Fullilove v. Kreps Brief of the American Civil Liberties Union and the Society of American Law Teachers Board of Governors, Amici Curiae

    In the

Supreme Court of ttjc United States
October Term, 1979

No. 79-1007

H. Earl F ullilove, e t a l ,  

—against—

Petitioners,

J uanita Kreps, Secretary of Commerce of 
the United States of America, et al.,

Respondents.

ON WRIT OF CERTIORARI TO THE UNITED STATES 
COURT OF APPEALS FOR THE SECOND CIRCUIT

BRIEF OF THE AMERICAN CIVIL LIBERTIES UNION 
AND THE SOCIETY OF AMERICAN LAW TEACHERS 

BOARD OF GOVERNORS, AMICI CURIAE

Frank A skin
Rutgers University Law 

School
Newark, New Jersey 

07102
Robert S edler

Wayne State University 
Law School

Detroit, Michigan 48202 

Attorneys for SALT

E. Richard Larson 
Edna D. W ells 
B urt N euborne 
B ruce J. Ennis

American Civil Liberties 
Union Foundation 

22 East 40th Street 
New York, New York 

10016

Attorneys for ACLU



T A B L E  OF C O N T E N T S
P a g e

Interest of the A m i c i .............1
Statement of the C a s e .............8

1. The Background of 
Minority Business 
Enterprise Programs. . . .  12

2. The Background of 
Government Contracting . .22

3. The Enactment of the 
MBE Ten Percent Set
A s i d e ................... 26

Summary of Argument.................39

Argument ....................... 4 7

I. THE MBE TEN PERCENT SET ASIDE 
IS CONSISTENT WITH TITLE VI 
AND LAWFUL IN VIEW OF THE 
CONTROLLING PRINCIPLE THAT 
SUBSEQUENT SPECIFIC CONGRES­
SIONAL ENACTMENTS PREVAIL
OVER PRIOR GENERAL ONES. . . .  50

II. THE MBE TEN PERCENT SET
ASIDE, WHICH HAS NEITHER A 
DISCRIMINATORY EFFECT NOR A 
DISCRIMINATORY PURPOSE, IS 
CONSTITUTIONAL UNDER THE 
STANDARDS APPLIED IN UNITED 
JEWISH ORGANIZATIONS BY 
JUSTICES WHITE, STEVENS AND 
REHNQUIST, AND BY JUSTICES 
STEWART AND POWELL ........ 59



P a g e

III. THE MBE TEN PERCENT SET ASIDE 
ALSO IS CONSTITUTIONAL UNDER 
THE INTERMEDIATE STANDARD OF 
REVIEW APPLIED IN BAKKE BY 
JUSTICES BRENNAN, WHITE,
MARSHALL AND BLACKMUN . . . .  68
A. Because the MBE Ten

Percent Set Aside Is 
Similar in Formulation 
and Purpose to the 
Sixteen Percent Special 
Admissions Program at 
Issue in Bakke, the 
Intermediate Standard 
of Review Is Applicable 
Here ...................... 69

B. The Intermediate Standard
of Review Also Is Applic­
able because— as Justice 
Powell Pointed Out in 
Bakke— the Racial Classi­
fication Here Is Premised 
upon Congressional Find­
ings of Severe Minority 
Underrepresentation in 
Government Contracting . . 72

C. The MBE Ten Percent Set
Aside Is Necessary To 
Remedy Substantial and 
Chronic Minority Under­
representation in 
Government Construction 
Contracting, and It 
Does Not Stigmatize Any 
Group..................... 8 7

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IV. EVEN IF THE STRICT SCRUTINY 
STANDARD OF REVIEW WERE 
APPLICABLE, THE MBE TEN 
PERCENT SET ASIDE STILL 
WOULD BE CONSTITUTIONAL . . . .  94

A. Under the Standards 
Applied by Justice 
Powell in Bakke,
Congress Is both Author­
ized and Competent To 
Find Minority Underrep­
resentation in Government 
Contracting and To Devise 
a Remedy for that Under­
representation ...........94

B. The MBE Ten Percent Set 
Aside Furthers a Compel­
ling Governmental Purpose 
and No Less Restrictive 
Alternative Is Available . 103

CONCLUSION..........................112

P a g e

Cases

TABLE OF AUTHORITIES

A. J. Raisch Paving Co. v. Kreps,
No. 77-3977 (N.D.Cal. Dec. 15,
1977) .......................... 48

Arlington Heights v. Metropolitan
Housing Development Corp., 429
U.S. 252 (1977).....................  59

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Associated General Contractors 
of America, Inc. Alaska Chapter 
v. Kreps, No. F78-1 (D.Alas.
Oct. 10, 1 9 7 8 ) .....................  48

Associated General Contractors of 
California v. Secretary of 
Commerce, 441 F.Supp. 955 (C.D.
Cal. 1977)   49

Associated General Contractors 
of Kansas v. Secretary of Commerce,
No. C.A. 77-4218 (D.Kan. Feb. 9,
1978)   48
Associated General Contractors of
Massachusetts v. Altshuler, 490
F.2d 9 (1st Cir. 1973), cert.
denied, 416 U.S. 957 (1974) . . . passim

Bridgeport Guardians, Inc. v.
Bridgeport Civil Service Commission,
482 F.2d 1333 (2d Cir. 1973) . . . .  74

Buckner v. Goodyear, 339 F.Supp.
1108 (N.D.Ala. 1972), aff1d,without 
opinion, 429 F.2d 1287 (5th Cir.
1973)   28

Bulova Watch Co. v. U.S., 365
U.S. 753 (1961)    57

Califano v. Webster, 430 U.S.
313 (1977)........... 43, 96, 100, 101

Carolinas Branch, Associated 
General Contractors of America 
v. Kreps, No. CA.M-77-165 (W.D.
Mich. Jan 4, 1 9 7 8 ) .................  49

Carter v. Gallagher, 452 F.2d 315 
(8th Cir.), modified on rehearing 
en banc, 452 F.2d 327 (8th Cir.), 
cert, denied, 406 U.S. 950 (1972)

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74



passim

Contractors Association of 
Eastern Pa. v. Secretary of Labor 
442 F.2d 149 (3d Cir.), cert. 
denied, 404 U.S. 854 (1971) . . .

Constructors Association of 
Western Pa. v. Kreps, 573 F.2d 
811 (3rd Cir. 1978) ........... 48

Florida East Coast Chapter,
Associated General Contractors 
of America v. Secretary of Commerce,
No. C.A. 77-8351 (S.D. Fla. Nov. 3,
1977) .......................... 49
Fullilove v. Kreps, 584 F. 2d 600
(2d. Cir. 1978).................  5, 48

Frank Coluccio Construction Co. v.
Kreps, No. F78-9-Civ.(D. Alas.
Oct. 5, 1 9 7 8 ) ...................  48

General Building Contractors
Ass'n v. Kreps No C.A. 77-3682
E.D. Pa Dec. 9, 1977)........... 49

Hampton v. Mow Sun Wong, 426 U.S.
88 (1976)............... 43, 96, 97, 98,99
Heart of Atlanta Motel v. United
States, 379 U.S. 241 (1964)........... 105

Indiana Constructors, Inc., v.
Kreps, No. IP 77-602-c (S.D. Inc.
Jan. 4 , 19 7 9 ) .........................  48

Jones v. Alfred H. Mayer Co., 392
U.S. 409 (1968).................  105

Katzenbach v. Morgan, 384 U.S.
641 (1966)........... 44 , 82, 84 , 105, 64

Lau v. Nichols, 414 U.S. 563 (1974). • .105
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Local 53 of International 
Association of Heat & Frost, 
etc. v. Voglen 407 F. 2d 1047
(5th cir. 1969) .............. 28

McDaniel v. Barresi, 402 U.S. 39 
(1971).................................60

Montana Contractors Association 
v. Secretary of Commerce, 460 F.
Supp. 1174 (D. Mont. 1979)..........  49

Morten v. Mancari, 417
U.S. 535 (1974).................. 56, 57

North Carolina Board of Education 
v. Swann, 402 U.S. 43 (1971)........  60

Ohio Contractors Association v.
Economic Development Administration,
580 F . 2d 213 (6 Cir. 1 9 7 8 ) ......... 4 8

Palmer v, Thompson, 4 03 U.S.
217 (1971).....................  42 , 59
Radzanower v, Touche Ross & Co.
et.al. 426 U.S. 148 (1976) . . . . .  57

Regents of the University of 
California v, Bakke, 438 U.S. 265 
(1978) .......................... passim

Rhode Island Chapter, Associated 
General Contractors of America v.
Kreps, 450 F. Supp 338 (D.R.I.
1978) ................................

South Carolina v. Katzenbach, 383
U.S. 301 ( 1966) . . . 44, 76, 82, 83, 105
Southern Illinois Builders
Association v. Ogilve, 47 F. 2d
159 (3d cir. 1 9 7 2 ) .................  28

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Tennessee' Valley Authority v. 
Hill, 437 U.S. 153 ......... . 56,58

United Jewish Oraanizations v. 
Carey, 430 U.S. 144 (1977) . . . passim

United States v International 
Union of Elevator Contractors,
538 F.2d 1012 (3d Cir. 1976) . . .

United Steelworkers of America v. 
Weber, 61 L. Ed 2d 480

28

(1979) .......................... passim

Virginia Chapter, Associated 
General Contractors of America, Inc.
v. Kreps, 444 F. Supp. 1167 (WO 
Va 1978)..........................

Washington v. Davis, 426 U.S. 
229 (1976) ................. 42, 61

Wright Farms Construction, Inc. v. 
Kreps 444 F. Supp.-1023 (D. Vt.
1977) ............................

STATUTES

Local Public Works Capital 
Development and Investment Act of 
1976, Pub. L. No. 94-369, 90 
Stat. 999, 42 U.S.C. §§6701, 
et seq ............................ oLOC

O

Public Works Employment Act of 
1977, Pub. L. No. 95-28, 9 Stat. 
116, 42 U.S.C. §§670], et seq., 
as amended .....................

- vi i -
passim



20, 21

Railroad Revitalization and 
Regulatory Reform Act of 1976,
Pub. L. No. 94-212, 90 Stat. 31,
49 U.S.C. §1657a, et seq . . . .

Small Business Act of 1953, Pub. L. 
No. 83-163 (July 30, 1953), 67 
Stat. 232 ..........................

Small Business Act, Pub. L. No. 
85-536 (July 18, 1968), 72 Stat. 
384, 15 U.S.C. §631, et seq. . .
Small Business Act Amendments of 
1974, Pub. L. No. 93-386, 88 
Stat. 742 ........................

Small Business Act Amendments of 
1976, Pub. L. No. 94-305, 90 
Stat. 667 ........................

State and Local Fiscal Assistance 
Act of 1972, §122, 31 U.S.C.
§§]242 ..........................

Title VI of the Civil Rights Act 
of 1964, 42 U.S.C. §2000d . . . .

Executive Orders

Executive Order 11458, 3 C.F.R.
109, 34 Fed. Reg. 4937 (March 5,
1969) ............................

Executive Order 11518, 3 C.F.R.
109, 35 Fed. Reg. 4938 (March 21,
1 9 7 0 )  ..................... ..

