Mr. NORMAN. Perhaps, Congressman, I might suggest that, dealing, as it does, with the Civil Service Commission, you might wish to speak to them.

Mr. PUCINSKI. I am sure we will have to get an opinion from you people, too. We have had them, and I might tell you that their testimony was miserable. There is just no defense. If we were to rely on their testimony, this legislation ought to sail through the Congress. Mr. DENT. Would you say that the testimony is another pattern or practice? [Laughter.]

Mr. PUCINSKI. Thank you, Mr. Chairman.

Mr. DENT. Mr. Kemp?

Mr. KEMP. I have no questions, Mr. Chairman.

Mr. DENT. We welcome you to the committee, and we hope you are learning as much as we are this morning.

Mr. KEMP. Thank you.

Mr. DENT. Thank you, Mr. Norman, and your associates today for some very frank answers to some pretty difficult questions.

We may be compelled to ask you to come back, and I know that you will.

Mr. NORMAN. Thank you, Mr. Chairman.

Mr. DENT. The next witness is Mr. Laurence H. Silberman, Under Secretary of Labor, accompanied by Mr. John Wilks, Director, Office of Federal Contract Compliance.

Is Mr. Fletcher with you, too?

Mr. SILBERMAN. He is, Mr. Chairman.

STATEMENT OF HON. LAURENCE H. SILBERMAN, UNDER SECRETARY OF LABOR; ACCOMPANIED BY HON. JOHN WILKS, DIRECTOR, OFFICE OF FEDERAL CONTRACT COMPLIANCE, AND HON. ARTHUR FLETCHER, ASSISTANT SECRETARY OF LABOR

Mr. DENT. You may proceed as you wish, Mr. Silberman.

Mr. SILBERMAN. It is not very long, Mr. Chairman, and I would like to read my statement.

I would like to formally introduce my associates, here, Assistant Secretary Arthur Fletcher on my right, and John Wilks, Director, Office of Federal Contract Compliance.

Mr. DENT. We are happy to have you, gentlemen.

Mr. SILBERMAN. I appreciate this opportunity to present the views of the Department of Labor on H.R. 1746, a bill "to further promote equal employment opportunities for American workers."

The Department of Labor is primarily concerned with section 11 of the bill which would transfer the function of the Office of Federal Contract Compliance under Executive Order 11246 from the Department to the Equal Employment Opportunity Commission.

It is the Department's position that OFCC should remain a part of the Department of Labor.

We believe that the present proposal poses a serious threat to the accomplishment of OFCC's mission. Consequently, I must voice the Department's strong opposition to the transfer proposed by section 11. I may say, Mr. Chairman, parenthetically, that although we defer to the Department of Justice on the pattern or practice question, we would have to say that we have been helped a great deal by the Department of Justice's capacity to bring suits to supplement and im

to answer any questions the committee may have regarding these programs.

OFCC has also developed a model construction compliance plan issued to assist communities in developing their own local solutions and a special task force to assist the area coordinators during the 1970 construction season in developing these hometown solutions.

As of the middle of February 1971, 21 communities have developed hometown solutions. These hometown solutions have 1-year goals of 3,000 new minority hires, and 5-year goals of 20,000 hires. It is estimated that 35 such plans will be approved by the end of fiscal year

1971.

OFCC has also addressed itself to the contents of the affirmative action programs for supply contractors. In February 1970, OFCC issued revised rules, known as Order No. 4, which for the first time set forth their affirmative action obligations in detail.

Order No. 4 implements section 60-1.40 of the OFCC regulations which requires every contractor and subcontractor holding a contract or subcontract of $50,000 or more and employing at least 50 persons to develop a written affirmative action program for each of their facilities.

The order specifies the ingredients of an acceptable affirmative action program and details specific guidelines to assist the contractor in meeting the order's requirements.

Under the order each Government contractor is required to analyze his employment structure and to set goals (numbers) for the utilization of minority workers.

However, those goals are to be set by the contractor based upon his analysis of his own situation, thus removing the unguided negotiation process over numbers. Once the contractor has established his goals he is required to make every good-faith effort to meet those goals.

