Senator KENNEDY. Was this before or after you made the agreement? Mr. PACKARD. It was before I made the agreement, Mr. Chair man. Senator KENNEDY. And what did they specifically advise you on the question of whether the agreement would be made orally or could be made written? Mr. PACKARD. They advised me that it would be appropriate for me to get in touch with the chief executive officers, and to get a commitment from them. We prepared a letter which we sent to these chief executive officers outlining what we expected of them. (The letters and the replies follow:) Mr. CHARLES F. MYERS, Jr., Chairman, Burlington Industries, Inc., THE DEPUTY SECRETARY OF DEFENSE, DEAR MR. MYERS: This refers to our recent conversation with respect to the awards pursuant to Invitation for Bids number DSA-100-69-BO782. The pre-award surveys of your plants conducted by the Contract Compliance Officer revealed inadequate progress under the Equal Employment Opportunity Program established by Executive Order 11246, and my review of the background of this matter also leads me to the conclusion that while progress has been made, it has not been entirely satisfactory. For this reason I telephoned you on 4 February 1969 to discuss the future plans of your company in the achievement of the goals of Executive Order 11246 and to obtain your assurance that every effort will be made to make additional progress in the future. Upon the basis of progress which has been made and your personal assurance, I have concluded that awards should be made under Invitation for Bids number DSA-100-69-BO782 for needed field uniform cloth. In accordance with your assurance to me, the Department of Defense will expect continual progress in the achievement of the goals of equal employment opportunities. I will also expect quarterly progress reports with respect to your various plants. Because I feel that it is essential that this problem receive your personal attention, I am enclosing a copy of Department of Defense Directive 1100.11 to which is attached a copy of Executive Order 11246, and a copy of the pertinent Department of Labor regulations. I will expect within the near future to continue discussions with you of specific steps which will enable the Department to evaluate your further progress in the Equal Employment Opportunity Program. Sincerely yours, DAVID PACKARD. BURLINGTON INDUSTRIES, INC., Hon. DAVID PACKARD, Deputy Secretary of Defense, DEAR MR. SECRETARY: Inasmuch as Mr. Myers is out of the country, your letter of February 7 to him has been referred to the writer for attention. Although not directly involved in the daily operations of our Equal Employment Opportunity Program, I am familiar with it and have kept fully informed on progress made and on continuing plans for implementation. We are pleased that you have concluded that Burlington is eligible to participate in awards made under Invitation for Bids #DSA-100-69-B0782 for needed field uniform cloth on the basis of progress made by our Company to date and by Mr. Myers' personal assurances to you. We re-emphasize our determination to continue to comply fully with the Equal Employment Opportunity Program established by Executive Order 11246. We are determined to make continuing progress in that direction and we will, of course, submit the quarterly progress reports you have requested. Your letter of February 7 provided clearance only on the field uniform cloth covered by the Invitation for Bids above referred to. We are, however, receiving additional Invitations to Bid from various military procurement agencies and such invitations have been received in recent days. In view of the fact that we have a revised program of affirmative action as detailed in our January 27, 1969 report with covering letter of January 28 to Mr. Shafer, we request that Burlington Industries and its various divisions be classified as being in compliance with Executive Order 11246 pending further studies by the office of contracts compliance and reviews of our quarterly progress reports. We re-emphasize, as Mr. Myers did in his February 4 letter to you, that Burlington Industries has had an affirmative action program in compliance with Equal Employment Opportunity requirements for some time past, the most recent of which is referred to in the preceding program. A copy of this Plan was attached to Mr. Myers' letter to you. Notwithstanding the very proper procedural treatment relating to Invitation of Bid #DSA-100-69-B0782, we believe that our January 27 Plan meets the full requirements of Executive Order 11246 for continuing affirmative action and should be considered as such by the government agencies having jurisdiction. If you and Mr. Shafer agree with our position, it would be helpful if we could be advised promptly in order that we may do an even better job than in the past in meeting the Department of Defense textile requirements. Sincerely, ELY R. CALLAWAY, Jr. THE DEPUTY SECRETARY OF DEFENSE, Mr. ROBERT SMALL, Dan River Mills, Inc. DEAR MR. SMALL: This refers to our recent conversation with respect to the awards pursuant to Invitation for Bids number DSA-100-69-BO782. The pre-award surveys of your plants conducted by the Contract Compliance Officer revealed inadequate progress under the Equal Employment Opportunity Program established by Executive Order 11246, and my review of the background of this matter also leads me to the conclusion that while progress has been made, it has not been entirely satisfactory. For this reason I telephoned you on February 3, 1969 to discuss the future plans of your company in the achievement of the goals of Executive Order 11246 and to obtain your assurance that every effort will be made to make additional progress in the future. Upon the basis of progress which has been made and your personal assurance, I have concluded that wards should be made under Invitation for Bids number DSA-100-69-BO782 for needed field uniform cloth. In acordance with your assurance to me, the Department of Defense will expect continual progress in the achievement of the goals of equal employment opportunities. I will also expect quarterly progress