tract awards are made. The prequalification procedure was thus self-enforcing in significant respects, although the State and federal highway agencies needed a qualified staff to review the plans submitted, to discover deficiencies, if any, and to secure their correction. Order 7-2(1) gives up the incentive inherent in prequalification procedures and depends for its effectiveness upon field reviews by the government after contract awards are made. In major respects, the prequalification procedure follows those which have been used effectively by the Department of Health, Education, and Welfare in the enforcement of Title VI with respect to elementary and secondary schools where the framing and submission of constitutional desegregation plans are required before commencement of the school year and the renewed commitment of federal funds.

The prequalification procedure was not a departure from regular Federal Highway Administration contract procedures. Testimony before the Senate Subcommittee on Roads indicates that it is relied upon to assure responsible bidders in important areas other than EEO. The President of the American Association of State Highway Officials, Ross G. Stapp, testified (Hearings, p. 102):

"Further, the prequalification of bidders has always been the prerogative and area of operation for the State highway departments as a means of assuring that their bidders are responsible and have the equipment, experience, capabilities, and finances to satisfactorily complete the type and size of project upon which they might bid.

"The FHWA order 7-2 actually establishes a 'Federal' prequalification requirement in addition to the States' prequalification."

Federal Highway Administrator Bridwell affirmed the point (Hearings, p. 213):

"In reality, this program is not significantly different from a number of other prequalification requirements of various contracting programs that require a bidder to demonstrate his financial responsibility or performance capability prior to bidding."

Contractors criticized the prequalification procedure in the hearings before the Senate Subcommittee on Roads this past January. However, a review of the testimony reveals that the dissatisfactions rested essentially upon delays which were caused by inadequate government personnel and lack of familiarity with new procedures. While these concerns necessitated a remedy, they were not addressed to the substance of the prequalification procedure itself as a means of securing EEO. It is an added ground for concern that under Order 7-2(1) the same lack of manpower for EEO and lack of familiarity with EEO requirements can exist and go entirely unnoticed.

Order 7-2 provided that contractors were to be prequalified not less than once each year. This would have assured periodic review of the implementation of their EEO undertakings. Responsible administration of this provision would have afforded an early check upon the effectiveness of the program with the receipt of future contracts dependent upon the contractor's performance of his prior commitments and his development of needed amendments to his program to meet deficiencies shown by experience. Here again, Order 7–2 built in self-enforcement. There is no comparable requirement in Order 7-2(1). It makes no commitment by federal or State highway agencies to conduct compliance reviews in the field and sets no timetable for any follow-up action by the government. The effectiveness of the program-the achievement of more than paper compliance depends upon these undertakings which are neither announced nor scheduled in the order. As pointed out by Secretary of Transportation Volpe in his prepared statement before your subcommittee, Order 7-2 (1) reaches all construction contracts and all subcontracts of $10,000 or more. Order 7-2 reached all prospective contractors and subcontractors who were in a position to anticipate bidding or being retained by subcontract on contracts of $500,000 or more. Secretary Volpe testified that Order 7-2(1) "broadening the coverage from some 30% of Federally aided highway construction contracts to almost 100% of Federally aided highway construction contracts." I support the extension of the coverage of the EEO regulations. However, looking at coverage alone, I would question whether the difference between the two orders is as great or as meaningful as the Secretary's testimony would suggest. In a press release of March 9, 1969, the Federal Highway Administration announced that 88% of the $3.6 billion of federal-aid highway construction in 1968 was performed under contracts and subcontracts of $500,000 or more. In addition, since Order 7-2 established a prequalification procedure, it would have reached all contractors who anticipate wanting to bid either alone or jointly

with another on contracts or subcontracts of $500,000 or more. As the Commissioner of the Virginia Department of Highways, Douglas B. Fugate, stated to the Senate Subcommittee on Roads, this reached virtually all contractors (Hearings, p. 143):

"The reason I stated that approximately five hundred contractors were affected in Virginia by these regulations was due to the fact that while only 178 are actually qualified financially for work of $500,000.00 or more, many, if not all, of the smaller contractors do work as subcontractors on these projects in excess of one-half million dollars, and on many occasions one or more of these smaller contractors will submit a joint bid for a contract in excess of one-half million dollars. In view of these two contingencies, it is necessary to have all of these potential contractors prequalified in order to comply with the Federal regulations and in order not to have to disqualify a contractor's joint bid or a subcontractor's request for failure to prequalify on Equal Employment Opportunity." The abandonment of the yearly prequalification procedure is the major change made by the replacement of Order 7-2 by Order 7-2(1).

Order 7-2 set minimum guidelines for an acceptable EEO affirmative action program together with criteria which State and federal highway officials were to apply in determining such acceptability. The requirements of Order 7-2(1) appear to have been prepared from these guidelines. However, certain changes and deletions have been made which in my judgment weaken the EEO requirements of the earlier order and in some instances leave the intention of the federal government unclear.

Section 2 of both orders deals with EEO policy. Order 7-2 called upon the contractor to submit an EEO policy accepting "responsibility to effect equal employment opportunity with respect to all aspects of his employment practices and to correct any and all discriminatory practices and conditions which presently exist, as a condition to being permitted to bid on a Federal-aid construction contract" (emphasis added). The underscored part of this provision properly gives expression to the legal obligation of the contractor to correct any present discriminatory effects of past discrimination. Section 2 or Order 7-2(1) omits this language. I hope that this omission does not reflect an intention to exclude this responsibility from the federal program. At a minimum, the omission leaves the contractor's obligations in doubt and thereby does not fulfill one of the four major features emphasized Secretary Volpe in his testimony: "It places specific and understandable-and for that reason enforceable-responsibilities on the contractors. ..."

