OMWI Contract Standard PRA Extension Supporting Statement FV

SUPPORTING STATEMENT
FOR THE PAPERWORK REDUCTION ACT INFORMATION COLLECTION
SUBMISSION
“Contract Standard for Contractor Workforce Inclusion”
OMB Control No. 3235-0725

A. 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 the 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) of the Dodd-Frank Act 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 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.
To implement the acquisition-specific requirements of section 342(c) of the
Dodd-Frank Act, the Commission adopted a Contract Standard for Contractor Workforce
Inclusion (Contract Standard). The Contract Standard is 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 with a dollar value of $100,000 or more awarded
under the contract. Accordingly, the requirements of the Contract Standard apply to
covered subcontractors, as prescribed in section 342(c)(2) of the Dodd-Frank Act.

1

12 U.S.C. 5452.

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 allows the
Commission’s OMWI Director to determine whether the contractor has complied with its
obligations under the Contract Standard to make good faith efforts to ensure the fair
inclusion of minorities in its workforce, and as applicable, to determine whether the
contractor’s covered subcontractors have similarly complied with their obligations to
make 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) of the
Dodd-Frank Act 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
2

44 U.S.C. 3501 et seq.

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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 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 March 19, 2018, the Commission published a notice in the Federal Register
(83 FR 12042) soliciting comments on its intention to request an extension of this
currently approved information collection, and allowed the public 60 days to submit
comments. The Commission received no comments.
9.

Payment or Gift to Respondents

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 are 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
11.

Sensitive Questions

No questions of a sensitive nature are asked.
12.

Estimate of Information Collection Burden
a. Respondents

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.

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We estimate that 190 contractors would be subject to the collection of information
requirement under the Contract Standard. 5 Approximately 115 of these contractors have
50 or more employees, while about 75 contractors have fewer than 50 employees. Since
the last approval of this information collection, we adjusted the estimated number of
contractors from 170 contractors to 190 contractors based on the number of contractors
awarded contracts during the last two years that were subject to the Contract Standard. 6
In addition, we adjusted the number of contractors that have 50 or more employees and
the number that have fewer than 50 employees to reflect the percentages of contractors
meeting these workforce size thresholds among all contractors reviewed by OMWI for
compliance with the Contract Standard during the last two years.
b. 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 imposes no new
recordkeeping burden on the estimated 115 contractors that have 50 or more employees.
Such contractors are generally subject to recordkeeping and reporting 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 may
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 115 contractors
are already required to maintain the information that may be requested under the Contract
Standard.
5

Unless otherwise specified, the term “contractors” refers to contractors and subcontractors.
Data was obtained from FPDS and usaspending.gov.
7
42 U.S.C. 2000e, et seq.
8
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.
6

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The estimated 75 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
develop a plan to ensure workforce inclusion of minorities and women.
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 We also revised the
estimated time required to develop and update a plan for workforce inclusion of
minorities and women since the last approval of this information collection. Based on
OMWI’s review of the plans and other documentation submitted by contractors with
fewer than 50 employees to demonstrate compliance with the Contract Standard, we
believe such contractors would require approximately 25 percent 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 18
hours of employee resources to develop a plan for workforce inclusion of minorities and
women. This one-time implementation burden annualized would be 450 hours.
After the initial development, we estimate that each contractor with fewer than 50
employees would spend approximately 8 hours each year updating and maintaining its
plan for workforce inclusion of minorities and women. The Commission estimates that
the annualized recurring burden associated with the information collection would be 375
hours. Thus, the Commission estimates the annual recordkeeping burden for such
contractors would total 825 hours.
The Contract Standard requires 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 is included in
their subcontracts. Based on data describing recent Commission subcontractor activity,
we believe that very few subcontractors will have subcontracts 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 time-consuming 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.

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$100,000 or more under Commission service contracts. 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.
c. 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 we estimate the total annual reporting
burden to be 100 hours. 13
d. Burden hour monetization
The estimated annualized cost to contractors associated with the recordkeeping
and reporting burden resulting from this collection of information is based on Bureau of
Labor Statistics data in the publication “Employer Costs for Employee Compensation”
(2017), which lists total compensation for management, professional, and related
occupations as $60 per hour and administrative support as $27. 14
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. 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. For administrative convenience,
the presentation of the totals related to the paperwork burden hours have been rounded to the
nearest whole number and the cost totals have been rounded to the nearest dollar. 15

12

A search of subcontract awards on the usaspending.gov website showed that three subcontractors in FY
2016 and six subcontractors in FY 2017 had subcontracts of $100,000 or more. See data on subcontract
awards available at http://usaspending.gov.
13
The estimated burden hours are solely for the purpose of the Paperwork Reduction Act. They are not
derived from a survey or study of cost of compliance with the Contract Standard
14
For purposes of these calculations, the average salaries of $59.89 and $26.68 have been rounded up.
15
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.

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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
l

75

6*

450

$311

$23,325

375

$259

$19,425

$35

$3500

75

100
_____

5**
1

100

_____

925

$46,250

*18 hours annualized over 3 years

**After first year; 16 hours (8 each year) annualized over 3 years

13.

Estimate of Total Annualized Cost Burden

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

Estimate of Cost to Federal Government

The estimated annual cost to the government for this collection of information is
$31,680. 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. 16
15.

Explanation of Changes in Burden

The changes in the estimated annual burden hours from 850 to 925 are due to an
increase in the estimated number of contractors that would be subject to recordkeeping
burden as a result of this collection of information, from 50 contractors to 75 contractors. In
addition, the changes reflect a decrease in the annualized one-time implementation burden
hours associated with developing a plan for workforce inclusion (from 8 to 6 burden hours)
and a decrease in the annualized burden hours associated with updating the plan (from 7 to 5
burden hours).

16

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, 60 contractors will have 50 or more employees, and 40 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 400 hours each year to review and analyze the documentation submitted by contractors.
The estimated annual cost is based on the value of staff time devoted this activity and related overhead.

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16.

Information Collections Planned for Statistical Purposes

Not applicable.
17.

Display of OMB Expiration Date

Not applicable.
18.

Exceptions to Certification

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

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