Richmond v JA Croson Company Brief of Amici Curiae in Support of Appellant
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April 21, 1988

89 pages
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Brief Collection, LDF Court Filings. Richmond v JA Croson Company Brief of Amici Curiae in Support of Appellant, 1988. 8272e65b-c29a-ee11-be36-6045bdeb8873. LDF Archives, Thurgood Marshall Institute. https://ldfrecollection.org/archives/archives-search/archives-item/7137bb52-983a-4641-80f3-85bec7f88582/richmond-v-ja-croson-company-brief-of-amici-curiae-in-support-of-appellant. Accessed July 30, 2025.
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No. 87-998 I n T h e &itprm? (tart itf % luttrii Stairs O ctober T e r m , 1987 Cit y of R ic h m o n d , v. Appellant, J.A. Croson Co m p a n y , Appellee. On Appeal from the United States Court of Appeals for the Fourth Circuit BRIEF OF THE NATIONAL LEAGUE OF CITIES, U.S. CONFERENCE OF MAYORS, NATIONAL ASSOCIATION OF COUNTIES, AND INTERNATIONAL CITY MANAGEMENT ASSOCIATION AS AM ICI CURIAE IN SUPPORT OF APPELLANT David A . Strauss University of Chicago Law School 1111 East 60th Street Chicago, IL 60637 (312) 702-9601 Ben n a R uth Solomon Chief Counsel State and Local Legal Center 444 N. Capitol Street, N.W. Suite 349 Washington, D.C. 20001 (202) 638-1445 Counsel of Record for the Amici Curiae W il s o n - Ep e s P r in t in g C o . , In c . - 7 8 9 - 0 0 9 6 - W a s h in g t o n , o . c . 2 0 0 0 1 QUESTION PRESENTED Whether the Equal Protection Clause prohibits the City of Richmond from remedying the effects of racial discrimination on minority participation in city construc tion contracts by enacting a temporary program that, subject to a waiver provision, requires contractors to subcontract a portion of their contracts to minority busi ness enterprises. 1 (i) Page QUESTION PRESENTED....................... ......... ........... j TABLE OF AUTHORITIES ......................................... iv INTEREST OF THE AMICI CURIAE ......... ............... 1 STATEMENT............................................................ _____ 2 SUMMARY OF ARGUMENT ........................................ 5 ARGUMENT................................................................... 7 RICHMOND’S MINORITY BUSINESS UTILIZA TION PLAN DOES NOT VIOLATE THE EQUAL PROTECTION CLAUSE.......................................... 7 A. The Court Of Appeals’ Decision Is Inconsistent With Fullilove v. Klutznick........................... 7 B. The Richmond Plan Promotes Compelling Gov ernment Interests And Does Not Impose Unfair Burdens On Nonminority Contractors. .... 14 1. The Richmond Plan promotes the compelling interest of remedying racial discrimination in the construction industry.......................... __ 14 2. Richmond may enact a race-conscious remedy for prior discrimination in the local construc tion industry without admitting complicity in racial discrimination....................................... 23 3 3. Richmond’s plan does not unfairly burden nonminority contractors................................. 28 CONCLUSION ......... 30 Appendix I Minority Business Enterprise Programs of State Governments......................................................... la Appendix II Minority Business Enterprise Programs of Mu nicipal and County Governments ...................... 14a TABLE OF CONTENTS (iii) IV TABLE OF AUTHORITIES CASES: Page Andrus v. Allard, 444 U.S. 51 (1979) ............................ 29 Associated General Contractors v. City and County of San Francisco, 813 F.2d 922 (9th Cir. 1987), petition for rehearing pending............ ..................................... 10 Board of Directors v. Rotary Club, 107 S.Ct. 1940 (1987) .......................................................................... 23,24 Bob Jones University v. United States, 461 U.S. 574 (1983) ..................... ........... ......................................... 23-24 Byrd v. Local No. 2i, IBEW, 375 F. Supp. 545 (D. Md. 1974) ........................................................................... 25 City of Renton v. Playtime Theatres, Inc., 475 U.S. 41 (1986) ......................................................................... 19,20 Ethridge v. Rhodes, 268 F. Supp. 83 (S.D. Ohio 1967).... 25 Ex Parte Virginia, 100 U.S. (10 Otto) 339 (1880) ____ 11 FERC v. Mississippi, 456 U.S. 742 (1982) ............ ........ 10 Firefighters Local Union No. 178U v. Stotts, 467 US 561 (1984) .............. ............................ ...... ______..... ..... 28 Franks v. Bowman Transportation Co., 424 U.S. 747 (1976) ............ -........................................................... 28,29 Fullilove v. Klutznick, 448 U.S. 448 (1980) ....... passim Furnco Construction Corp. v. Waters, 438 US 567 (1978) ......................................................................... 17 Green v. County School Board, 391 U.S. 430 (1968) ...... 23 Hughes v. Alexandria Scrap Corp., 426 U S 794 (1976) ......................................................................... 24 International Brotherhood of Teamsters v. United States, 431 U.S. 324 (1977)......... ........................... i6) 17> 18 James v. Ogilvie, 310 F. Supp. 661 (N.D. 111. 1970) ’ ’ 25 Johnson v. Transportation Agency, 107 S.Ct. 1442 v l198? T .............................. ......... ..................... 13> 16> 18, 28Katzenbach v. Morgan, 384 U.S. 641 (1966) .................. H Local No. 98, Firefighters v. Cleveland, 478 US 501 (1986) ................................................................. 2g Local 28 of Sheet Metal Workers v. EEOC 106 S Ct 3019 (1986) ............................................’ ........ ' i 7 25 28 McDaniel v. Barresi, 402 U.S. 39 (1971) ’ ’ 25 V Page National Black Police Association v. Velde, 712 F.2d 569 (D.C. Cir. 1983), cert, denied, 466 U.S. 963 (1984) .............................. ,.......................................... 25 North Carolina State Board of Education v. Swann, 402 U.S. 43 (1971)......................................................... 23,25,26 Norwood v. Harrison, 413 U.S. 455 (1973) .................. 25 Percy v. Brennan, 384 F. Supp. 800 (S.D.N.Y. 1977).... 25 Railway Mail Association v. Corsi, 326 U.S. 88 (1945).. 24 Reeves, Inc. v. Stake, 447 U.S. 429 (1980) .................... 24 Regents of the University of California v. Bakke, 438 U.S. 265 (1978) ................ .............................. 11,27,28 Roberts v. United States Jaycees, 468 U.S. 609 (1984).. 24 Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303 (1927) ....................................................................... 29 Runyon v. McCrary, 427 U.S. 160 (1976) ....................... 24 Schlesinger v. Reservists Committee to Stop the War, 418 U.S. 208 (1974) .......................... .......... .............. 21 Steelworkers v. Weber, 443 U.S. 193 (1979) .............16, 18, 28 Swann v. Charlotte-Mecklenburg Board of Education, 402 U.S. 1 (1971) .................... ................................ 25-26 The Slaughter-House Cases, 83 U.S. (16 Wall.) 36 (1872) .......................................................................... 11 United States v. Paradise, 107 S.Ct. 1053 (1987) .....14, 25, 28 White v. Massachusetts Council of Construction Em ployers, 460 U.S. 204 (1983) ........ 24 Wygant v. Jackson Board of Education, 476 U.S. 267 (1986) ..........................................................................passim CONSTITUTIONAL AND STATUTORY PROVISIONS: U.S. Const. Amend V, Due Process Clause ............ 7 U.S. Const. Amend. XIV Equal Protection Clause ......... 7 Section 5 ........... ..................................... 10-11, 12,13 Public Works Employment Act of 1977, Section 103(f)(2), 42 U.S.C. 6705(f)(2) ........... 7,8,9,10,12 TABLE OF AUTHORITIES—Continued V I TABLE OF AUTHORITIES—Continued CONGRESSIONAL MATERIALS: Page Cong. Globe, 39th Cong., 1st Sess. 2768 (1866) ..... 11 BOOKS: H. Flack, The Adoption of the Fourteenth Amend ment (1965) ......................................................... 11 J. Gillies & F. Mittelbach, Management in the Light Construction Industry (1962) .................. 18 R. Glover, Minority Enterprise in Construction (1977) .......................................... 18 R. Harris, The Quest for Equality (1960) ............... 11 J. tenBroek, The Antislavery Origins of the Four teenth Amendment (1951) ................................. 11 I n T h e fhtpratt? ( t a i l at % T&nltih October T e r m , 1987 No. 87-998 Cit y of R ic h m o n d , v Appellant, J.A. Croson Co m p a n y , _________ Appellee. On Appeal from the United States Court of Appeals for the Fourth Circuit BRIEF OF THE NATIONAL LEAGUE OF CITIES, U.S. CONFERENCE OF MAYORS, NATIONAL ASSOCIATION OF COUNTIES, AND INTERNATIONAL CITY MANAGEMENT ASSOCIATION AS AM ICI CURIAE IN SUPPORT OF APPELLANT INTEREST OF THE AM ICI CURIAE The amici, organizations whose members include mu nicipal and county governments and officials throughout the United States, have a strong interest in legal issues that affect state and local governments. This case con cerns the constitutionality of a temporary minority sub contracting program adopted by the City of Richmond, Virginia. The program provides that any firm awarded a construction contract by the City shall, unless it re ceives a waiver, subcontract 30% of the value of the contract to minority business enterprises. This is a case of great importance to the amici. Pro grams comparable to Richmond’s are very common among state and local governments. After the Court noted probable jurisdiction in this case, we undertook a survey of state, municipal, and county governments; the results are reproduced in the appendices to this brief. The survey identifies 36 States and 190 local govern ments throughout the Nation that have adopted programs that use a variety of devices, including numerical goals or targets, to expand minority access to government con tracts. The vast majority of these programs were adopted after this Court’s decision in Fullilove v. Klutznick, 448 U.S. 448 (1980), which upheld a similar program enacted by Congress. Many of the programs, including Rich mond’s, were modeled on the federal program upheld in Fullilove. As we explain below (pages 7-10), the decision of the court of appeals in this case imposes more strin gent requirements on state and local governments than Fullilove imposed on the federal government. Many state and local programs, therefore, would be jeopardized by the approach taken by the court of appeals, if it were to prevail. These efforts by state and local governments represent a practical and constructive attempt to deal with the effects of discrimination at the level of government where such problems are best addressed. Because amici believe that it is exceptionally important that those efforts not be jeopardized, we offer this brief to assist the Court in its resolution of this case.1 STATEMENT 1. In April 1983, the Richmond City Council adopted a Minority Business Utilization Plan. The Plan provides that a contractor who is awarded a construction contract by the City shall, unless granted a waiver, subcontract at least 30% of the value of the contract to minority business enterprises (MBEs).2 J.S. App. 2a. The City will grant a waiver if a “ sufficient [number of] . . . 1 The parties’ letters of consent to the filing of this brief have been lodged with the Clerk. 2 The Plan contains a detailed definition of which businesses qualify as minority business enterprises. These provisions require that the firm be owned by members of minority groups and that it be either controlled or operated by minority group members. See J.S. Supp. App. 115-116, 251-252. A general contractor that is itself a minority business enterprise need not subcontract 30% of its contract to other MBEs. Id. at 247. The Plan requires the City to verify that an enterprise claiming to be an MBE is not a sham. See id. at 62. . 2 3 qualified [MBEs] . . . are unavailable or are unwilling to participate in the contract.” J.S. Supp. App. 67-68. The Plan is explicitly “ remedial” {id. at 248) and tem porary; it expires at the end of June 1988 {ibid.). The City Council adopted the Plan after holding a hearing during which it received testimony and informa tion about the history of public construction contracting in Richmond. The Council learned that during the pre ceding five years, only two-thirds of 1% of the dollar value of construction contracts awarded by Richmond was awarded to MBEs. J.S. Supp. App. 38, 115. The population of Richmond is approximately 50% minority. Ibid. The City Manager and a member of the City Council stated, on the basis of their experience, that there was widespread discrimination in the construction industry in general and in Richmond in particular; op ponents of the Plan within the Council, and representa tives of contracting associations who spoke at the hear ing, did not dispute these statements. Id. at 38, 164-165. 2. In September 1983, the City invited bids on a proj ect that involved the installation of certain plumbing fixtures in the City Jail. Appellee was the only bidder. After the bidding was closed, appellee sought a waiver of the requirement that it subcontract with an MBE. J.S. App. 2a-3a; J.S. Supp. App. 120-124. The City declined to grant the waiver and, when appellee sought to increase the price of its contract with the City, the City reopened the bidding on the contract. The City invited appellee to submit a new bid. J.S. App. 3a. Instead, appellee brought this action, which was re moved to the United States District Court for the East ern District of Virginia. Appellee sought injunctive and declaratory relief and damages, claiming, among other things, that the Plan violated its rights under the Equal Protection Clause of the Fourteenth Amendment, The district court rejected appellee’s claims (J.S. Supp. App. 110-232), and the court of appeals affirmed {id. at 1- 109). This Court granted appellee’s petition for a writ of certiorari, vacated the judgment of the court of ap 4 peals, and remanded the case for reconsideration in light of Wygant v. Jackson Board of Education, 476 U.S. 267 (1986). See 106 S.Ct. 3327 (1986). 