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refused employment in order to be in a position to interview them as part of any meaningful compliance review in the field. It has been the constant policy of the Department of Justice in EEO matters to call for the maintenance of such records and provisions to this effect appear in decrees suggested by the Department and entered by the courts in a number of cases.

A few contractors objected to the keeping of such data in testimony before the Senate Subcommittee on Roads. They felt this would be burdensome. I believe any burden could be obviated by procedures requiring each applicant to fill out an application for employment giving his name, race, experience, the date and time, and other pertinent information. When a decision is made not to employ the applicant, the contractor's agent responsible for hiring would note the reason on the form. Forms could be retained for a stated period of time. Under the prequalification procedure the contractor could draw up procedures which would accomplish the desired results with maximum efficiency and minimum effort. Omission of paragraph (1) from the records required to be kept by Order 7-2(1) is particularly unfortunate since the effectiveness of that approach will depend upon field reviews and review teams will need such information. The number and identity of unsuccessful minority applicants will be the key to determining the fairness of the contractor's hiring program.

Both orders would obligate contractors to recruit affirmatively among minority groups for employees through advertisements in newspapers having large circulations in the area of the construction work among minority groups and the schools, colleges, and minority group organizations likely to yield qualified minority applicants. However, Order 7-2 obligated the government to name newspapers and schools, colleges, and minority group organizations which the contractors' program should include. In my experience companies and unions have generally sought such specific information and the placing of the responsibility on the government was a constructive step.

Paragraph 3 or Order 7-2(1) on “applicability" includes the following sentence which does not appear in Order 7-2:

"Whenever equal employment opportunity problems are encountered in connection with particular kinds of projects or in particular geographic areas, these special provisions will be modified or supplemented as appropriate to include in the bidding provisions the specific affirmative action requirements designed to meet and overcome these problems."

The meaning and reach of this sentence are nowhere explained; nor are procedures for its implementation spelled out. It could be read to authorize inclusion in the advertised bidding proposal of more or less specific or stringent EEO requirements because of "problems encountered." The occasions which would warrant less stringent provisions are difficult to envision, particularly since the order spells out the EEO requirements of the Federal-Aid-Highway Act. Problems would generally be encountered with respect to individual contractors whereas bidding advertisements will reach all who wish to bid. My reaction to this sentence is that its presence suggests the wisdom of the prequalification procedure and the difficulties faced under the substitute procedures in dealing meaningfully with problems which arise in individual situations.

In one respect both orders appear to be deficient in not reaching directly the unions which supply workers for federal-aid highway construction, particularly those unions which operate under exclusive hiring hall contracts. These contracts obligate the contractors to secure their employees from the union and, unless the union is unable to fill the requirements, the entire work force is determined by the union's referral and membership policies. In these circumstances, it is often the union which governs whether members of minority groups are employed on federal projects rather than the contractor who considers that his hands are tied by the exclusive hiring hall provisions. In my judgment an effective EEO program in the highway construction field should address this problem directly. The text of Section 22 of the 1968 Act appears broad enough to authorize the Federal Highway Administration to require undertakings by unions, at least those supplying men under exclusive hiring hall agreements, comparable to those required of the contractors themselves. I would respectfully suggest this matter for consideration by the subcommittee or other appropriate body.

In conclusion, let me say that the success of any EEO program depends upon the sufficiency and quality of the personnel assigned to enforce it. Under Order 7-2 such personnel were required to review and negotiate satisfactory prequali

fication statements and to conduct reviews of compliance by study of records and interviews of persons in the field. Testimony before the Senate Subcommittee on Roads shows that the number of personnel made available to implement the order was inadequate to the task. Order 7-2(1) depends entirely upon compliance reviews in the field for enforcement and accordingly requires substantial numbers of personnel to be assigned to this work. In 1968 HEW had some 100 persons engaged in compliance activities with respect to elementary and secondary school desegregation. A comparable number is required if Order 7-2(1) is to be enforced with respect to federal-aid highway construction contractors. I hope this letter addresses the subjects which prompted your inquiry. Should you desire any further information, please do not hesitate to call upon me. Sincerely,

STEPHEN J. POLLAK.

APRIL 7, 1969.

