ATTACHMENT 7 THE DEPUTY SECRETARY OF DEFENSE, Hon. GEORGE P. SHULTZ, Washington, D.C. DEAR MR. SHULTZ: This is in response to your 12 February 1969 request for a report on the Department of Defense EEO compliance efforts with Dan River Mills, Incorporated, Burlington Industries, Incorporated, and J. P. Stevens and Company, Incorporated. The Director, Defense Supply Agency is the Deputy Contract Compliance Officer for the Department of Defense and is responsible for contract compliance operations. DSA completed compliance reviews of Dan River Mills facilities on 26 January 1968. J. P. Stevens reviews were completed in August 1968, and Burlington Industries on 23 September 1968. Negotiations between DSA and these companies have been continuous since the time of their reviews. The Office of Federal Contract Compliance has been kept fully informed of these negotiations. During the negotiations DSA received guidance on the implementation of the 28 May 1968 Rules and Regulations, OFCC policy memoranda, and recent court decisions. DSA's final position with these companies was discussed at conferences at DSA headquarters level in late January 1969. The concept of affirmative action is an evolving one. Successful practices, court decisions, and experience define its meaning more clearly. Much knowledge has been gained in the past year. This has resulted in new policy guidance and the need to give contractors an opportunity to react with plans to these changing concepts. This occurred during the textile negotiations and understandably resulted in lengthy negotiations and some misunderstanding between the companies and government officials. These misunderstandings are now dispelled. Actual results in terms of employment of minority applicants and treatment of employees without regard to race, creed, color or national origin determine whether a contractor is in compliance with the Executive Order. The contractor is in the unique position to decide which is the best method for his organization to achieve these required results. In my discussions with the chief executives of Dan River Mills, Burlington Industries and J. P. Stevens, the deficiencies found by DSA were discussed. They were in the following areas: 1. The companies do not provide in detail "specific goals and time tables for the prompt achievement of full and equal employment opportunity" as required in Section 60-1.40 of the OFCC Rules and Regulations. 2. OFCC policy and recent court decisions require that contractors remedy the present effects of past discrimination. Acceptable contractor programs to meet this requirement have yet to be formulated. 3. The companies have not provided a meaningful plan to assure fairness and nondiscrimination in recruiting, selection, placement, promotion, and upgrading. 4. There still remains some company housing that is occupied on a segregated basis. A plan for prompt desegregation is needed. The chief executives have assured me that their companies will implement affirmative action plans to achieve the results contemplated under the Executive Order. I intend to personally monitor this program and have asked for quarterly reports. The first report will cover 1 February 1969 through 30 April 1969. The Department of Defense compliance staff has been asked to keep the Office of Federal Contract Compliance fully informed and to seek the assistance offered in their letter of 6 February 1969. I plan to keep you fully advised and will consult with you on any further actions. Sincerely, DAVID PACKARD. ATTACHMENT 8 DEMOCRATIC STUDY GROUP, U.S. HOUSE OF REPRESENTATIVES, THE PRESIDENT, DEAR MR. PRESIDENT: We are writing to you again about the matter of civil rights enforcement. We are concerned that Deputy Secretary of Defense Packard's disregard of regulations established to carry out Executive Order 11246, which bans the award of federal contracts to companies which engage in discriminatory employment practices, may signal a serious breakdown in federal civil rights enforcement efforts. Executive Order 11246, together with the rules and regulations promulgated thereunder, is designed to assure that the federal government will not subsidize companies which practice employment discrimination. The Executive Order directs that the Office of Federal Contract Compliance, Department of Labor, shall have supervisory responsibility over enforcement of the Order and will coordinate the efforts of the various federal contracting agencies. In the past month, defense contracts totaling $14 million were awarded to three textile firms-Dan River Mills, Burlington Industries and J. P. Stevens & Co.-despite the fact that investigations by the Defense Supply Agency revealed that all three companies discriminate in hiring, promotion and other practices. OFCC regulations of May 28, 1968, specifically provide that once a contractor is found deficient in civil rights compliance, "it must make a specific commitment, in writing, to correct any such deficiencies. The commitment must include the action to be taken and the dates for completion." (Sec. 60-1:20) Compliance with this regulation is sorely lacking. On February 8, 1969, despite finds of deficiency, contracts totaling $9.4 million were granted the three noncomplying companies. Further, contracts totaling $4.5 million were announced on February 19 and 20. In each case, the requirement of written assurances was ignored. Deputy Secretary Packard claims to have received oral assurances that the companies would henceforth comply with the Executive Order. Such a procedure is not only totally inadequate, but is a gross violation of the OFCC regulation cited above. In addition, despite its responsibilities in this area, the OFCC was not even consulted regarding the decision to award these contracts. Such actions seriously undermine federal civil rights enforcement efforts. As we pointed out in our letter of February 1, expressing concern at relaxation of Title VI school desegregation procedures, any letup in enforcement of civil rights inevitably leads those who would disobey the law to believe they can do so with