Executive Order 11625, 3 C.F.R.
213, 36 Fed. Reg. 19967 (Oct. 13, 
(1971)...................  15, 16

-viii-

12

13,14,20

20

20

10

passim

14,102 

15, 102 

, 17, 102



Regulations

13 C.F.R. §124.8-1, 31 Fed.
Reg. 13729 (May 25, 1 9 7 3 ) ........... 17

49 C.F.R. §265. 12a
265. 13b (5)
265. 13c (3) v i ........... 21

Legislative History

123 Cong. Rec. H.1436 (daily ed.
Feb. 24, 1 9 7 7 ) .................  passim

123 Cong. Rec. H.1437 (daily ed.
Feb. 24, 1 9 7 7 ) .................  passim

123 Cong. Rec. H.1438 (daily ed.
Feb. 24, 1 9 7 7 ) .................  32

123 Cong. Rec. H.1440 (daily ed.
Feb. 24, 1 9 7 7 ) .................  passim

123 Cong. Rec. H.1441 (daily ed.
Feb. 24, 1977) 38

123 Cong. Rec. H. 3920-3935 (daily
ed. May 3, 1 9 7 7 ) .................  38

123 Cong. Rec. S. 3910 (daily ed.
March 10, 1977 ...................  passim
123 Cong. Rec. S. 3920 (daily ed.
March 10, 1 9 7 7 ) ............... 38, 41, 42

123 Cong. Rec. S.6755-6757 (daily
ed. April 29, 1 9 7 7 ) ...............  38

H.R. Conf. Rep. No. 95-230, 85th 
Cong., 1st Sess. 9 (April 28, 1977)
(reprinted in U.S. Cong. & Adm.
News 168 (1977) ) ...................  38

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Other Authorities

Bureau of Labor Statistics,
Employment and Earnings, 143 
(Jan. 1 9 7 8 ) ............................  8

Committee on Samll Business,
Summary of the Activities, House
of Representatives, 94th Congress
(1977)................................  109

Department of Commerce, A New
Strategy for Minority Business
Enterprise Development, at 4
(April 1 9 7 9 ) ............   22
Brief of the ACLU and SALT, amici 
curiae, at 75-89, filed in United 
Steelworkers of America v Weber,
61 L. Ed. 2d 480 (1979).............  27

GAO Report to Congress: Questionable
Effectiveness of the 8(a) Procurement 
Program 32 (April 1975) . . . . . .  19

............. 19,85
Marshall, R. & Briggs v The
Negro and Apprenticeship (1967) . . . .  28

Marshall "The Negro in Southern 
Unions", in the Negro and the American
Labor Movement (ed. Jacobson, Anchor 
(1968)..............................  28

Myrdal, G. An American Dilemma
1079-1124 (1944)   21

Sedler, "Beyond Bakke: The Constitu­
tion and Redressing the Social History 
of Racism", 14 Harv. Civ. Rights-- 
Civ. Lib. L. Rev. 133 (1979)........ 88

-x-



Spero, S. and Harris A.
The Black Worker (1931)............. 28

United States Commission on
Civil Rights Employment 97
(1961)................... . .......... 28

United States Commission on Civil 
Rights Report, Minorities and 
Women as Government Contractors 
(May 1975) ........................ passim

United States Commission on Civil 
Rights, State Advisory Committee 
50 States Report 209 (1961) . . . .  28

United States Commission on Civil 
Rights, The Challenge Ahead: Equal
Opportunity in Referral Unions 58-94 
(1976)..............................  28

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In the
SUPREME COURT OF THE UNITED STATES 

OCTOBER TERM, 1979 
NO. 78-1007

H. EARL FULLILOVE, et al.,
Petitioners,

against

JUANITA KREPS, Secretary of Commerce of the 
United States of America, et al.,

Respondents,

On W rit of Certiorari to the United States court 
of A ppeals f o r the Seco nd cir cuit

BRIEF OF THE
AMERICAN CIVIL LIBERTIES UNION 

AND THE SOCIETY OF AMERICAN LAW TEACHERS 
BOARD OF GOVERNORS, AMICI CURIAE

Interest of the Amici*

The American Civil Liberties Union 
for 59 years has devoted itself exclu­
sively to protecting the fundamental

* The parties have consented to the filing of 
this brief and their letters of consent have 
been filed with the Clerk of the Court pursuant 
to Rule 42(2) of the Rules of this Court.

-1-



rights of the people of the United 
States.

For nearly a decade, the governing 
board of our 200,000-member national 
organization has vigorously debated the 
issue of "numerically based affirmative 
action." The intensity and vigor of our 
discussions have heightened the ACLU's 
realization that the major civil liber­
ties issue still facing the United 
States is the elimination, root and 
branch, of all vestiges of racism. No 
other right surpasses the wholly 
justified demand of the nation's 
discrete and insular minorities for 
access to the American mainstream from 
which they have so long been excluded.

In recognition of this right, the 
ACLU in 1973 adopted the following 
policy:

"The root concept of the principle 
of non-discrimination is that 
individuals should be treated 
individually, in accordance with 
their personal merits, achievements 
and potential, and not on the basis 
of the supposed attributes of any 
class or caste with which they 
may be identified. However, when 
discrimination— and particularly

-2-



when discrimination in employment 
and education— has been long and 
widely practiced against a 
particular class, it cannot be 
satisfactorily eliminated merely 
by the prospective adoption of 
neutral, 'color-blind' standards 
for selection among the applicants 
for available jobs or educational 
programs. Affirmative action is 
required to overcome the handicaps 
imposed by past discrimination of 
this sort; and, at the present time, 
affirmative action is especially 
demanded to increase the employment 
and the educational opportunities 
of racial minorities."

Pursuant to this policy, the ACLU, 
amicus curiae, filed a brief in this 
Court supporting the constitutionality 
and legality of the sixteen percent set 
aside for disadvantaged minorities in 
the race conscious admissions program at 
issue in Regents of the University of 
California v. Bakke, 438 U.S. 265 (1978). 
The ACLU and SALT, amici curiae, also 
filed a brief in this Court supporting the 
legality of the numerical goals, ratios 
and timetables in the race conscious 
on-the-job training program at issue in 
United Steelworkers of America v. Weber, 
61 L.Ed.2d 480 (1979) .

-3-



Subsequent to this Court's decision 
in Bakke, the ACLU's governing board 
again debated the appropriateness of 
numerically based affirmative action.
As a result of these debates, our 
governing board in March 1979 "reaf­
firm [ed] the continuing need for 
vigorous efforts to redress the adverse 
effects of racism...in American society, 
and encouraged the adoption of numerical 
measures designed to remedy "current 
disadvantage caused by discrimination, 
whether specific or societal." Our 
revised policy also states with approval

"As Justice Blackmun has recog­
nized [in Bakke], 'In order to 
get beyond racism, we must first 
take account of race.... We 
cannot— we dare not— let the 
Equal Protection Clause 
[perpetuate] racial supremacy.'
[438 U.S. at 407]"

The instant case, following on the 
heels of Bakke and Weber, presents 
another facet of affirmative action: a 
race conscious law which sets aside ten 
percent of the contracts in a new 
government contracting program for

-4-



minority business enterprises. Premised 
upon nearly a decade of special but 
inadequate assistance for minority 
business enterprises, and specifically 
directed at alleviating the high unem­
ployment rate in minority communities, 
this congressional enactment is but one 
more step necessary to get beyond racism.

The United States Court of Appeals 
for the Second Circuit found this 
congressional enactment constitutional. 
Fullilove v. Kreps, 584 F„2d 600 (2d Cir. 
1978) .

For the reasons expressed in this 
brief, the ACLU urges this Court to 
affirm that decision.

The Society of American Law Teachers 
is a professional organization, formed 
in 1973, of approximately 400 professors 
of law at more than 120 law schools in 
the United States. Among its stated 
purposes is the encouragement of fuller 
access of racial minorities to the legal 
profession; since its inception the 
Society has been active in supporting 
the adoption and maintenance of special

- 5 -



minority admissions programs at American 
law schools. Its position is that volun­
tary affirmative action programs are 
fully consistent with the requirements 
of the Constitution of the United States 
and federal laws designed to eradicate 
racial dsicrimination. In accordance 
with this position, it has filed an 
amicus curiae brief, urging reversal, in 
Regents of the University of California 
v. Bakke, 438 U.S. 265 (1978), and has 
joined with the American Civil Liberties 
Union in filing an amici curiae brief 
urging reversal in United Steelworkers 
of America v. Weber, 41 L.Ed.2d 480 (1979) . 
Like the affirmative action programs 
involved in Bakke and in Weber, the MBE 
ten percent set aside involved in the 
present case represents an affirmative 
effort, this time by the federal govern­
ment, to end the historic exclusion of 
blacks and other racial minorities from 
the American mainstream. If true racial 
equality is ever to be achieved in this 
Nation, it is imperative that such affir­
mative efforts be upheld by this Court.

For these reasons, the Society of
-6



American Law Teachers joins the ACLU in 
this brief, urging this Court to affirm 
the judgment of the United States Court 
of Appeals for the Second Circuit, and 
to uphold the validity of the MBE ten 
percent set aside.

-7-



STATEMENT OF THE CASE

In 1976, the national unemployment 
rate was 7.7%, with the nonwhite rate 
nearly double at 13.1%.1 A year later, 
there had been little improvement. The 
national unemployment rate was 7.0%, 
while the nonwhite rate remained at 
13.1%.2

Congress, in the exercise of its 
economic powers, sought to reduce these 
high rates of unemployment and to 
stimulate general economic recovery 
from the lingering recession of several 
years earlier. It did so, in part, by 
enacting legislation authorizing 
billions of dollars for state and local 
government public works projects. One 
such enactment was the Local Public 
Works Capital Development and Investment 
Act of 1976, Pub.L.No. 94-369 (July 22, 
1976), 90 Stat. 999, 42 U.S.C. §§6701, 
et seq. In that Act, Congress authorized

1. U.S. Dept, of Labor, Bureau of Labor Statis­
tics, Employment and Earnings, 143 (Jan. 1978) .

2. Id.

-8-



the Secretary of Commerce, acting 
through the Economic Development 
Administration, to distribute two 
billion dollars to state and local 
governments for local public works 
construction projects. 42 U.S.C.
§§6701, 6702, 6710. As part of the 
Act, Congress established priorities 
and preferences for state and local 
governments in jurisdictions with 
particularly high unemployment rates 
and directed that grants should provide 
employment for unemployed persons in 
those jurisdictions. 42 U.S.C. §6707. 
Congress also incorporated into the Act 
a nondiscrimination provision similar 
to that of Title VI of the Civil Rights 
Act of 1964 and directed that it be en­
forced in a manner similar to that which 
is used to enforce Title VI. 42 U.S.C. 
§6727. Finally, Congress directed that 
the two billion dollar authorization be 
allocated and expended no later than 
September 30, 1977. 42 U.S.C. §6710.

In the spring of 1977, Congress 
recognized that its two billion dollar 
authorization was insufficient to reduce

-9-



unemployment or to stimulate economic 
recovery. It thus amended the law by 
enacting the Public Works Employment Act 
of 1977, Pub.L.No. 95-28 (May 13, 1977), 
91 Stat. 116, 42 U.S.C. §§6701, et seq., 
as amended. The new Act increased the 
overall authorization to six billion 
dollars, 42 U.S.C. §6710, as amended; 
altered the priorities and preferences 
so as to increase the grants available 
to local governments in jurisdictions 
with particularly high rates of unem­
ployment, 42 U.S.C. §6707, as amended; 
encouraged the Secretary to award grants 
to construction projects which would 
result in energy conservation, id.; 
changed the nondiscrimination enforce­
ment provision from one paralleling 
Title VI to one paralleling the manda­
tory enforcement provisions in §122 of 
the State and Local Fiscal Assistance 
Act of 1972 ["the Revenue Sharing Act," 
31 U.S.C. §1242], 42 U.S.C. §6727, as 
amended; and directed that no grants 
be made to a state or local government 
applicant unless the applicant assured 
the Secretary that at least ten percent

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of the amount of each grant would be 
expended for minority business enter­
prises, 42 U.S.C. §6705 (f) (2) .

The last amendment, the subject 
of this litigation, provides as follows

"Except to the extent that the 
Secretary determines otherwise, no 
grant shall be made under this chapter 
for any local public works project 
unless the applicant gives satisfactory 
assurance to the Secretary that at 
least 10 per centum of the amount of 
each grant shall be expended for 
minority business enterprises. For 
purposes of this paragraph, the term 
'minority business enterprise' means 
a business at least 50 per centum of 
which is owned by minority group 
members or, in case of a publicly 
owned business, at least 51 per 
centum of the stock of which is owned 
by minority group members. For the 
purposes of the preceding sentence, 
minority group members are citizens 
of the United States who are Negroes, 
Spanish-speaking, Orientals, Indians, 
Eskimos, and Aleuts." Id.

This amendment, generally referred to 
as the "MBE [Minority Business Enter­
prise] ten percent set aside," was 
authored by Representative Parren J. 
Mitchell, who, at that time, was Chair­
man of the Subcommittee on Domestic



Monetary Policy of the House Committee 
on Banking, Finance and Urban Affairs; 
and Chairman of the Task Force on Human 
Resources of the House Committee on the 
Budget.

The amendment reflected a decade 
of experience by Congress and by the 
Executive Branch with providing economic 
and business assistance to minority 
business enterprises.

1. The Background of 
Minority Business 
Enterprise Programs

The preference in §103(f)(2) of 
the Public Works Employment Act of 1977, 
42 U.S.C. §6705(f)(2), for Minority 
Business Enterprises did not originate 
with that law. Rather, it derives from 
a compendium of federal laws, federal 
regulations, and Executive Orders which 
together comprise the Minority Business 
Enterprise Program.

The origin of the MBE Program dates 
back to the enactment of the Small 
Business Act of 1953, Pub.L.No. 83-163 
(July 30, 1953), 67 Stat. 232, an Act

-12-



which was replaced in 1958 by a new law 
known as "the Small Business Act," Pub. 
L.No. 85-536 (July 18, 1968), 72 Stat. 
384. Amended at various times since 
then, the Small Business Act currently 
is codified at 15 U.S.C. §§631, et seq.

