or subcontract, and debarment from future contracts or subcontracts. The contractor is provided 14 days to request a formal hearing to present his reasons why such action should not be taken and to date none of the show-cause letters that we have issued have resulted in this letter action.

Mr. HAWKINS. So you have never had any termination or cancellation as a result of failure to comply with the Executive Order 11246?

General DEARMOND. No, sir. Not that I know of. They made the corrections after they received the show-cause letter or actually before the show-cause letter was really issued.

Mr. HAWKINS. And they

General DEARMOND. There was one instance where we recall where one lost a contract worth $200,000 on a procurement order, sir.

Mr. HAWKINS. That is the only instance that you know of in which a contractor

General DEARMOND. Yes, sir.

Mr. HAWKINS [continuing]. Any contractor has lost a contract as a result of failure to comply?

General DEARMOND. Yes, sir.

Mr. HAWKINS. Does it seem to you somewhat remarkable that out of all of the contractors whom you have jurisdiction over, that they would be in such perfect compliance with the Executive order at the same time that such a tremendous number of allegations of discrimination are being made both with respect to minorities as well as women? Are you satisfied that every contractor who is doing business with the Federal Government is reasonably complying with the Executive order?

General DEARMOND. Sir, I would hope so. I cannot comment accurately on your question. I would say that the contractors are most aware of the potential when they are awarded a show-cause letter or when we consider the fact that they are going to receive a show-cause letter, and they take very prompt corrective action to correct the discrepancies.

Mr. HAWKINS. Well, would you detail a little bit the type of corrective actions to which you refer?

General DEARMOND. Yes, sir. It is basically showing good faith to complete the goals and agreements of their affirmative action plan. Mr. HAWKINS. Well, let's say that it is a company which has a pattern or history of past discriminations. Would you depend largely on their affirmative action program that they will not discriminate in the future or that they would show good faith effort in order to overcome past discrimination? Would you accept their assurance that if they get the contract, they are going to be good fellows?

General DEARMOND. Yes, sir. We would accept on good faith that their intentions are honorable in this direction, but we would also check to make sure that they would follow up on it, and I would like, if I may, to discuss a case which your office requested, Data Design, to show you perhaps the operation.

Data Design Corp., at the time of a routine compliance review in 1971, had a total work force of 155 people, including 21.9 percent females and 5.8 percent minorities.

That is in 1971. A determination was made to the effect that an underutilization existed in each job category.

A preaward review of April 4, 1972, indicated a total work force of 172, including 9.2 percent females and 8.1 percent minorities. The contractor was making slow progress and agreed to an accelerated goal of 8 minorities out of the next 11 hires.

Also, this is in communications with our agency. Also, quarterly reports would be submitted on this hiring program.

A preaward review of October 1972 revealed further slow progress, However, from October 1, 1972, through March 15, 1973, considerable progress was made, as indicated by the fact that the contractor made a total of 38 new hires, including 71 percent females and 31.6 percent minorities. From July 1 through August 31, 1973, there were 15 new hires involving 20 percent females, although the numbers are small, and 26.7 percent minorities.

On July 1, 1974, the total work force was 96, which is now a reduction in number, but now included 33 percent female and 17.7 percent minorities.

In January 1975 we received a progress report showing that substantial emphasis on the employment of minorities and females had resulted in these achievements: out of a total work force now of 104, Data Design reported 9 blacks, 14 Spanish surnamed, 1 oriental and 39 females, well scattered over most job categories. These figures indicate that minorities now make up 23 percent of the total work force and females 38 percent.

I mentioned this to give you some idea of the checks that we would do, and the progress reports we would get of an organization that we consider having inadequate minority employment.

Mr. HAWKINS. Gentlemen, let me ask you this: Using Rockwell International, for example, which has many divisions. Let's assume that we are seeking a contract in one division, and their affirmative action plan for that division was acceptable, but that in another division-and I am not stating this as a fact, I am using this as an example their record was not good; that is, another division would not comply with the provisions of an affirmative action program. Would the contract to the one division based on that single contract be acceptable, or would all divisions of that company be required to have an affirmative action program acceptable before being approved?

General DEARMOND. Sir, if one division was unacceptable, all divisions would be barred from Government contracts.

Mr. HAWKINS. The final question, which I would like to ask with respect to the relationship between the Office of Federal Contract Compliance and your particular agency is: What type of relationship do you have with the Office of Federal Contract Compliance today? Do they supervise or do they interject their control or guidelines over what you do, and do they review from time to time the administrative functions that you perform?

General DEARMOND. Sir, the Federal Office of Contract Compliance is responsible for the total contracts compliance operation Government-wide and determines the rules, regulations, and procedures for all Government agencies. These instructions are then received by the Deputy Assistant Secretary of Defense for Equal Opportunity, Mr. Francis, who then codifies and verifies these corrections provided to DSA, in turn which promulgates the regulations and gives us our guidelines. So, I guess you can say that the Office of Federal Contract Compliance is overall responsible and sets the guidance and general direction.

Mr. HAWKINS. Thank you. I have no further questions.
Mr. Mosse.

Mr. Mosse. Thank you, Mr. Chairman.

Aside from the regulations which it promulgates, how does the OFCC supervise agencies such as yours in the approval of affirmative action plans? How does it know that the implemention of those regulations which it has promulgated will be fully effectuated?

