THE FEDERAL COURTS are striking down more and more government contracting schemes that give preferences to bidders based on race, ethnicity, and sex. But the politicians continue to resist these decisions. What’s more, the federal judiciary itself may be dramatically transformed by this year’s presidential election. Consequently, many contractors are concluding that the time to attack these programs is now.
The Supreme Court over the past decade has expressed its antagonism toward official discrimination in a variety of ways. Most important were its 1989 Croson decision striking down a Richmond, Virginia, contracting scheme and its 1995 Adarand ruling, which declared that discrimination by the federal government was also presumptively unconstitutional. These two decisions — each by a deeply divided Court — are the critical weapons now wielded by contractors against government preferences.
But the Court has sent other signals, too. This February, in Rice v. Cayetano, it struck down a Hawaii law that limited voting in certain state elections to those with Native Hawaiian blood. Although it was a decision about voting and not contracting, Justice Kennedy wrote broadly: It “demeans the dignity and worth of a person to be judged by ancestry instead of by his or her merit and essential qualities.”
Even more important was a unanimous per curiam decision by the Court earlier this year in Adarand II. After the earlier 1995 decision, the nonminority guardrail subcontractor had continued to try, without success, to get a lower court judgment in his favor. The federal court of appeals, in fact, had ruled that he now lacked standing to press his lawsuit. The Supreme Court reversed and warned: “It is no small matter to deprive a litigant of the rewards of its efforts, particularly in a case that has been litigated up to this Court and back down again.” The Court’s obvious impatience and its fast action in handing down this ruling sends a message to the lower courts that the justices are tired of pro-preference foot-dragging.
In general, the lower courts are following the Supreme Court’s lead. In part this is because there remain plenty of Reagan and Bush appointees to the bench. Contracting programs with discriminatory preferences have been struck down by federal courts over the past few years in Dade County, Florida; Cleveland, Cincinnati, and Columbus, Ohio; Fulton County and Atlanta, Georgia; Houston and the state of Texas; New Orleans; and Philadelphia.
Indeed, the law is becoming so indisputable, and the attempts to justify continued preferences so specious, that even many Democrat-appointed judges are now striking down these programs. Judges chosen by Clinton and Carter remain more likely to uphold preferences than those picked by Reagan or Bush, and if new appointments to the Supreme Court overrule Adarand and Croson, then all bets are off. But for now contractors are enjoying victories even when the judge was not a Republican appointee.
For instance, Baltimore imposed racial and gender preferences in public construction contracts for the past 20 years but, in mid-February, a judge ended the practice. For 15 years Jackson, Mississippi, had a similar program, but it was struck down last Christmas. A program adopted in 1981 by New Jersey casinos mandating preferences in hiring and contracting has been terminated in three separate court decisions since November. The Baltimore scheme was struck down by a Clinton appointee, as was one of the New Jersey programs. The three-judge court of appeals panel that unanimously spiked the Jackson program included two judges appointed by President Carter. None of these cases even required a full trial.
Preferences have been no more successful when defended at trial. On March 7, Judge Richard Matsch, best known for presiding over Timothy McVeigh’s trial for the Oklahoma City bombing, shut down Denver’s 17-year-old contracting preference program. The city lost despite spending more than $ 2.5 million on various studies in addition to legal and expert fees of up to $ 350 an hour to defend the program. The judge concluded: “The most fundamental flaw in this effort to support Denver’s preferential use of race, ethnicity and gender by statistical evidence is that no objective criteria define who is entitled to the benefits of the program and who is excluded from those benefits.”
That is a common judicial finding these days. The Supreme Court’s decisions make clear that discriminatory contracting programs can be justified only if the government can show that there has historically been discrimination against the businesses now being favored and that there is no other remedy. Efforts to make this showing are becoming ever more pathetic.
In the casino case, for example, among the groups preferred were Native Hawaiians and Alaskans. But Clinton-appointed judge Stephen M. Orlofsky noted he was presented with no evidence that “qualified Hawaiian-owned and native Alaskan-owned contractors even exist in New Jersey, let alone that these minority businesses are discriminated against by casino licensees in the purchase of goods and services.” He likewise criticized the inclusion of persons of Portuguese descent, and further found that there had never been any findings of contract discrimination in the casino industry, period.
Judge Andre Davis, the Clinton appointee in the Baltimore case, remarked that the city did not bother trying to justify its race-based program until years after it came under attack. He found that there is “no legal support for the proposition that a governmental entity might permissibly adopt an affirmative action plan including set-aside goals and wait until such a plan is challenged in court before undertaking the necessary studies upon which the constitutionality of the plan depends.” In December he had enjoined the program with a terse order finding the numerical goals had not been changed over the years even though the ordinance called for annual reevaluations.
But more litigation is still necessary because the Clinton administration, as well as many state and municipal governments, continue to do their best to circumvent the federal courts’ rulings. Despite President Clinton’s promise to “mend” affirmative action, movement has been glacial and even backwards: In 1998, the administration actually expanded to all federal agencies a 10 percent preference that, up until then, had been awarded only on defense department contracts. Furthermore, it has broken its promise that “the extent of any credit awarded will be adjusted annually.” In fact, no such adjustment has yet been made, with the administration announcing last fall that no review would be released until June this year. In all likelihood, that date won’t be met either, falling as it does in the middle of a presidential campaign.
Meanwhile, the administration has opposed every effort to end these preferences legislatively. In addition, it has consistently defended in court a wide variety of discrimination, including contracting preferences based on race, ethnicity, and sex. All this despite repeated rebuffs from the judiciary, such as in Rice v. Cayetano, where the administration weighed in on behalf of Hawaii’s racially exclusionary elections.
Not that the Republican-controlled Congress has been much better. Both the House and Senate frequently reauthorize discriminatory federal programs, most recently on March 15, when by a vote of 410 to 11 the House extended the preference provisions in the Federal Acquisition Streamlining Act until 2003. This bill is now pending in the Senate.
For now, then, businesses that don’t like being discriminated against must go to court to vindicate their constitutional rights. Fortunately, there remains a window of opportunity for successful challenges to be brought against affirmative discrimination in the contracting area. But in January 2001 a new president will begin to make his appointments to the federal bench, and the window will either stay open — or slam shut.