The evident purpose of the Small 
Business Act was to strengthen the 
economic position of small businesses, 
especially those businesses located in 
areas with high unemployment and with 
high proportions of low income individ­
uals. 15 U.S.C. §631(b). In order to 
effectuate these objectives, Congress 
created the Small Business Administra­
tion ["SBA"], and directed that it be 
"under the general direction and super­
vision of the President." 15 U.S.C.
§633(a). Under this direction and 
supervision, the SBA was authorized to 
make loans, guarantee loans, and provide 
for technical assistance to small busi­
nesses. 15 U.S.C. §636. Most signifi­
cantly, under what is known as the 
Section 8 (a) Program, the SBA was 
empowered to enter into procurement 
contracts with federal agencies and to

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arrange for the performance of such 
contracts by letting subcontracts to 
small business enterprises. 15 U.S.C. 
§637(a).

Despite the beneficent purposes of 
the Small Business Act, the SBA was 
unexpectedly inactive for the first 
fifteen years of its existence.
Virtually no aid of any significance 
flowed from the SBA to any small 
businessesfmuch less to minority 
business enterprises.

In 1969, the SBA was awakened from 
its slumber. Acting under the authority 
granted by 15 U.S.C. §633(a), President 
Richard Nixon issued Executive Order 
11458, 3 C.F.R. 109, 34 Fed.Reg. 4937 
(March 5, 1969). With that Executive 
Order, the Minority Business Enterprise 
Program was formally established. The 
Order created within the SBA the Office 
of Minority Business Enterprise ["OMBE"] 
and further created a President's 3

3. See generally, United States Commission on 
Civil Rights Report, Minorities and Women as 
Government Contractors, 29 n.54, 35 (May 1975).

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Advisory Council for Minority Enterprise. 
The explicit purpose of the Executive 
Order was to rejuvenate the Section 8(a) 
Program so as to award procurement 
subcontracts to minority business enter­
prises .

A year later, President Nixon 
supplemented the foregoing Order with 
Executive Order 11518, 3 C.F.R. 109, 35 
Fed.Reg. 4939 (March 21, 1970). That 
Order directed all federal departments 
and agencies to increase the proportion 
of procurement contracts to small 
businesses, especially to minority 
business enterprises.

In 1971, President Nixon superseded 
the old Orders with Executive Order 
11625, 3 C.F.R. 213, 36 Fed.Reg. 19967 
(Oct. 13, 1971). Titled as a "National 
Program for Minority Business Enterprise," 
the Executive Order was premised upon 
the recognition that the OMBE had 
"facilitated the strengthening and 
expansion of our minority enterprise 
program" but that it was necessary to 
make better use "of resources and 
opportunities in the minority enterprise

-15-



field" by authorizing the Secretary of 
Commerce "to implement Federal policy 
in support of the minority business 
enterprise program" and "to coordinate 
the participation of all federal 
departments and agencies in an increased 
minority enterprise effort." Id. The Execu­
tive Order indeed sought to accomplish 
such a national program. Section 1 of 
the Order required the Secretary to 
coordinate all federal, state, local 
and private efforts to strengthen 
minority business enterprises; Section 
2 continued the existence of the 
Advisory Council for Minority Enterprise; 
Section 3 directed all federal depart­
ments and agencies to cooperate with 
the Secretary and to foster and promote 
minority business enterprises; and 
Section 5 authorized the Secretary to 
take all steps necessary to achieve 
the purposes of the Order. In Section 
6 of the Order, "minority business 
enterprise" was formally defined:

" 'Minority business enterprise 
means a business enterprise that is 
owned or controlled by one or more

-16-



socially or economically disadvantaged 
persons. Such disadvantage may arise 
from cultural, racial, chronic economic 
circumstances or background or other 
similar cause. Such persons include, 
but are not limited to, Negroes,
Puerto Ricans, Spanish-speaking 
Americans, American Indians, Eskimos, 
and Aleuts." Id.

The foregoing definition of 
"minority business enterprise" was 
reiterated and further refined in new 
regulations issued by the SBA under its 
Section 8(a) Program. The pertinent 
regulation, 13 C.F.R. §124.8-1, 31 Fed. 
Reg. 13729 (May 25, 1973), provides in 
part:

"(b) Purpose. It is the policy 
of SBA to use such authority to assist 
small business concerns owned and 
controlled by socially or economically 
disadvantaged persons to achieve a 
competitive position in the market 
place.

"(c) Eligibility.— (1) Social or 
economic disadvantage. An applicant 
concern must be owned and controlled 
by one or more persons who have been 
deprived of the opportunity to 
develop and maintain a competitive 
position in the economy because of 
social or economic disadvantage.
Such disadvantage may arise from

-17-



cultural, social, chronic economic 
circumstances or background, or other 
similar cause. Such persons include, 
but are not limited to, black Ameri­
cans, American Indians, Spanish- 
Americans, Oriental Americans,
Eskimos, and Aleuts. Vietnam-era 
service in the Armed Forces may be a 
contributing factor in establishing 
social or economic disadvantage.

"(2) Ownership and control. Dis­
advantaged persons must presently own 
and control the concern except where 
a divestiture agreement or management 
contract, approved by the Associate 
Administrator for Procurement and 
Management Assistance, temporarily 
vests ownership or control in non- 
disadvantaged persons.

"(i) Proprietorships. An appli­
cant concern may be a proprietorship.

"(ii) Partnerships. The ownership 
of at least a 50-percent interest in 
the partnership by disadvantaged 
persons will create a rebuttable pre­
sumption of ownership and control.

" (iii) Corporations. The owner­
ship of at least 51 percent of each 
class of voting stock by disadvantaged 
persons will create a rebuttable 
presumption of ownership and control." Id.

No longer allowed to remain dormant, 
the SBA, acting through the OMBE, revived 
the Section 8(a) Program and began to 
award government procurement subcontracts 
to minority business enterprises. In

-18-



Fiscal Year I"FY"] 1968, for example, 
the SBA had awarded only 8 contracts 
totaling approximately $10.5 million to 
MBEs. In FY 1972, the SBA had increased 
its efforts by awarding 1720 contracts 
totaling more than $153 million to MBEs. 
Despite this dramatic increase, the 
procurement contracts awarded to minority 
firms under the Section 8(a) Program 
nonetheless were relatively minimal.
In FY 1972, these contracts represented 
less than 0.3 percent of the total $57.5 
billion of federal procurement.^

In the years subsequent to its 
establishment, the MBE Program was of 
course subjected to periodic review 
inside and outside Congress. In 
several reports to Congress, the MBE 
Program was praised as necessary and 
yet criticized as insufficient. In 
response, Congress continued the MBE 4 5

4. id. at 41.

5. See, e.g., House Comm, on Small Business, 
Summary of Activities, H.R. No. 94-1791, 94th 
Cong., 2d Sess. (1977); GAO Report to Congress: 
Questionable Effectiveness of the 8(a) Procure­
ment Program 32 (April 1975).

-19-



Program. And although the Small Business 
Act was amended on several occasions in 
the early 1970s,6 Congress kept the 
Section 8(a) Program intact.

The use of race conscious programs to 
assist minority business enterprises has not 
been limited to the SBA. They also have 
been adopted by Congress, for example, 
as part of the Railroad Revitalization 
& Regulatory Reform Act of 1976, Pub.L.
No. 94-212 (Feb. 5, 1976), 90 Stat. 31,
49 U.S.C. §1657a. Under the Revitalization 
Act, as amended, Congress authorized the

6. The Small Business Act Amendments of 1974, 
Pub.L.No. 93-386, 88 Stat. 742, increased the 
loan, guaranty, and investment ceilings of the 
Agency.

The Small Business Act Amendments of 1976, 
Pub.L.No. 94-305, 90 Stat. 667, established the 
Office of Export Development; aided the procure­
ment of equipment to meet government pollution 
control standards; made changes in corporate 
securities requirements; provided for investment 
guarantees; assumed jurisdiction over unincor­
porated investment companies; repealed limita­
tions on bank investment; provided for loans 
for plant acquisition; increased the amount 
available for economic opportunity loans, local 
development company loans, and regular business 
loans; and established the National Commission 
on Small Business in America.

-20-



establishment of a race-conscious admin­
istrative body, "The Minority Resource 
Center," whose specific and sole function 
was to assist and to encourage minority 
business enterprises. 49 U.S.C. §1657a 
(e). Thus, the Minority Resource Center 
was empowered to "enter into such con­
tracts , cooperative agreements, or 
other transactions as may be necessary 
in the conduct of its functions and 
duties." 49 U.S.C. §1657a(e).

The federal regulations promulgated 
under the Act require detailed affirma­
tive action programs to be established 
to guarantee employment and contractual 
opportunities. Specific goals and time­
tables must be established to hire 
minority employees in proportion to 
their percentage in the work force of 
the contracting area where prior under­
utilization of minority employees renders 
such establishment appropriate. 49 
C.F.R. 265.13b (5) . A similar provision 
for specific goals and timetables exists 
for minority businesses. 49 C.F.R.
265.13c(3)vi.

Overall, both Congress and the

-21-



Executive acted on numerous occasions 
prior to 1977 to strengthen minority 
business enterprises with the intent of 
increasing their share of government 
contracts. But the efforts fell far 
short of altering governmental exclusion 
of minority business enterprises from 
receipt of government contracts.

2. The Background of
Government Contracting

Despite the federal government's 
Minority Business Enterprise Program,, 
minority businesses have not fared well 
under government contracting. In FY 
1972, for example, only 0.7 percent of 
all federal procurement contracts were 
awarded to minority business enter-

7prises. (Approximately half of these 
MBE contracts were awarded through the

OSBA's Section 8(a) Program. ) Since FY
1972, MBEs consistently have shared less
than one percent of all federal procure-

9ment contracting. 7 8 9

7. See note 3, supra, at 6.
8. Id.

9. U.S. Department of Commerce, A New Strategy for 
Minority Business Enterprise Development, at 4 
(April 1979). -22-



This exclusion of minority business 
enterprises from government contracting 
is not simply the result of open, compe­
titive bidding. Indeed, most federal 
procurement contracts are awarded not 
through open, competitive bidding, but 
through negotiation with competing firms, 
and through "sole source" negotiation 
without competition. The latter methods 
of awarding multi-million dollar con­
tracts is justified by the government on 
grounds of urgency, lack of competitors, 
need for standardization, and other 
factors.

Noncompetitive "sole source" 
contracting accounts for a sizeable 
portion of all federal contracts. It, 
in fact, has been the primary means of 
contracting used by such agencies as 
the Department of Defense, the National 
Aeronautics and Space Administration, 
and the Department of Energy (formerly 
the Atomic Energy Commission and the 
Energy Research and Development Adminis­
tration).^ Significantly, in FY 1972, 
these three agencies alone accounted 
for $43.2 billion or more than 70 per- 10
10. See note 3 supra, at 2, 6, 7.

-23-



cent of the $57.5 billion of federal 
procurement contracts.^

Given the small size of most MBEs 
and the relatively smaller size of 
contracts awarded by state and local 
governments, it might be expected that a 
higher proportion of these contracts 
would be awarded to MBEs. This should 
be especially true since state and local 
governments spend far more proportionately 
than the federal government for construc­
tion (approximately 40% by state and local 
governments compared to less than 10% by 
the federal government), and since a 
disproportionately large percentage 
(approximately 10%) of minority firms

1 nare small construction contractors.
Whatever the expectations may be, 

state and local governments have been no 
less exclusionary than the federal 
government. In some instances, MBEs 
have been totally excluded from state 
and local contracting. For example, 
during FY 1972, Denver's Department of 
Public Works awarded more than $23 11 12

11. Id.

12. Id. at 9.
-24-



million in contracts but none went to
13minority businesses. California, which 

has an annual procurement budget of $500 
million, awarded merely $10,000 in con­
tracts to minority enterprises in FY 1972

14and only $60,000 during FY 1973.
Overall, of the $62.5 billion spent 

by state and local governments on goods 
and services in the private sector in 
1972, less than 0.7 percent of all con­
tracting dollars were awarded to minority
.. 0 15firms.

This record, like the federal 
government's record, is appalling in 
itself. And it was no doubt 
appalling to Congress, which had increased 
federal aid to state and local governments 
from $2 billion in FY 1950 to $45 billion 
in FY 1974.13 14 15 16

13. U.S. Commission on Civil Rights, note 3 supra, 
at 95.

14. Id. at 97.

15. Id. at 95.

16. Id. at 89.
-25-



3. The Enactment of the MBE 
Ten Percent Set Aside

When Congress in the spring of 1977
considered enactment o f the Public Works
Employment Act of 1977, it had before it
numerous reports summarizing the severe
underrepresentation of minority business
enterprises in federal, state and local

17government contracting. Congress knew,
for example, that the federal government
and state and local governments together
awarded more than 99% of all government
procurement contracts to white business 

18enterprises. Congress also was aware
that SBA's Section 8(a) Program applied
only to federal procurement, and that
even there it had not been successful in
remedying the federal government's
historic exclusion of MBEs from federal 

19contracting.

