rector of OFCC may notify EEOC, the Department of Justice, or other appropriate Federal agencies, to obtain effective relief under Title VII or any other Federal law which may have been violated.

(4) Testing

The requirements for an acceptable testing program under the Executive order and Title VII appear to be substantially the same.

Each contractor is required to provide evidence showing the tests used have predictive value or significantly evaluate the skills required in the precise jobs for which the test is administered. Many contractors rely exclusively on test results to make employment and promotion decisions. This is desirable if, in fact, the tests are result-oriented and not discriminatory in effect. The guidelines issued by the Department of Labor assert, however, that there has been ". a notable increase in the incidence of doubtful testing practices which, experience indicates, tend to have racially discriminatory effects." 196 In order to remedy the situation, OFCC published the guidelines requiring that tests be valid indices of performance potential.197

(5) Seniority

The Executive order, through implementation of Order No. 4 and the June 1969 Philadelphia Plan,198 has been interpreted as prohibiting seniority systems which exclude minorities from employment or deprive them of promotion rights. This determination is essentially the same under the requirements of Title VII.

The seniority policy rule of OFCC was formally communicated to all contract compliance officers in a memorandum of August 8, 1968. It developed from Court decisions in the U.S. v. Crown Zellerbach and Quarles v. Philip Morris cases which defined discriminatory seniority systems and determined they violated Executive Order 11246, as well as Title VII of the Civil Rights Act of 1964. OFCC stated that

discriminatory seniority systems, previously permitted by contractors, were unacceptable and not negotiable as principles or as to the extent of remedy required; only the method of remedy was to be open to discussion.199

Order No. 4 requires in-depth analysis of seniority practices and the seniority provisions of union contracts to determine whether such plans result in underutilization of minority group members.200 In situations where seniority provisions contribute to discriminatory employment practices the employer must undertake corrective action.201

The Department of Labor, in issuing the Philadelphia Plan,202 maintained that it was necessary because of the long-standing history of discrimination by contractors and, more importantly, by construction craft unions in Philadelphia. Unions were, as a practical matter, the exclusive source of labor for the contractors. Where, because of past discrimination, maintenance of apparently neutral hiring principles, such as referral by seniority, perpetuates the effects of the past, the Executive order is violated. Thus, under the Philadelphia Plan, a contractor may not justify his failure to meet the minority employment goals on grounds of the union's seniority system. The union, itself, regardless of its seniority system, must make an affirmative effort to refer minority employees. The absence of such an affirmative effort may result in the contractor being directed to draw his employees from a source other than the union.

100 Memorandum from Ward McCreedy, Acting Director, OFCC to contract compliance officers, "Discriminatory Seniority Systems," Aug. 8, 1968.

200 41 C.F.R. 60.2–23(a) (6).

201 41 C.F.R. 60.2–23 (b) (11).

202 The Philadelphia Plan, which applies to all Federal and federally assisted contracts for projects in the Philadelphia metropolitan area valued in excess of $500,000, states that no contracts or subcontracts shall be awarded . . . unless the bidder submits an acceptable affirmative action program which shall include specific goals of minority manpower utilization. In fact, in an order issued Sept. 23, 1969, as guidelines to the revised Philadelphia Plan, percentage ranges of acceptable levels of minority employment were adopted for each of the next 4 fiscal years. Failure to meet the designated percentages requires that the employer demonstrate that he made every good faith effort to meet the goals. A failure to make such a showing will subject the contractor to the sanctions available to OFCC.

D. Office of Federal Contract Compliance (OFCC)

1. EARLY RESPONSE OF OFCC (1965-68) a. Procurement Contract Compliance

Executive Order 11246 carries significant potential for having a major impact on the problem of unequal job opportunities faced by minority groups. In its first 5 years, however, it has not fulfilled this potential for a number of reasons.

