[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]





       EXAMINING RECENT ACTIONS BY THE OFFICE OF FEDERAL CONTRACT
                          COMPLIANCE PROGRAMS

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

                                HEARING

                               before the

                 SUBCOMMITTEE ON WORKFORCE PROTECTIONS

                         COMMITTEE ON EDUCATION
                           AND THE WORKFORCE

                     U.S. House of Representatives

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

            HEARING HELD IN WASHINGTON, DC, DECEMBER 4, 2013

                               __________


                           Serial No. 113-41

                               __________

  Printed for the use of the Committee on Education and the Workforce

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                COMMITTEE ON EDUCATION AND THE WORKFORCE

                    JOHN KLINE, Minnesota, Chairman

Thomas E. Petri, Wisconsin           George Miller, California,
Howard P. ``Buck'' McKeon,             Senior Democratic Member
    California                       Robert E. Andrews, New Jersey
Joe Wilson, South Carolina           Robert C. ``Bobby'' Scott, 
Virginia Foxx, North Carolina            Virginia
Tom Price, Georgia                   Rubeen Hinojosa, Texas
Kenny Marchant, Texas                Carolyn McCarthy, New York
Duncan Hunter, California            John F. Tierney, Massachusetts
David P. Roe, Tennessee              Rush Holt, New Jersey
Glenn Thompson, Pennsylvania         Susan A. Davis, California
Tim Walberg, Michigan                Rauul M. Grijalva, Arizona
Matt Salmon, Arizona                 Timothy H. Bishop, New York
Brett Guthrie, Kentucky              David Loebsack, Iowa
Scott DesJarlais, Tennessee          Joe Courtney, Connecticut
Todd Rokita, Indiana                 Marcia L. Fudge, Ohio
Larry Bucshon, Indiana               Jared Polis, Colorado
Trey Gowdy, South Carolina           Gregorio Kilili Camacho Sablan,
Lou Barletta, Pennsylvania             Northern Mariana Islands
Martha Roby, Alabama                 Frederica S. Wilson, Florida
Joseph J. Heck, Nevada               Suzanne Bonamici, Oregon
Susan W. Brooks, Indiana             Mark Pocan, Wisconsin
Richard Hudson, North Carolina
Luke Messer, Indiana

                    Juliane Sullivan, Staff Director
                 Jody Calemine, Minority Staff Director
                                 ------                                

                 SUBCOMMITTEE ON WORKFORCE PROTECTIONS

                    TIM WALBERG, Michigan, Chairman

John Kline, Minnesota                Joe Courtney, Connecticut,
Tom Price, Georgia                     Ranking Member
Duncan Hunter, California            Robert E. Andrews, New Jersey
Scott DesJarlais, Tennessee          Timothy H. Bishop, New York
Todd Rokita, Indiana                 Marcia L. Fudge, Ohio
Larry Bucshon, Indiana               Gregorio Kilili Camacho Sablan,
Richard Hudson, North Carolina         Northern Mariana Islands
                                     Mark Pocan, Wisconsin
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on December 4, 2013.................................     1

Statement of Members:
    Courtney, Hon. Joe, Ranking member, Subcommittee on Workforce 
      Protections................................................     4
        Prepared statement of....................................     6
    Walberg, Hon. Tim, Chairman, Subcommittee on Workforce 
      Protections................................................     1
        Prepared statement of....................................     3

Statement of Witnesses:
    Fitzgerald, Brian, Chief Executive Officer Easter Seals 
      Disability Services........................................    59
        Prepared statement of....................................    61
    Fortney, David, Co-Founder, Fortney & Scott, LLC, H.R. Policy 
      Association................................................    20
        Prepared statement of....................................    22
    Kirschner, Curt, Partner, Jones Day, The American Hospital 
      Association................................................    67
        Prepared statement of....................................    69
    Shanahan, Thomas C., Vice President for Legal Affairs & 
      General Counsel, The University of North Carolina..........    47
        Prepared statement of....................................    49
    Shiu, Patricia A., Director, Office of Federal Contract 
      Compliance Programs, Department of Labor...................     7
        Prepared Statement of....................................    10

Additional Submissions:
    Mr. Courtney:
        The Women's Legal Defense and Education Fund, letter 
          dated Dec. 3, 2013.....................................   143
        Graves, Fatima G., Vice President, Education and 
          Employment, National Women's Law Center, prepared 
          statement of...........................................   145
        Henderson, Wade, President and CEO, The Leadership 
          Conference on Civil and Human Rights, prepared 
          statement of...........................................   150
        Consortium for Citizens with Disabilities, letter dated 
          Dec. 3, 2013...........................................   153
    Fudge, Hon. Marcia L., a Representative in Congress from the 
      State of Ohio:
        Question submitted for the record........................   185
    Kline, Hon. John, Chairman, Committee on Education and the 
      Workforce:
        Question submitted for the record........................   180
    Miller, Hon. George, Senior Democratic Member, Committee on 
      Education and the Workforce:
        Chambers, Gregory T., President, The American Association 
          for Affirmative Action, prepared statement of..........   161
        Kirlin, Eileen, International Executive Vice President, 
          prepared statement of..................................   164
        Maatz, Lisa, Vice President of Government Relations, 
          American Association of University Women, prepared 
          statement of...........................................   167
        McMahon, Shawn, Acting President/CEO, Wider Opportunities 
          for Women, prepared statement of.......................   170
        Wojahn, Patrick, National Disability Rights Network, 
          prepared statement of..................................   173
    Ms. Shiu:
        Response to questions submitted for the record...........   186
    Chairman Walberg:
        Associated General Contractors of America, letter dated 
          Dec. 4, 2013...........................................    88
        American Hospital Association, letter dated Dec. 6, 2013.   177
        Questions submitted for the record.......................   180

 
                    HEARING ON RECENT ACTIONS BY THE
             OFFICE OF FEDERAL CONTRACT COMPLIANCE PROGRAMS

                      Wednesday, December 4, 2013

                       House of Representatives,

                 Subcommittee on Workforce Protections,

               Committee on Education and the Workforce,

                            Washington, D.C.

                              ----------                              

    The subcommittee met, pursuant to call, at 10:00 a.m., in 
Room 2175, Rayburn House Office Building, Hon. Tim Walberg 
[chairman of the subcommittee] presiding.
    Present: Representatives Walberg, Kline, Hunter, Rokita, 
Bucshon, Hudson, Courtney, Fudge, and Pocan.
    Staff present: Molly Conway, Professional Staff Member; Ed 
Gilroy, Director of Workforce Policy; Benjamin Hoog, Senior 
Legislative Assistant; Marvin Kaplan, Workforce Policy Counsel; 
Nancy Locke, Chief Clerk; Daniel Murner, Press Assistant; Brian 
Newell, Deputy Communications Director; Krisann Pearce, General 
Counsel; Alissa Strawcutter, Deputy Clerk; Juliane Sullivan, 
Staff Director; Alexa Turner, Legislative Assistant; Joseph 
Wheeler, Professional Staff Member; Tylease Alli, Minority 
Clerk/Intern and Fellow Coordinator; Jody Calemine, Minority 
Staff Director; Melissa Greenberg, Minority Staff Assistant; 
Julia Krahe, Minority Communications Director; Richard Miller, 
Minority Senior Labor Policy Advisor; Megan O`Reilly, Minority 
General Counsel; Michael Zola, Minority Deputy Staff Director; 
and Mark Zuckerman, Minority Senior Economic Advisor.
    Chairman Walberg. A quorum being present, the committee 
will come to order.
    Good morning. I would like to thank our witnesses for 
joining us.
    I would also like to extend a special welcome to Director 
Shiu. This is our first opportunity to hear from you, and I 
appreciate your willingness to sit down further, beyond this. 
That is always helpful. Thank you for taking the time to be 
with us today as we examine your agency's regulatory actions.
    The Office of Federal Contract Compliance Programs is 
charged with enforcing the affirmative action and 
nondiscrimination employment requirements governing federal 
contractors. It is a tremendous responsibility that affects 
more than 20,000 businesses and roughly one out of every five 
American workers. Any government agency with this much 
influence should exercise its authority judiciously, especially 
at a time when so many cannot find full-time employment.
    I hope my colleagues will keep this in mind as we examine 
two regulations adopted by OFCCP in September.
    Last year a number of witnesses shared their concerns about 
the proposed regulations with the committee. They described how 
the rules would add an unprecedented amount of new paperwork on 
top of existing reams of reporting requirements.
    Regulations would also set arbitrary hiring goals for 
certain classes of workers, but the agency has the power to 
revoke a contract if employers fail to meet those so-called 
goals. In addition, witnesses discussed the fact that the 
agency is essentially requiring workers to disclose a 
disability before they have been offered employment, even 
though the Americans with Disability Act clearly prohibits this 
type of invasive inquiry.
    Unfortunately, OFCCP failed to address these and other 
concerns in the final regulations. Today's witnesses will 
discuss in greater detail why the regulations remain 
problematic and how they will impact the nation's workplaces.
    I also hope to discuss why workers and job creators deserve 
a completely new regulatory approach. Dana Bottenfield, a 
witness at a previous hearing, accurately described the 
problems that exist in the current process. As a human 
resources professional for St. Jude Children's Research 
Hospital, Dana characterized the current structure as, and I 
quote--``all stick and no carrot.''
    Dana explained existing rules, and I quote again--``impose 
a level of expense of time and money that is far in excess of 
what is necessary to accomplish effective affirmative action.'' 
She concluded her statement by saying, quote--``Our team is not 
focused on providing a fair and diverse workplace, but instead, 
surviving our next audit.''
    No doubt the experience of St. Jude is similar to the vast 
majority of federal contractors: They want to follow the rules 
and do the right thing, but too often they are tied up in 
unnecessary investigations or tripped up by excessive red tape.
    Director Shiu, we should be working together to find ways 
to streamline this regulatory mess. We should be discussing 
solutions that would make it easier for employers to follow the 
law and easier to identify those who don't. We should be 
developing enforcement policies that promote the best interests 
of workers and the best use of taxpayer dollars.
    Regrettably, the Obama administration has pursued a 
different agenda. Instead of simplifying the process, the 
administration creates more confusion and uncertainty. Instead 
of working together, the department refuses to provide adequate 
responses to our most basic oversight questions. Delivering 
documents weeks late on the eve of a national holiday and days 
before an oversight hearing that are ultimately nonresponsive 
is an insult to this committee and its oversight 
responsibilities.
    Finally, instead of smart enforcement practices, the 
administration is doing less with more. Since 2009 OFCCP has 
received a 30 percent funding increase and hired roughly 29 
percent more staff. Yet compared to the prior administration, 
OFCCP is conducting fewer compliance evaluations and fewer 
audits.
    Even more striking are the outcomes. Between 2004 and 2008 
the Bush administration recovered more than $250 million in 
financial remedies. However, the Obama administration has 
collected a total of just $57 million.
    In the face of all these challenges, OFCCP wants to expand 
its reach through regulatory fiat. Health care providers now 
fear they will be forced to inherit OFCCP's regulatory burden 
because they serve some of our nation's most vulnerable 
citizens.
    I have introduced legislation, H.R. 3633, that will ensure 
hospitals and doctors reimbursed through federal health care 
programs are not unilaterally designated contractors and 
subject to OFCCP's dictates. I hope my colleagues will oppose 
this bureaucratic overreach by supporting the Protecting Health 
Care Providers from Increased and Administrative Burdens Act.
    Federal contractors have a moral and legal obligation to 
ensure employment discrimination is not tolerated in their 
workplaces. OFCCP has an obligation as well, to enforce the law 
fairly and effectively. Unfortunately, more regulations, more 
spending, more staff, and fewer results have become the 
agency's track record. The men and women who rely on OFCCP to 
enforce these critical policies deserve better. For their sake, 
I strongly urge the administration to change its course.
    With that, I will now recognize the senior Democratic 
member of the subcommittee, my friend Representative Joe 
Courtney, for his opening remarks.
    [The statement of Chairman Walberg follows:]

