance with the requirement
in section 4212 (a)(1) that contractors take affirmative action to
employ and advance in employment qualified protected veterans, and the
requirement in section 4212(a)(2)(A) that contractors list their
employment openings with the appropriate employment service delivery
system. ETA is responsible for ensuring that the appropriate employment
service delivery systems comply with the requirement in section
4212(a)(2)(B) that covered veterans receive priority in referral to
Federal contractor employment openings. ETA also provides leadership
and oversight over the employment service offices of State workforce
agencies. VETS administers the requirement in section 4212(d) that
Federal contractors report annually on the number of employees and new
hires in their workforces who are covered veterans. Further, VETS
administers a local veterans' employment representative program to
assist local employment service offices and One Stops in providing
priority job referrals to veterans (38 U.S.C. 4104), and investigates
complaints under the Uniformed Services Employment and Reemployment
Rights Act program, which also protects veterans from employment
discrimination.
According to the Department's Bureau of Labor Statistics (BLS), as
of the first quarter of the calendar year ending March 2009
approximately 12 million veterans are in the civilian labor force.
VEVRAA protects specified categories of veterans that are employed or
seeking employment with covered Federal contractors and subcontractors.
There are two primary enforcement procedures that OFCCP utilizes to
ensure that Federal contractors and subcontractors are complying with
VEVRAA - scheduled compliance evaluations of Federal contractors, and
investigations of individual or class complaints alleging
discrimination that are filed by veterans.
On average, OFCCP conducts approximately 4,000 compliance
evaluations and 900 compliance assistance events annually nationwide
for Federal contractors and subcontractors in the supply, service, and
construction industries. In FY 2008, nearly 20 percent of the
compliance evaluations included an examination of the contractor
affirmative action program (AAP) for veterans as required by the
regulations in 41 C.F.R. Parts 60-250 and 60-300.
During FY 2008, OFCCP conducted nearly 800 on-site investigations.
OFCCP's investigative procedures during an on-site investigation
include verification that the employer is listing appropriate job
openings with the employment service delivery system so that veterans
may be given priority in referral, as stated in 41 C.F.R. 60-
250.5(a)(2) and 60-300.5(a)(2). So far, in FY 2009, roughly 15 percent
of all on-site reviews conducted by OFCCP found violations of the
mandatory job listing requirement for veterans by Federal contractors
and subcontractors.\2\
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\2\ 41 C.F.R. 60-300.5(a)(2).
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OFCCP's efforts on behalf of equal opportunity for veterans extend
beyond compliance evaluations of Federal contractors and
subcontractors. If a veteran believes a Federal contractor or
subcontractor has discriminated against him or her or that a Federal
contractor has otherwise violated VEVRAA and the regulations, he or she
may file a complaint with OFCCP. Complaints may also be filed through
VETS in DOL or through a local Veteran's Employment Representative
(LVER) at a local One-Stop Career Center. Complaints filed through VETS
or LVERs are promptly referred to OFCCP.
During FY 2008, OFCCP received 543 complaints from individuals
under the three equal employment opportunity laws enforced by OFCCP.
Eighty-three (83) of those complaints were filed by veterans under
VEVRRA. The table below responds to the Subcommittee question regarding
the number of complaints that OFCCP receives each year. Using the
number of initial complaints received, OFCCP has received approximately
500-700 complaints each year over the past 5 fiscal years, with 15 to
20 percent of these being complaints based on veteran's status. Once a
complaint is received and prior to conducting an investigation, OFCCP
must determine if the employer is a covered Federal contractor and if
the complaint was timely filed.
OFCCP Complaints Received
(FY 2004-2008)
--------------------------------------------------------------------------------------------------------------------------------------------------------
E.O. 11246 Sec. 503 Veterans 38
------------------------------------ U.S.C. 4212
Fiscal Year Total Complaints Received -----------------
# % Rec'd # % Rec'd # % Rec'd
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2004 691 315 45.59% 200 28.94% 136 19.68%
FY 2005 717 354 49.37% 191 26.64% 119 16.60%
FY 2006 594 276 46.46% 151 25.42% 116 19.53%
FY 2007 519 251 48.36% 159 30.64% 76 14.64%
FY 2008 543 275 50.64% 148 27.26% 83 15.29%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: OFIS CI-006B 10/21/08 and 04/28/09.
Over the last 5 fiscal years, OFCCP conducted a total of 321
investigations resulting from complaints filed by veterans. Nineteen of
these investigations identified violations and were ultimately closed
with financial agreements, which resulted in a total of $399,926 in
benefits provided to veterans. Additionally, OFCCP investigates cases
under VEVRAA that result from scheduled compliance evaluations. In FY
2008, 68 contractors were cited for violations of the mandatory job
listing requirement, which resulted in conciliation agreements with
OFCCP to correct the violation and to report their progress to OFCCP.
In response to the Subcommittee question concerning how long it
takes to resolve a complaint, on average, most complaint investigations
are completed within 8 to 12 months. Investigatory time includes time
spent with the complainant to be sure that the complaint adequately
reflects the nature of the acts that led the individual to file, time
spent researching jurisdiction to ensure that the company was a covered
Federal contractor at the time of the alleged discriminatory act, and
the time spent conducting the investigation of the complaint.
The Subcommittee asked which type of businesses and which
geographical areas receive the highest number of complaints. Over 75
percent of all complaints made by veterans come from seven industries,
which are identified in the table below.
VETERANS COMPLAINTS RECEIVED BY INDUSTRY
----------------------------------------------------------------------------------------------------------------
NAICS \3\ INDUSTRY PERCENT
----------------------------------------------------------------------------------------------------------------
31-33 Manufacturing 27.5
54 Professional, Scientific & Tech. Services 12.6
56 Administration & Waste Management 10.0
61 Educational Services 9.5
48-49 Transportation & Warehousing 7.6
51 Information 5.2
62 Health Care 4.4
All Other 23.2
----------------------------------------------------------------------------------------------------------------
Over the past 5 years, the Southeast and Midwest Regions of OFCCP
have received the most veterans' complaints.
---------------------------------------------------------------------------
\3\ North American Industry Classification System (NAICS): The
NAICS is the standard used by Federal statistical agencies in
classifying business establishments for the purpose of collecting,
analyzing, and publishing statistical data related to the U.S. business
economy.
