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Michigan Federal Contracts

Posted by Tamara

Michigan federal contractors that prefer not to be the subject of unending audits will be happy with a recent ruling regarding the OFCCP (Office of Federal Contract Compliance Programs).

The good news revolves around the scope that the OFCCP has when conducting an audit, and will also affect federal contractors across the country.

As a result of a landmark case involving the Frito-Lay plant in Dallas, Texas, the judge found that OFCCP could not continue to ask for more information to audit. The court found that the original audit scheduling letter set limits on what documents would be available to the government agency.

The audit began in July of 2007 when the OFCCP requested applications, affirmative action plans and hiring documents for the Dallas plant for 2006 through June 2007. After viewing these documents, OFCCP claimed they found a pattern of adverse impact on the hiring of women. The agency then requested more information for the period from July 13, 2005 to December 31, 2005 and through December of 2007. Frito Lay complied.

OFCCP requested more records on November 10, 2009. This time they wanted to view information from January 1, 2008 to October, 31, 2009.

Frito-Lay refused. The company’s attorneys argued that the OFCCP was unlawfully extending its investigation beyond the date of the original letter. OFCCP’s reply was that they had the right and duty to investigate the subsequent period due to the discovery of the disparate impact on hiring..

The judge ruled in favor of Frito-Lay. He noted that in its comments on its regulations, the U.S. Department of Labor provided assurances that compliance reviews would not be unending. As a result, he found that the OFCCP, as defined by its own agency’s regulations, could not extend its investigation beyond the original July 2007 launch date.

David Cohen, a consultant with DCI Consulting Group in Washington, D.C., added, “If the OFCCP drags the case on, it can’t ask for more data.”




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