impunity. We therefore think it imperative, Mr. President, that you make it clear to all federal contracting agencies and the business community that Executive Order 11246 will be firmly enforced. Such action is necessary in order to correct any misimpression that may have occurred due to Deputy Secretary Packard's action in awarding the contracts without proper written assurances of compliance with the Executive Order. Further, we understand that the Department of Defense may award several million dollars in additional contracts to the same three companies, as well as contracts to four or five other textile companies whose employment policies are now under review by the Department of Defense. We urge that these contracts not be awarded unless and until such time as the companies involved meet all legal requirements not to engage in discriminatory employment practices. Any other course of action would completely disrupt orderly governmental procedures and would give notice that federal laws against discrimination may be flaunted with abandon. We understand that Dan River Mills, Burlington Industries and J. P. Stevens & Co. will be required to file periodic reports of their progress in eliminating discriminatory practices. Until such time as those reports are filed and evaluated by the Department of Defense and the OFCC, further contract awards to these companies would be reprehensible. In addition, contracts should not be granted those companies now under investigation until it is found that they do, in fact, comply with federal law. Sincerely, DONALD M. FRASER, Chairman. JAMES C. CORMAN, Secretary-Chief Whip. DON EDWARDS, Chairman, Task Force on Civil Rights. ATTACHMENT 9 MARCH 5, 1969. Deputy Secretary DAVID PACKARD, DEAR MR. PACKARD: On February 12th, we wrote to you expressing our deep concern over your award of $9.4 million in textile contracts to three firmsDan River Mills, Inc., Burlington Industries, Inc. and J. P. Stevens and Company, Inc., whose employment policies have been found to be discriminatory. The award of these contracts on the basis of verbal and as yet undisclosed assurances that the heads of the three firms made to you, strike us as a violation of Executive Order 11246 and its regulations. These require "a specific commitment, in writing, to correct any . . . deficiencies. The commitment must include the precise action to be taken and dates for completion." Since none of these requirements appears to have been met, you can imagine how our apprehension has deepened upon learning there is every likelihood the Department of Defense, within the month, will award additional contracts to the three companies without written commitment that they will comply with the Executive Order. It is impossible to exaggerate the gravity of the situation. The Defense Department has long been the bell-wether of contract compliance. Other government agencies follow the lead of your Department. In this instance the Department seems to have adopted a procedure that could undermine the program instituted by Presidential order, to prohibit job discrimination in government contract work and to promote equal employment opportunities for all citizens. Your informal handling of the matter may well result in less rigorous enforcement of the Executive Order by other Federal agencies. Contractors may feel less impelled to meet the requirements of the regulations since you have shown a disposition to waive them. Those contractors who have previously complied with the order may now feel the three firms were given special preferential treatment and may well resent that. The precedent is a dangerous one. It may weaken enforcement of the Executive Order. Under the circumstances, we feel the least the Department of Defense can do is withhold any further contracts from the three companies until their first quarterly reports, due we understand on May 1, are carefully examined by your office and the Department of Labor to determine if the firms are in full compliance with the Executive Order. These cases are crucial to further enforcement of the government's equal opportunity policy. If they are mishandled public confidence in the government's efforts to end racial discrimination in employment will be badly shaken. Thousands of Americans will be denied the hope that can be fostered by good jobs, good pay and the prospect of advancement on the basis of merit. We therefore urge you to stop all further awards to these companies. We also renew our request for a meeting. Your reply to our letter of February 12 gives no clear indication of when we can see you. The urgency of this matter compels us to ask to meet with you at your earliest convenience to discuss the grave implications of what has been done. Sincerely yours, Chairman, Compliance and Enforcement Committee. JAMES HAMILTON, CLARENCE M. MITCHELL, Chairman, Legislative Committee. U.S. SENATE, The HONORABLE DAVID PACKARD, COMMITTEE ON LABOR AND PUBLIC WELFARE, Deputy Secretary of Defense, Department of Defense, DEAR MR. SECRETARY: I am most concerned that the Department of Defense has approved contracts totaling $9.4 million with three Southern textile companiesJ. P. Stevens, Dan River Mills, and Burlington Industries. Under a textile program plan agreed to by the Department of Defense, the Equal Employment Opportunity Commission, the Department of Justice, and the Office of Federal Contract Compliance in January, 1968, OFCC and DOD agreed to review the employment policies of the eight largest Southern textile firms. The Department of Defense also agreed to consult OFCC and to obtain their concurrence before approving any contracts with these companies. Essentially, there were three primary complaints against the larger of these companies, including the three involved in the above contracts: 1. Company owned housing for employees was segregated; 2. Few Negro females were being hired, despite the large number of white females employed by these firms; 3. Negro male employees were being discriminated against in terms of promotion. After an extensive review of these complaints and