The Supreme Court agreed yesterday to decide whether Congress can require a portion of public works grants to be set aside for minority businesses.

The cases involves the Public Works Employment Act of 1977, which provides that at least 10 percent of each grant shall be reserved for enterprises at least half-owned by citizens who are "Negroes, Spanish-speaking, Orientals, Indians, Eskimoes, and Aleuts."

The provision - never considered by a congressional committee - was sponsored on the House floor by Parren J. Mitchell (D-Md.) and has been challenged in numerous lawsuits around the country.

Several federal courts have upheld the provision, but in Los Angeles District Court Judge A. Andrew Hauk struck it down as a violation of the Civil Rights act of 1964. That law forbids job discrimination against "any person."

The case chosen for review comes from the 2nd U.S. Circuit Court of Appeals in New York, which affirmed a ruling upholding the law.

Rejecting a challenge by several associations of contractors and subcontractors and a heating and air conditioning firm, U.S. District Court Judge Henry F. Werker held that the 10 percent set-aside of Congress to try to remedy the effects of past discrimination in the constructions industry.

Even under "the most exacting standard of review," the provision passes constitutional muster, Werker said.

Congress had ample basis for concluding that the severe shortage of potential minority entrepreneurs with general business skills is a result of their historical exclusion from the mainstream economy and that the history of discrimination was specific to the construciton industry, Werker said.

Agreeing, Judge M. Joseph Blumenfeld wrote for the 2nd Circuit: "Considering that nonminority businesses have benefitted in the past by not having to compete against minority bisinesses, it isnot inequitable to exclude them from competing for this relatively small amount of business for the short time that the program has to run."

He went on to say that "a remedy for past discrimination which results in a not unreasonable amount of reverse discrimination" doesn't deny the equal protection of the laws guaranteed by the Constitution.

The law, similar to a 1976 version, appropriated $4 billion, or about 2.5 percent of the total spent on construction in 1977. The set-aside for minority contractors was $400 million.

Because all of the $4 billion long since has been appropriated, the Justice Department told the Supreme Court in a brief, a decision on the merits of the constitutional issue "would be largely academic." The case will be argued and decided in the term starting next October.

At the same time, however, Solicitor General Wade H. McCree Jr. acknowledged the possibility that Congress in the future will enact legislation providing preferences for minority contractors.

By contrast, the Associated General Contractors of America praised the Supreme Court for agreeing to review the 2nd Circuit decision. "Racial quotas are destructive" of the right to compete for work "on an equal footing," said executive a director Hubert Beatty.

The court took other actions.


Ending a good deal of confusion involding the Age Discrimiantion in Employment Act of 1967, the court ruled 9 to 0 that a person alleging a violation by an employer cannot file a federal lawsuit until he or she first seeks an administrative remedy from a state agency, if there is one empowered to deal with such complaints.


The court agreed to review a ruling that the Civil Service Retirement act violates the constitutional guarantee of equal protection by allowing payment of survivors' benefits to a deceased federal employe's children if they are legitimate but not if they are illegitimate.

The ruling was handed down last November by the U. S. Court of Claims in a case involving George C. Isaacson, a Veterans Administration employe who died in August 1974 and who left two illegitimate children whose mother is Patricia I. Clark of Helena, Mont.

The Civil Service Commission rejected the children's claims for survivors' annuities on the ground that at the time of their father's death he had no "regular parent-child relationship" with them. Actually, the claims court said, he'd lived with them and their mother for six years and provided child support until his death.

The claims court ordered the government to pay the children's mother benefits of $7.081 for each child. In his successful petition for review, Solicitor General McCree said, "The Constitution does not require identical treatment of legitimate and illegitimate children." CAPTION: Picture, REP. PARREN J. MITCHELL . . . sponsor of provision under challenge