The United States and Westinghouse Electric Corp. agreed yesterday to allow the company to receive a $10 million government contract the firm had been denied after a Defense Department inspector said he found "deficiencies" in company's employment of minorities in Bloomfield, N.J. plant.
Westinghouse had filed suit Thursday against the Defense Department and nine other government officials claiming it had not been allowed to contest at a hearing the allegations of deficiencies in its employment program.
In a stipulation signed yesterday, the government agreed to allow Westinghouse to accept the contract on Wednesday, and that it the government intended to deprive the company of contracts in the future it will either give the company a hearing or advise it within 10 days of intentions to deprive the firm of contracts said Asst. U.S. Atty. Thomas K. Berger.
According to court papers filed in U.S. District Court in Alexandria, a Defense Department inspector began reviewing employment at the Bloomfield plant in accordance with government regulations requiring companies that contract or subcontract with the government to follow equal employment standards.
On Sept. 18, the Defense Department inspector told Westinghouse officials of deficiencies he found in their affirmative action program. The inspector told Westinghouse it had five days to respond to the allegations. Westinghouse asked for more time.
On Oct. 3, government officials said they would re-evaluate the allegations, but on Oct. 16 another official told Westinghouse he would recommend enforcement action against the company.
In the meantime, the government sent letters to Westinghouse customers precluding them for doing business with the government, and it also sent letters to other government agencies telling not to do business with Westinghouse.
As part of the stipulation yesterday, the government will notify the customers and government agencies that they can still do business with Westinghouse.
Allegations of deficiencies in Westinghouse's affirmative action are still under review, and no official conclusion has been reached, Berger said.
Westinghouse whose net income during the first six months of this year was $141.05 million, claimed the disputed contract for the slae of lighting to the government could be worth as much as $10 million or more in gross sales annually.