OMWI Contract Standard PRA Supporting Statement 4 27

SUPPORTING STATEMENT
FOR THE PAPERWORK REDUCTION ACT SUBMISSION FOR A NEW
INFORMATION COLLECTION
“Contract Standard for Contractor Workforce Inclusion”

JUSTIFICATION
1.

Legal and Administrative Requirements

Section 342(a)(1)(A) of the Dodd-Frank Wall Street Reform and Consumer Protection
Act (the Dodd-Frank Act) provides for certain agencies, including the Securities and Exchange
Commission (the Commission), to establish an Office of Minority and Women Inclusion
(OMWI). 1 Section 342(c)(2) of the Dodd-Frank Act requires that the OMWI Director include in
the procedures for evaluating contract proposals and hiring service providers a component that
gives consideration to the diversity of an applicant, to the extent consistent with applicable laws.
In addition, section 342(c)(2) requires that contracting procedures include a written statement, in
the form and content prescribed by the OMWI Director, that a contractor shall ensure, to the
maximum extent possible, the fair inclusion of women and minorities in the workforce of the
contractor and, as applicable, subcontractors.
Section 342(c)(3)(A) further requires the OMWI Director to establish standards and
procedures for determining whether an agency contractor or subcontractor “has failed to make a
good faith effort to include minorities and women” in its workforce. If the OMWI Director
determines that a contractor has failed to make good faith efforts, section 342(c)(3)(B)(i)
provides that the Director shall recommend to the agency administrator that the contract be
terminated. Upon receipt of such a recommendation, section 342(c)(3)(B)(ii) provides that the
1

12 U.S.C. 5452.

agency administrator may terminate the contract, make a referral to the Office of Federal
Contract Compliance Programs of the Department of Labor, or take other appropriate action.
The Commission developed a Contract Standard for Contractor Workforce Inclusion
(Contract Standard) to implement the requirements of section 342 (c)(2) of the Dodd-Frank Act.
The Contract Standard will be included in the Commission’s solicitations and resulting contracts
for services valued at $100,000 or more. The Contract Standard requires the contractor to
include the substance of the Contract Standard in all subcontracts for services awarded under the
contract with a dollar value of $100,000 or more. Accordingly, the requirements of the Contract
Standard will apply to covered subcontractors, as prescribed in section 342(c)(2) of the DoddFrank Act.
The Contract Standard contains a “collection of information” within the meaning of the
Paperwork Reduction Act of 1995 (PRA). 2 The Contract Standard requires a contractor to
provide specified documentation, upon the request of the Commission’s OMWI Director, to
demonstrate that it has made good faith efforts to ensure the fair inclusion of minorities and
women in its workforce and, as applicable, to demonstrate that its covered subcontractors have
made such good faith efforts.
2.

Purpose and Use of the Information Collection

The purpose of the collection of information is to satisfy the requirements of section
342(c)(3)(B) of the Dodd-Frank Act. The collection of information will allow the Commission’s
OMWI Director to determine whether the contractor has complied with its obligations to make
good faith efforts to ensure the fair inclusion of minorities in its workforce, and as applicable, to

2

44 U.S.C. 3501 et seq.

2

determine whether the contractor’s covered subcontractors have similarly complied with their
obligations to made such good faith efforts.
3.

Consideration Given to Information Technology

Contractors have the option of delivering this collection of information requirement by
electronic or paper submissions.
4. Duplication of Information
The collection of information will not duplicate existing information.
5.

Reducing the Burden on Small Businesses

The collection of information will affect small as well as larger entities. As described
below in Item 12 of this Supporting Statement, we believe the burden of complying with the
collection of information will be low for all entities, regardless of size.
6.

Consequences of Not Requiring Collection

Without the implementation and use of the collection of information, the Commission
would not be able to satisfy the requirement of section 342 (c)(3)(B) that the OMWI Director
determine whether the agency contractors have failed to make good faith efforts to ensure the
fair inclusion of minorities and women in their workforces.
7.

Inconsistencies with Guidelines in 5 CFR 1320.5(d)

The Contract Standard calls for contractors to provide the specified documentation to
demonstrate its good faith efforts to comply with the provisions of the Contract Standard within
ten (10) business days of a written request from the Commission’s OMWI Director or designee,
or such longer time as the OMWI Director or designee determines. The specified documentation
should be readily available when the request is received from the OMWI Director. As explained
in Item 12 of this Supporting Statement, we estimate that it will take all contractors on average

3

approximately one hour to retrieve and submit the documentation specified in the Contract
Standard. Although shorter than the 30-day guideline in 5 CFR 1320.5(d)(2)(ii), we believe that
the ten days provided under the Contract Standard is a reasonable amount of time to respond a
request from the OMWI Director to submit the specified documentation. The Commission’s
Contract Standard is modeled after the contract clause entitled “Minority and Women Inclusion”
in the Department of Treasury’s Acquisition Regulations, which similarly requests that the
contractor provide documentation that demonstrates its good faith efforts within ten business
days of a written request from the contracting officer. 3
8.

