National Association of Government Contractors

First Compliance Complaint of Trump Era Issued

Last month, the U.S. Office of Federal Contractor Compliance Programs filed their first Complaint against a federal contractor of the Trump-era. The Complaint alleges that contractor Advance 2000 Inc. violated a June 2015 conciliation agreement with OFCCP by failing to submit required progress reports and failing to respond to OFCCP's notice of violation.

The Complaint is significant in that it is the first action brought by the OFCCP against a federal contractor since President Trump took office. However, the Complaint does little to illuminate the administrative enforcement priorities of the Trump OFCCP.

The Complaint addresses the failure of a contractor to comply with its conciliation agreement obligations – a matter that would likely be pursued no matter who occupied the White House, so the actions does little to illuminate what the OFCCP's enforcement priorities will be under the Trump Administration. Those will likely not be evident until after the new Solicitor of Labor is confirmed. President Trump has nominated Kate O'Scannlain, for the post, but her nomination is still pending Senate confirmation.

Even so, the Complaint does highlight another common issue in the government contracting sector – namely, the tendency of high compliance costs to discourage small businesses from government contracting. Advance 2000 appears to be a small business, with relatively modest government contracts of approximately $158,000.

The government has historically encouraged small businesses, which often include minority- and women-owned businesses, to participate in government contracting. However, the personnel and financial burdens of complying often favor larger institutional government contractors, which already have a substantial compliance program in place Small contractors are often at a disadvantage when entering the government contracting sector.

However, in the face of compliance costs, smaller contractors are often forced to incur substantial additional expenses to meet compliance obligations, where the profit margin for the contracts smaller contractors typically are awarded may already slim.

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