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Affirmative Action


This Part offers a summary of the Department of Labor's program to promote equal employment opportunity practices by private firms who have contracts with the federal government.

6.1 Concepts & Principles

OFCCP's primary responsibility is to implement and enforce an Executive Order and several statutes banning discrimination and establishing affirmative action requirements for federal contractors and subcontractors. While these policies have roots in the 1940s, the seminal requirements are contained in E.O. 11246, signed by President Johnson, and in regulations promulgated pursuant to that order in 1970 under President Nixon, which introduced the concept of goals and timetables. Specifically, OFCCP may require goals for hiring and promoting women and minorities as part of the affirmative action program (AAP) which contractors are required to develop and/or implement; however, race- or gender-based hiring and promotion are not required, and quotas are prohibited.

6.2 Policies & Practices

  • Coverage: With certain exceptions, E.O. 11246 applies to Federal contractors and subcontractors with contracts of more than $10,000 per year. In FY 1993, some 92,500 nonconstruction establishments and 100,000 construction establishments were covered. These establishments employed approximately 26 million people and received contracts of more than $160 billion.

  • Affirmative Action Requirements: OFCCP regulations impose different requirements on construction and nonconstruction firms.

    - Nonconstruction firms with 50 or more employees or contracts of more than $50,000 must develop and maintain a written affirmative action program (AAP). The contractor keeps the AAP on file and carries it out; it is submitted to OFCCP only if the agency requests it for the purpose of conducting a compliance review. As part of its AAP, the contractor must conduct a workforce analysis of each job title, determine workforce availability of women and minorities for each job group, and conduct a utilization analysis to determine whether women or minority group persons are "underutilized" in any job group. Based on these analyses, the contractor establishes goals to overcome the "underutilization," and makes a good faith effort to achieve those goals.

    - Construction firms are not required to maintain written AAPs, but must make good faith efforts to meet demographic goals informed by place-specific census data for minorities and a nation-wide goal for women.

    - OFCCP regulations expressly prohibit discrimination and the use of goals as quotas. (48)

  • Goals & Timetables: The numerical goal-setting process in affirmative action planning is used to target and measure the effectiveness of affirmative action efforts to eradicate and prevent discrimination. Numerical benchmarks are established based on the availability of qualified applicants in the job market or qualified candidates in the employer's work force. The regulations specifically prohibit quotas and preferential hiring and promotions under the guise of affirmative action numerical goals. Numerical goals do not create quotas for specific groups, nor are they designed to achieve proportional representation or equal results.

  • Enforcement Procedures: A contractor's failure to attain its goals is not, in and of itself, a violation of the Executive Order; failure to make good faith efforts is. OFCCP undertakes compliance reviews for certain contractors flagged by a computer program as having below average participation rates for minorities or women. OFCCP also conducts reviews of contractors selected randomly and identified through complaints. (49) In FY 1994, OFCCP conducted more than 4,000 reviews, roughly 3.26 percent of its supply-and-service contractor universe, and 1.55 percent of its construction contractors. If a firm is found to violate affirmative action requirements (or antidiscrimination requirements) OFCCP attempts to conciliate with the contractor; in a very small percentage of cases, no agreement is reached and the case is referred for formal administrative enforcement.

  • Incentives: OFCCP gives Exemplary Voluntary Efforts (EVE) and Opportunity 2000 awards to those companies who demonstrate significant achievement in equal opportunity and affirmative action.

  • Sanctions: A contractor in violation of E.O. 11246 may have its contracts terminated or suspended, or be debarred. Such administrative actions are rare, and there is ample due process accorded the contractor before hand.

6.3 Performance & Effects

Performance Generally:

As noted in Part 3 of this document, OFCCP programs have been studied in some detail. During the 1970s, when enforcement was quite strong, the programs were found to increase modestly the employment of minorities. (During the 1980s, enforcement -- and the effectiveness of the policies -- declined.) Most studies have found that OFCCP has had a less significant impact on hiring of minorities in skilled crafts and trades. However, some limitations on the validity of the OFCCP evaluation studies have been raised. The available evidence indicates that productivity at contracting firms is unaffected by OFCCP. This suggests that OFCCP has not caused contracting firms to hire less qualified workers. Further, a recent study finds that exemplary affirmative action programs help a company's stock market values.

The OFCCP national office conducted a random survey of 247 conciliation agreements obtained by the field in FY 1993 and FY 1994, and did not find any situations where the agency sought and obtained remedies outside the scope of OFCCP's authority. Moreover, during the review of the conciliation agreements OFCCP found an example of an OFCCP regional office requiring corrective action by a contractor who had engaged in an employment practice that discriminated against males, both whites and minorities. OFCCP cited the contractor with a violation of Executive Order 11246 and required it to enter into an agreement providing relief to both white and minority victims.