Hon. JOHN A. VOLPE,

Secretary, Department of Transportation,
Washington, D.C.

DEAR JOHN: I want to express my appreciation to you for appearing before our Subcommittee to articulate the Department of Transportation's views on the subject of equal employment opportunity in federally assisted contracts. I was pleased that you took the opportunity to reiterate your strong personal dedication to a strong federal compliance effort, and I am hopeful that our continuing interest will be a constructive force which assists you in implementing this policy within the Department.

As I indicated at the hearings, there were some additional questions which I wanted to pose to you, but which because of the limited time, I thought could be presented and answered in letter form. These questions fill some of the gaps in the hearing questions, and the answers will help make the record more complete. The questions are listed in the enclosure.

I hope, John, that the atmosphere of advocacy which is maintained in some of our hearings did not raise any doubts in your mind of my continuing regard and respect for you. Perhaps I am picking up bad habits from my friend, the Minority Leader.

With best wishes.

EDWARD M. KENNEDY.

QUESTIONS

1. Precisely what attempts were made to solicit the views of civil rights groups or their representatives with regard to changes in the Federal Highway Administration's Equal Opportunity Program?

2. What civil rights groups or representatives were actually consulted, and what views did they express?

3. What efforts have you made to increase the manpower devoted to Equal Opportunity enforcement? What efforts do you intend to make?

4. How many Equal Employment Opportunity checks do you expect the Federal Highway Administration to make this year? How many do you expect the state agencies to make?

5. What sort of review will be made of compliance checks carried out by the state?

6. Precisely what actions do you plan to take where noncompliance is discovered?

7. What will you do where a contractor, who has been found in noncompliance on a prior contract, is now the low bidder on a contract now open to competitive bidding? Will he be awarded the contract? If so, will he have to undertake any any additional obligations? If so, of what sort and under what authority will they be imposed?

8. Enclosed is a letter which we invited from Mr. Stephen Pollak, formerly the Assistant Attorney General in charge of civil rights. He has undertaken to compare Order 7-2(1) with Order 7-2(2) which it replaced. This letter, along with the Department's comparison, will probably be made a part of the record. Are there any additional comments you would like to make regarding these comparisons?

9. Congress has repeatedly stressed that highway plans are to be consistent not simply with transportation plans but with all aspects of the social environ

ment. Conflicts are likely to arise between, for instance, projected highway locations and model city programs. The Intergovernmental Cooperation Act provides that to the extent possible all viewpoints, national, regional, state and local are to be considered, as are "all developmental aspects of our total national community."

What practices are currently in effect to assure that proper procedures have been provided for and are followed?

What steps have been taken to achieve a more rationalized procedure— one that extends beyond the present informal procedure? What federal departments and citizen groups are being solicited for their views?

10. Reference was made in the explanation of the Policy and Procedure Memoranda PPM 50-9 "Urban Transportation Planning." The explanation stated that PPM 50-9 "is being amended to require that the public be given the right to express their views with respect to such issues as the choice between alternative methods of transportation." What progress has been made on that amendment? What improvements are under consideration to increase the effectiveness of public participation in choosing alternative methods of transportation? What federal departments and citizen groups are being solicited for their views?

Hon. EDWARD M. KENNEDY,
U.S. Senate,

Washington, D.C.

THE SECRETARY OF TRANSPORTATION,
Washington, D.C., June 30, 1969.

DEAR TED: Enclosed is the response I promised to send you in my April 26 letter.

I believe we have answered all questions thoroughly and candidly. But beyond that, I believe you will understand and appreciate the tremendous task we have undertaken and which will be accomplished-here in the Department of Transportation. Civil rights problems and programs, whether they be within the Department or in the public sector, are interrelated and somewhat interdependent. As you will gather from the enclosures to our answers to your questions, we are concerned with and are dedicated to the full and effective implementation of programs and actions which will produce the desired results-that is, minority group persons on jobs for which they are qualified within our Department, as well as in the work forces of our recipients, contractors, and subcontractors.

Our means and methods of accomplishing this high priority goal may differ from what you envision us doing, but I believe we are together on the goal. I am convinced we will accomplish the task with the means and methods now in effect. However, as I said before the Subcommittee, if these programs are not successful, or are only partially successful, we will change them and try something else, always working toward our mutually identified objective.

