E.O. 11246 prohibits federal contractors and federally assisted construction contractors and subcontractors, who do over $10,000 in Government business in one year from discriminating in employment decisions on the basis of race, color, religion, sex, or national origin."  Contractors are also required to "take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex or national origin."
The Executive Order also required contractors with 50 or more employees and contracts of $50,000 or more to implement affirmative action plans to increase the participation of minorities and women in the workplace if a workforce analysis demonstrates their underrepresentation.
Underrepresentation is defined as there being fewer minorities and women than would be expected, given the statistics of the area from which the workforce is drawn (and not from those necessarily qualified).
The statistics used are those minorities and women qualified to hold the positions available, not all minorities or women in a given geographical area. Pursuant to federal regulations, affirmative action plans must consist of an equal opportunity policy statement, an analysis of the current work force, identification of underrepresented areas, the establishment of reasonable, flexible goals and timetables for increasing employment opportunities, specific action–oriented programs to address problem areas, support for community action programs, and the establishment of an internal audit and reporting system.