Several studies were critical of the administrative aspects of the programs, such as the mechanisms for selection of contractors for review and the paperwork burdens on smaller contractors. Some groups have been critical of the length and detail of the AAPs. In response to this latter criticism, OFCCP plans to (i) significantly reduce the AAP paperwork requirements and (ii) initiate a summary AAP format that will help target reviews.

Finally, some have raised a concern that although AAPs as a formal matter are framed in terms of flexible goals, and although rigid quotas violate both OFCCP regulations and Title VII, in some cases employers implement the goal with a rigidity making it tantamount to a quota. OFCCP has little data directly addressing this concern, but notes that reverse discrimination complaints, including objections to de facto quotas, are very rare in their administrative mechanism or at the EEOC. The absence of litigation is not, of course, a complete answer, in as much as subtle discrimination -- reverse or otherwise -- can be difficult to detect and even more difficult to challenge. Therefore, the DOL conducted further analysis for this Review:

- analysis of a recent report by an association of 300 Federal contractors, and interviews with attorneys who represent contractors on OFCCP matters;

- analysis of OFCCP's 1994 customer satisfaction sample survey of contractors; and

- detailed interviews with OFCCP regional directors.

The conclusion of this further analysis is that, while there are some issues of regulatory burden and enforcement consistency, and while there are a small number of firms who feel that the effect of goals is to make them "hire by the numbers," the weight of the evidence refutes the claim that the Executive Order program leads to widespread abuses.

The following subsections review this material in more detail.

Views of the Contractors' Trade Association and Attorneys

On March 17, 1995, the Equal Employment Advisory Council (EEAC), an association of 300 federal contractors (including companies such as Marriott, Martin-Marietta, and Bausch & Lomb), issued a report "to clarify the nature of affirmative action planning" as well as "to explain the point that Executive Order 11246 does not require contractors to grant preferential treatment to any employee or applicant on the basis of race, gender, or ethnic background." DOL played no role in soliciting the EEAC to prepare and issue its report, but believes it is entitled to considerable weight because EEAC exists to promote the interests of federal contractors.

Emphasizing that OFCCP's regulations explicitly prohibit the use of goals as "inflexible quotas," (50) the Report notes that "rancorous debate" often ensues between employers and OFCCP over how many women and minorities are "available" in the work force because solid empirical data do not exist.

The Report also noted that goals and timetables in the past (i.e., during the 1970s and 1980s) worked as quotas. Under OFCCP regulations, numerical affirmative action steps are not required unless "underutilization" exists. OFCCP's previous approach required three types of goals for each underutilized group: an annual placement rate goal (expressed as a percentage, and generally set at a rate above "availability"); an annual numerical goal (determined by multiplying the annual placement rate goal by the number of anticipated placements); and an ultimate goal (expressed as a percentage and equal to availability, coupled with a timetable for reaching that goal). Contractors complained that by setting the placement rate above availability, they were pressured "into extending preferences to fulfill goals." Also during prior periods, failure to implement an acceptable affirmative action goal could be remedied by "catch-up goals." This would have the effect of having goals function like quotas and bore "no relationship to true current availability." In the early 1980s OFCCP abandoned these "preferential tactics." In 1987, a majority staff report of the Committee on Education and Labor, U.S. House of Representatives, specifically recommended reinstating (1) ultimate goals; (2) multi-year timetables; (3) goals set above availability; and (4) numerical goals (to add to percentage placement rate goals). The EEAC concludes that OFCCP did not adopt these recommendations and "the goal-setting process today clearly does not impose preferences or quota-like requirements."

DOL also contacted several lawyers who work with contractors on OFCCP matters. These attorneys consistently stated that employers' major concerns about the administration of Executive Order 11246 have very little to do with goals operating as quotas. Major complaints include inconsistent enforcement among regions, irrelevance of some factors OFCCP requires to be considered in the workforce availability analysis, length and paperwork burden associated with preparing the affirmative action plan, and compliance officers' emphasis on minor or technical requirements. They attribute some of these problems to lack of training of compliance officers and poor quality control.

Customer Satisfaction Survey

In its 1994 customer satisfaction surveys of nonconstruction and construction contractors, OFCCP selected randomly from contractors that had been reviewed during the past year. The response rate for each group was approximately 80 percent -- responses from 278 construction and 363 service and supply contractors were tabulated.