3. On remand, a divided court of appeals reversed the judgment of the district court and held the Plan uncon stitutional. J.S. App. la-26a. The majority acknowl edged that a City may use a racial preference in order to “redress a practice of past wrongdoing” (J.S. App. 14a). But the majority ruled that the Richmond Plan was invalid because there was “no record of prior dis crimination by the city” in this case. Id. at 6a. The ma jority explained that, for example, “ [tjhere has been no showing that qualified minority contractors who sub mitted low bids were passed over . . . [or] that minority firms were excluded from the bidding pool.” Id. at 8a. The majority further asserted that the statements made during the City Council hearing were not sufficient to support the Plan because they were “conclusory” and “ highly general” (J.S. App. 6a). The majority also rejected as “ spurious” {id. at 8a) the City’s argument that an inference of discrimination was raised by the virtual absence of city contracts awarded to minorities, even though minorities constituted half the City’s popula tion. The majority stated that this disparity did not “demonstrate discrimination” because “ [t]he appropri ate comparison is between the number of minority con tracts and the number of minority contractors” {id. at 7a; emphasis in original). Finally, the majority concluded that even if the Plan were supported by the need to remedy past discrimina tion, it would be unconstitutional because “ it is not nar rowly tailored to that remedial goal.” J.S. App. 11a. The majority asserted that the 30% figure was chosen “arbitrarily” ; that the definition of an MBE was not narrowly tailored; that the provision for a waiver was too “ restrictive” ; and that the temporary nature of the plan was immaterial because “ [w]hether the . . . [P]lan will be retired or renewed in 1988 is, at this point, nothing more than speculation.” Id. at lla-13a. Judge Sprouse dissented. J.S. App. 14a-26a. The court of appeals denied rehearing en banc by a vote of 6-5. Id. at 27a-28a. SUMMARY OF ARGUMENT A. The decision of the court of appeals is inconsistent with Fullilove v. Klutznick, 448 U.S. 448 (1980). Fulli love upheld a federal program that is indistinguishable from Richmond’s Minority Business Utilization Plan in every relevant respect. Moreover, the evidence support ing the Richmond Plan is stronger than the evidence adduced in Fullilove. Fullilove cannot be distinguished on the ground that it involved the exercise of congressional power under Sec tion 5 of the Fourteenth Amendment. The basis of Con gress’s broad Section 5 power is the concern that the States might fail to act against discrimination. Here, Richmond has acted to remedy discrimination. It would be paradoxical to interpret the grant of power to Con gress in the Fourteenth Amendment in a way that re duces the authority of state and local governments to remedy racial discrimination. In addition, state and lo cal remedies for discrimination have many practical ad vantages over remedies imposed by the more remote and less knowledgeable federal government. B. Although Fullilove is sufficient to dispose of this case, the Richmond Plan also satisfies the standards pre scribed in this Court’s other decisions concerning race conscious measures. 1. Richmond has a strong basis for concluding that racial discrimination in the construction industry af fected minorities’ access to City contracting opportu nities. The most compelling evidence is that minorities, who are half of Richmond’s population, received less than one percent of public construction contracting funds. The court of appeals’ dismissal of that evidence is mani festly erroneous. In addition, Richmond had nonstatis- tical evidence of discrimination from several sources. The court of appeals ruled that this evidence was in adequate because the Richmond City Council did not 5 6 make a “ finding” or “ showing” that identified particular discriminatory acts. This Court’s decisions, however, establish that such findings are not required. In addi tion, requiring a government to identify discriminatory acts will inject an unnecessarily divisive and adversarial element into the process of designing remedies for racial discrimination. A race-conscious remedy was a fully appropriate re sponse to the discrimination that Richmond identified in the construction industry. Simply requiring that firms in the industry not discriminate would not have been effective. Because of prior discrimination, minority firms now lack experience; they would accordingly be at a com petitive disadvantage even if there were no longer any discrimination at all. An effective remedy for the ves tiges of discrimination must provide a temporary way to overcome that competitive disadvantage. 2. Contrary to the court of appeals, Richmond was entitled to adopt a race-conscious remedy for discrimi nation in the construction industry even if the City itself did not discriminate. As this Court has often held, state and local governments have a compelling interest of the highest order in remedying private discrimination. That interest is even greater when the City is attempting to ensure that its own funds will not be spent in a way that supports, or perpetuates the effects of, private discrimi nation. A race-conscious measure will sometimes be the only effective means of promoting these exceptionally im portant government interests. 3. Richmond’s Plan does not unfairly burden non minority contractors. To a large extent, the burdens im posed by the Richmond Plan fall on the taxpayers. In that respect, the Plan is superior to nearly every other affirmative action measure that this Court has consid ered. The burden on nonminority subcontractors who compete with minority firms is limited and diffuse. Moreover, the Richmond Plan does not uproot settled ex pectations but only denies, at most, the contingent possi bility of future economic gain. 7 ARGUMENT RICHMOND’S MINORITY BUSINESS UTILIZATION PLAN DOES NOT VIOLATE THE EQUAL PROTEC TION CLAUSE. A. The Court Of Appeals’ Decision Is Inconsistent With Fullilove v. K lutznick. 1. In Fullilove v. Klutznick, 448 U.S. 448 (1980), this Court held that Section 103(f) (2) of the Public Works Employment Act of 1977, 42 U.S.C. 670 5 (f)(2 ), does not violate the equal protection component of the Fifth Amendment’s Due Process Clause. Section 103(f) (2) provided that 10% of the funds granted under the Act was to be used to procure services and supplies from MBEs. The Richmond Minority Business Utilization Plan was modeled on Section 103(f) (2), and it is indis tinguishable from Section 103(f) (2) in every relevant respect. Indeed, the arguments supporting the Richmond Plan are significantly stronger than those advanced in support of Section 103 (f) (2). a. Section 103(f) (2) was supported by the same kind of statistical disparity as the Richmond Plan— a dispar ity between the percentage of minorities in the general population and the percentage of government contract funds received by minorities. The court below, without referring to Fullilove, condemned as “ spurious” and “ not . . . meaningful” the overwhelming disparity between the percentage of minorities in Richmond’s population and the percentage of Richmond’s public construction contract funds that had been awarded to minorities. J.S. App. 8a, 10a. But in Fullilove, a majority of the Mem bers of this Court relied on precisely the same statistical comparison to support their conclusion that Section 103(f) (2) was a permissible remedy for past discrimi nation.3 3 See 448 U.S. at 459 (opinion of Burger, C.J.) (“ in fiscal year 1976 less than 1% o f all federal procurement was concluded with minority business enterprises, although minorities comprised 15- 8 Indeed, in Fvllilove the statistical disparity— minori ties were 15% to 18% of the population and received less than 1% of public contracting funds— was far less dramatic than the 0.67% to 50% disparity that Rich mond faced. The conclusion that Richmond had an ade quate statistical basis for enacting a subcontracting re quirement therefore follows a fortiori from Fullilove. b. The court of appeals ruled that the Richmond Plan was not narrowly tailored to its remedial objective be cause the City’s waivable 30% goal was an “ arbitrarjy] . . . figure [that] simply emerged from the mists.” J.S. App. 11a. Fullilove rejected just such an attack on the 10% figure used by Congress. See, e.g., Brief for Peti tioner General Building Contractors, Fullilove v. Klutz- nick, No. 78-1007, at 22 ( “ Congress made a purely ar bitrary selection” of a 10% requirement). Justice Powell explained in Fullilove why Congress’s choice of a 10% requirement was reasonable, and his ex planation fully justifies the waivable 30% figure chosen by Richmond. Justice Powell explained that the 10% requirement of Section 103 (f)(2 ) was warranted be cause that figure fell approximately “halfway between the present percentage of minority contractors and the percentage of minority group members in the Nation.” 448 U.S. at 513-514 (Powell, J., concurring). See also id. at 488-489 (opinion of Burger, C.J.). There were almost no minority contractors in Richmond (see J.S. Supp. App. 164), which has a minority population of 50%. The City’s choice of a waivable 30% goal is there fore firmly supported by Justice Powell’s reasoning. 18% of the population” ) ; id. at 562-563 ( “ [The] 10% MBE par ticipation requirement . . . was thought [by Congress] to be required to [avoid] . . . repetition of the prior experience . . . [in which] participation by minority business accounted] for an inordinately small percentage of government contracting.” ) ; id. at 511 (Powell, J., concurring) ( “ By the time Congress en acted § 103(f)(2 ) in 1977, it knew that other remedies had failed . . . [because] the fact remained that minority contractors were receiving less than 1% of federal contracts.” ) ; id. at 520 (Marshall, J., concurring in the judgment). 9 c. The court of appeals’ approach to the nonstatisti- cal bases of the Richmond Plan is similarly irreconcil able with FvMlove. The court of appeals discounted the statements, made during the Richmond City Council’s hearing, that the construction industry in Richmond had been marked by discrimination, on the ground that these statements were “ conclusory,” “general,” and often made by supporters of the Plan. J.S. App. 6a. But in Fulli- love, a majority of the Members of this Court relied extensively on statements of comparable generality made by supporters of Section 1 0 3 (f)(2 ). Indeed, the state ments on which the Court relied in Fullilove were, for the most part, made in connection not with Section 103 (f)(2 ) but with other federal programs to aid mi nority enterprises. See 448 U.S. at 458-463 (opinion of Burger, C.J.) ; id. at 504 (Powell, J., concurring) ; id. at 520 (Marshall, J., concurring in the judgment). d. The court of appeals ruled that the City’s plan was invalid because the City had not made “ showing[s]” (J.S. App. 8a) or “particularized findings” of prior dis crimination (id. at 5a). But Chief Justice Burger ex plicitly noted in Fullilove that Section 103 (f)(2 ) “ re cites no preambulary ‘findings’ ” (448 U.S. at 478). Indeed, a majority of the Members of the Court empha sized that it is inappropriate to require a legislative body to produce specific findings to support the actions it takes.4 In Fullilove, of course, the question was whether Con gress should be required to make specific findings. But 4 See 448 U.S. at 478 ( “ Congress, of course, may legislate with out compiling the kind of ‘record’ appropriate with respect to judicial or administrative proceedings.” ) ; id. at 502-503 (Powell, J., concurring) (“ Congress is not expected to act as though it were duty bound to find facts and make conclusions of law. . . . [F]ore- ting] Congress to make specific factual findings with respect to each legislative action . . . would mark an unprecedented imposi tion of adjudicatory procedures upon . . . the legislative process.” ) ; id. at 520 n.4 (Marshall, J., concurring in the judgment) (The “view [that] Congress must make particularized findings . . . is 10 imposing such requirements on a state or local legisla tive body is at least as intrusive and unjustifiable. Cf. FERC v. Mississippi, 456 U.S. 742, 777-778 (1982) (O’Connor, J., dissenting). The inappropriateness of the requirement of specific findings stems from the nature of the legislative process itself. When elected representa tives act, they bring to bear knowledge that they have gathered from a wide range of sources, including their general experience in public life and their contacts with constituents. This collective knowledge cannot be cabined in “ findings” or “ showings” about specific acts of dis crimination. e. The court below appears to have concluded that the Richmond Plan was invalid because it was not based on evidence of discrimination by the City itself. J.S. App. 5a, 6a, 8a, 9a. But there was no suggestion in Fullilove that Section 103 (f)(2 ) was justified because of discrimination by the federal government, as a dissent in that case pointed out. 448 U.S. at 528 (Stewart, J., dissenting). Section 103(f) (2 ), like the Richmond Plan, was directed to discrimination in the construction indus try and among the recipients of federal grants. See, e.g., id. at 475, 478 (opinion of Burger, C .J .); id. at 505-506 (Powell, J., concurring). 