No Compelling Interest
Awarding federal contracts based on race or ethnicity is unconstitutional.

By Roger Clegg & John Sullivan. Mr. Clegg is general counsel at the Center for Equal Opportunity. John Sullivan is associate director of the Project on Civil Rights and Public Contracting in Baltimore, where he has worked on the Gross Seed and Sherbrooke Turf cases.
May 25, 2001 10:15 a.m.

esterday, by a thin 51-47 margin, the Senate confirmed the eminently well-qualified Theodore Olson to be solicitor general. Mr. Olson's job will be representing the federal government before the Supreme Court, and what may be his toughest case is already waiting for him.

Two months ago, on March 26, the Court agreed to hear Adarand Constructors, Inc. v. Mineta, a case involving the constitutionality of federal contracting preferences based on race and ethnicity. The opening briefs in the case are due next month, and the indefensibility of the program was recently revealed by the government in a sworn deposition. The case therefore presents a major test for the Bush administration's commitment to the rule of law.

But first, some background. The plaintiff is a small, family-owned, and Colorado-based highway-construction company. It specializes in guardrail work, and had submitted the low bid on one such contract. The prime contractor, however, awarded the bid to another company, because the federal government pays a cash bonus when bids are accepted from companies owned by members of certain racial and ethnic groups. Adarand's rival was Hispanic and, therefore, in the preferred category; Randy Pech, the owner of Adarand, was not.

This will be the third time the Court considers Adarand. The original contract giving rise to the litigation was awarded nearly twelve years ago, and the case has been bouncing around the federal courts ever since. Each time the Supreme Court has ruled, it has made clear its skepticism about the government's discriminatory program. It is distinctly possible the Court will use Adarand this time to make a definitive statement on the constitutionality of racial and ethnic preferences in federal contracting.

The Court has already declared that discrimination by the federal government will be held to the same, "strict scrutiny" standard as discrimination by state and local governments. In other words, if a preference is to remain constitutional, the government must prove that there is a sufficient "factual predicate" for the preferences: that there is no other way that it can remedy discrimination against some groups except by discriminating against other groups.

That's where the recent deposition comes in. To make its case in Adarand and in similar cases all over the country, the Department of Justice has been relying on a single document: a 15-page 1996 report called "The Compelling Interest for Affirmative Action in Federal Procurement: A Preliminary Survey." The Compelling Interest statement appears at first blush to marshal an impressive array of reports, dozens of committee hearings, and studies, going back to 1964, documenting discrimination in various sectors of the economy. In court filings the Department of Justice has called the Compelling Interest statement "voluminous evidence" showing that "as a matter of law Congress has the requisite evidence to take action to remedy discrimination."

But on January 18 this year a Justice Department lawyer was deposed in two cases, Gross Seed Company v. Nebraska and Sherbrooke Turf v. Minnesota, a pair of ongoing challenges to preferences in federally funded highway contracting. The lawyer's testimony reveals that the Department of Justice has almost no factual support in defense of these preferences.

The lawyer questioned, Mark Gross, is listed in the Federal Register as the contact person for the Compelling Interest statement. Mr. Gross, who works in the Department's Civil Rights Division, admitted in his deposition that the Compelling Interest statement was not an attempt to provide a neutral, scholarly evaluation of whether discrimination existed in federal procurement. Instead, it was pure advocacy: The Department of Justice wanted to "try and compile some of the kinds of evidence that would support the continuing need for an affirmative action process in federal contracting." The author of the Compelling Interest statement was not told to find out if discrimination was essential to fighting discrimination. Instead he was "charged with finding whatever reports are out there that would support the compelling interest."

No author had been listed for the Compelling Interest statement when it had been published in the Federal Register. So Mr. Gross was asked who actually wrote it. It turns out that the author was a paralegal of four years experience who has since left the Department to go to law school. The young man, Sean Flynn, was given all of one week to do his work. He was rushed to complete the study so that it could "accompany the publication of the report on reforms to federal procurement."

