Contract Compliance

A 29-year-old history of unrewarding efforts to eliminate discrimination from the employment practices of Federal contractors lies behind the relative impotence of Executive Order 11246. The failure of this most recent of operative Executive orders on the subject is directly related to inadequate executive leadership by the Office of Federal Contract Compliance, which is charged with responsibility for coordinating and overseeing the entire Federal contract compliance program.

Until lately, OFCC had failed to adopt and implement policies and procedures that would produce vigorous compliance programs in the Federal agencies immediately responsible for contract compliance. Recent actions taken in meeting OFCC's three current priorities— defining the affirmative action requirement of the order, monitoring compliance programs of the agencies, and building a Governmentwide construction compliance program-give promise of leading to a more effective effort. Their implementation, however, lies in the future.

The importance of explaining in detail the meaning of affirmative action to contractors and compliance agencies has been clearly recognized. Earlier this year OFCC took the significant step of expanding its regulations to deal specifically with the nature of the affirmative action requirement. The extent to which these expanded regulations will be implemented by compliance agencies depends upon OFCC capabilities and determination. Until recently, its own activities did not offer encouragement. For example, it was unable to succeed in requiring adequate enforcement of similar affirmative action requirements.

Monitoring of agency Executive order enforcement is a key ingredient in an effective Federal contract compliance program. Establishment of uniform policies and the assurance that those policies are carried out are the chief responsibilities of OFCC. In the past OFCC monitoring has been haphazard-a series of ad hoc efforts that did not appear to have lasting effect. A recent OFCC reorganization, the new development of an industry target selection system, and the redistribution of compliance agency contractor responsibilities, seems to have improved OFCC's monitoring capability but no procedures for

monitoring have been developed. The value of these structural changes is totally dependent upon actions yet to be taken.

After several false starts, OFCC has finally established the firm basis for a Governmentwide construction compliance program and has adopted a strategy for its application. The Philadelphia Plan approach of requiring minority group percentage employment goals for specific construction trades provides the basic standard of construction compliance. OFCC has indicated that it is prepared to impose Philadelphia-type plans in 91 additional cities unless those cities devise plans of their own to increase minority utilization in the construction trades. These community-developed plans, or "hometown solutions", however, have been forthcoming in only a few cities and their viability has not yet been established, nor has provision been made for their enforcement.

Of the 15 departments and agencies assigned compliance responsibility, the Department of Defense (DOD), which, in terms of dollar amount, is responsible for more than half of Federal contracting, is the most important. The Department's performance has been disappointing. For example, in two recent contract compliance matters involving southern textile mills and a large aircraft manufacturer in St. Louis, DOD initially failed to follow its own procedures. Although some changes have been made to prevent recurrence of these failures, the compliance program of the Department still has serious structural defects. In addition, its staff is too small and its compliance review efforts have proved inadequate.

The 14 other agencies responsible for contract compliance in some important industries have failed to assign sufficiently high priority to this responsibility. These agencies have limped along with inadequate staffs and cumbersome administrative structures which have produced a variety of inadequate compliance efforts.

The use of sanctions and the collection of significant racial and ethnic data by OFCC and the compliance agencies are two essentials of a successful contract compliance program that have been missing to date. The use of sanctions is necessary to make the enforcement program credible. Yet no contract has ever been terminated nor any company de

barred for Executive order violation. Rarely have any hearings been held concerning noncompliance.

The collection of data would permit compliance agencies and OFCC to adequately evaluate their efforts and the total effect of the entire program adequately. Currently, however, few data are collected and what exists are inadequate to inform the agencies of the extent of progress in minority employment or, indeed, whether any progress is being made. Plans for extensive data collection and analysis are only in their initial stages.

Equal Employment Opportunity
Commission

At the close of fiscal year 1970, the Equal Employment Opportunity Commission, which has responsibility for administering Title VII of the Civil Rights Act of 1964, will have been in operation for 5 years. It is not much closer to the goal of the elimination of employment discrimination than it was at its inception.