2. The court of appeals did not attempt to reconcile its decision with Fullilove or to explain why state and local subcontracting requirements must meet standards that are stricter than those specified in Fullilove. Other courts of appeals, however, have asserted that Congress has greater power to remedy racial discrimination than state and local governments have. See, e.g., Associated General Contractors v. City and County of San Fran cisco, 813 F.2d 922, 928-934 (9th Cir. 1987) (petition for rehearing pending). a. The notion that Congress’s authority to remedy dis crimination is greater than that of state and local gov ernments is unfounded in the law, and represents an unwarranted inversion of important values of federal ism. It is true, of course, that Section 5 of the Four 11 teenth Amendment greatly expanded the power of Con gress to remedy racial discrimination. See Katzenbach v. Morgan, 384 U.S. 641, 650-651 (1966) ; Ex Parte Vir ginia, 100 U.S. (10 Otto) 839, 345-346 (1880). But the reason for this expansion was not to occupy the field or to preempt state and local action designed to remedy dis crimination. Rather, the drafters of the Fourteenth Amendment expanded the power of Congress because they doubted that the States would adequately enforce the rights of the newly freed slaves to be free from un lawful discrimination.5 Against this background, it would be highly paradoxi cal to construe the Fourteenth Amendment to reduce the authority of state and local governments to deal with the problem of discrimination. The determination that ra cial discrimination was a national problem did not mean that it ceased to be a local problem. On the contrary, there is every reason to believe that the Framers of the Fourteenth Amendment would have welcomed state and local efforts to eradicate the effects of discrimination, where such efforts were forthcoming. Cf. The Slaughter- House Cases, 83 U.S. (16 Wall.) 36, 77-78 (1872) (“ [T]he Fourteenth Amendment [did not] . . . transfer the security and protection of all the civil rights . . . from the States to the Federal Government” ) ; see Regents of the University of California v. Bakke, 438 U.S. 265, 368 (1978) (opinion of Brennan, White, Marshall, and Blackmun, JJ.). From a practical standpoint, local remedies for dis crimination are likely to be far preferable to federal remedies. Congress lacks familiarity with local condi * See, e.g., The Slaughter-House Cases, 83 U.S. (16 Wall.) 36, 70-71 (1872); Cong. Globe, 39th Cong., 1st Sess. 2768 (1866) (statement o f Sen. Howard) (Section 5 “ enables Congress, in case the States shall enact laws in conflict with the principles of the amendment, to correct that legislation” ) ; R. Harris, The Quest for Equality 53 (1960) ; J. tenBroek, The Antislavery Origins of the Fourteenth Amendment 204-207 (1951); H. Flack, The Adop tion of the Fourteenth Amendment 138 (1965). 12 tions; it acts on the basis of nationwide generalizations that will necessarily be over- and under-inclusive. For example, while some industries have a record of racial discrimination throughout the Nation, it is also some times the case that the firms in a particular locality have engaged in discrimination even though the industry has an excellent national record. Under the court of ap peals’ approach, the local government’s power to act in such a situation will be sharply limited. Congress will be forced to choose between imposing a national solution, which may be excessive, and allowing the problem to go without remedy. Similarly, a local government will be able to tailor its remedy to local conditions. For example, any nationwide numerical goal or target will be unrealistically high for areas of the country with a low minority population, and too low to be a fully effective remedy in areas with a high minority population. Local programs will not en counter this difficulty. Of course, a national goal may contain a waiver provision, as the Section 103(f) (2) program did. But if variations are to be made to accom modate local conditions, it is far better that they be adopted through local political processes than by the dis cretionary judgments of a federal administrator. b. Nothing in the opinions in Fullilove suggests that the Fourteenth Amendment’s expansion of Congress’s au thority restricts the power of state and local govern ments to remedy discrimination. Members of the Court did, of course, emphasize the scope of Congress’s power to enforce the Fourteenth Amendment. See, e.g., 448 U.S. at 483 (opinion of Burger, C.J.) ; id. at 499-502 (opinion of Powell, J). But they did so only to answer arguments that Congress might lack the power to act in this area. See, e.g., id. at 476 (opinion of Burger, C.J.). State and local governments have always had the authority— under the police power and, as here, by virtue of their power to control public expenditures— to act against racial discrimination. The opinions in Fullilove do not suggest that the existence of Congress’s power under Section 5 somehow derogates from that traditional state and local authority.6 c. Perhaps most important, local solutions to the prob lems of racial discrimination have crucial political and social advantages over federal measures. When a deci sion is made at the local level, the officials responsible for it can be held directly politically accountable. Conse quently, a decision by the elected officials of a state or local government reflects a decision by the people most directly affected to address the problem of racial dis crimination in a certain way. The process of considering and enacting a remedy like Richmond’s can help build a consensus. If circumstances change, the remedy can be modified. A federal requirement, by contrast, is imposed coercively from above. Ultimately the problems stem ming from racial discrimination will be solved not by such coercive measures but by the development of a con sensus and an understanding at the local level. As we have noted (pages 1-2, supra), state and local governments throughout the Nation have determined, through their elected representatives, that public con tracting requirements comparable to Richmond’s will help to remedy the effects of racial discrimination. In these ways, Fullilove has become “ an important part of the fabric of our law” (Johnson v. Transportation Agency, 107 S. Ct. 1442, 1459 (1987) (Stevens, J., con curring) ; see id. at 1461 (O’Connor, J., concurring in the judgment)). It has become the basis for political and economic accommodation of the various interests that are affected when the government attempts to remedy the effects of discrimination— an accommodation that has 6 Thus Chief Justice Burger’s statement that “ in no organ of government, state or federal, does there repose a more compre hensive remedial power than in the Congress, expressly charged by the Constitution with competence and authority to enforce equal protection guarantees” (448 U.S. at 483) must be taken to mean what it says: Congress’s authority is as broad as that of state and local governments. The opinion does not say— and, in our view, it would be paradoxical and incorrect to say—that congressional power is broader. 13 14 taken place on the local level, in scores of localities and more than two-thirds of the States, throughout the Na tion. There is no sufficient reason for upsetting these accommodations and precluding state and local govern ments from addressing the problem of discrimination in this way. B. The Richmond Plan Promotes Compelling Government Interests And Does Not Impose Unfair Burdens On Nonminority Contractors. FvMlove is, in our view, sufficient to dispose of this case. But there is no inconsistency between Fullilove and the standards established in the other decisions of this Court that have considered the constitutionality of race conscious measures. Although the Court does not appear to have agreed on a specific formulation of these stand ards, it is clear that such a measure is constitutional if it is designed to achieve a sufficiently important gov ernment objective and if it is tailored so as not to im pose undue burdens on individuals who are not members of minority groups.7 The Richmond Plan satisfies these standards. Indeed, although we do not believe that a state or local govern ment must show a “ compelling” interest in order to sus tain a race-conscious remedy, the objectives that the Richmond Plan promotes are in fact compelling, and the burdens it imposes on nonminorities are minimal. 1. The Richmond Plan promotes the compelling inter est of remedying racial discrimination in the con struction industry. The Richmond City Council explicitly stated that it was adopting the Minority Business Utilization Plan for the purpose of remedying prior racial discrimination. The court of appeals did not deny that the Plan would 7 See, e.g., United States v. Paradise, 107 S. Ct. 1053, 1064 & n.17 (1987) (plurality opinion) ; Wygant, 476 U.S. at 274 (plurality opinion); id. at 286-287 (O’Connor, J., concurring); id. at 301-302 (Marshall, J., dissenting); id. at 313 (Stevens, J., dissenting). 15 be an effective means of remedying the effects of dis crimination in the construction industry. Instead, the court ruled that Richmond did not have an adequate basis for concluding that such discrimination exists. In this section we address that aspect o f the court of ap peals’ decision. In addition, we will explain why a race- conscious subcontracting requirement like Richmond’s is an especially useful means— indeed, an indispensable means— of remedying discrimination in the construction industry. The court of appeals also suggested that Richmond was entitled to remedy only its own discrimination, and that remedying discrimination in the construction indus try did not constitute a sufficient government interest to uphold the Richmond Plan. We address that aspect of the court of appeals’ reasoning in Part B2 below. a. i. In Wygant, Members of this Court stated that a government may adopt a race-conscious remedy for past discrimination when it “ ha [s] a strong basis in evi dence for its conclusion that remedial action [is] neces sary.” 476 U.S. at 277 (plurality opinion). See also id. at 293 (O’Connor, J., concurring) ( “ a firm basis for concluding that remedial action [is] appropriate” ). The Richmond City Council had more than a “ strong basis” for concluding that there was discrimination in the con struction industry. Perhaps the clearest evidence was the stark statistical disparity: minorities constitute half of Richmond’s population, but have received only two- thirds of 1% of public construction contract funds. The court of appeals dismissed this statistical demon stration as “ spurious” [id. at 8a) and “not . . . mean ingful” (id, at 10a). “ The appropriate comparison,” the court asserted, “ is between the number of minority con tracts and the number of minority contractors” (id. at 7a; emphasis in original). The court of appeals stated that the City’s “ [s]howing that a small fraction of city contracts went to minority firms,” did not “demonstrate discrimination” because “the number of minority-owned contractors in Richmond was also quite small.” Ibid. 16 This ruling is manifestly incorrect. The error in the court of appeals’ approach is clear from numerous deci sions of this Court, and it was recently explained by Justice O’Connor: when discrimination prevents minori ties from “ obtaining th[e] experience” that they need to qualify for a position, the “relevant comparison” is not with the percentage of minorities in the pool of quali fied candidates but with “ the total percentage of [minori ties] in the labor force.” Johnson v. Transportation Agency, 107 S. Ct. 1442, 1462 (1987) (opinion concur ring in the judgment). See also id. at 1462-1463; Steel workers v. Weber, 443 U.S. 193, 198-199 (1979) ; Inter national Brotherhood of Teamsters v. United States, 431 U.S. 324, 339 n.20 (1977). Discrimination does not merely prevent established minority contractors from obtaining contracts; it discourages and prevents minori ties from entering the pool of contractors in the first place. The absence of the disparity on which the court of appeals insisted may simply be evidence that minorities, faced with widespread discrimination, did not quixotically enter a business in which they knew they would not be allowed to succeed. An individual who wishes to take advantage of sub contracting opportunities must expend considerable re sources. Such an individual ordinarily must incorporate, obtain bonding, hire managerial employees, buy or lease equipment, establish contacts with union hiring halls or other sources of labor, arrange credit, investigate bidding opportunities, and determine the bid that the newly formed firm can enter. These are costly operations. If there is discrimination at any stage— in the discretionary deci sions of general contractors, in the practices of bonding companies, in the judgments banks or equipment leasing companies make about creditworthiness, in the willing ness of skilled or unskilled laborers to work for a mi nority business— the minority group member is immedi ately placed at a competitive