Keeping skin color and sex out of government contracting

Last month, the Center for Equal Opportunity weighed in with Nassau County in New York regarding the issue of preferences based on race, ethnicity, and sex in its contracting. Here’s what we said (and this is typical of what we have said to many state and local jurisdictions over the years):

June 22, 2019

To: Laura Curran
Nassau County Executive

From: Roger Clegg
General Counsel, Center for Equal Opportunity

Re: Proposed disparity study

For the legal and policy reasons stated in the attached redacted memorandum, which we sent to another jurisdiction, we urge that the County reconsider whether to conduct a disparity study [frequently used in an attempt to justify preferential treatment for certain groups] at all — and, if it nonetheless proceeds with its plan to do so, that it at least instruct whatever entity conducts it to consider only race-, ethnicity-, and gender-neutral measures. For example, you recently noted in your “Request for Expressions of Interest” that the County has “eliminated a $125 fee for vendors seeking to do business with Nassau County”; it makes perfect sense and is good to do this for all vendors, but it would have been bad as a matter of law and policy if this were done only for vendors of a particular race, ethnicity, or sex.

Thank you very much for your attention to our concerns.

To: The Honorable XXX
City Manager
XXX

From: Roger Clegg
President and General Counsel
Center for Equal Opportunity

Re: Article in The State This Week Titled “XXX”

An article this week in The State titled “XXX” [which was appended to the end of this email] says that you are insisting that your city “continue to make its policies race- and gender-neutral” with respect to municipal contracting. We are writing to applaud you for your position and to offer our perspective on why it is the correct one, as a matter of both law and policy.
Cities are frequently urged to treat contractors and subcontractors differently based on the race, ethnicity, or sex of the companies’ owners. We would like to take this opportunity to urge that the City not engage in such discrimination. Conversely, there is much the City could do to ensure true equal opportunity and nondiscrimination that we would support.
For the City to use classifications and preferences based on race (or ethnicity or sex) would raise serious constitutional issues. As a result, using such classifications and preferences will invite costly litigation challenging the constitutionality of the program: litigation the City will almost certainly lose.
Legal issues aside, programs that discriminate on the basis of race, ethnicity, and sex are divisive and unfair, and any system that awards contracts to those other than the lowest qualified bidder will cost the City and its taxpayers money.

Using classifications and setting goals or requiring set-asides of particular racial — hereafter in this memorandum, “racial” may be understood to include, as well, “ethnic” and “gender” — percentages inevitably encourage discrimination as a means to meet them, and so they trigger strict constitutional scrutiny. See, e.g., Lutheran Church–Missouri Synod v. FCC, 154 F.3d 487 (D.C. Cir. 1998); see also Adarand Constructors, Inc. v. Pena, 515 U.S. 200, 227 (1995) (“all racial classifications … must be analyzed by a reviewing court under strict scrutiny”); Rothe Development Corp. v. United States Department of Defense, 545 F.3d 1023 (Fed. Cir. 2008). Strict scrutiny is also triggered if, for example, some companies based on race are given a special opportunity to match low bids when other companies, again based on race, are not – or if special efforts to do work with some firms, but not others, are required on the basis of race.

Once strict scrutiny is triggered, classifications and preferential treatment are allowed only if there is a “compelling interest” (in the contracting context, this means the remediation of discrimination in the program involved) and the preferential treatment is “narrowly tailored” to that interest. See generally Engineering Contractors Ass’n of South Florida Inc. v. Metropolitan Dade County, 122 F.3d 895, 910 (11th Cir. 1997); Phillips & Jordan, Inc. v. Watts, 13 F. Supp. 1308 (N.D. Fla. 1998).

By the way, sometimes it is urged that expensive “disparity studies” be commissioned by a city. As their name suggests, “disparity studies” look for evidence that there are racial disparities in a city’s contracting. Of course, such claims, particularly when presented by those who stand to gain monetarily if a city uses contracting preferences, must be viewed with an appropriate degree of skepticism. But, in any event, a disparity is not necessarily evidence of discrimination, let alone proof of discrimination. In Rothe Development Corp., supra, a federal appeals court recently rejected the statistical and anecdotal evidence put forward by the federal government to justify its contracting preferences.

What’s more, as noted, disparity studies are expensive and are likely to be a waste of that money even if — through statistical evidence or anecdotal evidence — a pattern of recent discrimination is found. This is because it does not follow that racial preferences must be used to correct a disparity; to the contrary, there are better ways to end such discrimination.

The bottom line is that the use of racial preferences cannot be “narrowly tailored,” because there are better ways of achieving nondiscrimination. So even if the first prong of strict scrutiny is met, in 2010 the second cannot be.

