Time to set aside government race-based set-aside contracts

October 30, 2015 | By RALPH KASARDA

PLF attorneys filed a brief in the United States Court of Appeals for the District of Columbia Circuit this week in Rothe Development, Inc. v. United States Department of Defense. In their brief, attorneys for PLF argue that the racial classification enacted in 1978 to set aside federal contracts under section 8(a) of the Small Business Act is unconstitutional. The Center for Equal Opportunity joined PLF in its brief.

The Small Business Administration (SBA) and the Department of Defense (DoD) enforce a small business set-aside program that “sets aside” contracts exclusively for contractors of certain races. PLF argues that there is no compelling government interest to justify the government’s racial preferences because the statistical evidence the government relies on is flawed and fails strict scrutiny.

PLF also argues that the court must make a judicial determination that government’s use of race is necessary. The Supreme Court held in Fisher v. Univ. of Tex. at Austin that government has “the ultimate burden of demonstrating, before turning to racial classifications, that available, workable race-neutral alternatives do not suffice.” The government’s burden to search for race-neutral alternatives is ongoing, and requires the government to conduct “periodic reviews to determine whether racial preferences are still necessary.” But the district court failed to apply – or even mention – the government’s narrow tailoring burden under Fisher, or inquire into the government’s use of race-neutral alternatives since 1978.

For those skeptical of big government, the SBA deserves close attention. In his book, Big Government and Affirmative Action, Professor Jonathan Bean examined the “the scandalous history” of the SBA, chronicling loans to criminals, government contracts for minority “fronts,” outrageous pork barrel allocations, and questionable definitions of what constitutes a small business. Bean writes:

By affirmatively discriminating in favor of ill-defined interest groups, the SBA has become embroiled in constant controversy. Preferences designed to overcome disadvantage have flowed disproportionately to the not-so-small businesses and affluent minorities. Yet, these programs continue to grow and have become entrenched in government.

It is time for government to transition away from its use of racial preferences. Justice Kennedy warned in his dissenting opinion in Grutter v. Bollinger, that a court’s “abdicat[ion of its] constitutional duty” to apply “meaningful strict scrutiny” to racial preferences provides a perverse incentive to public institutions to abandon the search for race neutral programs that would be “more effective in bringing about the harmony and mutual respect among all citizens that our constitutional tradition has always sought.” The court of appeals should heed this warning.