   Prepared Statement of Hon. Tim Walberg, Chairman, Subcommittee on 
                         Workforce Protections

    Good morning. I'd like to thank our witnesses for joining us. I 
would also like to extend a special welcome to Director Shiu. This is 
our first opportunity to hear from you. Thank you for taking the time 
to be with us today as we examine your agency's regulatory actions.
    The Office of Federal Contract Compliance Programs is charged with 
enforcing the affirmative action and nondiscrimination employment 
requirements governing federal contractors. It is a tremendous 
responsibility that affects more than 20,000 businesses and roughly one 
out of every five American workers. Any government agency with this 
much influence should exercise its authority judiciously, especially at 
a time when so many cannot find work. I hope my colleagues will keep 
this in mind as we examine two regulations adopted by OFCCP in 
September.
    Last year a number of witnesses shared their concerns about the 
proposed regulations with the committee. They described how the rules 
would add an unprecedented amount of new paperwork on top of existing 
reams of reporting requirements. The regulations would also set 
arbitrary hiring ``goals'' for certain classes of workers, but the 
agency has the power to revoke a contract if employers fail to meet 
these so-called goals. In addition, witnesses discussed the fact that 
the agency is essentially requiring workers to disclose a disability 
before they've been offered employment, even though the Americans with 
Disabilities Act clearly prohibits this type of invasive inquiry.
    Unfortunately, OFCCP failed to address these and other concerns in 
the final regulations. Today's witnesses will discuss in greater detail 
why the regulations remain problematic and how they will impact the 
nation's workplaces. I also hope to discuss why workers and job 
creators deserve a completely new regulatory approach.
    Dana Bottenfield, a witness at a previous hearing, accurately 
described the problems that exist in the current process. As a human 
resources professional for St. Jude Children's Research Hospital, Dana 
characterized the current structure as ``all stick and no carrot.'' 
Dana explained existing rules ``impose a level of expense of time and 
money that is far in excess of what is necessary to accomplish 
effective affirmative action.'' She concluded her testimony by saying, 
``Our team is not focused on providing a fair and diverse workplace, 
but instead surviving our next audit.''
    No doubt the experience of St. Jude is similar to the vast majority 
of federal contractors: They want to follow the rules and do the right 
thing, but too often they are tied up in unnecessary investigations or 
tripped up by excessive red tape.
    Director Shiu, we should be working together to find ways to 
streamline this regulatory mess; we should be discussing solutions that 
would make it easier for employers to follow the law and easier to 
identify those who don't; we should be developing enforcement policies 
that promote the best interests of workers and the best use of taxpayer 
dollars.
    Regretably, the Obama administration has pursued a different 
agenda. Instead of simplifying the process, the administration creates 
more confusion and uncertainty. Instead of working together, the 
department refuses to provide adequate responses to our most basic 
oversight requests. Delivering documents weeks late, on the eve of a 
national holiday, and days before an oversight hearing that are 
ultimately nonresponsive is an insult to this committee and its 
oversight responsibilities.
    Finally, instead of smart enforcement practices, the administration 
is doing less with more. Since 2009 OFCCP has received a 30 percent 
funding increase and hired roughly 29 percent more staff. Yet compared 
to the prior administration, OFCCP is conducting fewer compliance 
evaluations and fewer audits. Even more striking are the outcomes. 
Between 2004 and 2008, the Bush administration recovered more than $250 
million in financial remedies. However, the Obama administration has 
collected a total of just $57 million.
    In the face of all these challenges, OFCCP wants to expand its 
reach through regulatory fiat. Health care providers now fear they will 
be forced to inherit OFCCP's regulatory burden because they serve some 
of our nation's most vulnerable citizens. I have introduced 
legislation, H.R 3633, that will ensure hospitals and doctors 
reimbursed through federal health care programs are not unilaterally 
designated contractors and subject to OFCCP's dictates. I hope my 
colleagues will oppose this bureaucratic overreach by supporting the 
Protecting Health Care Providers from Increased Administrative Burdens 
Act.
    Federal contractors have a moral and legal obligation to ensure 
employment discrimination is not tolerated in their workplaces. OFCCP 
has an obligation as well, to enforce the law fairly and effectively. 
Unfortunately, more regulations, more spending, more staff, and fewer 
results have become the agency's track record. The men and women who 
rely on OFCCP to enforce these critical policies deserve better. For 
their sake, I strongly urge the administration to change course.
    I will now recognize the senior Democratic member of the 
subcommittee, Representative Joe Courtney, for his opening remarks.
                                 ______
                                 
    Mr. Courtney. Thank you, Mr. Chairman, and thank you for 
holding this hearing today and for the witnesses for all 
joining us this morning and to talk about what I think is the 
primary focus, which are two new regulations which have been 
issued by the Department of Labor after a protracted process, 
which again got, actually, pretty high marks from groups and 
individuals as diverse as former Governor Tom Ridge, who 
complimented the department for listening to some of the input, 
which again, was recounted here by the chairman at prior 
hearings and came out with an outcome today that basically 
strengthen job discrimination protections for individuals with 
disabilities and men and women who have served this country in 
the armed forces.
    These rules, which are primarily nonpunitive and 
aspirational goals to help federal contractors monitor and 
evaluate their progress to ensure that they are abiding by 
civil rights laws. Taken together, these rules have a very 
simple message: If you are a veteran who served our country as 
a volunteer, even if you suffered a disabling injury, we have 
your back.
    These rules say that you deserve a fair shot to compete for 
a private sector job free of discrimination or bias based on 
your veteran status or disability. And these rules also say 
that if you are one of more than 50 million disabled Americans 
you, too, should deserve a fair shot at a job with a federal 
contractor, free of discrimination against you because of a 
disability.
    With the cooperation of federal contractors, the Department 
of Labor's rules are a game-changer for veterans and disabled 
individuals, providing them with 715,000 additional private 
sector job opportunities. And as you can see from the chart 
across the room, based on extensive analysis, the Department of 
Labor estimates that there will be over 200,000 job 
opportunities for veterans, particularly those from Iraq and 
Afghanistan, and over 500,000 for individuals with disabilities 
because of this rule.
    Mr. Chairman, the many challenges veterans and individuals 
with disabilities face in the job market are well-documented. 
The household wages of those with disabilities is less than 
half of those of households without a disability, and almost a 
third of those individuals have incomes below the poverty 
level, compared to 12.5 percent of those who do not.
    As we will hear today, recent veterans face significantly 
higher unemployment rates than nonveterans, despite the fact 
that Congress has passed the Hiring Our Heroes Act and the 
Veterans Hiring Tax Credits. I see those initiatives, which, 
again, give incentives to employers to hire veterans, as 
dovetailing perfectly with, again, these nonpunitive 
aspirational goals which the department has put forth.
    For male Gulf War-Era II veterans 18 to 24 the unemployment 
rate today is 20 percent, four points higher than nonveterans 
in that age group. For all Gulf War-Era II veterans the 
unemployment rate is almost 10 percent.
    This is simply unacceptable for the brave men and women who 
served our country and we need to do much more.
    As many of you heard me at a number of other hearings, I am 
lucky enough to represent a district with a shipyard--an 
electric boat shipyard, which, in my opinion, builds the most 
complex vessels in the world that sustains human life in an 
environment that does not sustain human life, and does it with 
a nuclear powered system. Almost 20 percent of that workforce 
are veterans.
    Again, they didn't just seek to achieve the aspirational 
goals that we are discussing here today; they doubled it. And 
frankly, if they had the opportunity to hire more veterans, 
even those who carry combat-related disabilities, they would do 
it in a heartbeat because the fact of the matter is that the 
skills of teamwork, discipline, specialized skills that are 
imparted in the military, are something that America's 
workforce should not view as a burden or employers as a burden, 
but frankly, as an opportunity of growth and fulfilling, again, 
some of the workforce challenges that our nation faces.
    And again, these rules, which again, I want to emphasize, 
are nonpunitive and aspirational, are a good start to achieve 
that goal. I commend all the advocates in the disability 
community and veterans community that have helped support the 
issuance of these final rules.
    Now again, the chairman has raised some issues that maybe 
are not directly related to these particular regulations which 
were issued, and again, I think they deserve a very thorough 
vetting here today and look forward to working with you in 
terms of addressing some of those issues.
    But again, this morning there was a shipbuilding caucus, 
which is a bipartisan group of members that General James Amos, 
who is the commandant of the Marine Corps, spoke for an hour, 
and I was telling him about a disabled veteran in my district 
who lives in the next town over who is a double amputee, 
stepped on a landmine in Afghanistan--very difficult, 
challenging recovery. Again, the general visited him on 
numerous occasions at Walter Reed, which was unbelievably 
appreciated by his family.
    But I was telling him that he and I played golf the other 
day--Corporal Cairn, double amputee. He was hitting the ball 
250 yards off the tee straight down the middle, much to my 
dismay, because I was in his foursome.
    But, you know, to me, again, it just demonstrated that, you 
know, you give people the opportunity and again, with some of 
the unbelievable advances in medicine that have taken place 
right now, these are folks that have a lot more to give, not 
only to themselves and their families but also to our country. 
And that really should be the focus of today's hearing is to 
try and work with these rules to take advantage of just great 
Americans who can do a lot for our country.
    And with that I yield back.
    [The statement of Mr. Courtney follows:]