One question, designed to elicit respondents' overall opinion of the compliance review, asked respondents to indicate their agreement with five statements using a ten point scale. Overall, the survey results were relatively positive. Regarding perceptions of enforcement consistency, 15.2 percent of the construction and 29.3 percent of the service and supply contractors responded that OFCCP had not been very consistent among reviews by the same compliance officer or by staff members from the same office. More than 70 percent agreed that the compliance review was a thorough assessment of compliance with OFCCP's regulations, that OFCCP provided responsive technical assistance, and that the company's position was considered during the conciliation process. Most respondents (more than 80 percent) agreed that the compliance officer was professional during the review and that oral and written communications from OFCCP were professional and courteous.

More broadly, two survey questions ("If you could change or improve any part of the review process, what would it be?" and "Are there any additional comments that you would care to include?") invited respondents to add narrative comments. Of the 278 construction and 363 nonconstruction responses, one-quarter and one-third of the firms, respectively, commented. Only 10 construction firms and four nonconstruction firms chose to address quotas or reverse discrimination. The following are examples of these comments:

Allow businesses to conduct their business for the betterment of customers and employees and not to satisfy some minority quota requirement. [nonconstruction contractor]

Believe program has gone overboard. It is not flexible considering the different factors that effect the hiring process. It has become a numbers game, even though it will not be admitted to. [nonconstruction]

I can see no way to improve the review due to its basis in the code which stresses quotas and quality with little or no emphasis on productivity, work ethic or quantity and quality of work which ultimately makes us competitive nationally and internationally. [construction]

Greater consideration for employer showing good faith. If skills necessary are not available in area in minority and female applicants, they cannot be hired. Do not want to hire unqualified applicants just because they are minorities or females; want to hire best qualified applicant regardless of race or sex. [nonconstruction]

There were also isolated comments about unrealistic goals:

Our women goals, we can't even come close to obtaining. Add to this, the fact that there is currently high levels of unemployment at the union local. What's the reality of these goals? How can we comply when there isn't enough work, and there aren't enough women and minorities in the trade? When will someone take an honest look at this situation and develop realistic goals and procedures to follow? [construction]

The fact that so very few contractors addressed the quota issue is consistent with OFCCP's random survey of conciliation agreements obtained by the field in FY 1993 and FY 1994. OFCCP did not find any instances of contractors being cited for not meeting their goals, use of the word "quota," or obtaining remedies outside the scope of OFCCP's authority.

Other comments from contractors addressed the length of time that it took to prepare for and conduct the compliance review; inconvenient scheduling of the review; inconsistency among compliance officers; and compliance officers' lack of familiarity with the particular industry. Approximately 11 percent of the construction contractors comments and approximately 14 percent of the service and supply contractor comments addressed paperwork burdens. Many of the comments indicated that OFCCP devoted too much time to the on-site review and took an inordinately long time to complete the entire review. Contractors also commented that they sometimes were given the impression during the on-site review that the review had gone well, but the formal closing correspondence was much more negative.

Interviews with OFCCP Regional Directors

The complaints of contractors conveyed by the regional directors were similar to those revealed in the customer satisfaction survey, such as inconsistency and frustration over technical infractions. Also:

  • The Region III Director believes that some contractors today allow goals and timetables to limit unnecessarily opportunities for women and minorities in that the contractors consider the goal to be a ceiling. For example, they hire only 20 percent women because that is the affirmative action program, but there are 60 percent women in the applicant pool for a particular job. (Such a situation could lead OFCCP to investigate whether the contractor is engaging in unlawful discrimination, and a quota would be unlawful.)

  • According to the Director from Region II, some contractors often set their own hiring and promotion goals and treat those as quotas because "it is smart for their company" and to "keep the government off their backs." When they "hire by the numbers," the word spreads that numbers are driving hiring and promotion decisions -- leaving it unclear as to whose "numbers" are driving the process. Where a contractor engages in such action, the OFCCP is charged with conducting an investigation. Such conduct would violate the executive order.

  • Neither Director from Region VIII or IX believes their federal contractors have treated their goals as quotas. The Directors from Regions III, IV, VIII, and IX cannot recall reverse discrimination complaints. The Region V Director reports only one reverse discrimination complaint.

  • The Region I Director noted that contractors can perpetuate the false notion that contractors are being driven by "quotas." Contractors will sometimes tell disappointed male applicants that the individual who got the job or promotion got it because he or she was a women or minority, even though that was not the reason.

