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Contract Compliance Good Faith Efforts


Compliance with the Affirmative Action Obligations

Contract Compliance Program Management Directive (PDF)

Contract Compliance FAQs​ (PDF)

Contractors and subcontractors must use good faith efforts to meet specific affirmative action goals. The goal for the utilization of women under the Executive Order is 6.9% of work hours. The goal for minority utilization varies by geographic area and is published in the Federal Register and by the OFCCP. Although these goals are not treated as quotas, they serve as targets for recruitment and outreach, and the OFCCP takes the position that these goals should be attainable by applying good faith efforts.
Where a contractor does not or cannot achieve its annual training goal with female or minority trainees, it must produce adequate Good Faith Efforts documentation. Good Faith Efforts are those designed to achieve equal opportunity through positive, aggressive, and continuous result oriented measures. 23 CFR § 230.409(g)(4). Good Faith Efforts should be taken as trainee hiring opportunities arise. Contractors should request minorities and females from unions when minorities and females are under-represented in the contractor’s workforce. Whenever a contractor requests INDOT approval of someone other than a minority or female, the contractor must submit documented evidence of its Good Faith Efforts taken to fill that position with a minority or female. When a non-minority male is accepted, however, a contractor must continue to attempt to meet its annual training goal with females and minorities.
The Executive Order regulations apply to all contracts over $10,000 and therefore must be strictly followed in all such cases. The Executive Order regulations sixteen (16) steps that contractors and subcontractors must follow to demonstrate a good faith effort to meet utilization goals. If a contractor is audited by the OFCCP, the agency will look for evidence that the contractor has complied with all 16 steps. It is essential that contractors and subcontractors be familiar with the 16 steps and document all efforts to comply with them. Below is a summary of each step and what contractors can do to ensure compliance.

The Department of Labor’s “16 Steps for Good Faith Efforts’ (41 CFR § 60-4.3(a)7a-p)