1 7 . See, e.g., U.S. Commission on Civil Rights 
"Minorities and Women as Government Contractors"
(May 1975); GAO Report to Congress, "Questionable 
Effectiveness of the 8(a) Procurement Program"
(April 1975).

18. U.S. Commission on Civil Rights, supra, at vii.

19. GAO Report to Congress, supra, at 4.

-26-



Congress, like the courts, was also 
aware that most government construction 
contracts are awarded by state and local 
governments, that most construction firms 
are formed by entrepreneurs who are 
skilled craft workers, and that the 
extensive racial discrimination in the 
building trades had prevented minority 
workers not only from obtaining necessary 
skills but also from forming their own 
viable concerns. These latter conclusions 
were known to Congress as evidenced by 
its rejection of legislative efforts in 
1969 and 1972 to eviscerate the affirma­
tive action requirements imposed on the 
construction industry by Executive Order 
11246,20 and its own observations.

20. The 1969 and 1972 legislative history is 
set forth in the Brief of the ACLU and SALT, 
amici curiae, at 75-89, filed in United Steel­
workers v. Weber, 61 L.Ed.2d 480 (1979).
21. In United Steelworkers of America v. Weber, 
61 L.Ed.2d 480 (1979), this Court took judicial 
notice of the past discrimination in the con­
struction industry, stating:

"Judicial findings of exclusion from 
crafts on racial grounds are so numerous 
as to make such exclusion a proper subject 
for judicial notice. See, e.g., United

-27-



Aware of these conditions, Congress 
in the early spring of 1977 focused on 
legislation that could help to remedy 
some of these past patterns: the Public * V.

States v. International Union of Elevator 
Constructors, 538 F.2d 1012 (CA3 1976); 
Associated General Contractors of Massa­
chusetts v. Alshuler [sic], 490 F.2d 9 
(CAl 1973); Southern Illinois Builders 
Association v. Ogilve [sic], 471 F.2d 159 
(CA3 1972); Contractors Association of 
Eastern Pennsylvania v. Secretary of Labor, 
442 F .2d 159 (CA3 1971); Local 53 of 
International Association of Heat & Frost, 
etc. v. Vogler, 407 F.2d 1047 (CA5 1969); 
Buckner v. Goodyear, 339 F.Supp. 1108 (ND 
Ala. 1972), aff'd without opinion, 476 
F.2d 1287 (CA5 1973). See also United 
States Commission on Civil Rights, The 
Challenge Ahead: Equal Opportunity in 
Referral Unions 58-94 (1976) (summarizing 
judicial findings of discrimination by 
craft unions); G. Myrdal, An American 
Dilemma (1944) 1079-1124; R. Marshall and
V. Briggs, The Negro and Apprenticeship 
(1967); S. Spero and A. Harris, The Black 
Worker (1931); United States Commission on 
Civil Rights, Employment 97 (1961); State 
Advisory Committee, United States Commis­
sion on Civil Rights, 50 States Report 209 
(1961); Marshall, "The Negro in Southern 
Unions," in The Negro and the American 
Labor Movement (ed Jacobson, Anchor 1968) 
p 145; App, 63, 104." 61 L.Ed.2d at 486
n.l.

-28-



Works Employment Act of 1977. Designed 
to decrease unemployment and to speed 
economic recovery, the Act authorized 
the expenditure of $4 billion of new 
federal money for state and local govern­
ment construction projects. Construction, 
of course, was the precise area where 
minorities in the past had suffered such 
egregious discrimination and where there 
nonetheless existed a sizeable number of 
minority businesses. Congress quite 
plainly was confronted with a vehicle 
which could remedy past patterns.

During the debates on H.R. 11, the 
House version of the Public Works Employ­
ment Act, Representative Mitchell offered 
the MBE ten percent set aside as an amend­
ment to the Act. 123 Cong.Rec. H.1436 
(daily ed. Feb. 24, 1977). He observed 
that it was consistent with the SBA and 
OMBE programs, and otherwise explained 
the amendment in considerable detail:

"I want to commend the chairman and the 
members of the committee who have done a 
great deal to make this public works bill 
far more equitable than it was last year. 
They have targeted and have amended the 
legislation to cover areas of high unem­
ployment and they have improved the

-29-



legislation so that it is a much better 
bill. But there is one shortcoming that 
I see in the bill that I am attempting to 
address through my amendment. That short­
coming is that there will be numerous con­
tracts awarded at the local level for 
various public works projects, but in that 
there is no targeting— and I repeat— there 
is no targeting for minority enterprises.
"Let me tell the Members how ridiculous it 
is not to target for minority enterprises.
We spend a great deal of Federal money 
under the SBA program creating, strength­
ening and supporting minority businesses 
and yet when it comes down to giving those 
minority businesses a piece of the action, 
the Federal Government is absolutely remiss. 
All it does is say that, 'We will create 
you on the one hand and, on the other hand, 
we will deny you.1 That denial is made 
absolutely clear when one looks at the 
amount of contracts let in any given fiscal 
year and then one looks at the percentage 
of minority contracts. The average per­
centage of minority contracts, of all 
Government contracts, in any given fiscal 
year, is 1 percent— 1 percent. That is 
all we give them. On the other hand we 
approve a budget for OMBE, we approve a 
budget for the SBA and we approve other 
budgets, to run those minority enterprises, 
to make them become viable entities in our 
system but then on the other hand we say 
no, they are cut off from contracts.
"In the present legislation before us it 
seems to me that we have an excellent 
opportunity to begin to remedy this situ­
ation.

-30-



"I know what the points in opposition will 
be. The first point in opposition will be 
that you cannot have a set-aside. Well, 
Madam Chairman, we have been doing this 
for the last 10 years in Government. The 
8-A set aside under SBA has been tested in 
the courts more than 30 times and has been 
found to be legitimate and bona fide. We 
are doing it in this bill. We are target­
ing for the Indians, that is a set-aside. 
All that I am asking is that we set aside 
also for minority contractors.
"...That is because that is the only way 
we are going to get the minority enter­
prises into our system.
"...We cannot continue to hand out survival 
support programs for the poor in this 
country. We cannot continue that forever. 
The only way we can put an end to that 
kind of a program is through building a 
viable minority business system. So, I 
am deadly serious about it." 123 Cong.Rec. 
H.1436-37 (daily ed. Feb. 24, 1977).

Subsequent to Mr. Mitchell's intro­
duction of the MBE ten percent set aside, 
the Committee of the Whole, for the most 
part, debated neither the purposes of nor 
the need for the amendment but rather its 
effect in jurisdictions where there were 
few or virtually no qualified minority 
contractors. This issue was first raised 
by Representative Abraham Kazen: "What
happens in the rural areas where there

-31-



are no minority enterprises?" Id. Rep­
resentative Mitchell responded that the 
amendment would not apply in those areas, 
that administrative procedures to this 
effect already were in operation under 
the minority contracting program encom­
passed in Executive Order 11246, and that 
the Secretary of Commerce was assumed to 
have a similar authority under the bill. 
Id. Another Member, Representative 
Robert Roe, Chairman of the Economic 
Development Subcommittee of the House 
Committee on Public Works and Transpor­
tation, proposed that the "assumption" 
be added to Representative Mitchell's 
amendment by making the MBE ten percent 
set aside non-mandatory through prefatory 
language: "Except to the extent the 
Secretary determines otherwise...." Id. 
at 1438. After further discussion, 
Representative Mitchell agreed: "I accept 
the amendment to my amendment." Id.

Throughout the entire debate in the 
House, no Member expressed any opposition 
to the MBE ten percent set aside. All of 
the commentary was favorable. Represen­
tative John Conyers, for example, stated

-32-



that "minority contractors and business­
men who are trying to enter in on the 
bidding process... get the 'works' almost 
every time. The sad fact of the matter 
is that minority enterprises usually 
lose out.... [Tjhrough no fault of 
their own, [they] simply have not been 
able to get their foot.in the door."
Id. at 1440.

Additional comments in support of 
the MBE ten percent set aside were made 
by Representative Mario Biaggi who 
stressed the need to reduce the high 
rate of unemployment among minority 
workers and to remedy the exclusion of 
minority enterprises from government 
contracting:

"I rise to indicate my full support of the 
amendment offered by my distinguished col­
league from Maryland as amended by the 
gentleman from New Jersey (Mr. Roe). I 
consider the amendment wholly complementary 
to the bill as its objective is to guaran­
tee to minority business enterprises that 
they too will benefit from the passage of 
this legislation.
"This Nation's record with respect to pro­
viding opportunities for minority businesses 
is a sorry one. Unemployment among minority 
groups is running as high as 35 percent. 
Approximately 20 percent of minority busi­

-33-



nesses have been disolved [sic] in a period 
of economic recession. The consequences 
have been felt in millions of minority 
homes across the Nation.
"What the amendment seeks to do is guaran­
tee that at least 10 percent of all funds 
in this legislation will go to contracts 
which will be awarded to minority business 
enterprises. This is not an unreasonable 
demand— in fact it is quite modest. If 
implemented however it could have great 
benefits to the entire minority community. 
Fiscal year 1976 figures indicate that 
less than 1 percent of all Federal procure­
ment contracts went to minority business 
enterprises. This is a situation which 
must be [rjemedied.
"The objectives of this legislation are 
both necessary and admirable. Yet without 
adoption of this amendment, this legisla­
tion may be potentially inequitable to 
minority businesses and workers. It is 
time that the thousands of minority busi­
nessmen enjoyed a sense of economic parity. 
This amendment will go a long way toward 
helping to achieve this parity and more 
importantly to promote a sense of economic 
equality in this Nation." Id.

After additional debate, Representa­
tive Mitchell's amendment was adopted on 
a voice vote by the Committee of the 
Whole. Id. at 1441.

The proceedings in the Senate on 
the Public Works Employment Act paralleled 
those in the House. Early in the debates

-34-



on S.427, the Senate version of H.R. 11, 
Senator Edward Brooke offered an MBE ten 
percent set aside amendment very similar 
to that adopted by the House. 123 Cong. 
Rec. S.3910 (daily ed., March 10, 1977).

Recognizing that the purpose of the 
Act was to increase employment, Senator 
Brooke focused on the severe unemployment 
of members of racial and ethnic minori­
ties. He stated that it was "important 
that we focus on the unemployment 
experiences of different ethnic and 
racial groups in designing a sensitive 
and responsive jobs program. For 
example, among minority citizens, the 
average rate of unemployment runs double 
that among white citizens." Id.

Senator Brooke viewed the percentage 
targeting concept as "entirely proper, 
appropriate and necessary." Id.

"It is a proper concept, recognized for 
example in this committee's bill which 
set aside up to 2h percent for projects 
requested by Indians or Alaska Native 
villages. And, the Federal Government, 
for the last 10 years in programs like 
SBA's 8(a) set-asides, and the Railroad 
Revitalization Act's minority resources 
centers, to name a few, has accepted the

-35-



set aside concept as a legitimate tool to 
insure participation by hitherto excluded 
or unrepresented groups." Id.

Senator Brooke added that the set 
aside also was appropriate:

"It is an appropriate concept, because 
minority businesses' work forces are 
principally drawn from residents of 
communities with severe and chronic 
unemployment. With more business, these 
firms can hire even more minority citizens. 
Only with a healthy, vital minority 
business sector can we hope to make 
dramatic strides in our fight against the 
massive and chronic unemployment which 
plagues minority communities throughout 
this country." Id.

Finally, echoing Parren Mitchell's 
observations, he noted that the program 
was "necessary because minority businesses 
have received only 1 percent of the 
Federal contract dollar, despite repeated 
legislation, Executive orders and regula­
tions mandating affirmative efforts to 
include minority contractors in the 
Federal contracts pool." Id. Senator 
Brooke then assuaged possible concerns 
about the amendment:

"Many have expressed concern about 
the impact of this amendment as a limita-

- 3 6 -



tion on contracting in areas where there 
are few minorities. But this amendment 
is not a limitation. Rather, it is 
designed to facilitate greater equality 
in contracting. This amendment provides 
a rule-of-thumb which requires much more 
than the vague 'good-faith efforts* lan­
guage which currently hampers our efforts 
to insure minority participation.

