I. Introduction
As of March 2023, 13.6% of the American population identified as Black, and 18.9% identified as Hispanic. However, in fiscal year 2020, Black-owned small businesses received only 1.7% of all federal contracting dollars; similarly, Hispanic-owned small businesses received 1.8%. Even accounting for discrepancies due to data collected in different years, this data illustrates a dearth of opportunity for minority-owned small businesses. Though contracting programs like 8(a) and HUBZone were created to advance the development of socially and economically disadvantaged businesses, these statistics demonstrate that such programs have failed to equalize the allocation of government contracting dollars to the actual percentage of small businesses owned by racial minorities. As such, further action is needed to provide racially diverse small businesses with opportunities to compete for government contracts. One potential path forward is the re-prioritization of federal race-conscious procurement programs. Although such policies were never formally declared unconstitutional by the Supreme Court, their use virtually ended with Adarand Constructors Inc. v. Pena.
This Note examines the history of federal race-conscious procurement programs after Adarand. It seeks to understand how, if at all, the government has utilized race in its procurement policies in light of the Supreme Court’s decision in Adarand that effectively ended set-aside programs based on race and procurement incentives at the federal level. In addition, this Note will propose novel constitutional approaches to re-prioritizing racial diversity in procurement in light of current understandings of the Fourteenth Amendment.
First, this Note will trace the history of race-conscious procurement programs, beginning with the passage of Section 8(a) of the Small Business Act in 1953 and running through the Supreme Court’s consideration of the constitutionality of race-conscious programs, from Fullilove in 1980 to Ultima Services in 2023. Second, this Note will describe the current state of Fourteenth Amendment jurisprudence and analyze what, if anything, can be learned from recent Equal Protection cases beyond the procurement world, specifically involving affirmative action in education. Finally, this Note will conclude with novel constitutional arguments in favor of re-prioritizing consideration of race in procurement.
This Note will ultimately propose several paths forward after Adarand and emphasize that race-based procurement programs may yet be constitutional under current understandings of the Fourteenth Amendment. First, this Note argues that under Washington v. Davis and similar precedent, new race-conscious procurement programs could potentially avoid Equal Protection issues all together by crafting policies that apply equally to potential government contractors and subcontractors of all races and ethnicities by providing paths to eligibility besides ownership by racial minorities. Second, this Note summarizes the Court’s most recent guidance as to the constitutionality of programs that consider race under the Fourteenth Amendment in Students for Fair Admissions v. President and Fellows of Harvard College (S.F.F.A.) and explains how carefully crafted programs may still pass strict scrutiny based on the Court’s analysis in S.F.F.A.
Finally, this Note seeks to leverage the data collected by the Small Business Administration (SBA) that demonstrates that, nearly thirty years after Adarand, racial minority-owned small businesses continue to receive few government dollars. This data will accomplish two things. First, it demonstrates the inadequacy of existing programs, such as 8(a), to diversify the award of government contracts on the basis of race after Adarand. Second, it provides statistical evidence that race-blind policies have failed to ensure racial and ethnic diversity in procurement and offers a jumping-off point for development of new race-conscious programs to bridge this gap while simultaneously providing evidence that would help such programs pass strict scrutiny. Based on the state of race-conscious procurement programs after Adarand and other Fourteenth Amendment jurisprudence, this Note argues that the government must re-prioritize race-conscious procurement programs, as several constitutional justifications may exist to defend such programs.
II. Background: Race-Conscious Programs in Government Procurement
This section will follow the Supreme Court’s consideration of race-conscious policies in the realm of both state and federal procurement. Overall, it will walk through the various approaches that the Court has taken in evaluating the constitutionality of race-conscious procurement programs. This section will emphasize how the Court’s evaluation of such policies has varied widely over time and will explain how each case that the Court has considered provides guidance that will help modern race-conscious polices pass strict scrutiny. It will end with a brief discussion of the most recent District Court guidance involving the 8(a) Program, the modern inheritor to the pre-Adarand race-conscious policies.
A. 1953–1977: Early Congressional Action
Considerations of race in government contracting began as early as 1953 with the congressional passage of Section 8(a) of the Small Business Act of 1953. This provision authorized the SBA to contract with small businesses “whenever it determine[d] such action [was] necessary.” In 1968, President Lyndon Johnson issued an executive order directing the SBA to design a program with the purpose of helping small businesses owned and controlled by “socially or economically disadvantaged” individuals. Ultimately, the SBA’s reforms following the 1968 executive orders failed to have their intended effect of diversifying procurement to the benefit of “socially or economically disadvantaged” businesses. In response, Congress passed the Public Works Employment Act of 1977, which required that ten percent of every public works grant go to minority-owned businesses.
B. Fullilove v. Klutznick (1980)
In 1980, constitutional challenges to the ten percent set-aside program put forth by the Public Works Employment Act of 1977 failed in Fullilove v. Klutznick. Although the Supreme Court’s decision in Fullilove was a plurality opinion, six of the justices on the court voted to affirm that the set-aside program was constitutional under some level of scrutiny.
In Fullilove, the Court emphasized that, although it did not owe Congress absolute deference, it recognized that Congress had broad authority to “provide for the general Welfare” and to enforce the Equal Protection Clause. In this case, the Court evaluated the constitutionality of the Minority Business Enterprise (MBE) program on two criteria: first, whether the objectives of the legislation at issue were “within the power of Congress” and, second, “whether the limited use of racial and ethnic criteria . . . is a constitutionally permissible means for achieving the congressional objectives” that did not violate the Equal Protection Clause inherent in the Fifth Amendment’s Due Process Clause.