General DEARMOND. Sir, I am unqualified to answer just the management techniques used by OFCC. I assume they have management measures which they look at the job done not only in the Department of Defense, but other departments, and compare their activities. But I am not qualified to respond on that.

Mr. MOSSE. Is your immediate line of responsibility to the Department of Defense?

General DEARMOND. Yes.

Mr. MOSSE. And not to OFCC?

General DEARMOND. No, sir. Mine is to the Defense Supply Agency. Mr. MOSSE. I see.

General DEARMOND. Which is a segment of the Department of Defense.

Mr. MOSSE. And then the Defense Department in turn has to coordinate with OFCC?

General DEARMOND. They in turn coordinate with Mr. Francis' office, or Mr. Francis coordinates with the Office of Federal Contract Compliance.

Mr. MOSSE. Have you ever had a visit by an OFCC representative? General DEARMOND. No, sir. Not that I know of.

Mr. Mosse. Do you think that it would be helpful to have visits by OFCC staff?

General DEARMOND. We would welcome visits, sir, for any recommendations they have on how we might increase our productivity or areas where we possibly have shortcomings.

Mr. Mosse. Do you find that you lack guidance from OFCC? General DEARMOND. No. I think our guidance is detailed and specific.

Mr. Mosse. Do you think it would be helpful to have training programs for your employees, guided by OFCC officials, so that your employees would know exactly what was expected of them and of DCASR in its analysis of affirmative action plans?

56-250-75- -6

General DEARMOND. In general, sir, I think any training programs are good in improving the capabilities and production of anyone, as long as the funds are available for such training.

I would welcome additional training, but you must take into consideration the funding situation right now. We do our own training, which I believe is we produce qualified people using principally onthe-job training techniques.

Mr. MOSSE. Another question I wanted to ask you: on page 6 of your prepared statement, you indicated that the percentages which you therein stated reflected the decline in employment in the industries which you have reviewed, especially the decline in male employment. Do you mean male employment as opposed to female employment? Does that also include male minorities, or what is the basis for those statistics?

General DEARMOND. No. That was total male and total female, sir, if I can review those for you. We are looking at the categories now from the point of view of rates of change, 1969 and 1970 to 1974. We found that the number of semiskilled females employed increased by 4 percent, while males semiskilled decreased by 5 percent.

We are talking totals.

Mr. Mosse. But you have found in that 4- to 5-year time period that male employment has definitely decreased, while at the same time female employment has increased?

General DEARMOND. Looking at the time frame from 1969 and 1970 to 1974, yes, sir. Female employment increased in most categories, and male employment declined. As an example, among professionals, the female accession rate was 10 percent against 15 percent drop in males. Among officials and managers, female representation increased by 34 percent, while among males there was a drop of 8 percent.

Mr. Mosse. How about the percentage of minorities reflected the increase in female and decrease in male employment?

General DEARMOND. I would like to address male minority and female minority, if I could in response to your question. Turning to the male-excuse me.

For the period July 1, 1973, through July of 1974, we have to analyze the status of 222 facilities. We found that despite a net decline of 13 percent total employment, minority employment increased from 14.3 percent of the total work force to 19.1 percent. The employment of females during this time, however, increased only one-tenth of 1 percent as a percentage of the total work force.

Now, this is a national employment decline from approximately 85,000 to 78,000. Looking further at the work force distribution, we find 41 percent of women employees are semiskilled, 7 percent are the semiskilled categories, less than 2 percent are managers, and less than 5 percent professionals.

In this paragraph we are contrasting to male employees, and we show generally a higher number of males in the more skilled levels. Mr. MOSSE. Excuse me, General, but getting back to your original point that male employment is falling while female employment is rising, did you say that less than one-tenth of 1 percent of the increase in female employment is minority?

General DEARMOND. No, sir. That is total female.

Mr. MOSSE. Total female?

General DEARMOND. Yes, sir.

Mr. Mosse. What is the percentage of the total female increase which is minority; do you have that figure?

General DEARMOND. No, sir. I will have to get that data for you. I don't have it in my presentation. I will have to forward it to the subcommittee.

Mr. HAWKINS. Without objection that material will be entered in the record at this point.

[Information referred to follows:]

DEFENSE SUPPLY AGENCY,

DEFENSE CONTRACT ADMINISTRATION SERVICES REGION, LOS ANGELES,

Hon. AUGUSTUS F. HAWKINS,

Los Angeles, Calif., April 2, 1975.

Chairman, Subcommittee on Equal Opportunities,
Committee on Education and Labor,
Washington, D.C.

DEAR MR. CHAIRMAN: In response to your question concerning female minority employment at the hearing here in Los Angeles on March 27, 1975, I am enclosing the results of surveys conducted by our Contracts Compliance Office for Fiscal Year 1970 and Fiscal Year 1974.

As you will note from the enclosure, at the 222 facilities examined there was a net reduction in total employment of 45,986 or a net decline of 13% as I informed your committee (formal statement, page 4). With respect to changes among female minority employees from 1970 to 1974 we found there had been an increase in the employment of minority females of 5,089 which is an increase of 41.1%. The enclosure shows the distribution among the job categories and also shows the total number of persons employed in the various job categories.

If the foregoing information is not adequate to meet the needs of your committee, I will be happy to supply further information upon your request. Sincerely,