  Prepared Statement of Hon. Joe Courtney, Senior Democratic Member, 
                 Subcommittee on Workforce Protections

    Mr. Chairman:
    I want to thank the witnesses for their participation and testimony 
today regarding civil rights and federal contracting.
    The main topics of discussion today are two rules recently 
finalized by the Department of Labor to strengthen job discrimination 
protections for individuals with disabilities and the men and women who 
serve their country in the armed forces.
    Specifically, the rules set forth non-punitive, aspirational goals 
to help federal contractors monitor and evaluate their progress to 
ensure that they are abiding by civil rights laws.
    Taken together, these rules have a very simple message. If you are 
a veteran who served our nation for love of country, even if you 
suffered a disabling injury, we have your back.
    These rules say you deserve a fair shot to compete for a private 
sector job, free of discrimination or bias based on your veteran status 
or disability.
    And these rules also say, if you are one of the more than 50 
million disabled Americans, you too should deserve a fair shot at a job 
with a federal contractor, free of discrimination against you because 
of your disability.
    With the cooperation of federal contractors, the Department of 
Labor's rules are a game changer for veterans and disabled individuals, 
providing them 715,000 additional private sector job opportunities.
    As you can see from the chart across the room, based on extensive 
analysis, the Department of Labor estimates there will be over 200,000 
job opportunities for veterans, and over 500,000 for individuals with 
disabilities because of this rule.
    Mr. Chairman, the many challenges veterans and individuals with 
disabilities face in the job market are well documented.
    The household wages of those with disabilities is less than half of 
those households without a disability. Almost a third of individuals 
have incomes below the poverty level, compared to 12.5 percent of those 
who do not.
    As we will hear today, recent veterans face significantly higher 
unemployment than non-veterans.
    For male Gulf War-era II veterans, 18 to 24, the unemployment rate 
is now 20 percent, 4 points higher than non-veterans in that age group. 
For all Gulf War-era II vets, the unemployment rates is almost 10 
percent.
    This is simply unacceptable for the brave men and women who served 
our country, and we need to do much more.
    These rules are good start. And I commend all the advocates in the 
disability community and veteran community that helped support the 
issuance of these final rules.
    I look forward to hearing the testimony today.
                                 ______
                                 
    Chairman Walberg. I thank the gentleman. I thank you for 
bringing an important face to this hearing, as well--and not 
the face of necessarily--how in the world did you golf in that 
cold state at this time of year anyway? Michigan we couldn't do 
that, but no, seriously, to bring a face to what we are trying 
to deal with in the most appropriate way is a great thing. 
Thank you.
    Pursuant to rule 7(c), all members will be permitted to 
submit written statements to be included in the permanent 
hearing record. And without objection, the hearing record will 
remain open for 14 days to allow statements, questions for the 
record, and other extraneous material referenced during the 
hearing to be submitted into the official hearing record.
    It is now my pleasure to introduce our distinguished 
witnesses. First and foremost, Ms. Patricia Shiu is Director of 
the Office of Federal Contract Compliance Programs at the 
Department of Labor.
    Thank you for being with us today.
    Mr. David Fortney is cofounder of the law firm Fortney & 
Scott in Washington, D.C., and is testifying on behalf of the 
H.R. Policy Association.
    Welcome.
    Mr. Thomas Shanahan is vice president and general counsel 
of the University of North Carolina in Chapel Hill, North 
Carolina.
    Mr. Brian Fitzgerald is president and chief executive 
officer of Easter Seals New Jersey in East Brunswick, New 
Jersey.
    Welcome.
    Mr. Curt Kirschner is a partner at Jones Day in San 
Francisco, California and is testifying on behalf of the 
American Hospital Association.
    Welcome.
    Before I recognize each of you to provide your testimony 
let me briefly explain our lighting system. You will have 5 
minutes to present your testimony. The lights are according, 
starting out with green; yellow being 1 minute remaining; red, 
we hope you have wrapped up by then. If not, please do it as 
quickly as possible.
    The same will be true for the questioning of my colleagues 
and myself to keep it to the 5-minute, especially when we have 
a full panel like this and a topic of great concern and 
interest to discuss.
    At this point I recognize Director Shiu for her testimony. 
Thank you.
    Microphone, please. Hit the microphone.

STATEMENT OF MS. PATRICIA A. SHIU, DIRECTOR, OFFICE OF FEDERAL 
CONTRACT COMPLIANCE PROGRAMS, DEPARTMENT OF LABOR, WASHINGTON, 
                              D.C.

    Ms. Shiu. There we go.
    Chairman Walberg. Great.
    Ms. Shiu. Okay. Good morning, Chairman Walberg, Ranking 
Member Courtney, and distinguished members of the subcommittee. 
Thank you for inviting me to discuss the critical work of the 
Office of Federal Contract Compliance Programs, which I have 
been privileged to lead since 2009.
    It is an honor to testify before the elected 
representatives of the American people we both serve--with Mr. 
Fitzgerald, a veteran who now serves people with disabilities 
in New Jersey and with my other colleagues on this panel.
    OFCCP enforces the civil rights of the nearly one-quarter 
of American workers who work for federal contractors and 
subcontractors. We enforce three longstanding laws that 
prohibit employment discrimination by contractors and require 
them to take affirmative action to advance employment 
opportunities for qualified women, minorities, veterans, and 
people with disabilities. Our jurisdiction covers almost 
200,000 business establishments which receive $500 billion in 
federal contracts.
    When we find discrimination we take action to correct it 
and provide relief to the affected workers. Over the past 5 
years we negotiated $57 million in back wages and interest and 
nearly 10,000 job offers on behalf of 90,000 workers affected 
by discrimination.
    Today I would like to focus on two of the laws we enforce, 
known as VEVRAA and Section 503. These laws require equal 
employment opportunity and affirmative action for protected 
veterans and people with disabilities.
    The regulations under these two laws have not always worked 
to improve employment opportunity as Congress had intended. We 
are far from fulfilling what Vice President Biden called our 
sacred obligation to our returning veterans who have sacrificed 
so much and who deserve good jobs when they return home. Yet 
post-9/11 veterans are still more likely to be unemployed than 
nonveterans and people with disabilities are still 
disproportionately found among the unemployed and those too 
discouraged to look for work.
    In September, OFCCP updated these rules to increase 
dramatically their effectiveness by clarifying expectations and 
facilitating compliance with the law. These rules provide, for 
the very first time ever, specific aspirational metrics for 
hiring qualified veterans and people with disabilities--metrics 
that are similar to those that have long been used to promote 
equal opportunities for women and minorities.
    I believe that what gets measured gets done, and metrics 
are essentially management tools that measure progress and 
inform decision-making.
    These new rules are a win-win. If contractors achieve the 
metrics, more than 200,000 veterans and almost 600,000 workers 
with disabilities could have new job opportunities in the first 
year alone.
    According to the Department of Defense, more than 1 million 
members of the armed services will be transitioning to civilian 
jobs over the next 5 years--roughly 200,000 per year. Our new 
rule could dramatically improve the employment prospects of 
many of those returning veterans each year.
    In addition, the new rules will benefit contractors by 
helping them successfully identify, hire, and retain well-
qualified workers, as well as increasing their access to new 
markets.
    These outcomes benefit not only our workers and workplaces, 
but ultimately, our communities and the national economy, as 
well.
    The VEVRAA rule requires contractors to use either a 
national hiring benchmark of 8 percent or an alternative 
benchmark that they select based on various factors. The 
Section 503 rule sets a national 7 percent goal for individuals 
with disabilities in every job category.
    Neither the benchmark nor the goal is a rigid or inflexible 
quota. Quotas are expressly forbidden.
    Instead, the metrics are used to measure the effectiveness 
of contractors' outreach and recruitment efforts. When we find 
companies that have not achieved these metrics we work with 
them to review the critical steps that lead to the successful 
identification, hiring, and retention of qualified vets and 
people with disabilities.
    And I am particularly proud of our rule-making process. We 
conducted a 4-year-long open and transparent process that 
included town halls and advanced notice of proposed rule-
making, two NPRMs, hundreds of comments, countless meetings, 
and we engaged the full panoply of OFCCP stakeholders. And we 
listened, as evidenced by the many changes we made to the 
proposed rules in response to our stakeholders' concerns.
    I was pleased to see those efforts recognized by former 
Secretary of Homeland Security Tom Ridge in an op-ed that 
appeared in the Wall Street Journal 1 week after the rules were 
published. He commended OFCCP for following a model process to 
create a rule that has a real impact on improving employment 
while at the same time providing flexibility to companies in 
how best to achieve the new hiring standards.
    We know that workers are our nation's greatest resource and 
the United States has among the most talented, innovative, and 
hardworking people in the world, and they are the engine of our 
economic recovery. That is why the Department of Labor and 
OFCCP are so fully committed to ensuring that American workers 
have the opportunities that would allow them and their 
employers to flourish.
    Mr. Chairman, that concludes my statement. Thank you very 
much, again, for the opportunity to testify. I am happy to 
answer any questions you may have.
    [The statement of Ms. Shiu follows:]
    
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    Chairman Walberg. Thank you.
    We recognize Mr. Fortney now for your 5 minutes of 
testimony.

