Office of Federal Contract Compliance Programs
(OFCCP)
Department of Labor26 million workers employed by federal contractors; anti-discrimination enforcement
Summary
The Office of Federal Contract Compliance Programs (OFCCP) is the Department of Labor unit that checks whether companies holding federal contracts follow anti-discrimination and affirmative-action rules for their workers, including protections for people with disabilities and veterans. The FY2027 budget proposes eliminating OFCCP entirely, cutting its full $101 million budget (a 100% cut), and shifting its remaining legal duties to a newly created Office of Civil Rights inside the Labor Department.
Who Is Affected
OFCCP has historically overseen roughly 26 million workers employed by the roughly 200,000 companies and worksites that hold federal contracts or subcontracts, monitoring compliance with Section 503 of the Rehabilitation Act (workers with disabilities) and the Vietnam Era Veterans' Readjustment Assistance Act, or VEVRAA (veterans). This is the second year in a row the administration has proposed zeroing out the office; Congress rejected the same plan for FY2026 and instead funded OFCCP at $101 million.
What this cut would actually mean
If OFCCP is eliminated, the dedicated agency that audits federal contractors, investigates discrimination complaints, and can bar companies from future contracts for violations would disappear, with its narrower Section 503/VEVRAA duties shifted to a not-yet-established Office of Civil Rights. Legal experts note this transfer requires congressional action to move enforcement authority and could leave gaps in oversight during the transition, meaning fewer compliance reviews and slower response to discrimination complaints from contractor employees, including disabled workers and veterans, even though the underlying legal protections technically remain on the books.
Why this hits Alabama harder
Alabama is one of the top states in the country for federal contract dollars relative to the size of its economy, so eliminating OFCCP's anti-discrimination enforcement for federal contractor workers would hit Alabama harder than most states. The Huntsville area alone has over 92,000 defense-related federal contractor and government jobs tied to Redstone Arsenal, showing how many Alabama workers depend on federal contracting. Because Alabama relies more heavily on federal contract work than most states, its contractor workforce would lose civil-rights protections at a higher rate than the national average.
- Geography of Small Business Contracts: Where Federal Procurement Dollars are Awarded to Small Businesses — Congressional Research Service report identifying Alabama as one of the states that consistently ranks among the highest for federal contract dollars relative to state GDP, even though it does not have among the nation's largest population or economy.
- Redstone Arsenal: Driving economic impact and shaping Huntsville's future — City of Huntsville report noting Redstone Arsenal supports more than 92,000 Department of Defense military, government, and contractor jobs in the Tennessee Valley region, underscoring how many Alabama workers are employed by federal contractors.
Sources
- White House Proposed Budget Targets OFCCP, Section 503, and VEVRAA — Explains that Congress rejected the FY2026 elimination proposal and funded OFCCP at $101 million, and details the FY2027 proposal to again defund OFCCP and shift disability/veteran enforcement to an expanded Office of Civil Rights.
- FY2027 Appropriations Bill Proposes to Zero Out OFCCP & Cut DOL Funding by 27% — Reports that the FY2027 bill eliminates all OFCCP funding, tying it to Executive Order 14173, alongside a broader 27% cut to the Department of Labor's discretionary budget.
- DOL Plans to Eliminate OFCCP Under New Budget — Legal experts discuss the practical and legal complications of shutting down OFCCP and transferring its enforcement authority, including the need for congressional action.
- President's FY 2027 Budget Proposal Moves Enforcement of Section 503 & VEVRAA to a new Office of Civil Rights at DOL — Details how the FY2027 budget proposes moving Section 503 and VEVRAA enforcement to a new DOL Office of Civil Rights after eliminating OFCCP.
- FY 2027 Department of Labor Budget in Brief — The Department of Labor's own budget justification document stating the elimination of OFCCP and transfer of its remaining statutory functions to a new Office of Civil Rights.
- Congressional Deal Funds DOL, Rejects Plan To Eliminate OFCCP — Confirms Congress funded OFCCP at $101 million for FY2026 rather than eliminating it as the administration had proposed.
Administration's Stated Rationale
“Federal contractor anti-discrimination requirements considered DEI overreach; OFCCP eliminated per executive order.”