The staff of OFCC and the contracting agencies devoted to this program have been numerically inadequate. In 1967, OFCC maintained a small full-time staff of 28 in Washington,203 while the contracting agencies employed only 228 full-time contract compliance specialists plus 40 others who devoted more than half-time to this activity.204

From the beginning, OFCC has had a Director, a Deputy Director, and two major units: Contract Compliance [Procurement] and Construction Contract Compliance. An Assistant Director for Construction, with one assistant, supervised the area coordinators who, beginning in April 1965, were stationed in more than a dozen large metropolitan areas to assist the contracting agencies in obtaining compliance from construction contractors.205 The Contract

203 R. Nathan, Jobs and Civil Rights, (prepared for the U.S. Commission on Civil Rights by the Brookings Institution) 101 (1969). The data are for fiscal year 1967. A small additional staff supported the private "Plans for Progress" program, which attempted by purely private voluntary means to improve equal employment opportunity. This support was provided for in sec. 402 of the Executive order.

204 Id., at 113. The Department of Defense, at the time of the Commission's hearing in Montgomery, Ala., had a contract compliance staff of 11 professionals with responsibility for monitoring the compliance of more than 5,800 contractor facilities in the seven States and Puerto Rico that make up its southeast region. To supervise equal employment opportunity in GSA contracts in the amount of $1,350,400,000, GSA provided three professionals in Washington and 10 compliance investigators in the field. Only one investigator covered the entire seven-State region, and he devoted a portion of his time to matters other than contract compliance. For a more detailed discussion of agency staffing, see pp. 76-81 infra.

Compliance Unit consisted of seven senior compliance officers and seven assistant compliance officers responsible for liaison with the 26 contracting agencies. Their job was to establish governmentwide goals, targets, and priorities; review selected preawards, followup compliance investigations and complaint investigations; participate in the most significant contract compliance negotiations conducted by the agencies; and monitor the manner in which the compliance agencies implement their own compliance programs. Because of insufficient staff,206 the informal nature of the relationship between OFCC and the agencies,207 and, in relation to the other duties of OFCC, the lower priority assigned to the monitoring function, 208 comprehensive agency compliance program evaluations received scant attention, In fact, agency evaluations by OFCC appeared superficial and were conducted on an ad hoc basis.209

The gross lack of staff of OFCC and the agencies had obvious effects on the agencies' ability to perform their roles in this area. This was both a cause and effect of the reluctance of agencies to take vigorous contract compliance action.210

The rationale for separating construction compliance from other contract compliance is based on the different nature of construction employment. Construction employment begins and ends with the contractor having no control of employment opportunities for particular individuals once his project is complete. See pp. 57-58 infra for current structure.

208 Interview with Leonard Bierman, Senior Compliance Officer, OFCC, Nov. 27, 1969. Interview with Robert Hobson, Senior Compliance Officer, OFCC, Dec. 4, 1969.

207 Interview with Ward McCreedy, Assistant Director for Contract Compliance, OFCC, Dec. 2, 1969; interview with Alex Estrin, Senior Compliance Officer, OFCC, Dec. 3, 1969. [It was felt that it is difficult for one cabinet agency to give orders to another. Furthermore, since OFCC staff had to work with the agencies on a regular basis, they could not afford to antagonize them.]

208 Bierman interview, supra note 206.

200 Id. McCreedy and Estrin interviews, supra note 207. Response by 15 contract compliance agencies to a Dec. 23, 1969 Questionnaire from the U.S. Commission on Civil Rights.