"One final objection to this set- 
aside may be that it will cause undue 
delays in beginning these vital public 
works projects. In fact, EDA already 
maintains a roster for each State of 
capable and qualified minority enterprises 
who are ready and willing to work. These 
firms are capable of competitive bidding, 
and need the financial support which this 
potential level of Federal contracting 
will guarantee." Id.

As in the House, no Member raised 
any objection to the amendment. One 
Senator, however, voiced concern about 
the amendment. Senator John Durkin 
questioned the application of the amend­
ment to states with small minority popu­
lations. Senator Brooke responded to 
this concern by noting that the language 
of his amendment insured the fair fund­
ing of projects through wide discretion

22granted to the Secretary. Satisfied,

22. This language,which differs from that contained 
in the House version, reads:

-37-



Senator Durkin asked one last question:

Mr. DURKIN. "May I be a co-sponsor?
Mr. BROOKE. "Yes.
Mr. PRESIDENT. "I ask unanimous consent 

that the name of the distinguished 
Senator from New Hampshire be added 
as a co-sponsor.

The PRESIDING OFFICER. "Without objection, 
it is so ordered." Id.

The majority and minority floor 
managers, Senators Quentin Burdick and 
Robert Stafford, agreed to accept the 
amendment and it was adopted on a voice 
vote. Id. The differences between the 
House and Senate versions were resolved 
in Conference, H.R. Conf.Rep. No. 95-230, 
85th Cong., 1st Sess. at 9 (April 28,
1977); and the House version was enacted 
as law, 123 Cong.Rec. S. 6755-6757 (daily 
ed., April 29, 1977); 123 Cong.Rec. H. 
3920-3935 (daily ed. May 3, 1977).

"This section shall not be interpreted 
to defund projects with less than 10 percent 
minority participation in areas with minority 
population of less than 5 percent. In that 
event, the correct level of minority parti­
cipation will be predetermined by the Secretary 
in consultation with EDA and based upon its 
lists of qualified minority contractors and 
its solicitation of competitive bids from 
all minority firms on these lists." 123 
Cong.Rec. S.3910 (daily ed. March 10, 1977).

- 3 8 -



SUMMARY OF ARGUMENT

When Congress enacted the Public 
Works Employment Act of 1977, 42 U.S.C. 
§§6701 , et seq. , it sought to alleviate 
unemployment and to stimulate economic 
recovery in the private sector by author­
izing $4 billion in new federal monies 
flowing to private contractors. Con­
cerned about the especially high rate of 
unemployment among minority workers, 
aware of the inadequacy of past MBE 
Programs, and determined to alter the 
severe underrepresentation of minority 
business enterprises in government 
contracting. Congress targeted ten per­
cent of the new federal monies for 
minority business enterprises. 42 
U.S.C. §6705(f)(2). In view of the 
scope of the problems faced by Congress, 
this ten percent target, as described by 
Representative Mario Biaggi, was "not 
unreasonable— in fact it is quite modest." 
123 Cong.Rec. H. 1440 (daily ed. Feb.
24, 1977).

The ten percent set aside not only 
is quite modest. It also is lawful under

- 3 9 -



Title VI of the Civil Rights Act of 1964 
and constitutional under the equal pro­
tection component of the Fifth Amendment.

1. The same Public Works Employment 
Act that contains the ten percent set 
aside, 42 U.S.C. §6705(f)(2), also con­
tains a general nondiscrimination provi­
sion stating that no person shall "on 
the ground of race, color [or] national 
origin...be excluded from participation 
in, be denied the benefit of, or be sub­
jected to discrimination under any pro­
gram or activity...[which] receives funds 
made available under this subchapter."
42 U.S.C. §6727(a). This language is 
virtually identical to the ban against 
discrimination found in Title VI of the 
Civil Rights Act of 1964, 42 U.S.C. §2000d.

Congress in 1977 quite obviously 
saw no inconsistency between the ban on 
discrimination and the Act's race con­
scious ten percent set aside for minority 
business enterprises. Whatever Title VI 
may have meant when it was enacted in 
1964, see Regents of the University of 
California v. Bakke, 438 U.S. 265 (1978), 
its ban on discrimination was viewed by

-40-



Congress in 1977 as. entirely consistent 
with race, conscious set asides.

Even if the ten percent set aside 
were viewed in isolation from the Act's 
prohibition against racial discrimination 
parallel to that in Title VI, the ten 
percent set aside still would not violate 
Title VI. To the extent that any two 
legislative enactments conflict, it is 
settled that the specific act later in 
time controls the former general one.

Since the Public Works Employment Act of 
1977 with its ten percent set aside was 
enacted by Congress after Title VI had 
been enacted, the ten percent set aside 
is not and cannot be unlawful under 
Title VI.

2. Among the unmistakeable pur­
poses of the ten percent set aside, as 
summarized by Senator Edward Brooke, was 
the need to make "strides in our fight 
against the massive and chronic unemploy­
ment which plagues minority communities 
throughout this country." 123 Cong.Rec.

- 4 1 -



S.3920 (daily ed. March 10, 1977). More­
over, of crucial significance is the fact 
that the entire Public Works Employment 
Act was designed to fuel our economy by 
pumping $4 billion of new federal money 
into the coffers of private contractors. 
Because of the legislative design of this 
program, the ten percent set aside cannot 
be found to have been premised upon a 
racially discriminatory purpose. United 
Jewish Organizations v . Carey, 430 U .S . 
144 (1977); Washington v. Davis, 426 U.S. 
229 (1976). Additionally, because it was 
a new program providing billions of dol­
lars to white contractors, and because it 
in no way fenced out white contractors 
from receiving the lion's share of new 
government contracts, the legislative 
plan had no discriminatory impact upon 
whites. United Jewish Organizations v. 
Carey, 430 U.S. 144 (1977); Palmer v . 
Thompson, 403 U.S. 217 (1971). "Having 
failed to show that the legislative.,, 
plan had either the purpose or the effect 
of discriminating against them on the 
basis of their race, the petitioners have 
offered no basis for affording them the

- 4 2 -



Unitedconstitutional relief they seek."
Jewish Organizations v. Carey, 430 U.S. 
at 180 (concurring opinion of Stewart,
J. , with Powell, J.).

3. Even if this legislative plan 
had a discriminatory purpose or effect, 
the constitutionality of the ten percent 
set aside would be determined under the 
intermediate standard of review applicable 
to racial classifications which have a 
benign, compensatory purpose. Regents 
of the University of California v. Bakke, 
438 U.S. 265, 355-380 (1978) (opinion of 
Brennan, J., with White, Marshall and 
Blackmun, JJ.). Indeed, the strict 
scrutiny standard of review is especially 
inapplicable here because the ten percent 
set aside is premised upon administrative 
and legislative findings of severe minority 
underrepresentation in government contract­
ing, a problem which Congress is uniquely 
capable of remedying. Regents of the 
University of California v. Bakke, 438 
U.S. 265, 300-310 (1978) (opinion of 
Powell, J.); Califano v. Webster, 430 
U.S. 313 (1977); Hampton v . Mow Sun Wong,

- 4 3 -



426 U.S. 88 (1976); Katzenbach v . Morgan, 
384 U.S. 641 (1966); South Carolina v . 
Katzenbach, 383 U.S. 301 (1966).

Under the intermediate standard of 
review, the ten percent set aside must 
be sustained. As in Bakke, the race 
conscious plan here serves the important 
and articulated purpose "of remedying the 
effects of past societal discrimination" 
in a context where "there is a sound 
basis for concluding that minority under­
representation is substantial and chronic 

438 U.S. at 362 (opinion of Brennan 
J., with White, Marshall and Blackmun,
JJ.). It also serves the important and 
articulated purposes of "building a 
viable minority business system," 123 
Cong.Rec, H. 1436-37 (daily ed. Feb. 24, 
1977) (remarks of Rep. Mitchell); of 
"promot[ing] a sense of economic equality 
in this Nation," 'id. at 1440 (remarks of 
Rep. Biaggi); of "facilitat[ing] greater 
equality in contracting," 123 Cong.Rec. 
S.3910 (daily ed. March 10, 1977)' (remarks 
of Sen.Brooke); and, of course, of 
fighting "the massive and chronic unemploy 
ment which plagues minority communities

- 4 4 -



throughout this- country," Id. Finally, 
as in Bakke, this race conscious plan 
neither "stigmatizes any group [n]or... 
singles out those least well represented 
in the political process to bear the 
brunt of [this] benign program." 438 
U.S. at 361 (opinion of Brennan, J., with 
White, Marshall and Blackmun, JJ.).

4. In view of the demonstrated 
inadequacy of past and ongoing MBE Pro­
grams to alter our government contracting 
practices which award less than 1% of all 
government contracts to minority business 
enterprises, the ten percent set aside 
would be sustained as constitutional even 
under the strict scrutiny standard of 
review. See Regents of the University 
of California v. Bakke, 438 U.S. 265,
305 (1978) (opinion of Powell, J.). As 
Senator Brooke commented, the ten percent 
set aside is "necessary because minority 
businesses have received only 1 percent 
of the Federal contract dollar, despite 
repeated legislation, Executive Orders 
and regulations mandating affirmative 
efforts to include minority contractors 
in the Federal contracts pool." 123

-45-



Cong.Rec. S.3910 (daily ed. March 10, 
1977), The purposes of the race con­
scious set aside unquestionably are 
substantial and compelling; the set 
aside is necessary to accomplish its 
purposes; and no less restrictive 
alternative is available.

- 4 6 -



ARGUMENT

Shortly after Congress made $4 
billion of new contracting money 
available to construction contractors, 
reserving only ten percent for the eco­
nomic recovery of minority business 
enterprises, the MBE ten percent set 
aside in §103 (f) (2) of the Public Works 
Employment Act of 1977, 42 U.S.C.
§6705(f)(2), was roundly challenged in 
lawsuit upon lawsuit by various state 
and local chapters of the Associated 
General Contractors of America, Inc.
The contractors' associations this time 
were not concerned with having to employ 
a few minority workers. To be sure, 
they appreciated the federal largess. 
Nonetheless, they wanted to receive the 
same 99% to 100% of the contracts under 
this new program in the same manner as 1

1. This concern is reflected in, e.g., Associ­
ated General Contractors of Massachusetts v. 
Altshuler, 490 F.2d 9 (1st Cir. 1973), cert, 
denied, 416 U.S. 957 (1974); Contractors Associ­
ation of Eastern Pa. v. Secretary of Labor, 442 
F .2d 159 (3d Cir.), cert, denied, 404 U.S. 854 
(1971).

-47-



they had received 99% to 100% of all 
construction contracts in the past.

In response to the challenges, the 
lower federal courts, virtually without 
exception, upheld the MBE ten percent 
set aside as lawful and constitutional.

2. In addition to the court below, Fullilove 
v. Kreps, 584 F.2d 600 (2d Cir. 1978), the only 
other courts of appeals that have confronted the 
MBE ten percent set aside have upheld it. Ohio 
Contractors Association v. Economic Development 
Administration, 580 F.2d 213 (6th Cir. 1978); 
Constructors Association of Western Pa. v. Kreps, 
573 F .2d 811 (3d Cir. 1978).

Eleven district courts have rejected chal­
lenges to the statute. Cases upholding the 
constitutionality of the challenged provision 
are: Rhode Island Chapter, Associated General 
Contractors of America v. Kreps, 450 F.Supp. 338 
(D.R.I. 1978); Associated General Contractors of 
Kansas v. Secretary of Commerce, No. C.A.77-4218 
(D.Kan. Feb. 9, 1978); Indiana Constructors, Inc., 
v. Kreps, No.IP 77-602-C (S.D.Inc. Jan. 4, 1979); 
Associated General Contractors of America, Inc. 
Alaska Chapter v. Kreps, No. F78-1 (D.Alas. Oct. 
10, 1978), appeal filed, No. 78-3421 (9th Cir. 
Oct. 19, 1978); Frank Coluccio Construction Co. 
v. Kreps, No. F78-9-Civ. (D.Alas. Oct. 5, 1978).

Decisions denying preliminary injunction 
are: A.J. Raisch Paving Co. v. Kreps, No. 77-3977 
(N.D.Cal. Dec. 15, 1977), appeal filed, No. 77- 
2497 (9th Cir. Dec. 20, 1977); Florida East 
Coast Chapter, Associated General Contractors of 
America v. Secretary of Commerce, No. C.A.77-8351

-48-



Given the uniqueness of this legislation, 
and in view of this Court's decision in 
Regents of the University of California 
v. Baklce, 438 U.S. 265 (1978), it is 
apparent that the near unanimity among 
the lower courts is correct. The MBE 
ten percent set aside is consistent with 
and lawful under Title VI of the Civil 
Rights Act of 1964, and it is constitu­
tional under the Fifth Amendment.

