Government: Creatorof Employment

Directly or indirectly, Federal funds affect a large part of the country'swork force. In addition to the 6 million persons on the Federal payroll2014in the Civil Service and in the Armed Forces2014millions * are employedby Government contractors or recipients of Federal grants-in-aid. Tenmillion persons work for the 100 largest defense contractors and subcontractors alone. 2 In fiscal 1961 between $25 and $30 billion wereexpended for Federal contracts 3 and about $7.5 billion for Federalgrant-in-aid programs. 4 In view of the fact that the Federal Government helps create these employment opportunities, the Commission isconcerned that they be made available on a nondiscriminatory basis.

As mentioned in chapter 2, attempts to assure equality of opportunityin jobs created by Government contracts and by grants-in-aid, as partof an overall Federal effort to assure full equal employment opportunity,date back to the early igso's. Administrative machinery to implementthis policy began with the first FEPC in 1941. Since 1946, when thesecond FEPC was forced to terminate its activities as a result of theenactment of the Russell Amendment, 5 separate provisions have beenmade by Executive order or by administrative regulation to eliminatediscrimination in employment by Government contractors and on grantin-aid projects. Accordingly, this chapter treats the two mattersseparately.

  1. GOVERNMENT CONTRACTS

    "The nondiscrimination clause .. . is the means by which Federal contracting agencies direct that the millions of American workers in privateindustry whose skills are paid for wholly or in part by Federal fundsbe recruited, hired, trained, and promoted hi accordance with theirmerit2014without regard to the color of their skin, their race, their religion,

    or their ancestry." 8 Although a nondiscrimination clause has been required in all Government contracts since 1943, when President Rooseveltissued Executive Order 9346, 7 the administrative machinery establishedto effectuate the provision was abolished in 1946, when the secondFEPC terminated its activities. The adoption of the Russell Amendmentin June 1944 (discussed more fully in ch. 3) 8 presented a real barrier tothe establishment by Executive order of any new machinery to implement a policy of equal job opportunity. However, the IndependentOffices Appropriation Act of 1946 authorized the establishment of interagency committees without specific congressional appropriations, andthereby offered a way to bypass the Russell Amendment roadblock. 9

    Yet, it was not until December 1951, when President Truman established the Committee on Government Contract Compliance, 10 that anysuch action was taken.

    The Committee on Government Contract Compliance spent most ofits one-year existence studying the effectiveness of the nondiscriminationclause in Government contracts. It "found the provision almost forgotten, dead and buried under thousands of words of standard legal andtechnical language in Government procurement contracts." " Most contracting agencies, it appeared, lacked the machinery, the administrativepersonnel, or even the will to enforce the clause. Enforcement was usually restricted to investigation of complaints and inadequate proceduresrendered even this of limited effect. Moreover, as most employees orapplicants for employment were unaware of the nondiscrimination requirement, few complaints had been filed2014only 40 between July i, 1950,and June 6, I952. 12 The Committee's terminal report contained morethan 20 specific recommendations, relating to training and recruitmentas well as to the effectiveness of the nondiscrimination provision. Severalof them were directed to the President. 13

    1. . . . take appropriate measures to designate an established

      department or agency of the Government to receive and investigatecomplaints of violations of the nondiscrimination provision in Government contracts. The designated department or agency shouldbe responsible for the preliminary efforts at conciliation, mediation,and persuasion to effect compliance by contractors and shouldrecommend necessary action by the contracting agencies.

      * * # * *

      1. ... [require] a revision of the nondiscrimination provisionand .. . by Executive order require that the revised provision beadopted by all Government agencies for use in contracts for supplies, services, and construction.

        * * * * *

      2. ... assign responsibility and commensurate authority for theplanning, coordination, and execution of an educational program

        designed to promote national awareness, understanding, and acceptance of the national policy of equal opportunity in employment.