 STATEMENT OF MR. DAVID FORTNEY, CO-FOUNDER, FORTNEY & SCOTT, 
  LLC, WASHINGTON, D.C., TESTIFYING ON BEHALF OF H.R. POLICY 
                          ASSOCIATION

    Mr. Fortney. Thank you, and good morning. Chairman Walberg 
and Ranking--
    Chairman Walberg. Microphone on? Thank you.
    Mr. Fortney. And good morning again, Chairman Walberg, 
Ranking Member Courtney, and honorable members of the 
Subcommittee on Workforce Protections. Thank you again for your 
interest in these very important developments.
    And I am appearing today on behalf of the H.R. Policy 
Association to discuss specifically the 503 regulations 
addressing individuals with disabilities. Let me briefly take a 
moment to introduce the H.R. Policy Association, which has a 
longstanding and very proud history of being supportive and 
involved in assisting individuals with disabilities to find 
meaningful employment.
    The association is comprised of 350 of the largest 
corporations in the United States. These companies employ more 
than 10 million employees in the U.S. and nearly 9 percent of 
the private workforce, and indeed, offer employment to 20 
million employees worldwide.
    The H.R. Policy members have a strong history of supporting 
affirmative action and have been intimately involved in the 
development of effective programs to deal with individuals with 
disabilities, including the recent amendments to the Americans 
with Disabilities Act that have been widely accepted. In the 
initial statement, in the limited time I have, I would like to 
focus on several areas of concern, though, that we do have with 
respect to the 503 regulations.
    First, let me note that the regulations are an improvement 
from what had been proposed in some of the initial concerns. 
With that being said, though, there still are remaining 
concerns.
    With respect to the goal, and with all due respect to 
Director Shiu, our concern remains that the goal, as it is 
administered, may, in fact, become a quota. And let me tell you 
why we have the concern. Because the language, although it 
states that it will be a goal, look beyond and, in fact, how 
the goals historically have been administered. Because as 
Director Shiu has explained, and certainly the OFCCP carries 
out in the field, what gets measured is what gets done.
    We know in the field and in practice that if you fall short 
of that 7 percent, what is going to happen? The agency is going 
to impose what is called a conciliation agreement and require 
that a numerical goal be achieved. That effectively operates as 
a quota.
    Now, that is not just supposition on our part. We have an 
example under the law today involving a contractor, G-A 
Masonry, involving veterans.
    The department determined that their outreach efforts were 
insufficient. The answer was, ``Here is a numerical target. You 
must hire the following number of veterans in order to 
demonstrate you are making sufficient outreach efforts.''
    That, we submit, is how a goal becomes a quota. That should 
not be allowed to proceed and we are concerned.
    Second, under these new rules contractors will be required 
to ask every applicant whether he or she has a disability, and 
this is before they are offered a job. Now, that has not been 
the requirement of this land for over 30 years. The Americans 
with Disabilities Act specifically prohibits that type of 
inquiry and we have a longstanding, proud culture where we have 
focused on individuals' abilities, not their disabilities, in 
assessing whether they meet the basic qualifications of the 
job.
    These are concerns that we have expressed repeatedly. We 
have asked for a safe harbor to be made. If this is going to be 
required, at least amend the ADA. Do something to make clear 
that we won't as a result of complying with the regulation, now 
face litigation as a result.
    What we have received so far is a letter from staff counsel 
at the EEOC saying, ``I think this will not violate the ADA.'' 
I might add, her letter failed to note that the same counsel in 
1996 wrote a letter stating it would violate the ADA to make 
such inquiries.
    And unfortunately, when we have asked the Department of 
Labor whether in the event that our member companies comply 
with this new regulation and face litigation, will the 
department have our back, will they come and file an amicus 
brief to support us in court, we have been told no, the 
department can't make that commitment either.
    So we are concerned. This is an issue that could easily and 
should have been addressed; it would have avoided these 
concerns.
    I think that one of the aspects that would assist so that 
these issues don't pile up and get sorted out through prolonged 
litigation that costs members needless resources would be if 
there could be periodic reporting to this committee by this 
agency. That way, we could know in real time, perhaps every 6 
months, what the agency is doing and how they are implementing 
these rules.
    So with that, I thank you and be happy to answer any 
questions you may have.
    [The statement of Mr. Fortney follows:]
    
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    Chairman Walberg. Thank you.
    Mr. Shanahan, welcome and recognize you for 5 minutes of 
testimony.

STATEMENT OF MR. THOMAS C. SHANAHAN, VICE PRESIDENT AND GENERAL 
 COUNSEL, THE UNIVERSITY OF NORTH CAROLINA, CHAPEL HILL, NORTH 
                            CAROLINA

    Mr. Shanahan. Thank you, Mr. Chairman and members of the 
subcommittee. I appreciate the opportunity to testify today 
regarding the impact of OFCCP compliance on the mission and 
operations of the 17-campus University of North Carolina 
system.
    The university is strongly committed to equal opportunity 
in employment. We enroll more than 220,000 students across our 
17 campuses and we employ 55,000 people in hundreds of 
different job classifications.
    We share the goals that underlie OFCCP's regulatory 
activities and the university's policies and employment 
practices reflect our commitment. But as part of the higher 
education sector, UNC institutions are also part of one of the 
most highly regulated industries in the United States and we 
face increasing regulations with significant compliance costs. 
The laws and regulations within OFCCP's enforcement authority 
are just a few among hundreds of regulations and other 
requirements at the federal level alone that apply to the 
university system.
    What this means is that our campuses have to allocate 
limited resources to employ compliance specialists and other 
professionals in order to understand and meet regulatory 
requirements imposed across numerous areas. And we have to do 
this while addressing serious budget challenges.
    The university receives much of its financial support from 
the state of North Carolina, and by necessity the budgets 
adopted by North Carolina's General Assembly over the last 5 
years have contained significant reductions in appropriations 
per student. We have responded to these challenges by 
prioritizing core academic and teaching programs and allocating 
cuts primarily to operational areas, but when it does become 
essential to fill compliance-related positions, our campuses 
face the difficult choice of allocating scarce resources to 
compliance rather than to teaching, research, or service--part 
of our mission.
    UNC institutions devote significant resources to OFCCP 
compliance now. We estimate we employ at least 30 individuals 
whose primary duties involve OFCCP-related compliance across 
our campuses.
    This estimate doesn't include efforts of academic 
administrators and other staff whose work includes tasks that 
are tied to the requirements found in Executive Order 11246 and 
the statutes enforced by OFCCP. It also doesn't account for the 
I.T. systems and business processes that have been purchased, 
modified, and improved over time in order to perform these 
compliance functions in an efficient manner.
    In recent years a small number of UNC campuses have 
undergone compliance evaluations by OFCCP and we have responded 
to the agency in a prompt and comprehensive manner and have 
found OFCCP investigators to be knowledgeable and professional 
in their conduct.
    We also find that the process of preparing for and 
responding to compliance evaluations is lengthy, time-
consuming, and resource-intensive. The time from the beginning 
of a review until its conclusion can extend for 2 years or 
more, and during that time thousands of hours of UNC staff time 
can be consumed in responding to requests for information and 
documents from OFCCP. At some campuses these compliance 
evaluations have consumed one or more full-time employees for 
extended periods of time.
    Based on input from our campuses, the multiple new and 
enhanced record keeping, data collection, and compliance 
requirements contained in the Section 503 and VEVRAA final 
rules will further increase our compliance costs. And our 
campuses believe that these costs will include hundreds of 
hours of staff time ranging from 100 or more hours at our 
smallest units to several hundred hours at our larger research 
institutions.
    We appreciate that OFCCP adjusted its annual compliance 
cost and effort estimates based on comments received during the 
rule-making process, but we still project the need to devote 
the equivalent of an estimated 20 additional full-time 
personnel to revising systems to comply with the new 
regulations and to complying with the requirements once those 
new systems are established.
    In addition, we expect that the new requirements will 
require the expenditure of yet more funds to reprogram, 
purchase, or upgrade existing management systems, alter record-
keeping practices, and to revise current operational 
procedures, resulting in several thousand dollars in additional 
costs.
    Once again, we support the efforts to increase employment 
opportunities for individuals with disabilities and protected 
veterans. Moreover, in keeping with its mission for and on 
behalf of the people of the state of North Carolina, the 
university is committed to ensuring that employment 
opportunities are extended to individuals without regard to 
race, gender, disability, or protected veteran status.
    It is far from clear, however, that the substantial data 
collection, record keeping, and other process requirements 
prescribed by OFCCP in the final rules will achieve these 
desired outcomes without substantial cost burdens to the 
university.
    Thank you.
    [The statement of Mr. Shanahan follows:]
    
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    Chairman Walberg. Thank you.
    Mr. Fitzgerald, welcome, and you are recognized for your 5 
minutes.

