Center for Equal Opportunity

The nation’s only conservative think tank devoted to issues of race and ethnicity.

Sun02142016

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Contracting

The Center for Equal Opportunity asks:  Why do race, ethnicity, and sex need to be considered at all in deciding who gets awarded a contract?  It's good to make sure contracting programs are open to all, that bidding opportunities are widely publicized beforehand, and that no one gets discriminated against because of skin color, national origin, or sex.  But that means no preferences because of skin color, etc. either--whether it's labeled a "set-aside," a "quota," or a "goal," since they all end up amounting to the same thing.  Such discrimination is unfair and divisive; it breeds corruption and otherwise costs the taxpayers and businesses money to award a contract to someone other than the lowest bidder; and it's almost always illegal—indeed, unconstitutional—to boot. Those who insist on engaging in such discrimination deserve to be sued, and they will lose.

 

For those who want to challenge such programs, here are a couple of useful links. 

Unkingly Discrimination

As  Americans honor the memory and legacy of Dr. Martin Luther King Jr., it is sobering to see how far many of our public entities have strayed from Dr. King’s important message about equality. A case in which the Center for Equal Opportunity joined and helped write an amicus brief this month makes that sad point very well.

So entrenched have racial preferences become that, last March, a federal judge tossed out a case against government-mandated discrimination, Midwest Fence v. United States Department of Transportation. Last week, the U.S. Court of Appeals for the Seventh Circuit heard oral argument in an appeal of that decision, which involves a federal contracting program that requires bidders to discriminate against subcontractors on the basis of skin color and national origin.

A small guardrail-installation subcontractor, Midwest Fence, submitted the lowest bids on a multiple-highway construction project in Illinois. But the government pressured prime contractors to reject those bids and favor other subcontractors on the basis of their race. And without even holding a hearing, the judge granted summary judgment in favor of three government agencies and approved the racial preferences.

Racial preferences should never be approved. To favor one race means to disfavor another, and discrimination in contracting violates the Constitution’s guarantee of equal protection of the laws. The Fourteenth Amendment guarantees every person the right to be treated equally by state governments, and the Fifth Amendment provides a similar guarantee with respect to the federal government.

There’s more at stake than money. It’s flatly unfair and needlessly divisive to use race and ethnicity to decide who gets awarded contracts. As Alexander Bickel wrote in The Morality of Consent: “The lesson of the great decisions of the Supreme Court and the lesson of contemporary history have been the same for at least a generation: discrimination on the basis of race is illegal, immoral, unconstitutional, inherently wrong, and destructive of democratic society.”

The Seventh Circuit’s ultimate decision will have national implications, because the case concerns a federal program implemented in all 50 states. To receive federal highway funds, states must follow federal regulations that require a two-step goal-setting process that almost always leads to race-conscious goals for hiring subcontractors. Whenever Congress authorizes a highway-spending bill, alas, the race-based program is automatically extended.

Racial preferences in government contracting can be justified only if they are “narrowly tailored” to remedy racial discrimination. In Fisher v. University of Texas(2013), the Supreme Court held that, as part of the narrow-tailoring analysis, the government has “the ultimate burden of demonstrating, before turning to racial classifications, that available, workable race-neutral alternatives do not suffice.” The Court’s evolving jurisprudence makes clear that it demands that this burden be taken seriously.

And today, there are always workable race-neutral alternatives to racial preferences, in the contracting area in particular. That is, it is an area where there are always better ways to stop and remedy racial discrimination (the only justification for such policies) than by requiring more racial discrimination.

First, as the Supreme Court noted in City of Richmond v. J. A. Croson Co. (1989), if the government has evidence that non-minority contractors are systematically excluding minority businesses from subcontracting opportunities, it can and should take action to end the discriminatory exclusion. The appropriate response is to take measures against those who discriminate on the basis of race or other illegitimate criteria and provide relief to the victims of such discrimination. It should be noted that Illinois has not taken action against any prime contractors for engaging in racial discrimination — if only because it has not identified any prime contractors as engaging in discrimination.

Second, to stop such discrimination, federal and state governments could make public contracting completely transparent — at both the prime-contracting and subcontracting levels. States typically award prime contracts in a process that has been designed to eliminate discrimination and favoritism. Prime contractors must submit sealed bids, which are then publicly opened on a certain date and made available for inspection. The contractor who wins the contract is the one who was able to put together the lowest bid, period. Courts should ask why a similar race-neutral process has not been designed for subcontracts on public-highway projects. Such a process would allow state governments to do what everyone expects them to do when tax dollars may be funding the evils of discrimination: identify the discrimination and eradicate it.

What’s more, to the extent that the real concern is that minority-owned companies may be at a disadvantage because many of them are small or new, the appropriate policy is to define the businesses that should receive preferences — the disadvantaged businesses — by the size of the firm and the income of the owner, or the fact that the firm is new, instead of the race or ethnicity of the owner, as is done now. Why use skin color and national origin as proxies for disadvantage in 2016? There are plenty of disadvantaged whites and advantaged non-whites.

In sum, contracting programs should be open to all, bidding opportunities should be widely publicized beforehand, and no one should be discriminated against because of skin color, national origin, or sex. That means no preferences for one group, whether labeled as “set-asides,” “quotas,” or “goals,” since they all end up amounting to discrimination against other groups.

Remedial discrimination makes less and less sense with every tick of the clock, as the days when black companies were not allowed to compete fade into the past, and as America becomes increasingly multiethnic and multiracial.

Regarding that last point, consider: It is widely known that Asians (along with whites) are discriminated against in university admissions, but what is less widely known is that it is more and more common for Hispanics (again, along with whites) to be discriminated against in government contracting.

As an example, Milwaukee enacted an affirmative-action ordinance in 2012, requiring the city and its prime contractors to grant preferences to businesses owned by African Americans, Asian Americans, and women of all races, but not to Hispanic males, Native American males, and white males. The city was promptly sued by the Hispanic Chamber of Commerce and forced to abandon its discriminatory program.

Congress should put an end to this nonsense. If a bill could not get through the Oval Office, a senator or representative could at least ask the Government Accountability Office to calculate how much these programs are costing the taxpayers. The GAO could also help document how widespread discrimination is at the state and local levels.

In 2016, contracting preferences are never the “narrowly tailored” remedy. This is clearly an area where a dictum of Chief Justice John G. Roberts Jr. applies: “The way to stop to stop discrimination on the basis of race is to stop discriminating on the basis of race.”

Here’s hoping that the Court of Appeals keeps in mind that point, and Dr. King’s dream, when it rules in the Midwest Fence case.

Surprise result when city ends preferences in contracting

Supporters of racial and gender preferences in public contracting claim that preferences are needed because, without them, few contracts would go to minority- or women-owned firms. But a study recently done for Charlotte, N.C., reached exactly the opposite conclusion. After race and gender preferences ended, work awarded to minority- and women-owned businesses increased.

How can that be?

A bit of history is needed: Not long ago, Charlotte had a Minority- and Women-owned Business Enterprise (MWBE) program with preferential goals in its public contracts. The goals were suspended in 2002 as the result of a court challenge. The following year the city started its Small Business Opportunity program.

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