I think that the enclosed material answers the questions you raised, however, if you need any additional information, please let me know.

Sincerely,

DEPARTMENT OF TRANSPORTATION

JOHN A. VOLPE.

(Response to inquiry from Senate Committee on the Judiciary Subcommittee on Administrative Practice and Procedure)

This information is intended to reply to the inquiry enclosed with the April 7, 1969, letter from the Subcommittee Chairman to the Secretary of Transportation. We have decided to deal with question 8 first because Mr. Pollak's comments seem to go to the heart of the matter which prompted the hearings before the Senate Subcommittee on Administrative Procedure and Practice in March of this year. We trust that this answer together with Mr. Pollak's letter will be made a part of the record.

QUESTION NO. 8

Question. Enclosed is a letter which we invited from Mr. Stephen Pollak formerly the Assistant Attorney General in charge of Civil Rights. He has under

taken to compare Order 7-2(1) with Order 7-2 which it replaced. This letter, along with the Department's comparison, will probably be made a part of the record. Are there any additional comments you would like to make regarding these comparisons?

Answer. Mr. Pollak's analysis, while helpful to the Department in its continuing efforts to improve its EEO program, does not reflect the total context which made it necessary to replace FHWA Order 7-2 with a more effective procedure. As Mr. Pollak suggested, a principal advantage expected from the prequalification procedure established by Order 7-2 was that the contractor himself would fashion his EEO program according to his individual circumstances. In theory, this would engage the contractor's interest in equal employment opportunity as well as make his EEO obligations more meaningful. Unfortunately, these hopedfor benefits failed significantly to materialize, while unanticipated, serious problems appeared. There could be no assurance that the EEO program which the contractor wrote for himself satisfied the requirements of Order 7-2 unless an exhaustive review was conducted not only of his submitted prequalification statement but of his actual circumstances and employment practices including, in Mr. Pollak's words, "the racial make-up of his work force, the skills available among minority group members, on-going training programs, his relationship to local construction unions (exclusive or nonexclusive hiring hall), etc." The prequalification process thus constituted a major administrative procedure and placed a tremendous burden on Federal and State administering authorities. These difficulties were compounded by the fact that contractors were required to prequalify on a mass basis for the upcoming construction season. Furthermore, while it was questionable that a contractor, once he had drafted his own program, would have a greater personal commitment to its implementation than he would have by agreeing to standard EEO provisions, in practice the submission of form statements drawn up by contractor associations frustrated this purpose.

Most important, the prequalification procedure did not seem to lend itself to evenhanded application from contractor to contractor. Fairness in competitive bidding requires that bidders be treated alike, but the requirements and criteria of Order 7-2 were necessarily indefinite, leaving much room for judgment and abuse in their application to individual circumstances. Moreover, it was inordinately difficult to coordinate the actions of the great number of State officials who were initially passing on submitted prequalification statements. Because the prequalification procedure called for separate statements from contractors in different circumstances, Federal reviewing officials could not effectively detect uneven application of the Order or other abuses.

The gist of the complaints that the contractors lodged before the Senate Subcommittee on Roads in January of this year was precisely that Order 7-2 was being unevenly and unfairly applied from contractor to contractor. R. G. Stapp, President of the American Association of State Highway Officials, for example, stated: (Hearings, 91st Cong., 1st Sess. Serial No. 91-1, at 100 (1969).) "Some problems can be charged to the fact that it is difficult to administer such a requirement in a program as big as the highway program, and involving so many separate contracting agencies and bidders, on the basis of the generalized guidelines that have been issued. We must say that the guidelines apparently are subject to nonuniform interpretation because this has been a major problem, and on numerous occasions a contractor prequalified and accepted in one State is rejected in another."

N. L. Teer, Jr., representing the Highway Contractors Division, Associated General Contractors of America, Inc., suggested that the unfairness of Order 7-2 stemmed from the nature of the prequalification system itself: "We question the wisdom of placing so much power in the individual Federal representatives to pass on the contractors' prequalification programs and whose subjective judgment all too frequently results in a contractor's program being approved in one State and the identical program rejected in another." Id. at 12. J. W. Moore, representing the Arkansas Chapter of the Associated General Contractors of America, amplified on this theme: (Id. at 90.)