210 Leonard Bierman, an OFCC Senior Compliance Officer, testified at the Commission's Alabama hearing that, "95 percent of the contracting agencies' staff and attention and desires are aimed at awarding contracts [it is therefore necessary] to overcome

OFCC failed to exercise its own role effectively as leader or coordinator of the compliance effort. It did not even issue regulations until 22 years after it was created.211 Until recently, OFCC even avoided explicitly defining what was required by the order's mandate of "affirmative action". For example, in a January 1967 statement, Edward C. Sylvester, Jr., then Director of OFCC, defined affirmative action, not in terms of specific actions the contractor had to perform, but vaguely, in terms of undefined results that had to be achieved:

Affirmative action is going to vary from time to time, from day to day, from place to place, from escalation to escalation. It depends upon the nature of the area in which you are located, it depends upon the kinds of people who are there, it depends upon the kind of business that you have. There is no fixed and firm definition of affirmative action. I would say that in a general way, affirmative action is anything that you have to do to get results. But this does not necessarily include preferential treatment. They key word here is "results." 212

The failure of OFCC to provide specific guidance on affirmative action requirements gave rise to the use of indefinite or otherwise ineffectual standards by the contracting agencies. For example, a booklet published by the Department of Defense's Contract Administration Services, entitled Nondiscrimination in Employment, which appeared to be the principal Department statement on standards for compliance, failed to state any requirements at all. Instead, the booklet listed actions or this built-in resistance that we find in every contracting agency." Federal agencies are loathe to upset their relations with contractors. Effective enforcement might result in the disqualification of low bidders or other preferred contractors, or cause delays in the letting or performance of contracts. Alabama Hearing, supra note 155, at 471.

21 The regulations were finally issued on May 28, 1968, although it had been indicated that they would be issued in early 1967. 1967 Plans for Progress Report 75. Until the new regulations were issued OFCC continued to use the regulation of its predecessor, the President's Committee on Equal Employment Opportunity. This delay may be one measure of the impotence of OFCC in the Federal bureaucracy. See pp. 60-61, infra, for a discussion of the latest clarification of affirmative action by OFCC.

practices which a contractor might undertake in support of the equal employment opportunity program. Further, the booklet stated that "the absence of any of these factors (including desegregated facilities and the eliminatior. of other forms of discrimination) does not necessarily establish a condition of noncompliance." 213 This uninformative and even misleading exposition of substantive compliance standards was an inadequate substitute for the guidance which was OFCC's responsibility-perhaps its most important responsibility to provide.

With regard to its leadership and coordinative role OFCC did not take aggressive and effective action to require contracting agencies to comply with their responsibilities under the order. In many cases OFCC was unaware of the fact that the agencies were not operating in accordance with its regulations 214 and in some cases where the facts were known, it failed to insist upon strict compliance with policies.21

215

Still another impediment to effective enforcement was the inadequacy of the reporting system used in assessing employment practices

213

214

Department of Defense, Defense Supply Agency, Nondiscrimination in Employment, November 1968. For example, the Alabama hearing disclosed that OFCC's directive creating a program of preaward compliance reviews by the agencies-potentially a most effective method for obtaining compliance-was not being carried out by the Department of Defense, in that 40 to 50 percent of the supposedly preaward compliance reviews in the Southeast region in fact were being conducted days or weeks after award of the contract. The Commission learned that in the 16 months prior to the hearing, in DOD's Southeast region, contract compliance officers in 95 percent of their compliance inspections said that a followup inspection was necessary; yet in only 10 percent of the cases was a followup inspection actually made. Alabama Hearing, supra, note 155, at 460. Interview with Kenneth W. Eppert, Chief, Office of Contract Compliance, Defense Contract Administration Services, Atlanta Region, Atlanta, Ga., Mar. 16, 1968.

215 For example, when the Commission's Alabama hearing uncovered serious problems of discrimination in Alabama facilities of the American Can Co., a General Services Administration contractor, OFCC became involved in their resolution. But apparently by reason either of hesitance to exercise its supervisory authority, or of inadequate resources with which to do so, OFCC permitted GSA to adopt an enforcement course which was clearly inadequate. Also see discussion on textile industry compliance problems, pp. 73-74 infra.

of Government contractors. Companies subject to Title VII of the Civil Rights Act of 1964 and companies with substantial Federal contracts are required to submit annually an employment data report called the "EEO-1" form. The report gives employee statistics, by race or national origin, for each of the employer's facilities. The data in general use were outdated. For example, in 1968, Federal agencies were relying principally on data from forms submitted in 1966. Moreover, the agencies did not have reports covering all the facilities for which they were responsible.2