VEVRAA enforcement activities include:
Conducting compliance evaluations and complaint
investigations of Federal contractors and subcontractors personnel
policies and procedures;
Offering technical assistance to Federal contractors and
subcontractors to help them understand the regulatory requirements and
review process;
Securing relief for victims of discrimination that
includes, but is not limited to, back pay for lost wages;
Negotiating conciliation agreements with contractors and
subcontractors who are in violation of regulatory requirements;
Monitoring contractors' and subcontractors' progress to
ensure that they are fulfilling the terms of their conciliation
agreements by reviewing periodic compliance reports;
Forming linkage agreements between contractors and job
training programs to help employers identify and recruit covered
veterans; and
Recommending enforcement actions to DOL's Solicitor of
Labor.
The Subcommittee further asked what penalties OFCCP uses to
increase Federal contractor compliance. Where voluntary compliance
cannot be achieved, OFCCP may continue conciliation efforts with the
contractor; refer the matter to the Solicitor of Labor to institute
formal, administrative enforcement proceedings; or refer the case to
the Attorney General for litigation, as appropriate. If there is a
finding of discrimination against a protected veteran, the contractor
would be required to provide back-pay and other make-whole remedies.
Regarding the Subcommittee's question whether OFCCP shares
information with other agencies on Federal contractors who have failed
to comply, OFCCP does not presently have formal agreements to share
such information. However, OFCCP does use its available resources, such
as media releases, to communicate OFCCP policies, accomplishments, best
practices, awards, and enforcement actions. Information about
enforcement actions OFCCP may publicize would include the filing of
administrative complaints, the signing of conciliation agreements, the
entry of consent decrees, orders of debarment, or other news that may
be appropriate for public dissemination as determined by OFCCP's
National Headquarters.
OFCCP treats information received from Federal contractors during a
compliance evaluation as confidential, to the maximum extent allowable
under the Freedom of Information Act (FOIA). It is OFCCP practice not
to release data where the contractor is still in business and where the
contractor asserts, and a Department of Labor review process
determines, that the data are confidential and that disclosure would
subject the contractor to commercial harm. The Department's FOIA
regulations at 29 C.F.R. 70.26 require OFCCP to notify affected
contractors on a case-by-case basis whenever a FOIA request is made.
This notification gives contractors the opportunity to object to the
disclosure of any data they consider confidential.
The Subcommittee also asked about the most recent analysis of the
VETS-100 Report and associated results. OFCCP does not analyze the
VETS-100 or 100A Reports. During a compliance evaluation, OFCCP
verifies that the required VETS-100 or 100A Reports have been submitted
to VETS.
VEVRAA also requires that government contractors track and annually
report the number of employees in their workforces who are veterans
covered under the law. The reporting requirements under VEVRAA are
administered by VETS. The VETS-100 Report is filed by contractors who
entered into covered contracts prior to December 1, 2003. The VETS-100A
Report is filed by contractors who entered into covered contracts on or
after that date. Those with covered contracts entered both before and
after December 1, 2003 file both reports. The reports differ in terms
of the contract coverage threshold for filing the report as well as the
categories of protected veterans included in each report.
Federal contractors and subcontractors awarded a Federal contract
of $25,000 or more prior to December 1, 2003 are required to report
annually to the Secretary of Labor the number of employees and recent
hires who are:
Special disabled veterans;
Vietnam Era veterans;
Recently separated veterans (within 12 months of
discharge from active duty); and
Veterans who served on active duty in the U.S. military
during a war or campaign or expedition for which a campaign badge is
awarded.
The regulations in 41 C.F.R. Part 61-250 require contractors to use
the Federal Contractor Veterans' Employment Report VETS-100 (VETS-100
Report'') form to provide the information on the covered veterans in
their workforces. In FY 2008, 22,159 Federal contractors and
subcontractors filed a VETS-100 Report, and reported the employment of
341,000 Vietnam Era veterans and 62,000 Special Disabled veterans. Of
these figures, 32,000 Vietnam Era veterans and nearly 15,500 Special
Disabled veterans were newly hired during the 2008 reporting period.
The Jobs for Veterans Act (JVA) amended the VEVRRA reporting
requirements for those contractors and subcontractors with Federal
contracts of $100,000 or more awarded or modified on or after December
1, 2003. The JVA requires reporting on the following categories of
veterans:
Disabled veterans; Veterans who served on active duty in
the U.S. military during a war or campaign or expedition for which a
campaign badge is awarded;
Veterans who, while serving on active duty in the Armed
Forces, participated in a United States military operation for which an
Armed Forces service medal was awarded pursuant to Executive Order
12985; and
Recently separated veterans (with 36 months from
discharge from active duty).
The regulations that implement the JVA amendments are found in 41
C.F.R. Part 61-300, and require filing of a VETS-100A Report. The VETS-
100A reporting requirements apply to reports submitted for 2009 and
future years. Covered Federal contractors and subcontractors are
required to submit their first VETS-100A between August 1, 2009, and
September 30, 2009.
There are some contractors that will be required to submit both the
VETS-100 and the VETS-100A Reports in 2009 and subsequent years.
Contractors that hold ``unmodified'' active contracts valued at $25,000
or more that were awarded before December 1, 2003, who also enter into
or modify one or more contracts valued at $100,000 or more on or after
December 1, 2003, will be required to submit both the VETS-100 and
VETS-100A Reports. The VETS 2010 Annual Report to Congress will include
information on the number of Federal contractors and subcontractors
that were required to submit both a VETS-100 and a VETS-100A Report in
2009.
Federal Contracting Officers are prohibited from awarding or
modifying Federal contracts unless the latest VETS-100 or VETS-100A
Report has been submitted (31 U.S.C. 1354). The Secretary of Labor
makes a database available to Federal Contracting Officers listing the
VETS-100 and VETS-100A Reports received from Federal contractors and
subcontractors.
We know that there is still work to be done to increase the
employment of covered veterans. In response to the Subcommittee
question regarding incentives that OFCCP uses to increase compliance by
Federal contractors, in 2008 OFCCP established the ``Good-Faith
Initiative for Veterans Employment (G-FIVE),'' \4\ which is an
incentive program that recognizes the efforts of contractors in the
area of veterans' employment. G-FIVE reaffirms OFCCP's commitment to
ensure compliance with the requirements of VEVRAA; recognizes
companies' ``best practices'' for the employment and advancement of
veterans; creates an incentive for Federal contractors and
subcontractors to increase their employment of, and affirmative action
for, covered veterans; and strengthens VEVRAA partnerships between
OFCCP, other Federal agencies and veterans advocacy groups.
---------------------------------------------------------------------------
\4\ OFCCP's Good-Faith Initiative for Veterans Employment (G-FIVE)
web page, http://www.dol.gov/esa/ofccp/g_five.htm.