  STATEMENT OF MR. BRIAN FITZGERALD, CHIEF EXECUTIVE OFFICER, 
      EASTER SEALS NEW JERSEY, EAST BRUNSWICK, NEW JERSEY

    Mr. Fitzgerald. Mr. Chairman and members of the 
subcommittee, my name is Brian Fitzgerald. I am the president 
and CEO of Easter Seals New Jersey, a nonprofit that helps 
individuals with disabilities, veterans, and other New Jersey 
residents achieve their potential, including helping them find 
employment. Thank you for inviting me to testify how final 
rules announced by the Department of Labor will help veterans 
and people with disabilities have meaningful opportunities to 
compete for jobs with federal contractors.
    My entire professional career has focused on the employment 
for people with disabilities and veterans. I joined Easter 
Seals in 1975 as a vocational counselor, where I helped people 
with disabilities develop skills to find and maintain jobs. In 
1989 I became CEO of Easter Seals New Jersey.
    Over these nearly 40 years I have relied on the training, 
decision-making, and responsibilities I learned in the 
military. In 1967 I joined the United States Army and served as 
an infantry officer until 1972.
    When I left I struggled to translate my military skills to 
the civilian workforce. I spent several months job hunting but 
I failed to get noticed to prove I was qualified.
    I ran into the barriers veterans face today when their only 
previous work experience is the military. I had leadership; I 
had skills; I had discipline. But I couldn't turn that 
experience into a job.
    My first break came thanks to a college buddy. His company 
had an open position and he asked me to apply. My friend went 
to bat for me. I got a call for an interview and later a job 
offer.
    My buddy's intervention didn't guarantee me a job or even 
an interview, but that warm handoff to a willing recipient 
ensured my resume got noticed and was fairly considered.
    The Rehabilitation Act and the Vietnam Era Veterans' 
Readjustment Assistance Act help ensure job applicants with 
disabilities and who are veterans have a fair shot at 
employment. These laws prohibit employment discrimination and 
require federal contractors to affirmatively recruit and hire 
qualified veterans and individuals with disabilities.
    The final rules represent the logical step in meeting our 
nation's longstanding commitment of promoting and protecting 
employment opportunities for these populations. They set a 
hiring benchmark for veterans and a utilization goal for people 
with disabilities, as well as the data categories contractors 
can use to measure their recruitment and hiring strategies.
    Some may ask whether we need to set measures and hiring 
goals and benchmarks since the protections and affirmative 
action rules are already in place. The answer is yes. I have 
been in management long enough that what gets measured gets 
done.
    Employment is critical to a veteran's successful 
transition. It is the foundation to their successful transition 
to civilian life. Once employed, health care and ability to 
have a home follows.
    Employment also leads to greater independence for 
individuals with disabilities. Despite national efforts and 
good intentions, people with disabilities continue to face 
double-digit unemployment and veterans still struggle to find 
jobs.
    My written testimony features a female veteran from New 
Jersey who struggles to find work. She is depressed and 
frustrated that no one will give her a chance. We are helping 
her through our new women veterans program.
    Why do these two populations struggle to find work? The 
female veteran pointed out to stigma, bias, and fear on the 
part of prospective employers.
    Unfamiliarity with veterans is also an issue. My written 
testimony highlights a company interested in hiring veterans, 
yet their H.R. manager questioned whether veterans fit into the 
company's participatory culture, given the command and control 
and top-down culture of the military.
    Older veterans and workers with disabilities often find 
similar employer apprehension.
    Easter Seals works to match qualified job seekers with New 
Jersey businesses. When we do, companies come back looking for 
similarly-qualified candidates, but the key was getting the 
company to first consider the person. The final rules will 
ensure companies are actively recruiting and reviewing 
candidates from these populations.
    Like from my first experience, these changes don't 
guarantee a job or an interview, but they help assure 
contractors are effectively recruiting these candidates and 
that qualified candidates are seriously considered. These rules 
will provide veterans and people with disabilities with the 
chance to compete for jobs at companies that receive federal 
funding.
    Thank you for the opportunity to testify. I will be pleased 
to answer any questions.
    [The statement of Mr. Fitzgerald follows:]
    
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    Chairman Walberg. Thank you, Mr. Fitzgerald.
    Mr. Kirschner, recognized for your 5 minutes of testimony.

   STATEMENT OF MR. CURT KIRSCHNER, PARTNER, JONES DAY, SAN 
  FRANCISCO, CALIFORNIA, TESTIFYING ON BEHALF OF THE AMERICAN 
                      HOSPITAL ASSOCIATION

    Mr. Kirschner. Good morning, Chairman Walberg, Ranking 
Member Courtney, and distinguished members of the subcommittee. 
I am Curt Kirschner, a partner of the Jones Day law firm, and 
today I am testifying on behalf of the American Hospital 
Association, with its over 5,000 member hospitals. Thank you 
for the opportunity to testify.
    My comments today will briefly summarize a critical issue 
facing our nation's hospitals. A more thorough discussion of 
this issue is included in AHA's written testimony submitted to 
the subcommittee, which I request to be introduced into the 
record.
    Recently, the OFCCP has sought to expand aggressively its 
jurisdiction over hospitals without advance notice to those 
hospitals and without their agreement or consent. The agency's 
attempt to expand its jurisdiction is based on hospitals 
providing medical care pursuant to federally funded health 
benefit plans, including TRICARE, the health benefit plan for 
servicemembers and their families; and FEHBP, the health plan 
covering federal employees and their families.
    The OFCCP is seeking to cover hospital providers 
participating in the managed care plan options within TRICARE 
and FEHBP despite the fact that the government agencies that 
actually administer those programs--the Department of Defense 
and the Office of Personnel Management--continue to assert, 
through their own regulations, that such hospitals are not 
government contractors.
    To be clear, the concerns of our nation's hospitals with 
the OFCCP's position has nothing to do with being subject to 
nondiscrimination laws. Hospitals already are and will continue 
to be governed by numerous federal, state, and local 
nondiscrimination laws regardless of whether they are 
considered federal contractors.
    Rather, the concerns expressed here are based on the 
massive record-keeping obligations and sometimes crushing 
regulatory burdens that the OFCCP unknowingly imposes on 
hospitals as a result of their being deemed federal contractors 
as a result of providing medical care to servicemembers and 
federal employees.
    The OFCCP's position is a significant departure for the 
agency. For many years, including both the Clinton and Bush 
administration, the agency's position on this issue has been 
consistent with that of the DOD and the OPM--that is, that 
hospitals participating in TRICARE or FEHBP are not considered 
federal contractors. Now the OFCCP's current position conflicts 
with both the regulations of the OPM and the DOD, and it also 
conflicts with the Grant Act, the U.S. law that excludes 
payments such as those received from federally funded health 
benefit plans from the definition of what constitutes a federal 
procurement contract.
    The OFCCP's recent expansion of jurisdiction over hospitals 
is untenable for a number of other reasons. First, there is no 
reasonable explanation for the agency's abrupt change in 
position. The federal benefit plans at issue have been--
including their managed care components--have been consistent 
and not substantively changed for many years.
    In fact, the only recent legal change that occurred was the 
2011 adoption of section 715 of the National Defense 
Authorization Act, which explicitly sought to limit the OFCCP's 
jurisdiction over hospital providers participating in TRICARE. 
Despite this new limiting statute, the OFCCP has argued that 
this law does not actually deprive the agency of jurisdiction 
over hospitals participating in the TRICARE program.
    The agency's proposed dichotomy between managed care and 
fee-for-service plans makes no sense. Under the agency's view, 
a medical procedure performed at one hospital, pursuant to a 
TRICARE plan that is participating in a plan with managed care 
options, would cause the hospital to be considered a federal 
contractor.
    On the other hand, the same procedure performed at a 
hospital that participates in a TRICARE plan that is a fee-for-
service plan would not cause the hospital to be a federal 
contractor. Such different treatment of hospitals providing 
essentially the same care is illogical.
    Moreover, the ambiguity created by the OFCCP's position 
will inevitably lead to costly and unnecessary litigation over 
the agency's jurisdiction, diverting precious resources that 
would otherwise be available for patient care.
    In conclusion, the delivery of patient care, whether 
provided as part of a fee-for-service or managed care contract, 
should not be deemed to be a federal contract. Therefore, the 
AHA fully supports H.R. 3633, the Protecting Health Care 
Providers from Increased Administrative Burdens Act, introduced 
yesterday by Chairman Walberg. This bill would help maintain a 
robust network of health care providers for servicemembers, 
federal employees, and their families by providing clear legal 
guidance that the care rendered to them under federally funded 
programs would not unknowingly and incorrectly classify the 
providers as federal contractors.
    Thank you for the opportunity to provide these comments.
    [The statement of Mr. Kirschner follows:]
    
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    Chairman Walberg. Thank you.
    And I thank all of the panelists for your testimony. Give 
us a lot to work with in our questioning.
    And before I recognize my colleagues for their 5 minutes of 
questioning, without objection, I ask that this letter from the 
Associated General Contractors of Americas addressing their 
concerns with the regulations be inserted in the record.
    [The information follows:]
    
