/>iThe Trump Administration’s recently passed Fiscal Year 2026 budget eliminates all funding for the Office of Federal Contract Compliance Programs (OFCCP). The “Big Beautiful Bill” dismantles the agency and transfers its remaining responsibilities to other federal offices, continuing the Administration’s significant changes to federal contractor oversight.
A Legacy Agency on the Chopping Block
Established in 1965 and housed within the U.S. Department of Labor, the OFCCP has been responsible for ensuring that federal contractors comply with affirmative action and nondiscrimination obligations under Executive Order 11246, Section 503 of the Rehabilitation Act, and the Vietnam Era Veterans' Readjustment Assistance Act (VEVRAA). These programs required proactive affirmative action plans and systemic reviews—not merely responses to individual complaints.
However, the FY2026 budget calls for zeroing out OFCCP’s funding, effectively abolishing the agency. The move follows the January 2025 issuance of Executive Order 14173, which revoked EO 11246’s affirmative action mandates. Since then, OFCCP operations have been scaled back drastically—from approximately 479 staff members across 55 offices to fewer than 50 employees in just four regional locations.
In alignment with this action, on June 18, 2025, OFCCP submitted a Proposed Rule titled “Rescission of Executive Order 11246 Implementing Regulation”. In addition to removing regulations related to EO 11246, the OFCCP proposed the removal of self-identification and utilization goals, which would remove the requirements for contractors to invite applicants and employees to self-identify as disabled and to meet a 7% utilization goal for individuals with disabilities. While removing the utilization goal, the OFCCP proposal would retain the requirement that contractors evaluate the effectiveness of their outreach and recruitment efforts for individuals with disabilities.
Transfer of Functions
Under the Administration’s plan, the limited remaining responsibilities of the OFCCP would be transferred elsewhere: Section 503 disability discrimination enforcement would move to the Equal Employment Opportunity Commission (EEOC), while VEVRAA oversight would be absorbed by the Veterans’ Employment and Training Service (VETS), another arm of the Department of Labor. Congressional action will be necessary to effectuate aspects of the reorganization.
Additional OFCCP Activities
Interestingly, on July 2, 2025, U.S. Secretary of Labor Lori Chavez-DeRemer issued Order 08-2025, allowing for the OFCCP to resume its enforcement of Section 503 and VEVRAA. Previously, the acting Secretary of Labor held Section 503 and VEVRAA enforcement in abeyance. Moreover, this order noted that the certification period will remain closed, while also extending the moratorium on enforcement activities related to Veteran Affairs Health Benefits Programs.
On June 27, 2025, Director Catherine Eschbach sent a letter to federal contractors asking them to voluntarily submit information to the agency explaining their efforts to “wind down” programs implemented to comply with EO 11246. In the letter, the Director requests contractors inform the OFCCP that they have (1) reviewed their EO 11246 compliance programs; (2) determined whether modification of such programs are necessary; and, if so, (3) what changes are being implemented. Contractors were provided 90 days to submit the requested information.