The revisions of the paragraphs on EEO policy make further unfortunate omissions and changes which narrow the reach of the EEO program. Order 7-2 emphasized the contractor's responsibility to effect EEO with respect to "all aspects of his employment practices and to correct any and all discriminatory practices and conditions which presently exist" and "to provide procedures for curing any defects in the contractor's prior equal employment opportunity performance." Order 7-2(1) makes no reference to "all aspects" of the contractor's employment practices and states "the requirements set for [in this Order] shall constitute the specific affirmative action requirements for project activities under this contract. . . ." (emphasis added). These differences suggest that Order 7-2 (1) is intended to be limited to employment on federal projects only, leaving the contractor free to apply less stringent EEO standards in the remainder of his activities. This sort of double standard has been all to characteristic of past performance where Negroes were hired for work on federally-financed projects while the rest of the work force remained all white. The discrimination inherent in such procedures is obvious and should not be encouraged by federal rules. The two orders use almost the same language to describe the obligations of contractors to recruit qualified minority group applicants:

"Unless precluded by a valid bargaining agreement, the contractor must conduct systemic and direct recruitment through public and private employee referral sources likely to yield qualified minority group applicants . .

In my judgment both orders are deficient in conditioning the contractor's EEO responsibility upon the absence of preclusion "by a valid bargaining agreement." Section 22 of the Federal Aid Highway Act, Section 703 of the Civil Rights Act of 1964, 42 U.S.C. 2000e-2, and Presidential Executive Order 11246 obligate the contractor to give minority group members access to employment equal to that afforded to nonminority group members. The regulations of the Highway Administration should make clear that the contractor does not avoid

this legal obligation by bargaining away the responsibility for recruiting and selecting employees to a union. At a minimum, the two orders leave the Administrator's intention vague where it should be clear in failing to define what is a "valid bargaining agreement." Where the government is setting guidelines for a national program which depends in large measure upon self-enforcement, it is encumbent upon it to eliminate vagueness wherever possible.

My view is that an agreement which freezes in the effects of past discrimination is unlawful and that the contractor, if satisfactory remedial arrangements with the union cannot be worked out, would be obligated, under the provision as written, to exercise his responsibility for direct recruitment of minority group members. The United States District Court for the Southern District of Ohio ruled union referral priorities unlawful on this ground in Dobbins and United States v. IBEW, Local 212, Civil No. 6473, decided Sept. 12, 1968. Clarification of the Administrator's intention would be helpful.

Section 7 of the Order 7-2 and Section 8 of Order 7-2(1) require contractors who rely in whole or in part upon unions as the source of their work forces, to work closely with those unions to increase minority group opportunities within those unions. Order 7-2 calls upon the contractor to seek referrals by the unions "of greater numbers of minority group employees" (emphasis added). Order 7-2(1) omits the words "greater numbers of" and may leave the contractor free to infer that token numbers will satisfy his obligation.

Order 7-2 calls upon the contractor to make every effort to obtain agreements with unions permitting him to hire other than union employees when minority group union members are not available. There is no comparable provision in Order 7-2(1). A related provision of Order 7-2(1) is Subsection 8c which provides:

"In the event a union is unable to refer applicants as requested by the contractor within the time limit set forth in the union agreement, the contractor will, through his recruitment procedures, fill the employment vacancies without regard to race, color, religion, sex, or national origin, making full efforts to obtain qualified minority group persons."

This provision is limited in scope and comes into play only when the union cannot fill the contractor's requirements for workers in other words, when the union has no men to refer at all. It does not obligate the contractor to seek to hire minority group workers directly when the union is supplying his needs but doing so only with nonminority workers.

Order 7-2(1) does not include the provisions in paragraph 8 of Order 7-2 which called upon contractors to "counsel and assist minority group subcontractors relative to the methods and procedures to follow in order to qualify as subcontractors on federal aid highway construction work . ." Contractors had voiced objection to this provision in testimony before the Subcommittee on Roads, taking the position that this should be the responsibility of the Small Business Administration or some other government agency.

The record keeping requirements in paragraph 10 of Order 7-2(1) omit two important provisions from Order 7-2. These called upon the contractor to keep records to indicate

(1) To the extent permissible under State law the name and addresses of each minority group applicant who was not hired and the reason therefor; and

(2) The general progress being made by each subcontractor used by the contractor in the former's equal employment opportunity program. The information described in (1) is vital to any meaningful review of whether a contractor is affording equal employment opportunities.

The requirement that the contractor record the number of minority and nonminority group members employed in each work classification on the project reaches only a portion of the relevant facts. The fact that the contractor may have none, a few, or a large number of minority group members working on a project does not answer the question whether he is assuring or denying equal opportunity. At a minimum, the Administrator should want to know the name, number, and date of minority group applicants and the reason why they were not hired. If the contractor reports no minority employees and no minority applicants, the Administrator can infer that problems, if any, lie in his recruiting; if the contractor reports no minority employees despite a large number of minority applicants, a different inference is suggested; and so on. Also, if the records suggest discrimination, the Administrator should want the names of persons

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