---------------------------------------------------------------------------
The following factors are considered when evaluating Federal
contractor and subcontractor establishments for G-FIVE recognition:
Evidence of covered veterans in the contractor's labor
force;
During the AAP year, evidence of an increase in the
number of covered veterans in the contractor's labor force;
The number of partnerships with local veterans' service
organizations to employ or advance covered veterans;
Established liaison with the state workforce agency job
bank or the local employment service delivery system representative to
facilitate the posting of their job listings;
Whether appropriate job openings were sent to the state
and/or local employment service delivery system;
Number of veterans hired by the contractor during the AAP
year;
Recruitment efforts at educational institutions to reach
students who are covered veterans;
The number of job advertisements in the local community
targeting veterans;
Targeted recruitment of qualified covered veterans during
company career days and/or related activities in contractor
communities;
For prime contractors, evidence that demonstrates a
commitment to encourage their subcontractors to seek qualified covered
veterans for employment opportunities;
Affirmative action steps taken to attract qualified
special disabled or disabled veterans through the nearest Veterans
Administration job placement program; and
The number of on-the-job training opportunities provided
to covered veterans.
G-FIVE rated contractors and subcontractors are eligible to receive
certificates and are recognized on the OFCCP Web site. Additionally,
the establishments of contractors or subcontractors which received a G-
FIVE rating are excluded from an OFCCP compliance evaluation for 3
years following the receipt of the rating, unless: 1) a complaint
suggests equal employment opportunity issues that warrant a compliance
evaluation; 2) an EEOC or State fair employment practices agency
investigation reveals significant equal employment opportunity issues;
or 3) the OFCCP Deputy Assistant Secretary, acting upon a credible
report of a violation of a law enforced by OFCCP, determines that a
compliance evaluation is warranted. Since calendar year 2008, OFCCP has
recognized five Federal contractors for their exemplary efforts in
hiring covered veterans.
Another initiative sponsored in part by OFCCP is Operation Stand
Down, an annual event held in Nashville, Tennessee to assist homeless
veterans. Operation Stand Down provides services to honorably
discharged veterans, including employment services, transitional
housing, and referrals to other support services agencies.
In summary, although we have made progress in addressing equal
employment opportunity for veterans among Federal contractors and
subcontractors, we have an opportunity at this point in time to build
on our efforts to further full economic opportunity for veterans
throughout America's workforce. OFCCP looks forward to working with our
new Deputy Assistant Secretary, once that person is announced and on
board, and Members of this Committee in order to improve contracting
opportunities for veterans.
This concludes my statement, and I would be happy to respond to any
questions.
Prepared Statement of Jan R. Frye,
Deputy Assistant Secretary for Acquisition and Logistics,
U.S. Department of Veterans Affairs
Madam Chair, Members of the Subcommittee, thank you for the
opportunity to appear before you today to discuss VA's acquisition
operations with regards to Federal Contractor Compliance. It is a
privilege for me to represent the many dedicated and hardworking
acquisition and logistics professionals throughout the Department that
provide mission-critical support everyday to ensure quality care and
benefit delivery for our Nation's most special citizens: our Veterans.
I have been asked specifically to address the issue of Federal
contractor compliance with regard to employment of Veterans in Federal
contracting. The Committee requested that VA respond to a series of
questions and I would like to take this opportunity to do so.
The first question centers on how VA monitors contractor compliance
with 38 USC Sec. 4212. VA contracting officers comply with the Federal
Acquisition Regulation (FAR). They are required to verify vendor
compliance prior to the award or modification of a contract. They may
accomplish this by several appropriate means, but they must rely on the
Department of Labor's Veterans' Employment and Training Service-100
(VETS-100) database to ensure that apparently successful offerors have
completed the required reporting for the appropriate reporting year.
To improve VA's oversight and ensure vendors doing business with
the VA have complied with the requirements, as amended, of the Vietnam
Era Veterans' Readjustment Assistance Act of 1974, I have instituted
two significant changes:
The first is the issuance of an information letter to VA's Heads of
Contracting Activities reinforcing that contracting officers must be
aware of this important requirement and their responsibility to query
the VETS-100 database. Second, to establish an electronic record of the
contracting officer complying with the policy, I have directed that
VA's contract writing system be modified to add a mandatory feature to
allow contracting officers to record when they query the VETS-100
database prior to award or the exercise of contract options. This
feature will create the electronic record that VA will be able to use
to monitor compliance on a recurring basis in the future.
Until changes are implemented with VA's contract writing system, we
will continue to work with the Department of Labor to extract VA-
specific compliance information from the VETS-100 system.
The second question from the Subcommittee inquired as to how many
VA contractors are non-compliant. In response to the Subcommittee's
request, we conducted a review of a statistically significant, randomly
selected sample of contract files throughout VA. All contracts in the
sample had the appropriate FAR Part 52 contract clauses in place, and
all contractors were fully compliant with the Department of Labor's
reporting requirements.
Third, the Subcommittee requested information on any action VA
takes to address non-compliant contactors, and last, whether non-
compliance affects a company's ability to do business with VA.
At this time we are not aware of vendors who are non-compliant.
Non-compliance would affect a company's ability to contract with VA.
For those contractors deemed to be non-compliant, VA will take action
as set forth in FAR Part 22. The first step would be to notify the
Department of Labor and then make efforts to negotiate a mutually
acceptable remedy. Failure to reach a remedy could result in
termination of the contract for default. VA will also improve the
capability of its information systems to ensure that no contract is
awarded or modified unless the current VETS-100 Reports have been
submitted by the apparent successful offeror.
Madam Chair, I would like to close by thanking you for the
opportunity to discuss VETS-100 Reporting, and the Federal Contractor
Compliance program at VA. We will continue to work diligently to
improve and set a standard worthy of emulation throughout the Federal
acquisition community. I would be pleased to respond to any questions
you or the Subcommittee's Members may have.
Statement of National Veteran-Owned Business Association
Madam Chairwoman Sandlin, Ranking Member Boozman, Committee Members
and staff. Thank you for the opportunity to submit this statement for
the record. NaVOBA represents over 2000 veteran-owned small businesses
in the United States. We are concerned about Federal contractor
compliance with Title 38 U.S. Code section 4212 requiring for any
contract over $100,000 or more ``the party contracting with the United
States take affirmative action to employ and advance in employment
qualified covered veterans.''
We understand the U.S. Department of Labor, Office of Federal
Contract Compliance Program (DOL-OFCCP) has primary responsibility for
insuring employment possibilities for qualified covered veterans.
