[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]


 
                     FEDERAL CONTRACTOR COMPLIANCE 

=======================================================================

                                HEARING

                               before the

                  SUBCOMMITTEE ON ECONOMIC OPPORTUNITY

                                 of the

                     COMMITTEE ON VETERANS' AFFAIRS
                     U.S. HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 14, 2009

                               __________

                           Serial No. 111-20

                               __________

       Printed for the use of the Committee on Veterans' Affairs

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                     COMMITTEE ON VETERANS' AFFAIRS

                    BOB FILNER, California, Chairman

CORRINE BROWN, Florida               STEVE BUYER, Indiana, Ranking
VIC SNYDER, Arkansas                 CLIFF STEARNS, Florida
MICHAEL H. MICHAUD, Maine            JERRY MORAN, Kansas
STEPHANIE HERSETH SANDLIN, South     HENRY E. BROWN, Jr., South 
Dakota                               Carolina
HARRY E. MITCHELL, Arizona           JEFF MILLER, Florida
JOHN J. HALL, New York               JOHN BOOZMAN, Arkansas
DEBORAH L. HALVORSON, Illinois       BRIAN P. BILBRAY, California
THOMAS S.P. PERRIELLO, Virginia      DOUG LAMBORN, Colorado
HARRY TEAGUE, New Mexico             GUS M. BILIRAKIS, Florida
CIRO D. RODRIGUEZ, Texas             VERN BUCHANAN, Florida
JOE DONNELLY, Indiana                DAVID P. ROE, Tennessee
JERRY McNERNEY, California
ZACHARY T. SPACE, Ohio
TIMOTHY J. WALZ, Minnesota
JOHN H. ADLER, New Jersey
ANN KIRKPATRICK, Arizona
GLENN C. NYE, Virginia

                   Malcom A. Shorter, Staff Director

                                 ______

                  SUBCOMMITTEE ON ECONOMIC OPPORTUNITY

          STEPHANIE HERSETH SANDLIN, South Dakota, Chairwoman

THOMAS S.P. PERRIELLO, Virginia      JOHN BOOZMAN, Arkansas, Ranking
JOHN H. ADLER, New Jersey            JERRY MORAN, Kansas
ANN KIRKPATRICK, Arizona             GUS M. BILIRAKIS, Florida
HARRY TEAGUE, New Mexico

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Veterans' Affairs are also 
published in electronic form. The printed hearing record remains the 
official version. Because electronic submissions are used to prepare 
both printed and electronic versions of the hearing record, the process 
of converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.












                            C O N T E N T S

                               __________

                              May 14, 2009

                                                                   page
Federal Contractor Compliance....................................     1

                           OPENING STATEMENTS

Chairwoman Stephanie Herseth Sandlin.............................     1
    Prepared statement of Chairwoman Herseth Sandlin.............    29
Hon. John Boozman, Ranking Republican Member.....................     2
    Prepared statement of Congressman Boozman....................    30

                               WITNESSES

U.S. Department of Labor, Lorenzo Harrison, Acting Deputy 
  Assistant Secretary, Office of Federal Contract Compliance 
  Programs.......................................................    19
    Prepared statement of Mr. Harrison...........................    39
U.S. Department of Veterans Affairs, Jan R. Frye, Deputy 
  Assistant Secretary for Acquisition and Logistics..............    23
    Prepared statement of Mr. Frye...............................    44

                                 ______

American Legion, Joseph C. Sharpe, Jr., Director, National 
  Economic Commission............................................     9
    Prepared statement of Mr. Sharpe.............................    36
American Veterans (AMVETS), Christina M. Roof, National Deputy 
  Legislative Director...........................................     7
    Prepared statement of Ms. Roof...............................    33
DirectEmployers Association, Inc., Indianapolis, IN, Sergeant 
  First Class Chad Sowash, USAR, Vice President of Business 
  Development....................................................     6
National Association of State Workforce Agencies, Thomas S. 
  Whitaker, President, and Deputy Chairman/Chief Counsel, North 
  Carolina Employment Security Commission, Raleigh, NC...........     4
    Prepared statement of Mr. Whitaker...........................    31
Vietnam Veterans of America, Richard F. Weidman, Executive 
  Director for Policy and Government Affairs.....................    10
    Prepared statement of Mr. Weidman............................    38

                       SUBMISSIONS FOR THE RECORD

National Veteran-Owned Business Association, statement...........    45

                   MATERIAL SUBMITTED FOR THE RECORD

Post-Hearing Questions and Responses for the Record:.............

    Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on 
      Economic Opportunities, Committee on Veterans' Affairs, to 
      Thomas S. Whitaker, President, National Association of 
      State Workforce Agencies, letter dated May 20, 2009, and 
      Mr. Whitaker's responses...................................    47
    Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on 
      Economic Opportunities, Committee on Veterans' Affairs, to 
      James King, Executive Director, AMVETS, letter dated May 
      20, 2009, and Christina M. Roof, National Deputy 
      Legislative Director, AMVETS' response.....................    48
    Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on 
      Economic Opportunities, Committee on Veterans' Affairs, to 
      Peter Gaytan, Executive Director, American Legion, letter 
      dated May 20, 2009, and Joseph C. Sharpe, Jr., Director, 
      National Economic Commission, American Legion's, response 
      letter dated July 1, 2009..................................    51
    Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on 
      Economic Opportunities, Committee on Veterans' Affairs, to 
      Lorenzo Harrison, Acting Deputy Assistant Secretary for the 
      Office of Federal Contract Compliance Programs, U.S. 
      Department of Labor, letter dated May 20, 2009, and Mr. 
      Harrison's response letter dated July 17, 2009.............    52
    Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on 
      Economic Opportunities, Committee on Veterans' Affairs, to 
      Jan R. Frye, Deputy Assistant Secretary for Acquisition and 
      Logistics, U.S. Department of Veterans Affairs, letter 
      dated May 20, 2009, and VA responses.......................    55


                     FEDERAL CONTRACTOR COMPLIANCE

                              ----------                              


                         THURSDAY, MAY 14, 2009

             U.S. House of Representatives,
                    Committee on Veterans' Affairs,
                      Subcommittee on Economic Opportunity,
                                                    Washington, DC.

    The Subcommittee met, pursuant to notice, at 1:30 p.m., in 
Room 334, Cannon House Office Building, Hon. Stephanie Herseth 
Sandlin [Chairwoman of the Subcommittee] presiding.

    Present: Representatives Herseth Sandlin, Adler, Teague, 
Boozman, and Moran.

        OPENING STATEMENT OF CHAIRWOMAN HERSETH SANDLIN

    Ms. Herseth Sandlin. Good afternoon ladies and gentlemen. 
The Committee of Veterans' Affairs Subcommittee on Economic 
Opportunity Hearing on Federal Contractor Compliance will come 
to order.
    Before I begin with my opening statement I would like to 
state that Mr. Scott Denniston, Director of Programs for the 
National Veteran-Owned Business Association (NaVOBA), has asked 
to submit a written statement for the hearing record. If there 
is no objection I ask unanimous consent that his statement be 
entered for the record. Hearing no objection, so entered.
    [The prepared statement of NaVOBA appears on p. 45.]
    Ms. Herseth Sandlin. Providing our servicemembers and 
veterans with employment opportunities is indeed a way of 
investing in our brave men and women of the Armed Forces for 
the sacrifices they have made while serving our country. 
Providing them with opportunities and establishing equity in 
employment opportunities can help veterans become gainfully 
employed.
    The U.S. Department of Labor's (DOL's) Office of Federal 
Contract Compliance Program (OFCCP) plays an important role in 
protecting veterans by ensuring that they are not discriminated 
against and are given equal employment opportunity.
    While OFCCP provides certain veterans protection against 
discrimination, it also requires that contractors are actively 
involved in providing employment or advancement opportunities 
by providing outreach, recruitment, and training.
    In addition, contractors must make good faith efforts to 
maximize their current qualified workforce, develop and update 
affirmative action plans, and submit an annual report to the 
Department of Labor.
    The Vietnam Era Veterans' Readjustment Assistance Act of 
1974, also known as VEVRAA, and section 4212 of title 38, 
provide legal authority to enforce veterans' equal employment 
opportunities.
    VEVRAA provides enforcement for Federal contracts to 
provide equal employment opportunities for special disabled 
veterans and veterans of the Vietnam Era. This provision would 
apply to prime contractors and subcontractors who engage in 
personal property and non-personal services, including 
construction. All employment is required to be listed in the 
Federal Contractor Job Listing (FCJL) Program which gives 
priority referral to qualified disabled veterans and Vietnam 
Era veterans.
    Currently, the OFCCP provides enforcement measures for 
compliance. For example, compliance reviews are conducted to 
ensure that employers are following their affirmative action 
program established as a prerequisite for reaching a contract 
threshold. To assist in this effort, OFCCP provides training, 
consultations, and technical assistance to contractors.
    I have become deeply concerned over reports of Federal 
contractors not complying with Federal regulations. This is 
especially troubling considering the increased number of 
servicemembers returning to the civilian workforce. It is also 
disturbing when I hear that disabled veterans hiring practices 
are inadequate, coupled with the lack of effort by contractors 
to employ disabled veterans.
    Federal contractors and subcontractors have the opportunity 
to work with the U.S. Department of Veterans Affairs' (VA's) 
Vocational Rehabilitation and Employment Program, or the 
Department of Labor's Veterans' Employment and Training Service 
(VETS), both of which are equipped to assist veterans gain 
employment. These resources, along with the Local Veteran's 
Employment Representatives (LVERs) and Disabled Veterans 
Outreach Program Specialists (DVOPs), should provide for 
contractor compliance.
    I am hopeful that today we can determine to what extent 
these enforcement measures are beneficial, if they lack 
incentives for compliance, or if there is a need for stricter 
enforcement measures.
    I look forward to exploring the options to assist employers 
who are making good faith effort in hiring and promoting 
qualified disabled veterans in the workforce.
    This Subcommittee is fully committed to protecting our 
veterans and providing protections against employment 
discrimination.
    Finally, today's hearing is an important one. It is the 
first time this Subcommittee has held a hearing on Federal 
Contractor Compliance; therefore, we hope that we are able to 
learn more about the issue while conducting oversight and 
gaining from the insight provided to us by our witnesses on the 
topic.
    I now recognize our distinguished Ranking Member, 
Congressman John Boozman, for any opening remarks he may have.
    [The prepared statement of Chairwoman Herseth Sandlin 
appears on p. 29.]

             OPENING STATEMENT OF HON. JOHN BOOZMAN

    Mr. Boozman. Thank you very much, Madam Chair.
    The current recession is affecting veterans just like the 
rest of the American labor force. According to the Bureau of 
Labor Statistics (BLS), the unemployment rate among adult men 
was 9.4 percent, and adult women was 7.1 percent. 
Interestingly, the Bureau of Labor Statistics does collect data 
on veterans in its monthly report, but does not publish the 
data.
    One would think that given the current War on Terror and 
the recognition that veterans are an important sector of 
society, veterans would be included in any national level 
unemployment report.
    The following table from the Veterans' Employment and 
Training Service illustrates today's employment challenges to 
veterans, and as you will see things are not good.
    Everything is working, our slide is up there. I am 
impressed.
    Using 2008 national data for comparison it appears that 
veterans in general continue to have lower unemployment rates 
than their non-veteran counterparts. However, that same data 
shows that younger veterans still experience significantly 
higher unemployment rates than older veterans and non-veterans. 
But veterans are supposed to have some advantages in seeking 
employment in the private sector, especially by companies that 
are Federal contractors.
    Title 38, section 4212, requires Federal contractors to 
take affirmative action to hire veterans and task State 
employment services in the Department of Labor with its roles 
in promoting hiring by Federal contractors. I believe each of 
those bear some responsibility in achieving the goals of 
section 4212.
    While there are many reasons for higher unemployment among 
younger veterans, lack of attention to veterans in general by 
the Federal Government should not be among those reasons.
    For example, in addition to not be identified in BLS data, 
section 4212(c) of title 38 requires the Department of Labor to 
report annually on veteran hiring by Federal contractors. 
Included in that report the law requires the following data.
    The number of complaints filed against Federal contractors, 
the actions taken by the Department on those complaints, the 
results of the Department's actions on those complaints, the 
number of contractors listing job openings, the nature and 
types of positions, the number of veterans given priority 
referral by the local employment services.
    If one looks at this section on Federal Contractor 
Compliance on pages 20 and 21 in the most recent DOL report, 
there is no data on actions taken to investigate complaints 
regarding contractor's affirmative action to hire veterans. I 
hope the office of Federal Contractor Compliance can explain to 
us this lack of focus for us today.
    Section 4212 also includes several requirements for 
information to be supplied annually by Federal contractors 
which are included in the VETS-100 Report, which should form 
the basis for the Department's annual report to Congress.
    I have a feeling that the only time anyone looks at the 
VETS-100 Report is when DOL receives a Congressional inquiry.
    Finally, the question of enforcement raises an issue of 
common sense. We hear suggestions of failure to have an 
affirmative action plan or submit the VETS-100 Report should be 
grounds for debarring a company from doing business with the 
Federal Government. While I fully support affirmative hiring 
under section 4212, it is not really--we really don't think 
that the Federal Government is going to debar a contractor like 
Lockheed or IBM, Pfizer or Boeing. The only alternative is to 
fine such companies, and there is no provision in the current 
law.
    I also believe we should take a close look at whether 
placing the investigation responsibility with OFCCP is the 
right thing to do, and whether that responsibility should more 
promptly reside in VETS.
    Madam Chair, the situation surrounding section 4212 is less 
than optimal, and I hope that we can all work together to fix 
it. And I yield back my time.
    [The prepared statement of Congressman Boozman appears on
p. 30.]
    Ms. Herseth Sandlin. Thank you, Mr. Boozman.
    We do have a vote pending. There are about 11 minutes 
remaining, so we will invite the first panel up and recognize 
our first witness, and then we will have to take a short recess 
to vote.
    I would like to welcome the first panel with us at the 
Subcommittee today. Joining us is: Mr. Thomas Whitaker, 
President of the National Association of State Workforce 
Agencies (NASWA) and Deputy Chairman/Chief Counsel of the North 
Carolina Employment Security Commission, accompanied by Mr. 
Chad Sowash; Ms. Christina Roof, National Legislative Deputy 
Director for AMVETS; Mr. Joe Sharpe, Director of the National 
Economic Commission for the American Legion; and Mr. Rick 
Weidman, Executive Director for Policy and Government Affairs 
for the Vietnam Veterans of America (VVA). He is on his way I 
am told.
    We only have 10 minutes now, Mr. Whitaker, is your 
presentation longer than 5 minutes? If so, I will recognize Ms. 
Roof and you will be next when we come back. If you can keep it 
to 5 minutes, you are recognized.
    Thank you, Mr. Whitaker.

     STATEMENT OF THOMAS S. WHITAKER, PRESIDENT, NATIONAL 
 ASSOCIATION OF STATE WORKFORCE AGENCIES, AND DEPUTY CHAIRMAN/
 CHIEF COUNSEL, NORTH CAROLINA EMPLOYMENT SECURITY COMMISSION, 
 RALEIGH, NC; ACCOMPANIED BY SERGEANT FIRST CLASS CHAD SOWASH, 
 USAR, VICE PRESIDENT OF BUSINESS DEVELOPMENT, DIRECTEMPLOYERS 
    ASSOCIATION, INC., INDIANAPOLIS, IN; CHRISTINA M. ROOF, 
    NATIONAL DEPUTY LEGISLATIVE DIRECTOR, AMERICAN VETERANS 
 (AMVETS); JOSEPH C. SHARPE, JR., DIRECTOR, NATIONAL ECONOMIC 
COMMISSION, AMERICAN LEGION; AND RICHARD F. WEIDMAN, EXECUTIVE 
DIRECTOR FOR POLICY AND GOVERNMENT AFFAIRS, VIETNAM VETERANS OF 
                            AMERICA

                STATEMENT OF THOMAS S. WHITAKER

    Mr. Whitaker. Good afternoon, Chairwoman Herseth Sandlin 
and Representative Boozman.
    On behalf of the National Association of State Workforce 
Agencies I want to thank you for the opportunity to speak to 
you today on Federal contractors hiring practices and the 
performance of the U.S. Department of Labor, OFCCP, and 
monitoring Federal contractor job listing compliance.
    NASWA's members are the State leaders of the publicly 
funded workforce system vital to meeting the employment needs 
of veterans through the Disabled Veterans Outreach Program 
known as DVOP and the Local Veteran's Employment 
Representatives, or LVER programs.
    In 2007, NASWA offered its members a new and free online 
labor exchange service called Job Central National Labor 
Exchange. We refer to that as the NLX. The NLX is a 
sophisticated job search engine, which is the result of a 
partnership between NASWA and the DirectEmployers Association, 
DEA, a trade association of over 485 Fortune 500 companies.
    State job banks across the United States can now transmit 
job orders to each other, plus receive thousands of job orders 
via electronic download from DEA members. Job orders are 
updated daily, avoiding duplication and thus ensuring job 
opportunities are open for veterans in a very timely manner. 
FCJL compliance is provided through VETS Central, a sister site 
of the National Labor Exchange.
    OFCCP regional staff have recently been providing 
inconsistent guidance to States and employers about VET 
Central's validity as a compliance mechanism.
    The situation was quickly addressed when national OFCCP, at 
the urging of NASWA, responded offering guidance to their field 
staff.
    We are hopeful that the OFCCP's response will meet the 
needs of our members, the employers, and ultimately provide 
veterans with additional job opportunities.
    Based on our experience with VET Central and OFCCP, as well 
as available feedback received from the State workforce 
agencies, we would like to offer the following recommendations.
    Number one, Federal contractor list. NASWA's first 
recommendation is for OFCCP to develop and maintain an official 
list of Federal contractors who fall within Federal contractor 
job listing requirements. This list should be shared with State 
workforce agencies who, per regulation, have a legal 
responsibility to refer only eligible veterans to Federal job 
listing contractors.
    As an example, in the last 9 months, my department in North 
Carolina has made almost 500 veteran job development contacts 
to companies considered to be Federal contractors, but without 
an official list my agency cannot ever be sure whether they are 
speaking with FCJL contractors or not.
    Number two, increase staff. Our second recommendation is 
for additional OFCCP staff. In North Carolina, my agency was 
told that it would take up to 6 months for OFCCP to arrange a 
meeting with my agency and employers. It is common in many 
States to have no contact between State workforce personnel and 
OFCCP staff. That is unacceptable.
    Number three, training. Our third recommendation is for a 
comprehensive training of OFCCP's field staff to ensure laws 
and regulations are administered properly and uniformly.
    Number four, clarify and communicate roles of all involved. 
Our final recommendation is for the U.S. Department of Labor to 
clarify and communicate the appropriate roles and 
responsibilities of all involved Federal agencies and State 
entities. NASWA would be pleased to assist in this effort by 
initiating a meeting between our members and the relevant U.S. 
Department of Labor agencies and possibly employers.
    Thank you again for the opportunity to comment, and we 
stand ready to work on these issues.
    [The prepared statement of Mr. Whitaker appears on p. 31.]
    Ms. Herseth Sandlin. Thank you, Mr. Whitaker. Did you have 
a presentation to make at this point?
    Sergeant Sowash. Yes.
    Ms. Herseth Sandlin. About how long does that take?
    Sergeant Sowash. It will take 5 minutes.
    Ms. Herseth Sandlin. That will bring us down to zero time 
remaining on the vote. So while we will have 15 minutes after 
that, I know the Majority Leader is interested in trying to 
address this issue sooner rather than later. We will have to 
come back for the presentation because we don't want to rush 
you. We do need to head over to the Capitol now.
    We will recess for about 30 minutes and we will return. 
Thank you.
    [Recess.]
    Ms. Herseth Sandlin. Thank you for waiting on us. And now 
we will look forward to getting the presentation from Sergeant 
First Class Sowash. Thank you for being here and thanks for the 
work that you are doing. You are recognized for 5 minutes.

         STATEMENT OF SERGEANT FIRST CLASS CHAD SOWASH

    Sergeant Sowash. Thank you, good afternoon Chairwoman and 
the rest of Committee.
    I am Sergeant First Class Sowash, I am a U.S. Army 
Reservist, and I am sure you all know Army reservists are also 
civilians with jobs on the outside, so I am also Vice President 
of Business Development for DirectEmployers Association, and 
would like to share with you parts of the National Labor 
Exchange that actually focuses on getting veterans job, which 
is very near and dear to my heart.
    So first thing we do is we go to the National Labor 
Exchange and we have got areas of interest, or you can actually 
just come over here for the actual veterans JPEG and it will 
take you to our VET Central site.
    Now this site is focused on being able to help veterans to 
find jobs, and also to be able to single out Federal 
contractors for veterans. You can search via a keyword, which 
is very common on the Internet, but you can also search--if you 
are in the military, you can search by your military 
occupational specialty (MOS) or your military occupation (MOC) 
or what have you. So if you actually put in--let us say for 
instance 63 Juliet enlisted in the Army, I am just going to do 
an open search with that, then you will actually see that that 
MOS actually crosses over and pushes out civilian jobs that are 
comparable to the tasks, or I should say is skill sets, that 
that military person actually had. So as opposed to them trying 
to think of different key words that would fit them, they can 
just put their MOS in and they can see different jobs that 
focus on what they have done and their experience.
    As you can see, little American flags, those denote Federal 
contractors. Obviously who give preference to veterans, which 
is obviously very important. If a veteran wants to only see 
jobs from Federal contractors, all they have to do is press 
this link right here and all that will show are jobs that are 
Federal contractor jobs.
    One thing that is extremely important that we believe from 
DirectEmployers Association is we actually--we have the best 
interest of our member companies in mind, because we are a non-
profit and we represent close to 500 of the Fortune 500 
companies. So what we do is we send the veteran, we send the 
job seeker directly to the job on the corporate site. So this 
allows the job seeker to apply directly to the company as 
opposed to a third party, and it makes it much easier for the 
job seeker to get into the corporate database as opposed to 
applying to a third-party database. So again, trying to be more 
efficient and help with labor market efficiencies, as obviously 
on the other side of the ball trying to get veterans jobs as 
quick as humanly possible.
    We back out to just the home site, you can see again, you 
can do any sort of keyword type of search, look for mechanic in 
Iowa, and once again you will see the Federal contractors jobs 
and you can go ahead and just focus on the Federal contractor 
jobs and click right through to the corporate site. This job is 
actually on the corporate site, so when I am applying right 
here I am applying to that company, I am not applying off to a 
job order or what have you.
    Do this real quick, and I will actually give you an idea of 
the companies that comprise DirectEmployers Association. And 
again, these companies, when America's Job Bank (AJB) went 
away, wanted to, needed to, had to get their jobs down to the 
local level so that veterans could have an opportunity to 
actually see their jobs. So this is one of the mechanisms that 
was used was a Web interface was VET Central.
    The main mechanism that is actually used is e-mail. We e-
mail well over 3,500 different local veterans representatives 
and different local Wagner Pfizer locations with opportunities 
on a daily basis. So when a veteran walks through the door, and 
obviously a vet rep have these e-mails sent to them on a daily 
basis, they will have new and fresh jobs available to them. I 
appreciate the time.
    Ms. Herseth Sandlin. Thank you for the presentation.
    Sergeant Sowash. Thank you.
    Ms. Herseth Sandlin. Very helpful.
    Ms. Roof, you are now recognized. Welcome back to the 
Subcommittee.

