Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, January 18, 1995 TAG: 9501180059
SECTION: NATIONAL/INTERNATIONAL PAGE: A-7 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
Special federal help for companies owned by minorities unlawfully steals business from white-owned companies, the Supreme Court was told Tuesday in a key showdown on affirmative action.
But the Clinton administration's top-ranked courtroom lawyer defended the 13-year-old program, saying it's needed to fight ``continuing effects of well-documented discrimination.''
The potential stakes are enormous. The court's ruling, expected by July, could affect billions of dollars worth of federal contracts. The future of all government affirmative action, some of it aimed at making up for past societal bias against women, also may be at stake.
The court hasn't handled a major affirmative-action dispute since 1990, and its membership today is far more conservative. Serving as a backdrop are the 1994 election results, a rightward turn many commentators attribute to the festering anger of one group of voters - white males.
``That's an impermissible racial stereotype ... that they [racial and ethnic minorities] need the help,'' Denver lawyer William Perry Pendley argued on behalf of a white businessman challenging the affirmative-action program. He said his client ``cannot compete on an equal footing'' because of it.
Under one of the many affirmative-action programs required by Congress, the Transportation Department's Central Federal Lands Highway Division gives contractors on federal projects a 1.5 percent bonus if at least 10 percent of their subcontracts go to ``disadvantaged business enterprises.''
A $10,000 bonus was paid to Mountain Gravel and Construction Co. for a 1989 highway-building project in the San Juan National Forest in Colorado.
Mountain Gravel subcontracted all the project's guardrail work to Gonzales Construction Co. even though another company, Adarand Constructors Inc. of Colorado Springs, submitted a lower bid.
The program has a built-in presumption that minority-owned companies are disadvantaged.
Gonzales Construction is Hispanic-owned and fits the Small Business Act's definition of a disadvantaged business. Adarand, run by Randy Pech, a white man, does not.
Pendley said Pech's company bids on every guardrail contract in Colorado, but in the past has lost 12 such contracts to higher-bidding minority-owned companies.
He said the problems faced by minority-owned firms have little to do with race, but more to do with their size. Such problems are shared by small, white-owned businesses such as Adarand, Pendley argued, adding, ``race-neutral solutions are called for.''
Solicitor General Drew S. Days III countered by saying the focus of the affirmative-action program is social and economic disadvantage, not race. A minority company can lose its status as a disadvantaged business by reaching ``a level of economic take-off,'' he said.
``There's no showing that Adarand lost this contract because of the rebuttable presumption,'' Days said.
Justices Ruth Bader Ginsburg, David Souter and Stephen Breyer, all of whom have joined the court since its last major affirmative-action ruling, appeared most sympathetic to Days' contention that Adarand had not linked its lost contract to the racial presumption.
Chief Justice William Rehnquist and Justices Antonin Scalia and Anthony Kennedy appeared most hostile to Days' arguments.
The high court ruled in 1980 that Congress lawfully could set aside 10 percent of federal public works budget for minority businesses, and in 1990 upheld racial preferences in the awarding of licenses for radio and television stations.
by CNB