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    Chairman Walberg. Without objection, so ordered.
    I now recognize the chairman of Education and Workforce 
full committee, Mr. Kline, for his 5 minutes of questioning.
    Mr. Kline. Thank you, Mr. Chairman.
    Thank you to the witnesses. We are very pleased that 
Director Shiu could be with us today.
    My colleague, the ranking member on the full committee, Mr. 
Miller, said in a hearing we had the other day that this is a 
little bit like a tale of two cities, where you--Director Shiu 
says one thing and Mr. Fortney says another thing and there are 
two different cities, apparently. But there are regulations 
that we are trying to get at here that cause some confusion.
    So, Director Shiu, I just want to get this clear on the 
record. Mr. Fortney was expressing some concerns about 
individual right to sue. As I understand it, both the OFCCP and 
the Equal Employment Opportunity Commission have asserted that 
inviting applicants to self-identify as disabled at the pre-
offer stage does not violate the Americans with Disabilities 
Act. I understand that is your position and EEOC's.
    But because there is a right to sue under the Americans 
with Disability Act, Mr. Fortney was proposing that OFCCP join 
as amici and defend follow contractors who face private suits 
pursuant to the Americans with Disabilities Act. Will OFCCP 
join as amici in such a case?
    Ms. Shiu. Thank you for your question. I would be happy to 
discuss that with my solicitors.
    We firmly believe that--and as the EEOC has stated--that 
you can--a contractor, in furtherance of affirmative action--in 
furtherance of affirmative action, that is the key there--can 
ask somebody before they are offered a job whether they have a 
disability. That person doesn't have to answer the question nor 
does that person have to disclose the disability.
    And the reason why we are trying to do that is so that both 
contractors can begin to get the baseline data that they need 
in order for them to measure how well they are doing in--
    Mr. Kline. All right. Forgive me for interrupting. I have 
got a few more questions here.
    But the question remains, I mean, they have concerns that 
it looks like in the language under ADA that you cannot--
cannot--in the pre-offer stage, inquire about disability. Even 
though it is self-identifying, they believe businesses would 
believe that they can be sued, and certainly they can be sued. 
And that costs money and time.
    And so the question is, because it is your opinion that it 
is okay to do that, will you join as amici and defend federal 
contractors who face these suits? Just a--
    Ms. Shiu. I would be happy to discuss that with the 
solicitors and--
    Mr. Kline. Okay. Thank you.
    Let me move on here a little bit. Let's talk about 
veterans.
    One of two ways, according to your regulations, which a 
contractor may fulfill the requirements of the new veterans 
regulations is to set an across-the-board 8 percent hiring 
benchmark. OFCCP states this 8 percent number is reflective of 
the number of veterans currently in the civilian workforce. 
Although the benchmark is based on all veterans, the regulation 
pertains only to covered veterans, a subset of all veterans.
    Are you aware of any data on the number of covered veterans 
in the civilian workforce and did you take that into account?
    Ms. Shiu. We looked at all the available data that was--
that we could get our hands on, and it is my understanding that 
VEVRAA covers a majority of veterans. But I cannot give you a 
specific number with respect to the difference. But yes, it is 
something that we did look at.
    Mr. Kline. You did look at but you don't actually know what 
that number is?
    Ms. Shiu. Because it doesn't exist, sir, as far as I can--
as I understand.
    Mr. Kline. So it is a somewhat arbitrary number, then? 
Okay. Thank you.
    Mr. Shanahan, you are here representing the University of 
North Carolina. My time is about to run out, so the simple 
question is, what makes a university system unique, as compared 
to other government contractors, when undergoing and responding 
to an OFCCP audit?
    Mr. Shanahan. I think one of the things that would make the 
University of North Carolina unique compared to other 
contractors, Congressman, might be some of the technical 
differences in our workforce.
    So for example, promotions of faculty who are on tenure 
track when they achieve tenure or they move from assistant 
professor to an associate professor, that is not the typical 
promotion you would see; it is not the sort of typical 
competitive event you would see in another contractor 
establishment or, say, in the private sector, or even in other 
government sector employment relationships. Sometimes that has 
been an issue that has had to be explained in compliance 
evaluations to OFCCP investigators.
    Mr. Kline. Okay. Thank you.
    I see my time is expired. I yield back.
    Chairman Walberg. I thank the gentleman.
    And now I recognize the gentlelady from Ohio, Ms. Fudge, 
for her 5 minutes of questioning.
    Ms. Fudge. Thank you very much, Mr. Chairman.
    And thank all of you for being here today.
    Just want to make a statement and then I am going to 
actually, Ms. Shiu, allow you to respond to the questions that 
were asked of you just a few moments ago.
    But it is interesting to me that as we talk on both sides 
of the aisle about accountability and transparency that we 
would not want to fill out some forms, that we would not want 
to assist those who have served this nation. I am concerned 
about what we are doing here today.
    Certainly you have gone through the rule-making process. It 
has been open, as you talked about all of the hearings and how 
you listened.
    I don't know why we are even having this hearing today 
since we can't change it. It is nothing, to me, more than just 
politics. We are doing what is necessary as a government to 
ensure that those who we provide a contract to follow certain 
rules.
    You know, I heard the chairman talk about the job creators. 
We are the job creators. The federal government is creating the 
jobs. The contractors are not.
    And so I think that it is incumbent upon us all to 
understand why we are here, and that is to ensure that 
taxpayers' dollars do go to assist those persons who we believe 
are important.
    And so with that, I am going to ask Ms. Shiu if you want to 
answer the questions that were asked of you of the chairman 
earlier?
    Ms. Shiu. Yes. First of all, let me say that there would be 
huge benefits that would inure to the economy, to people with 
disabilities, and veterans, just by having these rules.
    The creation of jobs means the creation of a new taxpayer 
base. It means that we would diminish government entitlements 
to people who otherwise would not be able to work. It means 
that there is going to be a whole new treasure trove, if you 
will, of people who are available for contractors to hire.
    I do want to address one thing, if you would, which is 
these are aspirational goals, and the reason why they are not 
quotas is because nobody is going to be found in violation of 
the law if they do not hit the goal or the benchmark. But you 
have to try. You have to put into place systems.
    You have to measure what you are doing to determine whether 
you are doing enough outreach, doing enough recruitment, hiring 
people, retaining them. You are going to have to look and 
measure every step of the way. You are going to have to look at 
policies.
    The idea is to create a culture where individuals with 
disabilities and vets are welcome, okay? That is really what 
this is about, where people are unafraid to self-disclose, to 
disclose they have a disability and they are not going to fear 
retaliation.
    I do want to make one comment, if I might, Congresswoman, 
in response what Mr. Fortney has said. In discussing this G&K 
case, which I understand is subject to discussion with my 
solicitors, I don't want you to get the impression that this is 
somehow typical--although I have not been totally briefed on 
it--of what the OFCCP does.
    It is important for people to know that in discrimination 
cases we are not proceeding based on whether the contractor has 
or has not met a utilization goal. Instead, we are looking at a 
substantial, usually statistically significant pattern of one 
protected group getting treated much worse in the hiring 
process than the favored group, as well as other evidence from 
our investigations and interviews to draw that conclusion.
    So I don't want you to draw the assumption that somehow 
failing to meet the goal, one leads to violation and something 
that we would sue for.
    Also, if I might answer one other question. Chairman 
Walberg, with all due respect, I think that the numbers with 
respect to the previous administration versus this 
administration are not accurate in so far as the previous 
administration included in its numbers the value of every job 
that they negotiated for, regardless of whether anybody 
actually got that job. In fact, we have decided not to use that 
approach and I would be happy to brief you.
    We have done 6 percent more audits; we have a higher 
findings of discrimination--triple--with respect to vets, much 
higher with respect to Section 503. But we have done it in a 
more quality way and we have recovered more per year on behalf 
of victims of discrimination.
    Ms. Fudge. Thank you very much.
    I just want to say that it is--there are many, many people 
who want to do business with the federal government. There are 
many people who would be willing to provide the information 
that we are requesting today.
    Thank you, and I yield back.
    Chairman Walberg. I thank the gentlelady.
    And I thank Director Shiu for offering to discuss those 
numbers. We would be delighted to discuss those. It is our 
intention to be accurate and to work off of accuracy in issues. 
At present we don't agree, but willing to discuss further.
    I am delighted now to recognize my colleague from Indiana, 
Mr. Rokita, for your 5 minutes of questioning.
    Mr. Rokita. I thank the chairman.
    Ms. Shiu, thank you for being here. Picking up on the 
discussion that you referenced that--with Mr. Fortney, or his 
testimony, rather, does a conciliation agreement, in your 
opinion, have the force and effect of law or not? Right? If 
there is a conciliation agreement, according to Mr. Fortney's 
testimony, that has a quota, that has a number in it, and that 
is violated, quote-unquote, or that is not followed through, 
are there not consequences? Would you not enforce that somehow?
    Ms. Shiu. It depends on the other provisions of the 
agreement. I am not--
    Mr. Rokita. You wouldn't enforce a conciliation agreement?
    Ms. Shiu. It depends on whether there are provisions to 
enforce it, yes. It depends on what is in it. Sometimes 
conciliation agreements--
    Mr. Rokita. Mr. Fortney, with your experience with 
conciliation agreements what have you found with regard to my 
question?
    Mr. Fortney. Rigorous and demanding insistence by the 
agency that all the terms be met as scheduled.
    Mr. Rokita. Right.
    It is a contract. It has the force and effect of law. I 
certainly disagree with your earlier statement and I am 
concerned, as a person who used to run five agencies in a 
previous life, that the head of an agency would be that 
misinformed about the force and effect of an agreement that 
their agency enters into on almost probably a daily or weekly 
basis, and your ability to enforce and your intention to 
enforce such agreements.
    Would you say, speaking of your agency, that it is more 
efficient or less efficient than it was during the previous 
administration?
    Ms. Shiu. Definitely more efficient.
    Mr. Rokita. By what metric would you say that it is more 
efficient?
    Ms. Shiu. By looking at the number of audits that we do, by 
looking at the quality of the audits, by looking at the 
breadth--
    Mr. Rokita. How do you measure quality of the audit?
    Ms. Shiu. We measure quality in a number of different ways 
depending on things that we call deficiencies--technical 
deficiencies or other deficiencies, timeliness. We have worked 
very hard to reduce the timeliness--the time it takes for us to 
investigate cases, the amount of recoveries we get, the amount 
of jobs that we have recovered, whether we have been able to 
save money in litigation--
    Mr. Rokita. Let me stop you there. Let me stop you there at 
timeliness. It seems like an investigation, if it is an honest 
one, at least when I used to be responsible for hundreds of 
investigations, you weren't put on a time schedule because that 
could lead to short circuiting, that could lead to cutting 
corners.
    An investigation takes as long as it needs to find the 
truth. That is what an honest investigation does, so I would 
question--and I appreciate what you are saying, and in fact, I 
agree with it, and apparently other witnesses share the same 
feeling. What measured is what gets done, and you only have to 
ask my previous employees and current employees about what we 
do in terms of strategic planning. But you have to have honest 
metrics, in my opinion.
    One way to do that, I think, is to measure budgets, and we 
are going to pick up this discussion, perhaps, where the 
chairman left it and your response to it. It is true that the 
President's fiscal year 2014 budget request was around $27 
million more than in the final year of the previous 
administration. Is that accurate? You questioned some accuracy, 
and I am not sure if that is what you were talking about or 
not.