For the reasons given in testimony that the Center for Equal Opportunity delivered to the U.S. Commission on Civil Rights (this testimony was published by the Commission in May 2006–as part of a briefing report on “Disparity Studies as Evidence of Discrimination in Federal Contracting”–and can be downloaded from its website, www.usccr.gov), the Center for Equal Opportunity believes the City’s programs should be race-blind and race-neutral. For the reasons given in CEO’s testimony, there is no justification for such classifications and preferences in 2010.

To the extent that the City is concerned that racial groups face discrimination in its contracting programs, there are effective responses that do not require racial classifications or preferences.

At every step of the contracting process, it is clear that there are better tailored remedies than using racial preferences. If companies are being excluded from bidding because of unrealistic or irrational bonding or bundling requirements, then those requirements should be changed for all companies, regardless of the race of the owner. If companies who could submit bids are not doing so, then the publication and other procedures used in soliciting bids should be opened up — but, again, to all potential bidders (regardless of race), not just some. And, finally, if it can be shown that bids are being denied to the lowest bidder because of that bidder’s race, then there should be put in place safeguards to detect discrimination and sanctions to punish it — but, again, those safeguards and sanctions should protect all companies from race discrimination, not just some. All of this applies to subcontracting, too.

Contracts are not like hiring, promoting, or even university admissions, where there is an irreducible and significant amount of subjectivity in the decisionmaking. Contracting is an area that can be made very transparent and where this transparency should make it relatively easy to detect and correct discrimination.

Even if there could still, in theory, be a few cases of discrimination that go unremedied in the absence of racial classifications, there will be many more cases of discrimination that will result from the institutionalization of racial preferences.

A study that the U.S. Commission on Civil Rights published in 2005 does a very good job of collecting and discussing race-neutral alternatives. U.S. Commission on Civil Rights, Federal Procurement after Adarand (2005). If the City believes that racial discrimination is occurring in its contracting, there are many race-neutral steps it can take to fight it, and we encourage the City to do so. The best way to fight discrimination is not through more discrimination. We would be happy to send to you a recent report on such race-neutral steps (prepared for the City of St. Petersburg, Florida, by Professor George La Noue of the University of Maryland’s Project on Civil Rights and Public Contracts).

Our only criticism of the USCCR report, by the way, is that it did not make clear that the aim of the alternatives is to correct and end discrimination–not to achieve a particular percentage of contracting by this or that racial group. But that is obvious in light of the case law in this area: The judicial decisions make very clear that the desire to achieve a particular politically correct mix for its own sake is not itself a compelling or important interest; that would be “discrimination for its own sake. This the Constitution forbids.” University of California Regents v. Bakke, 438 U.S. 265, 307 (Powell, J.). Rather, the use of preferences can be justified only if there is an interest beyond such bean-counting–such as, in this case, ending racial discrimination. And, as just discussed, it is very unlikely that, in 2010, the only way to end race discrimination in contracting is through race discrimination in contracting.

As Chief Justice Roberts wrote recently, “The way to stop discrimination on the basis of race is to stop discriminating on the basis of race.” Parents Involved in Community Schools v. Seattle School District No. 1, 127 S.Ct. 2738 (U.S. 2007).

Moreover, if the City uses such preferences they are extremely likely to be challenged in court and struck down as unconstitutional. This has happened in, to give just two recent examples, the cities of Jackson and Atlanta. See W.H. Scott Construction Co. v. City of Jackson, 199 F.3d 206 (5th Cir. 1999); Webster v. Fulton County, 51 F. Supp.2d 1354 (N.D. Ga. 1999).

Even more recently, a program was struck down in Miami and the officials who voted to adopt it were held personally liable. See Hershell Gill Consulting Engineers, Inc. v. Miami-Dade County, 333 F.Supp.2d 1305 (S.D. Fla. 2004). Likewise, a public community college’s trustees were found personally liable for damages in F. Buddie Contracting, Ltd. v. Cuyahoga Community College District, No. 196CV2136 (N.D. Ohio Oct. 21, 1998), another contract set-aside case. See also Alexander v. Estepp, 95 F.3d 312 (4th Cir. 1996) (no qualified immunity for county and fire department officials in case challenging affirmative-action employment policy); Alexander v. City of Milwaukee, 474 F.3d 437 (7th Cir. 2007) (individual liability upheld for compensatory and punitive damages against various city commissioners where discrimination violated “clearly established law”).

We also note that, in the event of a legal challenge, the City will have to pay its lawyers and expert witnesses; moreover, if it loses (and it will), it will also have to pay the other side’s lawyers and expert witnesses as well.

Finally, we reiterate that, legality aside, why should the City want to use something as divisive and unfair as racial classifications and preferences–and why should it want to waste the taxpayers’ money by awarding contracts to other than the lowest qualified bidder?

Thank you very much in advance for your consideration of our concerns—and thank you especially also for your insistence on nondiscriminatory policies by the City. Please feel free to contact me at 703/442-0066 if you have any questions or would care to discuss this matter further.

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