Are Contracting Programs at Risk?
During a meeting with government entities today, we discussed the risk of contracting programs due to the supreme court decision on affirmative action in university admissions. This has been a concern since it occurred this summer. Additionally, there was also recent lawsuit against the Small Business Administration’s 8A program causing changes to the criteria. Our discussion was candid and direct, and I wanted to share a bit of reality to help tamper concerns. A quick overview of the legal decisions:
The SCOTUS decision on using affirmative action for university admissions ends the ability of colleges and universities to consider race as one of many factors in deciding which qualified applicants to be admitted. Justice Roberts noted that in 2003 when the court reaffirmed the constitutionality of affirmative action programs it was noted that there would have to be an end at some point in the future and that time is now. I personally disagree but believe that keeps the door open for a return to programs in admissions if data suggests that enrollment discrimination is prevalent through data.
In the SBA 8A program decision, the US District court in Tennessee held that the use of “rebuttable presumption” violates the US Constitution’s Fifth Amendment guarantee of equal protection. This decision did not deem the 8A program, targets, and preferences illegal but requires evidence of past discrimination for minority owned businesses rather than presumption of it. All applicants will now have to submit a narrative to document social disadvantage.
When Kendra and I were meeting with legislators in Washington DC this past September, we spoke about the decisions and the nervousness of the potential impact on contracting goal programs. Those we met with were aware and sensitive to our concerns. They offered us a direct line of support should we hear of any tee ups to reverse discrimination lawsuits directed at contracting.
The local and state entities I spoke with reiterated that these programs need to have clear documentation and equal application where appropriate. How do diverse contracting programs hold up in court you ask? Through the data collected in disparity studies. Disparity studies are the legally defensible justification for programs. As entities are planning for the next study, they are working on strengthening the collection parameters of the data in anticipation of any challenges. This is also why it is so important to participate in the study through surveys, questionnaires, and conversations with the study consultants.
I am hearing that some are extremely nervous right now. I am not saying that there isn’t a potential risk in the future. The greatest risk that I see is to programs that are not doing their documentation needed to defend a programs. For instance, if an entity imposes contracting goals that include penalty language but doesn’t have a disparity study completed to defend such action, I see a higher likelihood of it being challenged and potentially losing that challenge. Conversely, if statutes or other regulations become too aggressive without having data to defend the actions, those could also become a target.
Please keep in mind that AWC continues to monitor this issue. Should there be any activity that jeopardizes the construction related contracting programs we will advocate appropriately and keep you informed.