disadvantage. In these cir cumstances, few minority entrepreneurs will be willing to invest the necessary resources to establish a contracting 17 firm. They will pursue opportunities in a different field, where discrimination may be less of an obstacle to success.8 Significantly, these barriers continue to exist after acts of intentional discrimination have ceased. “ [BJarriers to competitive access ha[ve] their roots in racial and ethnic discrimination, and . . . continue today, even absent any intentional discrimination or other unlawful conduct.” Fullilove, 448 U.S. at 478 (opinion of Burger, C.J.). Experience—a “ track record”— is highly important to any firm seeking contracting opportunities. Id. at 467. A network of contacts and a prior working relationship can be crucial in obtaining credit, bonding, or high- quality employees. See Furnco Construction Corp. v. Waters, 438 U.S. 567, 570, 572 (1978) (describing hir ing by construction “job superintendent” who “hired only persons whom he knew to be experienced and competent in th[e] type of work or persons who had been recom mended to him as similarly skilled” ) . Indeed, it is often rational, and not an act of racial discrimination, for general contractors, banks, and others to give preferential treatment to firms that have an established record of reliability. This case furnishes an example: the district court found that a minority sub contractor interested in obtaining part of appellee’s con tract could not obtain a timely price quotation from a supplier because the minority entrepreneur “ was un known to” the supplier, and the supplier’s agent “was not allowed to quote to unknown [firms] until they had undergone a credit investigation.” J.S. Supp. App. 123. Because discrimination has prevented minorities from entering the field in the past, minority firms will con tinue to suffer the competitive disadvantages caused by relative lack of experience even if there is no longer any 8 On several occasions, this Court has recognized that entrenched hiring discrimination will deter minorities from applying for jobs. See, e.g., Local 28 of Sheet Metal Workers v. EEOC, 106 S. Ct. 3019, 3036-3037 (1986); Teamsters, 431 U.S. at 365-367. It follows a fortiori that discrimination will discourage minorities from form ing contracting firms, a much more expensive and difficult task. 18 intentional discrimination at all. Minority group mem bers will, accordingly, be unwilling to establish firms, and the disparity on which the court of appeals insisted will not appear. Of course, it is theoretically possible that these bar riers were not the source of the virtual exclusion of minorities from Richmond’s public contracting business. But it is extremely unlikely. See Teamsters, 431 U.S. at 342 n.23; Johnson, 107 S. Ct. at 1465 (O’Connor, J., concurring in the judgment). Faced with the undisputed fact that there were essentially no minority contractors in a City that was half minority, the Richmond City Council could have concluded either that virtually no minorities were willing and able to become contractors, or that some appreciable percentage had been excluded by discrimination. The Council, with its intimate knowl edge of the City’s history, thought the latter hypothesis was more plausible. There is no justification for denying the City the right to reach this conclusion. ii. In addition to the statistical evidence, the Rich mond City Council had other reasons to believe that dis criminatory practices had denied minorities opportunities in the construction industry. For example, a member of the City Council, as well as the City Manager, speaking from experience, stated their judgment that there had been widespread discrimination in the construction in dustry. _ J.S. Supp. App. 38, 164-165. In addition, the discriminatory exclusion of minorities from craft unions is so notorious that this Court has held it a proper sub ject for judicial notice. Weber, 443 U.S. at 198 & n.l. Craft unions supply employees to construction firms, and often new construction firms are formed by craft work ers.® Thus the historic discrimination against minorities by the craft unions is likely to have had a severe effect on minorities’ opportunities in the construction industry. Finally, as the district court noted (J.S. Supp. App. 9 9 See, e.g., J. Gillies & F. Mittelbach, Management in the Light Construction Industry 27, 28 (1962); see generally R. Glover, Minority Enterprise in Construction (1977). 19 165), the City had before it the same evidence that Con gress had when it enacted the Fullilove program— “ abundant evidence from which [a legislature] could con clude that minority businesses have been denied effective participation in public contracting opportunities by procurement practices that perpetuated the effects of prior discrimination,” and “direct evidence” that a “pat tern of disadvantage and discrimination existed with respect to state and local construction contracting” (Fullilove, 448 U.S. at 477-478 (opinion of Burger, C .J.)). The court of appeals considered this nonstatistical evidence insufficient because it was not captured in ad equately “particularized findings” (J.S. App. 5a). As we noted above, this conclusion is inconsistent with Fullilove, and it ignores the realities of the legislative process. The court of appeals relied exclusively on Wygant for its con trary conclusion, but one Members of the five-Justice majority in Wygant fully explained why specific findings of prior discrimination should not be required. 476 U.S. at 289-293 (O’Connor, J., concurring). And it appears that a majority of the Court in Wygant rejected a require ment that a government must make formal findings of discrimination before adopting a race-conscious remedy. See id. at 312 n.7 (Marshall, J., dissenting). The court of appeals rejected the City’s reliance on the data developed by Congress with the statement that “ [n]ational findings do not alone establish the need for action in a particular locality.” J.S. App. 9a. But in City of Renton v. Playtime Theatres, Ine., 475 U.S. 41 (1986), a case involving an ordinance that arguably af fected First Amendment rights, this Court squarely rejected— as “ unnecessarily rigid”— the contention that because the City had not presented “ studies specifically relating to ‘the particular problems or needs of Renton,’ the city’s justifications for the ordinance were ‘conclusory and speculative.’ ” Id. at 50 (citations omitted). This is almost precisely the contention that the court below accepted. Renton held that a City is “ entitled to rely on the ex periences of . . . other cities” even when it is regulating in an area involving constitutional rights. Id. at 51. A City is not required “ to conduct new studies or produce evidence independent of that already generated by other cities, so long as whatever evidence the city relies upon is reasonably believed to be relevant to the problem that the city addresses.” Id. at 51-52. The statistical evi dence of discrimination in Richmond gave the City ample reason to believe that the congressional findings were relevant to its situation. Finally, the court of appeals’ approach is insensitive to important practical considerations that affect state and local governments. First, as a practical matter, a require ment that a City compile a “record” or make specific “ findings” with an eye toward judicial review will place all but the largest localities at an unwarranted disadvan tage. Translating the insights, experience, and judgment of an elected official into a “ record” or “particularized findings” suitable for judicial review is a task for a pro fessional staff, preferably a staff with an extensive legal background. Congress and the Executive Branch of the federal government employ staffs that are adept at com piling a record that will withstand the kind of review that the court of appeals’ opinion contemplates. But many medium-size and small localities— whose delibera tions may be every bit as careful and thoughtful— do not employ, and cannot afford to employ, that kind of pro fessional staff. Second, and more important, the court of appeals’ approach ignores the nature— and the special advantages — of the political process. The court of appeals appears to have required that state and local governments iden tify particular occasions on which identifiable acts of discrimination occurred. See, e.g., J.S. App. 8a ( “There has been no showing that qualified minority contractors who submitted low bids were passed over. There has 20 been no showing that minority firms were excluded from the bidding pool.” ) . Such a procedure— in which specific discriminatory acts or actors are identified— would benefit no one. It would require state and local governments to engage in a destructive process of recrimination and accusation if they wished to address the effects of racial discrimi nation through a race-conscious remedy. The genius of the political process is that it can often find a solution, even to problems as difficult as those implicated in this case, without reopening old wounds and setting individ uals against each other. See Schlesinger v. Reservists Committee to Stop the War, 418 U.S. 208, 221 n. 10 (1974) ( “ The legislative function is inherently general rather than particular and is not intended to be respon sive to adversaries asserting specific claims or interests peculiar to themselves.” ). The divisive process envisioned by the court of appeals would forfeit these advantages. b. A race-conscious subcontracting requirement is a fully appropriate remedy for the discrimination that Richmond found to exist in the construction industry. A measure that simply required the firms involved in the construction industry not to discriminate would not have been effective. Indeed, we do not, understand the court of appeals to have suggested otherwise. As we noted above, and as Members of the Court ex plained in detail in Fullilove, discrimination in the con struction industry creates a variety of subtle but severe barriers to competitive success. Intentional discrimination can handicap a construction firm in ways that a mere pro hibition against discrimination cannot prevent, no matter how diligently it is enforced. More important, even after intentional discrimination has ceased, minority firms will continue to suffer from its effects. A simple prohibition against discrimination will do nothing to remedy those effects. See pages 16-18, supra-, Fullilove, 448 U.S. at 461-467, 477-478 (opinion of Burger, C.J.). For example, as we have noted, a rational, non- discriminatory general contractor will often prefer to 21 22 give work to a subcontractor with which it has worked on previous projects and which it knows to be reliable. A bank or a bonding company will have nondiscriminatory reasons for giving better terms to firms with a long record of reliable performance. Informal networks, developed over years of working together, will often be the best means of hiring good employees. See pages 17-18, supra. In each of these areas, minority firms are at a com petitive disadvantage because they lack experience and contacts; and they lack experience and contacts because of past discrimination. This disadvantage cannot be over come simply by banning discrimination. It can be over come only by a compensatory remedy that improves the competitive position of minority firms. Richmond’s subcontracting requirement accomplishes this task in a measured, tailored fashion. It is a tem porary device; the City will reassess the need for a race conscious remedy before extending it. It does not guaran tee any particular contract to any minority firm. Because of the waiver provision, minority firms have an incentive to be as efficient as possible; if their costs are too high, a general contractor may obtain a waiver. Moreover, as the district court explained (J.S. Supp. App. 145-146) : [UJnder the Plan, there remains every incentive for both MBEs and non-MBEs to compete against one another. . . . The Plan simply changes the struc ture of the competition, by requiring non-MBEs to team up, insofar as possible, with MBEs, to com pete for contracts against other teams of non- MBEs and MBEs. The Richmond Plan does, however, ensure that a general contractor will not lose a job because it has subcontracted with a minority firm that has higher costs as a result of past discrimination. And, of course, the Richmond Plan requires general contractors to make real efforts to seek out minority firms; it does not permit a general con tractor to make a merely perfunctory effort before re turning to the traditional ways of doing business. 