Consultations Outside the Agency

On February 13, 2015, the Commission published a notice in the Federal Register (80 FR
8119) soliciting comments on the proposed information collection for 60 days. The Commission
received no comments on the information collection.
9.

Payment or Gifts

There are no gifts or payments to respondents.
10.

Assurance of Confidentiality

The Commission makes no express assurance of confidentiality in relation to this
information collection. However, contractors submitting information in response to a request
from the OMWI Director that is considered sensitive and confidential will be advised to follow
the procedures under the Commission’s regulations implementing the Freedom of Information
Act (FOIA) for designating information as confidential business information or seeking
confidential treatment. 4

3

See Department of the Treasury final rule amending the Department of the Treasury Acquisition Regulation
(DTAR) to include a contract clause on minority and women inclusion, 79 FR 15551(March 20, 2014).
4
17 CFR 200.83.

4

11.

Sensitive Questions

No questions of a sensitive nature are asked.
12.

Information Collection Burden Estimate
A. Respondents

The Contract Standard on Contractor Workforce Inclusion will be included in
Commission contracts and subcontracts for services valued at $100,000 or more. Based on the
data showing the dollar value of contacts and subcontracts awarded in FY 2012 and FY 2013, we
estimate that 170 contractors 5 would be subject to the collection of information requirement
under the Contract Standard. 6 Approximately 120 of these contractors have 50 or more
employees, while about 50 contractors have fewer than 50 employees.
a. Recordkeeping Burden
The documentation requested to demonstrate good faith efforts to ensure the fair
inclusion of minorities in the contractor’s workforce may include, but is not limited to: 1) the
total number of employees in the contractor’s workforce, and the number of employees by race,
ethnicity, gender, and job title or EEO-1 job category (e.g., EEO-1 Report(s)); 2) a list of
covered subcontract awards under the contract that includes the dollar amount of each
subcontract, date of award, and the subcontractor’s race, ethnicity, and/or gender ownership
status; 3) the contractor’s plan to ensure the fair inclusion of minorities and women in its
workforce, including outreach efforts; and 4) for each covered subcontractor, the information
requested in items 1 and 3 above. This collection of information under the Contract Standard
would impose no new recordkeeping burdens on the estimated 120 contractors that have 50 or
more employees. Such contractors are generally subject to recordkeeping and reporting
5
6

Unless otherwise specified, the term “contractors” refers to contractors and subcontractors.
Data was obtained from FPDS and usaspending.gov.

5

requirements under the regulations implementing Title VII of the Civil Rights Act 7 and
Executive Order 11246 (“EO 11246”). 8 Under the regulations implementing EO 11246,
contractors that have 50 or more employees (and a contract or subcontract of $50,000 or more)
are required to maintain records on the race, ethnicity, gender, and EEO-1 job category of each
employee. 9 Such contractors are also required to develop and maintain a written program, which
describes the policies, practices, and procedures that the contractor uses to ensure that applicants
and employees receive equal opportunities for employment and advancement. 10 In lieu of
developing a separate workforce inclusion plan, a contractor would be permitted to submit its
existing written program prescribed by the EO 11246 regulations as part of the documentation
that demonstrates the contractor’s good faith efforts to ensure the fair inclusion of minorities and
women in its workforce. Thus, approximately 120 contractors are already required to maintain
the information that may be requested under the Contract Standard.
The estimated 50 contractors that employ fewer than 50 employees are required under the
regulations implementing EO 11246 to maintain records showing the race, ethnicity and gender
of each employee. We believe that these contractors also keep job title information during the
normal course of business. However, contractors that have fewer than 50 employees may not
have the written program prescribed by the EO 11246 regulations or similar plan that could be
submitted as part of the documentation to demonstrate their good faith efforts to ensure the fair
inclusion of minorities and women in their workforces. Accordingly, contractors with fewer
than 50 employees may have to create a plan to ensure workforce inclusion of minorities and
women.
7

42 U.S.C. 2000e, et seq.
Executive Order 11246, 30 Fed. Reg. 12,319 (Sept. 24, 1965).
9
See 41 CFR 60-1.7.
10
See 41 CFR part 60-2.
8

6

In order to estimate the burden on contractors associated with creating a workforce
inclusion plan, we considered the burden estimates for developing the written programs required
under the regulations implementing EO 11246. 11 As there is no regulatory blueprint for a
workforce inclusion plan, and contractors creating a workforce inclusion plan are not required to
perform the same types of analyses required for the written programs prescribed by the EO
11246 regulations, we believe that to develop a workforce inclusion plan contractors with fewer
than 50 employees would require approximately a third of the hours that contractors of similar
size spend on developing the written programs required under the EO 11246 regulations.
Accordingly, we estimate that contractors would spend about 24 hours of employee resources to
develop a workforce inclusion plan. This would be a one-time recordkeeping burden. After the
initial development, we estimate that each contractor with fewer than 50 employees would spend
approximately 10 hours each year updating and maintaining its workforce inclusion plan.
The Contract Standard also would require contractors to maintain information about
covered subcontractors’ ownership status, workforce demographics, and workforce inclusion
plans. Contractors would request this information from their covered subcontractors, who would
have an obligation to keep workforce demographic data and maintain workforce inclusion plans
because the substance of the Contract Standard would be included in their subcontracts. Based
on data describing recent Commission subcontractor activity, we believe that very few
subcontractors will have subcontracts under Commission service contracts with a dollar value of
11