216

Of even greater significance is the fact that current racial data on applications, hiring, and promotions, crucial for evaluating present employment policies, were not gathered systematically. The official responsible for administering the Department of Defense contract compliance in the area comprising Alabama, Mississippi, and portions of neighboring States, indicated that in 1968 less than a dozen of his 1,300 facilities were submitting special compliance progress reports giving such current data.217

The ineffectiveness of the program, however, was due at least as much to failure to impose sanctions on known noncomplying contractors, as to the lack of staff of OFCC and the agencies and OFCC's lack of leadership. All contract compliance efforts prior to Executive Order 11246 had been characterized by voluntarism-designed to achieve compliance by consultation and mediation without resort to sanctions.218 This policy had been ap

216 While GSA has responsibility for an estimated 5,000 contractor facilities, GSA has indicated that it has in its files EEO-1 forms covering only 1,600 facilities. Interview with Robert J. Harlan, contract program policy officer, GSA, Feb. 11, 1968.

217

Eppert interview, supra note 214.

218 Voluntarism was best exemplified by the Plans for Progress approach. The organization, whose members are private employers who pledged compliance with the order, was serviced by Federal employees. It was established in 1961 as an “adjunct” to the President's Committee on Equal Employment Opportunity. There was considerable feeling at the time of President Kennedy's first Executive order that before it could be effectively enforced, it would be necessary to have leading Government contractors take voluntary action, thereby setting the climate for the Government to insist that other contractors follow suit. The program was not notable for its success. In 1969, the program was

propriate initially because of OFCC's and the contracting agencies' need to establish policies, procedures, and ground rules and the need to inform compliance agency personnel and contractors of the program's importance and the manner in which it was expected to operate.

From its beginning, OFCC indicated its preference for enforcement as opposed to continued emphasis on voluntarism.219 Notwithstanding this stated preference it was not until May 24, 1968 that first notices of debarment were sent to contractors.220 At that time there had not been a single cancellation or termination because of a contractor's discriminatory policies. Furthermore, only two noncomplying contractors had been sued or recommended for suit; 221 the administrative merged with another private group, the National Alliance of Businessmen, which had as its goal and purpose the provision of large numbers of full-time jobs for disadvantaged unemployed persons including minorities.

219

For example, see Jobs and Civil Rights, note 203, at 102-03 supra.

220 On May 24, 1968, notices of proposed debarment (ineligibility for future Federal contracts) were sent to five different contractors. They were: The Bethlehem Steel Corp., Timken Roller Bearing Co. (Columbus and Canton, Ohio), Allen-Bradley (Milwaukee, Wis.), B & P Motor Express (Pittsburgh, Pa.), and Pullman, Inc. (Bessemer, Ala.). Memorandum from Edward C. Sylvester, Jr., Director, OFCC, to the Secretary of Labor, Debarment Hearings, May 24, 1968.

The only subsequent debarment notices were sent in August 1968. On Aug. 5, 1968, a debarment notice was sent to Hennis Freight Lines, Inc. and on Aug. 8, 1968, a debarment notice was sent to the Bemis Co., Inc.; both firms requested hearings within 10 days, but no further action has been taken, i.e., no hearings have been held and no agreements reached. Interview with Gresham Smith, Assistant Solicitor of Labor, June 9, 1970.

DOD was the compliance agency for four of these contractors. B & P Motor Express and Hennis Freight Lines, Inc. were Post Office Department contractors and Bemis Co., Inc., was the responsibility of the Department of Agriculture. Hearings were actually held for Bethlehem, Timken, and Allen-Bradley—and agreements were reached with two others before a hearing. Timken is functioning under an agreement while AllenBradley is being considered for court action. Although the Bethlehem hearing is completed, no decision has been rendered. Interview with Robert Hobson, Senior Compliance Officer, OFCC, Apr. 15, 1970.