    Ms. Shiu. I don't know that to be the case, but if you say 
so I--we can work off of that premise.
    Mr. Rokita. Well, I have figures of--for the record--$81 
million in 2008 to $108.5 million in 2014. So assuming that is 
true, you are saying that you have gotten $41 million in 
financial remedies on behalf of 80,000 workers--$512 per 
worker.
    Ms. Shiu. I believe I said $57 million--
    Mr. Rokita. Okay.
    Ms. Shiu.--on behalf of--
    Mr. Rokita. But the previous administration got $171 
million for 62,000 workers--$2,630 per worker. But you are 
saying there is a difference in how you measure that?
    Ms. Shiu. There is a difference, sir, because we do not 
count the amount of the value of a job if we negotiate extra 
jobs as part of the conciliation agreement, which, by the way, 
is a contract. I think I was reading too much into your 
question, sir. We don't count the value of that job--
    Mr. Rokita. Okay. It is a contract, meaning that you 
enforce it? My question was do you not enforce the contracts, 
because you said this would not be a quota, that these would be 
aspirational, and my question was, if you get into a 
conciliation agreement--
    Ms. Shiu. Yes.
    Mr. Rokita.--and it doesn't meet the number that is in the 
agreement--we have testimony where you said there was an actual 
number--will you not then enforce that agreement?
    Ms. Shiu. Well, it depends on what the agreement says. What 
we anticipate the agreements will say--
    Mr. Rokita. It says that there is a number that you have to 
hire so many people with disabilities and/or veterans.
    Ms. Shiu. What we will enforce, sir, is whatever 
deficiencies have not been worked on with respect to hiring, 
retention--
    Mr. Rokita. Like if you didn't meet the number that is in 
the conciliation agreement, would you enforce on that?
    Ms. Shiu. We will not enforce on the goal or the benchmark 
alone, no.
    Mr. Rokita. Chairman, I yield back. I see that I am out of 
time.
    Chairman Walberg. Thank the gentleman.
    I now recognize the ranking member for his 5 minutes of 
questioning.
    Mr. Courtney. Thank you, Mr. Chairman.
    Mr. Kirschner, I just wanted to cover one point. Again, 
your focus was on the impact of hospitals participating in fee-
for-service managed care programs that are financed through 
TRICARE and FEHB.
    If a hospital was contracting with the federal government 
directly for an NIH grant or any other type of department 
funding, you know, again, for research, clinical trials, 
whatever, again, as a, you know, direct contract between a 
hospital and the federal government, that is a sort of 
different sort of kettle of fish, right? I mean, that is not 
really what your concern is today. I just want to clarify 
that--
    Mr. Kirschner. That is completely correct. If a hospital 
enters into a contract, whether it is a research grant that 
would qualify as a federal contract or if some other 
relationship with the federal contract where it is clear that 
is--the parties are entering into that knowing that is a 
federal contract, then they are knowingly entering into an 
arrangement with the federal government and should be subject 
to the obligations of being a federal contractor.
    Now, they may have concerns similar to those expressed by 
other employers with respect to the burdens imposed there, but 
that is not what our concern is today.
    Mr. Courtney. Right.
    Mr. Kirschner. Our concern is where hospitals enter into a 
contract where on its face it says that this does not make you 
a federal contractor, where the regulations of the entity that 
is operating--
    Mr. Courtney. I appreciate that clarification. And again, I 
just, in terms of the legislation which was mentioned earlier, 
I mean, it is your understanding of that bill that it does not, 
again, change that situation at all, right? I mean, that is--
    Mr. Kirschner. It does not change that. In fact, the--
    Mr. Courtney. Just wanted to clarify that point.
    Mr. Fitzgerald, as the witness here today who is on the 
ground dealing with people affected by these regulations, you 
know, again, I think for some people listening to this they 
might find it kind of incredible that employers resist hiring 
veterans or people with disabilities who obviously, you know, 
have the education and training and even job experience and the 
background. I mean, tell us how these regulations will help, 
since they, in some respect they are being sort of presented 
as, again, not mandates or quotas, but how will they dovetail 
with the efforts that Easter Seals is doing on the street?
    Mr. Fitzgerald. I think by the aspirational goals will 
create opportunities for veterans and people with disabilities. 
I think that employers, if they are working towards achieving a 
goal, create more opportunity, so that I think that qualified 
veterans will have more opportunity to go before an employer, 
sell their skills, show what they can do, and increase the 
opportunity to hire.
    Given the rate of unemployment for people with disabilities 
and for veterans, the current approach is not working as well. 
So I think, once again, you know, it is a cliche but it is 
proven to be true, what measured gets done.
    And I would like to just mention a cost of not providing 
employment. I have eight Vietnam veterans in my residential 
program and we spend on annually $60,000 per year for these 
eight veterans. That comes out to about $480,000 for veterans 
whose aspirations were never met.
    I am a success story. They weren't successful. They didn't 
find the job. They lost hope. And then as the lost hope they 
ran into trouble.
    And today we serve them and support them but there is a 
cost to not creating that opportunity. Employment is kind of 
the foundation and the success mark particularly for veterans 
in transition, and once they have that--so there is a cost in 
not moving towards this.
    And industry today, you know, the new trend is analytics, 
and everything is about developing analytics for smart business 
decisions. Why not have analytics for smart business decisions 
to employ veterans who have served their country proudly? And I 
think we owe them. We owe them opportunity.
    Mr. Courtney. Right.
    So when you described in your initial testimony, you know, 
resistance by some H.R. folks who weren't sure whether somebody 
who comes out of a military experience, you know, would fit 
into the culture of the company that is there, is there other 
examples that you can cite in terms of resistance by companies 
when a veteran shows up at their doorstep in terms of whether 
or not they really should be hired?
    Mr. Fitzgerald. I don't have any other specific examples. I 
think it is the unfamiliarity.
    At an earlier age many more people served in the military 
so they understood military training and could relate it to 
civilian work experience. There are less people that have that 
experience today, so I feel for veterans today, particularly if 
you are in--were in the combat arms, it is harder to translate 
that military experience into civilian occupation.
    Mr. Courtney. Right.
    Mr. Fitzgerald. So I think that is the--it is more 
difficult today.
    Mr. Courtney. Right. Thank you.
    Chairman Walberg. I thank the gentleman.
    I turn to the good doctor from Indiana, Mr. Bucshon, for 
your 5 minutes.
    Mr. Bucshon. Thank you, Mr. Chairman.
    First of all, I would like to completely disagree that 
anyone here today is being resistant to hiring veterans. I find 
that everyone I talk to out there of course has great respect 
for what veterans have done for their country and wants every 
one of them to be employed, and I disagree with the previous 
statements that are to the contrary.
    Ms. Shiu, the question I have--and I am concerned about the 
Americans with Disabilities Act--do you think an employer 
should ask a woman when she comes to be employed whether or not 
she plans to have a family or not?
    Ms. Shiu. No.
    Mr. Bucshon. Okay. Do you think that there are some people 
out there who are employers that may consider that a 
potential--having a potential impact on their future employment 
of that individual?
    Ms. Shiu. Perhaps.
    Mr. Bucshon. Okay. Then why do you think that it is okay 
for businesses now to ask people if they have a disability or 
not?
    Ms. Shiu. Because the ADA says so.
    Mr. Bucshon. They can ask, you can ask people--I ran a 
medical practice that had 100 employees and 15 physicians and I 
can tell you that we never--those type of questions in the 
initial pre-offer stage were not the type of things that we 
would ask. Why? Because it violates the law.
    Ms. Shiu. If it is in furtherance of affirmative action, 
sir, then they are permissible questions.
    Mr. Bucshon. You know, I think you are talking out of both 
sides of your mouth on this issue--I will be frankly honest 
with you--because I have serious concerns about, on one hand, 
saying that employers--people are allowed to have people 
voluntarily say whether they have a disability, but on the 
other hand, saying that, well, it depends on the circumstance, 
that could be a violation of the law. I do think it leaves 
employers wide open to individual lawsuits.
    As a previous employer--and I can tell you that my wife--I 
have four children. My wife is a working mother. She is an 
anesthesiologist. I have direct experience with this, and I 
don't think that employers should be able to ask women whether 
they plan to have a family or not. I think it should be a 
violation of the law because it is discriminatory, potentially.
    So I have serious concerns about what you said today about 
accepting the fact that now, because you want to set a quota, 
the only way to do a quota is to have people self-determine 
whether or not they have a disability so that you can use that 
to establish a quota. That is the issue I have, because I think 
personally it leaves people open to violation of the law, and I 
just think that is a serious problem.
    And I think your intent is--I am not talking about your 
intent or your motivation; I am just thinking, particularly 
based on the law, that you are changing precedent where now 
people--so say what happens, an employer comes in and they 
asked someone that has a disability and the person says, ``I 
refuse to answer that question.''
    Ms. Shiu. That is a perfectly appropriate answer.
    Mr. Bucshon. Right. And so say that person is someone who--
is someone who was told to go in to a particular employer 
because they knew they were going to get asked that question 
and when they walked out of the room their attorney filed a 
lawsuit saying that they were discriminated against because the 
employer didn't--say they didn't get the job.
    The employer says, ``You didn't get the job because you are 
not--you don't have the requirements.'' They say it is because 
they refused to answer whether they have a disability or not. 
Would that be a violation of--would that be a lawsuit that 
would be something you would agree with that they could do 
that?
    Ms. Shiu. It is certainly not a lawsuit I would have taken 
as a plaintiff's lawyer.
    Mr. Bucshon. Why not?
    Ms. Shiu. Because you have to have proof that there was an 
intent to discriminate against someone solely because of their 
disability.
    Mr. Bucshon. Well if somebody comes in--
    Ms. Shiu. There is no nexus--
    Mr. Bucshon.--and you ask them the question and they--as it 
turns out, they say--say they do have a disability but they 
refuse to answer the question--
    Ms. Shiu. Just because a pregnant woman applies for a job 
doesn't mean that if she doesn't get the job it is because she 
was pregnant. I mean, there is an analysis that has to go and I 
would--I find that to be very thin on the facts and the law, 
sir.
    Mr. Bucshon. Yes, well I find your testimony to be very 
thin on the facts, also.
    Mr. Kirschner, I want to ask you a question. Your testimony 
states that over 3,300 hospitals and clinics provide coverage 
to almost 10 million TRICARE beneficiaries that an expansion of 
OFCCP's jurisdiction to classify these hospitals as a federal 
subcontractor will cover almost 60 percent of the registered 
hospitals in the United States.
    If OFCCP is successful in its assertion of jurisdiction 
over hospitals, how do you expect this potentially will affect 
the care for our nation's servicemembers and veterans?
    Mr. Kirschner. Well, each hospital would need to make its 
own decision, but what the DOD has already found in a published 
report is that hospitals are becoming more resistant to signing 
up to participate in TRICARE programs out of a concern that 
they could, after the fact, be found to be federal contractors.
    Mr. Bucshon. So what you are saying is it is going to limit 
access to health care? Because I was a heart surgeon before. I 
know about health care. What you are going to say is maybe a 
lot of community hospitals in smaller communities just aren't 
going to mess with it.
    Mr. Kirschner. Correct. If they are not otherwise federal 
contractors and therefore, just participating in TRICARE or 
FEHBP would cause them to, by that--by performing that medical 
care, become federal contractors, hospitals could make a 
decision to say, ``I don't want that burden--that 
administrative burden, and so therefore we are not going to 
provide care for either servicemembers or for federal employees 
and their families.''
    Mr. Bucshon. Thank you.
    Mr. Chairman, I yield back.
    Chairman Walberg. I thank the gentleman.
    I recognize myself for my 5 minutes of questioning.
    And, Director Shiu, I appreciate the opportunity to sit 
down, hopefully soon, with the issues of the results and the 