Federal Acquisition Regulation (FAR) Part 22.1306 requires contractors
and subcontractors to submit a report at least annually to the
Secretary of Labor regarding employment of covered veterans. The
contractor and subcontractor must use Form VETS-100, Federal Contractor
Veterans' Employment Report to submit the required reports. FAR Part
22.1302(b) states: ``except for contracts for commercial items or
contracts that do not exceed the simplified acquisition threshold,
contracting officers must not obligate or expend funds appropriated for
the agency for a fiscal year to enter into a contract or procurement of
personal property and nonpersonal services (including construction)
with a contractor that has not submitted as required annual Form VETS-
100, Federal Contractor Veterans' Employment Report (VETS-100 Report),
with respect to the preceding fiscal year if the contractor was subject
to the reporting requirements of 38 U.S.C. 4212(d) for that fiscal
year''. We do not believe contracting officers regularly check with
DOL-OFCCP to see whether the required reports have been submitted.
NaVOBA respectfully requests the Committee survey contracting
officers in government agencies, including VA to see:
1. Are contracting officers aware of the need for VETS-100
Reporting?
2. Do contracting officers include the required clauses in
solicitations and contracts?
3. Do contracting officers check with DOL-OFCC to determine if
prospective contractors have submitted required reports prior to
contract execution?
4. Do contracting officers provide necessary material to
contractors to post at their work places?
NaVOBA is also concerned as to whether DOL-OFCCP is enforcing the
requirements of 38USC4212. We are not aware of DOL-OFCCP running any
reports from the Federal Procurement Data System award data against the
list of companies delinquent in filing their VETS-100 Reports to
identify if any non-compliant companies are receiving awards. We are
also concerned about what happens with any data collected. We are aware
of instances when Federal agencies have requested VETS-100 data from
DOL-OFCCP and have been told the data is ``proprietary information''
and is not releasable by DOL. We question why DOL expends valuable
resources to collect data and then does nothing with it? Why collect
contractor utilization data if the information cannot be made publicly
available?
NaVOBA commends the Committee for holding this hearing on an
important issue in the veterans' community. We look forward to working
with the Committee to improve this process.
MATERIAL SUBMITTED FOR THE RECORD
Committee on Veterans' Affairs
Subcommittee on Economic Opportunity
Washington, DC.
May 20, 2009
Mr. Thomas S. Whitaker
President, National Association of State Workforce Agencies
Deputy Chairman/Chief Counsel
North Carolina Employment Security Commission
444 North Capitol Street, N.W.
Suite 142
Washington, DC 20001
Dear Mr. Whitaker:
I would like to request your response to the enclosed questions for
the record I am submitting in reference to our House Committee on
Veterans' Affairs Subcommittee on Economic Opportunity hearing on
Federal Contractor Compliance on May 14, 2009. Please answer the
enclosed hearing questions by no later than Wednesday, July 1, 2009.
In an effort to reduce printing costs, the Committee on Veterans'
Affairs, in cooperation with the Joint Committee on Printing, is
implementing some formatting changes for material for all Full
Committee and Subcommittee hearings. Therefore, it would be appreciated
if you could provide your answers consecutively on letter size paper,
single-spaced. In addition, please restate the question in its entirety
before the answer.
Due to the delay in receiving mail, please provide your response to
Ms. Orfa Torres by fax at (202) 225-2034. If you have any questions,
please call (202) 226-4150.
Sincerely,
Stephanie Herseth Sandlin
Chairwoman
__________
NASWA's Response to Questions Posed by
Chairwoman Herseth Sandlin in her May 20, 2009, Letter
Question 1: Should the Department of Labor generate an official
list of Federal contractors?
Response: Yes. All Federal contractors need to be recorded as such
in a central location. This will allow States to contact employers with
Federal contracts for veterans' job referrals. The U.S. Department of
Labor should commission a study to identify the best process to create
and maintain such a list. The study should also identify suitable
technological solutions. In the past, there was an attempt to create
such a list which was initially successful. However, manual update
processes rendered such efforts useless as information quickly became
outdated.
Without a Federal contractor list, the States' one-stop center
staff members, including DVOPs and LVERs, often have to speculate which
employers might be Federal contractors, and take action accordingly. A
list would help them to direct efforts to employers on the contractor
list.
Question 2: Can you explain what you mean by your statement,
``state workforce agencies are also interested in standardizing
communication protocols with OFCCP during and at the conclusion of the
employer audit process.''
Response:
a. Each State workforce agency has different procedures
established to handle the provision of requested information to OFCCP
regional staff during Federal contractor audits. It is important that
regional OFCCP staff contact the designated State representative to
facilitate effective communication. NASWA can assist in identifying the
appropriate State workforce agency personnel for these purposes.
b. In addition, it appears that OFCCP regional offices do not
follow standardized audit procedures when contacting State workforce
agencies or request the same type of information from State workforce
agencies. NASWA has communicated this concern with OFCCP, and they have
indicated a desire to work with us to improve communications between
States and OFCCP.
c. Finally, States have indicated that they hardly ever receive
information about audit outcomes on particular employers once audits
are completed. Receiving some resolution information would be helpful
in working with employers following the audit.
Question 3: In your testimony you State that LVERs/DVOPs are
particularly frustrated when they have knowledge of Federal contractors
who will not list with the employment service but cannot get Federal
action initiated? Can you explain what you mean by this?
Response: Many times LVERs/DVOPs contact employers, whom they
believe are Federal contractors, and are met with a refusal to list in
the employment service. (State staff also indicated many times
employers are genuinely not aware of their FCJL obligations or at the
local level are not aware of their corporation's Federal contractor
status).
Since there is no list of Federal contractors, LVERs/DVOPs make
such contacts based on their past knowledge of an employer's Federal
contractor status or because OFCCP has recently asked them to report on
whether an employer has listed with the employment service (therefore
indicating they are Federal contractors). In addition, they outreach to
employers they believe are Federal contractors based on information
received through local social/business networks or through media
coverage.
In many cases, after LVERs and DVOPs report employer refusals to
cooperate to OFCCP, no action appears to have been taken. If there is
any action, LVERs and DVOPs are not informed of any progress. LVERs and
DVOPs indicate it is their experience that action is only forthcoming
when it involves a formal Equal Opportunity complaint by a customer.
This situation enforces the LVERs and DVOPs perception FCJL
requirements are superficial.
Question 4: How do veterans get priority in the daily emails
VetCentral sends of Federal Contractor Job Listings jobs?