reports with respect to your various plants. Because I feel that it is essential that this problem receive your personal attention, I am enclosing a copy of Department of Defense Directive 1100.11 to which is attached a copy of Executive Order 11246, and a copy of the pertinent Department of Labor regulations. I will expect within the near future to continue discussions with you of specific steps which will enable the Department to evaluate your further progress in the Equal Employment Opportunity Program. Sincerely yours, DAVID PACKARD. DAN RIVER MILLS, INC., Greenville, S.C., February 14, 1969. Hon. DAVID PACKARD, Deputy Secretary of Defense, Washington, D.C. DEAR SECRETARY PACKARD: We have received your letter of February 7, 1969 informing us of your decision to make awards under Invitation for Bids No. DSA-100-69-BO782. Your interest in this matter is deeply appreciated. We wish to reaffirm our assurance that our Company expects to make continued progress in the achievement of equal employment opportunity goals. It has been and is our intention to implement an affirmative action program which will accomplish the goals of Executive Order 11246. During the many discussions with representatives of the Defense Supply Agency, we made a number of modifications in our plan at their request and thought as long ago as last July that a satisfactory agreement had been reached. We are hopeful that this can now be brought to a successful conclusion. I will be happy to meet with you at your convenience in order to voluntarily conclude this matter. Yours very truly, ROBERT S. SMALL. THE DEPUTY SECRETARY OF DEFENSE, Mr. ROBERT T. STEVENS, DEAR MR. STEVENS: This refers to our recent conversation with respect to the awards pursuant to Invitation for Bids number DSA-100-69-BO782. The pre-award surveys of your plants conducted by the Contract Compliance Officer revealed inadequate progress under the Equal Employment Opportunity Program established by Executive Order 11246, and my review of the background of this matter also leads me to the conclusion that while progress has been made, it has not been entirely satisfactory. For this reason I requested that you join me in my office on 3 and 5 Feb. 1969 to discuss the future plans of your company in the achievement of the goals of Executive Order 11246 and to obtain your assurance that every effort will be made to make additional progress in the future. Upon the basis of progress which has been made and your personal assurance, I have concluded that awards should be made under Invitation for Bids number DSA-100-69-BO782 for needed field uniform cloth. In accordance with your assurance to me, the Department of Defense will expect continual progress in the achievement of the goals of equal employment opportunities. I will also expect quarterly progress reports with respect to your various plants. Because I feel that it is essential that this problem receive your personal attention, I am enclosing a copy of Department of Defense Directive 1100.11 to which is attached a copy of Executive Order 11246, and a copy of the pertinent Department of Labor regulations. I will expect within the near future to continue discussions with you of specific steps which will enable the Department to evaluate your further progress in the Equal Employment Opportunity Program. Sincerely yours, DAVID PACKARD. J. P. STEVENS & CO., INC., Hon. DAVID PACKARD, Deputy Secretary of Defense, DEAR MR. SECRETARY: This will acknowledge your letter of February 7th and I want to reaffirm the assurance that Stevens (J. P. Stevens & Co., Inc.) is not only committed to, but is sincerely in agreement with, the principles of equal employment opportunity. It is our intention to cooperate fully in the achievement of the objectives set forth in the Executive Order 11246. As I have made known to you, however, there have been some demands made upon us by the compliance people which call for a policy of discrimination instead of non-discrimination. We believe that it would be neither right nor lawful for us to acquiesce in proposals of that nature. In order that you may assess more specifically the genuineness of our position and our actions in this matter, I am enclosing a copy of our latest communication to the Defense Supply Agency under date of January 23, 1969. I trust that we can now proceed without delay in working out an affirmative action program which will be deemed fair and just to all concerned. Hopefully, recurrent delays in the implementation of contract awards will also be thereby avoided. Referring to the mention in your letter of February 7th of quarterly reports, we will plan to submit our first report on or about May 7th 1969. I am sure you will appreciate that it is going to require time to get our affirmative action into high gear but we will do our best. Yours sincerely, ROBERT T. STEVENS. JANUARY 23, 1969. Mr. M. R. SHAFER, Chief, Office of Contracts Compliance, Contract Administration Services, Defense Supply Agency, Cameron Station, Alexandria, Va. DEAR MR. SHAFER: We are writing for the purpose of setting forth our response to the matters discussed at our meeting with you, in Alexandria, on January 17th. We think it would not be inappropriate to point out first, however, that, as has been the case all along, rather long intervals occur before we hear from you relative to our communications, and then quite suddenly you impose very short time limitations upon us-although the matters at issue are of grave importance and require the most thorough consideration and study on our part. Thus, on November 29, 1968, pursuant to your instructions, we submitted to you a carefully drawn program for affirmative action, by our company, under Executive Order 11246. We heard nothing from you at all until January 9th, when Mr. Landry called and asked us to come to Alexandria. We offered to come on either January 13th or 14th. Mr. Landry told us to come, instead, either on January 16th or 17th. At the conclusion of the meeting on January 17th, you informed us that you must have in your hands a definite reply on the matters in question by tomorrow, January 