(S.D.Fla. Nov. 3, 1977); General Building Con­
tractors Ass'n v. Kreps, No. C.A.77-3682 (E.D.
Pa. Dec. 9, 1977); Virginia Chapter, Associated 
General Contractors of America, Inc. v. Kreps, 
444 F.Supp. 1167 (W.D.Va. 1978); Carolines 
Branch, Associated General Contractors of 
America v. Kreps, 442 F.Supp. 392 (D.S.C. 1977); 
Michigan Chapter, Associated General Contractors 
of America, Inc. v. Kreps, No. C.A.M-77-165 (W. 
D.Mich. Jan. 4, 1978).

Three district courts have rendered deci­
sions adverse to the constitutionality of the 
statute: Wright Farms Construction, Inc. v.
Kreps, 444 F.Supp. 1023 (D.Vt. 1977) (unconsti­
tutional as applied); Montana Contractors Asso­
ciation v. Secretary of Commerce, 460 F.Supp.
1174 (D.Mont. 1979) (unconstitutional as applied) 
Associated General Contractors of California v. 
Secretary of Commerce, 441F.Supp. 955 (C.D.Cal.
1977) , vacated and remanded for determination of 
mootness, 438 U.S. 909 (C.D.Cal. 1978), appeals 
filed, Nos. 78-1107, 78-1108, 78-1114 (Nov. 17,
1978) (unconstitutional on its face) .

- 4 9 -



I. THE MBE TEN PERCENT SET ASIDE IS
CONSISTENT WITH TITLE VI AND LAWFUL 
IN VIEW OF THE CONTROLLING PRINCIPLE 
THAT SUBSEQUENT SPECIFIC CONGRES­
SIONAL ENACTMENTS PREVAIL OVER PRIOR 
GENERAL ONES ~

In Regents of the University of 
California v. Bakke , 438 U.S. 265 (1978),
this Court was divided on the issue of 
whether Title Vi's ban on racial discrim­
ination prohibited a race conscious set 
aside favoring racial minorities, The 
Court's division in Bakke is irrelevant 
here. Whatever Congress may have intended 
in 1964, it is patent that Congress in 
1977 perceived no conflict between Title 
Vi's ban on discrimination and the ten 
percent set aside in the Public Works 
Employment Act of 1977. Even if any 
such conflict existed, the ten percent 
set aside would be lawful under the con­
trolling principle that subsequent specific 
legislative enactments prevail over former 
general ones. See pp. 56-59, infra.

The immediate predecessor of the 
Public Works Employment Act of 1977 was 
the Local Public Works Capital Develop­
ment and Investment Act of 1976, Pub.L.

-50-



No. 94-369 (July 22, 1976), 90 Stat. 999, 
42 U.S.C. §§6701, et seq. When Congress 
enacted the 1976 Act, it added a Title 
VI nondiscrimination provision similar 
to those added to virtually all laws 
authorizing the expenditure of federal 
monies by state and local governments.'*’ 
This provision, contained in §207(a) of 
the Act, 90 Stat. 1007, 42 U.S.C. §6727 
(a), is virtually identical to the 
nondiscrimination provision contained in 
Title VI of the Civil Rights Act of 1964, 
42 U.S.C. §2000d.^ Congress continued 1

1. The nondiscrimination provision provided as 
follows:

"No person in the United States shall, 
on the grounds of race, religion, color, 
national origin, or sex, be excluded from 
participation in, be denied the benefits of, 
or be subjected to discrimination under any 
program or activity funded in whole or in 
part with funds made available under this 
subchapter." 42 U.S.C. §6727(a).

2. The nondiscrimination provision in Title VI 
provides:

"No person in the United States shall, 
on the ground of race, color, or national 
origin, be excluded from participation in, 
be denied the benefits of, or be subjected 
to discrimination under any program or 
activity receiving Federal financial 
assistance." 42 U.S.C. §2000d.

- 5 1 -



this parallel by requiring that the
nondiscrimination provision in the 1976
Act be enforced in the same discretionary

3manner as Title VI is enforced.
The following year, Congress sub­

stantially amended the 1976 Act by 
enacting the Public Works Employment Act 
of 1977, Pub,L . No. 95-28 (May 13, 1977), 
91 Stat. 116, 42 U.S.C. §§6710, et seg., 
as amended. See pp. 8 - 10, supra. Among 
the amendments added by Congress in 1977 
was the MBE ten percent set aside amend­
ment, added by §103 of the 1977 Act, 91 
Stat. 117, 42 U.S.C. §6705(f)(2), as 
amended. When it added this amendment, 
Congress saw no reason to alter the Act's 
nondiscrimination provision barring 
discrimination on grounds, inter alia, 
of race, color and national origin in 
"any program or activity" funded under

The only difference between this provision and the 
nondiscrimination provision in the 1976 Act, see 
note 1, supra, is that the latter added religion 
and sex to the grounds of prohibited discrimination.

3. Compare the enforcement procedures in 207 
(b)& (c) of the 1976 Act, 90 Stat. 1008, 42 U.S.C. 
§6727(b)&(c) with the nearly identical procedures 
under Title VI, 42 U.S.C. §2000d-l.

- 5 2 -



the Act, 42 U.S.C. §6727(a), as amended. 
And Congress did not change the use of 
Title VI procedure to enforce the non­
discrimination provision.^ There, of 
course , was no need to do so since Congress 
viewed the MBE ten percent set aside as 
consistent with nondiscrimination.

When Representative Parren Mitchell 
introduced the ten percent set aside in 
the House, he reviewed the historical 
exclusion of minority business enterprises

4. Interestingly, Congress several days later 
did change the enforcement procedures under the 
Act through enactment of another piece of legis­
lation. Specifically, Congress strengthened the 
procedures by making enforcement not discretionary, 
as under Title VI, but mandatory through incorpor­
ation of the compulsory enforcement procedures 
contained in §§122, 124 and 125 of the State and 
Local Fiscal Assistance Act of 1972, 31 U.S.C. 
§§1242, 1244 and 1245, as amended. See 91 Stat. 
166-167, 42 U.S.C. §6727, as amended.

The legislative vehicle for this change was 
the Intergovernmental Antirecession Act of 1977, 
an Act attached to the omnibus Tax Reduction and 
Simplification Act of 1977, Pub.L. No. 95-30 (May 
23, 1977) , 91 Stat. 126. In §605 of the omnibus 
Act, Congress slightly altered the nondiscrimina­
tion provision of §207(a) of the Local Public 
Works Capital Development and Investment Act of 
1976, 42 U.S.C. §6727(a), by adding age and 
handicapped status to the grounds of prohibited 
discrimination; and significantly strengthened 
the enforcement provisions in 207(b), 42 U.S.C. 
§6727(b), by incorporating the mandatory proce­
dures in the State and Local Fiscal Assistance 
Act. See generally, 91 Stat. 166-167, 42 U.S.C. 
§6727, as amended. -53-



from government contracting and observed 
that the set aside was "an excellent 
opportunity to begin to remedy this 
situation." 123 Cong.Rec. H. 1436-37 
(daily ed. Feb. 24, 1977). He added 
that the set aside was not discriminatory 
especially in view of the fact that"[t]he 
8-A set aside under SBA has been tested 
in the courts more than 10 times and 
has been found to be legitimate and 
bona fide." Id. Representative Mario 
Biaggi supported the set aside precisely 
because it was nondiscriminatory; in 
fact, "without adoption of this amend­
ment, this legislation may be potentially 
inequitable to minority businesses and 
workers." 123 Cong.Rec. H. 1440 (daily 
ed. Feb. 24, 1977).

Senator Edward Brooke, author of 
the ten percent set aside in the Senate, 
was even more to the point. At the out­
set, he observed that "the Federal 
Government, for the last ten years in 
programs like SBA's 8(a) set-asides, and 
the Railroad Revitalization Act's 
minority resources centers, to name a 
few, has accepted the set aside concept

- 5 4 -



as a legitimate tool to insure partici­
pation by hitherto excluded or unrepre­
sented groups." 123 Cong.Rec. S.3910 
(daily ed. March 10, 1977). In view of 
this background, the amendment was 
neither discriminatory nor "a limitation. 
Rather, it [was] designed to facilitate 
greater equality in contracting." Id, 
(emphasis added).

Throughout the debates on the ten 
percent set aside, no Member of Congress 
saw the set aside as discriminatory. 
Instead, the only concern about the 
amendment was its effect in areas where 
there were few or no minority business 
enterprises, a concern that was wholly 
assuaged because of the waiver provisions 
in the amendment. See pp. 31-32, 37-38, .
supra. Assured that the set aside amend­
ments would work no inequality but. instead 
would facilitate greater equality,
Congress adopted the set aside without 
any opposition whatsoever.

The Congress that enacted the ten 
percent set aside in 1977 quite obviously 
perceived no conflict between the set 
aside and the nondiscrimination provisions

-55-



contained in the 1977 Act itself or in 
Title VI.

Even if one assumes a direct conflict —
which there is not--between the general
anti-discrimination provisions of the
Public Works Employment Act of 1977 at 

5issue herein , the subsequent, specific stat­
ute must be given precedence. If, as peti­
tioners argue,̂  a basic inconsistency 
exists between the 1964 and 1977 Acts, 
traditional canons of statutory construc­
tion compel this Court to give effect to 
a subsequent Congressional enactment 
which is more specific in scope. See, 
e.g., Morton v. Mancari, 417 U.S. 535,

5. Of course, this Court should attempt to give 
effect to both the 1964 and 1977 acts by recogniz­
ing that no conflict exists between them. See 
generally, Tennessee Valley Authority v. Hill,
437 U.S. 153 (1978); Morton v. Mancari, 417 U.S. 
535, 549 (1974); Posadas v. National City Bank,
296 U.S. 497 (1936) .

6. Petitioners argue:
"The applicability of the Civil Rights Act 
clearly indicates that the MBE provision 
in the instant statute must be struck down 
because, most obviously, it cannot co-exist 
with the applicable provision of Title VI." 
Brief for Petitioners at 38.

-56-



549 (1974). Where, as under petitioners'
view, "the earlier and later statutes are

7irreconcilable," the last expression of 
legislative will must generally be 
respected. Of course, a specific ex­
pression of legislative will controls 
over a general statute without regard to 
priority of enactment. Id. at 550-551.
See also, Radzanower v. Touche Ross & Co., 
et al., 426 U.S. 148, 154-155 (1976); 
Bulova Watch Co. v. United States, 365 
U.S. 753 (1961). However, where, as here, 
the subsequent statute is more specific 
than the prior enactment, courts may not 
ignore the more recent expression of 
legislative will.

Petitioners argue that a Federal 
judge is free to disregard a subsequent, 
more specific Congressional enactment 
whenever the judge believes "the latter 
more particularized statute is less 
conducive to the public welfare." Brief 
for the Petitioners at 37.

Nothing could be further from the 
proper exercise of federal judicial 
power. As Chief Justice Burger noted

7. Morton v. Mancari, supra, at 550.

- 5 7 -



for this Court in Terrness,ee Valley 
Authority v. Hill, 437 U.S. 153 (1978):

"Our individual appraisal of the wisdom or 
unwisdom of a particular course consciously 
selected by the Congress is to be put aside 
in the process of interpreting a statute. 
Once the meaning of an enactment is dis­
cerned and its constitutionality determined, 
the judicial process comes to an end. We 
do not sit as a committee of review, nor 
are we vested with the power of veto.

* * *

"[l]n our constitutional system the commit­
ment to the separation of powers is too 
fundamental for us to pre-empt congressional 
action by judicially decreeing what accords 
with 'common sense and the public weal.'
Our constitution vests such responsibilities 
in the political branches." Id. at 194-195.

- 5 8 -



II. THE MBE TEN PERCENT SET ASIDE,
WHICH HAS NEITHER A DISCRIMINATORY
EFFECT NOR A DISCRIMINATORY PURPOSE,
IS CONSTITUTIONAL UNDER THE STANDARDS
APPLIED IN UNITED JEWISH ORGANIZA-
TIONS BY JUSTICES WHITE, STEVENS AND
REHNQUIST, AND BY JUSTICES STEWART
AND POWELL

Race conscious numerical measures, 
contrary to the petitioners' arguments to 
this Court,1 are not unconstitutional per 
se. United Jewish Organizations v. Carey 
["UJO"] , 430 U.S. 144 (1977). Indeed, before the 
petitioners can invoke even the interme­
diate standard of review by this Court, 
they must show that the challenged class­
ification has both a racially discrimina­
tory purpose and at least a probable 
racially discriminatory effect. Id. See 
also, Arlington Heights v. Metropolitan 
Housing Development Corp., 429 U.S. 252 
(1977); Washington v . Davis, 426 U.S.
229 (19 76); Palmer v . Thompson, 403 U.S.
217 (1971). They have shown and can show 
neither.