Response: VetCentral emails are emailed to staff designated by
State workforce agency administrators. These primarily are LVERs and
DVOPs who only serve veterans. An example of how such emails are used
is a Georgia LVER, who upon receiving his daily VetCentral email
immediately forwards this to his list of veteran customers.
Question 5: How much more personnel does OFCCP need and where?
Response: It does appear that OFCCP could benefit from more
personnel. However, since we do not know how many Federal contractors
there are or where they are located, it is really difficult to suggest
specific increases in personnel needed within OFCCP. Once resolution
regarding the issue of the Federal contractors list is underway and
with the input from State workforce agencies, it would be easier to
gauge personnel needs in the various OFCCP regions.
Committee on Veterans' Affairs
Subcommittee on Economic Opportunity
Washington, DC.
May 20, 2009
Mr. James King
Executive Director
AMVETS
4647 Forbes Blvd.
Lanham, MD 20706
Dear Mr. King:
I would like to request your response to the enclosed questions for
the record I am submitting in reference to our House Committee on
Veterans' Affairs Subcommittee on Economic Opportunity hearing on
Federal Contractor Compliance on May 14, 2009. Please answer the
enclosed hearing questions by no later than Wednesday, July 1, 2009.
In an effort to reduce printing costs, the Committee on Veterans'
Affairs, in cooperation with the Joint Committee on Printing, is
implementing some formatting changes for material for all Full
Committee and Subcommittee hearings. Therefore, it would be appreciated
if you could provide your answers consecutively on letter size paper,
single-spaced. In addition, please restate the question in its entirety
before the answer.
Due to the delay in receiving mail, please provide your response to
Ms. Orfa Torres by fax at (202) 225-2034. If you have any questions,
please call (202) 226-4150.
Sincerely,
Stephanie Herseth Sandlin
Chairwoman
__________
Response To Committee's Questions For The Record By
Christina M. Roof, AMVETS National Deputy Legislative Director
Submitted to Subcommittee on Economic Opportunity
of the House Committee on Veterans' Affairs
Concerning Federal Contract Compliance
Question 1: In your testimony, you state that the Department of
Labor and OFCCP auditing methods are unnecessarily lengthy and lack
accountability and uniformity. How can we improve these audits?
Response: AMVETS believes that in order for an organization to
sufficiently provide control and oversight, that contract auditing
should be performed periodically by the organization's auditing
department, or if this kind of department is not yet established, via a
contract auditing agency or firm. These audits will provide the
necessary information required to ensure the integrity of all VA
contracts, as well as providing verification that the reason(s) for
issuing the contract or that the savings envisioned as part of the
award are being met. A well organized, timely audit provides
transparency to the total procurement process and confirms that public
trust is fulfilled. As we know, most of the time VA contracts are put
into place, but the contract reviews fail to occur. It is vital to the
stability of any contracting system that there is a set, structured
process in place to verify that all pertinent issues of a contract are
being met. These include, but are not limited to, the obligations
regarding title 38 U.S.C., section 4212, terms and conditions regarding
price, procedure, and invoicing, as well as the quality of work
performed. VA and OFCCP must start performing organized, non-
reactionary audits if VA hopes to deter fraudulent activities, protect
our veteran business community, and assure that the funds allotted per
award are used properly.
A well organized procurement auditing system begins with the
contract and procurement officers. Deterring fraudulent activities and
behaviors at the beginning of the contracting process will greatly
reduce the rate and occurrences of future noncompliant activities by
contractors. A competitive bid process has inherent controls that
afford reduced risk. A key factor AMVETS believes is hurting our
veteran business population in the current procurement process is
collusive bidding and fraud in the reporting of use of SDVOSB and VOSB
as subcontractors in these large procurements. AMVETS believes that as
a part of restructuring the auditing process, VA should start from the
ground up and involve their procurement officers. AMVETS suggests a
stronger, more job dependent training process, and annual retesting of
current procurement officers to ensure all officers are up to date on
current VA procurement policy. If VA starts by promoting knowledge and
education from within the agency as a means eliminating fraud, VA only
stands to better the entire procurement process and aid our veteran
business community.
The next step AMVETS believes is vital in strengthening VA's
auditing process is the reevaluation of enforcement authority. Failure
to comply with all nondiscretionary or affirmative action provisions is
essentially a violation of the contract. OFCCP was initially founded as
a subsection of DOL, and was designed to be the ultimate authority,
unmatched by any other government agency, in their ability to conduct
reviews and audits of employers' employment practices to ferret out any
discrimination.
Currently, DOL's OFCCP has the authority to enforce these laws
through audits and evaluations of a company's Affirmative Action
Program and employment practices.
Nonetheless, AMVETS believes that VA and OFCCP have become too
heavily reliant on contractors engaging in self-evaluation, designed
originally for the purpose of discovering any barriers to equal
employment opportunity, but now are being used as a way of getting
around any compliance issues that may be present. In view of the fact
that VA testified, on May 14, 2009, that they had not conducted a
single contract audit in the past four years and were not able to
collect any information from DOL on VA contracts that have been
audited, AMVETS cannot specifically recommend any improvements to a
non-enforced process. This being the case, AMVETS will use the current
OFCCP auditing process as described in their training material as well
as interviews we conducted with field officers on the challenges they
face on a daily basis, that inhibit a productive auditing system.
AMVETS deemed it is particularly important to speak with different
OFCCP offices throughout the country to get a better understanding of
the true challenges they feel are inhibiting their individual
performances and the overall performance of the OFCCP auditing system.
AMVETS continually hears the same concerns when speaking with OFCCP
field officers. The field officers state that due to current statutes
and timeframes given to contractors to reply to OFCCP's request for
documentation to begin the compliancy audit process. The field agents
were greatly troubled by this lengthy time period due to the fact that
by the time they actually get the access to records they need, it is
often too late, because former employees can not be reached to
substantiate claims or the contractor hires a lawyer resulting in
settlements for pennies on the dollar of what they would have truly
owed for breaching contract terms. If and when a contractor does settle
to avoid an audit the only consequences for their noncompliance is that
they are required to file a quarterly report with the OFCCP showing the
steps they have implemented to correct any problems with compliance.