                 STATEMENT OF CHRISTINA M. ROOF

    Ms. Roof. Thank you, very much glad to be back.
    Madam Chairwoman, Ranking Member Boozman, and distinguished 
Members of the Subcommittee, on behalf of AMVETS I extend our 
gratitude for being given the opportunity to discuss and share 
with you our views and recommendations on Veterans' Affairs 
contracting policies relating to title 38, section 4212.
    AMVETS believes that the use of qualified veterans in 
Federal contracts is vital to the reintegration and business 
success of our veteran community.
    AMVETS also believes that our veterans deserve the full 
opportunity to participate in the economic system sustained by 
their service.
    The Committee has my complete statement for the record, and 
in my oral statement today, I would like to focus on compliance 
auditing ensuring title 38, section 4212, law is withheld in 
all VA contracts.
    Contractors are required to develop and implement an 
affirmative action plan that complies with regulations that 
support three separate Federal laws as we are discussing today. 
These are Executive Order 11246, amended, the Rehabilitation 
Act of 1973, and VEVRAA.
    Aside from VA, there are two agencies in place to perform 
the oversight of these laws. The DOL and their OFCCP.
    The OFCCP is charged with monitoring Federal Contracts for 
Compliance to these three laws, as well as investigating any 
complaints against employers bound to these laws by a Federal 
contract.
    It is important to remember these laws encompass both 
contractors and subcontractors involved in any procurement 
process with the government.
    Performing audits and compliancy testing of Federal 
contracts are important tools to ensure that the purpose for 
the agreement and the performance of the contract actually 
occurs, and that all title 38, section 4212, compliance is 
maintained throughout the entire contract.
    VA lacks reasonable assurance, at minimum, that it is 
receiving services that it has paid for and that contractors 
are taking all necessary steps to ensure our veterans' rights 
under title 38 are protected.
    To AMVETS knowledge, VA rarely performs any compliance 
audits of completed projects. In non-government owned and 
operated businesses, audits of contracts often occur up to 5 
years upon contract completion.
    AMVETS recommends that VA include and enforce more 
uniformly this practice, as well as contractor's performance 
under the contract. This provides validation to VA that all 
terms of the contract, and most importantly ones regarding 
title 38, section 4212, were met and completed in the agreed 
manner.
    AMVETS believes compliance audits are essential to the 
stability of a contracting system. It is in the opinion of 
AMVETS that a major impediment to current VA contracting policy 
is that of reactionary audits or audits that occur after a 
problem is identified.
    Over the past few years, VA, OFCCP, and DOL audits have 
shifted from enforcement to more reactionary compliance audits.
    Enforcement audits will allow VA to accurately validate and 
measure the current processes in place, identify those that 
need enhancement, and isolate weak processes that lead to 
fraud, collusion, and most importantly infringements to the 
title 38, section 4212, which protect our veteran population's 
business success.
    AMVETS recommends the re-implementation and regular use of 
enforcement based audits.
    AMVETS believes that a contributing factor in the failure 
of current compliance testing methods is on the overall process 
itself.
    VA and OFCCP compliance auditing methods are unnecessarily 
lengthy in our opinion and lack accountability in uniformity. 
This reactionary style of auditing Federal contracts has proven 
ineffective to OFCCP because of the challenges it faces in 
locating former employees and records to substantiate the 
allegations of discrimination.
    These types of audits usually result in small settlements. 
Unfortunately, the small settlement option not only costs VA 
millions of dollars every year, but more importantly, it costs 
our veterans their due entitlements sustained by their service.
    Madam Chairwoman, Members of the Subcommittee, AMVETS 
thanks you for inviting us to partake in this discussion and is 
available for questions.
    [The prepared statement of Ms. Roof appears on p. 33.]
    Ms. Herseth Sandlin. Thank you for your testimony.
    Mr. Sharpe, you are now recognized for 5 minutes.

               STATEMENT OF JOSEPH C. SHARPE, JR.

    Mr. Sharpe. Madam Chairman and Ranking Member Boozman, and 
Members of the Subcommittee, thank you for the opportunity to 
appear before you to discuss Federal Contract Compliance.
    In the Federal Register of August 8, 2007, OFCCP 
significantly expanded the responsibilities of Federal 
contractors concerning their affirmative action plan for 
veterans.
    The Federal Register noted that Federal contractors are 
required to conduct active outreach to find veterans; going far 
beyond posting their Internet listings.
    Persons and organizations that Federal contractors are 
directed to partner with to ensure appropriate outreach for 
eligible veterans are the Local Veteran's Employment 
Representative, the Department of Veterans Affairs Regional 
Office, veteran counselors and coordinators on college 
campuses; and the service officers of the national veterans' 
groups active in the area of the contractor's establishment.
    Based upon dialog with Local Veteran's Employment 
Representatives, veterans, and other organizations across the 
country, the American Legion found that Federal contractors 
have not consistently enlisted the assistance and support of 
the above mentioned persons and organizations in recruiting and 
developing on-the-job training opportunities for qualified 
disabled veterans, recently separated veterans, other protected 
veterans, and Armed Forces service medal veterans to fulfill 
its commitment to provide meaningful employment opportunities 
to such veterans.
    The American Legion recommends that a VETS-100 Report 
should no longer be filed electronically, because it goes 
around the laws intent of bringing employers and the One-Stop 
Career Centers together to discuss and develop employment 
opportunities for veterans. The American Legion also recommends 
VETS-100 be amended to measure direct compliance with OFCCP 
regulations. And additionally, the American Legion recommends 
that the Federal Contractor Veterans Employment Program 
presently under OFCCP should be placed under the direction of 
the Department of Labor's Veterans' Employment and Training 
Service so this program can receive proper oversight, as well 
as input and guidance from stakeholders.
    It is vital that eligible veterans to receive a fair and 
proportionate amount of Federal employment from Federal 
contractors so these veterans can build and maintain a quality 
of life while they contribute to the United States economy.
    Madam Chairman, that concludes my statement.
    [The prepared statement of Mr. Sharpe appears on p. 36.]
    Ms. Herseth Sandlin. Thank you, Mr. Sharpe.
    Mr. Weidman, welcome back to the Subcommittee. You are now 
recognized for 5 minutes.

                STATEMENT OF RICHARD F. WEIDMAN

    Mr. Weidman. Thank you, Madam Chairwoman. Mr. Boozman, Mr. 
Moran good to see you again, and Mr. Teague.
    The FCJL started in the Readjustment Act of 1973, and it 
was an effort by many Members of Congress to do something for 
Vietnam veterans who were struggling in a terrible job market 
when we came home in the early seventies, which was only 
compounded by the OPEC induced gas shortage, which only drove 
that in recession to be much longer and much deeper than 
anybody anticipated. It was a well meaning thing, but any kind 
of law that is passed without a mechanism for enforcement and 
implementation and compliance simply begs the question.
    Unfortunately, OFCCP is full of terrific people, like the 
gentleman who has sent up his sacrificial lamb this morning, 
Lorenzo Harrison and Mr. Teague, he is a born again New Yorker. 
As soon as he could leave Teaneck, New Jersey, he moved to the 
city, so be easy on him.
    The problem is, is they are not set up to be able to do 
their job. They don't do their job for women, they don't do 
their job for ethnic minorities, and they don't do it for vets, 
simply because they do not have the tools.
    In about 2000, 2001, my good friend Congressman Jerry 
Solomon from Upstate New York, pushed hard to have improvements 
made to the VETS-100 Report, and that was then incorporated in 
the Jobs for Veterans Act as well, and then it took 5 years, 
plus to finally get the regulations in 2007, which have mostly 
been observed in a breach.
    The question is, what do you do with the information and 
who enforces it? Perhaps moving it to VETS would help, but 
frankly we doubt it.
    The entire set of tools, whether that in the Public Labor 
Exchange model of the DVOPs, LVERs, OFCCP, Federal contract job 
listings, and every other tool that we have depends upon a 
Public Labor Exchange that works, and I would submit to you to 
this distinguished body today that we do not have a Public 
Labor Exchange that works probably, and certainly does not work 
probably for veterans.
    I have recommended a number of steps on behalf of Vietnam 
Veterans of America that would take us to a point where perhaps 
we could do this, have something that actually worked for the 
young people coming home.
    First, and foremost, we urge that you federalize the DVOPs 
and LVERs and have them report directly to the Directors for 
Veterans' Employment (DVETs) across the country.
    In many cases where the labor exchange actually does work, 
and there are States like South Dakota, and you are fortunate 
Madam Chairwoman that you have a State where it does work 
pretty well and it works pretty well for vets too, but in most 
States like New York, it doesn't work well at all. And so, on a 
memorandum of agreement, those now Federal employees, DVOPs and 
LVERs, could go right back into the same office on a memorandum 
of understanding, if in fact, it is an atmosphere that is truly 
practicing priority of service to veterans and in fact it is 
conducive to assisting veterans, particularly disabled and 
recently separated veterans. So it is a tool that would allow 
us to continue where it is working, and where it is not working 
to have alternatives to make it work.
    Secondly, we now have a Secretary of Labor who is deeply 
committed to veterans, and her track record in the Congress 
suggests that she will in fact take steps to do it. But we also 
need an Assistant Secretary for Employment and Training who is 
committed. That is where the power lies and that is where the 
money lies at the Department of Labor. And until we have an 
Assistant Secretary of Employment and Training who is as 
committed to veterans as the Assistant Secretary for Veterans' 
Employment and Training, as well as a Secretary and a Deputy 
Secretary, we are not going to get much head way.
    Thirdly, there needs to be a significant increase in the 
funding for the DVOP/LVER program to at least $200 million 
fiscal year 2010.
    Fourth, the Secretary of Labor needs to commit significant 
amounts of discretionary Workforce Investment Act funds to 
reward the States that do the best job in providing actual 
employment and training services.
    Fifth, employers who are Federal contractors who--and if 
you do all those we will start to have an effective DVOP/LVER 
system again. And then if you have employers who are Federal 
contractors who want to do the right thing and who now need to 
have a signature from the Local Veteran's Employment 
Representative that in fact they have listed their jobs in that 
State where that location is, and at that point without that 
then they would be barred from seeking further contracts or 
securing contract extensions.
    If there are no teeth there might as well not do the law. 
There has to be some mechanism for enforcement that is not over 
labor intensive; no pun intended.
    And sixth, since OFCCP is not now, nor has it ever been 
effective, VVA proposes that veterans be given a right to sue 
Federal contractors for discrimination when they do not hire 
veterans, with up to $300,000 punitive damages in addition to 
any actual damages, plus attorneys' fees.
    It will only take a very few cases and the rest of the 
contractors will be coming and beating their way to the LVER's 
door to get signed up and to list jobs and to follow through 
with a proper plan to seek and hire qualified veterans, 
particularly those young people coming home today and those who 
are disabled veterans.
    I thank you. I see my 5 minutes is up. And thank you for 
the opportunity to share these thoughts with you today, Madam 
Chairwoman.
    [The prepared statement of Mr. Weidman appears on p. 38.]
    Ms. Herseth Sandlin. Thank you, Mr. Weidman. What value do 
you place on the VETS-100 Report?
    Mr. Weidman. In the absence of an effective mechanism in 
order to do job matching, we don't place a lot.
    I must admit I was surprised today because I know of most 
of the military job boards and I had never heard of VETS 
Connect, so I apologize to the distinguished vice president of 
that outfit for never having heard of it, and there has to be a 
way to get the listing of jobs to the individual.
    The first Public Labor Exchange was in New York City 
founded in 1935 because it became too big for the Village Green 
to work anymore. And similarly in our country, the reason why 
we have veterans' preference, the reason why we have service 
disabled veteran businesses set aside, and the reason why we 
have OFCCP for Federal contractors is because we don't have 
bounty lands to give away to veterans as a reward for service 
and sacrifices made.
    And so we need a mechanism, whereby first dibs on jobs, 
either in the Federal workforce or in the Federal contractor 
workforce, can go to qualified veterans. And we need some kind 
of mechanism to close that gap, ma'am, and we don't have that 
mechanism today.
    Ms. Herseth Sandlin. Your response, what you just said in 
terms of not being aware of the VETS Central Web site was going 
to be a question I was going to ask the sergeant, but let me 
just ask each of you a question related to this.
    Mr. Weidman, do you think it was a mistake to terminate 
America's Job Bank? And what is your opinion of its private 
sector successor, Job Central, with the technical operations 
being conducted by DirectEmployers Association and the Web site 
that they have created that you saw today?
    And then my question, Sergeant, is how do veterans learn of 
this Web site?
    Mr. Weidman, if you could answer first.
    Mr. Weidman. At the risk of reliving and reviving bad 
history, I thought that the way in which and the fact of ending 
the Public Labor Exchange and America's Job Bank, given the 
number of States that depended on that mechanism was highly 
irresponsible and a shameful decision and a shameful action.
    The transfer over, if you will, to VET Central, as you 
might well imagine, Madam Chairwoman, I keep up on a lot of 
stuff when it comes to economic affairs and veterans, and was 
not aware of Job Central--VET Central and what they were doing 
in the same way, and I do not believe that it has replaced what 
we had 15 years ago when we had at least something that 
approached an effective Public Labor Exchange on a national 
basis.
    Sergeant Sowash. Thank you, Madam Chairwoman.
    When America's Job Bank did go away, the employers 
mobilized to be able to create something that would replace it, 
especially with regard to getting jobs down to veterans at the 
local level. And I am assuming after this session we will have 
an opportunity to actually speak and get you a little bit more 
educated about the National Labor Exchange the way it is today. 
Because there are actually more--we have 48 States that are 
actually participating in the National Labor Exchange, which 
actually is more than America's Job Bank had when it went away, 
which is very surprising to me right out of the gate with 
regards to uploads of jobs and downloads of jobs.
    When we created the National Labor Exchange, along with our 
partners NASWA, we actually went down to the State level and we 
asked them what they liked about AJB and what they didn't like 
about AJB, and that is where we started. That was ground zero 
for us in creating a new National Labor Exchange, and actually 
creating relationships with North Carolina and other States, 
and being able to understand what happens at the local level so 
that we can get jobs down to the local level and we can ensure 
that when veterans come through the door, they have jobs 
available to them.
    So I think this is actually more of an awareness for maybe 
this whole room and maybe even more, that the National Labor 
Exchange is actually a lot bigger than America's Job Bank was 
with regard to participation when it went away.
    Ms. Herseth Sandlin. Thank you. Mr. Whitaker, what was your 
experience with America's Job Bank, and what was that 
experience in relationship to now working with DirectEmployers 
Association and VET Central?
    Mr. Whitaker. We had an experience with the America's Job 
Bank, and I think it--when it started it was new and novel and 
provided a different layer and a different way to provide 
service too, but over a period of time, it lost some of that 
extra service that it could provide.
    There were issues with the America's Job Bank with funding 
and being able to continue, because a lack of funding and some 
commitment from a number of States and other areas to be able 
to keep up with the new technology in providing service as 
customers expected that, and providing service in a very 
effective way.
    So when the America's Job Bank ended there was certainly--
or when it was coming to an end, there certainly was a vacuum. 
And NASWA, as a representative of the State workforce agencies, 
was aware of that issue, and we received a number of proposals 
from entities desiring to replace the America's Job Bank.
    We selected Job Central and VET Central because of their 
proposal, because it is a free service to the States, it is a 
free service to veterans, and we believe it is working very 
effectively to replace the America's Job Bank and it is getting 
better every day.
    Ms. Herseth Sandlin. Thank you. Mr. Boozman.
    Mr. Boozman. Thank you, Madam Chair. I would like to go 
ahead, with your permission, to pass my time in this round or 
to skip me and to go to Mr. Moran. He has an appointment in the 
future.
    Ms. Herseth Sandlin. Mr. Moran.
    Mr. Moran. Thank you, Mr. Boozman and Madam Chairwoman.
    Mr. Weidman, you mentioned in your testimony, perhaps kind 
of offhand about how South Dakota has a good program and New 
York less so. Is there some objective standard, or is there 
something that I as a Member of Congress ought to be paying 
attention to, looking at, that would give me a clue as to how 
the programs are fairing across the country and particularly in 
my State of Kansas?
    Mr. Weidman. The smaller States tends to do much better, 
Mr. Moran, and from that point on having said that, it has to 
do with acculturation and a corporate culture that is built up 
around the State workforce development agency in that 
particular State.
    So, that as an example, New Hampshire had a very strong 
veteran influence and always has been very good and has always 
worked very closely with VA voc rehab and State rehab 
particularly on dealing with disabled vets. South Carolina is 
very good. North Carolina is pretty good. Both the Dakotas are 
pretty good. In western Kansas where you are from, it is 
actually pretty good. It is tougher in the more urbanized 
eastern part of the State. And that pattern pretty much follows 
around the country. Is the more urbanized the area, the more 
difficult it is for a number of reasons. When it comes for 
veterans employment I am talking about.
    Part of that has to do with the structure of the DVOP/LVER 
Program. You can attract people in a less urbanized area for 
what they are able to pay, and so that has partly to do with 
it, and part of it has to do with simply the sociological 
culture and the respect for veterans that you find are often in 
the more rural areas.
    Mr. Moran. Thank you very much.
    Let me ask you an additional question, a more specific one. 
You suggest barring Federal contractors who do not comply with 
section 4212. Do you worry about with all the consolidation 
that has gone on in recent years, that such a move would put 
veterans who are working at those companies at a greater risk? 
Are there consequences for the veterans in barring those 
Federal contractors?
    Mr. Weidman. You have to have a way for people to 
reasonably get listed first and foremost, and you have to have 
a way to get the listing to people. VET Central may be one of 
those means. There are a number of private job boards. The most 
effective one, which we found we endorse in the VVA, and also 
others endorse, is VET Jobs.
    So as long as it is clear to the employer community and to 
the Federal contractor community what the requirement is and 
how to satisfy it, I do not see it as placing veterans at a 
disadvantage.
    What often has happened in my experience over the years, 
and unfortunately, Mr. Moran, I am an old guy, I have been at 
that for a long time, since 1973 dealing with veterans 
employment when I was doing it as a volunteer while teaching 
full-time at one of the Vermont State colleges, and once you 
get veterans through the door then they prove themselves and 
that employer generally says okay, I want to hire some more of 
those folks. They show up on time, they work hard, they are 
drug free, and they do whatever needs to be done to get the job 
done and out the door. And if that means staying an extra hour, 
they will do it and don't even blink an eye.
    So the question is getting a leg up to get in the door. So 
I don't see it for those who are already working for Federal 
contractors as being an impediment to their future.
    Mr. Moran. Because they have proven themselves.
    Mr. Weidman. Because they have proven themselves, and 
frankly, set a good example.
    Mr. Moran. Right.
    Mr. Weidman. And a smart employer. Ross Perot became a 
billionaire hiring only veterans. It is useful to remember.
    Mr. Moran. Let me ask Mr. Sharpe. You suggest moving the 
Office of Contract Compliance to the VA. I want to see if 
others agree with you. I am sorry, the Veterans' Employment and 
Training Service, not the VA. Do you agree with the Vietnam 
Veterans Association, that disabled vet outreach program 
specialists and local vet employment representatives should be 
federalized?
    Mr. Sharpe. We do believe that it should be moved to the 
Veterans' Employment and Training Service. That seems to be the 
consensus that we receive from those that work in that 
particular office all across the country. Many of them feel 
like the program is not working. There is a communication 
problem. Very little oversight. And we believe the only way 
that we could really improve the program overall is for it to 
be in the Veterans' Employment and Training Service Program.
    It just seems logical that, you know, they are already 
looking at Uniformed Services Employment and Reemployment 
Rights Act, they already have the job of finding employment for 
veterans. That should be another component instead of it being 
spread out in so many different offices.
    And as far as federalizing, that is the only way that we 
see that the Department of Labor can adequately monitor the 
money that is being sent to the States.
    Right now there is very little compliance. The monitoring 
is not there. There is no way to actually track where the money 
is actually going. Every State that we have talked to, I mean, 
the complaints are, you know, are just astronomical.
    Mr. Moran. Do you mean complaints by veterans?
    Mr. Sharpe. Complaints by veterans, complaints by DVOPs, 
LVERs, DVETs. They feel like the program is not being properly 
administered and that veterans are not receiving their 
preferences, their priority in job services, and we just feel 
like if it is federalized then Washington can really keep track 
of where the money is going, how is it being spent, and how is 
it being used.
    Mr. Moran. Thank you very much. Thank you Mr. Chairman.
    Mr. Adler [presiding.] Mr. Teague.
    Mr. Teague. Yes, thank you, Mr. Chairman, Ranking Member.
    I would like to thank the panel for being here today and 
all of the information that you have given, the time that you 
have given. But I am a little concerned that we have--everybody 
seems to be in agreement that people are ignoring the rules and 
just being able to slide by. And you said, Mr. Sharpe, that you 
think it should be federalized. Has anybody done any scoring or 
anything to see what the cost of that would be?
    Mr. Sharpe. Not that I am aware of.
    Mr. Teague. Do you have any idea how many people it would 
take it to do it or anything?
    Mr. Weidman. May I?
    Mr. Teague. Sure, please do, yes.
    Mr. Weidman. The administrative overhead of indirect costs 
that goes to States now, out of the $162 million that is 
currently there fiscal year going out to the States, our 
scientific wild guesstimate is probably about $50 million worth 
of services. The administrative overhead indirect costs runs as 
high as 37 percent of that. For somebody who is making $35,000 
a year, in some cases it is costing the Federal Government in 
excess of $70,000 by the time you add direct and indirect 
additional costs having to do with medical, insurance, et 
cetera, plus what the State is giving out.
    We hear from DVOPs and LVERs that part of the direct 
administrative cost, which is travel moneys, and other kinds of 
supportive services, is not made available particularly when it 
gets to be in a budget crunch in that particular State. But the 
States aren't giving the money back to the feds.
    So you have to ask the question here, are we getting the 
bang for the buck, and are we doing the right thing by the 
young men and women coming home? Not everybody is going to need 
a Vet Center, not everything is going to need medical care, but 
everybody is going to need a job, whether they are guard, 
reservists, or returning active duty from the wars, and it is 
the key readjustment program, and it is the flash point of the 
whole readjustment process, is the ability to obtain and 
sustain meaningful employment.
    And so that is why, sir, that we believe that $162 million 
would be enough to start, but with the cost of federalization, 
and it would be probably higher pay in certainly some 
localities, that is why we recommended at least $200 million 
for fiscal year 2010 to handle those transitional costs. Those 
who wanted to stay as State employees who didn't have the 
opportunity in most States under their own Civil Service laws 
to transfer and become regular employment counselors within the 
office. Those who wanted to commit to working with vets would 
then go with the feds.
    Mr. Teague. I think probably the answer to both of the 
questions that you asked about, how good a job we are doing for 
our veterans, is probably no, we are not doing a very good job.
    But I also heard you make a statement earlier in your 
testimony that you thought the programs work better in rural 
than urban areas because they were willing to work for the 
price that people paid. Would you explain that a little 
further?
    Mr. Weidman. I will give you an example, sir. Under 
Governor Cuomo I had returned to New York State and ran the 
State Veterans Employment and Training Program for 9 years. The 
person that you could attract in Watertown, New York, or in 
Massena, New York, in the north country for what I could pay as 
a beginning DVOP or LVER, which was about $35,000 a year, that 
is a pretty good job up there. In New York City, $35,000 you 
can't live without doing a second job.
    So I had DVOPs in New York City 15 years ago who were 
working three jobs in order to be able to feed their kids and 
pay the rent. So that is why I say if we transitioned over to 
Federal employment, paid people decently, and with the 
differentials that are paid, depending on locality and Federal 
pay, we would be able to hold our people and not have them 
working themselves to death by working a second and third job 
just because they want to work with vets during the day.
    Mr. Teague. Okay, thank you. Thank you, Mr. Chairman.
    Mr. Adler. I would like to hear Ms. Roof for a second.
    VEVRAA requires Federal contractors and subcontractors to 
compile and submit annual reports on the number of employees 
who are veterans. Has there been any concern about the lack of 
reporting and what happens when a Federal contractor or 
subcontractor does not submit a report, and who reviews the 
reports?
    Ms. Roof. You know, I am really glad you brought that up, 
that was one of my and AMVETS main concerns when going through 
this as I am calling compliancy auditing process.
    There is not enough information out there, and if there is 
we were unable to find it.
    Also could you ask your first part the question, I would 
like to address each point of it.
    Mr. Adler. Is there a requirement in VEVRAA to file and 
submit reports? Contractors and subcontractors. Are they doing 
it? If so, who gets access to the information? Is the 
information adequate? Because it seems to me the essence of 
this is trying to get veterans jobs. And if we have this 
information in the system we should be able to access it. So is 
the information in the system and who is using the information 
and how?
    Ms. Roof. And again, I think the VA is doing a good job 
getting the information into the system to a certain extent, 
but I think that is where it stops.
    There is no compliancy auditing to check on these 
companies. To make sure that the information they submitted was 
not just an initial submission to get a contract, but that the 
veterans are actually being used. I think that is where the 
OFCCP comes in.
    Again, that's why I touched on doing more audits, because 
things can look great on the front end, and I am going to 
submit all the information, it is going to go into the system, 
but now who is going to hold me accountable to that, to what I 
submitted?
    And as far as who has access, I am not really sure to be 
quite honest with you. I can look into that and get back to 
you.
    Mr. Adler. I would ask if any of the other panelists know. 
I have certainly asked the VA the same question. Do any other 
panelists know what happens with the VEVRAA information? Does 
it come in? Are contractors and subcontractors complying? And 
are people getting access to the information?
    Mr. Weidman. If you mean does the average DVOP and LVER in 
a local office have access to this Federal contractor list the 
answer is I don't believe so.
    Mr. Adler. Anybody else?
    All right, thank you. I thank all the panelists for your 
testimony this afternoon. Oh, I am sorry, you have got more? 
Mr. Boozman, please proceed.
    Mr. Boozman. I have just got a couple.
    On the, and I made reference to it in my opening statement, 
on the VETS-100 Report how do you think we should disseminate 
that information? Evidently it is not getting out. Have you got 
any sort of advice as to an appropriate way to get the 
information out?
    Mr. Weidman. Well putting it online is one way and let 
veterans market themselves. Essentially the vets who are 
getting jobs today more and more are on their own, and that is 
despite the fact there are some wonderful DVOPs and LVERs out 
there and people can't get to them or they don't have time to 
see the number of people that need help within their community. 
So veterans are having to market themselves more and more.
    If, in fact, you had those listings online, the only place 
where I know there is a complete list that is searchable by 
State, by zip code, is through the small business that I talked 
about in Montpelier, Vermont, but there may be other ways. And 
then you have voluntary efforts, such as put together by 
DirectEmployers apparently, is one way to do it.
    But if you put it online and we give veterans some 
additional tools--as an example, there is for all disabled 
veterans a tax credit of $6,000 that the employer gets back for 
the first $12,000 paid to any disabled vet. Instead of leaving 
it all up to the employer to do that, give the vet a 
certificate, simplify that program where he can walk into your 
office in Arkansas and say I have a certificate, I am skilled 
as an optician, optician assistant, you hire me and you get 
back the first $6,000 of the first--$6,000 of the first $12,000 
paid you can take off what you owe the feds. So you let 
veterans go market themselves. And the more you put the things 
out there, then you will have other services like 
DirectEmployers, like VET Jobs, and others who will work with 
the individual veterans to market themselves.
    But that begs the question of does there need to be a 
publicly funded mechanism to accomplish the most important task 
in the readjustment process for our younger veterans who are 
returning home? And we don't have an effective mechanism and we 
need to create one, and we stand ready to work with you, Mr. 
Boozman, with Chairwoman Herseth Sandler, and with Mr. Adler, 
and with all other Members of the Committee to create a new 
paradigm that works.
    Mr. Boozman. A few years ago we allowed the ability for 
part-time DVOPs and LVERs. Is that a good idea or bad idea?
    Mr. Weidman. With all due respect, VVA never supported the 
part-time DVOPs. I mentioned that for 9 years I ran what at 
that time was the second largest program in the country and 
eliminated part-time LVERs, even though it meant at some of the 
smaller offices LVERs had to split their time between two 
separate small offices because you didn't get 100 percent of 
the person. It is supposed to be 50 percent DVOPs. You are 
lucky if you get the equivalent of 1 day a week, and that is 
just the plain fact, and that is not just from me. You can talk 
to folks right across the country and you will get the same 
answer. It was not a good idea, sir.
    Mr. Boozman. Gentlemen, would you like to comment?
    Mr. Sharpe. We also agree that it is not a good idea. We 
hear from DVOPs and LVERs again from all over the country. They 
have been complaining about this program ever since it was 
enacted. Many of them complain that they are not working with 
veterans, they are forced to do other duties, other clerical 
type activities, and that was not the intention.
    We were also told that the DVETs are being told not to 
visit the One-Stop offices as they used to, so it is very 
difficult for them to monitor and ensure that those offices are 
in compliance. And because of that we have been against it.
    Mr. Boozman. Thank you guys for being here. As always you 
are very, very helpful. Yield back.
    Mr. Adler. I also thank all of you for taking the time to 
be with us and for your service to our country. Thank you so 
very much. You are excused with our gratitude.
    We have a second panel. We now invite panel number two to 
the witness table.
    Joining us on our second panel are Mr. Lorenzo Harrison, 
Acting Deputy Assistant Secretary for the Office of Federal 
Contract Compliance Programs, United States Department of 
Labor; and Mr. Jan Frye, Deputy Assistant Secretary for 
Acquisition and Logistics, United States Department of Veterans 
Affairs.
    Mr. Harrison, welcome, you are recognized for 5 minutes.

