The Philadelphia Plan was a 1969 federal program that required contractors on federally funded construction projects in the Philadelphia area to set numerical goals for hiring minority workers in six skilled trades. Designed by Labor Secretary George Shultz and Assistant Secretary Arthur Fletcher, it was the first federal effort to attach specific workforce targets to public contracts, and the framework it created under Executive Order 11246 governed federal contractor affirmative action for nearly sixty years, until that order was revoked in January 2025.
The 1967 Version That Failed First
Philadelphia’s skilled construction unions in the 1960s were among the most racially segregated workforces in the country. Apprenticeship programs and referral systems controlled access to the highest-paying craft jobs, and they effectively shut Black workers out. The Department of Labor’s Office of Federal Contract Compliance took its first swing at the problem in November 1967 with the Philadelphia Pre-Award Plan, which held up federal contracts until compliance officials approved the number of minority workers the low bidder planned to hire.
That version collapsed within months. Comptroller General Elmer Staats objected that contractors could not know before bidding what hiring numbers the government would later demand, which he said left compliance officers with arbitrary power over who got paid. Staats blocked funding, and the Department of Labor shelved the plan.
How the 1969 Plan Worked
Shultz and Fletcher relaunched the concept in June 1969 with one decisive change: the government would publish specific percentage ranges for minority hiring before bidding opened, so every contractor knew the targets going in. That answered Staats’s objection about bidding uncertainty and let the plan move forward.
Fletcher insisted the numbers be called goals rather than quotas. Contractors were not required to hit an exact figure. They committed to a good faith effort to reach the stated range. The distinction was legally load-bearing. Section 703(j) of the Civil Rights Act of 1964 prohibited rigid quotas, and Fletcher’s team argued that flexible goals paired with a genuine-effort standard operated outside that prohibition. The Department of Labor also held hearings in Philadelphia to build a formal record of discrimination in the trades, giving the plan an evidentiary foundation as a remedy.
Who Was Covered
The plan reached contractors and subcontractors bidding on federally assisted construction in a five-county area: Bucks, Chester, Delaware, Montgomery, and Philadelphia counties. Coverage kicked in when a project’s total estimated cost exceeded $500,000. Any firm working on a venture receiving federal financial support, whether by direct contract or grant, accepted the workforce obligations as a condition of bidding, so the commitment locked in before any work began.
The Six Trades
Enforcement concentrated on six skilled crafts where exclusion was worst: ironworkers, plumbers and pipefitters, steamfitters, sheet metal workers, electrical workers, and elevator constructors. These were the highest-paying positions in the industry and the ones where union control over apprenticeships and referrals created the steepest barriers.
The Goals and the Good Faith Standard
The plan set escalating percentage ranges for minority participation, measured as a share of total work hours. First-year ranges started around 5% to 9% and climbed each year, reaching 19% to 26% by year four. The annual increases assumed contractors would build recruitment pipelines and that more minority workers would move through apprenticeships over time.
Hitting the exact number was not the test. A contractor had to show real effort: active recruiting through community organizations, minority-focused placement services, and vocational training programs, not just reliance on union hiring halls that had historically excluded minority applicants. Detailed records of every outreach contact, job posting, and referral were required. A firm that fell short of the range but could document a sustained recruitment campaign satisfied the good faith standard. Token gestures did not.
The numbers moved fast. Within a year of implementation, the share of Black workers in skilled positions on covered projects jumped from roughly 2% to nearly 23%.
Enforcement
The Office of Federal Contract Compliance, inside the Department of Labor, ran oversight. Staff pulled payroll records and hiring logs, ran site visits, and interviewed workers to confirm that reported demographics matched what was happening on the job. When a contractor’s numbers were thin and the paperwork was thinner, the agency opened administrative review to decide whether the shortfall reflected bad faith or a real shortage of qualified applicants in that trade.
The tools were blunt. The OFCC could cancel existing contracts and bar non-compliant firms from bidding on future federal work. For contractors whose business depended on government projects, debarment was an existential threat, and that leverage is what made the good faith standard mean something in practice.
Executive Order 11246, the Legal Base
The plan rested on Executive Order 11246, signed by President Lyndon B. Johnson on September 24, 1965. The order required every federal contractor to agree not to discriminate based on race, creed, color, or national origin, and to “take affirmative action to ensure that applicants are employed, and that employees are treated during employment” without regard to those characteristics.1The American Presidency Project. Executive Order 11246 – Equal Employment Opportunity It gave the Secretary of Labor authority to issue implementing rules, and the Philadelphia Plan was built on that delegation. The Department of Labor’s position was that setting numerical goals in a region with documented discrimination was exactly the affirmative action the order contemplated.
Court and Congress
Contractors and trade associations sued. In Contractors Association of Eastern Pennsylvania v. Secretary of Labor, the Third Circuit upheld the plan in 1971, reasoning that the federal government “has the unrestricted power to fix the terms, conditions and those with whom it will deal” when spending public money.2Law.resource.org. 442 F.2d 159 The court held that numerical goals paired with a good faith standard were not illegal quotas, because contractors had room to fall short as long as they could show genuine effort. The Supreme Court declined to hear the case.
The political fight ran alongside the legal one. Comptroller General Staats’s office drafted an appropriations rider that would have blocked funds for any contract the Comptroller General deemed to violate federal law. Organized labor, which viewed the plan as a threat to union hiring prerogatives, backed the rider, as did southern Democrats opposed to federal civil rights enforcement. The Nixon administration lined up with civil rights liberals against it. The rider was defeated, and full implementation went forward.
How It Spread
The five-county model did not stay put. The Department of Labor extended similar plans to other cities with documented patterns of trade union discrimination and eventually built a nationwide framework requiring affirmative action by federal construction contractors. The Office of Federal Contract Compliance Programs, as the agency came to be called, set goals for minority participation informed by local census data and a separate nationwide goal for women in the trades. The basic architecture, specific hiring targets tied to a good faith standard and enforced by the threat of contract loss, was the one Fletcher and Shultz designed in 1969.
The approach also moved beyond construction. Executive Order 11246’s reach expanded over the decades to cover virtually every significant federal contractor, with OFCCP overseeing compliance across industries.
The 2025 Revocation
On January 21, 2025, President Donald Trump signed Executive Order 14173, which revoked Executive Order 11246 and ordered OFCCP to “immediately cease holding federal contractors responsible for taking affirmative action or allowing workforce balancing” based on the categories the original order had protected.3U.S. Department of Labor. Office of Federal Contract Compliance Programs Three days later, a Secretary’s Order directed OFCCP to halt all investigative and enforcement activity under the old order. Federal contractors were given until April 21, 2025, to wind down their compliance programs.
In July 2025, the Department of Labor formally rescinded the implementing regulations that had translated Executive Order 11246 into contractor obligations for nearly sixty years.4Federal Register. Rescission of Executive Order 11246 Implementing Regulations The numerical goals, good faith documentation, and debarment threat that grew out of the Philadelphia Plan no longer apply as a matter of federal executive policy. Two separate statutes, Section 503 of the Rehabilitation Act and the Vietnam Era Veterans’ Readjustment Assistance Act, still require affirmative action for workers with disabilities and certain veterans on federal contracts, and OFCCP continues to enforce those.3U.S. Department of Labor. Office of Federal Contract Compliance Programs The race- and sex-based regime built on Fletcher’s Philadelphia design has been dismantled at the federal level.