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Western Legal Foundation’s Demand for End to Race-Based Federal Contracting Opposed

Jul 07, 2017 | by William Perry Pendley

DENVER, CO.  A nonprofit, public-interest legal foundation that won a landmark victory over race-based decision-making before the Supreme Court of the United States today expressed its disappointment with the opposition filed by the Trump administration to its petition for writ of certiorari on behalf of a Texas company that suffered defeats in its attempt to end the federal government’s use of race to award contracts as unconstitutional, both before a federal district court and a court of appeals.  Mountain States Legal Foundation (MSLF) had advised the District of Columbia federal district court that use by the Department of Defense and the Small Business Administration of a provision in the Small Business Act to award federal contracts on the basis of the race of the business owners and operators is unconstitutional.  Its brief was filed as a friend of the court in the federal lawsuit brought by Rothe Development, Inc., a Texas corporation that bids on and performs contracts for computer systems and programming services.  In 1995, MSLF won a similar case at the Supreme Court in the landmark racial quota lawsuit, Adarand Constructors, Inc. v. Peña; Time called it “a legal earthquake.”  Over a strong dissent, a three-judge panel held the provision was not race-based.  MSLF now represents Rothe.

“We are disappointed the Acting Solicitor General attempts to obscure the importance of this case to prevent the Supreme Court from directly confronting the constitutionality of issuing federal contracts on the basis of race,” said William Perry Pendley, president of MSLF.

Rothe often bids for contracts with government agencies, including the U.S. Department of Defense (DOD) and branches of the military, to service computer systems.  In 1998, Rothe lost a bid for a DOD contract to another company, despite being the low bidder, because the contract was awarded pursuant to a race-based program.  In 2008, the United States Court of Appeals for the Federal Circuit ruled that the race-based program, on its face, as reenacted in 2006, violates the equal protection component of the Due Process Clause of the Fifth Amendment to the Constitution. 

Unfortunately, the DOD continues to award contracts on the basis of race-base through use of Section 8(a) of the Small Business Act, which sets a “government wide goal” that “not less than 5 percent of the total value of all prime [federal] contract and subcontract awards for each fiscal year” be awarded to socially and economically disadvantaged small business concerns.  The Small Business Administration (SBA) is authorized to contract with DOD to provide goods and services and then to subcontract that work to qualifying businesses, either on a “sole source” or on a “competitive” basis; most of the DOD Section 8(a) contracts are sole source.  To participate in the program, a firm must be 51 percent owned and controlled by socially and economically disadvantaged individuals, defined to include “Black[,] Hispanic[,] Native[,] [and] Asian Pacific Americans  . . . and other minorities”).

Mountain States Legal Foundation, created in 1977, is a nonprofit, public interest law firm dedicated to individual liberty, the right to own and use property, limited and ethical government, and the free enterprise system.  Its offices are in suburban Denver, Colorado.

For more information:  Rothe Development Inc. v. U.S. Department of Defense

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