Race Neutral Programs in Public Contracting

Abstract

Because the racial and ethnic characteristics of America's urban areas have changed dramatically in the last two decades, strategies for including new groups in employment, education, and public contracting opportunities have been debated in most cities. In broad terms, these strategies can be classified as race-neutral or race-conscious policies. Race-neutral programs may involve creating new laws against discrimination and improving enforcement procedures. Although it is expected that minorities will more often be the victims of discrimination, the laws are worded in race-neutral language to protect everyone. Another race-neutral approach is to reduce barriers that new or otherwise disadvantaged competitors face in particular arenas. Again the expectation may be that minorities will be relatively the greatest beneficiaries, but the programs are written to include all persons defined by income, residence, age, or other race-neutral categories. Race-conscious programs, on the other hand, designate beneficiaries belonging only to particular racial or ethnic groups and often define eligibility in terms of ancestry or cultural identification. Programs establishing quotas, goals, or set-asides are typically race-conscious in practice. The debate over race-neutral versus race-conscious strategies has often been contentious, reverberating in legislative chambers and courtrooms throughout the land. Race-neutral proponents believe these programs are more compatible with the American tradition of individual rights and current civil rights laws, while producing a more stable society in the long run. Race-conscious advocates argue that their approach is the only just response to past discrimination and the only effective means to achieve equality in the short run. Most jurisdictions have used combinations of race-neutral and race-conscious means, but the discretion that local jurisdictions previously enjoyed when using racial classifications for affirmative action or other benign purposes has been dramatically curtailed by the Supreme Court's decision in City of Richmond v. Croson (1989). The National League of Cities said about the case: The decision cast a pall of uncertainty over state or local programs which use a numerical quota or any other form of racial preference. It is likely to lead to the reassessment of affirmative action plans and other race preferences in many communities and could well lead to a rash of lawsuits alleging reverse discrimination against cities (National Cities Weekly, 1989). In this article, we explore how jurisdictions have responded to the race-neutral alternative in the context of public contracting, the subject of the Croson decision. Croson Although the Supreme Court had offered tentative endorsements of race-neutral programs prior to Croson, that made the concept more visible as the preferred alternative in public contracting and other public programs. In Fullilove v. Klutznick and in Metro Broadcasting Inc. v. F.C.C., the Court was willing to defer to congressional authority to establish minority business enterprise (MBE) preferences. But in Croson, for the first time, the Court agreed on strict scrutiny as the proper standard of review in evaluating the racial classifications used in state and local MBE programs and other race-conscious programs. The Court declared Richmond's MBE program unconstitutional because it failed a two-pronged test. There was neither a compelling governmental interest for the program, nor was the remedy chosen narrowly tailored. There was evidence that qualified minority contractors have been passed over for City contracts or subcontracts, either as a group or in any individual case (City of Richmond v. Croson, p. 510). The Richmond program was not based on statistics about how many qualified MBEs there were and how many public contracts they had received. Consequently, no foundation existed for the 30 percent set-aside for MBEs the city had established. …