At Risk

Since 1989, federal courts have issued decisions questioning the legality of local, state and federal procurement set-aside programs. In City of Richmond v. Croson, the Supreme Court ruled racially oriented policies could be maintained by states and localities only if there was concrete evidence of discrimination. In the six years since, federal courts, using Croson as a guideline, have struck down several state and local set-aside programs.

In 1995, the Supreme Court applied that same reasoning to federal programs in Adarand v. Peña, which dealt with a set-aside contract from the U.S. Department of Transportation. The judgment stated that "all racial classifications" by government agencies are "inherently suspect and presumptively invalid." A federal district court in Colorado is still reconciling the facts in that case.

Michael A. Carvin, a Washington, DC, attorney with Cooper & Carvin PLLC who worked on procurement set-aside cases in the Reagan Justice Department, says it is unlikely the final Colorado federal court ruling in Adarand will force the Clinton administration to pull the plug on 8(a). However, he says, "all federal set-aside programs, particularly 8(a), are vulnerable under Adarand."

George R. La Noue, a professor of political science at the University of Maryland, Baltimore County, graduate school and director of its Project on Civil Rights and Public Contracts, has testified nationwide in court cases on government set-asides. He feels the affirmative action policy changes being considered by the Justice Department in the wake of Adarand are insufficient. In fact, he argues, there probably is no way to save 8(a) because the Supreme Court requires proven discrimination by a federal agency before that agency can set aside contracts for an ethnic or racial group.

This article was originally published in the February 1997 print edition of Entrepreneur with the headline: At Risk.