data that is there. We simply took--
    Ms. Shiu. Of course.
    Chairman Walberg.--data as communicated by your office on 
the results for the past as well as the present, so without 
understanding any changes that might be there, it is difficult 
to determine.
    I noted earlier our frustration with the administration's 
lack of cooperation with our oversight specifically on this 
important issue. On September 19th we sent the Department of 
Labor an oversight request. Unfortunately, we did not receive a 
response until last Wednesday, right before the holiday.
    I am confused as to why the department was so late in 
delivering a wholly inadequate response, and I state that way 
because the department failed to answer all of our questions or 
provide the internal documents we requested. Based on what we 
did receive, am I to understand the department did not 
communicate with OMB regarding the rule-making and no one was 
denied a meeting with the administration regarding this rule-
making?
    Ms. Shiu. Chairman Walberg, the DOL's Office of 
Congressional and Intergovernmental Affairs guides the process 
for responding to congressional oversight matters. I have not 
been specifically involved in that but I do understand that 
hundreds of pages of documents have been turned over and 
questions were, in fact, answered.
    I also understand that there are ongoing discussions 
between your staff and their staff and I certainly hope we can 
get this resolved and get you the information that you want.
    Chairman Walberg. Well, that is not my understanding.
    Ms. Shiu. Oh, okay.
    Chairman Walberg. In February we held a hearing on guidance 
issued by the department concerning the WARN Act and 
sequestration. In response to similar frustrations with a lack 
of oversight cooperation, Assistant Secretary Oates stated that 
the OCIA handles the oversight requests and her agency was not 
involved in the process.
    I would hate to think that the department is obstructing 
our oversight. Will you assure us that by December 13 we will 
receive a complete and adequate response to our oversight 
request, including all requested materials, documents, and 
communications?
    Ms. Shiu. I will confer with OCIA and our solicitors. On 
our staff we have had people who have been working with OCIA on 
the oversight request, just to allay that one particular fear.
    Chairman Walberg. Well, in our deliberative process we need 
those issues resolved. And so I would continue to push for that 
to be made. And I know there are a lot of pushes that go on, 
but it is my responsibility and this subcommittee's 
responsibility to get the answers that we need to make accurate 
decisions.
    The Department of Defense stated in 2010 that it was 
impossible to achieve the TRICARE mission of providing 
affordable health care for our nation's active duty and retired 
military members and their families if onerous federal 
contracting rules were applied to more than 500,000 TRICARE 
providers in the United States. Are you at all concerned, Ms. 
Shiu, about the lack of access to care the Department of 
Defense believes our nation's servicemembers and veterans will 
face if OFCCP continues to assert jurisdiction over health care 
providers, along with testimony we received from Mr. Kirschner 
today about the practical ramifications to the hospital 
industry?
    Ms. Shiu. Of course I am concerned that everybody has 
appropriate health care, but I don't believe that it is--OFCCP 
has not expanded our jurisdiction. Whatever people may think, 
we just not--we have not expanded our jurisdiction over 
TRICARE-covered subcontractors nor do we believe that all 
health care providers that participate in TRICARE are 
subcontractors.
    In fact, our subcontractor coverage is determined on a 
case-by-case basis. The necessary to performance prong of the 
definition at issue in the TRICARE case has been in the 
regulations since 1978.
    Chairman Walberg. Well, let me jump in there and ask again, 
then, Mr. Kirschner, why would you disagree with that?
    Mr. Kirschner. On several points, Chairman.
    First of all, the OFCCP has expanded its jurisdiction. The 
OFCCP had previously issued directives--internal directives--
stating that, for example, that coverage under the FEHBP would 
not make you a federal contractor. The OFCCP has rescinded 
that.
    The OFCCP has also taken the position that participation in 
TRICARE in a managed care component of TRICARE would make 
hospitals a government contractor. That is a new position. 
Previously, TRICARE participation like FEHBP, like Medicare, 
was treated as a federal financial assistance that did not 
result in the hospital being a federal contractor.
    The OFCCP's current position, which is, as stated by 
Director Shiu, a case-by-case basis, is completely unworkable 
from a hospital's perspective. When the hospital enters into 
a--
    Chairman Walberg. I am going to have to cut it off here. I 
wish we could go on, and we will, on this issue and others 
related to it in the future.
    But I think what I did want to get at was that while there 
is a statement from the department's position, yet the 
practical ramifications and impressions out in the field are so 
much different, and we need to deal with that.
    But my time is expired, so I will try to hold myself to 
that, as well.
    I thank the panel for your participation today.
    And now I turn to my ranking member for final comments.
    Mr. Courtney. Thank you, Mr. Chairman. Again, before making 
my remarks I just want to introduce a joint letter which was 
signed by the Bazelon Center for Mental Health Law, National 
Disability Rights Network, Epilepsy Foundation, VetsFirst, 
Paralyzed Veterans of America, the National Down Syndrome 
Congress, Easter Seals, the National Council on Independent 
Living, and Source of America--again, a joint letter in support 
of the two rules that we have been discussing here today.
    Also, a separate letter from the Women's Legal Defense and 
Education Fund, the National Women's Law Center, and the 
Leadership Conference on Civil and Human Rights. So if I can 
submit those?
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    Chairman Walberg. Without objection, and hearing none, they 
will be added to the record.
    Mr. Courtney. Great. Thank you.
    Again, I want to thank the witnesses. This has been a very, 
I think, healthy, somewhat adversarial or--at times, but that 
is the way our system is set up, and again, I think there has 
been some good information that we have elicited from today's 
hearing, and I am sure there will be more follow up with the 
agency, particularly in terms of the question of just 
enforcement, which I think is a legitimate concern that people 
really should, again, get some more guidance from you in terms 
of how these rules would be enforced.
    But I also think it is important that we recognize, you 
know, that chart over there, as well, which is that there are 
hundreds of thousands of Americans who I think are prepared to 
contribute to this country, and we, again, and particularly in 
the area of federal contracts, need to really ensure that we 
are--in a way that is not intrusive or excessive mandates, 
trying to advance a goal which I think most Americans would 
support.
    You know, I would say, you know, Mr. Fitzgerald's comments 
regarding the obstacles that veterans face, which again, were 
challenged, the fact of the matter is the unemployment rate for 
veterans, particularly Iraq and Afghanistan War veterans, 
exceed both their own age group and the country as a whole. 
That is unacceptable.
    And, you know, when Admiral Mullen, who was chairman of the 
Joint Chiefs, left military service, he gave his farewell 
address, which was a remarkable speech, in my opinion, but he 
really warned about the fact that our military, as Mr. 
Fitzgerald said, has become the 1 percent. We talk a lot about 
the 1 percent, the 99 percenters, but there is no question--you 
know, numbers don't lie--that the fact of the matter is that 
the--particularly with an all volunteer force, which is so 
valuable in so many ways--but the fact of the matter is that 
the interaction between the vast, vast majority of our country, 
including employers and some who, again, benefit from federal 
contracts, and their exposure to people who serve in the 
military--as Admiral Mullen--you can't get more credible than 
Mike Mullen, is very limited just because of just the way 
things have developed over time in terms of how we raise our 
forces for our country.
    So the unemployment rate, which again, is unacceptably high 
for people leaving the military despite the best efforts for 
tax incentives for employers, and I am sure a lot of members, 
including all who are on the committee who do the best to 
promote, at job fairs and what not, hiring these folks, we are 
falling short here. And to say that we can't set up some system 
where federal contractors can sort of be part of that solution, 
again, I think is something that we really should do better.
    I mean, we really need to use our best, balanced, 
reasonable approach to try and, again, help these folks who 
have done so much over the last 12 years--longest military 
conflict in American history with an all volunteer force. 
Unemployment rate that, again, far exceeds the norm. You know, 
that just is not something that I think any American would find 
to be satisfactory or acceptable.
    So again, hopefully this dialogue which we started here 
today will answer some of the questions that have been brought 
forth. Again, Mr. Kirschner has raised, I think, some important 
issues about impact on programs that have--that help our 
TRICARE military retirees and active duty folks, in terms of 
making sure that we maintain access for hospital services.
    And again, I want to compliment the chairman for holding 
this hearing and look forward to working with you in the future 
to try and, again, work out some of the kinks that have come 
forward here today. And with that, I yield back.
    Chairman Walberg. I appreciate those comments and I respect 
them because I know they are true. And I look forward to 
working together on it.
    This is an important issue, and I appreciate the attention 
to this hearing today--each of you in the room as well as those 
of you in the panel. There is no one in this room at this dais 
or who has left this room that does not want to create more 
jobs, more opportunity for everyone in our great nation.
    And that includes those that would be considered disabled 
for whatever reason, and certainly those who have served our 
country in settings that many of us can only assume about the 
extent of what that means but appreciate it nonetheless.
    We want to encourage growth. We want to encourage 
opportunity.
    We want to encourage hope in our society that indeed, in 
this country, of any country on the face of the earth, there is 
still that wonderful dream called the American dream that can 
still be achieved and that there are entities in our 
governmental system that will do their best to assure that 
unnecessary roadblocks are kept out of the way, not allowed to 
be there, but also that same government and its system will 
recognize the reality of what human frailty and options and 
challenges that are out there in the real world put in the way 
of well-meaning people that still must have certainty reign in 
order to produce jobs and hope and economy for all people.
    Our nation has been successful in doing that better than 
any other nation, and that is why a hearing like this is put in 
place for oversight to make sure that we don't vault ourselves 
backwards.
    And so I would say thank you, certainly, to a panel that is 
made up of people who live in that real world, whether it be in 
health care, which is, frankly, frustrated right now with all 
sorts of uncertainty in how to go forward in dealing with a 
health care plan that isn't just a Web site but is a product 
that has produced a lot of uncertainty right now; with entities 
that deal with veterans and their specific needs and realizes 
the outcomes and the breakdown when we don't meet those needs 
and find now secondary solutions that have to be undertaken for 
their lives; educational systems that are challenged with costs 
to both students and the institutions to get back on track 
still as a world leader but, nonetheless, in a global challenge 
now that we have not had before--to meet those needs and still 
deal with bureaucratic challenges to your handling of that; and 
then ultimately, to human resource people who have to have 
Solomon's sword in hand at times to try to split through 
questions that come because of competing catch-22 situations 
put in law by well-meaning entities that need the touch of 
reality that comes from the real world.
    And then, Ms. Shiu, your response with doing the job you 
have been asked to do, and that is why we are here to help you 
do that and I hope that will continue to be the process that we 
can work together on.
    Having said all of that, we look forward to additional 
response, potentially additional hearings, roundtables, 
whatever it might take to make the system work for our people 
for which we at this dais have been elected to represent. There 
being no further business, the committee stands adjourned.
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    [Questions submitted for the record and their responses 
follow:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                ------                                

    [Whereupon, at 11:25 a.m., the subcommittee was adjourned.]

                                 [all]