New evidence undermines affirmative action in government contracting

CIR’s Adarand brief disputes claims of past discrimination

Washington, D.C. – The law firm at the forefront of the legal challenge to affirmative action in university admissions weighed in today in the battle over affirmative action in government contracting. Using government documents obtained in separate litigation, the Center for Individual Rights (CIR) submitted an amicus brief supporting Adarand Constructors’ Supreme Court challenge to federal contracting preferences for minorities. The documents put CIR in a unique position to assist the Court in its consideration of Adarand’s case. Most importantly, CIR’s brief demonstrates that the federal government lacks the proof of discrimination against minorities that is required to constitutionally justify its program of reverse discrimination. The brief also refutes the government’s contention that the preferences – which involve set-asides and bid adjustments – are intended to assist disadvantaged businesses generally, rather than being focused on minority-owned companies.

Adarand Constructors, Inc. v. Mineta, which will be heard by the Supreme Court this fall, involves a construction company’s challenge to the federal statute under which minority businesses are given preferences when bidding for Department of Transportation contracts and subcontracts. Similar statutes governing contracts awarded by the Small Business Administration are at stake in DynaLantic Corp. v. Dept. of Defense, which is in U.S. District Court for the District of Columbia after remand from a federal appeals court. Through its representation of DynaLantic in that case, CIR has obtained government documents and discovery materials that go to the heart of the Adarand case.

Although both the DOT and SBA programs are billed as helping “socially and economically disadvantaged” business owners, minority owners are presumed to be socially disadvantaged and benefit from an easily met definition of economic disadvantage. That definition is met as long as an owner’s adjusted net worth – excluding his home and business – does not exceed a generous threshold ($750,000 in most contexts). Documents reviewed by CIR in the DynaLantic litigation show that the owners designated as “economically disadvantaged” have actual net worths ranging up to $4 million.

CIR has also discovered that about 98 percent of the businesses qualified for preferences are minority-owned. In other words, it is extremely difficult for companies not owned by minorities to qualify. Not surprisingly, CIR’s materials show that the SBA often drops the race-neutral pretense in front of friendly audiences and describes the preferences as being for “minority” or “African-American” businesses.

“The federal government’s programs for disadvantaged businesses are a thinly veiled system of preferences for favored races and ethnic groups,” said Curt Levey, CIR’s Director of Legal & Public Affairs. “The government continues to deny the true nature of these programs, because it knows it cannot meet the constitutional standard for justifying racial preferences,” he added. Mr. Levey explained that, under the constitutional standard known as “strict scrutiny,” any government entity using racial preferences must show that it is remedying the effects of its own past discrimination, and that it has tried race-neutral alternatives to the preferences.

CIR’s documents demonstrate that neither requirement is met by the federal government. For example, the SBA admitted in the DynaLantic litigation that it is not aware of discriminatory treatment of minorities in connection with any federal contract. Indeed, the agency said it was unaware of any federal policy or practice that has had even an unintentional discriminatory impact on minorities’ ability to compete for contracts. And with regard to the requirement for trying race-neutral alternatives, the SBA admits that “no other alternative has ever been used.”