OFCC has also issued other specific statements to make sure that compliance agencies and contractors know what is expected.

In 1970, it issued sex discrimination guidelines as revisions of OFCC rules. Also a series of consultations with private groups are now being held to assist OFCC in developing affirmative action procedures applicable to discrimination and underutilization on the basis of sex.

These and other substantive requirements are being tested by joint OFCC and compliance agency focus on some specific major cases involving systematic discrimination. OFCC and Maritime Administration have developed specific applications of the "affected class" remedy in a number of large shipyards.

OFCC and the Department of Defense have worked closely to develop industry patterns of equal employment opportunity in textiles and paper. Leading cases, resolved by the joint participation of OFCC and several compliance agencies especially, in the aerospace, shipbuilding, metal fabrication, brewery, and educational services have provided important guidance in the interpretation of order No. 4 particularly with respect to goals and timetables. As a result of efforts in the metal fabrication industry, an affirmative action plan has been developed which serves as an industrywide model for over 200 can plants.

OFCC has also made considerable improvements in its coordination of compliance efforts among Government agencies. One significant advance was the abandonment of the predominant interest test for deter

mining the agency with responsibility for administering the order as to an individual contractor or subcontractor.

Under this old procedure, the agency under which a contractor or subcontractor held the largest aggregate dollar volume of contracts or subcontracts at the time of filing the latest compliance report would normally have the responsibility for assuring that such contractor or subcontractor complied with its equal opportunity commitments.

Unfortunately this previous method of assigning compliance responsibility did not operate effectively. It placed virtually all responsibility for contract compliance in the few agencies which expend enormous sums for procurement, straining their resources and resulting in superficial administration of that order.

The predominate interest approach also allowed responsibility to shift from one agency to another as contracts are performed and new ones let.

This created administrative confusion and prevented any single agency from becoming thoroughly familiar with a contractor's employment practices.

Consequently, the Department replaced the predominate interest concept with the compliance agency method of administration. The present regulations allow the director to assign the contracting agencies appropriate duties in connection with the administration of the order on a geographical, industry, or other basis.

However, when this administration took office, no general reassignment of compliance responsibility had taken place. Accordingly, on October 29, 1969, this Department issued order No. 1 which reassigned compliance responsibility to 15 compliance agencies according to standard industrial classification codes.

Every effort was made to assign agencies compliance responsibility for industries with which they were most familiar. And, of course, those with which they did the most contracting.

OFCC has also developed a target selection program, establishing uniform guidelines for use by compliance agencies in determining priorities for conducting compliance review.

In fiscal year 1970, the compliance agencies completed about 8,000 compliance reviews, about half of them preaward and the rest postaward and followup reviews.

This year over 15,000 reviews will be completed.

At the direction of the President the Office of Management and Budget has expanded the Government's capability to administer the compliance program. OFCC is being reorganized and its staff augmented so it may better fulfill its coordinating responsibilities.

It will have a staff of 119 in fiscal year 1972, as compared to 26 in fiscal year 1969, and it will develop a capability of handling over 400 conciliations and 25 hearings a year itself.

OFCC will be amply equipped to monitor effectively the programs of the compliance agencies, and its operations office will provide close communication with, and technical assistance to, the compliance agencies.

In fiscal year 1972, the total compliance program will involve 1,504 individuals and a projected expenditure of $24 million. This represents a dramatic increase over the 643 individuals, and $9,766,000 committed to the program in fiscal year 1970. The 1971-72 compliance

program has a goal of 580,000 new minority hires and promotions by Government contractors.

We feel that OFCC is creating an effective program to eliminate discrimination by Federal contractors, and that the objective of equal employment will best be served if this program remains a part of the Department of Labor.

Gentlemen, I turn to the basic issue before you today: Will the transfer of OFCC to EEOC hinder our efforts? It is our view that OFCC's activities regarding procurement could be seriously impaired by a transfer of its function to EEOC.