What is even harder to understand is why after being recognized as a
possible risk to a contract there is rarely ever surprise onsite visits
that occur to validate that everything they are reporting quarterly is
actually occurring. Most of the field officers AMVETS spoke with said
that currently contractors are aware that there is a significant lack
of oversight on VA awards and contractors know they can and will get
away with noncompliance no matter how small or large of a violation it
is. AMVETS finds this totally unacceptable. Between VA, OMB, OIG and
OFCCP, AMVETS finds there is no valid reason that this type of behavior
is widely known and practiced. GAO has pointed out these shortfalls in
oversight numerous times, yet they are still occurring? Respectfully,
if VA and this committee are truly dedicated to helping our veteran
business community, then they should take immediate steps to implement
change and improve oversight. Furthermore, OMB Circular No. a-133
states that the Federal agency that awards a grant or contract to a
recipient is responsible for ensuring the recipient stays in compliance
with Federal laws, regulations, and all of the provisions of the award
agreement.
While studying the current auditing processes (or lack thereof)
AMVETS recommends the following practices be implemented or reinstated
to improve VA's procurement system.
1. Implement the use of a well designed audit program that
provides:
Immediate access to all field audit data at any level,
using a secure extended enterprise server.
Establish a database that is also accessible to all
field and central locations to enable, but is not limited to, real-time
and historical data, employment practice analysis, inventory losses,
and affirmative action plan violation database.
Automate and streamline the data entry process of the
audit and investigations of complaints data to minimize errors and
centralize all historical relevant data on a contractor and award. This
system should be set up to automatically flag inconsistent data and
repeat compliance offenders. This will help eliminate human error as
well as provide VA with more reliable data on their awards.
Enable auditors to review audit scores interactively
with other necessary personnel or agency involved in the compliance
audit process allowing internal review of individual audits as a means
of continuing education and constant review of current processes to
identify weaknesses in the auditing methods being used by VA. This
``real scenario'' form of systems review has been proven the most
successful in offering Fortune 500 companies the internal data needed
to implement improvements to their systems. A well-integrated training
program will ensure that all auditors and centralized personnel conform
to the uniformed standards of any auditing process. To put it simply,
``When everyone is on the same page there is little room for confusion
and error.'' By implementing this practice, VA will be using an ``audit
solution that is auditable.''
2. Enable a centralized system for communication between all
agencies and personnel involved in the VA contract auditing process.
There should be uniformed standards of data reporting and communication
to ensure accurate results, so corrective actions can be taken
immediately. VA must be able to manage all data quickly and effectively
to be successful in the procurement process and in regards to
protecting the rights of those who served.
3. Transparency in an auditing process will yield clearer
standards, better performance and a significant savings in funds for
VA. Field auditors must know that management and central office
reviewers have full visibility and access to their data and results.
This should also be true for central office personnel. These practices
of contract management help implement a procurement program designed
around successful results and accountability.
After extensive research of written compliancy auditing procedures
set forth by DOL, in regards to OFCCP, I found that they are quite
detailed and should prove to be an excellent model from which VA can
build its foundation of a uniformed auditing system. However, just
because these laws, regulations, and procedures are in place, there is
still absolutely no guarantee that they are being used as they were
designed to be or that all personnel have been taught proper procedure.
After 6 years of contract auditing and human resource consulting, I can
honestly say that VA's gross lack of oversight on the awards they have
granted has likely cost them millions of dollars, and even more
disturbing is the cost paid by thousands of veterans who were never
given the chance that laws and their service entitles them to.
Finally, AMVETS strongly believes that in order for VA to
successfully implement all of the actions necessary regarding
improvements of procurement activities, including audits, that it is
vital that this Committee or another agency the Committee deems fit, to
have oversight on the process in a way that VA is probably not used to.
We have full confidence that VA is more than capable of implementing
the training and use of these procedures, but it will come down to
whether or not they are held accountable to do so.
Committee on Veterans' Affairs
Subcommittee on Economic Opportunity
Washington, DC.
May 20, 2009
Mr. Peter Gaytan
Executive Director
The American Legion
1608 K Street, NW
Washington, DC 20006
Dear Mr. Gaytan:
I would like to request your response to the enclosed questions for
the record I am submitting in reference to our House Committee on
Veterans' Affairs Subcommittee on Economic Opportunity hearing on
Federal Contractor Compliance on May 14, 2009. Please answer the
enclosed hearing questions by no later than Wednesday, July 1, 2009.
In an effort to reduce printing costs, the Committee on Veterans'
Affairs, in cooperation with the Joint Committee on Printing, is
implementing some formatting changes for material for all Full
Committee and Subcommittee hearings. Therefore, it would be appreciated
if you could provide your answers consecutively on letter size paper,
single-spaced. In addition, please restate the question in its entirety
before the answer.
Due to the delay in receiving mail, please provide your response to
Ms. Orfa Torres by fax at (202) 225-2034. If you have any questions,
please call (202) 226-4150.
Sincerely,
Stephanie Herseth Sandlin
Chairwoman
__________
The American Legion
Washington, DC.
July 1, 2009
Honorable Stephanie Herseth Sandlin, Chairwoman
Subcommittee on Economic Opportunity
Committee on Veterans' Affairs
U.S. House of Representatives
335 Cannon House Office Building
Washington, DC 20515
Dear Madam Chairwoman:
Thank you for allowing The American Legion to participate in the
Subcommittee hearing on Federal Contractor Compliance on May 14, 2009.
I respectfully submit the following in response to your additional
questions.
1. Why do you think that Federal contractors and subcontractors
are not hiring veterans?
The American Legion believes the Office of Federal Contract
Compliance Program (OFCCP) does not ensure employers comply with non-
discrimination and affirmative action laws and regulations in hiring
veterans when doing business with the Federal Government because it is
not a priority.
2. In your estimation are veterans being hired as a result of
section 4212 of Title 38?
The American Legion does not believe veterans are being hired as a
result of section 4212 of Title 38. Prior to the hearing on May 14,
requests were made by The American Legion repeatedly to the OFCCP for
written and oral documentation on the success of their office in hiring
veterans. We were also concerned with their ability to monitor and
track veteran hiring compliance of Federal contractors and
subcontractors. We found representatives of OFCCP to be extremely
uncooperative, written performance reports were denied to us, phone
calls were not returned, and the only information that was provided was
taken from their website. Therefore, along with negative comments made
by LVER's and DVETS from around the country, The American Legion has
recommended that the Federal Contractor Veterans Employment Program
presently under OFCCP should be placed--with additional funding and
staffing--under the direction of the Department of Labor's Veterans
Employment Training Service (DOL-VETS). This move will provide this
program with adequate oversight, as well as input and guidance from
stakeholders.
Thank you for your continued commitment to America's veterans and
their families.
Sincerely,
Joseph C. Sharpe Jr., Director
National Economic Commission
Committee on Veterans' Affairs
Subcommittee on Economic Opportunity
Washington, DC.