    STATEMENT OF LORENZO HARRISON, ACTING DEPUTY ASSISTANT 
SECRETARY, OFFICE OF FEDERAL CONTRACT COMPLIANCE PROGRAMS, U.S. 
    DEPARTMENT OF LABOR; AND JAN R. FRYE, DEPUTY ASSISTANT 
  SECRETARY FOR ACQUISITION AND LOGISTICS, U.S. DEPARTMENT OF 
                        VETERANS AFFAIRS

                 STATEMENT OF LORENZO HARRISON

    Mr. Harrison. Thank you Chairman, Mr. Boozman, and Members 
of the Subcommittee. Thank you for this opportunity to testify 
on Federal Contract Compliance.
    The Office of Federal Contract Compliance Programs has an 
important and unique role in the enforcement arena in 
protecting veteran's rights, ensuring that covered veterans are 
provided with equal employment opportunities, and that 
companies doing business with the Federal Government take 
affirmative action to recruit, hire, and promote qualified 
veterans.
    OFCCP is one of three agencies within the Department of 
Labor with responsibilities for administering the affirmative 
action provisions of the Vietnam Era Veterans' Readjustment 
Assistance Act (VEVRAA).
    The Employment and Training Administration oversees 
priority referrals for veterans seeking employment, and the 
Veterans' Employment and Training Service oversees the VETS-100 
and VETS-100A Reports.
    Under VEVRAA, Federal contractors are required to list most 
job openings with the appropriate employment service delivery 
system, and protected veterans are entitled to receive priority 
in referrals to the job openings that Federal contractors are 
required to list. However, VEVRAA does not require Federal 
contractors to give veterans a special preference in hiring. 
That is, VEVRAA does not require Federal contractors to give 
veterans a special preference in hiring.
    On average, OFCCP conducts approximately 4,000 compliance 
evaluations and 900 compliance assistance events annually for 
Federal contractors and subcontractors in supply and service 
and construction industries.
    During the compliance evaluation, OFCCP will verify that 
Federal contractors are listing appropriate job openings with 
the Employment Service Delivery System so that veterans may be 
given priority in referral. That is, priority in referral, not 
preference.
    So far in fiscal year 2009, roughly 15 percent of all on-
site reviews conducted by OFCCP have found violations of the 
mandatory job listing requirement by Federal contractors and 
subcontractors, as we witness the application of private 
entities like DirectEmployers.
    OFCCP also receives approximately 500 to 700 complaints 
each year, of which 15 to 20 percent of these are filed under 
VEVRAA. During fiscal year 2008, OFCCP received 83 complaints 
filed by veterans. Over the past 5 fiscal years, 19 complaints 
resulted in $399,926 in benefits being provided to veterans.
    Where voluntary compliance cannot be achieved, OFCCP may 
continue to use conciliation efforts with the contractor, refer 
the matter to the Solicitor of Labor to institute formal 
administrative enforcement proceedings, or refer the case to 
the Attorney General for litigation, as appropriate.
    OFCCP does not presently have formal agreements to share 
such information with other Federal agencies. We treat 
information received from Federal contractors during a 
compliance evaluation as confidential.
    The Subcommittee also asked about the most important 
analysis of the VETS-100 Report and associated result. 
Previously, OFCCP did not analyze VETS-100 and VETS-100A 
Reports, but only verified that these forms were submitted to 
VETS.
    Recently, OFCCP met with VETS and secured access to the 
VETS-100 database.
    In 2008, we established an incentive program called The 
Good-Faith Initiative For Veterans Employment, affectionately 
known as G-FIVE, and it recognizes the good efforts of 
contractors in the area of veterans employment.
    In summary, although we have made progress in addressing 
equal employment opportunities for veterans among Federal 
contractors and subcontractors, we know that there is still 
work to be done to increase the employment of covered veterans.
    OFCCP looks forward to working with our new Deputy 
Assistant Secretary once that person is announced and on board, 
and with Members of this Committee, in order to improve 
opportunities for veterans with Federal contractors.
    This concludes my oral statement, and I would be more than 
happy to answer the questions of this Committee.
    [The prepared statement of Mr. Harrison appears on p. 39.]
    Mr. Adler. Mr. Harrison, thank you. Let me start with 
something you said toward the end. You said, ``There is still 
work to be done.'' Talk to us for a moment about that. What 
should be done? What should your Department do? What should 
Congress do? What should Federal agencies do collectively, 
cooperatively to help our veterans get placed?
    Mr. Harrison. One is to hopefully have President Obama and 
Secretary Solis' 2010 budget ratified so that we can go about 
bringing on 213 new Equal Opportunity Specialists, which would 
increase considerably, definitively, compliance of contractors 
under VEVRAA.
    Two, we should be committed to working with the 
DirectEmployers, National Association of State Workforce 
Agencies, and other important stakeholders like the ones you 
have just heard from, to ensure that veterans are being helped 
and they are getting job prioritization, and that veterans are 
getting assisted.
    Mr. Adler. Let me follow up with the second one first. Why 
hasn't there been that sort of effort with the panelist from 
the previous panel to reach that sort of positive result in the 
past?
    Mr. Harrison. I believe there have been efforts in the past 
to work with various stakeholders. OFCCP has been in operation 
for 30 years. In recent years, there has been an emphasis, 
systemic discrimination, that is on focusing on classes of 
individuals who could have been harmed by personnel practices 
that in some ways de-emphasized focus on VEVRAA.
    Mr. Adler. So I just want to understand. We hire 213 more 
people that are specialists----
    Mr. Harrison. We haven't hired----
    Mr. Adler. No, we do that. That is one of the things we do. 
Tell me what else we should be doing going forward to enhance 
the cooperation among agencies and with the various entities 
that were represented by the panelists in the previous panel. I 
just want to get a better sense of what we should be doing 
collectively to address the needs of our veterans who want to 
work.
    Mr. Harrison. I mean, very simply stated, Congressman 
Adler, a commitment to reaching out. Very simply stated, sir. A 
commitment to reaching out to the panelists, to the diverse 
stakeholder community on these issues, and a commitment to 
following up on matters that are distilled in those kinds of 
discourses, and, generally speaking, a commitment to reach out.
    Mr. Adler. Let me just still understand. The commitment to 
reaching out, does it come from the Department of Labor? Does 
it come from some other entity?
    Mr. Harrison. It comes from all of us that are involved in 
seeing to it that veterans are treated as they should be. Those 
of us interested in ensuring that VEVRAA is enforced to the 
fullest extent. Those of us who are committed to veterans 
getting the benefits again that they deserve. Most certainly it 
includes a commitment from the OFCCP.
    Mr. Adler. It is hard for me to quantify what that means, a 
commitment to reaching out. I believe in it, I think everyone 
in the room believes in it----
    Mr. Harrison. Well, we have----
    Mr. Adler. Let me just finish my question to you. Do you 
have a sense in fact there is a commitment to reaching out on 
the part of the Department of Labor at this point?
    Mr. Harrison. I most certainly do, Congressman Adler.
    We are, between now and next fall, that would be fall of 
2010, going to conduct some 20 odd public forums that would 
provide a platform like has not existed in recent years for 
these issues to be further discussed, and commitments and 
potential commitments made.
    There will be over 1,000 compliance assistance events that 
are non-enforcement driven opportunities--safe havens--for 
partnerships to be made, opportunities to be distilled and 
defined that would be beneficial to veterans.
    Mr. Adler. I am truly gratified by the enthusiasm you speak 
about in terms of trying to reach out to the veterans.
    Do you have a sense there are other entities in Washington 
within the Federal Government that don't share the Department 
of Labor's commitment to reaching out, and how can we infuse 
them with your enthusiasm?
    Mr. Harrison. Well, I would hope that some of them are 
sitting as witnesses in the gallery; otherwise, I don't know of 
any, sir, that would be certainly against this kind of 
collaboration.
    We have strong partnerships with the Veterans' Employment 
and Training Service and we have a strong commitment to 
collaboration with the Office of Disability Employment Policy 
at the United States Department of Labor. And as you know, 
Secretary Solis is very committed to having a rigorous 
enforcement program that would be beneficial to veterans in 
this country when many men and women are returning from these 
wars overseas.
    Mr. Adler. I thank you for your testimony and for your 
commitment. Mr. Boozman.
    Mr. Boozman. Thank you, Mr. Chairman, we appreciate you 
guys being here.
    Mr. Harrison, you testified that 15 percent of on-site 
reviews in 2009 have found violation of the job listing 
requirements, as well as numerous cases where veterans claim 
violations of section 4212. Assuming that OFCCP found similar 
and other violations in past years, can you explain the lack of 
any such data in the annual report required by 38 U.S.C. 
4107(c)?
    Mr. Harrison. No, I am unable to explain that, sir. Except 
that I can say that those data will be publicly available in 
the report that is going through clearance currently.
    Mr. Boozman. Okay. I guess the next question, which we like 
to know up here is, is when could we expect that?
    Mr. Harrison. I would have to get back to you with that for 
the record for the Subcommittee.
    [The DOL subsequently provided the following information:]

          Section 4212(c) requires that the annual report prescribed in 
        Section 4107(c) include information on the number of complaints 
        filed alleging that a contractor has failed or refused to 
        comply with its contractual obligations relating to the 
        employment of protected veterans. Accordingly, the U.S. 
        Department of Labor Veterans' Employment and Training Service's 
        (VETS) Annual Report to Congress for Fiscal Year (FY) 2008 
        included information on the number of complaints filed with 
        OFCCP involving claims by veterans. Although section 4212(c) 
        does not require the Secretary to provide information on 
        violations of VEVRAA uncovered during compliance reviews, such 
        as violations of the mandatory job listing requirement, that 
        information will be included in the FY 2009 Annual Report to 
        Congress and in future reports.

    Mr. Boozman. Okay. Counsel reminds me that it was due in 
February.
    NASWA has mentioned several concerns about inconsistent 
application of the laws and regulations by OFCCP field staff. 
For example, e-mail posting are not considered compliant, 
third-party posting are not allowed, many States lack the 
technology demanded by field staff. More specifically, NASWA 
members cited a lack of a comprehensive, official, and accurate 
Federal contractor list, a lack of standardized communication 
protocol, during and after audits, and minimal contact between 
State and regional OFCCP staff. Can you comment on that?
    Mr. Harrison. What I would say to you as was indicated by 
Mr. Whitaker, as is reflected in the correspondence I shared 
with Mr. Whitaker, we are absolutely committed to having a 
topnotch professional core of Equal Opportunity Specialists 
that abide by our guidelines and regulations. Those that were 
distilled under the Jobs for Veterans Act, which amended VEVRAA 
in 2002, it provides a tremendous amount of flexibility to all 
of us who would have openings made available in an efficient 
and effective manner for veterans.
    Mr. Boozman. We are being told that DOL canceled the 
Federal contractor job bank shortly after passage of the Jobs 
for Veterans Act. Can you tell us why?
    Mr. Harrison. No, I am unable to. I am unable to tell you 
why, sir. I was not functioning in this capacity at that time.
    Mr. Boozman. Okay. And as you have heard earlier, I think 
there has been concern on our part. I mentioned in my opening 
statement about really not using the VETS-100 data. I guess, a 
question is, when was the last time that we really analyzed 
that data? How is it being used?
    Mr. Harrison. Well, as I mentioned, there will be detail in 
this upcoming annual report. And I am encouraged that we may 
find, via technological advancement, ways that were not 
available prior to now in utilizing information provided by the 
VETS-100 Reports to hopefully improve our evaluations of VEVRAA 
and investigations of VEVRAA.
    Mr. Boozman. Just one more thing. Is there a central 
database of Federal contractors?
    Mr. Harrison. No. Not all encompassing, sir. There are 
various databases that we utilize to identify contractors.
    Mr. Boozman. Is that something that we need to do? Would 
that be helpful? And I guess the next question would be, if so, 
who should maintain?
    Mr. Harrison. The Department hasn't really arrived at a 
position on that. I wouldn't want to misspeak about that. It 
seems like that might be a policy related matter. I would have 
to leave it there, Mr. Boozman.
    Mr. Boozman. Okay, very good. Again, thank you for being 
here and we appreciate your testimony.
    Mr. Harrison. Thank you. It is an honor and privilege.
    Mr. Adler. Mr. Frye, you are now recognized for 5 minutes.

