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Mr. COLE. I think the problem with desk audits, if you start off with a wrong assumption in the first place, it destroys the whole purpose of what you are doing.

In other words, if you have an EOS that lives in the northern part of the San Fernando Valley, knows nothing about the minority population in greater Los Angeles area, he could assume that availability of minorities would be 10 percent or 15 percent when in fact it is 30 percent.

If he is doing an analysis based on availability of 15 percent when the minorities' availability is really 30 percent, he can review and meet all the requirements and have missed half of the people that should be considered in the employment work force.

This is the fallacy of the desk audit. If you don't know what is going on out in the community you are reviewing, you are losing.

In addition to that, when a person is a good EOS, if he goes out to a contractor he can gain some valuable information from talking to employees and talking to managers and particularly supervisors. You would be amazed at some of the knowledge that supervisors have of the firms'affirmative action policies and how they relate to it.

Mr. HAWKINS. Would not the EOS have available such information at the time that the desk audit is made rather than, say, leaning on personal experience?

Mr. COLE. That is how it should be, but it just doesn't work that way. For instance, he and I both know of a company that is in Downey and their local recruiting area was identified as all areas east of Downey. The area west of Downey was not identified, so it shows blacks as 5 percent of the population. But they did not consider Compton or Los Angeles and they did not consider much of east Los Angeles. So if you are not knowledgeable in these kinds of things, it is meaningless.

Mr. HAWKINS. Well, I can certainly agree with you.

I just wonder why one leaves to the personal experience of the EOS this type of information. I think you made the point that it is relevant and should be the subject of a review.

I am fairly familiar with Los Angeles County, having lived here practically all of my life, but if I had to speculate on what the minority population is with respect to Downey, I think I would be a little bit hazy as to that myself. And I assume that an EOS would be handling not just Downey but many other areas at the same time and not completely familiar with all of them. Even though he rode through the area, I would think that he would not be totally familiar with what ratio blacks and women bear to the rest of the population.

Mr. COLE. I made a mistake.
It was South Gate, by the way.

Mr. HAWKINS. Well, it is the same. I was just using this as an example. It would seem to me that if a person is basing a review on whether or not compliance is being made with respect to a law, it would be based on something a lot more tangible than just the experience of the person who is reviewing the audit.

Mr. COLE. Well, this is part of the point that if you do not know your area, it is difficult to do an audit review and you can't do it by doing it at a desk. You have to be out in the field to do a good review.

Mrs. MCINTOSH, May, I say something? 1 Mr. HAWKINS. Yes.

Mrs. McIntosh. What he is trying to say is that before "14" came out, it used to be part of our job to go out into the community and talk to the chamber of commerce or the model cities or the Federal-funded agencies to find out the real population of the community and how many people out there are minorities and unemployed.

But with the desk audit you cannot go into the field unless you find a problem with the paperwork. If there is no problem with the paperwork, we cannot go out into the field.

Mr. HAWKINS. Are you saying that you are prohibited from going into the field ?

Mrs. McINTOSH. We are prohibited.
Mr. COLE. Yes.

Mrs. McINTOSH. Unless we find some problem with the paperwork. But the thing is, we are also because I guess it is money or budget, we cannot do as much community work as we did before. We used to have a community resource file where if one person picked up the information it could be typed up or relayed to the other people that is going into the same area.

So without this kind of contact this is really no means of getting availability figures that would be realistic when you are doing the desk audit.

Mr. Kalish. Our instructions as given to us in our staff meetings are that if a contractor says that he does certain things in his affirmative action program we are to assume that he does them.

Mr. HAWKINS. Will you repeat that and let me get that straight?

Mr. Kalish. The instructions that were given to us in our staff meetings are that if a contractor writes his affirmative action program and in that affirmative action program he says, “I decided and defined my policy in these ways, I use various groups for the recruitment forces, I send out letters to the people telling them I am an affirmative action employer," we are supposed to accept that without investigation, without verification.

Mr. HAWKINS. Do you find this reliable or do you find inconsistencies?