Many factors account for EEOC's inability to substantially reduce employment discrimination. Foremost among them have been lack of enforcement power and grossly inadequate staff and budget resources. Unless Congress rectifies these deficiencies, the Commission will remain what one observer has called it: a "poor, enfeebled thing".

EEOC has also been crippled in its formative years by organizational and personnel problems which have resulted in an absence of continuity and direction at all levels of Commission operation. Particularly damaging have been the inordinately rapid turnover of Chairmen, Commissioners, and key supervisory personnel; long vacancies in major operational posts; an exceedingly high rate of attrition among field compliance personnel; inadequate training programs, especially for investigative and conciliation staff; insufficient coordination among the various central offices and between headquarters and the field; and failure to establish clear lines of direction for supervision of the field and for liaison with other Federal agencies.

The Commission's operations have also been hampered by haphazard programming, which is frequently on an ad hoc basis. Means of making maximum use of the agency's limited

resources have not been devised and methods to measure its overall effectiveness have not been instituted.

As a result, the Commission has assumed a primarily passive role in the implementation of Title VII of the Civil Rights Act of 1964. Priority has been placed on the case-by-case or reactive approach to employment discrimination and emphasis has been placed on processing individual complaints of job bias.

EEOC has not adopted an initiatory posture, either through broader development of enforcement mechanisms (e.g., development of class complaints, assignment of priority to cases involving patterns of discrimination), or greater use of affirmative action programs, (e.g., hearings or technical assistance).

As a consequence of these numerous deleterious factors, both enforcement and affirmative action under Title VI have been retarded. Among the more significant implementation failures are the following:

Complaint processing: the major mechanism relied upon by the Commission to combat job discrimination now takes 2 years to conclude a case and in more than 50 percent of the complaints in which the Commission finds "reasonable cause", it is not able to secure relief for the aggrieved party.

The Commissioner charge has not been utilized to secure compliance in instances of pattern or industrywide discrimination. A private lawsuit under section 706 has never been filed as a result of unsuccessful conciliation of a Commissioner charge.

Despite the increased emphasis placed by EEOC on the 706 suit as a means of implementing Title VII, sufficient legal assistance has been unavailable to charging parties in bringing such actions.

The program to improve operations of State and local antidiscrimination agencies has not resulted in a decrease in the 86 percent of cases that EEOC must process de novo. Nor has the Commission entered into agreements with any State agencies, whereby it waives. its right to reassume jurisdiction, in any class of cases.

Finally, the potential effectiveness of public hearings has been greatly diluted by failure. to conduct those hearings jointly with an enforcement agency-OFCC, the predominant

interest agency, or the Department of Justice -or follow them up in any meaningful way.

Department of Justice

The Department of Justice, through its litigation function, plays a key role in enforcing Title VII and the Executive order on contract compliance. The Department's impact so far, however, has been limited. The Employment Section of the Civil Rights Division, which carries out this Justice responsibility, is handicapped by its small size.

Its 32 authorized attorney positions are not sufficient to have a significant effect upon discriminatory employment practices. Even if the Employment Section were doubled, however, the widespread reform needed in the employment area cannot realistically be expected through the current practice of piecemeal litigation.

In addition, the Division has limited its activities to cases involving discrimination against Negroes. Prior to June 1970 it had brought no cases in which American Indians, Spanish surnamed Americans, or women are the major victims of employment discrimination. The Division, to date, has sought to bring lawsuits involving different types of businesses, geographic locations, and forms of the discrimination. It has not done so, however, with regard to the victims of discrimination.

Finally, the Department of Justice has not recognized the importance of cooperating with EEOC and OFCC so that its litigation becomes part of a coordinated total Government effort to eliminate employment discrimination. The Division concedes that it can litigate only a handful of the potential employment cases each year and has devoted serious consideration to make the most effective use of its meager resources. It has done this, however, almost entirely within the context of litigation and has accorded low priority to developing a coordinated Government effort.

It is important that the Civil Rights Division give equal attention to defining its role as an element of the entire Federal equal employment opportunity effort. Rather than focusing solely on internal procedures and resources, the Division must analyze the way the power to sue can be most insightfully used

in conjunction with the EEOC's conciliation power and OFCC's sanction of contract termination or debarment. It should attempt to determine the specific circumstances under which each enforcement method is most appropriate and to create ways by which the three agencies can supplement each other's enforcement activities.