28 2. Richmond may enact a race-conscious remedy for prior discrimination in the local construction in dustry without admitting complicity in racial dis crimination. As we have explained, the Richmond City Council had more than sufficient basis for concluding that racial discrimination in the construction industry blocked mi nority access to city construction contracts, and the Rich mond Plan was well designed to remedy this situation. But passages in the opinion below suggest that the court imposed an additional requirement on Richmond: the City, the court of appeals suggested, could enact a race conscious plan only to remedy its own prior discrimina tion. The Richmond Plan, according to the court of appeals, could not be justified as a remedy for discrimina tion in the construction industry, no matter how conclu sively Richmond demonstrated the existence of that dis crimination, unless the City itself was in some sense guilty of discrimination. See J.S. App. 5a, 6a, 8a, 9a. This conclusion is erroneous. In some circumstances, a local government is obligated to use race-conscious means to remedy its own discrimination. North Carolina State Board of Education v. Swann, 402 U.S. 43, 46 (1971); see also Green v. County School Board, 391 U.S. 430 (1968). The question in this case, however, is not what a state or local government is obligated to do but what it may do. It is well established that a state or local gov ernment not only may act to remedy private discrimina tion but has the most compelling interest in doing so. Moreover, both logic and this Court’s decisions support the conclusion that a state or local government may use race conscious measures to remedy private discrimination and its effects. a. This Court has repeatedly recognized that govern ments have an interest of the highest order in eliminat ing private discrimination and its effects. See, e.g., Board of Directors v. Rotary Club, 107 S. Ct. 1940, 1947 (1987) ( “ the State’s compelling interest in eliminating discrimination against women” ) ; Bob Jones University 24 v. United States, 461 U.S. 574, 604 (1983) (“ [T]he gov ernment has a fundamental, overriding interest in eradi cating racial discrimination” ) ; Runyon v. McCrary, 427 U.S. 160, 179 (1976) ; Railway Mail Association v. Corsi, 326 U.S. 88 (1945). Indeed, the Court has recently ruled that a State government’s interest in “ eliminating dis crimination and assuring its citizens equal access to pub licly available goods and services”— an interest similar to that asserted by Richmond in this case— is not only a “ compelling state interest!] of the highest order" (Roberts v. United States Jaycees, 468 U.S. 609, 624 (1984)), but is sufficiently weighty to justify the infringement of a con stitutional right (see id. at 623). See also id. at 632 (O’Connor, J., concurring) ( “ the profoundly important goal of ensuring nondiscriminatory access to commercial opportunities in our society” ) . b. The City’s interest in combatting private discrim ination is even stronger in this case, because the City is attempting to ensure that its own expenditures of public funds do not contribute to the harms caused by discrim ination. Richmond is not acting merely as a regulator of private affairs, as the States were in Roberts, supra, and Rotary Club, supra; instead, the City is attempting to prevent its own spending decisions from supporting subtle forms of discrimination or perpetuating the effects of past discrimination. The Court has recognized that a local government has unusually great latitude to promote its interests when it is not acting in a regulatory capacity but is, for example, “expend [ing] only its own funds in entering into construction contracts for public projects” {White v. Massachusetts Council of Construction Em ployers, 460 U.S. 204, 214-215 (1983)). See also Reeves, Inc. v. Stake, 447 U.S. 429, 436-437 (1980) ; Hughes v. Alexandria Scrap Corp., 426 U.S. 794, 810 (1976). When, as here, the City is attempting to avoid giving support to private racial discrimination and its effects, the City’s power is at its greatest. We note in this connection that several courts have held that a state or local government can violate the Con 25 stitution by entering into contractual relationships with private firms that discriminate.10 See also National Black Police Association v. Velde, 712 F. 2d 569 (D.C. Cir. 1983) (officials are subject to personal liability if they knowingly provide public funds to recipients engaged in discrimination), cert, denied, 466 U.S. 963 (1984). While we do not agree with these decisions, they further estab lish the extraordinary weight of state and local govern ments’ interest in ensuring that public funds are not spent in a way that perpetuates racial discrimination or its effects. Cf. Norwood v. Harrison, 413 U.S. 455 (1973). c. In view of the extraordinary importance of the gov ernment’s interest in eliminating private discrimination and its effects, it would be unreasonable to preclude state and local governments from using race-conscious meas ures in appropriate circumstances. The Court has ap proved race-conscious remedies for government discrim ination because there are occasions on which government discrimination, and its effects, cannot be eliminated with out such measures. See, e.g., North Carolina State Board of Education, supra-, McDaniel v. Barresi, 402 U.S. 39, 41 (1971). The same is sometimes true of private discrimination. As the Court has recognized, sometimes a mere require ment of nondiscrimination is not enough to prevent such discrimination or to alleviate its effects. See, e.g., Local 28 of Sheet Metal Workers v. EEOC, 106 S. Ct. 3019, 3036-3037 (1986) ; Fullilove, supra. See also Paradise, 107 S. Ct. at 1065-1072. The Court has specifically stated that a school board may voluntarily remedy de facto seg regation— segregation that is not the result of discrimina tion by the government— by adopting a race-conscious student assignment policy. Swann v. Charlotte-Mecklen- 10 Notably, many of these cases involved the construction industry. See, e.g., Percy v. Brennan, 384 F. Supp. 800, 811-812 (S.D.N.Y. 1977); Byrd v. Local No. U , IBEW, 375 F. Supp. 545, 559-560 (D.Md. 1974); James v. Ogilvie, 310 F. Supp. 661 (N.D. 111. 1970); Ethridge v. Rhodes, 268 F. Supp. 83 (S.D. Ohio 1967). 26 burg Board of Education, 402 U.S. 1, 16 (1971). See also North Carolina State Board of Education, 402 U.S. at 45. We of course recognize that race-conscious measures must not be imposed casually, for whatever reason they are adopted. They must be supported by appropriate government interests. Moreover, the government must take care that they do not unfairly burden nonminori ties. But there is no basis for wholly prohibiting state and local governments from using such measures to remedy discrimination in appropriate cases, even if the discrimination does not have its source in the govern ment’s own actions. d. The court of appeals’ conclusion that a state or local government is limited to remedying its own dis crimination was based entirely on statements from Wygant. See J.S. App. 5a, quoting 476 U.S. at 274 (plurality opinion of Powell, J .). See also Wygant, 476 U.S. at 288 (opinion of O’Connor, J .). Understood in context, however, these statements do not support the court of appeals’ conclusion. Wygant involved a provision of a collective bargaining agreement under which a school board, in making lay offs, was to maintain a certain racial balance among teachers. See 476 U.S. at 270-272 (plurality opinion). That affirmative action provision, if analyzed as a reme dial measure, was capable of being justified only in one of two ways— as a remedy for prior discrimination by the school board, or as a general response to the fact that widespread discrimination in society has placed racial minorities in a disadvantaged position. See id. at 288 n.* (opinion of O’Connor, J .).n Justices Powell and O’Connor were concerned to reject the suggestion that this latter notion of societal dis crimination could justify the provision. Justice Powell reasoned that such a justification is “ too amorphous” and 11 11 The school board also suggested that the measure could be justified on the ground that it provided “ role models” for school- children (see 476 U.S. at 274 (plurality opinion)), but that is a nonremedial justification that has no counterpart in this case. 27 “ overexpansive” ; because “ [n]o one doubts that there has been serious racial discrimination in this country,” any remedies based on this notion of societal discrim ination would be “ ageless in their reach into the past, and timeless in their ability to affect the future.” Id. at 276 (plurality opinion). It was in this context— in which the only suggested remedial justifications were an open-ended notion of societal discrimination, on the one hand, and “discrimin ation by the local government unit in question” on the other— that Justices Powell and O’Connor insisted on the latter. Richmond, however, did not enact its Plan on the basis of an open-ended assertion of societal discrimina tion. Rather, Richmond is attempting to remedy discrimi nation in a specific industry, on the basis of abundant evidence (including evidence of which this Court has taken judicial notice) that such discrimination exists. Such a remedial effort does not present the problems of limit lessness and amorphousness with which Justices Powell and O’Connor were concerned. This interpretation of the statements in Wygant is confirmed by Justice Powell’s opinions in both BaJcke and Fullilove. In Bakke, Justice Powell contrasted “ identified discrimination” with “ ‘societal discrimination,’ an amor phous concept of injury that may be ageless in its reach into the past.” 438 U.S. at 307. In Fullilove, where there was no suggestion of prior discrimination by the federal government, Justice Powell again emphasized that “ identified” discrimination was sufficient to uphold the race-conscious remedy. See 448 U.S. at 496, 497, 515. This demonstrates that Justice Powell’s concern was that the discrimination be “ identified”— that is, that it be narrower than general societal discrimination—not that it be attributable to the government actor in question. In Wygant, the only form of identified discrimination was discrimination by the unit of government itself. Rich mond, however, is addressing another form of identified discrimination. Its Plan is therefore fully consistent with Justice Powell’s approach. 28 3. Richmond’s plan does not unfairly burden non minority contractors. The Court has emphasized that race-conscious remedial measures must not impose undue burdens on nonminori ties. See, e.g., Johnson, 107 S. Ct. at 1455-1456; Wygant, 476 U.S. at 282-284 (opinion of Powell, J.). The bur dens that the Richmond Plan imposes on nonminorities can fairly be characterized as minimal. At all events, they are well within the range permitted by this Court’s decisions. To a large extent, the burdens imposed by the Rich mond Plan fall on the City itself. They are therefore distributed among the taxpayers. Not only is this per haps the fairest way of dealing with the costs of remedy ing discrimination, but it ensures that there will be a political check on the program. If its costs grow too great, not isolated individuals but the taxpayers as a whole will demand that the Plan be modified or repealed. Because it spreads much of its cost among the taxpayers, the Richmond Plan is superior to nearly every other remedial measure that this Court has considered; those measures imposed virtually the entire burden on specific individuals and shifted little or none of it to the tax payers (or to a comparably large group) ,12 The principal burden of the Richmond Plan falls on the taxpayers because a general contractor can include 12 In the cases involving competitive seniority— Wygant, Fire fighters Local Union No. 178U v. Stotts, 467 U.S. 561 (1984), and also, in important respects, Franks v. Bowman Transportation Co., 424 U.S. 747 (1976)—the burden fell entirely on the nonminority employees who lost the benefits of their seniority; it is difficult to identify any burden that fell on the employer or could be passed on to taxpayers or customers. In cases involving affirmative action in hiring, promotions, or university admissions— Paradise, Johnson, Local No. 93, Firefighters v. Cleveland, 478 U.S. 501 (1986), Local %8 of Sheet Metal Workers, Weber, and Bakke—the government or employer incurred, in theory, the additional cost of employing or educating a minority applicant who was supposedly less well- qualified. But in practical terms that cost is not likely to be great. Realistically, the burden fell on the disappointed applicant. 