Ultimately, the Court determined that Congress had enacted the MBE portion of the Public Works Employment Act under several of its enumerated powers, including its Commerce Power, Spending Power, and its power to provide for the general Welfare. The Court also determined that the MBE program, enacted as a “strictly remedial measure,” was without constitutional defects and was therefore an appropriate exercise of Congress’s powers. In addition, the Court emphasized that its past precedent supported race-conscious remedial policies, both for unconstitutional race-based discrimination and for statutory violations. Finally, in regards to the possibility that some contracts may “disappoint the expectations of nonminority firms,” the Court determined that this was not a constitutional defect that warranted rejection of the policy. Rather, the Court determined that “[w]hen effectuating a limited and properly tailored remedy to cure the effects of discrimination, such a ‘sharing of the burden’ . . . is not impermissible.” This statement represented the broader policy embodied by the decision in Fullilove: programs such as MBE were specifically targeted at ameliorating the effects of past discrimination and represented a national commitment to ensuring more equitable procurement policies, particularly concerning minority businesses.
However, it was Justice Powell’s concurrence in Fullilove, not the majority opinion, that came to form the foundation of the Supreme Court’s evaluation of federal procurement policies until Adarand. Justice Powell’s concurring opinion in Fullilove emphasized that “eradicating the continuing effects of past discrimination identified by Congress” constituted a compelling state interest, justifying the constitutionality of the ten percent set-aside program even under strict scrutiny. He argued the federal government could demonstrate legitimate government interests justifying race-based considerations in government procurement to survive strict scrutiny. Though Justice Powell’s concurrence placed more emphasis on the standard of review for programs like MBE than policy rationale, the concurrence, like the majority opinion, represented the Court’s sentiment that such a remedy was needed to address the impact of past discrimination on minority businesses.
C. 1980–1989: Reforms Following Fullilove
Subsequent congressional reforms followed the Supreme Court’s decision in Fullilove, including the passage of two other bills with similar set-aside language (the Surface Transportation and Uniform Relocation Assistance Act of 1987 and the Intermodal Surface Transportation Efficiency Act of 1991) and the amendment of the Small Business Act. In particular, the amended version of the Small Business Act set a government-wide goal that at least five percent of all prime and subcontracts be awarded to socially or economically disadvantaged businesses. The definition of “socially disadvantaged business” in the context of the revised SBA presumed that any individual who identified as Black, Hispanic, Asian Pacific, Subcontinent Asian, or Native American was socially disadvantaged.
D. City of Richmond v. J.A. Croson Company (1989)
Following the Supreme Court’s decision in Fullilove and subsequent expansion of federal policies designed to help socially and economically disadvantaged businesses, the Supreme Court revisited the question of which standard of review was most appropriate for the evaluation of such policies in City of Richmond v. J.A. Croson Company. At issue in Croson was the state of Virginia’s “Minority Business Utilization Plan,” which required prime contractors to reserve at least thirty percent of the dollar value of each contract for subcontractors that were “Minority Business Enterprises” (MBEs). The key difference between the challenge in Croson and the previous challenge in Fullilove was that the policy at issue in Croson was a state policy promulgated by the state of Virginia, rather than a federal set-aside like in Fullilove, though the policy in Croson was directly modeled off of the set-aside that Fullilove had upheld.
Croson marked the first Supreme Court application of the strict scrutiny standard proposed in Justice Powell’s concurrence in Fullilove. In Croson, the Supreme Court determined that the thirty percent reservation for MBEs did not pass strict scrutiny and stated that the only way that set-aside programs could survive strict scrutiny was through the provision of statistical evidence of a significant racial disparity between the number of MBE contractors and actual percentage of government contract dollars that went to the MBE contractors.
In its decision, the Court relied heavily on the insufficiency of the evidence presented at the public hearing at which the Virginia plan had been adopted. Advocates of the Minority Business Utilization Plan had put forth two evidentiary justifications for the adoption of the plan. First, advocates pointed out that, although the population of Richmond, Virginia, was at that point fifty percent Black, only 0.67% of all prime construction contracts awarded in the fifteen-year period between 1978–1983 had gone to minority-owned businesses. Second, advocates of the program pointed to the dearth of minority business membership in local contractors’ associations as evidence that action was needed to diversify state and local level procurement efforts. Ultimately, however, the Supreme Court distinguished between the evidence presented in the Virginia case and the evidence presented before Congress in Fullilove—statistical evidence that “a nationwide history of past discrimination had reduced minority participation in federal construction grants.” As such, Croson effectively raised the bar as to which types of evidence would help race-conscious procurement programs survive strict scrutiny.
E. Wygant v. Jackson Board of Education (1986)
One explanation for the difference in outcome between Fullilove and Croson is the Supreme Court’s opinion in Wygant v. Jackson Board of Education. At issue in Wygant was a collective bargaining agreement for schoolteachers in Michigan that provided special protections against layoffs for minority teachers. The Supreme Court determined that the agreement in Wygant failed strict scrutiny for two reasons. First, the Supreme Court determined that the goal of the race-conscious protection policy, remedying past societal discrimination, was “too amorphous a basis for imposing a racially classified remedy.” Second, the Supreme Court was particularly concerned with the fact that the collective bargaining agreement at issue focused on protection against layoffs, implying that non-minority teachers bore a greater risk of being laid off as a direct result of the policy at issue. Taken together, these two rejections of race-conscious policy in Wygant raised the bar for which policies would pass muster under strict scrutiny. Wygant is but one example of how the Court’s beliefs on topics other than procurement had reaching impacts on its understanding of race-conscious procurement programs.
