Posted on April 24, 2013

Let’s End the Government’s Racial Discrimination in Contracting

Roger Clegg, Center for Equal Opportunity, April 24, 2013

In an recent op-ed, I posed this question: As the federal government struggles with sequestration and governments at all levels also face the need to economize, isn’t it time to start awarding government contracts to the lowest bidder, rather than on the basis of skin color, national origin and sex?

Every bit of savings helps, after all. Or, as the late Sen. Everett Dirksen put it, “A billion here, a billion there, and pretty soon you’re talking about real money.”

Besides, there’s of course more at stake than money. It’s just unfair and divisive to discriminate by using race, ethnicity and sex to decide who gets awarded contracts.

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. And that means no preferences, whether labeled as “set-asides,” “quotas,” or “goals,” since they all end up amounting to the same thing.

Race- and sex-based contracting can breed corruption, or at least abuse. This was underscored by the recent analysis by the Washington Times of contracts under President Obama’s $785 billion stimulus program that were reserved for minority-owned firms. According to the Times, 17 percent of these firms merely acted as “middlemen” and subcontracted the work to others.

Most fundamentally, contracting discrimination violates the Constitution’s guarantee of equal protection of the law.

Such discrimination has been around for a long time, but the Obama administration has certainly done nothing to stop it. In its first year, Secretary of Transportation Ray LaHood sent a letter to all 50 governors, telling them “it is vital that we work together to provide small disadvantaged businesses and female and minority workers a fair chance to engage in transportation projects.”

They must use not only existing programs but also, it was emphasized, “innovative strategies to provide opportunities for the underrepresented.” “Underrepresented” is invariably defined in terms of race, ethnicity and sex. So is “disadvantaged” in the Department of Transportation context. The governors and their “local partners” were urged to establish and meet goals, to reach a greater number of “disadvantaged” businesses.

Goals, of course, inevitably become quotas.

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 well-known is that it is more and more common for Hispanics (again, along with whites) to be discriminated against in government contracting.

A recent example is in Milwaukee. The Hispanic Chamber of Commerce last year called for the repeal of a new measure purportedly designed to ensure the participation of minority contractors in getting city business. According to the chamber’s president, Maria Monreal-Cameron, the ordinance is “based on the results of the disparity study which said that Hispanic-owned and Native American-owned firms are overutilized in the area of construction.” She added, “It means we’re being penalized for our success and hard work.”

The California Department of Transportation has been engaging in similar discrimination, and the issue has recently arisen in New York City as well. Meanwhile, however, the Obama administration has been considering whether to add Arab Americans to the list of those who get special treatment by the federal government.

Congress could put an end to this nonsense. If a House bill could not get through the Senate and the Oval Office, a 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 level.

In recent testimony before the U.S. Commission on Civil Rights, professor George LaNoue of the University of Maryland, Baltimore County, gave chapter and verse for why the federal government’s contracting preferences need to be carefully reassessed, to determine whether they can plausibly be defended as ending discrimination rather than causing it.

In Cleveland, the city paid hundreds of thousands of dollars for a disparity study in order to justify its discrimination, but it turns out that much of that study was simply cut and pasted from the consulting firm’s work elsewhere.

It’s doubtful the existence of a racial disparity in contracting any longer justifies racial discrimination. Greater transparency in advertising bids, in announcing the number of winning bids, in getting rid of irrational requirements and, of course, in insisting on a color-blind process is uniquely available in the contracting area as a way to remedy any discrimination.

In 2013, contracting preferences are never the “narrowly tailored” remedy, to use the Supreme Court’s parlance. As Chief Justice John G. Roberts Jr. has written, “The way to stop to stop discrimination on the basis of race is to stop discriminating on the basis of race.”

That’s a point that ought to be litigated, and a case now before a federal court of appeals, DynaLantic Corp. v. U.S. Department of Defense, may provide a vehicle for presenting it to the Supreme Court.

With luck, the Court will hand down opinions against racial preferences this term in university admissions and the use of politically correct racial gerrymandering in redistricting. It’s time that the court put a stop to racial discrimination in government contracting, too.