others, meetings were held between the government and each of the three firms in question in January, 1968. None of the firms made assurances at these meetings which were sufficient for either DOD or OFCC to recommend approval of their contracts. However, on February 8, 1969, your office announced that contracts with each of these firms were approved on the grounds that the companies had promised "affirmative action" to comply with the Federal Government's regulations banning discrimination in employment on the part of government contractors. Since the terms of the agreements have not yet been announced, I am in no position to determine whether there can be any expectation of compliance on the part of these companies. I would therefore appreciate it if you would inform me as to the content of each of those agreements. Regardless of the terms of the agreement, I am most disturbed by the fact that these contracts were approved without even consulting OFCC, much less obtaining their concurrence. In fact, as of February 11, 1969, OFCC did not even know the terms of the "affirmative action" plan agreed to by these companies. While the first line of responsibility for enforcement of Executive Order 11246 rests with the contracting agency, it is OFCC's responsibility to establish general government policy for contract compliance and to oversee the contract compliance programs of the various government agencies to assure a consistent policy. OFCC's role in the present case was even clearer, since it was spelled out by the textile program plan agreed to by the Department of Defense. Since OFCC was completely ignored by DOD when it entered into this particular settlement, it was obviously unable to evaluate the terms of this settlement. I therefore urge you to hold up DOD approval of these contracts for the purpose of informing OFCC of the settlement and seeking their concurrence. One of the primary dangers in the procedure followed by the Department of Defense is that if OFCC does object to the settlement, as a practical matter, it can only move to bar these companies from bidding on other federal contracts. I also urge you to consult with OFCC in the future before approving contracts in which OFCC has expressed an interest. To by-pass OFCC in these matters will cause chaos and confusion in the government's contract compliance program. Executive Order 11246 clearly reflects the policy of the Federal Government that it must not subsidize discrimination. The textile program plan agreed to by all relevant agencies, (including DOD) to deal with employment discrimination in the textile industry was in furtherance of this objective. Your action in approving these contracts clearly jeopardizes that plan. Sincerely, WALTER F. MONDALE. Senator KENNEDY. The copy of the letter that was sent from Mr. Packard to Mr. Shultz, we have placed in the record earlier today.. After listing those four areas where they feel there have been compliance before, as you indicated in your testimony, the letter continues: The chief executives have assured me that their companies will implement affirmative action plans to achieve the results contemplated under the Executive Order. The only things we have even heard about here today have been these questionnaires. And announcements have been made by one company that certain agreements have been reached, that was announced today, but from the other two companies which have had the most difficult record in terms of compliance we haven't had any affirmative action plans that have been exposed either to date or indicated to us. I am just wondering if from your research or your background you have come across these action plans. Senator MONDALE. First of all, the Deputy Secretary of Defense, like all of us, is required to obey the law. He disregarded the Executive order, he disregarded a carefully prepared order and set of procedures. He disregarded an office which is the office that specializes in this field, and which he is required to deal with under the Secretary's order, and he disregarded his own organization and the experts in his own Department which deal with this problem. And he disappointed and frustrated an effort that has been carried on in a most responsible, thorough, step-by-step fashion for over a year in this one field. And I rather suspect that he sold out at a time when they might have been close to settlement, at least with respect to one of the contractors. So that in all respects he violated the order. When they are in noncompliance he clearly has to have those matters in writing. And there is a good reason for that, because it becomes very complicated. It is not just signing a statement-I will do better; it involves agreements on hiring policies or promotional policies, on back pay, on all other aspects of employment, and where they own housing or other things, agreement on that as well. I can recall last year that there was a Minnesota employer who had to comply with the OFCC rules. And he signed an exhaustively detailed document. He had to make back pay and take all kinds of other steps to not only correct wrong in the future, but to make promotions and make restitution for lost pay, and many, many other steps. None of this to my knowledge is being required here. I have written the Deputy Secretary of Defense and received a "nonanswer" from him. And I think that is the best answer you can give right now. If this continues, the Executive order is dead, and one of the most promising and hopeful tools for requiring equal employment in this country will be destroyed. And I think we will further contribute to the frustration and despair and alienation not only of black Americans, but of the young and concerned in this country that are getting tired of all this baloney that separates us from our announced principles and our practices. Senator KENNEDY. Any further questions? Senator Hart? Senator HART. No. I just thank Senator Mondale for all that he has done. And I want to say that, unhappily, even if this is resolved in a fashion that will meet the views of the chairman and Senator Mondale |