F. Metro Broadcasting, Inc. v. FCC (1990)
The Court returned to the question of race-conscious procurement programs only a year after Croson in Metro Broadcasting, Inc. v. F.C.C. In Metro Broadcasting, the Court rejected the Croson standard that it had applied only a year prior as inconclusive. The Court dismissed Croson by arguing that the standard of review for federal procurement policies involving racial classifications was necessarily different from the standard of review for state and local policies, which marked the key distinction between its decisions in Fullilove and Croson. The Court reasoned that, while state and local polices were subject to strict scrutiny under Croson, federal policies need only “serve important governmental objectives” and be “substantially related to achievement of those objectives.” The lenient standard applied in Fullilove was therefore applied in Metro Broadcasting and the Tenth Circuit’s original decision in Adarand.
At issue in Metro Broadcasting were two preference policies promulgated by the Federal Communications Commission (FCC). One policy, known as “enhancement,” gave weight to minority ownership of companies applying for licenses for radio and television broadcast stations. The second policy allowed for the “distress sale” of radio and television broadcast stations by transferees who were considered minority enterprises; the “distress sale” option allowed individuals who were no longer qualified broadcasters to transfer their licenses to someone else without an FCC hearing. Metro Broadcasting alleged that the FCC’s enhancement policy substantially biased procurements against it by weighting minority ownership so heavily that award to minority-owned business was all but guaranteed.
The Supreme Court ultimately held that neither policy was a violation of Equal Protection because both had been created with congressional support and met the standard of intermediate scrutiny insofar as both policies were “substantially related to the achievement of the important governmental objective of broadcast diversity.” The Court was persuaded by the role that Congress had played in affirming the FCC’s actions in developing such policies and found especially persuasive the fact that Congress’s findings as to the benefits of such policies closely resembled the findings of the FCC itself. Beyond the findings, the Court emphasized the importance of Congress’s role in the promulgation of these policies. The Metro Broadcasting court quoted Justice Powell’s concurrence in Fullilove to support its view that Congress was uniquely suited to investigating and understanding a given problem, developing expertise in the issue over time, and responding to the problem with appropriate action.
Despite the Court’s decision in Croson from just a year prior leveraging strict scrutiny, the Supreme Court ultimately returned to the lesser level of scrutiny that had originally been applied in Fullilove. The Court determined that a racial classification need only pass intermediate scrutiny as long as such a classification was benign. The Supreme Court argued that Croson had not contradicted Fullilove, but that it had reinforced the Court’s position that different standards were necessary to evaluate federal race-conscious programs passed by Congress and evaluating similar state and local policies.
G. Adarand Constructors, Inc. v. Pena (1995)
Only five years later, Metro Broadcasting was directly overruled by the Supreme Court in Adarand Constructors, Inc. v. Pena. At issue in Adarand was a Department of Transportation program promulgated pursuant to the Section 8(d) Subcontracting Program, a provision of the Small Business Act that provided financial incentives to encourage prime contractors to hire subcontractors that were at least fifty-one percent controlled by “socially and economically disadvantaged individuals.” The term “socially and economically disadvantaged individuals” was statutorily defined to include “Black Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, and other minorities” as well as “any other individual found to be disadvantaged by the [Small Business] Administration pursuant to section 8(a) of the Small Business Act.”
In oral argument, the Department of Transportation asserted that the case was not fundamentally about race, but about disadvantage, and therefore should be evaluated under a lower tier of scrutiny. In its final decision, the Supreme Court even conceded that the statutes and regulations at issue in the case were, in fact, facially race neutral, and emphasized that these provisions “present[ed] none of the additional difficulties posed by laws that . . . result in racially disproportionate impact.”
Ultimately, the Supreme Court in Adarand held that “all racial classifications, imposed by whatever federal, state, or local governmental actor, must be analyzed by a reviewing court under strict scrutiny.” The majority opinion in Adarand posited that all prior cases concerning racial classifications conformed to three main principles: skepticism, consistency, and congruence. Skepticism warranted more stringent review of provisions implicating race; consistency required that the standard of review function independently of “the race of those burdened or benefited by a particular classification”; and congruence meant that analysis of racial considerations under the Fourteenth and Fifth Amendments (i.e., at the federal and state levels) should be the same.
Adarand was the Court’s dual attempt to reconcile inconsistencies between Fullilove and Croson and to constrain Metro Broadcasting. Though the Court had previously demonstrated its belief that some race-conscious programs needed to be evaluated with strict scrutiny in Croson, it had previously excluded federal policies from consideration under strict scrutiny. However, Adarand was not framed by the Supreme Court as a radical departure from its prior decisions; rather, the Court viewed Adarand as “restoring the fabric of the law” by overruling Metro Broadcasting, which it believed had gone too far and departed from previous cases. The Court in Adarand remanded the case for consideration by the Tenth Circuit, which in turn remanded the case to the District Court for the District of Colorado, which ultimately determined that the policy in question did not pass muster under strict scrutiny.
H. 1995–2023: Post-Adarand Reforms
The legacy of Adarand is the high bar that it imposed on all legislatures, including Congress, seeking to create race-conscious procurement programs after 1995. In addition, changes to the standard of review applied to race-conscious procurement programs accompanied the Supreme Court’s rejection of race-based quota systems in education affirmative action. These key doctrinal transformations, both in procurement doctrine and Supreme Court conception of racial quotas in other settings, made Adarand’s impact on federal race-conscious procurement programs strong and immediate. Although Adarand did not explicitly declare race-conscious set-aside programs facially unconstitutional, the Court’s assertion that such policies warranted strict scrutiny had a powerful chilling effect on procurement policy across the federal government. Agencies like the Department of Defense suspended their set-aside programs within months of the decision in Adarand. In practice, both the requirement that race-conscious procurement programs be evaluated under strict scrutiny and subsequent government policy shifts effectively ending all race-conscious procurement programs severely curbed opportunities for socially and economically disadvantaged businesses almost immediately. Adarand’s chilling effect “deterred many legislatures from enacting furtive affirmative action programs that had the potential of equalizing opportunity in the public procurement market.”