Coordination

overlapping legal

Despite jurisdiction, EEOC, OFCC (and the 15 contract compliance agencies) and the Department of Justice have not yet begun to coordinate their efforts effectively. Each has independently developed its own goals, policies, and procedures. Until recently, no systematic attempts were made to share data or complaint investigation and compliance review findings. Joint reviews or conciliations have rarely been conducted and, when attempted, have not proved successful examples of coordinated action. Employers occasionally have been reviewed by two or three different Federal agencies and inconsistent demands have been made upon the firms.

As a result, the entire Federal effort to end employment discrimination in the private sector has suffered. This failure of coordination is particularly unfortunate since each of the participating agencies is grossly understaffed for compliance functions.

In July 1969, an Interagency Staff Coordinating Committee was formed to develop mechanisms to cope with these problems. The results of the Committee's weekly deliberations have thus far been disappointing. Although it has issued an agreement which attempts to make maximum use of the investigative findings of EEOC by involving OFCC in the enforcement stage, it has not completed action on any of the other matters referred to it. Among the reasons for the Committee's lack of success are the low priority accorded to coordination by the three agencies involved, the fact that the agencies are not represented at Committee meetings by officials on a policymaking level, and the fact that the Committee operates without deadlines.

Formation of the Committee is salutary, but only as a stopgap measure. Until EEOC, OFCC, and the Department of Justice fully recognize the need for close cooperation and until an ef

I. INTRODUCTION

Equal housing opportunity, like equal job opportunity, is a broadly protected Federal right but one in which the breadth of coverage has not been matched by results in enforcement.

The Federal guaranty of nondiscrimination began in a limited way when, in 1962, President John F. Kennedy issued Executive Order 11063. Limited to federally assisted housing, the Executive order was followed by congressional action broadening coverage to include most of the Nation's housing, whether provided through Federal assistance or through the ordinary channels of the private housing market. In addition, the Supreme Court of the United States ruled that a Federal statute, originally enacted in 1866, prohibited discrimination on the basis of race with respect to all housing.

A. The Growth of Federal Involvement in Housing

The Federal Government has been heavily involved in housing for more than 35 years. But only within the last decade has it recognized a responsibility to assure equality of housing opportunity to all its citizens.

The Federal Government first evinced its concern with housing during the depression through such measures as creation of the Federal Home Loan Bank System in 1932 and the Home Owner's Loan Corporation in 1933. More significant Federal involvement in housing came through the 1934 National Housing Act, which created the Federal Housing Ad

'The discussion of the development of Federal policy on housing and civil rights is based on material contained in this Commission's 1961 report on Housing. See 1961 U.S. Commission on Civil Rights Report, Housing, ch. 2. [Hereinafter cited as 1961 Commission Report.]

ministration (FHA) and its mortgage insurance programs. The act also established the system of insuring accounts in savings and loan associations, whose principal business is home finance.

The principal purposes underlying the Federal Government's early housing policy were the facilitation of credit and the relief of depressed economic conditions. Thus the 1934 National Housing Act was aimed primarily at revitalizing the Nation's credit machinery by stimulating greater activity in the home finance community. In establishing the lowrent public housing program in 1937, Federal housing policy took a somewhat different turn by aiming primarily at the provision of housing for lower-income families. Even here, however, a major purpose also was economic-to relieve unemployment in the construction trades.

In the years that followed, the focus of Federal housing activity changed to one of emphasis on meeting the housing needs of American families. In 1949, the goal of "a decent home and a suitable living environment for every American family" was enunciated as the national housing objective toward which Federal housing policy was to be directed. By 1968, when the landmark Housing and Urban Development Act was passed, the goal of producing housing in volume, particularly for families that could not afford housing provided through the ordinary channels of the marketplace, had become a matter of national concern and major priority.

When the Federal Government first became significantly involved in the housing field, an opportunity was presented to effect salutary changes in the existing discriminatory practices of the private housing and home finance industry. It was an opportunity that was lost.