29 in its bid— and thereby pass through— any additional costs that reflect the competitive disadvantage of the minority subcontractors. Neither the general contractor, nor any bonding or lending institution, nor any other firm that deals with the minority subcontractor, is forced to incur additional net costs. It is of course true that the Plan is likely to cause some nonminority subcontractors to lose business. But in this respect, as well, the Plan contrasts sharply, and favorably, with the measures that this Court has invali dated in the past. The collective bargaining agreement in Wygant, for example, resulted in layoffs of non minority employees whose seniority would otherwise have protected them. This aspect of Wygant was crucial to the outcome of that case. See 476 U.S. at 282-284 (Powell, J.) ; id. at 294-295 (White, J., concurring). By contrast, the burden imposed on individual firms by the Richmond Plan— like the burden imposed by the federal program upheld in Fullilove— is “ limited and so widely dispersed that it [] . . . is consistent with funda mental fairness.” FvMlove, 448 U.S. at 515 (Powell, J., concurring) (footnote omitted). The Richmond Plan affects only the construction industry, only a segment of that market— municipal contracts— and only 30% of the dollar volume of that segment. We know of nothing in the record that suggests that any costs that the Rich mond Plan imposes on nonminority contractors will be concentrated on a few firms. Moreover, far from up rooting settled expectations acquired through years of seniority, the Richmond Plan threatens only the con tingent possibility of future economic gain. This in terest, as the Court has emphasized, has always been entitled to only minimal legal protection. See, e.g., Andrus v. Allard, 444 U.S. 51, 66 (1979) ; Franks v. Bowman Transportation Co., 424 U.S. 747, 778 (1976); Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303, 308-309 (1927) (Holmes, J.). Finally, since Richmond had ample reason to conclude that there was substantial discrimination in the con 30 struction industry, “ it was within [the City’s] power to act on the assumption that in the past some nonmi nority businesses may have reaped competitive benefit over the years from the virtual exclusion of minority firms from these contracting opportunities.” Fullilove, 448 U.S. at 485 (opinion of Burger, C.J.). As we noted, following Justice Powell’s logic in Fullilove, the 30% fig ure chosen by Richmond was a reasonable estimate of the amount of City contracting dollars that would have reached minorities in the absence of discrimination. See page 8, supra. There is reason to believe, therefore, that the nonminority firms that are disadvantaged by the Richmond Plan may be losing only opportunities that they would not have had in the absence of prior dis crimination. David A . Strauss University of Chicago Ben n a R uth Solomon Chief Counsel State and LocalLaw School 1111 East 60th Street Chicago, IL 60637 (312) 702-9601 Legal Center 444 N. Capitol Street, N.W. Suite 349 Washington, D.C. 20001 (202) 638-1445 Counsel of Record for the April 21,1988 Amici Curiae APPENDICES I APPENDIX I Minority Business Enterprise Programs of State Governments1 2 State Citation Coverage Goals Alabama Exec. Order No. 89 (1978) 2 Arkansas Exec. Order No. 83-2 Goods and services 10% Ark. Stat. Ann. §§5-916.2 to 5-916.6 Creates MBE office; defines functions Exec. Order Proc. E083-2 Goods and services 10% 1 In addition to the procurement measures listed in the Table, Alaska law provides for an employment preference for “ economically disadvantaged minority residents” in areas of the State suffering from underem ployment. The Labor Commissioner identifies zones of underemployment. In those zones, residents who are “economically disadvantaged minority residents” have a preference for 25% of the jobs or a percentage repre sentative of the number of minority citizens in the zone, whichever is greater. Alaska Stat. § 36.10.170 (1987). Georgia allows an income tax credit of 10% of payments made by contractors to MBE subcontractors. H.B. 635 A /P , S.B. 48-7-38, eff. Jan. 1, 1985. Kansas has established an Office of Minority Business to offer advice and technical assistance to MBEs; the office helps locate resources and acts as a minority advocate. 2 The 1978 Executive Order created a Department of Small and Minority Business Enterprise to encourage those businesses. The policy was to be “ implemented by all State agencies, departments and institutions by purchasing a fair proportion of the supplies, commodities and services required . . . .” State Citation Arizona California Exec. Order No. 87-9 (10/22/87) Cal. Gov’t Code §§ 8790.70 - 8790.87 (West 1987) Cal. Gov’t Code § 14132,eff. Jan. 1,1989,1988 Cal. Stat. ch. 9 Cal. Gov’t Code § 14839 (West 1987) Cal. Gov’t Code § 16850, eff. Jan. 1,1989,1988 Cal. Stat. ch. 61 Cal. Pub. Cont. Code § 10108.5, eff. Jan. 1,1989 (West 1988) All contracts 3 Coverage Goals All contracts for 15% construction, professional services, materials, supplies, equipment, and repairs Highway construction 15% Establishes Office of Small and Minority Business Professional bonding 15% services State prison facilities 15% Cal. Pub. Cont. Code § 10115,eff. Jan. 1,1989,1988 Cal. Stat. ch. 61 Cal. Pub. Cont. Code § 10470 (West 1988) Cal. Sts. & Hy. Code §§ 94.3, 94.4 (West 1987) Cal. Pub. Cont. Code § 2000 (West 1987) All state contracts except highway construction Correctional facilities MBE certification provision Permits local agencies to establish MBE goals for local purchases 15% 15% Colorado Exec. Order State procurement 17% (Dec. 10,1987) Connecticut Conn. Gen. Stat. Construction, goods, 15-25% Ann. § 32-9e (1987) and services Florida Fla. Stat. Ann. Construction, 15% § 287.042 contractual services, (West 1988) commodities 8 The Executive Order expands the Governor’s Office of Affirmative Action to encompass minority and women owned business enterprises. The office is “ to facilitate, preserve and strengthen minority and womens business enterprises and ensure their full participation in the State of Arizona’s free enterprise system.” State Citation Coverage Goals (Fla. cont.) Fla. Stat. Ann. § 287.093 (West 1987) Authorizes set-asides by counties, cities, and school districts in purchases of goods and services 10% Illinois Id. Stats. Ann. ch. 127,132-600 etseq. (Smith-Hurd 1985) State contracts 10% Indiana Ind. Code § 4-13-16.5-2 (e) (7) (Michie 1987)4 State constracts 5% Iowa Iowa Code § 314.14 (West 1985) Highway construction 10% Kentucky Ky. Rev. Stat. §§45.470-45.510 (Michie 1986) Goods, services, and construction 6 Louisiana La. Rev. Stat. Ann. §§ 39:1951 to 39:1991 (West 1987)8 Public works, goods, and services 10% La. Rev. Stat. Ann. § 38:2233.2 (West 1987) Authorizes local government set-aside programs 10% Maryland Md. State Fin. & Proc. Code Ann. § 18-601 Transportation construction contracts over $100,000 10% (Michie 1985) All other state procurement 10% Massachusetts Exec. Order No. 237 (1984) ; Goods, supplies, and services 5% Mass. Gen. Laws Ann. ch. 23A, §§ 39-44 (West 1987) ; and Construction 10% 4 The State information brochure, Indiana/We’ll Help You Make It, states that the “ MBE program relies on voluntary goal setting by individual state agencies for increasing minority participation in contracts.” 5 Kentucky’s Small or Small Minority Business Purchasing Act sets no specific goals. The Act provides that the Finance and Administration Cabinet set aside contracts for minority business enterprises if the Cabinet can identify 3 minority businesses that can reasonably be expected to bid and the businesses are “capable of furnish ing the desired property or services.” 8 8 Louisiana’s Minority Business Enterprise Act deals with procurement. Louisiana’s Minority Development Act (La.Rev.Stat.Ann. §§ 51:1751 -51:1765) defines “minority business enterprise,” sets up an authority and a fund, and authorizes loan guarantees to MBEs. State Citation Coverage Goals (Mass, cont.) Mass. Admin. Reg. 509 (1984) Michigan Mich. Stat. Ann. §3.540 (51), (52) (Callaghan 1985) Construction, goods, and services 7% 7 Minnesota 8 3 A Minn. Stat. Ann. § 16B.19 (5), (6 ); § 16B.22 (1986) All procurement 9% Missouri Mo. Ann. Stat. § 33.752-5 (7) (Vernon 1988) State contracts 0 Nebraska Exec. Order (Jan. 16,1984) State contracts 10 New Jersey N.J. Stat. Ann. § 52:32-21 (WestSupp. 1987) Goods, equipment, construction, and services 7% 11 N.J. Stat. Ann. § 58:llB-26 (West Supp. 1987) Wastewater treatment trust: Local government purchases 10% N.J. Stat. Ann. §§5:12-184-5:12-190 Purchases of goods and services by casinos 15% (West Supp. 1987); 1987 N.J. Sess. Law Serv. ch. 137 (West) New Mexico Exec. Order No. 83-52 Each Cabinet (1983)12 Department Negotiated fair share (no numeric goals) 7 The Michigan statute (Mich.Stat.Ann. §§ 3.540(31)-3.540(35)) authorizes a Minority Business Enterprise Division within the Department of Commerce. The Division must develop plans and specific program goals. The procurement policy requires a goal of “not less than 7%.” Mich.Stat.Ann. §§ 3.540(51), (52). 8 The Minnesota statute authorizes a set-aside for the “ socially and economically disadvantaged,” including “racial minorities, women, or persons who have suffered a substantial physical disability.” 8 Mo.Ann.Stat. §§ 33.750-33.755 creates a Minority Business Development Commission. Mo.Ann.Stat. § 33.752-5(7) states that it is the duty of the Commission to “ [ejstablish as a goal that state contracts be let to racial minority businesses.” The statute contains no specific percentages. -d S3 10 Article IV of the Executive Order requires each department to prepare an Affirmative Action Plan of Implementation for the Internal/External Contract Compliance Program. The plan “shall facilitate the promotion and enhancement of economic opportunities for all disadvantaged businesses and members thereof.” 11 The New Jersey Set Aside Act for Small Businesses, Female Businesses, and Minority Businesses (N.J.Stat. Ann. §§ 52:32-17 to 52:32-30) states that at least 25% of state purchases of goods, equipment, services, or con struction must be purchased from small (15% ), minority (7% ), or female (3% ) businesses. The 1987 legisla ture established a grant program to counties and municipalities for pilot programs to assist in the development of small, minority, and women owned businesses. 1987 N.J. Sess.Law Serv. ch.56 (West). 12 As of April 18, 1988, a new executive order is pending. State Citation Coverage Goals New York N.Y. Gen. Mun. Law §§955-969 (McKinney 1986) N.Y. Transp. Law §428(2) (McKinney 1983) N.Y. Unconsol. Laws § 6267 (McKinney 1983) Exec. Order State construction 13 No. 21 (1983) contracts, goods, and services 12% North Carolina N.C. Gen. Stat. § 136-28.4 (Michie 1987)14 Exec. Order No. 34 (1987) Contract purchases 4% Ohio Ohio Rev. Code Ann. §§ 122.71(e); 123.151;125.081 (Page 1984)15 Construction 5% Oklahoma Okla. Stat. Ann. tit. 74, § 85.45c (West 1987) Goods and services 10% lfl Oregon Or. Rev. Stat. §§ 200.005 - ” 200.085 (1987) 13 * 15 * 17 13 The New York State Economic Development Zones Act defines an MBE and provides that economic devel opment zone plans must contain a description of programs to stimulate MBEs. N.Y. Gen.Mun. Law 962(h). MBEs must also be given an opportunity for “meaningful participation” in a “ fair share of contracts” for New York City transit projects. N.Y. Pub. Auth. Law § 1266-cl4(a) (i) (McKinney 1986). w The North Carolina law declares that it is state policy to “ encourage and promote use of small, minority, physically handicapped and women contractors” in construction of state roads. N.C.Gen.Stat. § 143-135.5 contains a similar provision for the construction of public buildings. 15 In addition to the set-aside program, Ohio law establishes both a minority business development commis sion (Ohio Rev.Stat.Ann. §§ 122.92-122.94) and a minority development financing commission (Ohio Rev.Stat. Ann. §§ 122.71-122.85). There is also a special bonding program for minority contractors (Ohio Rev.Stat.Ann. §§ 122.87- 122.89). 18 The Oklahoma statute requires the State Purchasing Director to certify annually the percent of funds expended on state contracts which have been awarded to minority business enterprises. I f the percentage is less than 10%, then a 5% bid preference goes into effect. The percentage is adjusted annually according to formula. Okla. Stat. Ann. tit. 74, § 85.45c(B). 17 The Oregon Minority and Women Business Assistance Act defines disadvantaged, minority, and women business enterprises, establishes a certification procedure, prohibits fraud, establishes an advocate to “assist in the development and implementation of an aggressive strategy . . . that encourages participation of minorities and women in the state’s economy,” and sets standards for good faith efforts to meet goals. Or.Rev.Stat. §§ 200.005 - 200.085. State Citation Coverage Goals Pennsylvania 73 Pa. Stat. Ann. §§390.1-390.18 (1987) 18 Exec. Order No. 1987-18 (1987) State agency purchases Rhode Island R.I. Gen. Laws §§ 37-14.1-1 to 37-14.1-8 Any and all goods and services 10% Exec. Order No. 85-4 (Feb. 20,1985) State purchases 10% minimum South Carolina S.C. Code Ann. §§ 11-35-5010 to 11-35-5270 (Law. Coop. 1986) Total procurement 19 Tennessee Tenn. Code Ann. § 4-3-728 Community development block grants 20 Texas Tex. Civ. Code Ann. art. 4413 (301) State procurement 21 10a 18 The Pennsylvania Minority Business Development Authority Act creates an authority and a bureau as part of the Department of Commerce and establishes a development fund. The Authority can lend money and guarantee investments in MBEs. The Executive Order creates an Office of Minority and Women Business Enter prise to “aggressively pursue contracting and subcontracting opportunities for MBEs . . . with State Govern ment.” Each agency is to “establish specific goals for meaningful and significant participation of MBEs . . . .” The Order also requires all departments, boards, and commissions to appoint a minority business coordinator to cooperate with the Office of Minority and Women Business Enterprise in developing an effective program in each agency “ in establishing specific goals . . . .” Id. at 4 and 5 (d ). 19 The law, which applies to all procurement, states that each agency director must set up an MBE plan an nually with a goal that a “ reasonable percentage” of the agency’s “ total procurements” will be purchased from minority businesses. S.C.Code Ann. § 11-35-5240(1). The South Carolina law also sets up a Small and Minority Business Assistance Office that provides lists of minority contractors, training of minority contractors, other training programs, and special publications. S.C. Code Ann. § 11-35-5270. The S.C. Department of Highways & Public Transportation is required by its enabling legislation to expend 5% of its construction funds with “ small business concerns owned and controlled by economically and socially disadvantaged individuals.” S.C.Code Ann § 12-27-1320 (Law.Coop.Supp. 1987). 20 21 20Tenn.Code Ann. §§ 4-26-101-4-26-105 (Michie 1985) defines “ disadvantaged business” enterprises; the statute authorizes the Department of Economic and Community Development to assist disadvantaged businesses by offering aid and developing loan sources. That statute contains no specific goals. Tenn.Code Ann. § 4-3-728, however, states that a “substantial portion” of community development block grants must be used, when “reason ably possible,” for contracts with disadvantaged businesses. 