                    STATEMENT OF JAN R. FRYE

    Mr. Frye. Thank you, Mr. Chairman, Members of the 
Subcommittee, thank you for the opportunity to appear before 
you today to discuss VA's acquisition operations with regards 
to Federal Contractor Compliance.
    It is a privilege for me to represent the many dedicated 
and hardworking acquisition and logistics professionals 
throughout the Department that provide mission-critical support 
every day to ensure quality care and benefit delivery for our 
Nation's most special citizens, our veterans.
    I have been asked specifically to address the issue of 
Federal Contractor Compliance with regard to employment of 
veterans in Federal contracting. The Committee requested that 
VA respond to four questions, and I would like to take this 
opportunity to do so.
    The first question centers on how VA monitors contractor 
compliance with 38 U.S.C. 4212.
    VA contracting officers comply with the Federal Acquisition 
Regulation (FAR). They are required to verify vendor compliance 
prior to the award or modification of a contract. They may 
accomplish this by several appropriate means, but in all cases 
they rely on the Department of Labor's Veterans' Employment and 
Training Service-100 or VETS-100 database to ensure that 
apparent successful officers have completed the required 
reporting for the appropriate reporting year.
    To improve VA's oversight and ensure vendors doing business 
with the VA are complying with the requirements I have 
instituted two significant changes.
    The first will be the issuance of an information letter to 
VA's heads of contracting activities reinforcing that 
contracting officers must be aware of this important 
requirement and their responsibilities to query the VETS-100 
database.
    Second, to establish an electronic record of the 
contracting officer's compliance with the policy I have 
directed that VA's contract writing system be modified to add a 
mandatory feature to require contracting officers to record 
electronically the execution of a VETS-100 database query prior 
to award or the exercise of contract options. This feature will 
create the electronic record that VA will be able to use to 
monitor compliance on a recurring basis in the future.
    The second question from the Subcommittee inquired as to 
how many VA contractors are non-compliant.
    In response to the Subcommittee's request, we conducted a 
review of a statistically significant, randomly selected sample 
of contract files throughout VA.
    All contracts in the sample had the appropriate FAR Part 52 
contract clauses in place, and all contractors were fully 
compliant with the Department of Labor's reporting 
requirements.
    Third, the Subcommittee requested information on any action 
VA takes to address non-compliant contractors.
    And last, whether noncompliance affects a company's ability 
to do business with VA.
    At this time, we are not aware of vendors who are non-
compliant. Non-compliance would affect a company's ability to 
contract with VA. For those contractors deemed to be non-
compliant, VA will take action as set forth in FAR Part 22.
    The first step of course would be to notify the Department 
of Labor and then make efforts to negotiate a mutually 
acceptable remedy. Failure to reach a remedy could result in 
termination of the contract for default.
    Mr. Chairman, I would like to close by thanking you for the 
opportunity to discuss VETS-100 Reporting, and the Federal 
Contractor Compliance program at VA. We will continue to work 
diligently to improve and set a standard worthy of emulation 
throughout the Federal acquisition community.
    I would be pleased to respond to any questions you or the 
Subcommittee's Members may have.
    [The prepared statement of Mr. Frye appears on p. 44.]
    Mr. Adler. Mr. Frye, thank you.
    You heard from witnesses on the first panel that said there 
wasn't really a problem with vendor compliance prior to the 
award or modification of a contract, but at least a couple of 
the witnesses were suggesting there was a problem with 
compliance after a contract had been awarded or modified. Do 
you care to comment on that?
    Mr. Frye. Yes, I would. My view is that the contracting 
officer's job is to ensure that the required FAR clauses are in 
the solicitation, and that those required clauses are then 
incorporated into the contract award.
    Secondly, contracting officers have to ensure that the 
contractors have submitted reports to the Department of Labor 
prior to the contract being awarded.
    And thirdly, contracting officers take actions if the 
Department of Labor was notified by a veteran of noncompliance, 
the Department of Labor I assume would conduct an investigation 
and provide VA with information, and VA would then take action 
contractually against that contractor.
    But as far as contracting officers doing anything beyond 
that, I don't see that as part of the contracting officer's 
role.
    Mr. Adler. Is there a discrepancy here? We heard the 
panelists say that somehow it is just not happening. Is it in 
fact not happening, or is it in fact somewhere along the system 
there is a break down that is preventing the compliance or the 
termination of contracts or some sort of sanction for those 
vendors that are not complying?
    Mr. Frye. Well, I would respond by saying that I have no 
knowledge of noncompliance.
    In the last 3\1/2\ years during my tenure with the VA, I 
don't know of a single instance of reported noncompliance.
    We did query the Department of Labor to find out if we 
could get specific examples of contractor noncompliance prior 
to my testimony here today, we were unable to get a report that 
was specifically related to the VA. In other words, they 
weren't able to sort their database for noncompliance specific 
to the VA.
    So again, I have not heard of any noncompliance in the last 
3\1/2\ years that I have been at VA, and certainly we would 
aggressively tackle noncompliance if it were related to VA.
    Mr. Adler. Let me again understand jurisdictionally who 
monitors the compliance. Is it the Department of Labor that 
tells you, or do you have your own system of monitoring 
contract compliance?
    Mr. Frye. Again, we monitor contract compliance by making 
sure the required clauses are in the contract. We also monitor 
contract compliance by making sure that the required reports 
have been issued with Department of Labor, but it is Department 
of Labor's job to handle any complaints that might come 
forward. If those complaints were related to a contracting 
officer from a veteran, we would refer those complaints to the 
Department of Labor who would conduct the investigation, and we 
would take action accordingly based upon the Department of 
Labor's recommendations.
    Mr. Adler. Okay. Maybe I could jump back to Mr. Harrison 
for a second.
    Is it your sense that the Department of Labor is hearing 
complaints and handling them properly and when appropriate 
referring those concerns as well to the Department of Veterans 
Affairs?
    Mr. Harrison. I believe so. I am not quite sure how much, 
if I am hearing you clearly, Congressman Adler, have come from 
Veteran Affairs. You know, we have had 530 veterans' complaints 
filed with us over the past 5 fiscal years, 83 last year.
    Mr. Adler. So I guess I heard from at least one of the 
panelists from the previous panel that there was a multitude of 
concerns of veterans not being given the opportunity to have 
employment and may be the real break down in the compliance.
    Is there such a break down, or you don't think there is a 
break down in compliance? And maybe there was an exaggeration 
by a previous panelist.
    Mr. Harrison. Well, as I have already stated, 15 percent of 
the on-site evaluations of the 850 some odd on-site evaluations 
we conducted this past fiscal year, fiscal year 2008, showed 
mandatory job listing violations. That would be, I think, 150, 
if my arithmetic is correct, of the 800 on-sites, or close to 
that amount anyway. My arithmetic I suppose is a little off. 
You know, showed mandatory job listing violations.
    Mr. Adler. Do we have adequate sanctions in place to punish 
those employers or vendors that are not complying?
    Mr. Harrison. What we do is make certain that a 
conciliation agreement is made to ensure that that company, 
that contractor, reports to the Department of Labor and is 
underneath a monitoring process that is carried out by the 
OFCCP until they come into compliance.
    Mr. Adler. Is there any consideration of stronger sanctions 
than this sort of probation period? I heard a previous panelist 
talk about maybe banning such violators from access to future 
government contracts for some period of time.
    Mr. Harrison. Well OFCCP, the Department of Labor, has not 
made a position on that.
    Mr. Adler. Mr. Frye, does the Department of Veterans 
Affairs have any concern in that regard?
    Mr. Frye. Certainly. I think one of the things that could 
be done for noncompliance or repeated noncompliance is debar 
the contractor, eliminate their ability to contract with the 
government. That is certainly a contractual action that can be 
taken.
    Mr. Adler. I would think that would be an obvious 
conclusion. I thank you both for your testimony.
    Mr. Boozman.
    Mr. Boozman. Thank you, Mr. Chairman.
    Are the requirements of section 4212, are they included in 
the curriculum at the Acquisition Academy of Frederick?
    Mr. Frye. I can't answer that now. But I will take that for 
the record and get you a statement.
    [The VA subsequently provided the following information:]

          This topic is addressed in SBLD 013B--Federal Acquisition 
        Regulation (FAR) /Veterans Affairs Acquisition Regulation 
        (VAAR) and VA Regulation Workshop; a 2nd year skill building 
        and knowledge retention workshop in the VA Acquisition Academy 
        Internship Program.
            Type of training: Classroom setting
            How in-depth the training is: Approximately 2 to 4 hours in 
        duration. Overview of subject and FAR language, introduction to 
        the VETS-100 form, database and reporting system, and what 
        contracts the Act applies to.
            Who receives the training: VA Acquisition Academy Interns
          This training can be revised, as required, to meet VA needs. 
        The VA Acquisition Academy also includes this in its Federal 
        Acquisition Certification--Contracting (FAC-C) curriculum 
        taught to the VA Acquisition Team.

    Mr. Boozman. Okay.
    Let us go back a little bit. You mentioned the compliance 
with clauses required by FAR 52. It appears that there are over 
250 different clauses in that regulation. Which clause or 
clauses are you referring to relative to compliance with 
section 4212?
    Mr. Frye. There are two required clauses. First is FAR 
clause 52.222-35, and it is entitled ``Equal Opportunity for 
Special Disabled Veterans.'' And the second required clause is 
FAR clause 52.222-37, and it is entitled ``Employment Reports 
on Special Disabled Veterans.''
    There are some variant clauses, for instance a legal cause 
that you would put in if these are not commercial items that 
you are buying, but those two clauses that I just gave you are 
the two primary clauses that are required.
    Mr. Boozman. If there isn't an administered list of Federal 
contractors how can we be confident that all the contractors 
are submitting the VETS-100 Report?
    Mr. Frye. If you could repeat the question again.
    Mr. Boozman. If there is no list of Federal contractors--a 
master list--how can we be confident that all the contractors 
are submitting the VETS-100 Report?
    Mr. Frye. Again, our requirement, the contracting officer's 
requirement is to query the database in DOL and they can do 
that in two ways. They can directly query the database or they 
can send an e-mail to DOL to find out if that particular 
contractor has submitted the report.
    Mr. Boozman. Okay. Mr. Harrison.
    Mr. Harrison. I would have to check back with my 
colleagues. I just don't know.
    [The DOL subsequently provided the following information:]

          The Department is not able to determine whether every 
        contractor subject to the reporting requirement in section 
        4212(d) submits the required veterans' employment report. 
        However, the Department does monitor compliance with VEVRAA's 
        reporting requirement through audits of contractors selected by 
        the Federal Contractor Selection System (FCSS). When a 
        contractor is selected for a compliance review, OFCCP checks to 
        see whether the contractor has filed the VETS-100 Report (or 
        the VETS-100A Report after October 2009). If it is determined 
        that the contractor failed to file the required veterans' 
        employment report, OFCCP will notify VETS as outlined in 41 CFR 
        250.60(c) and 41 CFR 300.60(c). In addition, VETS maintains a 
        database of contractors that file the VETS-100 Report that is 
        available to Federal contracting officers who are required by 
        31 U.S.C. 1354 and 48 CFR 22.1302 to verify that a prospective 
        contractor subject to the reporting requirements in Section 
        4212(d) filed the required report in the prior fiscal year.

    Mr. Boozman. Okay, very good. Thank you all again for being 
here, and we do appreciate your hard work.
    Mr. Adler. I join Mr. Boozman in thanking you. We 
appreciate your testimony today that we have heard with great 
insight and interest of the topic. Today's hearings provides us 
with an opportunity to learn more about the ongoing problems 
facing disabled veterans seeking out equal employment 
opportunities and Federal contractor compliance.
    This hearing stands adjourned.
    [Whereupon, at 3:36 p.m., the Subcommittee was adjourned.]















                            A P P E N D I X

                              ----------                              

         Prepared Statement of Hon. Stephanie Herseth Sandlin,
            Chairwoman, Subcommittee on Economic Opportunity
    Providing our servicemembers and veterans with employment 
opportunities is indeed a way of investing in our brave men and women 
of the Armed Forces for the sacrifices they have made while serving our 
country. Providing them with opportunities and establishing equity in 
employment opportunities can help veterans become gainfully employed.
    The U.S. Department of Labor's (DOL) Office of Federal Contract 
Compliance Program (OFCCP) plays an important role in protecting 
veterans by ensuring that they are not discriminated and are given 
equal employment opportunity. While OFCCP provides certain veterans 
protection against discrimination, it also requires that contractors 
are actively involved in providing employment or advancement 
opportunities by providing outreach, recruitment, and training. In 
addition, contractors must make good faith efforts to maximize their 
current qualified workforce, develop and update affirmative action 
plans, and submit an annual report to DOL.
    The Vietnam Era Veterans' Readjustment Assistance Act of 1974 also 
known as VEVRAA and section 4212 of Title 38, provide legal authority 
to enforce veterans' equal employment opportunities. VEVRAA provides 
enforcement for Federal contracts to provide equal employment 
opportunities for special disabled veterans and veterans of the Vietnam 
Era. This provision would apply to prime contractors and subcontractors 
who engage in personal property and non-personal services, including 
construction. All employment is required to be listed in the Federal 
Contractor Job Listing Program which gives priority referral to 
qualified disabled veterans and Vietnam Era veterans.
    Currently, the OFCCP provides enforcement measures for compliance. 
For example, compliance reviews are conducted to ensure that employers 
are following their affirmative action program established as a 
prerequisite for reaching a contract threshold. To assist in this 
effort, OFCCP provides training, consultations, and technical 
assistance to contractors.
    I have become deeply concerned over reports of Federal contractors 
not complying with Federal regulations. This is specifically troubling 
considering the increased number of servicemembers returning to 
civilian workforce. It is also disturbing when I hear that disabled 
veterans hiring practices are inadequate coupled with the lack of 
effort by contractors to employ disabled veterans. Federal contractors 
and subcontractor have the opportunity to work with the Department of 
Veterans Affairs' Vocational Rehabilitation and Employment Program, or 
Department of Labor's Veteran Employment and Training Service, both of 
which are equipped to assist veterans gain employment. These resources 
along with the LVERs and DVOPs should provide for contractor 
compliance.
    I am hopeful that today we can determine to the extent that these 
enforcements are beneficial, if they lack incentives for compliance, or 
if there is a need for stricter enforcement measures. I look forward to 
exploring the options to assist employers who are making good faith 
effort in hiring and promoting qualified disabled veterans in the 
workforce. This Subcommittee is fully committed to protecting our 
veterans and providing protections against employment discrimination.
    Finally, today's hearing is an important one. It is the first time 
this Subcommittee has held a hearing on Federal contractor compliance; 
therefore, we hope that we are able to learn more about the issue while 
conducting oversight and gaining from the insight provided to us by our 
witnesses on the topic.

                                 
  Prepared Statement of Hon. John Boozman, Ranking Republican Member,
                  Subcommittee on Economic Opportunity
    Good afternoon.
    Madam Chair, the current recession is affecting veterans just like 
the rest of American labor force. According to the Bureau of Labor 
Statistics, the unemployment rate among adult men was 9.4 percent and 
adult women was 7.1 percent. Interestingly, BLS does collect data on 
veterans in its monthly report but does not publish the data. One would 
think that given the current War On Terror and the recognition that 
veterans are an important sector of society, veterans would be included 
in any national level unemployment report. The following table from the 
Veterans Employment and Training Service illustrates today's employment 
challenges to veterans and as you will see, things are not good.


            Veteran and Non-veteran Unemployment Rates for the First Seven Months of FY 2009 and FY 2008
                                                 (May 11, 2009)
----------------------------------------------------------------------------------------------------------------
                                                                     ALL AGES                  AGES 18-24
                        FISCAL YEAR                        -----------------------------------------------------
                                                             Veteran     Non-veteran    Veteran     Non-veteran
----------------------------------------------------------------------------------------------------------------
FY 2009                                                         7.1%            7.8%      18.3%           14.0%
(10/1/08-4/30/09)
FY 2008                                                         4.1%            4.7%      14.9%            9.9%
(10/1/07-4/30/08)
----------------------------------------------------------------------------------------------------------------


    Using 2008 national data for comparison, it appears that veterans 
in general continue to have lower unemployment rates than their non-
veteran counterparts. However, that same data shows that younger 
veterans still experience significantly higher unemployment rates than 
older veterans and non-veterans. But veterans are supposed to have some 
advantage in seeking employment in the private sector, especially by 
companies that are Federal contractors.
    Title 38 section 4212 requires Federal contractors to take 
affirmative action to hire veterans and tasks state employment services 
and the Department of Labor with roles in promoting hiring by Federal 
contractors. I believe each of those bear some responsibility in 
achieving the goals of section 4212.
    While there are many reasons for higher unemployment among younger 
veterans, lack of attention to veterans in general by the Federal 
Government should not be among those reasons. For example, in addition 
to not being identified in BLS data, section 4212(c) of title 38 
requires the Department of Labor to report annually on veteran hiring 
by Federal contractors. Included in that report, the law requires the 
following data:

      The number of complaints filed against Federal 
contractors
      The actions taken by the Department on those complaints
      The results of the Department's actions on those 
complaints
      The number of contractors listing job openings
      The nature and types of positions
      The number of veterans given priority referral by the 
local employment services

    If one looks at the section on Federal contractor compliance on 
pages 20 and 21 in the most recent DoL report, there is no data on 
actions taken to investigate complaints regarding contractors' 
affirmative action to hire veterans. I hope the Office of Federal 
Contractor Compliance can explain this lack of focus to us today.
    Section 4212 also includes several requirements for information to 
be supplied annually by Federal contractors which are included in the 
VETS 100 report which should form the basis for the Department's annual 
report to Congress. I have a feeling that the only time anyone looks at 
the VETS 100 report is when DoL receives a congressional inquiry.
    Finally, the question of enforcement raises an issue of common 
sense. We hear suggestions that failure to have an affirmative action 
plan or submit the VETS 100 report should be grounds for debarring a 
company from doing business with the Federal Government. While I fully 
support affirmative hiring under section 4212, do we really think the 
Federal Government would debar a major contractor like a Lockheed or 
IBM or Pfizer or Boeing? The only alternative is to fine such companies 
and there is no such provision in current law. I also believe we should 
take a close look at whether placing the investigation responsibility 
with OFCCP is the right thing to do and whether that responsibility 
should more properly reside in VETS.
    Madam Chair, the situation surrounding section 4212 is less than 
optimal to put it kindly and I want to work with you to fix it.

                                 
               Prepared Statement of Thomas S. Whitaker,
  President, National Association of State Workforce Agencies, Deputy
Chairman/Chief Counsel, North Carolina Employment Security Commission, 
                              Raleigh, NC
    Chairwoman Herseth Sandlin, Representative Boozman, and Members of 
the Subcommittee, on behalf of the National Association of State 
Workforce Agencies (NASWA), I thank you for the opportunity to submit 
written testimony addressing Federal contractors' hiring practices and 
the performance of the U.S. Department of Labor (USDOL), Office of 
Federal Contractor Compliance Program (OFCCP) in monitoring the 
compliance of Federal Contractor Job Listings (FCJL). NASWA and its 
members are strong proponents of activities benefiting the employment 
of qualified veterans through programs such as those under the 
Subcommittee's jurisdiction.
    The members of our association constitute State leaders of the 
publicly funded workforce investment system vital to meeting the 
employment needs of veterans through the Disabled Veterans' Outreach 
Program (DVOP) and the Local Veterans' Employment Representatives 
(LVER) programs. The mission of NASWA is to serve as an advocate for 
State workforce programs and policies, a liaison to Federal workforce 
system partners, and a forum for the exchange of information and 
practices. Our organization was founded in 1937. Since 1973, it has 
been a private, non-profit corporation, financed primarily by annual 
dues from member State agencies.
    Starting in 2007, NASWA began offering its State workforce agency 
members a new and free service called JobCentral National Labor 
Exchange (NLX). NLX is a labor exchange solution which also includes a 
FCJL compliance mechanism. In addition to our members programs and 
activities targeted to veterans, this mechanism has given NASWA and its 
partners a more direct involvement with OFCCP. In our experience most 
employers want to not only fulfill their obligations under OFCCP 
requirements, but also fulfill the intent of the legislation.
    NLX's technical operations are headed by DirectEmployers 
Association (DEA), a trade association of over 485 Fortune 500 
companies represented by their human resource directors. DEA's flagship 
service is JobCentral, a sophisticated job-search engine which NASWA 
endorsed as the successor to America's Job Bank (AJB, a national public 
labor exchange defunded by USDOL in 2007). Today a total of 48 State 
workforce agencies have signed participation agreements creating 
JobCentral National Labor Exchange (NLX). Talks are underway with the 
remaining States to join this alliance. DEA provides all online labor 
exchange services to State workforce agencies and States' employer and 
jobseeker customers for free. State job-banks across the United States 
can transmit job orders to each other, plus, receive thousands of job 
orders via electronic download from DEA's members. Job orders are 
updated daily, avoiding duplication and ensuring job opportunities are 
still open.
    This public-private alliance has created a cost-effective system 
dedicated to improving labor market efficiency and reflecting our 
Nation's diverse workforce. The initiative uses no Federal funds toward 
its operations and its research and development; rather it leverages 
private, non-profit-owned technology with existing State workforce 
agency resources.
    The NLX's FCJL compliance mechanism is a sister-site called 
VetCentral. VetCentral was designed to provide employers OFCCP 
compliance with the Vietnam Era Veterans' Readjustment Assistance Act 
(VEVRAA) as amended by the Jobs for Veterans Act (JVA). VetCentral 
sends daily emails of FCJL jobs to the appropriate local employment 
service delivery system. The emails are directed to LVERs and DVOPs. 
The emails contain links to the FCJL job orders, a ``how to apply'' 
link, and are very user-friendly. The NLX has received positive 
responses from the field-staff who use these emails every day in 
referring veterans. State workforce agencies designate who receives 
emails, and also review and correct current email addresses used by 
VetCentral. In addition to VetCentral emails, FCJL jobs are also 
directly being downloaded into many States' job-banks through the 
broader NLX initiative.
    We believe current regulations published in 41 CFR Part 60-300 
create a process that brings increased opportunities to our Nation's 
veterans, while simultaneously allowing affected employers to meet 
their responsibilities under the JVA.
    I want to preface the following discussion by stating our 
appreciation for the response by and interaction with the Office of 
Federal Contractor Compliance Program (OFCCP). Without their clear 
guidance and strong communication significant problems would escalate.