OFCCP Response and Reforms

As part of the ongoing National Performance Review process led by the Vice President, OFCCP is eliminating unnecessary paperwork requirements associated with the written affirmative action plan and has designed a summary format for the affirmative action plan that will greatly assist OFCCP in targeting its limited resources, while saving contractors approximately 4.5 million (out of 15 million) hours in the annual preparation of their plans and recordkeeping. Several other streamlining and burden-reduction measures are also underway.

OFCCP currently attempts to address the problem of inconsistencies with policy guidance by reemphasizing relevant portions of the Federal Contract Compliance Manual, the agency's operating manual, and with its continuing program of training for its compliance officers. Other mechanisms are more ad hoc. According to the Director from Region III, for example, the region has moved forward with suggestions from Scott Paper Company that (1) the Regional Office communicate/negotiate with the contractor before sending a formal letter of noncompliance, and (2) the compliance officer focus on substantive issues in the review (e.g. good faith) and not technical issues (e.g. formatting of the plan documents).

6.4 A Note on OFCCP Law Enforcement Functions

In addition to enforcing the government's affirmative action requirements, the OFCCP performs a related but distinct function: enforcement of the antidiscrimination provisions of Executive Order 11246 (based on the principles of Title VII of the Civil Rights Act). The courts and Congress have permitted the use of statistical evidence showing a disparate impact, or manifest imbalance, to establish a prima facie case of unlawful discrimination. Such evidence then shifts to the employer the burden of producing an explanation or other evidence showing that the disparity is not the result of discrimination.

Understandably, these two independent concerns are sometimes confusing to contractors when they are faced with corrective actions. For example, contractors occasionally claim they are being "forced" to hire a woman or minority when OFCCP, is in fact requiring them to remedy discrimination by providing job offers, back pay or other relief to identified victims. In contrast, OFCCP polices the affirmative action requirement of E.O. 11246 by "auditing" for "good faith efforts," not for whether any specific numerical goal has been met.

6.5 Conclusions and Recommendations

Does the federal government's affirmative action programs relating to fair employment meet the President's tests: Do they work? Are they fair?

6.5.1 Conclusions

Do they work?

With respect to antidiscrimination enforcement, the OFCCP process is designed to provide dispute resolution, adjudication and remediation for identified acts of unlawful discrimination. The key issue in this Review, however, concerns the use of affirmative action programs. Under the Executive Order program, affirmative action in employment is intended to:

- promote inclusion of underrepresented minorities and women, in recognition that the lingering effects of past discrimination and exclusionary practices have denied opportunity to qualified people;

- prevent future discrimination by encouraging employers to be inclusive in their hiring and promotion practices;

- provide a practical means, through use of flexible goals and timetables, for employers to gauge their progress;This mirrors the universal conclusion that successful organizations pursue their objectives by adopting measurable goals, and plans to achieve them.

The empirical literature indicates that affirmative action generally, and specifically the OFCCP Executive Order program, does create opportunity. According to five academic studies, active enforcement by OFCCP during the 1970s caused government contractors to increase moderately their hiring of minority workers. (51) According to one study, for example, the employment share of black males in contractor firms increased from 5.8 percent in 1974 to 6.7 percent in 1980. In non-contractor firms, the black male share increased more modestly, from 5.3 percent to 5.9 percent. For white males, the employment share fell from 58.3 percent to 53.3 percent in contractor firms, and from 44.8 percent to 41.3 percent in non-contractor firms. (52) The literature also finds that contractor establishments that underwent an OFCCP review in the 1970s subsequently had faster rates of white female and of black employment growth than contracting firms that did not have a review. (53) OFCCP enforcement was scaled back during the 1980s. Nonetheless, there is reason to believe that it continues to have a positive and significant impact on remedying discrimination in the workplace.

Is it fair?

(1) Not Quotas

The available evidence, from court and administrative litigation, refutes the charge, based on anecdote, that equal employment opportunity goals have led to widespread quotas through sloppy implementation or otherwise. Quotas are illegal under current law, and can be used only as remedies in extremely limited court-supervised settings involving recalcitrant defendants found to have engaged in illegal discrimination. EEOC and court records simply do not bear out the claim that white males or any other group have suffered widespread "reverse discrimination."

Undeniably, however, there is anecdotal evidence of certain managers taking impermissible short-cuts -- hiring and promoting "by the numbers" rather than by using affirmative action in a flexible way to broaden the pool and then ensure that the effort to be inclusive does not compromise legitimate merit principles. (See recommendation below.) These anecdotes, if true, may in fact be stories about illegal discrimination, and are grounds for more attention to enforcement and education. Nevertheless, the balance of the evidence, based on complaints and litigation, indicates the problem is not widespread.