21 Several provisions of Texas law concern MBEs. Tex.Civ.Code Ann. art. 4413 (301), §§ 5.001-5.007 sets up a program to assist small businesses, including “ disadvantaged” businesses. The Office of Small Business Assistance must offer guidance, assist with bidding, and foster participation by those businesses in state procurement. State agencies must keep data on the number of contracts awarded to disadvantaged businesses. Tex.Civ. Code Ann. art. 1118y, §20 (d )(1 ) (Vernon 1988) authorizes regional transportation authorities to adopt MBE programs; Tex. C.P. & R. Code Ann. § 106.001 defines an MBE and authorizes municipalities to establish MBE programs. 11a State Citation Coverage Goals Virginia Va. Code § 11-48 (Michie 1985) 122 Governor’s Memorandum re: Minority Business Procurement Goals (1/15/83) Contractual services, supplies, materials, and capital outlay projects 1.3% Governor’s Memorandum re: 1984-85 goals (10/12/84) State purchases as above 3-5% Washington Wash. Rev. Code Ann. §§ 39.19.010 to 39.19.921 (West 1988) Goods and services 23 Wisconsin24 Wis. Stat. Ann. § 16.855 (10m) (a) (West 1987) Wis. Stat. Ann. § 16.75 (3m) (a) ; § 16.87(2) (1985-86); Construction contracts 5% 12a Wis. Stat. Ann. § 560.036 (West 1987) 23 The statute is intended to foster small businesses and those owned by minorities and women. “All public bodies shall establish programs” to facilitate the participation of minority businesses in state procurement trans actions. 23 The Washington Code establishes an Office of Minority and Women’s Business Enterprises. The Office must establish overall goals for each state agency and educational institution for the procurement of goods and services, including professional services, from minority and women owned businesses. The programs are to be adminis tered on a contract-by-contract basis or in a class-of-contract basis. Washington law also requires “ first class cities” (those over 20,000) to “ invite at least one proposal from a minority or woman contractor” when letting bids on “ small public works.” Wash. Rev. Code Ann. § 35.22.650. All contracts exceeding $10,000 let by first class cities must contain a clause that requires the contractor to “ actively solicit” employment of minority group mem bers and to solicit bids from minority group subcontractors. Wash. Rev. Code Ann. § 35.22.620(7) (b). 24 24 A number of Wisconsin statutes contain specific goals for minority business enterprises: Wis.Stat.Ann. § 84.075—a 5% set-aside provision for engineering services and highway construction and maintenance contracts; Wis.Stat.Ann. §16.87 (2 )— 5% set-aside for engineering, architectural, and environmental consultant services; WIS.Stat.Ann. § 16.75 (3) (3m) & (b )— 5% set-aside for purchase of materials, supplies, equipment, and con tractual services by the legislative and judicial branch. Wisconsin municipalities with sewer construction projects funded under the combined sewer overflow abatement program must set goals of awarding 20% of the subcontracts to MBEs. Wis.Stat.Ann § 66.905. APPENDIX II Minority Business Enterprise Programs of Municipal and County Governments 1 The city and county programs listed on this chart include a wide variety of initiatives, including contracting goals, subcontracting goals or requirements, good faith efforts, bid preferences, set-asides, workforce requirements, and outreach programs, among others. A numerical percentage in the “ Goals” column should not be read to imply a fixed and nonwaivable requirement or the absence of a waiver provision. State and City/County Citation Types of Contracts Covered Goals Alabama: Birmingham: Birm. Code § 3-3-16 Construction and purchase of goods, material, equipment, and services Encourage, facilitate, and effect greater minority participation 2 Alaska: Anchorage Mun. Code § 7.60.010 All Mayor sets annual goals et seq. ; Mun. Reg. on recommendation of 7.60.006 MBE coordinator Juneau Ord. Serial No. 80-26; Construction 12-15% Res. Serial No. 677; Services 2% 14a City & Borough Code Goods § 53.50.95 and program guidelines Other North Slope Borough Mun. Code § 2.36.130 All Soldotna Female and Minority FAA assisted Enterprise Program (Sept. 1980, rev. Jan.1984) proj ects 2% 5 % 5% bid preference 5% 1 2 1 This list is intended to be illustrative only and should not be regarded as exhaustive. The information in this appendix was collected from a survey drafted by the State and Local Legal Center and circulated through three channels to more than 3,600 state and local government officials. The Legal Center mailed the survey to more than 200 minority business development coordinators and contract compliance officers from mailing lists obtained from the Minority Business Enterprise Legal Defense and Education Fund, Inc., which has published another compilation in its Report on Minority Business Enterprise Programs of State and Local Governments (Jan. 1988). The National Association of Counties mailed the survey to 350 elected county executives, 780 pro fessional county managers, and 3O0appointed county civil attorneys. The National Institute of Municipal Law Officers mailed the survey to 2000 city attorneys. More than 700 responses were received. All information con tained in this appendix is on file at the State and Local Legal Center. 2 This plan was adopted after a goal of 10% participation by minorities in city contracts was invali dated. Arrington v. Associated General Contractors, 403 So.2d 893 (Ala. 1981), cert, denied, 455 U.S 913 (1982). 15a State and City/County Arizona: Maricopa County Mesa Phoenix Tucson California: Anaheim Bell Gardens Types of Citation Contracts Covered Goals Program scheduled for adoption May 1988 Res. No. 4556 (1980) Res. No. 15629 Overall goal CDBG funds City-wide MBE utilization plan Res. No. 13567 All 10% 12% Same percentage city-wide as applicable to federal grant-in-aid programs Dollar value set on case-by-case review Res. No. 85R-311 Res. No. 84-11 All Federally funded construction projects 11.9% 10% goal and failure to meet goal can be grounds for rej ecting 16a the low bid on a particular project Culver City Res. No. 86-R048 UMTA funds 10% Fresno Res. No. 87-344 Construction 25% Gardena Minute resolution (2/17/84) UMTA funded proj ects 13.1% Hayward Ord. No. 86-09 C.S. Procurement contracts over $10,000 Public works contracts exceeding $100,000 10% bid preference for MBE Percentage goal set annually Los Angeles Exec. Directive All, with some 12-20% No. 1-B (March 29,1983) dollar minima set by Dept. Oakland Ord. 9739CMS (March 13,1979) Purchasing 30% goal and 10% preference Res. 60691 (June 15,1982) Construction 30% Res. 58715CMS (Feb. 19,1980) Professional services 40% Pasadena Res. No. 83-2 (1983) Community develop ment funds 20% 17a State and City/County Citation (Pasadena cont.) Res. No. 54-82 (1980) Richmond Res. No. 183-84 Sacramento Res. No. 85-328 Types of Contracts Covered Goals All contracts 10% Construction population employment parity Construction 20% contracting Permanent proj ect good faith employment effort to achieve 125 % of SMSA as of 1980 census (but not less than 35%) Business 20% developed by the City Goods, services, 20% and franchises Procurement 20% (combined MBE and WBE) Santa Clara County San Diego San Francisco San Jose Santa Monica Solano County 8 This plan was Francisco, 813 F.2d Bd. of Supervisors Policy, Dec. 11, 1984 Res. Nos. R-262633: R-270402 Ord. No. 139-84, S.F. Admin. Code ch. 12D ® Res. No. 56342 (1983) ; Res. No. 59890 (1987) ; Res. No. 58915 (1986) Res. No. 6386 (1981) Ord. No. 1310 (1987) Construction Services contracts of $12,000 or more Construction Consultant Vendor Overall goal All contracts All purchases Construction contracts over $50,000 Public works and all purchasing All for-profit contracts 12% contract-by contract 20% 12% 10% 30% 5% bid preference 10% set-aside Set for each project 10% goal (22% achieved) 13% largely invalidated in Associated General Contractors of California v. City & County of San 922 (9th Cir. 1987), pet. for rehearing pending. 19a State and City/County Citation Types of Contracts Covered Goals Stockton Res. No. 87-0584 All public works, supply, and services contracts over $20,000 15% Colorado: Denver Ord. No. 246 (1983) Construction, professional services, and design 20% Greeley Ord. No. 420 Federally funded projects Annual goals Connecticut: Hartford Resolutions of June 10,1985, and Feb. 14,1983 Construction At least 10% MBE and WBE with determi nation to be made for partic ular contracts whether a greater percent age for MBEs is possible 20a New Haven Ord. No. 121/2 (1965) Construction projects over $100,000 15% Delaware: New Castle County Exec. Order No. 12 (1985) All contracts 15% Wilmington 1 Wilm. Code §§ 20-40 Construction 15% set-aside through 20-43 All contracts 25 % goal in FY 1990 District of D.C. Code §§ 1-1141 All contracts 35% unless Columbia to 1-1150 otherwise set Florida: Alachua County Ord. No. 86-8 All bid contracts Specific contracts 15% (subject to reevalu ation) Percentage can be set aside Broward Ord. No. 84-14; All procurement Annual goals County Admin. Order No. except medical and proportioned 852; Res. Nos. 84-1688 and 87-3570 legal services, and construction contracts over $150,000 to population 21a State and City/County (Broward Cty. cont.) Daytona Beach Dade County Escambia County Types of Citation Contracts Covered Goals Particular Percentage can contracts be set aside to remedy past acts of discrim ination Ord. No. 84-131, Subcontracts 10% City Code ch. 131/2, art. II Cty. Code § 10-38 Construction Contract specific Cty. Code § 2-8.2 Goods and services Contract specific County Commission Contracts for goods Policy Statement, and services in the March 4,1983 construction industry: $1 million or less 10% $1 to 10 million 5% over $10 million 1% 22a Fort Lauderdale Code § 2-40.1 Procurement Equitable opportunity to participate Fort Myers Ord. No. 2333 (1986) All contracts and subcontracts 12% Gainesville Res. No. 86-60 All Must take affirmative action to solicit quotations from MBEs; all factors being equal, preference shall be given MBEs Hialeah City Code § 2-5 (1984) Contracts over $50,000 25% of contractor’s workforce must be minority Hillsborough County Res. No. R 86-0170 Construction contracts of $100,000 or more Goods and services 25% 5% 23a State and City/County Citation Types of Contracts Covered Goals Jacksonville Ord. No. 83-1200-647 All 10% Leon County Bd. of Commissioners Policy, Sept. 29, 1987 Capital improvement budget (except construction), equipment, commodities, and services 5% Miami Ord. No. 10062, City Code § 18-67 Procurement 51% Orange County Cty. Code art. IV, ch. 1, § 1-63 to 1-69 All contracts and subcontracts 18% Orlando City Code, ch. 57, art. II Construction, services, and supplies 18% Palm Beach Ord. No. 88-4 All Encourage County participation by MBEs and use good faith efforts to achieve 24a Pensacola St. Peters burg Tallahassee Tampa the maximum use of MBEs 4 Ord. pending passage to create § 3-3-4 of Pens. Code (formerly by executive policy) All 15% City Code ch. 2, art. Ill, § 2-57 Goods and services 10% City Code ch. 2, art. Construction Contract by Ill, § 2-59 contract Res. No. Contracts over 15% 82-R-1216 $100,000 Exec. Orders No. 85-19 and 86-14 All contracts 25% Georgia: Atlanta Admin. Order Contracts over Set annually No. 84-5 $25,000 and (35% for contracts for 1985) professional or consulting services 4 A draft ordinance including overall goals for MBE participation in county contracting was redrafted fol lowing the Fourth Circuit’s decision in the Croson case. Memorandum of March 31, 1988, to the State and Local Legal Center from Maureen Cullen, Assistant County Attorney, Palm Beach County, Florida. 25a State and City/County Citation Types of Contracts Covered Goals Augusta Res. No. 9842 (1984) Transit Dept, contracts 10% Dekalb County Res. of Aug. 15,1982 All 15% Fulton County Res. of July 17,1987 Contracts over $25,000 and contracts for professional or consulting services Goal of 20% for FY 88; set annually Macon Res. No. R-83-0008 Inner city development project Start-up costs for MBEs Richmond Bd. of Commissioners Contracts over Foster and County Policy Statement, 12-1-87 $25,000 and contracts for professional or consulting services promote MBEs; actively solicit bids 26a Hawaii: Maui Res. No. 82-3 Federally assisted projects Illinois: Bloomington City Code ch. 22.2 Construction Evanston Res. No. 59-R-73 All goods and services Specific projects and commodities Peoria City Counsel Policy and City Affirmative Action Plan 1985-88 Subcontracts Peoria County Affirmative All County Action Policy, August 14,1984 10% 8.9% (by population) Must solicit bids from MBEs Percentage set aside annually by city manager 10% County will not con tract with any busi ness that does not have an affirmative action plan; con tractor must supply information on 27a State and City/County Citation Types of Contracts Covered Goals (Peoria Cty. cont.) racial composition of workforce during bidding Rockford Mayor’s Program on Minority Businesses (1985) All Recruits and refers MBEs Equal Employment All contractors Must maintain Opportunity Ord. No. 91/2 with the City a minimum 9% minority workforce Indiana: Anderson Resolutions 1981 and 1985 Construction and other purchases 10% Fort Wayne Gen. Ord. No. Procurement 15% G-84-07 (1984) Construction 10% Indianapolis/ Marion County Exec. Order No. 1 (1987) All 10% Iowa: 28a Cedar Rapids Res. Nos. 532-4-84; All 5% 1373-9-85; 76-1-86 Federally funded projects 10% Des Moines Contract Compliance Public works contracts 7-9% Program and Policy Statement (1986) Professional services 4% Iowa City Res. No. 83-417 All Contracts over $25,000 3% Contractor must have affirmative action program Mason City Human Rights Code, All 2% tit. II Federally funded projects 10% Waterloo Res. No. 1986-58 Construction projects over $100,000 5% Construction funded all or in part by federal funds 10% Kansas: Lawrence Ord. No. 5436 All contracts over 12.9% (1983) $10,000 Leavenworth Res. No. B813 Construction 10% (1984) Wichita Admin. Reg. 64 CDBG funded 10% (1983) construction 29a Types of State and City/County Citation Contracts Covered Goals Kentucky: Jefferson Res. No. 75, Construction 15% Series 1987 subcontracts Lexington/ Code § 2.46 All Policy to encourage Fayette County use of MBEs Louisville Ord. No. 136 All 5% credit on MBE bids (1983) if 20% of prior year’s expenditures are not awarded to MBEs 5 Proposed Ord. All MBE Utilization Plan Louisiana: Baton Rouge City Ord. No. 10390; Construction contracts 10% Parish Ord. No. over $100,000, 16793 (1980) professional services, equipment, and supplies Calcasieu Motion of Police Jail and Courthouse 10% Parish Jury Jan. 21,1988 Improvement Project Lake Charles Ord. No. 6747 (1980) All 10% 30a Monroe New Orleans Ord. Nos. 7932 (1986); 7322 (1981) City Ord. No. 2-50.5; Exec. Order 84-01; Admin. Dir. 210 Shreveport Exec. Order No. 88-1 Maryland: Anne Arundel County MBE Procurement Guidelines and Pro cedures, Nov. 1985 5 This plan was invalidated in J. Edinger & Son, 1986). 