          Recently, DEA and State workforce agency officials informed 
        NASWA of major discrepancies in how some regional OFCCP staff 
        members were handling compliance audits. The way some OFCCP 
        regional staff members were interpreting Jobs for Veterans Act 
        (JVA) regulations on FCJL jobs we believe was inconsistent with 
        the law and regulations. Some regional OFCCP staff had informed 
        several States and employers that emails of FCJL jobs to the 
        appropriate local employment service delivery system would not 
        constitute compliance. Also, they were told that third parties 
        could not list FCJL jobs for employers in State job banks.
          Finally, State workforce agencies were told that accepting an 
        FCJL jobs-download from NLX would not give employers compliance 
        unless the State could produce a historical report 
        demonstrating that jobs had been posted. Most States do not 
        have the ability to keep such historical records unless they 
        invest in new technologies. Some States can store and provide 
        such historical records, but this would require employers to 
        register and follow each State's separate registration 
        process--a costly approach, and also contrary to the spirit of 
        flexibility outlined in pertinent regulations.
          Such an interpretation would shift the burden of compliance 
        from employers to State workforce agencies and create an undue 
        burden for both. Most importantly, this type of interpretation 
        would reduce the number of job openings available to veterans, 
        ultimately harming the very customer legislation and 
        regulations aim to benefit. The employers involved are DEA 
        members who have been regularly forwarding job openings to 
        local offices via emails, automatically downloading job orders 
        to State job banks, or both. Employers that are not DEA members 
        can also use the system to download FCJL jobs to State job 
        banks and have these jobs automatically emailed to the local 
        level, also at no cost.

    In response, NASWA sent a request to Mr. Lorenzo Harrison, Acting 
Director, at the national OFCCP office. NASWA has received written 
communication from the department that reaffirms the validity of the 
VetCentral process. The letter also indicates the Department will be 
communicating to field staff reinforcing the same message. This will 
allow State workforce agencies to receive FCJL jobs in a flexible 
manner without incurring added costs and give them the opportunity to 
make more referrals. It also will give employers a cost-effective means 
to meet and exceed compliance. And it will increase the number of real 
jobs available to veterans.
    NASWA is pleased with the Department's attention to this matter and 
appreciates its quick response. NASWA looks forward to partnering 
further with USDOL, Veterans' Service Organizations, employers, and 
others to help inform veterans, State workforce agency staff, Federal 
staff, and businesses of the appropriate roles and responsibilities of 
involved stakeholders.
    In crafting this testimony, NASWA also queried its members on OFCCP 
compliance issues. Their responses are summarized below. It is 
important to note, our members are the State workforce agencies who, 
through the Wagner-Peyser (employment services) DVOP and LVER programs, 
have been working with OFCCP's FCJL requirements for a long time under 
Title 38, and other Federal legislation and regulations. This long-term 
involvement in FCJL implementation, and the State workforce agencies' 
priority of service to veterans' requirement, uniquely positions our 
members to comment on compliance issues.
    Several State workforce agencies expressed frustration over the 
lack of a comprehensive, official and accurate Federal contactor list. 
State workforce agencies believe the compilation of such a list by 
OFCCP would enable States' LVER and DVOP staff to contact Federal 
contractors in their areas and build strong alliances to put veterans 
to work. Should the Federal Government create such a list, States can 
request the NLX copy electronic job orders appearing on Federal 
contractors' corporate websites and import them into State job banks at 
no cost. Overall, State workforce agencies believe this can be an 
opportunity for improved Federal-state coordination and an opportunity 
to educate employers about the valuable services provided through the 
publicly funded workforce development system.
    State workforce agencies also are interested in standardizing 
communication protocols with OFCCP during and at the conclusion of the 
employer audit process. Ideally, State workforce agencies indicate 
OFCCP would send official notification to the appropriate State 
officials when initiating monitoring reviews. State workforce agencies 
would also want to receive an outcome report at the conclusion of 
employer audits. This practice would allow States to assist Federal 
contractors and ultimately lead to veterans gaining employment and 
career opportunities. NASWA is willing to facilitate making the 
necessary connections between OFCCP and appropriate State level 
officials.
    Some States indicated minimal contact between State and regional 
OFCCP staff and expressed frustration in not being able to get 
questions answered. Further, LVERs and DVOPs are particularly 
frustrated when they have knowledge of Federal contractors who will not 
list with the employment service but cannot get Federal action 
initiated. State workforce agency officials acknowledge that the lack 
of a standard communications protocol or the lack of contact between 
State workforce staff and OFCCP are partly a result of OFCCP 
understaffing and are hopeful this will be changed in the near future. 
Overall, our members support the addition of more OFCCP personnel to 
help resolve issues and further working relationships.
    The workforce system remains dedicated in promoting veterans' 
employment and in helping employers expand their pool of veteran 
applicants. Some larger States have indicated OFCCP is placing the 
burden of compliance reporting on the State workforce agencies instead 
of the employers. Many times OFCCP audit procedures involve in-depth 
querying of State staff and systems for detailed information on job 
postings, referrals, applicant information, specific interview dates, 
start work dates, interview outcomes, etc.
    While State workforce agencies do maintain some of these data at 
various levels of detail, the primary responsibility to maintain and 
provide such information does not rest with the States. Such 
information is known best by the employer but seldom, if ever, is it 
communicated back to State workforce agencies. Even if States had this 
information it will not accurately reflect reality, if the employer 
does not exclusively recruit through that State's labor exchange 
system. Finally, this type of expectation often requires allocation of 
resources in both staff time and IT systems that might otherwise be 
used in more direct service delivery-related capacities to veterans.
    Based on the concerns outlined above, NASWA and its employer 
partner, DirectEmployers Association, would be supportive of a 
coordinated educational initiative. This initiative should be targeted 
to all involved stakeholders and seek to clarify the policy and 
operational roles of the State workforce agencies and USDOL agencies 
including: OFCCP, Veterans' Employment and Training Service (VETS), and 
the Employment and Training Administration (ETA). The initiative should 
also better communicate the OFCCP requirements and expectations for 
FCJL employers. This will ultimately result in better use of available 
funds, staff, and IT resources, and bring better customer service and 
more job opportunities to our Nation's deserving veterans.
    NASWA and its members remain dedicated to enhancing the delivery of 
employment services to our Nation's veterans. We are willing to assist 
the Subcommittee and the U.S. Department of Labor in any way possible.
    Thank you for the opportunity to address these important issues.

                                 
                Prepared Statement of Christina M. Roof,
    National Deputy Legislative Director, American Veterans (AMVETS)
    Madam Chairwoman, Ranking Member Boozman, and distinguished Members 
of the Subcommittee, on behalf of AMVETS, I extend our gratitude for 
being given the opportunity to discuss and share with you our views and 
recommendations on Veterans Affairs contracting policies relating to 
title 38, sec. 4212. AMVETS believes that the use of qualified veterans 
in Federal contracts is vital to the reintegration and business success 
of our veteran community.
    AMVETS is privileged in having been a leader, since 1944, in 
helping to preserve the freedoms secured by the United States Armed 
Forces. Today our organization prides itself on the continuation of 
this tradition, as well as our undaunted dedication to ensuring that 
every past and present member of the armed forces receives all of their 
due entitlements. These individuals, who have devoted their lives to 
upholding our values and freedoms, deserve nothing less.
    President Clinton signed Executive Order 12985 in 1996. The Order 
established the Armed Forces Service Medal with accompanying ribbons 
and appurtenances, for award to members of the Armed Forces of the 
United States who, on or after June 1, 1992, in the opinion of the 
Joint Chiefs of Staff: (a) participate, or have participated, as 
members of United States military units in a United States military 
operation in which personnel of any Armed Force participate that is 
deemed to be significant activity. The Order added anyone receiving 
this medal to the categories of veterans covered by the regulations set 
forth by title 38, sec 4212, established to require employers to take 
affirmative action in employing qualified special disabled veterans, 
Vietnam Veterans, and any other veteran who served on active duty 
during a war or in a campaign or expedition for which a campaign badge 
has been authorized, to include any veteran during the 1 year beginning 
date of such veteran's discharge or release from active duty.
    The Vietnam Era Veterans' Readjustment Assistance Act (VEVRAA) 
requires covered Federal Government contractors and a subcontractor to 
take affirmative action to employ and advance in employment specified 
categories of veterans protected by the Act and prohibits 
discrimination against such veterans. In addition, VEVRAA requires 
contractors and subcontractors to list their employment openings with 
the appropriate employment service delivery system, and that covered 
veterans receive priority in referral to such openings. Further, VEVRAA 
requires Federal contractors and subcontractors to compile and submit 
annually a report on the number of current employees who are covered 
veterans. The Employment Standards Administration's Office of Federal 
Contract Compliance Programs (OFCCP) within the U.S. Department of 
Labor (DOL) enforces the affirmative action and mandatory job-listing 
provisions of VEVRAA. DOL's Veterans Employment and Training Service 
(VETS), which was established to provide veterans and transitioning 
servicemembers with the resources to succeed in the 21st century 
workforce by maximizing their employment opportunities, protecting 
their employment rights and meeting labor-market demands with qualified 
veterans, administer the veterans' employment reporting requirement. 
VETS-100--Federal contractors and subcontractors with a Federal 
contract of $25,000 or more, entered into before December 1, 2003, are 
required to complete an annual report showing the numbers of qualified 
special disabled veterans, veterans of the Vietnam era, and any other 
protected veterans hired or employed during the reporting period. Note 
that the Job for Veterans Act (JVA) has amended VEVRAA, changing the 
VETS-100 Reporting requirements for contracts entered into on or after 
December 1, 2003. These changes (1) raise the reporting threshold from 
$25,000 to $100,000, and (2) modify the categories of covered veterans 
in the report. Any contractor or subcontractor whose only Federal 
contract is a contract of $100,000 or more entered into on or after 
December 1, 2003, is not required to file a VETS-100 Report until new 
regulations are published by DOL's VETS implementing these changes. 
Prior to amendments made by the JVA, VEVRAA applied to contracts in the 
amount of $25,000 or more, and covered other categories of veterans. 
The JVA amendments apply only to contracts entered into on or after 
December 1, 2003. For contracts or subcontracts of $25,000 or more, 
entered into before December 1, 2003, VEVRAA requires contractors to 
employ and advance in employment qualified disabled veterans, veterans 
of the Vietnam era, recently separated veterans (veterans within 1 year 
of their discharge or release from active duty), and other protected 
veterans. Only employers with Federal contracts valued at $100,000 or 
more entered into on or after December 1, 2003 will be required to file 
the VETS-100A report. Modifications made on or after December 1, 2003 
of pre-December 2003 Federal contracts create new contracts and are 
subject to the $100,000 threshold. Therefore, contractors would no 
longer be required to file the VETS-100 Report for these modified 
contracts and would only be required to file the VETS-100A report if 
the modified contract meets the $100,000 threshold.
    Federal contractors are required to preserve any personnel or 
employment records made or kept by the contractor for 2 years from the 
date of the making of the personnel record or the personnel action, 
whichever occurs later. Examples of records that must be maintained 
include but are not limited to job postings and advertisements, records 
of job offers, applications and resumes and personnel files. 
Contractors with fewer than 150 employees or who do not have a 
government contract of at least $150,000 only need to keep records for 
1 year. OFCCP enforces Executive Order 11246 and other laws that 
prohibit employment discrimination by Federal contractors. The agency 
monitors Federal contractors to ensure that they provide equal 
employment opportunities without regard to race, gender, color, 
religion, national origin, disability or veteran status.
    Performing audits and compliancy testing of Federal contracts are 
important tools to ensure that the purpose for the agreement or the 
performance of the contract actually occurs. As AMVETS has discussed 
before VA has increasingly had reason for concern regarding controls 
over performance monitoring and contract compliancy testing. The Office 
of Inspector General reported that on small contracts alone, this would 
result in the avoidance of contract fraud, more efficient verification 
processes, and an estimated savings of $47.4 million.\1\ VA's 
difficulties in some areas of contract administration illustrate that 
VA's major challenge lies in monitoring performance of previously 
awarded contracts.
---------------------------------------------------------------------------
    \1\ Office of Inspector General, Department of Veterans Affairs 
Statement before the Subcommittee on Military Construction, Veterans 
Affairs, and Related Agencies. Committee on Appropriations United 
States House of Representatives. Hearing on Department of Veteran 
Affairs Challenges; March 12, 2009
---------------------------------------------------------------------------
    AMVETS believes that this is due to VA not having a centralized and 
uniform contracting system in place. VA lacks reasonable assurance, at 
minimum, that it is receiving the services it paid for and that 
contracts are being closed within the designated period and all work is 
completed to contract terms. To AMVETS knowledge, VA rarely performs 
any audits of completed projects. In non-government owned and operated 
businesses audits of contracts often occur up to 5 years of contract 
completion. Most of these types of contracts contain a clause that 
allows organizations to perform and stipulate what will be re-inspected 
and what can be randomly inspected.
    AMVETS recommends that VA include and enforce more uniformly these 
aspects as well as a contractor's performance under the contract, 
including but not limited to its billings, certified payroll records 
and any other document showing expenditures. This provides validation 
to the award/contract grantor that all terms of the contract were met 
and completed in the agreed manner. The audit clause should also 
specify complete corporation on the part of the contractor whom 
preformed the work, as well as specifying how long the contractor 
should retain all records relating to the contract.
    Audits are essential to the stability of a contracting system. 
Audits validate and measure the current processes in place, identify 
those that need enhancement, and isolate the weak processes that lead 
to fraud, collusion, and most importantly to infringements of title 38, 
section 4212 which protect our veteran population's business successes. 
Contract compliance monitoring is as necessary an element to maintain 
an open and fair procurement process, as the implementation of ethics 
policies.
    It is in the opinion of AMVETS that a major impediment to current 
VA contracting policies is that of ``reactionary'' audits or audits 
that occur after a problem is identified. Over the past few years VA, 
Office of Federal Contracting Compliance, and Department of Labor 
compliance audits have shifted from enforcement to reactionary 
compliance reviews. Reactionary measures can never be as successful as 
random enforcement audits. Once an agency is contacted by an individual 
to report a violation of Executive Order 11246 as amended, 503 amended, 
or VEVRAA the probability of this violation being a companies' first or 
only non-compliant act is extremely low. This means that it will never 
be known how many veterans have lost work and financial means due to 
infringement of their legal rights.
    Currently, only initial or pre-contract verification processes are 
in place for most contracts. During the initial and often only review 
of a company's bid, the company will present all required 
documentation, including evidence that they will use veterans as 
employees or subcontractors to fulfill the title 38, sec. 4212 
qualifications; or they themselves may qualify as veteran preference 
contractors and then will be granted the award. After being awarded 
contracts on these terms, the verification process ceases and VA is 
using no means to guarantee that the contractor continues to stay 
compliant.
    AMVETS believes that a contributing factor in the failure of 
current compliance testing methods is the overall process of current VA 
and OFCCP auditing methods are unnecessarily lengthy and lack 
accountability and uniformity. Currently to prevent duplication of 
efforts the DOL and OFCCP will decide whether this is an individual 
complaint or a class complaint. Once the proper agency takes 
jurisdiction, the primary request for audit documentation occurs. 
Again, this is an example of reactionary auditing which has proven to 
be ineffective. Numerous field offices that AMVETS contacted reported 
major problems in the execution and timely completion with these types 
of compliance investigations. The common problem that was repeatedly 
brought to the attention of AMVETS, by numerous OFCCP personnel, was 
that when allegations of infringements of Executive Order 11246, title 
38, sec 4212, or VEVRAA were reported to them for investigation it was 
very hard to locate former employees and records to substantiate the 
allegations, thus resulting in small settlements by the contractor or 
company in question to avoid formal audit processes. Unfortunately, 
this option not only costs VA millions of dollars every year, more 
importantly it cost our veterans the due entitlements that VA, OFCCP, 
and DOL have worked so hard on providing to them.
    AMVETS believes VA professionals should partner with OFCCP to 
prevent further fraud of VA and discrimination among our veteran 
community. OFCCP is equipped with an arsenal of employees and tools to 
address these problems nationwide. OFCCP is present in every state and 
has the manpower to start doing enforcement audits of VA contracts and 
help steer VA contracts back to full compliancy, saving VA money, time, 
and guaranteeing the integrity VA contracts.
    AMVETS also most respectfully asks the Committee to mandate a 
uniform contract compliance standard to which every VA contract is held 
accountable to.
    In closing, AMVETS believes that a return to enforcement audits, a 
stronger partnering of VA with OFCCP and DOL, and uniformed contract 
compliance codes will help assure the integrity of VA awarded contracts 
and protect the rights of our veterans.
    Madam Chairwoman and Members of the Committee, AMVETS thanks you 
for inviting us to address this important matter and share our 
recommendations with you. This concludes my testimony and I can now 
address any questions you may have for me.

                                 
              Prepared Statement of Joseph C. Sharpe, Jr.,
        Director, National Economic Commission, American Legion
    Madame Chairwoman, Ranking Member Boozman and Members of the 
Subcommittee:
    Thank you for the opportunity to present The American Legion's 
views on Federal Contractor Compliance.
    The Department of Labor (DOL), Office of Federal Contract 
Compliance Program (OFCCP) ensures employers comply with 
nondiscrimination and affirmative action laws and regulations when 
doing business with the Federal Government. The Vietnam Era Veterans' 
Readjustment Assistance Act of 1974, as amended, section 4212, title 
38, United States Code (USC), states that covered contracts entered 
into by any department or agency for the procurement of personal 
property and non-personal services (including construction) for the 
United States, shall contain a provision requiring that the party 
contracting with the United States shall take affirmative action to 
employ and advance in employment qualified special disabled veterans, 
veterans of the Vietnam era and any other veterans who served on active 
duty during a war or in a campaign or expedition for which a campaign 
badge has been authorized.
    In the Federal Register of August 8, 2007, OFCCP significantly 
expanded the responsibilities of Federal contractors concerning their 
affirmative action plan for veterans. The Federal Register noted that 
Federal contractors are required to conduct active outreach to find 
veterans; going far beyond posting their Internet listings. Listed are 
persons and organizations that Federal contractors are directed to 
partner with to ensure appropriate outreach for eligible veterans.

      The Local Veterans' Employment Representative in the 
local employment service office nearest the contractor's establishment;
      The Department of Veterans Affairs Regional Office 
nearest the contractor's establishment;
      The veterans' counselors and coordinators (Vet-Reps) on 
college campuses;
      The service officers of the national veterans' groups 
active in the area of the contractor's establishment; and
      Local veterans' groups and veterans' service centers near 
the contractors establishment.

    Based upon dialog with Local Veterans' Employment Representatives 
(LVERs), veterans, and other organizations across the country, The 
American Legion found that Federal contractors have not consistently 
enlisted the assistance and support of the above mentioned persons and 
organizations in recruiting, and developing on-the-job training 
opportunities for, qualified disabled veterans recently separated 
veterans, other protected veterans, and Armed Forces service medal 
veterans, to fulfill its commitment to provide meaningful employment 
opportunities to such veterans. In 2005, the Government Accountability 
Office (GAO) reported that State workforce administrators cited lack of 
Federal contractor compliance with the law's provisions as most likely 
to have limited veterans' employment opportunities. Currently, Federal 
contractors are listing Internet openings without discussion with state 
staff or LVERs within the One-Stop Career Centers.
    America has benefited immeasurably from the service of its 23.4 
million living veterans, who have made great sacrifices in the defense 
of freedom, preservation of democracy, and the protection of the free 
enterprise system. The current Global War on Terror has had a 
devastating impact on the Armed Forces and has contributed to 
exacerbating this country's veterans' unemployment problem, especially 
within the Guard and Reserve components of the military. According to 
DOL, the present unemployment rate for recently discharged veterans is 
an alarming 20 percent, and one out of every four veterans who do find 
employment earn less than $25,000 per year.
    Small business creates an estimated 60 percent to 80 percent of net 
new jobs, therefore providing a central element for strong economic 
growth. One way of combating high unemployment among veterans is 
through the creation of new jobs through Federal contractors. 
Currently, too many military families are suffering financial hardship 
while their loved ones are recuperating in military hospitals around 
the country. Spouses are leaving their jobs to be with that disabled 
servicemember only to watch their family finances deteriorate. Seamless 
transition, in many cases, is just a wishful thought; however, if 
Federal contractors/subcontractors would hire a suitable amount of 
veterans, it would have a significant impact on veterans' unemployment 
rate and overall morale of the country.
    Listed below are several states with Federal contractors who 
obtained contracts with the Federal Government in excess of $100,000 
for April 2009.