Since Adarand, the Small Business Administration has shifted its focus to programs that prioritize the broad categories of social and economic disadvantage, such as the HUBZone Program and the 8(a) Program, over pre-Adarand programs that utilized race-based set-aside contracts. On the one hand, the Historically Underutilized Business Zone Empowerment Contracting Program (HUBZone Program) intends to extend economic opportunity to qualified census tracts and counties with “higher than average unemployment or lower than average median household incomes.” The 8(a) Program, on the other hand, utilizes a rebuttable presumption standard that allows businesses that are at least fifty-one percent owned and controlled by individuals that fall under the statutory definition of “socially and economically disadvantaged” to qualify for the program. Under the rebuttable presumption standard, businesses that are primarily owned by individuals who fall under the definition of “socially and economically disadvantaged” are not required to submit evidence of social disadvantage to qualify for the 8(a) Program. This presumption can only be overcome with “credible evidence to the contrary” submitted in writing to the SBA. The statutory definition of “socially and economically disadvantaged” individuals includes “Black Americans, Hispanic Americans, Indian tribes, Asian Pacific Americans, Native Hawaiian Organizations, and other minorities.” In 2016, the D.C. Circuit rejected a challenge against the 8(a) Program under the Fourteenth Amendment and held that, because the 8(a) Program did not implicate classifications on the basis of race, it passed muster under strict scrutiny and therefore did not violate the Fourteenth Amendment.
I. Recent Developments in the 8(a) Program
Most recently, a Tennessee District Court enjoined the 8(a) Program, the Small Business Association’s modern inheritor to pre-Adarand programs. In Ultima Services Corporations v. U.S. Department of Agriculture, the Court held that the rebuttable presumption standard violates Equal Protection under strict scrutiny. Ultima Services argued that the rebuttable presumption standard fails strict scrutiny because the government could not demonstrate that such a presumption was narrowly tailored to achieve a compelling state interest.
The district court agreed for three reasons. First, the district court rejected the government’s argument that it has a compelling state interest in remedying past discrimination on the basis that it failed to maintain goals for the 8(a) Program. Second, the district court stated that, even though the government had demonstrated racial disparities across various industries, it failed to provide evidence that connected these disparities to “an inference of intentional discrimination” that the court argued was the necessary harm the rebuttable presumption was designed to address. Finally, the district court held that the rebuttable presumption standard is not narrowly tailored for several reasons: there is no procedure for overcoming the rebuttable presumption in practice; the 8(a) Program is not limited in time, despite the fact that individual participants can only participate in the program for nine years; and because the rebuttable presumption for individuals of certain races hampers the ability of companies that do not meet such criteria to compete for contracts under the program.
Because of the district court decision in Ultima Services, the Small Business Administration is currently enjoined from applying the rebuttable presumption standard under the 8(a) Program. As such, any kind of government contracting program that implicates any consideration of race must utilize a standard other than a rebuttable presumption in order to be permissible under this latest guidance. In addition, the SBA and other federal agencies must monitor the future of Ultima Services for further guidance from the courts in order to carefully construct race-conscious programs that follow both guidance regarding the 8(a) Program and other programs under the Fourteenth Amendment.
To move forward with race-conscious programs within government procurement, it is important to understand both how the history of race-conscious programs in government procurement works and where the Supreme Court stands on other Fourteenth Amendment cases. The following section will summarize the most important cases in Fourteenth Amendment jurisprudence in two categories: first, the foundational cases in Equal Protection jurisprudence and, second, the Court’s recent guidance and consideration of affirmative action in education.
III. The State of the Fourteenth Amendment
Beyond the procurement world, other cases in Fourteenth Amendment jurisprudence offer hints as to what kinds of race-conscious programs may be constitutional. In particular, two lines of cases are relevant to this Note’s understanding of the path forward for race-conscious procurement programs. First, the line of cases including Brown v. Board of Education, Loving v. Virginia, and Washington v. Davis forms the backbone for modern Fourteenth Amendment doctrine. This group of cases has held that, while all race-conscious programs must be evaluated under strict scrutiny, the Fourteenth Amendment may not be implicated where laws apply equally to individuals of all races.
Second, the group of cases involving affirmative action programs in education, including Regents of the University of California v. Bakke, Grutter v. Bollinger, Gratz v. Bollinger, and Students for Fair Admissions v. President and Fellows of Harvard College, all detail the Court’s current understanding of how race-conscious affirmative action policies are (or are not) constitutional under modern conceptions of the Fourteenth Amendment. Most recently, the Court’s guidance in Students for Fair Admissions provides a framework under which constitutional race-conscious programs in procurement can be created. Such guidance will help these programs pass strict scrutiny even under the exacting standard promulgated by the Court in Students for Fair Admissions.
A. Origins of Modern Equal Protection Doctrine
Three cases, Brown v. Board of Education, Loving v. Virginia, and Washington v. Davis,formthe basis of understanding the Equal Protection Clause as it functions today. This section will briefly summarize each of these cases in turn to provide additional context for how these cases continue to inform modern Equal Protection doctrine.
