Another Obstacle for Affirmative Action, And Congress Is Prepared to Fight

Rep. Edolphus Towns questions the ruling that there isn't discrimination in federal contracting.
Rep. Edolphus Towns questions the ruling that there isn't discrimination in federal contracting. (Carol T. Powers - Bloomberg News)
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By Joe Davidson
Wednesday, December 3, 2008

On Nov. 4, amid all the excitement surrounding Barack Obama's election, a three-judge panel of the U.S. Court of Appeals for the Federal Circuit struck down a Pentagon program that included a 5 percent set-aside for companies run by African Americans, Asian Americans, Hispanic Americans and Native Americans.

The impact of the decision is unclear; the court's focus on an old Pentagon rule to decide the case created uncertainty about whether the set-aside remains. But if the panel's ruling stands, the implications for minority-owned companies that received almost $15 billion in fiscal year 2006 in Defense Department contracts could alter a long-standing program that allowed under-represented groups access to lucrative government contracts.

Last month, the panel ruled that the Defense Department erred when it failed to use a "price evaluation adjustment" tool, which allowed the Pentagon to increase bids from white-owned companies by 10 percent before comparing them to firms owned by people of color.

The Defense Department allowed International Computer and Telecommunications, a firm then owned by a Korean American couple, to win a computer contract even though its $5.75 million bid was $180,000 more than one submitted by Rothe Development, a San Antonio company owned by a white woman. Rothe sued the government in 1998.

A senior Defense Department official, who spoke on condition of anonymity, said that at the moment Pentagon officials are confused.

The court talked about the department using "preferential treatment based on race," but with the price tool defunct, that's not the case. "We don't really know what to do . . . " the official said about the decision. "We're having trouble explaining it."

The Pentagon should continue its goal of set-asides for contractors of color until everyone is certain what the panel's ruling means. The Supreme Court has recognized the value of programs designed to right a long series of wrongs that have accumulated over generations. And even though the high court is more conservative now than when some previous affirmative action cases were decided, it doesn't necessarily mean the current court would overturn the decisions that permit affirmative action to continue.

The goal, even at 5 percent, is important because it makes diversity in contracting a priority. Making government acquisition programs work for everyone is not only desirable, but crucial.

In last month's ruling, the judges also said that because the Pentagon's set-aside was based on race, the program was subject to a "strict scrutiny" review and it couldn't pass the test.

The problem, according to the court, is that "Congress did not have a 'strong basis in evidence' upon which to conclude that DOD [Department of Defense] was a passive participant in pervasive, nationwide racial discrimination -- at least not on the evidence produced by DOD."

Note that the court did not say there is no such discrimination. If the problem is the evidence, Congress should be able to fix that. And that's what Ed Towns plans to do.

Towns, now chairman of the House subcommittee on Government Management, Organization and Procurement, is in line to become chairman of the full committee on Oversight and Government Reform. He plans to hold hearings next year and perhaps move legislation that should satisfy the thirst for strict scrutiny.

"I question the court's finding that there is little evidence of discrimination in federal contracting," Towns said. "We in Congress hear every day from small and minority-owned businesses who have trouble accessing the federal market, and in fact have held hearings documenting these problems. Next year, Congress should hold hearings and pass whatever laws are necessary to ensure that the federal government can continue to encourage development of small and disadvantaged businesses."

Congress should be able to build a solid record of evidence that demonstrates pervasive, nationwide racial discrimination and pass federal contracting legislation -- hopefully Supreme Court-proof -- to correct it. But whether that record will be enough for an increasingly right-leaning Supreme Court remains to be seen.

Affirmative action is like a Timex watch -- it takes a licking but keeps on ticking. Despite this latest ruling, time has not run out on affirmative action yet.

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