        These recommendations were only partially adopted in 1953, whenPresident Eisenhower established the President's Committee on Government Contracts,14 the principal focus of this Commission's study.Although the Committee was replaced in April 1961 by the President'sCommittee on Equal Employment Opportunity, the latter has not beenin operation long enough to permit definitive assessment.

        COMMITTEE ON GOVERNMENT CONTRACTS

        Executive Order 10479, issued by President Eisenhower on August 13,1953, declared it to be "the policy of the U.S. Government to promoteequal employment opportunity for all qualified persons employed orseeking employment on Government contracts because such persons areentitled to fair and equitable treatment in all aspects of employment onwork paid for from public funds . . ." 15 To implement this policy theorder had three main provisions: it placed with the head of each Government contracting agency direct and primary responsibility for obtaining compliance with the nondiscrimination provision in all Governmentcontracts; it directed the head of each contracting agency to take appropriate measures, including the establishment of compliance machinery, tocarry out this responsibility; and it created the Committee on Government Contracts, a 15-member group composed of representatives ofGovernment and the public 18 to2014

        1i) assist and make recommendations to the contracting agenciesfor improving and strengthening the nondiscrimination provisions ofGovernment contracts;

        (2) receive complaints of alleged discrimination and transmit themto the appropriate contracting agencies for processing. Each contractingagency was to submit reports of action taken on all complaints received,which the Committee was directed to review and analyze;

        (3) encourage the furtherance of an educational program by employer, labor, civic, and other nongovernmental groups "in order toeliminate or reduce the basic causes and costs of discrimination inemployment;" and

        (4) establish and maintain cooperative relationships with agenciesof state and local governments and with nongovernmental bodies to helpachieve the purposes of the order.

        Vice President Nixon served as Chairman. Although it lacked authority to investigate and settle complaints (as recommended by the

        Committee on Government Contract Compliance), it did provide theadministration with a single agency to receive and refer such complaints,and to conduct an educational program to promote acceptance of thenational policy of equal employment opportunity.

        The Committee's functions were primarily advisory, but it interpretedits authority broadly, particularly in the area of education, and eventually took an active role in processing and settling complaints andfostering acceptance of equal job opportunity.

        Enforcement of the nondiscrimination clause

        The Committee attempted to give effect to the long-dormant nondiscrimination clause by: (i ) clarifying and strengthening the nondiscrimination clause itself; (2) developing complaint procedures; (3)recommending the appointment of and training compliance officers;and (4) recommending the broadening of compliance procedures toinclude more than the processing of specific complaints.

        Revision of the clause. 2014One of the first acts of the new Committee,adopting the recommendation of its predecessor, was to revise the nondiscrimination clause. This was effectuated by Executive Order 10557(September 3, 1954), which provided: "

        In connection with the performance of work under this contract,the contractor agrees not to discriminate against any employee orapplicant for employment because of race, religion, color, ornational origin. The aforesaid provision shall include, but not belimited to, the following: employment, upgrading, demotion, ortransfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selectionfor training including apprenticeship. The contractor agrees topost hereafter in conspicuous places, available for employees andapplicants for employment, notices to be provided by the contracting officer setting forth the provisions of the nondiscriminationclause.

        The contractor further agrees to insert the foregoing provision inall subcontracts hereunder, except subcontracts for standard commercial supplies or raw materials.

        The revision served two purposes. It specifically applied the nondiscrimination requirement to all aspects of the employment relationship,including recruitment and training. By requiring the posting of notices,it sought to inform employees and applicants for employment of theexistence of the provision, of the fact that the company was subject toit, and of the existence of an agency to which inquiries and complaintscould be sent.

        The Executive order made the clause mandatory hi all but two groupsof Government contracts: those to be performed outside the countrywhere no employees were recruited in the United States, and subcontracts for standard commercial supplies or raw materials. The Committee was authorized to grant further exemptions to meet "specialrequirements or emergencies." 18

        In practice, the Committee granted few exemptions. It authorized

        the head of each contracting agency to grant exemptions from the noticeposting requirement in instances where contracts did not exceed $5,000in...

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