Brown v. Board of Education is widely considered the most important Equal Protection case of the twentieth century. At issue in Brown were school segregation policies from several states (with a companion case challenging segregation policies in Washington, D.C.) that required Black students and white students to attend separate schools deemed to provide “equal” facilities to each group of students. In a landmark unanimous opinion, the Court ultimately held that segregation, while claiming to provide equal facilities and opportunities for all students, was a clear violation of Equal Protection both because of its use of race to segregate students and the resulting feelings of inferiority that segregation had on the “hearts and minds” of Black students.
Beyond its immediate and powerful impact on segregation in public education, two streams of thought involving Equal Protection emerged from Brown. The first stream of thought dictates that all race-based classifications, regardless of purpose, are automatically suspect under the Fourteenth Amendment. The second stream of thought, based most heavily on the dicta in Brown implicating the dignity of segregated students, proffers that the biggest issue with race-based segregation is racial subordination. This stream of thought looks beyond the classification of students as white and non-white, and instead leads the Equal Protection analysis to turn on whether or not the classification in question led to feelings of inferiority of non-white students. The key distinction between these two perspectives is whether all racial classifications are automatically suspect regardless of intent. This distinction has reaching impacts as to whether race-conscious programs that attempt to promote fairness and equality are constitutional. Under the former perspective, any use of racial classification for any purpose, even classifications designed to help certain individuals, is automatically suspect. Under the latter, however, race-conscious programs may thrive where their purpose is to promote fairness and equality.
The Court, however, has adopted the former perspective, consistently holding that racial classifications are automatically suspect. In Loving v. Virginia, the Supreme Court rejected a Virginia anti-miscegenation law as clearly unconstitutional under both Equal Protection and Due Process. However, unlike Brown, Loving contained no language referencing the dignity of individuals impacted by the Virginia law and rested primarily on the Court’s assertion that any law or policy implicating race must be evaluated under strict scrutiny. Thus, Loving and subsequent cases signaled the Court’s intention to adopt the first stream of thought originating from Brown—that racial classifications are inherently suspect and must be evaluated under strict scrutiny regardless of purpose.
The equality policy put forth in both Brown and Loving weakened over time as subsequent cases narrowed which cases fell within the scope of Equal Protection and therefore strict scrutiny. Specifically, Washington v. Davis limited the reach of cases like Brown and Loving by holding that laws and policies that disproportionately impact certain racial and ethnic groups over others do not necessarily constitute violations of Equal Protection. At issue in Washington v. Davis was a qualifying exam required for application to the D.C. Metropolitan Police Department. Despite the fact that this exam disproportionately disqualified Black applicants from being hired, the Supreme Court determined that facially neutral laws or policies within the authority of the government to create are not invalid under Equal Protection solely due to their disproportionate impact on certain groups.
Under modern Equal Protection doctrine, including Brown and Washington v. Davis, two potential justifications exist for the constitutionality of race-conscious programs today. First, advocates could argue that, under the racial-subordination theory originating from Brown, race-conscious programs and policies are only unconstitutional where they seek to subjugate certain groups of individuals; such policies would therefore be constitutional wherever their primary intent was to remedy past discrimination, even under strict scrutiny. Second, advocates of race-conscious programs could posit that policies that allow for consideration of minority status are permissible under Washington v. Davis because, even if such policies particularly impact certain racial or ethnic groups, policies that are not facially discriminatory are still constitutional under Equal Protection.
Based on both such arguments, this Note will turn towards a discussion of the Court’s handling of affirmative action programs in education. The story of affirmative action demonstrates how Equal Protection cases in other subject areas have influenced modern development of race-conscious programs to promote diversity and provides a framework under which similar policies may be promulgated to promote the same ends.
B. Affirmative Action in Education
In determining possible ways to reprioritize race-conscious programs within government procurement, advocates of such policies may look to the line of cases involving affirmative action in education as an indication of the kinds of programs that the Supreme Court would be likely to affirm under the Fourteenth Amendment. This line of cases indicates two crucial perspectives. First, the education affirmative action cases seem to suggest that a race-conscious admissions program can pass strict scrutiny wherever a program, instead of setting quotas, considers race only as one factor out of many in a holistic review process. Second, the cases agree that, while diversity may be an appropriate compelling state interest in some circumstances, the best evidence in favor of such programs demonstrates (a) that the program seeks to remedy some specific instance of discrimination or (b) provides statistical or other substantial support in favor of such a program, rather than just broad policy objectives.
The Supreme Court first considered affirmative action in education in 1978, in Regents of the University of California v. Bakke. At issue in Bakke was a preferential admission program utilized by the Medical School of the University of California at Davis. The program specifically reserved sixteen out of the one hundred total seats in the class for students considered to be disadvantaged minority students. The Supreme Court ultimately determined that the most pressing issue presented by the admission program was the emphasis that it placed on the admission of certain percentages of minority students to the medical school. Although the Supreme Court recognized that diversity in the classroom was, in fact, a compelling state interest, it took particular issue with the use of a quota system to obtain its goals.
The Court distinguished Bakke from prior cases like Brown insofar as Brown and the other school desegregation cases put forth a remedy to address “specific instances of racial discrimination.” Thus, although the majority in Bakke opposed the broad, intangible concept of “societal discrimination” as justification for the university’s policy under strict scrutiny, it seemed to indicate that affirmative action programs in education may pass strict scrutiny by demonstrating that the program in question is designed to remedy specific instances of past racial discrimination.