(2) Race-Neutral Alternatives

Nothing in the Executive Order requires race-based hiring or promotion, although equal opportunity results are measured. Thus, employers are free to adopt outreach, recruiting and hiring strategies as they choose, consistent with antidiscrimination law. While employers must analyze workforce and labor market data to identify manifest imbalances, the Executive Order only requires good faith efforts, and "good faith effort" is the basis upon which OFCCP reviews contractor performance. In that sense, therefore, as both a logical and practical matter, employers are perfectly free to adopt race-neutral strategies to achieve their EEO goals, provided they make a good faith calculation that such strategies will be effective.

(3) Flexible and Minimally Intrusive

There has been criticism of the Executive Order program as inflexible and intrusive, but the actual structure and working of the program demonstrate otherwise. First, there is the fact that the affirmative action programs emphasize goals and good faith, while leaving employers wide latitude to select means. Second, employers develop goals following analyses of their workforce and of the relevant labor pool, and there is no requirement of strict proportionality in the setting of a goal. Third, OFCCP is preparing a very significant reformulation of the guidelines for labor market analysis in order to simplify greatly the paperwork and research burden on firms preparing affirmative action programs. Finally, OFCCP is also streamlining the compliance review process so that its audits are less burdensome and disruptive. In these respects, some legitimate concerns about administration of the Executive Order are being addressed by the agency.

There continue to be concerns about the flat nationwide goal that women occupy 6.9 percent of construction jobs. That goal was established on April 8, 1978 as part of DoL regulations (41 C.F.R.60-4.6), and has not been revisited. The Secretary of Labor should consider whether such a review is called for. Experience may suggest adjusting the goal.

(4) Transitional

The transitional nature of affirmative action is implicit in the structure of the Executive Order, in as much as action is triggered by manifest underrepresentation of minorities and women, and when a workforce is fully inclusive, no further action is called for.

There is a broader issue, however. To the extent that a contractor is doing a good job of inclusion -- as demonstrated quantitatively by the numbers or qualitatively by the good faith efforts, then the compliance burdens of the Executive Order should be reduced and no regulations should require the continuation of elements of an affirmative action plan that are unneeded. OFCCP is considering taking steps in this direction.

(5) Balanced

Finally, affirmative action done the right way is balanced in that, even where it is necessary to have goals and timetables to correct manifest underrepresentation, those goals must be designed with reference to the relevant pool of applicants, and actual employment decisions cannot in the name of affirmative action give benefits to unqualified over qualified individuals. Moreover, caselaw makes clear that the interests of third parties -- of bystanders -- must be weighed in the balance. All of this is reflected in OFCCP's administration of the Executive Order program.

6.5.2. Recommendations:

Our conclusion is that the pragmatic use of affirmative action to promote equal opportunity in employment by government contractors has been and continues to be valuable, effective, and fair. The leadership provided by the federal government and its contractors has been a critical factor in causing private and public organizations to challenge and change their own personnel practices, using affirmative action as one tool to open up opportunity to qualified minorities and women who might otherwise have been left outside. We recommend that the President:

  • Direct the Secretary of Labor to underscore and reinforce current law and policy regarding nondiscrimination, the illegality of quotas, the enforcement focus on "good faith efforts," and the relationship of equal opportunity to legitimate qualifications, by instituting appropriate changes in the administrative guidelines for the Executive Order program and in the technical assistance provided to employers by the Office of Federal Contract Compliance Programs.

  • Instruct the Department of Labor to finalize and implement plans to reduce the employer paperwork burden associated with the Executive Order Program, and reward successful companies by targeting enforcement on problem firms. Currently, OFCCP is working to achieve a 30 percent reduction in private sector paperwork burdens. These steps include a streamlining of the written plan required to be prepared by contractors, targeting audits to firms where there is evidence of a problem, and limiting audits to areas of specific concern. In addition, OFCCP will eliminate duplicative or unnecessary forms now required from contractors.

  • Direct the Secretary of Labor to explore means of collaborating with private sector leaders in more vigorous private sector-led efforts to promote best practices in providing equal employment opportunity. Other Cabinet officers and Administration officials should participate as appropriate.

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Affirmative Action Review


2. History and Rationale

3. Empirical Research on Affirmative Action

4. Justifications

5. Review of the Programs

6. Office of Federal Contract Compliance

7. AA and EEO in the Military

8. Federal Civilians

9. Federal Procurement Policies and Practices

10. Education and HHS Policies

11. Selected Other Federal Policies


Appendix A

Appendix B

Appendix B Footnotes