Prior experience under the Executive order indicates the difficulty encountered by contracting agencies in reconciling the goals of equal employment with the need to obtain goods and services.

Only the executive branch can effectively coordinate these conflicting aims because it is the executive branch that has the procurement responsibility. To transfer ultimate coordination of the enforcement apparatus from the Department of Labor, a cabinet level agency under the control and possessing the strong support of the President (who also controls the contracting agencies), to an agency such as EEOC, which is independent of presidential direction, would decrease the enforcement impetus now provided by OFCC.

The weakness of the various presidential committees formerly charged with administration of the compliance program suggests that the difficulties inherent in placing the operations of the agencies under the control of an independent body may well be insurmountable.

The cornerstone of OFCC's activities is the development of voluntary, areawide, and companywide, affirmative action programs, under standards, which, of course, we set forth.

The Department of Labor is uniquely experienced in dealing with equal employment matters on this same scale and possesses familiarity with the areas and industries which would constitute reasonable units for the establishment of such programs.

OFCC especially benefits from its ready access to the resources of the Department's Bureau of Labor Statistics. Plans are being developed to make even more effective use of these services in developing and monitoring OFCC's programs.

A workable affirmative action program requires the cooperation of both labor and management. The Department has experience in the area of labor-management relations and is aware of the many questions which rise under labor-management relations law and collective brgaining agreements which govern the actions of management and unions.

The Assistant Secretary of Labor for Labor Management Relations and his staff in the Labor Management Services Administration, which have considerable experience in this area, have contributed significantly to the solution of some of these difficult problems. For example, in Pittsburgh, construction contractors, building trades unions, and the minority community were brought together for the negotiation of a hometown agreement dealing with equal employment opportunity in the construction industry in that city.

It must also be remembered that the Federal manpower programs are centered in the Department of Labor. The development and

utilization of training programs is a valuable supplement to the creation and operation of effective programs to promote the employment of minority workers. In the past 2 years, the resources of the Manpower Administration have been brought to bear with increasing effectiveness in assisting affirmative action programs.

At the present time, there are approximately 100 programs funded by the Manpower Administration specifically designed to support affirmative action in the construction industry. For example, a program has been recently funded I believe, in connection with the revised Philadelphia plan.

The funding capability of the Manpower Administration makes it possible to more rapidly negotiate and implement affirmative action hometown plans at the local level.

At the direction of the Secretary of Labor, the Manpower Administration and the OFCC have been working closely together so that here the activities and special expertise of each Office will complement the other in the development of affirmative action programs.

The presence of OFCC and the Manpower Administration, including the United States Training and Employment Service, Office of National Projects, and the Bureau of Apprenticeship and Training within the Department of Labor make coordination of activity and program direction more efficient and responsive.

May I digress for a moment to remind the chairman and the members of the committee, if they don't already know, that just recently the Department of Labor has proposed amendments to its apprenticeship regulations, which incorporate many of the techniques which we have developed over the last 2 years in the Office of Federal Compliance.

There is an important, as this example indicates, cross-fertilization between the constituent groups within the Department.

It is especially important that the Manpower Administration and OFCC remain within executive departments, even if they should be in separate departments, where their programs can be coordinated by the Executive Office of the President. The transfer of OFCC to an independent agency would seriously impair their complementary activities.

We feel that OFCC is logically constituted as a homogeneous part of the Department of Labor. The programs of OFCC deal primarily with inspection, compliance, and enforcement of workplace standards, similar to other workplace standards programs such as minimum wage, maximum hours, safety and health, and age and sex discrimination, which are also administered by the Department.

All of these labor standards programs are intimately connected with labor relations because of their effect on both labor and management as well as on collective bargaining agreements.

The Department of Labor has created a EEO Strategy Committee, which I chair, as Under Secretary, composed of top officials from its constituent agencies, including: OFCC, Manpower Administration, Bureau of Labor Statistics, Labor-Management Services Administration, and the Office of the Solicitor.

This group meets regularly to assure that each agency will be aware of the impact of OFCC's program on its own areas of operation and to coordinate the contribution of these agencies to the development and administration of the program.

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