But surely his work was carefully supervised? Actually, no. His product was never reviewed substantively by Department of Justice lawyers. Their review of Flynn's work was limited to "editing purposes" and "clarity." This lack of attorney oversight is particularly odd since the Compelling Interest contains numerous interpretations of constitutional law.

What did paralegal Flynn and the Department find? Were there, for example, instances of discrimination by government officials? Again, the answer is no. When asked whether "you or anyone else have [had] occasion to determine or otherwise find evidence of discrimination perpetrated against any contractors by any level of government on the basis of race or gender," Mr. Gross answered, "I didn't and I don't — don't know of any."

Mr. Gross's answer cannot be dismissed as that of just one bureaucrat taken by surprise: He was the individual listed by the government as its expert on "Any findings of discrimination in the highway industry or need for the race, ethnic, and gender presumptions related to the [disadvantaged business enterprise, or "DBE"] program." If even he cannot point to evidence of government discrimination, it is fair to conclude that no such evidence of discrimination has been established.

What about discrimination by private actors? The Compelling Interest statement cites 58 state and local "disparity studies." These studies are intended to measure contracting dollars awarded to minority- and women-owned firms against the availability of those firms. But such studies are notoriously unreliable — and have frequently been dismissed by the courts — and no one at Justice ever looked at any of them. Paralegal Flynn did not look to see if any of the information was true.

The studies concluded that minority- and women-owned firms received fewer public contracting dollars than expected, and the federal government then concluded that this must be due to discrimination, and that this justifies preferences. But when asked, "You didn't as part of your analysis form an opinion as to whether or not that difference was due to discrimination or whether it was due to some other factors?" Mr. Gross replied, "No, I didn't." Gross was certain of this. He was asked, "Did you or anyone at the Department [determine]…whether or not that was the result of discrimination or whether it could be the result of unrelated factors?" Mr. Gross answered, "I don't think we really — really studied that." When asked a related question, Mr. Gross admitted he never ascertained "whether or not the difference [in the number of companies available to bid] was due to discrimination or whether it was due to some other factors." Of course, if disparities are not due to discrimination, but are the result of other factors — such as the fact that minority- and women-owned firms are, in the aggregate, smaller and newer than their white male–owned competitors — then the need for preferences has not been established.

When pressed on more specific issues, the federal government's lack of knowledge became even more glaring. Sherbrooke Turf and Gross Seed, like Adarand, involve preferences in highway contracting, so deposition questions focused on those areas. When asked, "As part of your work did you determine whether or not there were any reports commissioned by Congress to examine whether and to what extent there was discrimination within the road construction industry or the construction industry against DBEs?," Mr. Gross acknowledged, "I didn't see reports of that kind, no."

Nor is the report even up to date. "The Compelling Interest for Affirmative Action in Federal Procurement: A Preliminary Survey" was compiled in 1996 but, despite the word "preliminary" in the title, Mr. Gross testified that "there hasn't been a subsequent review of the program" in the five years since the report was issued.

None of this is to criticize Mr. Gross, who was just telling the truth. But it does mean that the lawyers at the Justice Department, starting with Attorney General John Ashcroft, need to reassess the Clinton administration's policy of defending the indefensible.

Mr. Ashcroft said in March, when asked on Meet the Press if he would defend the government's contracting program, that "I defend the law of America. Obviously, I will defend the Department of Transportation's regulations." But one doubts that Mr. Ashcroft knew how weak the government's case was, and it is anything but obvious why the nation's attorney general, who swears to uphold the Constitution, should ignore that higher law if an agency's regulations are shown to violate it.

The Justice Department is housed in a massive stone building, and above one of the entrances is inscribed, "The United States prevails when justice is done." In other words, it is no victory for the government if it prevails despite the law, and it is no defeat if it admits the law is against it. Good advice for the president, the attorney general, and the new solicitor general as they ponder their next move in Adarand Constructors, Inc. v. Mineta.