According to the Supporting Statement for the OFCCP Recordkeeping and Requirements-Supply Service, OMB
Control No. 1250-003 (“Supporting Statement”), it takes approximately 73 burden hours for contractors with 1-100
employees to develop the initial written program required under the regulations implementing EO 11246. We
understand the quantitative analyses prescribed by the Executive Order regulations at 41 CFR part 60-2 are a timeconsuming aspect of the written program development. As there is no requirement to perform these types of
quantitative analyses in connection with a workforce inclusion plan under the Contract Standard, we believe the
workforce inclusion plan will take substantially fewer hours to develop. The Supporting Statement is available at
reginfo.gov.

7

$100,000 or more. 12 These subcontractors may already be subject to similar recordkeeping
requirements as principal contractors. Consequently, we believe that any additional
requirements imposed on subcontractors would not significantly add to the burden estimates
discussed above.
b. Reporting Burden
With respect to the reporting burden, we estimate that it would take all contractors on
average approximately one hour to retrieve and submit to the OMWI Director the documentation
specified in the Contract Standard. We expect to request documentation from up to 100
contractors each year and therefore the burden estimate for annual reporting is 100 hours.
c. Burden Hours monetization
The estimated annualized cost to contractors associated with the recordkeeping and
reporting burden resulting from the collection of information included in the Contract Standard is
based on Bureau of Labor Statistics data in the publication “Employer Costs for Employee
Compensation” (2014), which lists total compensation for management, professional, and related
occupations as $55 per hour and administrative support as $25. 13
With respect to the recordkeeping burden for developing and updating the workforce
inclusion plan, we estimate that 75 percent of the burden hours would be management,
professional, and related occupations and 25 percent would be administrative support.

12

A search of subcontract awards on the usaspending.gov website showed that four subcontractors in FY 2012 and
three subcontractors in FY 2013 had subcontracts of $100K or more. See data on subcontract awards available at
http://usaspending.gov.
13

For purposes of these calculations, the average salaries of $54.95 and $24.76 have been rounded up.

8

As for the reporting burden, we estimate that 75 percent of the burden hours for retrieving
and submitting documentation to the OMWI Director would be administrative support and 25
percent would be professional, management, and related occupations.
The estimated aggregate burden hours and monetary equivalent for the information
collection are summarized in the table below: 14
Paperwork Activity
Initial Workforce Inclusion Plan
One-time Implementation
Burden
Updating and Maintaining
Workforce Inclusion Plan (after
first year)
Retrieving and Submitting
Documentation of Good Faith
Efforts to OMWI Director
Total

Number of
Respondents

Burden Hours
Per Respondent

Annual
Burden
Hours

Cost of Burden
Hours Per
Respondent

Annualized Burden
Hour Monetary
Equivalent

50

8*

400

$380

$19,000

50

7**

350

$332.50

$16,625

100

$32.50

$3250

100
_____

1
_____

850

$38,875

*24 hours annualized over 3 years
**After first year; 20 hours (10 each year) annualized over 3 years (rounded to 7 burden hours)

13.

Total Annualized Cost Burden

There are no costs associated with this information collection.
14.

Cost to Federal Government

The estimated annual cost to the government for this collection of information is $27,755.
This amount reflects an estimate of the amount of time staff that would be needed to review and
analyze documentation submitted by an estimated 100 contractors each year pursuant to the
Contract Standard. 15

14

The burden hour and cost estimates are solely for the purpose of the Paperwork Reduction Act and are not derived
from a survey or study of the paperwork burdens resulting from compliance with the Contract Standard.
15

The time required by staff to review and analyze documentation submitted pursuant to the Contract Standard will
vary according to the size of the contractor. Of the 100 contractors expected to submit documentation each year, 71

9

15.

Explanation of Changes in Burden

This is a new collection of information.
16.

Information Collections Planned for Statistical Purposes

Not applicable.
17.

Approval to Omit the OMB Expiration Date

Not applicable.
18.

Exceptions to Certification

This collection complies with the requirements in 5 CFR 1320.9.
A. STATISTICAL METHODS
Not applicable.

contractors will have 50 or more employees, and 29 contractors will have fewer than 50 employees. We estimate
that it would take agency staff approximately one hour to review the documentation submitted by contractors with
fewer than 50 employees and approximately six hours to review documentation submitted by contractors with 50 or
more employees. Thus, we estimate that it will take approximately 455 hours each year to review and analyze the
documentation submitted by contractors. The estimated cost is based on the midpoint of the Washington, DC annual
salary for SK-14 employees ($126,452), divided by the Federal employee year of 2087 hours (rounded to $61),
multiplied by 455 hours.

10