----------------------------------------------------------------------------------------------------------------
                                                                                                    OTHER BLUE
                STATE                  TOTAL FEDERAL   CITIES     MANUFACTURING    CONSTRUCTION       COLLAR
                                        CONTRACTORS                CONTRACTORS      CONTRACTORS     CONTRACTORS
----------------------------------------------------------------------------------------------------------------
SOUTH DAKOTA                                    115        34                16              21               5
ARKANSAS                                        201        67                41              41               8
VIRGINIA                                      3,029       179               304             148              39
ARIZONA                                         577        64               101              61              27
NEW JERSEY                                      858       270               250              81              15
NEW MEXICO                                      365        59                37              54              11
FLORIDA                                       1,486       207               383             142              35
KANSAS                                          289        56                61              38               5
NEW YORK                                      1,417       341                79              96              31
CALIFORNIA                                    3,800       499               932             339              64
----------------------------------------------------------------------------------------------------------------


    The above mentioned figures show measurable opportunities for small 
businesses that obtain Federal contracts to hire qualified veterans.
                            RECOMMENDATIONS
    The American Legion believes veterans should be considered and 
hired first by these contractors and subcontractors who receive 
contracts from the Federal Government. It was the veteran who 
volunteered to defend this nation, the veteran who continues to keep 
this democracy intact, and the veteran who deserves the right to 
participate in rebuilding America's infrastructure and other necessary 
projects.
    Every contractor and subcontractor has the requirement to file a 
Vets- 100 report to measure compliance for the year. Many LVERs, 
Disabled Veterans' Outreach Program (DVOPs) Specialists, state 
veterans' staff, and veterans' advocates believe non-compliance with 
the filing of the Vets-100 is rampant since there is little if any 
consequence to non-compliance in the program. The American Legion 
recommends that Vets-100 report should no longer be filed 
electronically, because it goes around the law's intent of bringing 
employers and the One-Stop Career Centers together to discuss and 
develop employment opportunities for veterans. The American Legion also 
recommends Vets- 100 be amended to measure direct compliance with OFCCP 
regulations. Listed are two suggestions in relation to this issue:

      The Vets-100 should require the signature of a LVER to 
ensure that businesses are performing their required outreach at least 
once a year.
      The completed Vets- 100 submitted to the LVER for 
signature should have the name, signature, title, and phone number of 
the required affirmative action officer so the LVER has the optimal 
company contact information for veterans.

    Additionally, The American Legion recommends that the Federal 
Contractor Veterans Employment Program presently under OFCCP should be 
placed under the direction of the DOL's Veterans and Employment 
Training Service (DOL-VETS), so this program can receive proper 
oversight, as well as input and guidance from stakeholders.
    The mission of The American Legion's National Economic Commission 
is to take actions that affect the economic well-being of veterans, 
including issues relating to veterans' employment, home loans, 
vocational rehabilitation, homelessness, and small business owned by 
veterans, especially those with service-connected disabilities. It is 
vital that eligible veterans receive a fair and proportionate amount of 
Federal employment from Federal contractors so these veterans can build 
and maintain a quality-of-life, while they contribute to the United 
States economy.
    We look forward to continue working with the Subcommittee to 
enhance employment among America's veterans. The American Legion 
appreciates the opportunity to present this statement for the record.
    Again, thank you Madame Chairwoman, Ranking Member Boozman and 
Members of the Subcommittee for allowing The American Legion to present 
its views on this very important issue.

                                 
    Prepared Statement of Richard F. Weidman, Executive Director for
       Policy and Government Affairs, Vietnam Veterans of America
    Good afternoon, Madame Chairwoman, Ranking Member Boozman and 
distinguished Members of the Subcommittee. Thank you for giving Vietnam 
Veterans of America (VVA) the opportunity to offer our comments on a 
Federal Contract Job Listing (FCJL), whether this program as it is 
currently being operated is effective in producing job opportunities 
for veterans, and whether the authority for this program should be 
modified or expanded.
    The intent of this program, first established in the early 
seventies to assist with very high unemployment of young Vietnam 
veterans (we were actually young then, hard as that is to believe now) 
coming back from military service into a severe recession made much 
worse by the OPEC-caused gas shortage. The FCJL program was one of many 
measures that very well intentioned Members of Congress established in 
order to help veterans get started on civilian careers.
    FCJL was never a particularly well run program, for anyone. It was 
not particularly effective for women or minority citizens or for 
Vietnam veterans. Merely putting the law on the books without any 
enforcement or implementation mechanisms made a difference only with 
those employers/Federal contractors who would have probably done the 
right thing anyway in their employment practices.
    From 1999 to 2002 this Committee labored long and hard to achieve 
significant reform in the ability of the public labor exchange to 
assist veterans, particularly disabled veterans and recently separated 
veterans, receive meaningful assistance with securing work. One of 
those changes was making the VETS-100 Report mandatory. Those efforts 
mostly came to naught for a variety of reasons, mostly countervailing 
political pressure generated by the State workforce development 
agencies. Finally, in 2002, Congress passed the ``Jobs for Veterans'' 
bill that made some significant changes.
    As VVA has noted numerous times in the past 6\1/2\ years, the U.S. 
Department of Labor only implemented the parts of that legislation that 
gave increased ``latitude'' to the State workforce development agencies 
in how they employed DVOP and LVER personnel. Some even went so far as 
to say that this legislation, which was largely opposed by VVA, was to 
give managers of local one-stop offices virtual license to use the 
supposedly dedicated-to-veterans-only staff in any way they pleased, 
particularly because the funds for even doing on site or remote audits 
by the USDOL VETS staff was dramatically reduced.
    Parts of the Jobs for Veterans Act that were of little interest to 
USDOL and the states were the elements that would enable the DVOPs, 
LVERs, and others to do a better job of securing job openings and 
actually placing veterans. One of those elements was the FCJL program 
and generating the VETS-100 Report for use by the LVER to secure job 
listings from Federal contractors, which was supposedly mandatory.
    The military dictum is that ``A unit does well that which a 
Commander checks well.'' But nobody at USDOL was checking as to whether 
the reports were being generated, the jobs being listed, etc. In fact, 
the last Administration even went so far as to basically eliminate the 
public labor exchange altogether, and to actually close down 
``America's Job Bank.''
    So, where are we today? There is a very good compilation of the 
contractors that has been done by a private small business in Vermont 
that is available, and who is committed to working with this 
distinguished Subcommittee and your staff toward a plan for making 
those reports more complete. One suggestion they had is that the LVER 
must sign off on the VETS-100 Report, and that contractors that do not 
have a valid signature of the Local Veterans Employment Representative 
that they have listed all jobs and actually have a plan for hiring 
veterans, particularly recently separated and disabled veterans, that 
is truly being implemented be barred from either receiving new Federal 
contracts or extending current contracts.
    For the above to work, VVA suggest that a number of other changes 
need to be made:
    First, Congress must ``federalize'' the DVOP and LVER positions, 
and have them report directly to the USDOL Director, Veterans 
Employment & Training Service (DVET). In some cases it may mean that 
the same personnel are located in the same one stop centers, but only 
on an MOU under the control of the DVET for that State. If an office is 
in fact practicing priority of service for veterans, then that good 
relationship can continue. If not, then the DVET can place his or her 
staff in more conducive locations. In any case, they will be serving 
the needs of veterans.
    Second, as we now have a Secretary of Labor who is apparently very 
concerned about veterans, particularly the veterans of our current 
conflicts, we need to ensure that we also get an Assistant Secretary of 
Labor for Employment & Training who is as committed to veterans' 
priority of service as this Committee is. It is not enough to have a 
decent Assistant Secretary of Labor of Veterans Employment & Training, 
as the real money, and the real power to affect behavior at the local 
level, resides with the Employment and Training Administration. It will 
take all of these three officials, plus the Deputy Secretary of Labor 
(as the Chief operating officer of USDOL) being committed to making 
this work for veterans for it to be effective.
    Third, there needs to be a significant increase in the funding for 
the DVOP/LVER program, to at least $200 million for FY 2010.
    Fourth, the Secretary of Labor needs to commit significant amounts 
of her discretionary Worker Investment Act (WIA) funds to reward the 
states who do the best job in providing actual employment and training 
services to veterans that measurably result in meaningful employment at 
a living wage.
    Fifth, employers who are Federal contractors who consistently do 
not hire and promote veterans, especially disabled veterans and 
recently separated veterans, need to be barred from seeking or securing 
contract extensions or new contracts.
    Sixth, since the OFCCP is not now nor has it ever been effective, 
VVA proposes that veterans be given the right to sue Federal 
contractors for discrimination when they do not hire veterans, with up 
to $300,000 punitive damages in addition to any actual damages, and 
attorney's fees. It will only take a very few cases and all Federal 
contractors will get with the program and modify their behavior. The 
analogy that is apt in this instance is our ``voluntary'' system of 
paying Federal Income Tax.
    Will all of these steps lead to effective tools and mechanisms to 
assist veterans, especially disabled veterans and recently separated 
veterans to seek and secure meaningful employment at a living wage? All 
or at least some of these steps would lead in very short order to 
something that is far better than we have today, which really is a 
total mess.
    Thank you for the opportunity to share our views here today. I will 
be happy to answer any questions.

                                 
    Prepared Statement of Lorenzo Harrison, Acting Deputy Assistant
       Secretary, Office of Federal Contract Compliance Programs,
                        U.S. Department of Labor
    Chairwoman Herseth Sandlin, Ranking Member Boozman, and Members of 
the Subcommittee:
    Thank you for the opportunity to testify on ``Federal Contractor 
Compliance'' as authorized by the affirmative action provisions of the 
Vietnam Era Veterans' Readjustment Assistance Act of 1974 (``VEVRAA''; 
or ``Section 4212''), as amended, 38 U.S.C. 4212. Your invitation 
letter asked for an in-depth look into how the Department of Labor's 
(DOL) - Office of Federal Contract Compliance Programs (OFCCP) monitors 
compliance, what steps it takes to provide affirmative employment 
opportunities to covered veterans, and how it ensures that the laws are 
enforced. Further, your invitation listed several specific questions 
concerning veteran complaints, sharing of Federal contractor 
information among other Federal agencies, Federal contractors' 
compliance, OFCCP's use of penalties and incentives to increase 
compliance, and the results of the most recent analysis of the VETS-100 
Report.
    OFCCP is one of four programs within the Department of Labor's 
Employment Standards Administration. It has a staff of approximately 
585 employees, most of whom are Compliance Officers. OFCCP has six 
Regional Offices and more than 45 district and area offices nationwide.
    As you are aware, OFCCP enforces three equal employment opportunity 
laws: Executive Order 11246, as amended (Executive Order); section 503 
of the Rehabilitation Act of 1973, as amended; and VEVRAA. Taken 
together these laws require affirmative action and prohibit Federal 
contractors and subcontractors from discriminating on the bases of 
race, color, religion, sex, national origin, or status as a qualified 
individual with a disability or protected veteran.
    VEVRAA and its implementing regulations originally prohibited 
Federal contractors from discriminating in employment and required them 
to take affirmative action to employ and advance in employment 
qualified special disabled veterans and veterans of the Vietnam era. 
Statutory amendments made in 1998, 2000, and 2002 modified VEVRAA's 
coverage to include other protected veterans (veterans who served on 
active duty or in a campaign or expedition for which a campaign badge 
has been authorized, recently separated veterans, Armed Forces Service 
Medal veterans, and all veterans with service-connected 
disabilities).\1\
---------------------------------------------------------------------------
    \1\ The Veterans Employment Opportunities Act of 1998, the Veterans 
Benefits and Health Care Improvement Act of 2000, and the Jobs for 
Veterans Act enacted in 2002.
---------------------------------------------------------------------------
    VEVRAA requires Federal contractors to take special steps to 
recruit, hire, train, and promote qualified protected veterans. In 
addition, to implement the affirmative action requirement, VEVRAA and 
its implementing regulations found at 41 C.F.R. Parts 60-250 and 60-
300, require contractors to list most job openings with the appropriate 
employment service delivery system and each such employment service 
delivery system is to provide protected veterans who are qualified 
priority referrals to those job openings.
    VEVRAA does not require Federal contractors to give veterans a 
special preference in hiring. Under VEVRAA, protected veterans are 
entitled to receive priority in referrals to the job openings that 
Federal contractors are required to list with the appropriate 
employment service delivery system.
    OFCCP is one of three agencies within the Department of Labor (DOL) 
with responsibilities for administering the affirmative action 
provisions of VEVRAA. The other agencies with responsibilities under 
VEVRAA are the Employment & Training Administration (ETA) and the 
Veterans' Employment and Training Service (VETS). ETA oversees priority 
referrals for veterans seeking employment, and VETS oversees the VETS-
100, and VETS-100A Reports.
    OFCCP is responsible for ensuring compliance with the requirement 
in section 4212 (a)(1) that contractors take affirmative action to 
employ and advance in employment qualified protected veterans, and the 
requirement in section 4212(a)(2)(A) that contractors list their 
employment openings with the appropriate employment service delivery 
system. ETA is responsible for ensuring that the appropriate employment 
service delivery systems comply with the requirement in section 
4212(a)(2)(B) that covered veterans receive priority in referral to 
Federal contractor employment openings. ETA also provides leadership 
and oversight over the employment service offices of State workforce 
agencies. VETS administers the requirement in section 4212(d) that 
Federal contractors report annually on the number of employees and new 
hires in their workforces who are covered veterans. Further, VETS 
administers a local veterans' employment representative program to 
assist local employment service offices and One Stops in providing 
priority job referrals to veterans (38 U.S.C. 4104), and investigates 
complaints under the Uniformed Services Employment and Reemployment 
Rights Act program, which also protects veterans from employment 
discrimination.
    According to the Department's Bureau of Labor Statistics (BLS), as 
of the first quarter of the calendar year ending March 2009 
approximately 12 million veterans are in the civilian labor force. 
VEVRAA protects specified categories of veterans that are employed or 
seeking employment with covered Federal contractors and subcontractors.
    There are two primary enforcement procedures that OFCCP utilizes to 
ensure that Federal contractors and subcontractors are complying with 
VEVRAA - scheduled compliance evaluations of Federal contractors, and 
investigations of individual or class complaints alleging 
discrimination that are filed by veterans.
    On average, OFCCP conducts approximately 4,000 compliance 
evaluations and 900 compliance assistance events annually nationwide 
for Federal contractors and subcontractors in the supply, service, and 
construction industries. In FY 2008, nearly 20 percent of the 
compliance evaluations included an examination of the contractor 
affirmative action program (AAP) for veterans as required by the 
regulations in 41 C.F.R. Parts 60-250 and 60-300.
    During FY 2008, OFCCP conducted nearly 800 on-site investigations. 
OFCCP's investigative procedures during an on-site investigation 
include verification that the employer is listing appropriate job 
openings with the employment service delivery system so that veterans 
may be given priority in referral, as stated in 41 C.F.R. 60-
250.5(a)(2) and 60-300.5(a)(2). So far, in FY 2009, roughly 15 percent 
of all on-site reviews conducted by OFCCP found violations of the 
mandatory job listing requirement for veterans by Federal contractors 
and subcontractors.\2\
---------------------------------------------------------------------------
    \2\ 41 C.F.R. 60-300.5(a)(2).
---------------------------------------------------------------------------
    OFCCP's efforts on behalf of equal opportunity for veterans extend 
beyond compliance evaluations of Federal contractors and 
subcontractors. If a veteran believes a Federal contractor or 
subcontractor has discriminated against him or her or that a Federal 
contractor has otherwise violated VEVRAA and the regulations, he or she 
may file a complaint with OFCCP. Complaints may also be filed through 
VETS in DOL or through a local Veteran's Employment Representative 
(LVER) at a local One-Stop Career Center. Complaints filed through VETS 
or LVERs are promptly referred to OFCCP.
    During FY 2008, OFCCP received 543 complaints from individuals 
under the three equal employment opportunity laws enforced by OFCCP. 
Eighty-three (83) of those complaints were filed by veterans under 
VEVRRA. The table below responds to the Subcommittee question regarding 
the number of complaints that OFCCP receives each year. Using the 
number of initial complaints received, OFCCP has received approximately 
500-700 complaints each year over the past 5 fiscal years, with 15 to 
20 percent of these being complaints based on veteran's status. Once a 
complaint is received and prior to conducting an investigation, OFCCP 
must determine if the employer is a covered Federal contractor and if 
the complaint was timely filed.

                                                                OFCCP Complaints Received
                                                                     (FY 2004-2008)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        E.O. 11246         Sec. 503       Veterans  38
                                                                                                   ------------------------------------    U.S.C. 4212
                            Fiscal Year                                Total Complaints Received                                       -----------------
                                                                                                      #     % Rec'd     #     % Rec'd     #     % Rec'd
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2004                                                                                       691    315     45.59%    200     28.94%    136     19.68%
FY 2005                                                                                       717    354     49.37%    191     26.64%    119     16.60%
FY 2006                                                                                       594    276     46.46%    151     25.42%    116     19.53%
FY 2007                                                                                       519    251     48.36%    159     30.64%     76     14.64%
FY 2008                                                                                       543    275     50.64%    148     27.26%     83     15.29%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: OFIS CI-006B 10/21/08 and 04/28/09.


    Over the last 5 fiscal years, OFCCP conducted a total of 321 
investigations resulting from complaints filed by veterans. Nineteen of 
these investigations identified violations and were ultimately closed 
with financial agreements, which resulted in a total of $399,926 in 
benefits provided to veterans. Additionally, OFCCP investigates cases 
under VEVRAA that result from scheduled compliance evaluations. In FY 
2008, 68 contractors were cited for violations of the mandatory job 
listing requirement, which resulted in conciliation agreements with 
OFCCP to correct the violation and to report their progress to OFCCP.
    In response to the Subcommittee question concerning how long it 
takes to resolve a complaint, on average, most complaint investigations 
are completed within 8 to 12 months. Investigatory time includes time 
spent with the complainant to be sure that the complaint adequately 
reflects the nature of the acts that led the individual to file, time 
spent researching jurisdiction to ensure that the company was a covered 
Federal contractor at the time of the alleged discriminatory act, and 
the time spent conducting the investigation of the complaint.
    The Subcommittee asked which type of businesses and which 
geographical areas receive the highest number of complaints. Over 75 
percent of all complaints made by veterans come from seven industries, 
which are identified in the table below.

                                    VETERANS COMPLAINTS RECEIVED BY INDUSTRY
----------------------------------------------------------------------------------------------------------------
                   NAICS \3\                                          INDUSTRY                         PERCENT
----------------------------------------------------------------------------------------------------------------
31-33                                                                                Manufacturing         27.5
54                                                       Professional, Scientific & Tech. Services         12.6
56                                                               Administration & Waste Management         10.0
61                                                                            Educational Services          9.5
48-49                                                                 Transportation & Warehousing          7.6
51                                                                                     Information          5.2
62                                                                                     Health Care          4.4
                                                                                         All Other         23.2
----------------------------------------------------------------------------------------------------------------


    Over the past 5 years, the Southeast and Midwest Regions of OFCCP 
have received the most veterans' complaints.
---------------------------------------------------------------------------
    \3\ North American Industry Classification System (NAICS): The 
NAICS is the standard used by Federal statistical agencies in 
classifying business establishments for the purpose of collecting, 
analyzing, and publishing statistical data related to the U.S. business 
economy.

    VEVRAA enforcement activities include:
      Conducting compliance evaluations and complaint 
investigations of Federal contractors and subcontractors personnel 
policies and procedures;
      Offering technical assistance to Federal contractors and 
subcontractors to help them understand the regulatory requirements and 
review process;
      Securing relief for victims of discrimination that 
includes, but is not limited to, back pay for lost wages;
      Negotiating conciliation agreements with contractors and 
subcontractors who are in violation of regulatory requirements;
      Monitoring contractors' and subcontractors' progress to 
ensure that they are fulfilling the terms of their conciliation 
agreements by reviewing periodic compliance reports;
      Forming linkage agreements between contractors and job 
training programs to help employers identify and recruit covered 
veterans; and
      Recommending enforcement actions to DOL's Solicitor of 
Labor.

    The Subcommittee further asked what penalties OFCCP uses to 
increase Federal contractor compliance. Where voluntary compliance 
cannot be achieved, OFCCP may continue conciliation efforts with the 
contractor; refer the matter to the Solicitor of Labor to institute 
formal, administrative enforcement proceedings; or refer the case to 
the Attorney General for litigation, as appropriate. If there is a 
finding of discrimination against a protected veteran, the contractor 
would be required to provide back-pay and other make-whole remedies.
    Regarding the Subcommittee's question whether OFCCP shares 
information with other agencies on Federal contractors who have failed 
to comply, OFCCP does not presently have formal agreements to share 
such information. However, OFCCP does use its available resources, such 
as media releases, to communicate OFCCP policies, accomplishments, best 
practices, awards, and enforcement actions. Information about 
enforcement actions OFCCP may publicize would include the filing of 
administrative complaints, the signing of conciliation agreements, the 
entry of consent decrees, orders of debarment, or other news that may 
be appropriate for public dissemination as determined by OFCCP's 
National Headquarters.
    OFCCP treats information received from Federal contractors during a 
compliance evaluation as confidential, to the maximum extent allowable 
under the Freedom of Information Act (FOIA). It is OFCCP practice not 
to release data where the contractor is still in business and where the 
contractor asserts, and a Department of Labor review process 
determines, that the data are confidential and that disclosure would 
subject the contractor to commercial harm. The Department's FOIA 
regulations at 29 C.F.R. 70.26 require OFCCP to notify affected 
contractors on a case-by-case basis whenever a FOIA request is made. 
This notification gives contractors the opportunity to object to the 
disclosure of any data they consider confidential.
    The Subcommittee also asked about the most recent analysis of the 
VETS-100 Report and associated results. OFCCP does not analyze the 
VETS-100 or 100A Reports. During a compliance evaluation, OFCCP 
verifies that the required VETS-100 or 100A Reports have been submitted 
to VETS.
    VEVRAA also requires that government contractors track and annually 
report the number of employees in their workforces who are veterans 
covered under the law. The reporting requirements under VEVRAA are 
administered by VETS. The VETS-100 Report is filed by contractors who 
entered into covered contracts prior to December 1, 2003. The VETS-100A 
Report is filed by contractors who entered into covered contracts on or 
after that date. Those with covered contracts entered both before and 
after December 1, 2003 file both reports. The reports differ in terms 
of the contract coverage threshold for filing the report as well as the 
categories of protected veterans included in each report.
    Federal contractors and subcontractors awarded a Federal contract 
of $25,000 or more prior to December 1, 2003 are required to report 
annually to the Secretary of Labor the number of employees and recent 
hires who are:

      Special disabled veterans;
      Vietnam Era veterans;
      Recently separated veterans (within 12 months of 
discharge from active duty); and
      Veterans who served on active duty in the U.S. military 
during a war or campaign or expedition for which a campaign badge is 
awarded.

