Racial preferences in the Big Sky State

May 12, 2015 | By RALPH KASARDA

Attorneys for PLF filed a brief in the Ninth Circuit Court of Appeals in the case Mountain West Holding Company v. Montana.  The case concerns a contractor’s challenge against Montana’s use of racial preferences on highway construction contracts from 2012-2014.  The contractor submitted the lowest bids on state contracts during that time, but those bids were rejected because of the race of the firm’s owner.  Our brief argues that Montana’s race-conscious program was unconstitutional, because Montana cannot prove that contracts had to be awarded on the basis of race to remedy discrimination.  Cato Institute and the Center for Equal Opportunity joined PLF in its brief.

In the minds of racial preference proponents, contractors competing for government contracts should be judged on the basis of their race, ethnicity, and gender, not on their qualifications, character, or bid.  To these people, dollars for government contracts must be allocated based on socialist notions of equal outcome, rather than equal opportunity.  Unfortunately, the Federal Disadvantaged Business Enterprise Program (DBE) provides them with a mechanism to racially balance the award of subcontracts on highway construction projects through government-mandated discrimination.

States implementing the DBE Program may require general contractors to hire a certain percentage of subcontractors by race or sex, or demonstrate “good faith efforts” to do so.  Otherwise a state may reject the prime contractor’s bid for a highway construction contract, even if it is the lowest bid.  But a state’s race-conscious contracting program can still be unconstitutional.  After all, the Equal Protection Clause of the Fourteenth Amendment provides that “[n]o State shall … deny to any person within its jurisdiction the equal protection of the laws.”  In City of Richmond v. J.A. Croson Co., the Supreme Court held that only “[i]n the extreme case, [may] some form of narrowly tailored racial preference [] be necessary to break down patterns of deliberate exclusion.”  In Western States Paving Co., Inc. v. Wash. State Dep’t of Transp., the Ninth Circuit invalidated Washington’s DBE program even after it had been approved by the United States Department of Transportation.

Montana’s “evidence” fails to show that contractors of any race have been deliberately excluded.  Montana retained a consulting firm to try to find evidence of discrimination.  It held publicized hearings in four major Montana cities (Billings, Helena, Missoula, and Bozeman), but only six people showed up and only two offered testimony.  The firm analyzed several years worth of contracting data, but statistics showed no disparities on construction subcontracts.  In fact, the data showed the overutilization of firms owned by minorities and women.  Montana instituted race- and sex-based goals anyway.

Even if Montana had evidence of widespread discrimination on highway construction contracts – which it doesn’t – it must show that it first tried and failed to remedy the effects of past discrimination through race-neutral measures.  In Fisher v. Univ. of Texas at Austin, the Supreme Court held that government has “the ultimate burden of demonstrating, before turning to racial classifications, that available, workable race-neutral alternatives do not suffice.”  PLF argues in its brief that race-neutral alternatives always suffice to remedy past discrimination in public contracting.  For instance, all contracts could be awarded through a transparent competitive bidding process to the lowest responsive and responsible bidder.  Or, the state could set attainment goals for all small and economically disadvantaged firms, not just those owned by individuals of a certain race or sex.

So what will the Ninth Circuit do?  We won’t know for some time.  Because of its workload, the court probably won’t hear oral argument in this case until next year.  For Cato’s excellent summary of the case, see here.