Mr. KALISH. Complete inconsistencies.
Mr. HAWKINS. And if you find inconsistencies, what is the next step?
Mr. KALISH. What I have found that I had to do is give two reviews.

I have to get the paperwork right for what order 14 requires and what our office requires and then I have to go out and find out what is going on and in order to do that I usually have to get up any reason : I can to get out to the contractor.

And once I get out there then I do the job as a feel I have to do it. Mr. HAWKINS. When was order 14 issued? Can you give me the date? Mr. CANFIELD. It has been issued and not issued for a couple of years.

The latest change came out last May and we started implementing it last-it was supposed to be around August or September, but it, really was January before we got the full set of forms.

Mr. HAWKINS. Before that time, were vou able to verify information, were you able to go into the field, and were you able to do other things that you say now?..

; Mr. Cole. Let me say that we could.

Mr. HAWKINS. You could, but you were not required
Mr. CANFIELD. You still can.

The only thing at this point is if on the surface there appears to be no problem due to some algebraic formula then you have to justify your reason or doing otherwise and some of these things it just is not there. The criteria used and whether or not you should or should not.

Mr. HAWKINS. Do you feel that the conditions which you are then describing are due primarily to the conviction or feeling that the Department of Labor requires these things or are they simply something which you considered to be primarily in-house practice that your immediate supervisors wish you to do?

Mr. CANFIELD. Well, in reading order 14, what the requirements are, I get a certain impression of what they want you to do during a review. I read the manual that comes out of our headquarters in Washington and I get a slightly different interpretation of what they want us to do, and in the staff meeting they give us another different interpretation.

At each level it is interpreted somewhat different and by the time it gets to the work level it is quite different from what order 14 says.

Mr. COLE. It is clear to me, though, that in order to get along, go along and don't rock the boat and make it easy, don't find nothing.

Mr. Hawkins. You get that feeling from what, the staff meetings?
Mr. COLE. Everywhere.
Mr. HAWKINS. Everywhere?
Mr. COLE. Yes.

Mr. HAWKINS. Well, what alternatives to the present sanction of the department do you suggest that there should be?

I think you indicated that this sometimes seems to be rather harsh.

Do you think there should be another step short of complete debarment? Does not debarment mean that the contract is suspended for a period of time, pending a hearing? Are there other steps including a hearing, at which time there is an opportunity for a correction of the situation.

Mrs. McIntosh. Debarment-when we say debarment, there has never been a company debarred by our office.

Mr. HAWKINS. In what period of time?
Mr. COLE. 1965.
Mrs. MCINTOSH. Since the order has been implemented.

Mr. HAWKINS. Since the order has been issued have you ever known one to be issued ?

Mr. COLE. No.
No debarment.
Mr. CANFIELD. No.

Mrs. MCINTOSH. Up until last year I think there were two or three show-causes issued and it was stepped up by—

Mr. HAWKINS. How many show-causes were issued ?

Mrs. McIntosh. Up until last, I guess October, we didn't issue but four or five in a year.

Mr. COLE. I think the question is that there have been very few showcauses issued to major contractors and particularly for bad faith, and that is the key. I cannot think of no company particularly a major one, not being able to draw up an AAP. But if he does not implement his

there has never been a sanction taken against them.

AAP,

Mr. HAWKINS. We have gone a little bit around the question and that is what alternative to the department would you recommend !

Mr. COLE. A financial sanction.
Mr. Hawkins. By that

you mean what? Mr. COLE. The same kind of a sanction that if a contractor does not meet his goal of producing within a year there is a penalty on that if he runs over budget, there is a penalty for that.

So I am saying if it is going to work he should be penalized financially for not meeting his female goal, his minority goal, and we are talking about particularly the upward mobility too of females.

There should be some financial sanction.

Mr. Hawkins. To your knowledge, have any development proceedings been issued for causes other than that contained in Executive Order 11246 ?

