Federal Contractor Blues

'When I use a word,' Humpty Dumpty said, in rather a scornful tone, 'it means just what I choose it to mean — neither more nor less.'
                                                         ---Through the Looking Glass, by Lewis Carroll

There are many advantages to being a federal contractor, the biggest, of course, being that your main customer won't go bankrupt, and tolerates a level of inefficiency that would be certain death in the private sector. This is especially true if you are providing a unique product, such as building tanks, or nuclear submarines. The flipside of working for a client that simply prints more money for its vendors is that you are subject to the vagaries of the federal executive's social engineering programs.

One example of this is the OFCCP, an antiquated federal employment practices watchdog that engages regularly in highly intrusive reviews of workforces using standards that mutate based on, well I don't know.

A recent federal case out of the District of Columbia illustrates perfectly why nobody wants to be involved with the agency. A company receives notice that it is in the crosshairs of the OFCCP for something referred to as a "desk audit". This is a relatively benign process by which the agency requests annualized compensation data broken down by race, gender, and employee salaries, grade, and/or workforce level within the organization.

The initial analysis yields a threshold ratio determined by measuring the extent of pay differential between minorities, women, and white male employees within discrete job classifications. Above the threshold, and the employer is subject to the next phase of the OFCCP review. Or at least that's the way it's supposed to work in theory.

In actuality, if a company workforce meets the threshold test, i.e., there's no indication of discrimination in pay, and the compliance officer either decides or is directed to find discrimination somewhere, the OFCCP can run the compensation data through a variety of other statistical tests of dubious validity in an effort to try to find some test that will deliver a result indicating that there is a pay disparity. This pernicious determination opens the door to a far more intrusive, expensive, and likely rigged investigatory process. I use the word "rigged" advisedly-the OFCCP has every incentive to find some discrimination in order to justify its existence. Enough findings of no problems, and some congressional budget hawk might decide to allow the EEOC, which also has jurisdiction over federal contractors, to simply manage the discrimination issues by itself. This, of course, would be a disaster for all those career bureaucrats at the OFCCP.

And so this luckless federal contractor found itself meeting the threshold test, but then discovered that the OFCCP compliance officer decided to run a few more tests that-surprise!-showed some type of discrimination. The company objected to this post hoc  determination by the agency, and the case moved on to federal court. Unfortunately, federal administrative law being what it is, federal agencies have wide discretion as to how they conducts their tests, even to the extent of changing the rules in midstream. To its credit, the OFCCP doesn't try to obfuscate this, but says in its public documents that its measurement thresholds are not static, but "subject to changes as OFCCP continues to evaluate its targeting methodology". The end result, though, is a moving target for employers that are trying to run a business without opening the door to an investigation that can cost thousands of dollars, and hundreds of hours in employer time and effort.