"The compliance aspect of the program is much too broad and sweeping. It reposes entirely too much enforcement authority in the administrative agency. The plan lacks the proper checks and balances and opportunities for review of the administrative agency's determinations before imposition of penalties which con

ceivably could put many contractors out of business before any judicial review was obtainable."

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Thus, the problems of administering Order 7-2 did not seem to involve incidental difficulties but called the entire procedure into question.

These problems caused some including those charged with legislative oversight of the Federal-aid EEO program-to question even the legality of Order 7-2. The Chairman and the Ranking Minority Member of the Senate Committee on Public Works reported that "the Committee has come to the conclusion that Interim Order 7-2 runs contrary to the statutory requirements of section 22 of the Federal-Aid Highway Act of 1968." Letter from Jennings Randolph and John S. Cooper to John A. Volpe, Feb. 20, 1969. The Chairman and the Ranking Minority Member of the House Committee on Public Works similarly indicated: (Letter from George H. Fallon and William C. Cramer to John A. Volpe, Feb. 18, 1969.) "It is obvious that if both the highway program and the equal employment opportunity program are to proceed in a smooth and orderly fashion, more specific and reasonable Federal requirements must be substituted for those presently in effect. We urge you to look into this matter at the earliest possible time. We hope you will consider withdrawing Federal Administration Order Interim 7-2 and substituting clear and specific requirements to be set forth in the advertised specifications as required by section 22 of the Federal-Aid Highway Act of 1968." To us the administrative problems of Order 7-2 appeared particularly acute because the Department was determined to expand the coverage of the FHWA EEO program from approximately 30 to virtually 100 percent of Federally assisted highway contracts and subcontracts. The expanded coverage of FHWA Order 7-2(1), which substituted the Special Provisions for the prequalification approach, means that approximately an additional 6,000 contractors (not to mention subcontractors) will be governed by EEO obligations in addition to the basic Equal Opportunity Clause. If the scope of Order 7-2 had been correspondingly enlarged, approximately 10,000 rather than 4,000* contractors would have had to become prequalified. This change would have put an intolerable burden on the already bogged down prequalification procedure.

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In any case, Order 7-2(1) completely eliminates the problem of unfairness. As was indicated to the Senate Subcommittee on Administrative Procedure and Practice: (Statement of Secretary John A. Volpe to the Subcommittee on Administrative Procedure and Practice of the Senate Committee on the Judiciary. March 28, 1969.)

"We have substituted standard equal employment opportunity requirements for what had been differing requirements to be submitted by each contractor. The standard provisions permit timely appraisal to every bidder as to what is expected of him and will result in fair and uniform treatment of all contractors. There can be no complaints by a contractor that he is being asked to do more than another or that he does not know what he is being required to do."

Mr. Pollak considered the "abandonment of the yearly prequalification procedure" to be "the major change made by the replacement of Order 7-2 by Order 7-2(1),” apparently because, in his opinion, the prequalification procedure was "self-enforcing." This is hard to understand since Order 7-2 did not establish a self-enforcing system of contract compliance. Although, to quote Mr. Pollak, "[t]he incentive of a contractor to frame and adopt an effective EEO program is highest before contract awards are made," the prequalification procedure capitalized on this incentive only to secure from the contractor mere promises. Mr. Pollak regarded the requirement of Order 7-2 for periodic submission and review of prequalification statements to be another instance of how "Order 7-2 built in self-enforcement." But again the prequalification statement, no matter when submitted and reviewed, set forth mere promises. In this respect the pre

1 Order 7-2 provided for central review of disputes between the prospective contractor and reviewing officials, but experience suggests that it could be several weeks after the submission of a prequalification statement to the State authorities for approval before a dispute would surface and Federal review could be sought.

2 This figure is based on the generally accepted estimate that there are 10,000 contractors in the highway construction industry.

3 In terms of dollar amount, based upon 1968 statistics, the new procedure will apply to contracting totaling about $429,000,000 more than would be covered under the prequalification procedure.

4 This figure is based on the number of prequalification statements that were submitted for approval through February 24, 1969, discounted by 25 percent, the estimated rate of duplications and subcontractor submissions.

31-987-69-13

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