Mr. CANFIELD. Other than that?
Mr. HAWKINS. Yes.
Let's say material problems-
Mr. COLE. Yes.
Mr. CANFIELD. Yes.
Mr. HAWKINS. Failure to live up to the contract or-
Mr. COLE. You mean debarment or sanction?
Mr. HAWKINS. Either debarment or sanctions.
Mr. COLE. Yes.
Mr. Hawkins. Any debarment to your knowledge ?
Mr. CANFIELD. Yes.

There is a list that the Government contracting agency has of debarments.

Vr. Hawkins. Let's say they didn't use the right material specified.
What would happen then?
Mr. CANFIELD. It would be sent-
Mr. HAWKINS. Or they did not meet the time schedule?

Mr. CANFIELD. This is not my area, but there is a list of debarred contractors for different reasons for not meeting the time period for delivery and other items. I do not think there is anybody that has a list now. I don't think we have any reason to look at such a list, but you could check with the contract administration people.

Mr. Hawkins. I think, Mrs. McIntosh, you mentioned something about retaliation.

Do you have anything tangible to back up this statement, retaliation against someone?

Mrs. McIntosh. Are you talking about female retaliation ?

Mr. HAWKINS. Well, I am talking about any retaliation, failure to promote or dismissal or disciplinary action of any kind against an employee for vigorously enforcing

Mrs. MCINTOSH. Oh, yes.
Mr. HAWKINS. Executive Order 11246 ?
Mr. COLE. May I-
Vrs. McIntosh. I would like Mr. Cole to answer that.
Mr. COLE. Yes. You may say that I was a victim of this.

I was reviewing a company-I will not call the company's nameand because I was asking that certain things be done to the company such as I knew for sure the company had not only failed to take affirmative action, but they had rejected people like the urban leaders and so forth who had tried to refer them minorities and intimidation started against me, all kinds of reprimands, my promotion was denied even though I had a formal training agreement that said I should be promoted.

A freeze that was imposed that was undated, unwritten, local to the office of contracts compliance only. Myself, Mr. Canfield both were denied our promotions because of what was happening, my Agency's effort to discredit me and deny me a promotion because I was trying to do my job.

Mr. HAWKINS. What is your present status with your Agency?

Mr. Cole. I am a team leader, I guess there is no sense in bringing that up. I was promoted once a new commander came in, but this commander of the civilian personnel office and my office held up my promotion. It was 18 months.

Mr. CANFIELD. 18 or 29 months?
Mr. COLE. 18 or 20 months that my promotion was held up.
Mrs. MCINTOSH. I would like to add something to that.

The particular company that he was assigned to I came in afterwards and did it 2 years later and tried to issue a letter of show cause to the facility and this particular facility I went as far as writing it up to issue it, and then I was instructed that the admiral said that I could not issue the show cause letter and the letter was never issued. I did not put the company in compliance, someone went over my head to our chief, our action chief, went over my head and put the company in compliance and then proceeded to have me write it up, which I refused to do, and therefore, someone else wrote it up and was given the review and discovered that my documentation could not be written up and sent to Washington because there was a show cause whilefor lack of good-faith effort. So therefore they had no data base to say it was in compliance. It was obviously issued, but I think it took something like 300 hours.

Mr. COLE. Three years later it was finally issued on bad faith-
Mr. CANFIELD. No.
It was ultimately issued on lack of an affirmative action program.
Mrs. MCINTOSH. Yes.

It was issued on a lack of affirmative action program which is not the same as lack of good faith.

Mr. HAWKINS. Mrs. McIntosh, in the matters that we have been discussing and in general, do you find that the discrimination against women is more, less, or fairly comparable to the discrimination against blacks, Spanish-speaking persons, orientals, and so forth?

Mrs. MCINTOSH. Females
Mr. HAWKINS. How would you relate it?

Mrs. McIntosh. Females collectively are discriminated against because we do not get the backing in the field that we need.

If I go out to a company i have to be extra cautious in what I say or take another male crewmember with me when I talk to females to make sure they cannot call my boss up and say I am intimidating them, and if I do not have no one with me they never ask me. This takes place, they remove me from the review and give it to someone else.

I issued a show-cause letter on the company because of a lack of good-faith effort and they proceeded-the commander took me away

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