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(4) and that some company housing is segregated, but that no plan for prompt desegregation exists.

However, based on these companies' assurances in effect "to do better," he awarded the contracts. The subsequent contracts to J. P. Stevens and Brlington Industries were awarded on the basis of Secretary Packard's recent precedent. Mr. Packard implicitly concedes in his letter that no written commitments were obtained from these companies. It is also clear that nothing more was obtained than a promise to implement "affirmative action."

Secretary Packard's action, therefore, is in clear violation of the following Regulation issued by the Secretary of Labor under the authority of Executive Order 11246; (copies are on hand).

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(b) Where deficiencies are found to exist, reasonable efforts shall be made to secure compliance through conciliation and persuasion. Before the contractor can be found to be in compliance with the order, it must make a specific commitment, in writing, to correct any such deficiencies. The commitment must include the precise action to be taken and dates for completion. The time period alloted shall be no longer than the minimum period necessary to effect such changes. The assurances received by Secretary Packard violate this regulation in three respects:

(1) The commitment was not in writing.

(2) The commitment did not include any "precise action to be taken."

(3) There was no mention of any "dates of completion" for the action to be taken by the companies.

Similar requirements are also contained in DOD's own Regulations.

I believe several issues are at stake here.

1. Whether or not the Federal Government will award contracts to firms engaging in these discriminatory practices on the basis of vague oral promises to try harder;

2. Whether or not DOD will award these contracts in violation of both Department of Labor regulations and DOD regulations.

3. And whether or not DOD will make a shambles of federal contract compliance by bypassing and failing to consult the agency charged with responsibility in this matter, OFCC.

I would like some answers to these questions and I have not yet received them.

This Executive Order is a vital step in a long and continuing struggle to eliminate discrimination in this country. Its purpose is to guarantee our minority citizens a fair shake by government contractors in hiring, promotion, and job training. DOD's actions in the past month may be an ominous sign that the new Administration is not committed to ending government subsidized discrimination.

Hon. GEORGE P. SHULTZ,

ATTACHMENT 5

UNITED STATES SENATE,

COMMITTEE ON LABOR AND PUBLIC WELFARE,
Washington, D.C., February 17, 1969.

Secretary of Labor, U.S. Department of Labor,
Washington, D.C.

DEAR SECRETARY SHULTZ: It is my understanding that you have undertaken a complete review of the recent Department of Defense decision to award contracts to three Southern textile firms. As you may know, I expressed my concern to Deputy Secretary Packard about the fact that the OFCC was apparently bypassed in reaching this decision; in addition, I also asked the Deputy Secretary to inform me as to the terms of the agreement reached between these firms and the Department.

I am pleased that you are in the process of reviewing the entire matter. What particularly concerns me is that the Deputy Secretary's action may have disrupted the procedure established to assure that government contractors, such as these three firms, do not practice discrimination.

I would therefore appreciate it if you would inform me as to the role of the Department of Labor and the Office of Federal Contract Compliance, not only in regard to the contracts already awarded to these three firms, but also in regard to contracts presently under consideration between the Department of Defense and the other large textile firms located in the South. I would also like to know what you have learned from the Department of Defense concerning the terms of the assurances obtained from J. P. Stevens, Dan River Mills, and Burlington Industries.

Since it is still unclear as to exactly what procedures were followed by the Department of Defense in this matter and since there has been no disclosure of the terms of the assurances obtained from the three firms in question, it would be helpful if you could supply me with the information requested as soon as possible.

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DEAR SENATOR MONDALE: This is in response to your 11 February 1969 letter regarding the Department of Defense equal employment opportunity compliance efforts in the textile industry.

The Department of Defense has conducted this program cooperatively with the Equal Employment Opportunity Commission and the Office of Federal Contract Compliance, Department of Labor. This effort started in January 1968. To date, more than sixty-five textile compliance reviews have taken place and significant progress has been made.

After the completion of the compliance reviews of the facilities of Dan River Mills, Burlington Industries and J. P. Stevens, Defense Supply Agency, the agency responsible for contract compliance operations, conducted intensive negotiations with these companies. The Office of Federal Contract Compliance, Department of Labor and the Department of Justice were consulted and kept fully informed of these negotiations.

The Defense Supply Agency found the affirmative action plans of these companies deficient in specific areas. The Deputy Secretary of Defense discussed these deficiencies with the chief executives of the three companies. They assured him that their companies would implement affirmative action plans to achieve the results contemplated under the Executive Order. On the basis of these assurances, the decision was made to proceed with the pending award. The Department of Labor was consulted before this action was taken.

The enclosed report to the Secretary of Labor by Secretary Packard details these events.

Secretary Packard will receive quarterly progress reports on these companies. These reports will be made available to the Department of Labor and they will be consulted.

It is our intent to fully meet all our responsibilities under Executive Order 11246.

Sincerely,

JACK MOSKOWITZ,

Deputy Assistant Secretary, Civil Rights and Industrial Relations.

ATTACHMENT 7

THE DEPUTY SECRETARY OF DEFENSE,
Washington, D.C., February 13, 1969.

Hon. GEORGE P. SHULTZ,
Secretary of Labor,
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,
Washington, D.C., March 5, 1969.

THE PRESIDENT,
The White House,
Washington, D.C.

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.
JOHN BRADEMAS, Vice Chairman.

DON EDWARDS, Chairman, Task Force on Civil Rights.

ATTACHMENT 9

MARCH 5, 1969.

Deputy Secretary DAVID PACKARD,
U.S. Department of Defense,
Washington, D.C.

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 in

clude 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.

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