Last year, the Office of Federal Contract Compliance Programs (OFCCP) issued a notice of proposed rulemaking (NPRM) to amend the nondiscrimination and affirmative action requirements regarding individuals with disabilities for federal contractors and subcontractors. Among other changes, the proposed rule introduced a utilization goal of 7 percent for individuals with disabilities.

The OFCCP’s NPRM, published in the Federal Register on December 9, 2011, amends the way in which federal contractors and subcontractors would be required to act with regard to recruiting and training disabled individuals, as well as compliance with recordkeeping and policy requirements.

In the NPRM, the OFCCP estimated the total annual cost of the proposed rule to be approximately $81,064,219 (or $473 per contractor establishment). The agency noted that the total included both one-time (first year only) and recurring costs.

However, a new report by Applied Economic Strategies, LLC estimates the proposed rule will be at least $5.9 billion in the first year and at least $2.6 billion per year in recurring costs. The study suggests that the agency omitted a number of important requirements in its cost analysis and under-estimated many other costs associated with the proposed rule.

The AES report predicts that the top costs will come from modifying IT and HRIS systems ($1.7 billion) and annually reviewing all physical and mental job qualification ($1.1 billion).

In conclusion, the study suggests that the “high compliance costs of the individual provisions in the NPRM points to the necessity for OFCCP to carefully consider the costs of the proposed strategy in comparison to the costs of alternatives that could yield similar interests of disabled workers and all other workers in the hiring process.”