President Trump’s budget blueprint dubbed as “America First” was released Thursday, March 16, 2017. The blueprint calls for a $1.15 trillion proposed budget that seeks to provide increased spending for the military and homeland security, while cutting the spending budget for other federal agencies, including the Department of Labor (DOL).

The Department of Labor’s 2018 proposed budget will be $2.5B (20.7%) less than the annualized continuing resolution (CR)[1] for 2017 and calls for the following:

• The expansion of Reemployment and Eligibility Assessments – an activity by various States’ employment development departments to review the individual’s efforts to seek employment and to provide information on appropriate resources to assist the individual to return to work as quickly as possible.
• Reduced funding to ineffective and duplicative training grants. This eliminates the Senior Community Service Employment Program (SCSEP) which was found to be ineffective in transitioning low-income unemployed seniors to unsubsidized jobs.
• Elimination of the Bureau of International Labor Affairs’ largely noncompetitive and unproven grant funding.
• Closing of Job Corps centers for the disadvantaged youths that do a poor job in educating and preparing students for jobs.
• Decreased federal support and shifting more funding responsibilities to the States, localities, and employers for job training and employment service.
• Helping the States to expand apprenticeship programs
• Elimination of OSHA’s training grants and instead refocus the agency to keeping the workers safe on the job
• Elimination of less critical technical assistance grants by the Office of Disability and Employment and instead launching an early intervention projects that will allow States to test and evaluate methods that will help persons with disabilities to remain connected to the labor market.

What about the OFCCP?

While the proposed 2018 budget is by no means final until approved by Congress, it nevertheless squelched some speculations on the fate of the Office of Federal Contracts Compliance Programs (OFCCP) under the Trump administration. If nothing else, the proposed budget revealed that the OFCCP is here to stay, will remain a separate agency from the EEOC, and affirmative action programs will still be enforced. However, much like other agencies, it is almost certain that the trickle-down effect of the proposed budget cuts will affect the OFCCP, particularly its request for an $8,693,000 budget increase and the retention of 615 full-time employees (FTEs) as outlined in its 2017 Congressional Budget Justification document. Should this really be an area of interest or concern to anybody besides the OFCCP?

While nobody can be sure of what will happen in the next few months, we can look back at the OFCCP’s budget and operation history and maybe, just maybe, look into our crystal ball to see what the future might hold for the federal contracting community? History shows that the OFCCP operated efficiently in much leaner years: from 2003 thru 2009, its appropriated budget ranged from $78M to $84M and with FTEs ranging from 585 (in 2008) to 749. How did the OFCCP survive with much tighter belt during those lean years? One answer lies in the issuance of the OFCCP’s Active Case Management (ACM) directive in July 2003. Under this directive, compliance officers (COs) were able to expedite audits — allowing them to close audits where no systemic discrimination was found — conduct more compliance evaluations, and direct their focus on organizations where more apparent discrimination occurs. The directive definitely allowed the OFCCP to do more with less and produced more financial settlements at higher dollar amounts.

With the possibility of the trickle-down effect of the proposed budget cuts, it will not be a stretch to think that the OFCCP will once again re-invent itself so it can continue to enforce the provisions of the regulations in the most effective and efficient way. This, not coincidentally, is one of the main thrusts of the new administration: improve “the federal government’s effectiveness, efficiency, cyber security, and accountability.” There is no doubt that everybody in the federal contracting community – prime and sub-contractors, lawyers, consultants, analysts, etc. – can expect another roller coaster ride with the probable changes in the OFCCP. In the meantime, hold onto your seats and stay compliant with the current regulatory requirements.

Helpful Resources:

• Trump’s 2018 Budget Blueprint – Proposed Budget [PDF]
• 2017 Congressional Budget Justification  [PDF]
• Active Case Management Presentation  [PDF]

[1] In December 2016, the Senate passed legislation to fund the federal government until April 28, 2017 to avoid a government shutdown.