221 Interview with Barney Sellers, principal author of The Reluctant Guardians: A Survey of the Enforcement of Federal Civil Rights Laws (prepared for the Office of Economic Opportunity, 1969), June 8, 1970.

authority to suspend contractors from Government business during pending of hearings had never been used; only one hearing had been held by a contracting agency since the start of the compliance program; 222 the Department of Labor was in the fifth year of negotiation with the only contractor it had found guilty of discrimination; 223 and enforcement cases were before the Department of Labor's Office of Federal Contract Compliance only after the agencies that had let the contracts failed to take action against the contractors.224

The lack of utilization of sanctions by contracting agencies 225 forced OFCC to become involved in some of the most difficult negotiations of major noncompliance situations. For several reasons, reasons, including the paucity of OFCC's staff, this deference to OFCC in enforcement actions caused many to believe that sanctions would be imposed only in exceptional cases and only with OFCC involvement. Failure to make sanctions appear a likely result of noncompliance undermined all enforcement efforts in the early stages of implementing the order.226 Many compliance officers and contractors seemed to take the substantive provisions of the order casually and acted only when absolutely required to do so. In numerous cases, public exposure was the only vehicle which seemed able to bring about even minimal compliance. 227

224

Memorandum from Edward C. Sylvester, and Smith interview, supra note 220.

225 A striking illustration of differences in agency treatment of civil rights enforcement and its treatment of other responsibilities is afforded by the Department of Defense. Since 1964, DOD has cancelled more than 6,500 defense contracts for shortcomings in quality or production—yet it has never cancelled a single contract because of a firm's unfair hiring practices. This is typical of the behavior of the other contracting agencies. The A. Philip Randolph Institute, The Reluctant Guardians: A Survey of the Enforcement of Federal Civil Rights Laws (prepared for the Office on Economic Opportunity) (1969) ch. 1 at 30.

b. Construction Compliance

From its inception, OFCC handled construction contracts differently than supply contracts. Construction employment is temporary and no fixed site of operations exists. Further, construction contractors do not maintain employee forces forces of workmen, instead they assemble the necessary crews for each job. The various construction trade unions have established hiring halls which are fully utilized by contractors and subcontractors. Job selection in the union hall is usually based on (a) union membership and (b) seniority. For these reasons, plus the fact that there was no body of knowledge concerning methodology in securing compliance in the construction area, 228 OFCC officials believed that a method other than regular compliance reviews would be needed to promote minority employment progress in this industry. 229

To coordinate compliance efforts of each agency with construction contracts, OFCC developed "special area plans" in four cities: St. Louis, in January 1966; San Francisco, in December 1966; Cleveland, in February 1967; and Philadelphia, in November 1967.230

The St. Louis Plan resulted from local minority group agitation regarding job discrimination on a large construction job, the famous St. Louis Commemorative Arch, which received Federal funds and, potentially, could

infra and the McDonnell Douglas case at pp. 74-76 infra. Recently a Newport News agreement was held up by OFCC. Washington Post, Apr. 15, 1970.

228 Executive Order 11114 included construction as a responsibility of the President's Committee on Equal Employment Opportunity. No previous attempt had been made to establish any uniform approach to construction compliance and little was accomplished in this area by the President's Committee.

229

230

Interview with Nathaniel Pierson, Deputy Assistant Director for Construction, OFCC, Nov. 27, 1969. Beginning in 1965, area coordinators were established in more than a dozen metropolitan areas to try to improve minority construction employment within an entire labor market or metropolitan area. The four special area programs were developed to strengthen this approach and develop methods which might be used in other metropolitan areas. These plans or approaches, in their most comprehensive form, tried to set up a governmentwide construction plan for an area. All Federal agencies in selected areas with construction in progress or pending were expected to participate and the same rules and guidelines were to be used on all contracts. Hobson interview, supra note 220.