The university also argued that an additional goal of the program was “improving the delivery of health-care services to communities currently underserved.” Although the Court ultimately determined that the university had failed to provide evidence that the admission program in question would contribute to the achievement of this goal, it seemed to indicate that proper statistical substantiation supporting these means may have helped the program to pass muster. In particular, the Court emphasized that the petitioner had failed to provide empirical data to enforce its perspective that it could achieve its goal, improving medical service to historically underserved communities, by way of the quota system.
The Court revisited the question of affirmative action in education twenty-five years after Bakke in Grutter v. Bollinger and Gratz v. Bollinger, two cases arising out of race-conscious admission policies at the University of Michigan. The Court’s respective approaches to the programs in Grutter and Gratz demonstrate its rejection of quantified evaluations implicating race, but also its ready acceptance of more holistic evaluation processes that may consider race among other intangible criteria.
In Grutter, the Court upheld an admissions process utilized by the University of Michigan Law School that allowed for consideration of intangible factors, defined as any factor that may help to “achieve that diversity which has the potential to enrich everyone’s education and this make a law school class stronger than the sum of its parts.” Crucially, the policy did not restrict the definition of diversity only to racial diversity, though the policy did reaffirm the school’s commitment to racial diversity “with special reference to the inclusion of students from groups which have historically been discriminated against, like African-Americans, Hispanics and Native Americans.”
In contrast, the program at issue in Gratz involved an undergraduate admission policy that automatically guaranteed 20 points (out of a potential 150) to students of “underrepresented racial or ethnic minority group[s].” Although the university also employed a program of reserving “protected seats” to allow for rolling admission of other categories of students, including athletes, international students, and ROTC students, the automatic award of points only applied to students of racial minorities. Ultimately, the Gratz court took particular issue with the fact that the automatic award of points failed to individually consider applicants; it instead assumed that a student’s membership in a particular minority group necessarily meant that they would contribute to a diverse student body.
The difference in treatment between the point system in Gratz and the individualized, holistic application review process upheld in Grutter emphasizes a clear point in Fourteenth Amendment doctrine. Both cases represent the Court’s assertion that the automatic award of points and/or quota systems impermissibly infringe on Equal Protection of non-minority students. However, Grutter also provides a framework for race-conscious programs that are constitutionally permissible under Equal Protection. First, Grutter posits that a holistic but nevertheless race-conscious review process may be constitutional under the Fourteenth Amendment where such a review process is “flexible enough to consider all pertinent elements of diversity in light of the particular qualifications of each applicant.” Second, Grutter indicates that diversity in education constitutes a compelling state interest under strict scrutiny. Taken together, both of these criteria indicate two key constitutional requirements of race-conscious programs, not only in education but beyond.
C. Recent Developments in Affirmative Action
The Court returned to the question of race-conscious admissions program in Students for Fair Admissions v. President and Fellows of Harvard College in 2023 (S.F.F.A.). In S.F.F.A., the court determined that the race-conscious admissions programs at both Harvard College and the University of North Carolina (UNC) were unconstitutional under the Equal Protection Clause. Originally separate cases, the Harvard and UNC cases were consolidated due to the similar nature of each school’s admissions process and treatment of the applicant’s race within the process. On the one hand, within Harvard’s admissions process, applicant race is considered in the final stage of the process known as the “lop”; the Court emphasized that “race is a determinative tip for a significant percentage of all admitted African American and Hispanic applicants.” UNC, on the other hand, allows some consideration of applicant race in its initial review; students that are members of underrepresented minorities are more likely to score highly in the category of “personal rating.”
In its decision, the Court reiterated its history of evaluating race-based admissions programs under strict scrutiny. The Court emphasized that neither Harvard nor UNC had satisfied its burden of demonstrating compelling interests, as none of the interests asserted by either school could be “subjected to meaningful judicial review.” It compared the compelling interests raised by Harvard and UNC to other justifications that it had previously upheld as compelling interests under strict scrutiny in prior cases. According to the Court, the biggest issue with the interests asserted by Harvard and UNC is their elusive nature and the lack of discernable standards with which to evaluate both the interest and whether or not the ends it seeks have been met. Specifically, the Court stated that the interests asserted by both Harvard and UNC were “not sufficiently coherent for the purposes of strict scrutiny” insofar as the goals could not be measured, nor could courts know when such goals had been achieved.
Beyond the issues of measurability, the Court also determined that both Harvard and UNC had failed to demonstrate a “meaningful connection between the means they employ and the goals they pursue.” Specifically, the Court took issue with the overbroad nature of the different categories of race that both universities utilized; the Court was especially concerned with the fact that such categories failed to understand distinctions like South Asian students versus East Asian students, as well as which students should be considered Hispanic. The Court emphasized that “opaque racial categories undermines, instead of promotes, respondents’ goals” because of the fact that it values percentages of students within a given category over diversity of students within each category.
In the same vein, the Court argued both universities’ programs violated the Fourteenth Amendment insofar as they allowed an applicant’s race to be used in the negative and in a way that perpetuates stereotyping. Specifically, the Court took issue with the fact that, in the absence of policies that consider an applicant’s race, “members of some racial groups would be admitted in greater numbers than they otherwise would have been.” Further, the use of an applicant’s race in this manner perpetuates stereotypes—such programs assume “there is an inherent benefit in race qua race.” As such, a program that considers an applicant’s race “engages in the offensive and demeaning assumption that [students] of a particular race, because of their race, think alike.”
Finally, the Court took issue with the fact that the consideration of race in admissions lacked a “logical end point.” The Court was unwilling to accept the assertions by Harvard, UNC, and the government that considerations of race in college admissions would end once schools had achieved “meaningful representation and meaningful diversity” on their respective campuses. It likewise rejected respondents’ arguments that such considerations should be allowed for at least five more years under Justice O’Connor’s standard set forth in Grutter—that “25 years from now [2003], the use of racial preferences will no longer be necessary.”
