CIR Opposes Defendants’ Motion in Set-Aside Case

The Center for Individual Rights has filed opposition to the defendants’ motion for summary judgment in Ultima Services v. U.S. Department of Agriculture.  Ultima challenges the Section 8(a) program, a federal program through which the Small Business Administration authorizes government agencies to select contractors based in large part on race.  Defendants, the SBA and USDA, argue that they have produced sufficient evidence to show that 8(a)’s race preferences serve a compelling interest, that the 8(a) program is narrowly-tailored to meet that compelling interest, and that there is no genuine issue of material fact that would preclude summary judgment in their favor.

Defendants have the burden of proving that their use of race preferences redress “patterns of deliberate exclusion” by showing specific instances of intentional discrimination by the agency employing the preference.  They tried to meet this burden by documenting racial disparities among small business owners using congressional reports from the time of the creation of the 8(a) program, studies from the last decade, and other recent studies reviewing the data.

CIR’s opposition exposed deep flaws in defendants’ argument. To start, the courts have long recognized that the mere existence of disparities is insufficient to prove patterns of deliberate exclusion that can justify race preferences.  But much of defendant’s evidence did not get past the existence of disparities.  

Additionally, many of the studies that defendants used as evidence contained significant errors that undermined their conclusions, including failing to differentiate important variables like sex and race, citing studies that did not test for statistical significance, failing to account for the size and capacity of different firms, and counting companies with little or no involvement in government contracting as “available” to perform such contracts.  CIR submitted an affidavit and report from plaintiff’s expert, Dr. Jonathan Guryan, a Professor at Northwestern University who teaches economics and statistics, that identified and elaborated upon these and other flaws.

Defendants filed a reply on July 19.