    The regulations in 41 C.F.R. Part 61-250 require contractors to use 
the Federal Contractor Veterans' Employment Report VETS-100 (VETS-100 
Report'') form to provide the information on the covered veterans in 
their workforces. In FY 2008, 22,159 Federal contractors and 
subcontractors filed a VETS-100 Report, and reported the employment of 
341,000 Vietnam Era veterans and 62,000 Special Disabled veterans. Of 
these figures, 32,000 Vietnam Era veterans and nearly 15,500 Special 
Disabled veterans were newly hired during the 2008 reporting period.
    The Jobs for Veterans Act (JVA) amended the VEVRRA reporting 
requirements for those contractors and subcontractors with Federal 
contracts of $100,000 or more awarded or modified on or after December 
1, 2003. The JVA requires reporting on the following categories of 
veterans:

      Disabled veterans; Veterans who served on active duty in 
the U.S. military during a war or campaign or expedition for which a 
campaign badge is awarded;
      Veterans who, while serving on active duty in the Armed 
Forces, participated in a United States military operation for which an 
Armed Forces service medal was awarded pursuant to Executive Order 
12985; and
      Recently separated veterans (with 36 months from 
discharge from active duty).

    The regulations that implement the JVA amendments are found in 41 
C.F.R. Part 61-300, and require filing of a VETS-100A Report. The VETS-
100A reporting requirements apply to reports submitted for 2009 and 
future years. Covered Federal contractors and subcontractors are 
required to submit their first VETS-100A between August 1, 2009, and 
September 30, 2009.
    There are some contractors that will be required to submit both the 
VETS-100 and the VETS-100A Reports in 2009 and subsequent years. 
Contractors that hold ``unmodified'' active contracts valued at $25,000 
or more that were awarded before December 1, 2003, who also enter into 
or modify one or more contracts valued at $100,000 or more on or after 
December 1, 2003, will be required to submit both the VETS-100 and 
VETS-100A Reports. The VETS 2010 Annual Report to Congress will include 
information on the number of Federal contractors and subcontractors 
that were required to submit both a VETS-100 and a VETS-100A Report in 
2009.
    Federal Contracting Officers are prohibited from awarding or 
modifying Federal contracts unless the latest VETS-100 or VETS-100A 
Report has been submitted (31 U.S.C. 1354). The Secretary of Labor 
makes a database available to Federal Contracting Officers listing the 
VETS-100 and VETS-100A Reports received from Federal contractors and 
subcontractors.
    We know that there is still work to be done to increase the 
employment of covered veterans. In response to the Subcommittee 
question regarding incentives that OFCCP uses to increase compliance by 
Federal contractors, in 2008 OFCCP established the ``Good-Faith 
Initiative for Veterans Employment (G-FIVE),'' \4\ which is an 
incentive program that recognizes the efforts of contractors in the 
area of veterans' employment. G-FIVE reaffirms OFCCP's commitment to 
ensure compliance with the requirements of VEVRAA; recognizes 
companies' ``best practices'' for the employment and advancement of 
veterans; creates an incentive for Federal contractors and 
subcontractors to increase their employment of, and affirmative action 
for, covered veterans; and strengthens VEVRAA partnerships between 
OFCCP, other Federal agencies and veterans advocacy groups.
---------------------------------------------------------------------------
    \4\ OFCCP's Good-Faith Initiative for Veterans Employment (G-FIVE) 
web page, http://www.dol.gov/esa/ofccp/g_five.htm.
---------------------------------------------------------------------------
    The following factors are considered when evaluating Federal 
contractor and subcontractor establishments for G-FIVE recognition:

      Evidence of covered veterans in the contractor's labor 
force;
      During the AAP year, evidence of an increase in the 
number of covered veterans in the contractor's labor force;
      The number of partnerships with local veterans' service 
organizations to employ or advance covered veterans;
      Established liaison with the state workforce agency job 
bank or the local employment service delivery system representative to 
facilitate the posting of their job listings;
      Whether appropriate job openings were sent to the state 
and/or local employment service delivery system;
      Number of veterans hired by the contractor during the AAP 
year;
      Recruitment efforts at educational institutions to reach 
students who are covered veterans;
      The number of job advertisements in the local community 
targeting veterans;
      Targeted recruitment of qualified covered veterans during 
company career days and/or related activities in contractor 
communities;
      For prime contractors, evidence that demonstrates a 
commitment to encourage their subcontractors to seek qualified covered 
veterans for employment opportunities;
      Affirmative action steps taken to attract qualified 
special disabled or disabled veterans through the nearest Veterans 
Administration job placement program; and
      The number of on-the-job training opportunities provided 
to covered veterans.

    G-FIVE rated contractors and subcontractors are eligible to receive 
certificates and are recognized on the OFCCP Web site. Additionally, 
the establishments of contractors or subcontractors which received a G-
FIVE rating are excluded from an OFCCP compliance evaluation for 3 
years following the receipt of the rating, unless: 1) a complaint 
suggests equal employment opportunity issues that warrant a compliance 
evaluation; 2) an EEOC or State fair employment practices agency 
investigation reveals significant equal employment opportunity issues; 
or 3) the OFCCP Deputy Assistant Secretary, acting upon a credible 
report of a violation of a law enforced by OFCCP, determines that a 
compliance evaluation is warranted. Since calendar year 2008, OFCCP has 
recognized five Federal contractors for their exemplary efforts in 
hiring covered veterans.
    Another initiative sponsored in part by OFCCP is Operation Stand 
Down, an annual event held in Nashville, Tennessee to assist homeless 
veterans. Operation Stand Down provides services to honorably 
discharged veterans, including employment services, transitional 
housing, and referrals to other support services agencies.
    In summary, although we have made progress in addressing equal 
employment opportunity for veterans among Federal contractors and 
subcontractors, we have an opportunity at this point in time to build 
on our efforts to further full economic opportunity for veterans 
throughout America's workforce. OFCCP looks forward to working with our 
new Deputy Assistant Secretary, once that person is announced and on 
board, and Members of this Committee in order to improve contracting 
opportunities for veterans.
    This concludes my statement, and I would be happy to respond to any 
questions.

                                 
                   Prepared Statement of Jan R. Frye,
       Deputy Assistant Secretary for Acquisition and Logistics,
                  U.S. Department of Veterans Affairs
    Madam Chair, Members of the Subcommittee, thank you for the 
opportunity to appear before you today to discuss VA's acquisition 
operations with regards to Federal Contractor Compliance. It is a 
privilege for me to represent the many dedicated and hardworking 
acquisition and logistics professionals throughout the Department that 
provide mission-critical support everyday to ensure quality care and 
benefit delivery for our Nation's most special citizens: our Veterans.
    I have been asked specifically to address the issue of Federal 
contractor compliance with regard to employment of Veterans in Federal 
contracting. The Committee requested that VA respond to a series of 
questions and I would like to take this opportunity to do so.
    The first question centers on how VA monitors contractor compliance 
with 38 USC Sec.  4212. VA contracting officers comply with the Federal 
Acquisition Regulation (FAR). They are required to verify vendor 
compliance prior to the award or modification of a contract. They may 
accomplish this by several appropriate means, but they must rely on the 
Department of Labor's Veterans' Employment and Training Service-100 
(VETS-100) database to ensure that apparently successful offerors have 
completed the required reporting for the appropriate reporting year.
    To improve VA's oversight and ensure vendors doing business with 
the VA have complied with the requirements, as amended, of the Vietnam 
Era Veterans' Readjustment Assistance Act of 1974, I have instituted 
two significant changes:
    The first is the issuance of an information letter to VA's Heads of 
Contracting Activities reinforcing that contracting officers must be 
aware of this important requirement and their responsibility to query 
the VETS-100 database. Second, to establish an electronic record of the 
contracting officer complying with the policy, I have directed that 
VA's contract writing system be modified to add a mandatory feature to 
allow contracting officers to record when they query the VETS-100 
database prior to award or the exercise of contract options. This 
feature will create the electronic record that VA will be able to use 
to monitor compliance on a recurring basis in the future.
    Until changes are implemented with VA's contract writing system, we 
will continue to work with the Department of Labor to extract VA-
specific compliance information from the VETS-100 system.
    The second question from the Subcommittee inquired as to how many 
VA contractors are non-compliant. In response to the Subcommittee's 
request, we conducted a review of a statistically significant, randomly 
selected sample of contract files throughout VA. All contracts in the 
sample had the appropriate FAR Part 52 contract clauses in place, and 
all contractors were fully compliant with the Department of Labor's 
reporting requirements.
    Third, the Subcommittee requested information on any action VA 
takes to address non-compliant contactors, and last, whether non-
compliance affects a company's ability to do business with VA.
    At this time we are not aware of vendors who are non-compliant. 
Non-compliance would affect a company's ability to contract with VA. 
For those contractors deemed to be non-compliant, VA will take action 
as set forth in FAR Part 22. The first step would be to notify the 
Department of Labor and then make efforts to negotiate a mutually 
acceptable remedy. Failure to reach a remedy could result in 
termination of the contract for default. VA will also improve the 
capability of its information systems to ensure that no contract is 
awarded or modified unless the current VETS-100 Reports have been 
submitted by the apparent successful offeror.
    Madam Chair, I would like to close by thanking you for the 
opportunity to discuss VETS-100 Reporting, and the Federal Contractor 
Compliance program at VA. We will continue to work diligently to 
improve and set a standard worthy of emulation throughout the Federal 
acquisition community. I would be pleased to respond to any questions 
you or the Subcommittee's Members may have.

                                 
        Statement of National Veteran-Owned Business Association
    Madam Chairwoman Sandlin, Ranking Member Boozman, Committee Members 
and staff. Thank you for the opportunity to submit this statement for 
the record. NaVOBA represents over 2000 veteran-owned small businesses 
in the United States. We are concerned about Federal contractor 
compliance with Title 38 U.S. Code section 4212 requiring for any 
contract over $100,000 or more ``the party contracting with the United 
States take affirmative action to employ and advance in employment 
qualified covered veterans.''
    We understand the U.S. Department of Labor, Office of Federal 
Contract Compliance Program (DOL-OFCCP) has primary responsibility for 
insuring employment possibilities for qualified covered veterans. 
Federal Acquisition Regulation (FAR) Part 22.1306 requires contractors 
and subcontractors to submit a report at least annually to the 
Secretary of Labor regarding employment of covered veterans. The 
contractor and subcontractor must use Form VETS-100, Federal Contractor 
Veterans' Employment Report to submit the required reports. FAR Part 
22.1302(b) states: ``except for contracts for commercial items or 
contracts that do not exceed the simplified acquisition threshold, 
contracting officers must not obligate or expend funds appropriated for 
the agency for a fiscal year to enter into a contract or procurement of 
personal property and nonpersonal services (including construction) 
with a contractor that has not submitted as required annual Form VETS-
100, Federal Contractor Veterans' Employment Report (VETS-100 Report), 
with respect to the preceding fiscal year if the contractor was subject 
to the reporting requirements of 38 U.S.C. 4212(d) for that fiscal 
year''. We do not believe contracting officers regularly check with 
DOL-OFCCP to see whether the required reports have been submitted.
    NaVOBA respectfully requests the Committee survey contracting 
officers in government agencies, including VA to see:

    1.  Are contracting officers aware of the need for VETS-100 
Reporting?
    2.  Do contracting officers include the required clauses in 
solicitations and contracts?
    3.  Do contracting officers check with DOL-OFCC to determine if 
prospective contractors have submitted required reports prior to 
contract execution?
    4.  Do contracting officers provide necessary material to 
contractors to post at their work places?

    NaVOBA is also concerned as to whether DOL-OFCCP is enforcing the 
requirements of 38USC4212. We are not aware of DOL-OFCCP running any 
reports from the Federal Procurement Data System award data against the 
list of companies delinquent in filing their VETS-100 Reports to 
identify if any non-compliant companies are receiving awards. We are 
also concerned about what happens with any data collected. We are aware 
of instances when Federal agencies have requested VETS-100 data from 
DOL-OFCCP and have been told the data is ``proprietary information'' 
and is not releasable by DOL. We question why DOL expends valuable 
resources to collect data and then does nothing with it? Why collect 
contractor utilization data if the information cannot be made publicly 
available?
    NaVOBA commends the Committee for holding this hearing on an 
important issue in the veterans' community. We look forward to working 
with the Committee to improve this process.
                   MATERIAL SUBMITTED FOR THE RECORD
                                     Committee on Veterans' Affairs
                               Subcommittee on Economic Opportunity
                                                    Washington, DC.
                                                       May 20, 2009

Mr. Thomas S. Whitaker
President, National Association of State Workforce Agencies
Deputy Chairman/Chief Counsel
North Carolina Employment Security Commission
444 North Capitol Street, N.W.
Suite 142
Washington, DC 20001

Dear Mr. Whitaker:

    I would like to request your response to the enclosed questions for 
the record I am submitting in reference to our House Committee on 
Veterans' Affairs Subcommittee on Economic Opportunity hearing on 
Federal Contractor Compliance on May 14, 2009. Please answer the 
enclosed hearing questions by no later than Wednesday, July 1, 2009.
    In an effort to reduce printing costs, the Committee on Veterans' 
Affairs, in cooperation with the Joint Committee on Printing, is 
implementing some formatting changes for material for all Full 
Committee and Subcommittee hearings. Therefore, it would be appreciated 
if you could provide your answers consecutively on letter size paper, 
single-spaced. In addition, please restate the question in its entirety 
before the answer.
    Due to the delay in receiving mail, please provide your response to 
Ms. Orfa Torres by fax at (202) 225-2034. If you have any questions, 
please call (202) 226-4150.
            Sincerely,

                                          Stephanie Herseth Sandlin
                                                         Chairwoman

                               __________
                 NASWA's Response to Questions Posed by
         Chairwoman Herseth Sandlin in her May 20, 2009, Letter
    Question 1: Should the Department of Labor generate an official 
list of Federal contractors?

    Response: Yes. All Federal contractors need to be recorded as such 
in a central location. This will allow States to contact employers with 
Federal contracts for veterans' job referrals. The U.S. Department of 
Labor should commission a study to identify the best process to create 
and maintain such a list. The study should also identify suitable 
technological solutions. In the past, there was an attempt to create 
such a list which was initially successful. However, manual update 
processes rendered such efforts useless as information quickly became 
outdated.
    Without a Federal contractor list, the States' one-stop center 
staff members, including DVOPs and LVERs, often have to speculate which 
employers might be Federal contractors, and take action accordingly. A 
list would help them to direct efforts to employers on the contractor 
list.

    Question 2: Can you explain what you mean by your statement, 
``state workforce agencies are also interested in standardizing 
communication protocols with OFCCP during and at the conclusion of the 
employer audit process.''

    Response:

    a.  Each State workforce agency has different procedures 
established to handle the provision of requested information to OFCCP 
regional staff during Federal contractor audits. It is important that 
regional OFCCP staff contact the designated State representative to 
facilitate effective communication. NASWA can assist in identifying the 
appropriate State workforce agency personnel for these purposes.
    b.  In addition, it appears that OFCCP regional offices do not 
follow standardized audit procedures when contacting State workforce 
agencies or request the same type of information from State workforce 
agencies. NASWA has communicated this concern with OFCCP, and they have 
indicated a desire to work with us to improve communications between 
States and OFCCP.
    c.  Finally, States have indicated that they hardly ever receive 
information about audit outcomes on particular employers once audits 
are completed. Receiving some resolution information would be helpful 
in working with employers following the audit.

    Question 3: In your testimony you State that LVERs/DVOPs are 
particularly frustrated when they have knowledge of Federal contractors 
who will not list with the employment service but cannot get Federal 
action initiated? Can you explain what you mean by this?

    Response: Many times LVERs/DVOPs contact employers, whom they 
believe are Federal contractors, and are met with a refusal to list in 
the employment service. (State staff also indicated many times 
employers are genuinely not aware of their FCJL obligations or at the 
local level are not aware of their corporation's Federal contractor 
status).
    Since there is no list of Federal contractors, LVERs/DVOPs make 
such contacts based on their past knowledge of an employer's Federal 
contractor status or because OFCCP has recently asked them to report on 
whether an employer has listed with the employment service (therefore 
indicating they are Federal contractors). In addition, they outreach to 
employers they believe are Federal contractors based on information 
received through local social/business networks or through media 
coverage.
    In many cases, after LVERs and DVOPs report employer refusals to 
cooperate to OFCCP, no action appears to have been taken. If there is 
any action, LVERs and DVOPs are not informed of any progress. LVERs and 
DVOPs indicate it is their experience that action is only forthcoming 
when it involves a formal Equal Opportunity complaint by a customer. 
This situation enforces the LVERs and DVOPs perception FCJL 
requirements are superficial.

    Question 4: How do veterans get priority in the daily emails 
VetCentral sends of Federal Contractor Job Listings jobs?

    Response: VetCentral emails are emailed to staff designated by 
State workforce agency administrators. These primarily are LVERs and 
DVOPs who only serve veterans. An example of how such emails are used 
is a Georgia LVER, who upon receiving his daily VetCentral email 
immediately forwards this to his list of veteran customers.

    Question 5: How much more personnel does OFCCP need and where?

    Response: It does appear that OFCCP could benefit from more 
personnel. However, since we do not know how many Federal contractors 
there are or where they are located, it is really difficult to suggest 
specific increases in personnel needed within OFCCP. Once resolution 
regarding the issue of the Federal contractors list is underway and 
with the input from State workforce agencies, it would be easier to 
gauge personnel needs in the various OFCCP regions.

                                 

                                     Committee on Veterans' Affairs
                               Subcommittee on Economic Opportunity
                                                    Washington, DC.
                                                       May 20, 2009

Mr. James King
Executive Director
AMVETS
4647 Forbes Blvd.
Lanham, MD 20706

Dear Mr. King:

    I would like to request your response to the enclosed questions for 
the record I am submitting in reference to our House Committee on 
Veterans' Affairs Subcommittee on Economic Opportunity hearing on 
Federal Contractor Compliance on May 14, 2009. Please answer the 
enclosed hearing questions by no later than Wednesday, July 1, 2009.
    In an effort to reduce printing costs, the Committee on Veterans' 
Affairs, in cooperation with the Joint Committee on Printing, is 
implementing some formatting changes for material for all Full 
Committee and Subcommittee hearings. Therefore, it would be appreciated 
if you could provide your answers consecutively on letter size paper, 
single-spaced. In addition, please restate the question in its entirety 
before the answer.
    Due to the delay in receiving mail, please provide your response to 
Ms. Orfa Torres by fax at (202) 225-2034. If you have any questions, 
please call (202) 226-4150.

            Sincerely,

                                          Stephanie Herseth Sandlin
                                                         Chairwoman

                               __________
          Response To Committee's Questions For The Record By
     Christina M. Roof, AMVETS National Deputy Legislative Director
           Submitted to Subcommittee on Economic Opportunity
              of the House Committee on Veterans' Affairs
                 Concerning Federal Contract Compliance
    Question 1: In your testimony, you state that the Department of 
Labor and OFCCP auditing methods are unnecessarily lengthy and lack 
accountability and uniformity. How can we improve these audits?

    Response: AMVETS believes that in order for an organization to 
sufficiently provide control and oversight, that contract auditing 
should be performed periodically by the organization's auditing 
department, or if this kind of department is not yet established, via a 
contract auditing agency or firm. These audits will provide the 
necessary information required to ensure the integrity of all VA 
contracts, as well as providing verification that the reason(s) for 
issuing the contract or that the savings envisioned as part of the 
award are being met. A well organized, timely audit provides 
transparency to the total procurement process and confirms that public 
trust is fulfilled. As we know, most of the time VA contracts are put 
into place, but the contract reviews fail to occur. It is vital to the 
stability of any contracting system that there is a set, structured 
process in place to verify that all pertinent issues of a contract are 
being met. These include, but are not limited to, the obligations 
regarding title 38 U.S.C., section 4212, terms and conditions regarding 
price, procedure, and invoicing, as well as the quality of work 
performed. VA and OFCCP must start performing organized, non-
reactionary audits if VA hopes to deter fraudulent activities, protect 
our veteran business community, and assure that the funds allotted per 
award are used properly.
    A well organized procurement auditing system begins with the 
contract and procurement officers. Deterring fraudulent activities and 
behaviors at the beginning of the contracting process will greatly 
reduce the rate and occurrences of future noncompliant activities by 
contractors. A competitive bid process has inherent controls that 
afford reduced risk. A key factor AMVETS believes is hurting our 
veteran business population in the current procurement process is 
collusive bidding and fraud in the reporting of use of SDVOSB and VOSB 
as subcontractors in these large procurements. AMVETS believes that as 
a part of restructuring the auditing process, VA should start from the 
ground up and involve their procurement officers. AMVETS suggests a 
stronger, more job dependent training process, and annual retesting of 
current procurement officers to ensure all officers are up to date on 
current VA procurement policy. If VA starts by promoting knowledge and 
education from within the agency as a means eliminating fraud, VA only 
stands to better the entire procurement process and aid our veteran 
business community.
    The next step AMVETS believes is vital in strengthening VA's 
auditing process is the reevaluation of enforcement authority. Failure 
to comply with all nondiscretionary or affirmative action provisions is 
essentially a violation of the contract. OFCCP was initially founded as 
a subsection of DOL, and was designed to be the ultimate authority, 
unmatched by any other government agency, in their ability to conduct 
reviews and audits of employers' employment practices to ferret out any 
discrimination.
    Currently, DOL's OFCCP has the authority to enforce these laws 
through audits and evaluations of a company's Affirmative Action 
Program and employment practices.
    Nonetheless, AMVETS believes that VA and OFCCP have become too 
heavily reliant on contractors engaging in self-evaluation, designed 
originally for the purpose of discovering any barriers to equal 
employment opportunity, but now are being used as a way of getting 
around any compliance issues that may be present. In view of the fact 
that VA testified, on May 14, 2009, that they had not conducted a 
single contract audit in the past four years and were not able to 
collect any information from DOL on VA contracts that have been 
audited, AMVETS cannot specifically recommend any improvements to a 
non-enforced process. This being the case, AMVETS will use the current 
OFCCP auditing process as described in their training material as well 
as interviews we conducted with field officers on the challenges they 
face on a daily basis, that inhibit a productive auditing system. 
AMVETS deemed it is particularly important to speak with different 
OFCCP offices throughout the country to get a better understanding of 
the true challenges they feel are inhibiting their individual 
performances and the overall performance of the OFCCP auditing system. 
AMVETS continually hears the same concerns when speaking with OFCCP 
field officers. The field officers state that due to current statutes 
and timeframes given to contractors to reply to OFCCP's request for 
documentation to begin the compliancy audit process. The field agents 
were greatly troubled by this lengthy time period due to the fact that 
by the time they actually get the access to records they need, it is 
often too late, because former employees can not be reached to 
substantiate claims or the contractor hires a lawyer resulting in 
settlements for pennies on the dollar of what they would have truly 
owed for breaching contract terms. If and when a contractor does settle 
to avoid an audit the only consequences for their noncompliance is that 
they are required to file a quarterly report with the OFCCP showing the 
steps they have implemented to correct any problems with compliance. 
What is even harder to understand is why after being recognized as a 
possible risk to a contract there is rarely ever surprise onsite visits 
that occur to validate that everything they are reporting quarterly is 
actually occurring. Most of the field officers AMVETS spoke with said 
that currently contractors are aware that there is a significant lack 
of oversight on VA awards and contractors know they can and will get 
away with noncompliance no matter how small or large of a violation it 
is. AMVETS finds this totally unacceptable. Between VA, OMB, OIG and 
OFCCP, AMVETS finds there is no valid reason that this type of behavior 
is widely known and practiced. GAO has pointed out these shortfalls in 
oversight numerous times, yet they are still occurring? Respectfully, 
if VA and this committee are truly dedicated to helping our veteran 
business community, then they should take immediate steps to implement 
change and improve oversight. Furthermore, OMB Circular No. a-133 
states that the Federal agency that awards a grant or contract to a 
recipient is responsible for ensuring the recipient stays in compliance 
with Federal laws, regulations, and all of the provisions of the award 
agreement.
    While studying the current auditing processes (or lack thereof) 
AMVETS recommends the following practices be implemented or reinstated 
to improve VA's procurement system.