Despite the Court’s staunch dismissal of the constitutionality of Harvard’s and UNC’s consideration of applicant race in the admission process, it did not expressly overrule Grutter. Likewise, the majority opinion did not state that programs considering an applicant’s race could never survive strict scrutiny. Rather, the Court took issue with four aspects of Harvard’s and UNC’s programs: (1) measurability and meaningful judicial review; (2) meaningful connection between ends and means; (3) the use of race in the negative and the danger of stereotypes; and (4) temporality of such programs. The Court’s guidance in these areas implies that the Court could, given a carefully constructed program, find a program implicating some consideration of an applicant’s race constitutional as long as it meets the following criteria.
First, the program must utilize measurable, likely objective, standards so that the Court may evaluate the interest in a way that provides it an opportunity to meaningfully review the program’s constitutionality. Second, such a program must clearly articulate the connection between the program’s consideration of race and the ends that it seeks. Third, the program, through its use of race, must not allow an applicant’s race to be used in the negative—it must not take away an opportunity to receive a benefit if an applicant does not fit into a certain racial category, and it must be very careful to avoid stereotypes when constructing such categories. Finally, the program must be limited in time and must provide clear temporal limitations guiding when the program will end or otherwise no longer be necessary.
IV. Analysis: Re-Prioritizing Race in Procurement After Adarand
Although in practice most race-conscious procurement programs ended after Adarand, Adarand did not say that such programs could never be constitutional under equal protection. Rather, Adarand held that such cases must be evaluated under strict scrutiny. Based on this guidance and the Supreme Court’s Equal Protection precedent, from its foundational cases to its most recent guidance on affirmative action policies in education, government contracting programs that include race-conscious programs may still be constitutional.
A. Under Washington v. Davis, the Equal Protection Issue May Be Avoided All Together by Creating a Program with Multiple Paths to Eligibility, Including Business Ownership by Racial Minorities and Other Minority Status.
One potential constitutional argument in favor of new race-conscious federal procurement policies is the argument that, based on the precedent established by Washington v. Davis and the affirmative action cases, a carefully structured procurement program may avoid Equal Protection issues all together by guaranteeing that such a policy applied equally to individuals of all races. Washington v. Davis emphasized that equal application of a policy, not equal impact, was the basis of a policy’s constitutionality under the Fourteenth Amendment. As such, a procurement policy that allows for some consideration of race but also provides alternative paths to eligibility would apply equally to both racial minority and non-racial minority owned businesses and would therefore be constitutional under Washington v. Davis.
The best way to ensure equal application of a procurement program that implicates race-conscious elements is to allow multiple paths to eligibility for such programs. This change could leverage existing programs such as the 8(a) Program. For example, the SBA could expand eligibility under 8(a) by expanding its definition of social and economic disadvantage individuals to individuals outside of its existing categories. As the program stands, individuals who do not fall under the designated groups explicitly set out in the statute may “establish social disadvantage by a preponderance of the evidence.” A race-neutral program under Washington v. Davis, however, would allow all applicants to qualify for 8(a) status under this provision using the “evidence of individual social disadvantage” set forth in the Code of Federal Regulations. Such a program would be racially neutral, and therefore constitutional under Washington v. Davis, even if it disproportionately impacts businesses owned primarily by individuals of certain racial minorities.
Further, under Ultima Services, such a program should utilize an evidentiary standard that requires proof of social or economic disadvantage, rather than the rebuttable presumption standard of the current 8(a) Program. In fact, such a standard already exists in the regulations that implement the 8(a) Program. Together, these two features—paths to eligibility besides ownership by racial minorities and requiring a business to demonstrate social and economic disadvantage instead of receiving status based on a rebuttable presumption—would be more likely to be upheld as constitutional under modern understandings of Equal Protection.
B. The Supreme Court’s Guidance in S.F.F.A. Provides a Strategy to Re-prioritize Federal Race-Conscious Procurement Programs.
In Students for Fair Admissions, the Supreme Court highlighted its concerns with four aspects of both Harvard’s and UNC’s race-conscious admissions policies: (1) measurability and meaningful judicial review; (2) a meaningful connection between ends and means; (3) the use of race in the negative and the danger of stereotypes; and (4) temporality of such programs. Based on this guidance, the SBA can craft a race-conscious program or expand eligibility under an existing program in a way that would pass strict scrutiny.
First, as this Note will discuss, such a program or expansion of an existing program must utilize measurable interests, such as achieving parity between the actual award of government contracts to certain categories of minority-owned small businesses to the total percentage of small businesses owned by individuals of such racial or ethnic groups. This use will help to fulfill the second prong of the Court’s consideration. The application of statistical data that demonstrates discrepancies of government contract awards to individuals of certain racial groups demonstrates the connection between the means and the ends; it is clear that the SBA would intend to utilize consideration of an applicant’s race in order to achieve parity between the percentage of small businesses owned by individuals of certain racial and ethnic groups and the actual award of government contracting dollars to such firms.
Third, the SBA can avoid the Court’s third concern—the use of race in the negative and the Court’s concern with stereotypes—by creating a program with multiple paths to eligibility, as described above. In addition, the SBA can overcome the Court’s criticism of Harvard’s and UNC’s “imprecise” categories of individuals by specifying which countries of heritage fall into certain categories of race or ethnicity. Such classification for purposes of extending economic opportunity is also beyond the scope of the Court’s criticisms of the programs at issue in S.F.F.A. because it does not assume a difference in thinking or existence of minority-owned firms—only that such firms have historically lacked economic opportunity.