24th. At our meeting, you informed us that the affirmative action program, which we had presented to you, was unsatisfactory in various respects. You refer to these inadequacies in an outline which we received from you at our meeting. We have tried to analyze your outline from every standpoint-and in the light of all that you stated to us during the meeting. We are entirely willing to undertake to reform and re-draft the program we submitted to you, endeavoring in every way we can to put forward a full and detailed statement of purpose and action to carry out the guiding principle of discriminating neither against majority groups nor minority groups, in matters relating to employment and employees. We fear, however, that no degree of effort on our part in this direction will prove worthwhile. For your statements to us in our meeting on January 17th, make it clear that you expect and will require of us something other than evenhandedness and non-discrimination. You stated to us that an affirmative action program acceptable to you necessarily means a program involving preferential treatment for minority group individuals. You spoke of the necessity of setting and achieving numerical goals or quotas. You declared, for example, that as to employee housing, we must within brief time limits, evict all white employees from the houses which they now rent from us and begin anew the renting of such houses. We pointed out to you that we have heretofore tried to assure, and are willing to assure in any way you may wish, that all our dealings with employees, and potential employees, shall be wholly without regard to their race, color, religion, or national origin. We have stated that this is true, and will continue to be true, as to all phases of employment in our company, "including but not limited to recruiting, hiring, placement, training, promotion, transfer, upgrading, demotions, termination, lay-off, recall, compensation, benefits, use of facilities, and participation in all company-conducted employee activities.” We are willing to elaborate this principle, and all applications of it, in any way you may desire. We are not willing, however, to enunciate any program, nor implement any program, which would mean preferential treatment and discrimination in favor of minority group employees and against majority group employees. In expecting us to do so, we do not believe that you are justified or supported by anything in the law or in the Executive Order-nor in fairness or right, for that matter. We have heretofore brought to your attention various examples of affirmative action on our part, demonstrating that we are not in fact discriminating against employees, or potential employees, on grounds of race or color. As you may remember, among our company's plants included in your "in-depth" analysis, there were five selected by your office which were visited and surveyed by Mr. Landry. The figures for these plants, for the entire period covered by Mr. Landry's survey, with respect to:-(1) the percentages of Negroes hired in relation to the total number of employees hired, and (2) the percentage of Negro employees promoted in relation to the total number of employees promoted, were as follows: Patterson-24 percent of all persons hired, and 26 percent of all employees promoted, were Negroes. Whitmire-34 percent of all persons hired, and 31 percent of all employees promoted, were Negroes. Republic-30 percent of all persons hired, and 35 percent of all employees promoted, were Negroes. Cleveland-31 percent of all persons hired, and 40 percent of all employees promoted, were Negroes. Rosemary-29 percent of all persons hired, and 40 percent of all employees promoted, were Negroes. We realize that our unwillingness to do what you are now demanding of us could result in your recommending that our company not be allowed to perform work for the Government in our plants. This we deeply regret. For contracts with the Government are a significant source of work for our plants and employment for our people. Particularly also, would we regret losing the opportunity of helping to serve the military needs of our country-a contribution of which we have been proud and in which we know our company has made a notable record throughout the years. Nevertheless, we are not willing to enter upon any program of affrmative action which has as its true purpose that which you have expressed to us, namely, preferential treatment and discrimination based upon race or color. Respectfully yours, J. W. JELKS, Senator KENNEDY. The regulations relating to contract compliance under the Executive order provide that, "Each department will require each prime contractor to develop a written affirmative action compliance program for its establishment." It is most difficult for me to understand how counsel could advise that oral agreements would suffice under the regulations. Senator DIRKSEN. Mr. Secretary, you asked legal opinion before you took any action, and that must have included whether or not you had to proceed with a written understanding or whether you would do this orally, and you had such an opinion from counsel ? Mr. PACKARD. Senator Dirksen; yes. Senator DIRKSEN. Was that opinion to you reduced to writing? Mr. PACKARD. I have an opinion from our legal advisers that the procedure I proposed was appropriate. Senator DIRKSEN. Would you care to submit that for the record? Mr. PACKARD. Yes. GENERAL COUNSEL OF THE DEPARTMENT OF DEFENSE, Memorandum for Colonel Ray B. Furlong. Washington, D.C. February 5, 1969. I believe the absolute crux of this matter is whether or not it is necessary to grant the contractor a hearing before debarment. The Executive Order is inconsistent, providing on the one hand in section 208(b): "No order for debarment of any contractor from further Government contracts under section 209(a)(6) shall be made without affording the contractor an opportunity for a hearing." On the other hand, section 211 provides: "If the Secretary shall so direct, contracting agencies shall not enter into contracts with any bidder or prospective contractor unless the bidder or pro 31-987-69— 10 |