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Comments on the Proposed Rulemaking to Create a Compensation Data Collection Tool

Action Fund Supports Efforts to Uncover Discrimination Among Contractors

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The Center for American Progress Action Fund applauds the Obama administration for its efforts to create a meaningful data collection tool that could help it uncover compensation discrimination among contractors. The proposed data collection tool can dramatically and cost-effectively increase the efficacy of the administration’s enforcement efforts. And to do so, the survey should cover all contracted workers; improve review of companies before they receive lucrative government contracts; collect comprehensive information on wages and benefits; and be publically available.

The Action Fund sent the following letter to the administration today in support of its efforts:

October 7, 2011

Debra Carr, Director
Division of Policy, Planning and Program Development
Office of Federal Contract Compliance Programs
200 Constitution Avenue, NW
Washington, D.C. 20210

Regarding: RIN 1250-AA03

Dear Ms. Carr,

The Center for American Progress Action Fund would like to submit comments on the proposed rulemaking (RIN 1250-AA03) to create a compensation data collection tool.

We applaud the Office of Federal Contract Compliance Programs for its efforts to create a meaningful data collection tool that could help the agency uncover compensation discrimination among contractors.

The federal government has a long commitment to preventing discrimination among contractors. President Lyndon B. Johnson signed Executive Order 11246 in 1965 to ensure that federal government contractors and subcontractors “take affirmative action to ensure that applicants are employed, and that employees are treated during employment without regard to their race, color, religion, sex, or national origin.”

But currently the federal government has limited ability to monitor which contractors and industries are struggling with women and people of color entering and advancing in the workforce.

The proposed data collection tool can dramatically and cost-effectively increase the efficacy of the OFCCP’s enforcement efforts. And to do so, the survey should cover all contracted workers; improve review of companies before they receive lucrative government contracts; collect comprehensive information on wages and benefits; and be publically available. This would enable the government to identify and analyze industry trends and prevent future discrimination by screening companies before they receive a contract.

Cover all contracted workers: The government does a bad job of tracking federal contract workers. There is currently no way to quantify the actual number of contracted employees who perform government work at any given time. However, the Economic Policy Institute estimates that 43 percent of all employees who do the government’s work are employed by contractors.[1] Federal agencies are beginning to collect this data, but collection methodologies vary and the data is unreliable and does not provide a complete picture of the work performed by contractors. The OFCCP survey could be a valuable tool in getting an accurate number of how many workers are employed on federal contracts. But current data limitations prohibit the federal government from determining an accurate sample. For this reason, the survey should cover all types of government contracts—including construction contracts—and be administered to all contractors, rather than just a sample.

Improve review of companies before they receive contracts: The Federal Acquisition Regulation requires that before awarding supply and service contracts over $10 million contracting officers must work with the OFCCP to screen companies for EO 11246 compliance.[2] The government is also banned from entering into contracts of lesser value with companies that have been found to be noncompliant, but prescreening of these companies is less effective.[3] The government should ensure that all companies are in compliance with EO 11246 before they receive a lucrative government contract by using the OFCCP data tool to screen all prospective contractors to see if their compensation data indicates that further investigation is necessary.

Collect comprehensive information on wages and benefits: Wage and benefit packages have become increasingly complex in the years since President Johnson enacted EO 11246. But today we know very little about the wages and benefits contractors pay their workers.[4] The data collection tool should survey employers about their full menu of worker pay and benefits. Pay data should not only include wage and salary information, but also income from other types of worker compensation programs—such as profit and gain sharing, stock options, and stock purchase plans—and employee ownership programs—such as co-ops and employee stock ownership plans, or ESOPs. Benefits data should include paid leave; health and retirement benefits, as well as whether the company offers family-friendly benefits such as job-protected paid or unpaid family leave, paid sick days that can be used to care for a sick child or other family member; flexible workplace schedules; and child- and elder-care subsidies. The survey should also ask contractors if benefits packages are available to employees’ same-sex and opposite-sex domestic partners (similar to the question asked on the National Compensation Survey).

Make survey results public: The public has a right to know about the hiring and promotion practices of contractors receiving billions of taxpayer dollars every year. Sunlight is a powerful force that can expose wasteful and abusive contracts and help ensure that the government only does business with responsible contractors. And public access fits with existing laws and goals of the administration. The Freedom of Information Act requires agencies to proactively identify government documents falling within its scope that will receive multiple public requests and make them available, which is likely for most of the data included in the survey.[5] President Obama also stated at the beginning of his term that, “All agencies should adopt a presumption in favor of disclosure, in order to renew their commitment to the principles embodied in FOIA, and to usher in a new era of open Government.” The OFCCP should publically release the data from the new survey to give the public an accurate picture of EO 11246 compliance. This includes both detailed aggregate data and as many details from individual employer responses as possible without jeopardizing legitimate company secrets.

Past experience demonstrates that the data collection tool would be both feasible for businesses to administer and provide useful information. The OFCCP successfully initiated a similar reporting requirement—the Equal Opportunity survey—in 2000. Though the Bush administration shut down the survey before it could be fully implemented, researchers hired by the Department of Labor to evaluate the survey found that it was a useful tool in determining contractor noncompliance and urged the department to “implement the EO Survey requirement for all federal contractors.”

Thank you for your consideration of these comments.

Sincerely,

David Madland
Director of the American Worker Project
Center for American Progress Action Fund

Endnotes

[1]. Kathryn Edwards and Kai Filion, “Outsourcing Poverty” (Washington: Economic Policy Institute, 2009).

[2]. Federal Acquisition Regulation Subpart 22.8—Equal Employment Opportunity.

[3]. Ibid.

[4]. For example, there is no actual accounting of how many contracted workers are paid poverty wages, despite research indicating that it is a widespread problem. The Economic Policy Institute has estimated that nearly 20 percent of contracted workers are not paid enough to keep a family of four out of poverty. (See Edwards and Filion, “Outsourcing Poverty.”).

[5]. See 5 U.S.C. § 552 (a) (2).

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