May 20, 2009
Mr. Lorenzo Harrison
Acting Deputy Assistant Secretary for the
Office of Federal Contract Compliance Programs
U.S. Department of Labor
200 Constitution Avenue, N.W.
Washington, DC 20210
Dear Mr. Harrison:
I would like to request your response to the enclosed questions for
the record I am submitting in reference to our House Committee on
Veterans' Affairs Subcommittee on Economic Opportunity hearing on
Federal Contractor Compliance on May 14, 2009. Please answer the
enclosed hearing questions by no later than Wednesday, July 1, 2009.
In an effort to reduce printing costs, the Committee on Veterans'
Affairs, in cooperation with the Joint Committee on Printing, is
implementing some formatting changes for material for all Full
Committee and Subcommittee hearings. Therefore, it would be appreciated
if you could provide your answers consecutively on letter size paper,
single-spaced. In addition, please restate the question in its entirety
before the answer.
Due to the delay in receiving mail, please provide your response to
Ms. Orfa Torres by fax at (202) 225-2034. If you have any questions,
please call (202) 226-4150.
Sincerely,
Stephanie Herseth Sandlin
Chairwoman
__________
U.S. Department of Labor
Employment Standards Administration
Office of Federal Contract Compliance Programs
Washington, DC.
July 17, 2009
Hon. Stephanie Herseth Sandlin
United States House of Representatives
Chairwoman,
Committee on Veterans' Affairs
Washington, DC 20515
Dear Congresswoman Herseth Sandlin:
This letter responds to your May 20, 2009 correspondence requesting
answers for the record regarding the Department of Labor, Office of
Federal Contract Compliance Programs, May 14, 2009, hearing before your
House Committee on Federal Contractor Compliance.
Please find the enclosed responses to each of the Committee
questions for the record. Per your request, I am also providing my
response by email to Ms. Orfa Torres and by fax at (202) 225-2034.
If you have any follow-up questions, please do not hesitate to
forward them to me for a prompt response.
Sincerely,
Lorenzo D. Harrison
Acting Deputy Assistant Secretary for Federal Contract Compliance
Enclosure
__________
U.S. DEPARTMENT OF LABOR
BEFORE THE
SUBCOMMITTEE ON ECONOMIC OPPORTUNITY
COMMITTEE ON VETERANS' AFFAIRS
U.S. HOUSE OF REPRESENTATIVES
HEARING HELD--MAY 14, 2009
RESPONSES TO QUESTIONS FOR THE RECORD
Question 1: Besides collecting the VETS-100 Report, what else does
the Department of Labor do with the information?
Response: The information collected by the Department in the VETS-
100 Report is used to support the overall Federal procurement process.
Federal Contracting Officers (CO) are prohibited from awarding or
modifying Federal contracts unless the latest VETS-100 or VETS-100A
Report has been submitted by the contractor. The Department
electronically maintains the information submitted annually by
contractors to the Veterans' Employment and Training Service (VETS), as
prescribed by 38 U.S.C. Sec. 4212(d)(1). The information is stored in a
system called the ``VETS-100 Reporting System,'' which is accessible by
all Cos. A CO can either go directly to the VETS-100 Web site or
telephone VETS to verify a contractor's submission.
In addition, the information is also used to support
intradepartmental initiatives. For example, VETS provided the Office of
the Federal Contract Compliance Programs (OFCCP) a copy of the FY 2007
VETS-100 Report (filed by Federal contractors for the reporting period
that ended September 30, 2007). The report was used by OFCCP for their
initial review of ``Good-Faith Initiative for Veterans Employment'' (G-
FIVE) candidates. OFCCP's G-FIVE initiative is an incentive program
that recognizes the good-faith efforts of contractors in the area of
veterans' employment.\1\
---------------------------------------------------------------------------
\1\ OFCCP's Good-Faith Initiative for Veterans Employment (G-FIVE)
web page, http://www.dol.gov/esa/ofccp/g_five.htm.
---------------------------------------------------------------------------
Within the coming months, VETS will provide the OFCCP with direct,
real-time access to the VETS-100 Reporting System. OFCCP anticipates
using the data to:
Screen and investigate Federal contractors that have few
or no protected veterans on their payroll;
Enhance compliance investigations by determining whether
a contractor has hired protected veterans that applied for job
openings; and
Validate whether a contractor has submitted the
appropriate VETS-100 Report.
Furthermore, the Department will be steadfast in its effort to
strengthen OFCCP's enforcement capacity under the Vietnam Era Veterans'
Readjustment Assistance Act (VEVRAA). The enforcement strategy will
include, inter alia, working collaboratively with VETS in the
utilization and analysis of the VETS-100 and 100A reports;
consideration of comprehensive revision of VEVRAA regulations to enable
OFCCP to conduct more in-depth reviews and investigations of Federal
contractor personnel practices, and working collaboratively with the
Employment and Training Administration (ETA) and VETS to strengthen the
Department's approach in the enforcement of VEVRAA, and reaching out to
the Department of Veterans Affairs to identify and improve employment
results for covered veterans. The Department is convinced that the best
administration of veterans' rights under VEVRAA is fundamentally tied
to statutory authority that enables OFCCP to proactively review the
contractor's compliance, even in the absence of a complaint. In the
near term, the Department will determine whether regulatory changes
should be proposed that would allow evaluation of recruitment and
placement results under the current statute.
Question 2: Does the Department of Labor review any award data
reports from the Federal Procurement Data System against the delinquent
filing companies to see if any have received a contract?
Response: As previously indicated, Federal COs are prohibited from
awarding or modifying Federal contracts unless the latest VETS-100 or
VETS-100A Report has been submitted (31 U.S.C. Sec. 1354). Once the
appropriate VETS-100 Report is submitted, the award of the contract can
be made. The Federal Acquisition Regulation provision that implements
this requirement is 48 CFR 22.1302(b).
Currently, OFCCP uses the Federal Procurement Data System to
establish jurisdiction and to assist in the proper identification of
contractors that should be scheduled for compliance reviews. In
addition, during the compliance review, OFCCP verifies that the VETS-
100 Report has been submitted to VETS. If, during the review process,
it is determined that the contractor failed to file a VETS-100 or 100A,
OFCCP will notify VETS as outlined in 41 CFR Parts 60-250.60(c) and 60-
300.60(c). See also 41 CFR 61-250.20.
Question 3: The 2005 Government Accountability Office report, notes
that Department of Labor cut the contract that provided a central
repository of contractors maintained by the National Veterans Training
Institute. Does Department of Labor or anyone maintain a central
repository of contractors today?