    1.  Implement the use of a well designed audit program that 
provides:

        Immediate access to all field audit data at any level, 
using a secure extended enterprise server.
        Establish a database that is also accessible to all 
field and central locations to enable, but is not limited to, real-time 
and historical data, employment practice analysis, inventory losses, 
and affirmative action plan violation database.
        Automate and streamline the data entry process of the 
audit and investigations of complaints data to minimize errors and 
centralize all historical relevant data on a contractor and award. This 
system should be set up to automatically flag inconsistent data and 
repeat compliance offenders. This will help eliminate human error as 
well as provide VA with more reliable data on their awards.
        Enable auditors to review audit scores interactively 
with other necessary personnel or agency involved in the compliance 
audit process allowing internal review of individual audits as a means 
of continuing education and constant review of current processes to 
identify weaknesses in the auditing methods being used by VA. This 
``real scenario'' form of systems review has been proven the most 
successful in offering Fortune 500 companies the internal data needed 
to implement improvements to their systems. A well-integrated training 
program will ensure that all auditors and centralized personnel conform 
to the uniformed standards of any auditing process. To put it simply, 
``When everyone is on the same page there is little room for confusion 
and error.'' By implementing this practice, VA will be using an ``audit 
solution that is auditable.''

    2.  Enable a centralized system for communication between all 
agencies and personnel involved in the VA contract auditing process. 
There should be uniformed standards of data reporting and communication 
to ensure accurate results, so corrective actions can be taken 
immediately. VA must be able to manage all data quickly and effectively 
to be successful in the procurement process and in regards to 
protecting the rights of those who served.
    3.  Transparency in an auditing process will yield clearer 
standards, better performance and a significant savings in funds for 
VA. Field auditors must know that management and central office 
reviewers have full visibility and access to their data and results. 
This should also be true for central office personnel. These practices 
of contract management help implement a procurement program designed 
around successful results and accountability.

    After extensive research of written compliancy auditing procedures 
set forth by DOL, in regards to OFCCP, I found that they are quite 
detailed and should prove to be an excellent model from which VA can 
build its foundation of a uniformed auditing system. However, just 
because these laws, regulations, and procedures are in place, there is 
still absolutely no guarantee that they are being used as they were 
designed to be or that all personnel have been taught proper procedure. 
After 6 years of contract auditing and human resource consulting, I can 
honestly say that VA's gross lack of oversight on the awards they have 
granted has likely cost them millions of dollars, and even more 
disturbing is the cost paid by thousands of veterans who were never 
given the chance that laws and their service entitles them to.
    Finally, AMVETS strongly believes that in order for VA to 
successfully implement all of the actions necessary regarding 
improvements of procurement activities, including audits, that it is 
vital that this Committee or another agency the Committee deems fit, to 
have oversight on the process in a way that VA is probably not used to. 
We have full confidence that VA is more than capable of implementing 
the training and use of these procedures, but it will come down to 
whether or not they are held accountable to do so.

                                 

                                     Committee on Veterans' Affairs
                               Subcommittee on Economic Opportunity
                                                    Washington, DC.
                                                       May 20, 2009

Mr. Peter Gaytan
Executive Director
The American Legion
1608 K Street, NW
Washington, DC 20006

Dear Mr. Gaytan:

    I would like to request your response to the enclosed questions for 
the record I am submitting in reference to our House Committee on 
Veterans' Affairs Subcommittee on Economic Opportunity hearing on 
Federal Contractor Compliance on May 14, 2009. Please answer the 
enclosed hearing questions by no later than Wednesday, July 1, 2009.
    In an effort to reduce printing costs, the Committee on Veterans' 
Affairs, in cooperation with the Joint Committee on Printing, is 
implementing some formatting changes for material for all Full 
Committee and Subcommittee hearings. Therefore, it would be appreciated 
if you could provide your answers consecutively on letter size paper, 
single-spaced. In addition, please restate the question in its entirety 
before the answer.
    Due to the delay in receiving mail, please provide your response to 
Ms. Orfa Torres by fax at (202) 225-2034. If you have any questions, 
please call (202) 226-4150.

            Sincerely,

                                          Stephanie Herseth Sandlin
                                                         Chairwoman

                               __________

                                                The American Legion
                                                    Washington, DC.
                                                       July 1, 2009
Honorable Stephanie Herseth Sandlin, Chairwoman
Subcommittee on Economic Opportunity
Committee on Veterans' Affairs
U.S. House of Representatives
335 Cannon House Office Building
Washington, DC 20515

Dear Madam Chairwoman:

    Thank you for allowing The American Legion to participate in the 
Subcommittee hearing on Federal Contractor Compliance on May 14, 2009. 
I respectfully submit the following in response to your additional 
questions.

    1.  Why do you think that Federal contractors and subcontractors 
are not hiring veterans?

    The American Legion believes the Office of Federal Contract 
Compliance Program (OFCCP) does not ensure employers comply with non-
discrimination and affirmative action laws and regulations in hiring 
veterans when doing business with the Federal Government because it is 
not a priority.

    2.  In your estimation are veterans being hired as a result of 
section 4212 of Title 38?

     The American Legion does not believe veterans are being hired as a 
result of section 4212 of Title 38. Prior to the hearing on May 14, 
requests were made by The American Legion repeatedly to the OFCCP for 
written and oral documentation on the success of their office in hiring 
veterans. We were also concerned with their ability to monitor and 
track veteran hiring compliance of Federal contractors and 
subcontractors. We found representatives of OFCCP to be extremely 
uncooperative, written performance reports were denied to us, phone 
calls were not returned, and the only information that was provided was 
taken from their website. Therefore, along with negative comments made 
by LVER's and DVETS from around the country, The American Legion has 
recommended that the Federal Contractor Veterans Employment Program 
presently under OFCCP should be placed--with additional funding and 
staffing--under the direction of the Department of Labor's Veterans 
Employment Training Service (DOL-VETS). This move will provide this 
program with adequate oversight, as well as input and guidance from 
stakeholders.
    Thank you for your continued commitment to America's veterans and 
their families.

            Sincerely,
                                     Joseph C. Sharpe Jr., Director
                                       National Economic Commission

                                 

                                     Committee on Veterans' Affairs
                               Subcommittee on Economic Opportunity
                                                    Washington, DC.
                                                       May 20, 2009
Mr. Lorenzo Harrison
Acting Deputy Assistant Secretary for the
Office of Federal Contract Compliance Programs
U.S. Department of Labor
200 Constitution Avenue, N.W.
Washington, DC 20210

Dear Mr. Harrison:

    I would like to request your response to the enclosed questions for 
the record I am submitting in reference to our House Committee on 
Veterans' Affairs Subcommittee on Economic Opportunity hearing on 
Federal Contractor Compliance on May 14, 2009. Please answer the 
enclosed hearing questions by no later than Wednesday, July 1, 2009.
    In an effort to reduce printing costs, the Committee on Veterans' 
Affairs, in cooperation with the Joint Committee on Printing, is 
implementing some formatting changes for material for all Full 
Committee and Subcommittee hearings. Therefore, it would be appreciated 
if you could provide your answers consecutively on letter size paper, 
single-spaced. In addition, please restate the question in its entirety 
before the answer.
    Due to the delay in receiving mail, please provide your response to 
Ms. Orfa Torres by fax at (202) 225-2034. If you have any questions, 
please call (202) 226-4150.

            Sincerely,

                                          Stephanie Herseth Sandlin
                                                         Chairwoman

                               __________

                                           U.S. Department of Labor
                                Employment Standards Administration
                     Office of Federal Contract Compliance Programs
                                                    Washington, DC.
                                                      July 17, 2009

Hon. Stephanie Herseth Sandlin
United States House of Representatives
Chairwoman,
Committee on Veterans' Affairs
Washington, DC 20515

Dear Congresswoman Herseth Sandlin:

    This letter responds to your May 20, 2009 correspondence requesting 
answers for the record regarding the Department of Labor, Office of 
Federal Contract Compliance Programs, May 14, 2009, hearing before your 
House Committee on Federal Contractor Compliance.
    Please find the enclosed responses to each of the Committee 
questions for the record. Per your request, I am also providing my 
response by email to Ms. Orfa Torres and by fax at (202) 225-2034.
    If you have any follow-up questions, please do not hesitate to 
forward them to me for a prompt response.

            Sincerely,

                                                Lorenzo D. Harrison
  Acting Deputy Assistant Secretary for Federal Contract Compliance

    Enclosure

                               __________
                        U.S. DEPARTMENT OF LABOR
                               BEFORE THE
                  SUBCOMMITTEE ON ECONOMIC OPPORTUNITY
                     COMMITTEE ON VETERANS' AFFAIRS
                     U.S. HOUSE OF REPRESENTATIVES
                       HEARING HELD--MAY 14, 2009
                 RESPONSES TO QUESTIONS FOR THE RECORD
    Question 1: Besides collecting the VETS-100 Report, what else does 
the Department of Labor do with the information?

    Response: The information collected by the Department in the VETS-
100 Report is used to support the overall Federal procurement process. 
Federal Contracting Officers (CO) are prohibited from awarding or 
modifying Federal contracts unless the latest VETS-100 or VETS-100A 
Report has been submitted by the contractor. The Department 
electronically maintains the information submitted annually by 
contractors to the Veterans' Employment and Training Service (VETS), as 
prescribed by 38 U.S.C. Sec. 4212(d)(1). The information is stored in a 
system called the ``VETS-100 Reporting System,'' which is accessible by 
all Cos. A CO can either go directly to the VETS-100 Web site or 
telephone VETS to verify a contractor's submission.
    In addition, the information is also used to support 
intradepartmental initiatives. For example, VETS provided the Office of 
the Federal Contract Compliance Programs (OFCCP) a copy of the FY 2007 
VETS-100 Report (filed by Federal contractors for the reporting period 
that ended September 30, 2007). The report was used by OFCCP for their 
initial review of ``Good-Faith Initiative for Veterans Employment'' (G-
FIVE) candidates. OFCCP's G-FIVE initiative is an incentive program 
that recognizes the good-faith efforts of contractors in the area of 
veterans' employment.\1\
---------------------------------------------------------------------------
    \1\ OFCCP's Good-Faith Initiative for Veterans Employment (G-FIVE) 
web page, http://www.dol.gov/esa/ofccp/g_five.htm.
---------------------------------------------------------------------------
    Within the coming months, VETS will provide the OFCCP with direct, 
real-time access to the VETS-100 Reporting System. OFCCP anticipates 
using the data to:

      Screen and investigate Federal contractors that have few 
or no protected veterans on their payroll;
      Enhance compliance investigations by determining whether 
a contractor has hired protected veterans that applied for job 
openings; and
      Validate whether a contractor has submitted the 
appropriate VETS-100 Report.

    Furthermore, the Department will be steadfast in its effort to 
strengthen OFCCP's enforcement capacity under the Vietnam Era Veterans' 
Readjustment Assistance Act (VEVRAA). The enforcement strategy will 
include, inter alia, working collaboratively with VETS in the 
utilization and analysis of the VETS-100 and 100A reports; 
consideration of comprehensive revision of VEVRAA regulations to enable 
OFCCP to conduct more in-depth reviews and investigations of Federal 
contractor personnel practices, and working collaboratively with the 
Employment and Training Administration (ETA) and VETS to strengthen the 
Department's approach in the enforcement of VEVRAA, and reaching out to 
the Department of Veterans Affairs to identify and improve employment 
results for covered veterans. The Department is convinced that the best 
administration of veterans' rights under VEVRAA is fundamentally tied 
to statutory authority that enables OFCCP to proactively review the 
contractor's compliance, even in the absence of a complaint. In the 
near term, the Department will determine whether regulatory changes 
should be proposed that would allow evaluation of recruitment and 
placement results under the current statute.

    Question 2: Does the Department of Labor review any award data 
reports from the Federal Procurement Data System against the delinquent 
filing companies to see if any have received a contract?

    Response: As previously indicated, Federal COs are prohibited from 
awarding or modifying Federal contracts unless the latest VETS-100 or 
VETS-100A Report has been submitted (31 U.S.C. Sec. 1354). Once the 
appropriate VETS-100 Report is submitted, the award of the contract can 
be made. The Federal Acquisition Regulation provision that implements 
this requirement is 48 CFR 22.1302(b).
    Currently, OFCCP uses the Federal Procurement Data System to 
establish jurisdiction and to assist in the proper identification of 
contractors that should be scheduled for compliance reviews. In 
addition, during the compliance review, OFCCP verifies that the VETS-
100 Report has been submitted to VETS. If, during the review process, 
it is determined that the contractor failed to file a VETS-100 or 100A, 
OFCCP will notify VETS as outlined in 41 CFR Parts 60-250.60(c) and 60-
300.60(c). See also 41 CFR 61-250.20.

    Question 3: The 2005 Government Accountability Office report, notes 
that Department of Labor cut the contract that provided a central 
repository of contractors maintained by the National Veterans Training 
Institute. Does Department of Labor or anyone maintain a central 
repository of contractors today?

    Response: Unfortunately, there is no all-encompassing central 
database for Federal contractors. Currently, OFCCP utilizes the 
Standard Form 100, Employer Information Report, (commonly referred to 
as the ``EEO-1 Report'') database as a means to identify Federal 
contractors who may be subject to VEVRAA and other laws enforced by 
OFCCP. The Equal Employment Opportunity Commission (EEOC) and OFCCP 
jointly require larger employers and Federal contractors to file the 
EEO-1 Report annually. The EEO-1 Report contains information on the 
employer's minority and female workforce \2\ and asks the employer to 
identify whether it is a Federal contractor. EEO-1 Report data are used 
to analyze patterns of employment discrimination and to support civil 
rights enforcement. The OFCCP also uses EEO-1 Report data to determine 
which employer facilities to select for compliance evaluations. In 
addition, OFCCP uses the Federal Procurement Data System to verify that 
a contractor has current Federal contracts.
---------------------------------------------------------------------------
    \2\ See 42 U.S.C 2000e-8(c). For more information on who must file 
the EEO-1 Report, see http://www.eeoc.gov/eeo1survey/whomustfile.html.

    Question 4: If veterans have priority in hiring (referrals) from 
Federal contractors how does simply posting all jobs on the Internet 
---------------------------------------------------------------------------
give veterans priority?

    Response: VEVRAA does not require Federal contractors to give 
veterans special preference in hiring. VEVRAA does, however, require 
that protected veterans receive priority from state employment service 
delivery systems when such systems are referring applicants to job 
openings listed by Federal contractors. Should a veteran apply for a 
job with a Federal contractor as a result of a referral, the veteran 
will be invited to voluntarily identify whether he or she is a veteran 
protected by VEVRAA. Federal contractors may not discriminate against 
protected veterans and must take affirmative action to employ qualified 
veterans. The affirmative action prescribed by VEVRAA does not include 
providing hiring preferences to protected veterans by contractors.
    Contractors may satisfy VEVRAA's mandatory job listing requirement 
by listing job openings with the state workforce agency job bank in the 
state where the job opening occurs or with the appropriate local 
employment service delivery system where the opening occurs.
    States have prescribed a variety of procedures for listing job 
openings and a particular state may permit listing in its employment 
service delivery system by various methods, such as electronic posting/
notification. In some states, a Federal contractor may satisfy its 
mandatory job listing requirement under VEVRAA by sending an email 
message to the local employment service office or to the appropriate 
employment service delivery system that includes a link: to a specific 
job opening on the contractor's Web site. Irrespective of the method 
used, the VEVRAA job listing obligation requires that the contractor 
provide information about an employment opening in the manner 
prescribed by the employment service delivery system. The contractor 
must provide information that is sufficient to allow the appropriate 
employment service delivery system to carry out its responsibilities 
under VEVRAA to give protected veterans priority in referrals to 
Federal contractor employment openings.

    Question 5: Should all Federal contractors be required to send a 
copy of their jobs listings to the local DVOP/L VER before it is posted 
anywhere?

    Response: Under current OFCCP regulations, contractors must list 
all employment opportunities, except those exempted under 41 CFR 60-
250.5(a)6 and 60-300.5(a)6, with the appropriate employment service 
delivery system. Listing with the state workforce agency job bank: will 
satisfy this requirement. Once the jobs are listed, state and local 
employment personnel, to include DVOPS and L VERs, have access to the 
listings and can use them to identify qualified veterans for the job 
openings.

                                 

                                     Committee on Veterans' Affairs
                               Subcommittee on Economic Opportunity
                                                    Washington, DC.
                                                       May 20, 2009
Mr. Jan R. Frye
Deputy Assistant Secretary for Acquisition and Logistics
U.S. Department of Veterans Affairs
810 Vermont Ave., NW
Washington, DC 20420

Dear Mr. Frye:

    I would like to request your response to the enclosed questions for 
the record I am submitting in reference to our House Committee on 
Veterans' Affairs Subcommittee on Economic Opportunity hearing on 
Federal Contractor Compliance on May 14, 2009. Please answer the 
enclosed hearing questions by no later than Wednesday, July 1, 2009.
    In an effort to reduce printing costs, the Committee on Veterans' 
Affairs, in cooperation with the Joint Committee on Printing, is 
implementing some formatting changes for material for all Full 
Committee and Subcommittee hearings. Therefore, it would be appreciated 
if you could provide your answers consecutively on letter size paper, 
single-spaced. In addition, please restate the question in its entirety 
before the answer.
    Due to the delay in receiving mail, please provide your response to 
Ms. Orfa Torres by fax at (202) 225-2034. If you have any questions, 
please call (202) 226-4150.

            Sincerely,
                                          Stephanie Herseth Sandlin
                                                         Chairwoman

                               __________
                        Questions for the Record
               Hon. Stephanie Herseth Sandlin, Chairwoman
                  Subcommittee on Economic Opportunity
                  House Committee on Veterans' Affairs
                              May 14, 2009
                     Federal Contractor Compliance
    Question 1: Do any companies provide the Department of Veterans 
Affairs regional offices with their job listings?

    Response: The Department of Veterans Affairs (VA) does not receive 
job listings from any companies. Department of Labor (DOL) requires 
contractors and subcontractors to provide job listings to the nearest 
State employment service. The requirement applies to vacancies at all 
locations of a business not otherwise exempt under the company's 
Federal contract. Qualified targeted Veterans receive priority for 
referral to Federal contractor job openings listed at those offices. 
The priority for referral does not guarantee Veterans will be hired.

    Question 2: In your testimony you state that ``until changes are 
implemented with the Department of Veterans Affairs contracting system, 
we will continue to work with the Department of Labor to extract VA-
specific compliance information.'' Can you elaborate on what you mean 
by this statement?

    Response: At this time, VA does not have an automated process in 
place to monitor DOL's Veteran's employment and training service-100 
(VETS-100) database. VA contracting officers comply with the Federal 
Acquisition Regulation and the requirement to verify vendor compliance 
prior to award or modification of a contract. The VA's Office of 
Acquisition and Logistics Programs and Policy is adding a mandatory 
feature to its electronic contract management system. This feature will 
be effective October 30, 2009, and will allow contracting officers to 
record when they query the VETS-100 database prior to award or the 
exercise of contract options. Contracting officers must use this system 
to provide an electronic record of compliance with VETS-100. This 
feature will provide an electronic record for each action and track 
compliance. VA will continue to work with DOL to extract VA specific 
compliance information on the appropriate actions.

    Question 3: Does the Department of Veterans Affairs check subprime 
contractors for compliance?

    Response: Contractors and subcontractors are held to the same 
standards of VETS-100 Reporting. For that reason, VA uses the same 
process to verify compliance. VA's contracting officers use DOL to 
access the information required to verify compliance prior to award of 
actions above the appropriate dollar threshold.

                                 
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