Finally, and perhaps most importantly, race-conscious programs in procurement have a “logical endpoint”—when the percentage of small businesses owned by individuals of certain racial and ethnic groups and the actual award of government contracting dollars to such firms are equal. This comparison both provides a potential endpoint for such programs, as well as avoids the issue of racial balancing, since the analysis fundamentally turns on the opportunities available to minority-owned firms rather than the treatment of such businesses as “components of racial, religious, sexual, or national class[es].” In the alternative, the SBA could (and likely should) articulate other endpoints in the regulations guiding such race-conscious programs that specify when the program should sunset; this assertion would avoid the Court’s concern with programs that lack an endpoint.
Taken together, these criteria provide a framework under which the SBA may re-prioritize race-conscious programs in order to improve economic opportunity for firms owned by racial and ethnic minorities. A program meeting each of these criteria and providing multiple paths to eligibility as described above is likely to pass muster, even under strict scrutiny, by avoiding what the Supreme Court sees as the key issues with race-based affirmative actions in education. In addition to the Court’s guidance in S.F.F.A., such a program can also leverage data collected by the SBA that demonstrates the inadequacy of existing programs in achieving equalized opportunity for minority-owned businesses.
C. Data from Procurement Programs May Be Useful in Demonstrating Existing Programs’ Inadequacy in Achieving Racial Diversity in Procurement.
Data detailing the racial and ethnic breakdown of the award of small business contracts is collected and published each year by the SBA. Such data can easily be compared with other data from the SBA regarding the percentage of small businesses that are primarily owned by individuals of racial minority groups. Comparing the actual award of government contracts to certain categories of minority-owned small businesses, such as Black-owned small businesses or Hispanic-owned small businesses, to the total percentage of small businesses owned by individuals of such racial or ethnic groups is a helpful metric for measuring whether the actual award of government contract dollars is proportional to the respective shares of the market that each racial or ethnic group possesses.
Currently, the comparison of these sets of data demonstrates that, although Black Americans constitute around 13.4% of the population (as of December 2021), only 2.2% of small business employer firms were Black-owned. Further, only 1.7% of federal contracting dollars in fiscal year 2020 went to Black-owned small businesses. Taken together, this data indicates two points. First, it demonstrates the discrepancy between percentage of Black-owned small business employer firms and the percentage of federal contracting dollars going to such firms. Second, it reveals the dearth of Black-owned small businesses relative to the overall Black population of the United States. The same trend is true for Hispanic-owned businesses. Although Hispanic Americans make up around 18.5% of the population, Hispanic-owned businesses constituted only 5.8% of small business employer firms and received only 1.8% of federal contracting dollars in fiscal year 2020. As such, because the data as a whole points to the underrepresentation of small businesses owned by racial minorities, both generally and within the realm of government contracts, further action is needed to ensure more opportunities for minority-owned businesses within the field of government contracts.
In S.F.F.A., the Court took issue with the broadly asserted interests raised by Harvard and UNC because such interests were difficult to measure and therefore could not be “subjected to meaningful judicial review.” In addition, a lack of measurable standards made it difficult for the Court to ascertain whether the asserted state interests had been met by the parties asserting the interests. The use of statistical data, however, provides a more measurable standard. The SBA and reviewing courts can leverage statistics by comparing the percentage of minority-owned and operated firms to the percentage of government contracting dollars that those firms receive. This data will help the SBA and reviewing courts to understand the successes of existing programs in achieving racial parity and evaluate whether such programs have thus been successful in achieving their aspirational ends.
As such, leveraging data such as that collected by the SBA has two crucial benefits in the re-prioritization of race-conscious procurement programs. First, discrepancies between the percentage of businesses owned by racial minorities and the actual award of government contracts may demonstrate the inadequacy of existing programs like 8(a) and the HUBZone Program in terms of ensuring racial diversity in procurement. Second, and most significantly, such data could be used in a court of law as evidence that existing policies have failed to achieve the same benefits as policies that implicate consideration of racial diversity. This evidence would help new race-conscious programs pass strict scrutiny by evincing how prior policies have been enacted but have ultimately failed to have the same equitable impact that race-conscious programs could have.
V. Conclusion
After Adarand, federal agencies turned away from considering race in procurement, even in the context of policies designed to promote the diversification of procurement dollars. However, in Adarand, the Supreme Court merely determined that race-conscious procurement programs must be considered under strict scrutiny; it did not expressly disclaim such policies as unconstitutional. As such, this Note has proposed three potential paths forward to re-prioritize race-conscious procurement programs that are both consistent with modern Fourteenth Amendment jurisprudence and the Court’s rationale in Adarand.
First, this Note suggested that under Washington v. Davis, procurement policies that allow for some consideration of race may still avoid Equal Protection issues all together by allowing for multiple paths to eligibility, rather than constraining eligibility to just the race of a business’s owners. Second, this Note argued that Students for Fair Admissions provides a framework under which the federal government can craft race-conscious procurement programs that pass strict scrutiny. Finally, this Note posited that data from existing procurement policies, collected by entities like the SBA, would be useful in demonstrating the failure of extant procurement programs to achieve racial diversity in procurement. Such information is particularly useful given the Supreme Court’s recognition of the importance of demonstrating underrepresentation as a threshold issue for justifying race-conscious programs under strict scrutiny. Taken together, both the constitutional law explanation contained in this Note and its proposed strategies provide a jumping off point for the re-prioritization of race-conscious programs within the context of federal procurement.