Response: Unfortunately, there is no all-encompassing central
database for Federal contractors. Currently, OFCCP utilizes the
Standard Form 100, Employer Information Report, (commonly referred to
as the ``EEO-1 Report'') database as a means to identify Federal
contractors who may be subject to VEVRAA and other laws enforced by
OFCCP. The Equal Employment Opportunity Commission (EEOC) and OFCCP
jointly require larger employers and Federal contractors to file the
EEO-1 Report annually. The EEO-1 Report contains information on the
employer's minority and female workforce \2\ and asks the employer to
identify whether it is a Federal contractor. EEO-1 Report data are used
to analyze patterns of employment discrimination and to support civil
rights enforcement. The OFCCP also uses EEO-1 Report data to determine
which employer facilities to select for compliance evaluations. In
addition, OFCCP uses the Federal Procurement Data System to verify that
a contractor has current Federal contracts.
---------------------------------------------------------------------------
\2\ See 42 U.S.C 2000e-8(c). For more information on who must file
the EEO-1 Report, see http://www.eeoc.gov/eeo1survey/whomustfile.html.
Question 4: If veterans have priority in hiring (referrals) from
Federal contractors how does simply posting all jobs on the Internet
---------------------------------------------------------------------------
give veterans priority?
Response: VEVRAA does not require Federal contractors to give
veterans special preference in hiring. VEVRAA does, however, require
that protected veterans receive priority from state employment service
delivery systems when such systems are referring applicants to job
openings listed by Federal contractors. Should a veteran apply for a
job with a Federal contractor as a result of a referral, the veteran
will be invited to voluntarily identify whether he or she is a veteran
protected by VEVRAA. Federal contractors may not discriminate against
protected veterans and must take affirmative action to employ qualified
veterans. The affirmative action prescribed by VEVRAA does not include
providing hiring preferences to protected veterans by contractors.
Contractors may satisfy VEVRAA's mandatory job listing requirement
by listing job openings with the state workforce agency job bank in the
state where the job opening occurs or with the appropriate local
employment service delivery system where the opening occurs.
States have prescribed a variety of procedures for listing job
openings and a particular state may permit listing in its employment
service delivery system by various methods, such as electronic posting/
notification. In some states, a Federal contractor may satisfy its
mandatory job listing requirement under VEVRAA by sending an email
message to the local employment service office or to the appropriate
employment service delivery system that includes a link: to a specific
job opening on the contractor's Web site. Irrespective of the method
used, the VEVRAA job listing obligation requires that the contractor
provide information about an employment opening in the manner
prescribed by the employment service delivery system. The contractor
must provide information that is sufficient to allow the appropriate
employment service delivery system to carry out its responsibilities
under VEVRAA to give protected veterans priority in referrals to
Federal contractor employment openings.
Question 5: Should all Federal contractors be required to send a
copy of their jobs listings to the local DVOP/L VER before it is posted
anywhere?
Response: Under current OFCCP regulations, contractors must list
all employment opportunities, except those exempted under 41 CFR 60-
250.5(a)6 and 60-300.5(a)6, with the appropriate employment service
delivery system. Listing with the state workforce agency job bank: will
satisfy this requirement. Once the jobs are listed, state and local
employment personnel, to include DVOPS and L VERs, have access to the
listings and can use them to identify qualified veterans for the job
openings.
Committee on Veterans' Affairs
Subcommittee on Economic Opportunity
Washington, DC.
May 20, 2009
Mr. Jan R. Frye
Deputy Assistant Secretary for Acquisition and Logistics
U.S. Department of Veterans Affairs
810 Vermont Ave., NW
Washington, DC 20420
Dear Mr. Frye:
I would like to request your response to the enclosed questions for
the record I am submitting in reference to our House Committee on
Veterans' Affairs Subcommittee on Economic Opportunity hearing on
Federal Contractor Compliance on May 14, 2009. Please answer the
enclosed hearing questions by no later than Wednesday, July 1, 2009.
In an effort to reduce printing costs, the Committee on Veterans'
Affairs, in cooperation with the Joint Committee on Printing, is
implementing some formatting changes for material for all Full
Committee and Subcommittee hearings. Therefore, it would be appreciated
if you could provide your answers consecutively on letter size paper,
single-spaced. In addition, please restate the question in its entirety
before the answer.
Due to the delay in receiving mail, please provide your response to
Ms. Orfa Torres by fax at (202) 225-2034. If you have any questions,
please call (202) 226-4150.
Sincerely,
Stephanie Herseth Sandlin
Chairwoman
__________
Questions for the Record
Hon. Stephanie Herseth Sandlin, Chairwoman
Subcommittee on Economic Opportunity
House Committee on Veterans' Affairs
May 14, 2009
Federal Contractor Compliance
Question 1: Do any companies provide the Department of Veterans
Affairs regional offices with their job listings?
Response: The Department of Veterans Affairs (VA) does not receive
job listings from any companies. Department of Labor (DOL) requires
contractors and subcontractors to provide job listings to the nearest
State employment service. The requirement applies to vacancies at all
locations of a business not otherwise exempt under the company's
Federal contract. Qualified targeted Veterans receive priority for
referral to Federal contractor job openings listed at those offices.
The priority for referral does not guarantee Veterans will be hired.
Question 2: In your testimony you state that ``until changes are
implemented with the Department of Veterans Affairs contracting system,
we will continue to work with the Department of Labor to extract VA-
specific compliance information.'' Can you elaborate on what you mean
by this statement?
Response: At this time, VA does not have an automated process in
place to monitor DOL's Veteran's employment and training service-100
(VETS-100) database. VA contracting officers comply with the Federal
Acquisition Regulation and the requirement to verify vendor compliance
prior to award or modification of a contract. The VA's Office of
Acquisition and Logistics Programs and Policy is adding a mandatory
feature to its electronic contract management system. This feature will
be effective October 30, 2009, and will allow contracting officers to
record when they query the VETS-100 database prior to award or the
exercise of contract options. Contracting officers must use this system
to provide an electronic record of compliance with VETS-100. This
feature will provide an electronic record for each action and track
compliance. VA will continue to work with DOL to extract VA specific
compliance information on the appropriate actions.
Question 3: Does the Department of Veterans Affairs check subprime
contractors for compliance?
Response: Contractors and subcontractors are held to the same
standards of VETS-100 Reporting. For that reason, VA uses the same
process to verify compliance. VA's contracting officers use DOL to
access the information required to verify compliance prior to award of
actions above the appropriate dollar threshold.