The use of benign racial measures by 
government agencies has been sanctioned

1. See Brief for Petitioners at 9.

-59-



by this Court in a number of settings. 
Particularly wide latitude has been 
extended to school boards in assigning 
pupils and to states in drawing reappor­
tionment boundaries.

As to pupil assignment, this Court 
in McDaniel v. Barresi, 402 U.S. 39 
(1971), held that school boards, regard­
less of any findings of past discrimina­
tion, are empowered to assign students 
on the basis of race in order to enhance 
minority representation in otherwise 
predominantly white schools. See also, 
North Carolina Board of Education v. 
Swann, 402 U.S. 43 (1971).2

2. This point was reiterated by Chief Justice 
Burger speaking for a unanimous Court in Swann v. 
Charlotte-Mecklenburg Board of Education, 402 
U.S. 1 (1971) .

"School authorities are traditionally 
charged with broad power to formulate and 
implement educational policy and might 
well conclude, for example, that in order 
to prepare students to live in a pluralis­
tic society each school should have a pre­
scribed ratio of Negro to white students 
reflecting the proportion for the district 
as a whole. To do this as an educational 
policy is within the broad discretionary 
powers of school authorities; absent a 
finding of a constitutional violation, 
however, that would not be within the 
authority of a federal court." 402 U.S. at 
16. -60-



Similar to the manner in which 
school boards may voluntarily use race 
conscious numerical measures, reappor- 
tionment may be undertaken by a state 
using race conscious numerical measures.3

The underpinnings of these decisions 
are not that race conscious numerical 
measures may be used only by school 
boards or states. Rather, their consti­
tutionality hinges upon the racial fair­
ness of the practice. More particularly, 
as explained in UJO, their constitution­
ality results from their being discrimi­
natory neither in purpose nor in effect.

3. In his plurality opinion in United Jewish 
Organizations v. Carey, 430 U.S. 144 (1977),
Justice White stated:

"[W]e think it also [is] permissible for a 
State, employing sound districting principles 
such as compactness and population equality, 
to attempt to prevent racial minorities from 
being repeatedly outvoted by creating dis­
tricts that will afford fair representation 
to the members of those racial groups who are 
sufficiently numerous and whose residential 
patterns afford the opportunity of creating 
districts in which they will be in the 
majority." 430 U.S. at 168 (plurality 
opinion of White, J., joined by Rehnquist 
and Stevens, JJ.).

-61-



The issue in UJO centered upon a
revised racial plan adopted by the State
of New York in an effort to guarantee
minority political representation in the

4state legislature and to comply with 
the Voting Rights Act. One result of 
the revised plan was that a Hassidic 
Jewish community previously within a 
single, predominantly white assembly 4

4. As described by the Court:
" The revised 1974 plan, in its essentials, 
did not change the number of districts with 
nonwhite majorities, but did change the size 
of the nonwhite majorities in most of those 
districts. Under the 1972 plan, Kings County 
had three state senate districts with non­
white majorities of approximately 91%, 61%, 
and 53%; under the revised 1974 plan, there 
were again three districts with nonwhite 
majorities, but now all three were between 
70% and 75% nonwhite. As for state assembly 
districts, both the 1972 and the 1974 plans 
provided for seven districts with nonwhite 
majorities. However, under the 1972 plan, 
there were four between 85% and 95% nonwhite, 
and three were approximately 76%, 61% and 
52%, respectively; under the 1974 plan, the 
two smallest nonwhite majorities were in­
creased to 65% and 67.5%, and the two largest 
nonwhite majorities were decreased from 
greater than 90% to between 80% and 90%."
430 U.S. at 151-152 (footnotes omitted).

-62-



district was split by new legislative 
boundaries separating portions of that 
community into assembly districts that 
were at least 65% minority. Over the 
objections of the white community, which 
sued to invalidate the revised plan as 
discriminatory, this Court upheld the 
plan as an appropriate race conscious 
numerical measure.

At the outset of his plurality 
opinion in UJO, Justice White rejected 
the white community's arguments that 
racial criteria were inherently uncon­
stitutional.

"Contrary to petitioners' first argument, 
neither the Fourteenth nor the Fifteenth 
Amendment mandates any per se rule against 
using racial factors in districting and 
apportionment. Nor is petitioners' second 
argument valid. The permissible use of 
racial criteria is not confined to elimina­
ting the effects of past discriminatory 
districting or apportionment." 430 U.S. 
at 161 (plurality opinion of White, J., 
joined by Brennan, Blackmun and Stevens, 
JJ.) (footnote omitted).

As Justice White summarized, "a reappor­
tionment cannot violate the Fourteenth 
or Fifteenth Amendment merely because a 
State uses specific numerical quotas in

-63-



establishing a certain number of black 
minority districts." 430 U.S. at 162 
(plurality opinion of White, J., joined 
by Brennan, Blackmun and Stevens, JJ.).

In Justice White's view, the racial 
redistricting plan in UJO was constitu­
tional, at least in part, because it was 
consistent with the Voting Rights Act, a 
law which the Court had earlier upheld as 
constitutional. Katzenbach v. Morgan,
384 U.S. 301 (1966).5 Yet, regardless of 
the Act, it also was constitutional 
because there was no discriminatory 
purpose or effect.

Speaking for himself and Justices 
Rehnquist and Stevens, Justice White 
conceded that the plan was race conscious, 
but because the plan did not stigmatize 
and did not fence out whites, it was 
constitutional:

"There is no doubt that in preparing the 
1974 legislation, the State deliberately 
used race in a purposeful manner. But its 
plan represented no racial slur or stigma

5. For a discussion of how these decisions com­
pel the constitutionality of the 10% set aside, 
see pp. 8 2-8 5, infra.

-64-



with respect to whites or any other race, 
and we discern no discrimination violative 
of the Fourteenth Amendment....
"It is true that New York deliberately 
increased the nonwhite majorities in 
certain districts in order to enhance the 
opportunity for election of nonwhite 
representatives from those districts. 
Nevertheless, there was no fencing out of 
the white population from participation 
in the political processes of the county, 
and the plan did not minimize or unfairly 
cancel out white voting strength....
[E]ven if voting in the county occurred 
strictly according to race, whites would 
not be underrepresented relative to their 
share of the population." 430 U.S. at 
165-166 (plurality opinion of White, J., 
joined by Rehnquist and Stevens, JJ.) 
(citations omitted).

Justices Stewart and Powell also 
voted to uphold the racial plan in UJO 
for the same reason: there was no dis­
criminatory purpose or effect. At the 
outset, they observed that the constitu­
tional "question is whether the reappor­
tionment plan represents purposeful 
discrimination," and they noted that 
discriminatory "impact may afford some 
evidence that an invidious purpose was 
present." 430 U.S. at 179 (concurring 
opinion of Stewart, J., with Powell, J.).

-65-



The evidence failed to establish either 
condition:

"But the record here does not support a 
finding that the redistricting plan under­
valued the political power of white voters 
relative to their numbers in Kings County. 
That the legislature was aware of race when 
it drew the district lines might also sug­
gest a discriminatory purpose. Such aware­
ness is not, however, the equivalent of 
discriminatory intent....
"Having failed to show that the legislative 
reapportionment plan had either the purpose 
or the effect of discriminating against them 
on the basis of their race, the petitioners 
have offered no basis for affording them the 
constitutional relief they seek." 430 U.S. 
at 179-180 (concurring opinion of Stewart,
J., with Powell, J.) (citation omitted).
The MBE ten percent set aside here 

is no different from the racial redistrict­
ing plan in UJO. To be sure, Congress 
used race in a purposeful manner. But 
race consciousness is not the equivalent 
of discriminatory purpose. The undeniable 
purpose was not to discriminate but to 
reduce minority unemployment, to enhance 
minority business enterprises, and to 
turn around the near total exclusion of 
MBEs from government contracting. The 
ten percent set aside— giving minority

-66-



businesses at long last a fair shake—  
could hardly be characterized as a slur 
or stigma with regard to whites or 
minorities.

Finally, there is no evidence in 
this record that the MBE ten percent set 
aside fenced out white contractors or in 
any way undervalued their political and 
economic power. Quite to the contrary, 
the Public Works Employment Act of 1977, 
a new program, added billions of dollars 
to their coffers— billions of dollars 
that would have been unavailable but for 
passage of the Act.

Without a discriminatory purpose or 
effect, the MBE ten percent set aside 
cannot be said to have caused any dis­
crimination against white contractors.
As such, the MBE ten percent set aside 
is per se constitutional.

-67-



111• THE m be t e n p e r c e n t set a s i d e a l s o
IS CONSTITUTIONAL UNDER THE INTER­
MEDIATE STANDARD OF REVIEW APPLIED 
IN BAKKE BY JUSTICES BRENNAN,
WHITE, MARSHALL AND BLACKMUN

Assuming arguendo that this Court 
characterizes the MBE ten percent set 
aside as having an invidious purpose and 
a discriminatory effect, the constitu­
tionality of the benign set aside must 
be reviewed under the "intermediate" 
standard of review applied by Justices 
Brennan, White, Marshall and Blackmun in 
Regents of the University of California 
v. Bakke, 438 U.S, 265 (1978).

Just as the strict standard of 
review was deemed inapplicable to the 
benign classification in Bakke, so too 
is it inapplicable here. Additionally, 
the strict standard of review applied by 
Justice Powell in Bakke is not appropri­
ate here where there are legislative 
findings of severe minority underrepre­
sentation in government contracting.

Under the intermediate standard of 
review, the MBE ten percent set aside is 
constitutional because it does not stig­
matize any group and it is necessary to

- 68-



remedy substantial and chronic minority 
underrepresentation in government 
contracting.

A. Because the MBE Ten Percent Set 
Aside Is Similar in Formulation 
and Purpose to the Sixteen Percent 
Special Admissions Program at Issue 
in Bakke, the Intermediate Standard 
of Review Is Applicable Here

In Regents of the University of 
California v. Bakke, 438 U.S. 265 (1978), 
four of the five members of this Court 
who reached the constitutional issue 
declined to review the University's race 
conscious admissions program under the 
strict scrutiny standard of review. 
Neither Allan Bakke nor "whites as a 
class have any of the' traditional 
indicia of suspectness: the class is not 
saddled with such disabilities, or sub­
jected to such a history of purposeful 
unequal treatment, or relegated to such 
a position of political powerlessness as 
to command extraordinary protection from 
the majoritarian political process.'"
438 U.S. at 357 (opinion of Brennan, J., 
with White, Marshall and Blackmun, JJ.) 
(citations omitted).

-69-



Yet, the same four Justices also 
declined to review the University's 
racially benign program under the lenient 
rational basis standard of review. As 
Justices Brennan, White, Marshall and 
Blackmun observed: [T]he mere recita­
tion of a benign, compensatory purpose is 
not an automatic shield which protects 
against any inquiry into the actual 
purposes underlying a statutory scheme."'" 
438 U.S. at 358-359 (opinion of Brennan,
J., with White, Marshall and Blackmun, 
JJ.) (citations omitted).

Wisely, Justices Brennan, White, 
Marshall and Blackmun adopted for benign 
racial classifications an "intermediate" 
standard of review— the standard applied 
to gender classifications. Specifically, 
"racial classifications designed to 
further remedial purposes '"must serve 
important governmental objectives and 
must be substantially related to achieve­
ment of those objectives."'" Id. (cita­
tions omitted). In addition,

"because of the significant risk that 
racial classifications established for 
benign purposes can be misused...[further

-70-



inquiry is necessary] to justify such a 
classification an important and articulated 
purpose for its use must be shown. In 
addition, any statute must be stricken that 
stigmatizes any group or that singles out 
those least well represented in the politi­
cal process to bear the brunt of a benign 
program." 438 U.S. at 361 (opinion of 
Brennan, J., with White, Marshall and 
Blackmun, JJ.).

The benign program at issue in Ba'kke 
was an admissions program which set aside 
sixteen percent of the places in entering 
medical school classes for disadvantaged 
minority applicants. The program at issue 
here, the MBE ten percent set aside, is 
virtually identical in its benign purposes. 
As summarized by Representative Biaggi 
during the House debates on the MBE ten 
percent set aside:

"What the amendment seeks to do is guaran­
tee that at least 10 percent of all funds 
in this legislation will go to contracts 
which will be awarded to minority business 
enterprises. This is not an unreasonable 
demand--in fact it is quite modest. If 
implemented however it could have great 
benefits to the entire minority community. 
Fiscal year 1976 figures indicate that 
less than 1 percent of all Federal procure­
ment contracts went to minority business 
enterprises. This is a situation which 
must be [r] emedied.

