Effective December 17, 2012, OFCCP released a new Functional Affirmative Action Program (FAAP) directive.  This directive outlines the process for applying for a FAAP agreement with OFCCP and replaces previous guidance issued in June 2011.  It also ends OFCCP’s moratorium on new FAAP agreements. Here’s a quick overview of the new directive.

What is a Functional Affirmative Action Plan?

Functional Affirmative Action Plans allow Federal contractors the flexibility to structure their AAP’s according to business or functional units instead of physical establishments.  To be eligible for a FAAP, the functional or business unit must:

  • Currently exist and operate autonomously
  • Include at least 50 employees
  • Have its own managing official
  • Have the ability to track and maintain its own personnel activity

A company could potentially have only functional affirmative actions plans or a combination of functional and establishment-based AAPs. The contents of a FAAP are similar to that of establishment- or location-based AAPs, but there are some key differences in other aspects of implementing FAAPs.  Here is OFCCP’s example of a possible AAP structure using functional and establishment-based AAPs:

OFCCP sample functional AAP structure

Functional Affirmative Action Program Approval Process

To utilize FAAPs, a contractor must have a written agreement with the OFCCP.  Obtaining an agreement is a multi-step process that includes:

  1. Submitting a request for a FAAP Agreement
  2. Providing documentation and timeframes for moving from establishment-based AAPs to functional AAPs
  3. A conference with OFCCP to discuss the proposal and answer any of their questions

For more details on the documentation required and a list of conference topics, view Attachments B and C of the directive.

Guaranteed Audits and Other Requirements

If OFCCP grants the FAAP agreement, contractors are subject to additional steps to keep the agreement in place or to renew it.  Initial agreements are valid for three years unless OFCCP finds credible reason to cancel the agreement. Conditions for renewal include:

  • A minimum of two audits within the 3-year period
  • Annual reporting of any changes to the agreement such as change of managing official or contact information
  • Submitting a renewal request (at least 120 days before expiration of agreement)

It is worth keeping in mind that functional AAP audits are broader and wider reaching due to the nature of the AAP being reviewed.

Contact us if you have any questions about the FAAP process and whether it is right for your organization.