10%All DOT assisted programs Construction and 20% goal and public works 1 % set aside contracts over $100,000 Construction and 10% purchases Professional services 5 % All contractors on Must take affirmative contracts over steps to use MBEs, $10,000 including soliciting bids and either con firming use of MBE subcontractors or showing good faith efforts; noncompliance with MBE policy can be grounds for denial of contract and actions against contractor Inc. v. City of Louisville, KY, 802 F.2d 213 (6th Cir. 31a State and City/ County Citation Types of Contracts Covered Goals Baltimore Ord. No. 790 (1986) All 20% Baltimore Exec. Order Capital improvement 10% County (1983) projects over $100,000 Howard Cty. Code tit. 4, All 10% if solely County subt. 1, § 4.103(d) city funded, 15% if federally funded Montgomery County Cty. Code § 11B-23A All contracts over $75,000 15% Prince George’s County Ch. 102,1984 County Laws; chs. 87 & 88, 1987 County Law; CR-33-1985; CR-107-1987 All 30% Massachusetts: Amherst Selectmens Policy G-2-11-86 All 5% Arlington Town Plan (1984) Construction, supplies, 5% materials, services, and equipment 32a Attleboro MBE Plan/Statement of Policy, Dec. 1981 Boston Exec. Order, Dec. 1, 1987 Fitchburg Policy Statement (1986) Lynn Policy Statement (1985) Malden Ord. No. 754 (1985) Marlborough MBE Policy Statement (1982) New Bedford Exec. Order No. 3 (1986) Springfield Exec. Order (1984) Construction contracts over $50,000, other contracts over $4,000 Goods and services Construction Construction in an impacted area All contracts and purchases Construction contracts over $150,000, goods, services, and supplies Goods, services, and supplies Purchases over $25,000 Construction, materials, goods, and services All 5% 15% 15% 30% 10% 10% 10% 5% 10% 5% 10% MBE and WBE combined 38a State and City/County Citation Types of Contracts Covered Goals Michigan: Battle Creek Res. No. 114 (1980) All contracts over Failure to comply with Detroit City Code 18-5-31 et seq. $10,000 and all con tractors with more than 15 employees Construction All city contracts affirmative action package precludes award of contract and can be basis for sanctions Contractors must employ minimum SMSA minorities 20% Flint Res. No. R-19 Construction contracts 20-46% phased Grand Rapids (Feb. 11,1985) City Commission over $10,000 Construction contracts in by 1990 10% Saginaw Policy, May 25,1982 (Code 1600-05) City Ord. D-1516 (1986) over $10,000 Other contracts Construction contracts $50,000-$100,000 $100,000-$250,000 over $250,000 Use of MBEs is encouraged 9% 12% 15% 34a Procurement up to 20% set aside for MBE/WBE Minnesota: Hennepin County Res. No. 7221 All above $50,000 Construction 6-10% Services 10% Goods 10% Construction 10% subcontracting Minneapolis Ord. No. 139.50; Purchases and 10% Res. of Dec. 20,1980 construction Development 15% St. Paul Admin. Code ch. 81 All 5-15% Twin Cities Res. No. 87-262 Construction and Percentage set on Metropolitan engineering each contract Waste Control Commission Goods and Services Goals of 31/2 to 10% Mississippi: Jackson Order 3-Z-323 (1985) All 15% 35a State and City/County Citation Types of Contracts Covered Goals Missouri: Independence City Affirmative All contracts 2.5% Kansas City Action Plan (rev. 1988) Admin. Reg. of over $10,000 Construction 16% City Manager Supplies 10% (Sept. 5,1980) Services 15% St. Charles Admin. Policy All Good faith effort St. Louis Jan. 1987 Exec. Order Construction 25-30% city Dec. 6,1984 contracts over residents in $100,000 contractor’s workforce, of whom 50% must be minorities Nebraska: Lincoln Ad. Reg. No. 12 (1984) All contracts Good faith efforts Omaha City Code ch. 10, Central Park 10% § 10-108 Mall § 10-194 All Must solicit 36a Nevada: Nye County Res. No. R8 5-2A New Jersey: Atlantic City Atlantic County Atlantic County Improvement Authority Ord. No. 14 (1979); Exec. Orders No. 1 (1985) and No. 2 (1984) County Exec. Order, May 19,1983 P.L. 1975, ch. 127 All bids from minority sub contractors 5% of contracts and 5% of dollar value of contracts All contracts over $10,000 5% All 25% Construction contracts over $100,000 All 15% 15% combined MBE and WBE 37a State and City/County Citation Types of Contracts Covered Goals Camden Ord. MC 1964 (June Construction, goods, 25% to 50% 1983) and services subcontracting (depending on size of contract) Ord. MC 2274 (Feb. 1987) Construction, services, and procurement 15% set aside East Orange Ord. No. 7 (1982) Construction and capital goods 25% Newark Ord. No. 6S & FE Construction Goods and services 33 1/3% 25% New Brunswick Rev. Ord. No. 2-6v All procurement, Percentage negotiated (Aug. 1986) all major construction projects and other enterprises on contract-by contract basis Plainfield Mun. Code art. 18, § 11-18-1 Construction subcontracting 25% Union County Res. No. 676-87 All purchases unless county has no discretion as to payee 7% 38a New Mexico: Albuquerque Bill No. R-19, Enactment No. 27-1986 All public money expended by City for purchase of goods and services US DOT funds 10% 15% New York: Albany City Code § 1-706 to 1-718 All 17.8% Albany County Res. No. 124 (1985) All contracts over $100,000 10% Binghamton Ord. No. 83-31 All 10% Broome County Res. No. 260 (1983) ; Res. No. 139 (1985) Construction contracts over $100,000 3.5% Buffalo Common Council Proceedings 169 May 1,1979 CDBG funded construction and demolition contracts 10% Erie County Local Law No. 6-1987 All contracts of County Dept, of Public Works and Dept, of Planning 10% 39a State and City/County Citation (Erie Cty. cont.) Monroe County Exec. Order No. 1 (1983) New York N.Y.C. Admin. Code tit. 6, § 6-108.1; § 6-108.2 Rochester Res. No. 80-83 (1980 and annually thereafter) Syracuse City Charter, ch. 42 North Carolina: Chapel Hill Disadvantaged Business Enterprise Program, September 1984 Types of Contracts Covered Goals and Engineering over $100,000 Construction Construction con tracts in economic developments areas Construction Construction contracts: $20,000 to 100,000 over $100,000 US DOT contracts 10% 10% for locally based enterprises including MBEs Percentage set annually by City Council 10% 15% Each contract to have goals; failure to meet goals or show good faith effort can result in determination 40a Charlotte N.C. SB 290, ch. 344 (1987); City Plan, Nov. 23,1987 Durham Res. No. 5797 Res. Book 6, p. 41 Greensboro Code ch. 2, art. IV, § 2-117 (1985) Mecklenburg County Bd. of County Commissioners, Minority and Women’s Business Enterprise Program (1986-87) Winston- Salem Res. Adopting Minority and Women Business Enterprise Program (July 18,1983) Construction Procurements and pro fessional expenditures Federally assisted airport construction US DOT UMTA funds Services, materials, and construction Commodities, services, construction, and repair work Construction and consulting Procurement and professional services Construction that bid is not responsive 10% 3 % 14% 13% 20-35% 10% 10% 3% Goals negotiated for each contract; 5 % penalty if contractor fails to meet 41a Types of State and City/County Citation Contracts Covered Goals Ohio: Akron City Code § 34.10 Construction 15% Equipment, supplies, 7% materials, nonpro fessional services Professional services 5% Cincinnati Ord. No. 242-1987 Construction 20% Equipment, supplies, 7% materials, nonpro fessional services Professional 5% services Cleveland City Codified Ord. Construction 30% ch. 187 Services 20% Professional services 30% Supplies 20% Concessions 15% Columbus City Code §§ 3901- Construction, 10% 3927 services, purchase or lease of personal property 42a Cuyahoga County Res. No. 737333 (1987) Construction contracts over $10,000 Supplies, goods, and services over $10,000 Contracts between $1,000 and $10,000 Dayton R.C.G.O. §§ 35.30-35.35 R.C.G.O. - 35.40-35.47 Construction Goods and services Sheltered market: Construction Goods and services Elyria Ord. No. 83-758 Construction Supplies, services, and professional contracts Lima Ord. No. 131-86; Exec. Order (12/20/ 82, revised 4/7/83) CDBG funded contracts Lorain Ord. No. 23-82 Construction Supplies Lorain County Res. No. 84-547 Contracts over $20,000 for construction, supplies, and services 15% Percentage may be set aside 20% 5% 15% 2.5% 14% 5% 25% 16% 15% 5% 15% 43a State and City/County Citation Types of Contracts Covered Goals Massilon Montgomery County Springfield Stark County Ord. No. 84-1983 All 10% Res. No. 87-1509 All procurement and additional programs: 15% Construction Preference to contractor who meets subcon tracting goal Professional services Bid credits Goods under $10,000 Sheltered markets Ord. No. 84-608 Construction 10% Goods and services 5% Others Conscientious effort Bd. of County Construction Waivable Commissioners Res. contracts over 10% set aside of March 18,1986 $10,000 and 10% goal Ord. No. 80-744; All Short-term 10% 84-465 Long-term 15 % Youngstown 44a Oklahoma: Tulsa Res. of 4/18/86 Pennsylvania: Harrisburg Ord. No. 7-1983 Philadelphia Phila. Code, ch. 17-500 South Carolina: Charleston City Code § 2-267 Columbia Res. No. R-86-10 (1986) All Each City Dept, to set feasible goals Construction 15% Equipment purchases 5% Material, supplies 10% Services 15% Professional services 15% Construction, 15% vending, and services Construction Services Supplies All Set annually, but not less than 8% 3% 5% Specific procure ment goals set annually; specific contract goals set 45a State and City/County Citation Types of Contracts Covered Goals (Columbia cont.) on each prime con tract of $25,000 or more Richland County Ord. No. 1068-83HR All over $5,000 15% South Dakota: Sioux Falls Res. No. 158-86 Res. No. 36-88 City street projects Construction 5% 10% Res. No. 271-85 Procurement Equitable opportunity to compete Tennessee: Chattanooga Res. No. 13618 Contracts over 10-13% $500,000 Memphis Ord.introduced All goods and services 10% 3/17/87 Construction contracts 10% over $100,000 Shelby County Res. No. 18 (1986) All 10% Texas: Austin Ord. No. 87-0219-Q Construction contracts 5% 46a Beaumont Dallas El Paso Fort Worth Res. No. R-86-164 Res. No. 84-5301 Ord. of Aug. 13,1985 City Council Policy, July 8,1986 Ord. No. 84-1309Houston Construction 10% subcontracts Goods and nonprofes- 10% sional services Professional services 5% Construction 10% over $50,000 Professional services 20% over $25,000 Over $25,000 17% $10,000 to $25,000 2% Under $10,000 7% Construction 25% Professional services, 20 % equipment, supplies, services All 12% Construction 12% over $1 million Goods over $100,000 9% Services 19% 47a State and City/County Citation Types of Contracts Covered Goals Lubbock City Council All contracts Good faith Minority/Women Business Enterprise Statement, March 1984; Res. No. 667 (Dec. 11,1980) and projects effort San Antonio Ord. No. 51954 Procurement 5-9% (1980) Construction Professional services 12-15% 32-35% Virginia: Richmond Mun. Code § 12-156 (a)6 Construction 30% Mun. Code § 12-156 (b) All other contracts 20% Washington: King Cty. Code ch. 4.18 Construction 18% County of 1982, amended by Services 10% Ord. Nos. 7789, 8121, Goods 15% 8313 Concessions Consultant 10% 15% 48a Renton R.C.W. § 35-35.22.650 Construction Set by contract Seattle Ord. No. 109113, Construction and 20% codified at Mun. consulting Code ch. 20-46 Purchasing 15% Spokane City Council Res. All contracts 5% 1988 Tacoma Official Code Construction 15% ch. 10.26 Wisconsin: Madison Res. No. 39,920 Consulting, Overall goal 10% construction, and specific vendor projects 5% Milwaukee Mun. Ord., ch. 360 All projects 28 % phased in over 7 years (enacted 1987) Milwaukee Ord. chs. 32, All procurement, 15% County 42, 44 professional services, construction 6 This plan is under review in this case. 49a State and City/County Citation Types of Contracts Covered Goals Milwaukee Sewerage District Exec. Orders No. Construction 12138, 11625, 12432; NR 128.14 Professional services Racine County Ord. under consideration 7 10% 1980-82 and 15% thereafter 10% until 1984 and 15% thereafter 7 Memorandum of March 28, 1988, from Joseph R. Buchanan, Racine County Affirmative Action Officer. 50a