First, contractors and subcontractors must maintain a work environment free from harassment, intimidation, and coercion. To comply with this step, contractors and subcontractors must have a written sexual harassment policy with a clear complaint procedure, and the policy must be distributed to all employees. Contractors must adopt a comprehensive Equal Employment Opportunity (“EEO”) policy, and this policy should be posted in a common area at the main office and at all construction jobsites. To demonstrate compliance, contractors should have their employees sign their sexual harassment policy yearly, train their employees on their policies at least annually, and maintain all such training materials and a list of all individuals who attended the training. The OFCCP also encourages contractors to hold meetings to train supervisory personnel on their duty to maintain a workplace free of harassment. {41CFR 60-4.3(a)7a}
Second, contractors and subcontractors must establish and maintain a current list of minority and female recruitment sources and must provide written notification to these recruitment sources when the contractor or its unions have employment opportunities available. To demonstrate compliance with this step, contractors must maintain a record of the responses received from these organizations (which might include Job Corps, Urban League, YWCA, National Association of Women in Construction, etc.). Contractors should keep copies of all letters sent to these organizations and any responses received. If there are telephone calls or other correspondence with these organizations, contractors should maintain a log documenting all such communications. {41CFR 60-4.3(a)7b}
Third, contractors and subcontractors must maintain files containing the names, addresses, and telephone numbers of each minority or female off-the-street applicant and minority or female referral from a union, recruitment source, or community organization. Contractors and subcontractors must document what action was taken regarding each applicant. To comply with this step, contractors should develop an “applicant flow log,” which lists the name, addresses, phone numbers, and trades of each minority or female applicant or referral and which indicates the action taken with respect to each applicant. Unionized contractors must still comply with this obligation even though they hire their workers from the union hall: If the contractor receives a minority or female off-the-street applicant, the contractor is expected to refer the applicant to the union for a referral back to the contractor. {41CFR 60-4.3(a)7c}
Fourth, contractors and subcontractors must notify the Deputy Assistant Secretary in writing if the contractor’s union has not referred a woman or minority individual back to the contractor. This step is necessary when the contractor feels that the union has impeded the company’s efforts to comply with its EEO obligations. If this occurs, the contractor should maintain copies of all correspondence and any meeting minutes in which this issue is discussed. The OFCCP is clear that a collective bargaining agreement does not excuse a contractor’s affirmative action obligations. {41CFR 60-4.3(a)7d}
Fifth, contractors and subcontractors must develop on-the-job training opportunities or provide opportunities to participate in training programs that expressly include minorities and women. Contractors are expected to maintain records of employee participation in training programs. {41CFR 60-4.3(a)7e}
Sixth, contractors have an obligation to disseminate their EEO polices internally. The EEO policy should be sent to unions, should be in all policy manuals and collective bargaining agreements, and should be publicized in any company newsletters. The EEO policy must also be posted at all jobsites and in a central location at the company’s main office. The government requires contractors to review the EEO policy with all management personnel and with all minority and female employees at least once a year. {41CFR 60-4.3(a)7f}
Seventh, at least once a year, contractors and subcontractors must review EEO policies with all employees having any responsibility for hiring, assignment, layoff, termination, or other employment decisions. Contractors must maintain records that identify the time and place of these meetings, the persons who attended, and the topics covered. {41CFR 60-4.3(a)7h}
Eighth, contractors must disseminate their EEO policies externally – for example, through advertising, which must include the EEO “tag line” (i.e., “this contractor is an equal opportunity employer”). {41CFR 60-4.3(a)7h}
Ninth, contractors and subcontractors must direct recruitment efforts to minority and female community organizations, to schools with minority or female students, and to minority and female recruitment and training organizations. Contractors must maintain written records of contacts, which should specify the date of the contact, the person contacted, and the result. If a union is responsible for acceptance of individuals into training programs, contractors must obtain from the union a list of who was referred from the recruitment sources and who was accepted into the program. Notably, the OFCCP states that recruitment sources must be notified of training and apprenticeship opportunities one month before the company accepts applications for such programs. {41CFR 60-4.3(a)7i}
Tenth, contractors and subcontractors must encourage current minority and female employees to recruit other minorities and females to work for the company. Contractors should maintain diaries or logs indicating these discussions with minority and female employees. Any audit by the OFCCP will involve an interview of the contractor’s minority and female employees to confirm compliance. {41CFR 60-4.3(a)7j}
Eleventh, to the extent contractors or subcontractors use any tests or other selection criteria in their hiring procedures, these tests must not have a disparate impact on minorities and women. 41 CFR Part 60-3. {41CFR 60-4.3(a)7k}
Twelfth, at least once a year, contractors must inventory and evaluate all minority and female personnel for promotional opportunities. Contractors must keep written records of the promotional opportunities that are available and documents evidencing a review of women and minority candidate eligibility for these positions. Any internal announcements regarding promotional opportunities should state that women and minorities are encouraged to apply. Copies of all such announcements should be kept by the contractor. {41CFR 60-4.3(a)7l}
Thirteenth, contractors must ensure that seniority practices, job classifications, work assignments, and other personnel practices do not have a disparate impact on minority or female employees. {41CFR 60-4.3(a)7m}
Fourteenth, contractors must ensure all facilities are non-segregated, except for toilets and necessary changing facilities. All other company activities, such as parties, picnics, or trainings, should be open to and inclusive of all employees. {41CFR 60-4.3(a)7n}
Fifteenth, contractors and subcontractors must maintain a record of all solicitations of offers for subcontracts from minority and female construction contractors and suppliers. To comply with this step, contractors must keep all correspondence to and from minority and female contractors. Contractors should keep a list of subcontracts they have awarded to minority and female contractors or suppliers, and the dollar amounts involved. {41CFR 60-4.3(a)7o}
Finally, the sixteenth step requires contractors and subcontractors to conduct, at least once a year, a review of all supervisors’ compliance with and performance under the company’s EEO policies. Contractors should amend their performance evaluations to include a category that rates the supervisor’s performance and knowledge of the company’s EEO policy and affirmative action obligations. {41CFR 60-4.3(a)7p}
Federal contractors must comply with all 16 steps and must document all affirmative action efforts and training. Because this article is only a summary, contractors and subcontractors are strongly encouraged to consult with legal counsel in addressing questions regarding affirmative action compliance, which if not properly followed can have significant adverse consequences, including penalties and sanctions.
PennDOT will consider all contractors’ documentation of Good Faith Efforts on a case-by-case basis, and, take into account the following: 
  • Availability of minorities, females, and disadvantaged persons for training;
  • The potential for effective training;
  • Duration of the contract;
  • Dollar value of the contract;
  • Total normal work force that contractor/subcontractor could be expected to use;
  • Geographic location;
  • Type of work;
  • The need for journey level individuals in the area.
Good Faith Efforts may include, but are not limited to, documentation of efforts to:
  • Communicate with unions to increase the number of minority and female trainees and apprentices;
  • Contact minority and female employees to gain referrals on other minority and female applicants;
  • Contact minority and female recruitment sources when hiring opportunities arise or thirty (30) days prior to the start of a union’s open enrollment application periods;
  • Refer specific minorities and females to the unions or other  applicable outlets for trainee recruits and specifically request these trainees by name in the future;
  • Assist minority and female applicants in joining the union;
  • Upgrade minority and female unskilled workers into the skilled classifications when possible;
  • Accept applications at the project site or at the contractor’s home office;
  • Review and follow up on previously received applications from minorities and females when hiring opportunities arise;
  • Maintain monthly evaluations that monitor efforts made to achieve diversity on Federal projects and the contractor’s workforce in
    general (i.e. significant numbers of minorities and females employed on a company wide basis);
  • Report incidents in which unions are providing a barrier to employment for individuals, especially minorities or females that
    you have referred to the union and any observed pattern of underutilization of females and
    minorities in a particular classification;
  • Provide incentives for project management personnel or superintendents when hiring goals are met on a project (i.e. similar to
    performance bonuses paid when a job is completed timely and under budget);
  • Assist applicants with initiation fees;
  • Allow applicants to work in the shop or as an OJT trainee for ninety (90) days prior to referring them to a union, and assist them in the
    enrollment process for skilled trades;
  • Allow a trainee’s payroll deduction to be saved to cover the initiation fees prior to referring them to the union;
  • Purchase the journeyman’s card for the trainee and allow that worker to prepay with payroll deductions.