-71-



"The objectives of this legislation are 
both necessary and admirable. Yet without 
adoption of this amendment, this legisla­
tion may be potentially inequitable to 
minority businesses and workers. It is 
time that the thousands of minority busi­
nessmen enjoyed a sense of economic 
parity. This amendment will go a long way 
toward helping to achieve this parity and 
more importantly to promote a sense of 
economic equality in this Nation." 123 
Cong.Rec, H.1440 (daily ed. Feb. 24, 1977).

Just as the University's sixteen 
percent set aside admissions program at 
issue in Bakke was generated by benign 
purposes, so too is the MBE ten percent 
set aside a benign program reviewable by 
this Court under the "intermediate" 
standard of review.

B , The Intermediate Standard of Review 
Is Applicable Because— as Justice 
Powell Pointed Out in Bakke— the 
Raciai~~Classification Here Is 
Premised upon Congressional Findings 
of Severe Minority Underrepresenta­
tion in Government Contracting

Application of the intermediate 
standard of review adopted for benign 
racial classifications by Justices 
Brennan, White, Marshall and Blackmun was 
not ruled out by Justice Powell in Bakke.

-72-



True, Justice Powell did apply strict 
scrutiny review to the race conscious 
admissions program at issue in Bakke, but 
he strongly implied that a lesser standard 
of review might be appropriate where there 
have been judicial, legislative or admi­
nistrative findings of past discrimination 
or underrepresentation. 438 U.S. at 299- 
305 (opinion of Powell, J.).

Since the findings deemed necessary 
by Justice Powell were absent in Bakke, 
he chose not to apply a lesser standard 
of review to the University's benign 
program. Id. Here, however, there are 
both legislative and administrative 
findings made by government bodies 
charged with making such findings. Thus, 
under Justice Powell's own criteria, the 
intermediate standard of review for 
benign classifications is appropriate 
here.

For the most part, Justice Powell 
in Bakke referred to findings of "past 
discrimination" or of "unconstitutional 
discrimination." But the cases he relied 
on indicate that his views more broadly 
encompass findings of minority underrep­

-73-



resentation and include remedial measures 
certainly not limited to identified 
victims of past discrimination.

The crucial findings here of course 
are legislative and administrative. 1

1. With regard to the judiciary, Justice Powell 
in Bakke stated with approval that the courts 
"have fashioned various types of racial prefer­
ences as remedies for constitutional or statutory 
violations resulting in identified, race-based 
injuries to individuals held entitled to the 
preference. E.g., Bridgeport Guardians, Inc. v. 
Bridgeport Civil Service Commission, 482 F.2d 
1333 (CA2 1973) ; Carter v. Gallagher, 452 F.2d 
315 (CA8 1972), modified on rehearing en banc, 
id., at 327." 438 U.S. at 301 (opinion of
Powell, J.). In both Bridgeport and Carter there 
in fact had been judicial findings of past dis­
crimination, but the race conscious numerical 
remedies were in no way limited to identified 
victims of that discrimination.

In Bridgeport, the district court had 
found that the written tests used to screen 
minority applicants from 1965 to 1970 for the 
position of police officer were discriminatory, 
not job related, and hence unlawful. In order 
to overcome this past discrimination, the dis­
trict court imposed and the court of appeals 
approved a rigid remedy not limited to identified 
victims. With minority representation in the 
Bridgeport population at 25%, and minority 
representation in the Bridgeport Police Depart­
ment then at only 3.6%, the court set a goal of 
15% minority police officers. In order to reach 
this 15% goal, future minority applicants were 
to be placed in a separate minority pool: 50% of

-74



Addressing such findings in Bakke,
Justice Powell stated with approval that 
racial "preferences also have been upheld

the next ten vacancies were to be filled from 
the minority pool; 75% of the next twenty 
vacancies were to be filled from the minority 
pool; and 50% of the vacancies thereafter were 
to be filled from the minority pool (alterna­
tively hiring one minority and one white) until 
the goal was reached. 482 F„2d 1333 (2d Cir. 
1973) .

Carter is similar although the remedy was 
more strongly disputed. There the district 
court had found extensive, unlawful employment 
discrimination in the Minneapolis Fire Depart­
ment. In order to overcome this past discrimi­
nation, the district court imposed a remedy not 
limited to identified victims of the identified 
discrimination. With minority representation 
in the Minneapolis population at 6.4%, and with 
no minority representation in the Fire Depart­
ment, the district court set a goal of 3.7% and 
ordered that it be met by filling the next 
available twenty positions with minority appli­
cants. A panel of the court of appeals, noting 
that there were no identified victims as plain­
tiffs and that the preference would benefit 
minorities generally, 452 F.2d at 325-326, 
reversed the absolute preference. Thereafter, 
the court of appeals en banc, again conceding 
that there were no identifiable victims of the 
discrimination, 452 F.2d at 328, approved a 
remedy by which 33% of the future hires would 
be minority applicants until twenty minority 
persons were hired and the 3.7% goal attained. 
The Supreme Court denied certiorari, 406 U.S. 
950 (1972).

-75-



where legislative or administrative body- 
charged with the responsibility made 
determinations of past discrimination by 
the industries affected, and fashioned 
remedies deemed appropriate to rectify 
the discrimination. E.g., Contractors 
Association of Eastern Pennsylvania v 
Secretary of Labor, 442 F2d 159 (CA3), 
cert denied, 404 US 854 (1971); Associ­
ated General Contractors of Massachusetts, 
Inc. v Altshuler, 490 F2d 9 (CA1 1973), 
cert denied, 416 US 957 (1974); cf., 
Katzenbach v. Morgan, 384 US 641 (1966)
438 U.S. at 301-302 (opinion of Powell,
J.) (footnote omitted). In footnote 41, 
Justice Powell extended this commentary 
by observing that Bakke did "not call 
into question congressionally authorized 
administrative actions, such as... approval 
of reapportionment plans under §5 of the 
Voting Rights Act of 1965.... In such 
cases, there has been detailed legislative 
consideration of the various indicia of 
previous constitutional or statutory 
violations, e.g., South Carolina v 
Katzenbach, 383 U.S. 301, 308-310 (1966)."
438 U.S. at 302 n.41 (opinion of Powell, J.).

-76-



For the most part, the cases relied 
on by Justice Powell involved no legisla­
tive or administrative findings of past 
unlawful or unconstitutional discrimina­
tion. Thus, these cases provide overwhelm­
ing support for the implication that 
findings of underrepresentation are suf­
ficient .

Although there are pretensions in 
Contractors Association and in Altshuler 
that the race conscious numerical 
measures were based on identified past 
discrimination, there in fact were no 
legislative or administrative findings 
other than of underrepresentation.

In Contractors Association, the 
court upheld the goals and timetables 
imposed as bid conditions upon Philadel­
phia area construction contractors by the 
Office of Federal Contract Compliance 
pursuant to the United States Department 
of Labor's interpretation of Executive 
Order 11246— which requires contractors
on federally assisted construction pro-

2jects to "take affirmative action."

2. As summarized by the court, the Department 
of Labor in June 1967 issued an order implement-

-77-



The goals and timetables,- which 
became known as the Philadelphia Plan

ing the Executive Order in the Philadelphia area 
by requiring contract bidders "to submit 'accept­
able affirmative action' programs 'which shall 
include specific goals of minority manpower 
utilizationk ” Contractors Association of Eastern 
Pa. v. Secretary of Labor, 442 F.2d 159, 163 (3d 
Cir.), cert, denied, 404 U.S. 854 (1971). The 
Department of Labor order delegated to an area 
office of the Office of Federal Contract Compli­
ance the authority to set specific goals, and 
set forth the factors by which those goals were 
to be determined including:

’"T) The current extent of minority group 
participation in the trade.
2) The availability of minority group 
persons for employment in such trade.
3) The need for training programs in the 
area and/or the need to assure demand for 
those in or from existing programs.
4) The impact of the program upon the 
existing labor force.'" 442 F.2d at 163- 
164.

In August 1969, three days of hearings were held 
to determine the appropriate goals under the 
foregoing criteria; and in September 1969, the 
goals for minority manpower utilization were 
determined for six of the skilled building trades 
The goals actually were ranges imposed in steps 
over a four-year period. For example, required 
minority representation in the elevator construc­
tion workers increased from a range of 4%-8% in 
1970 to a range of 19%~23% in 1973; in the iron­
workers the goal was 5%~9% in 1970 and 22%-26% 
in 1973. 442 F.2d at 164.

-78-



were imposed without findings of past
discrimination or even a formal identifi-

3cation of past discrimination. Instead, 
the focus had been simply on the exclusion 
of minorities from the trades. For 
example, the Department of Labor found 
that "'there traditionally has been only 
a small number of Negroes employed in 
these...trades. '" 442 F,2d at 164. In
the court's view, this finding and 
related data alone "may have been suffi­
cient to justify administrative action 
leading to the specification of contract 
provisions." 442 F .2d at 177. But the 
court did not have to rely only on his­
torical generalizations, for there also
were administrative findings of severe

4minority underrepresentation.

3. As a result of the August 1969 hearings, 
the Office of Federal Contract Compliance, in 
September 1969, found that minority representation 
in the population of the five-county Philadelphia 
area was 30% while the minority representation in 
the six building trades was approximately 1%, and 
further "that this obvious underrepresentation 
was due to the exclusionary practices of the 
unions representing the six trades." 442 F.2d
at 173.
4. These findings, "revealing the percentages 
of utilization of minority group tradesmen in

-79-



Associated General Contractors of
Massachusetts, Inc, v. Altshuler, supra , 
presents a similar factual situation. 
There, the Massachusetts Department of 
Transportation and Construction, under 
the authority of gubernatorial Executive 
Order 74, determined that the federally 
approved affirmative action plan appli­
cable to the building trades under 
Executive Order 11246 was inadequate to 
assure minority representation and that 
the state thereby needed a stricter plan 
which would apply to state construction 
projects. Based not upon any identified 
past discrimination but instead only upon 
"an assessment of current availability of 
minority journeymen, apprentices, and 
trainees," 490 F.2d at 19, the state 
required that on any construction project 
located in any area of high minority

the six trades compared with the availability of 
such tradesmen in the five-county area, justified 
issuance of the order without regard to a finding 
as to the cause of the situation.... A finding 
as to the historical reason for the exclusion of 
available tradesmen from the labor pool is not 
essential for federal contractual remedial action." 
442 F.2d at 177.

-80-



»l 1concentration there be "'a not less than 
twenty percent ratio of minority employee 
man hours in each job category,'" and that 
contractors take "'every possible measure 
to achieve compliance.'" 490 F .2d at 11. 
Although this 20% goal was imposed without 
any timetables and without any proposed 
termination date, the court added an open- 
ended termination date: "If, at some 
future time, racial balance were to be 
achieved in Boston's construction trades, 
we assume that there would no longer exist 
a compelling need for remedial action."
490 F.2d at 18 n.16. Similar to the 
federally imposed Philadelphia Plan, the 
state-imposed Massachusetts Plan was not 
predicated or premised upon findings of 
past discrimination or even an identifi­
cation of past discrimination. But, as 
in Philadelphia, there were administrative
findings of severe minority underrepre-

5sentatxon m  the building trades.

5. Those findings "revealed that despite the 
existence of the federal Boston Plan, minority 
membership in all of the nineteen participating 
unions amounted to less than four per cent of 
union membership, while minorities comprised 
approximately twenty-three percent of the popu-

-81-



The Katzenbach cases present a simi­
lar pattern and are illustrative not only 
of Congress' broad powers to enact race 
conscious legislation but also of the 
minimal findings of underrepresentation 
required to support remedial legislation. 
These cases upheld the constitutionality 
of various provisions of the Voting Rights 
Act of 1965 as a proper exercise of 
Congressional power. The purpose of the 
Act, of course, was to enhance the voting 
rights of minorities.

lation of Boston.” Associated General Contractors 
of Massachusetts v. Altshuler, 490 F.2d 9, 13 (1st 
Cir, 1973), cert, denied, 416 U.S. 957 (1974). On 
the basis of these statistical findings and other 
statistical data, "the district court concluded 
that racial imbalance does exist in the Boston 
construction trades and such imbalance is the re­
sult of past discriminatory practices on the part 
of many 'entities' in that industry." 490 F.2d at 
18 n.15. The court of appeals elevated the statis­
tical findings and the district court's conclusion 
yet another step: "It is undisputed that past ra­
cial discrimination in Boston's construction trades 
is in large part responsible for the present racial 
imbalance." 490 F.2d at 21. Despite these gratui­
tous findings, the race conscious Massachusetts 
Plan was imposed and upheld not on the basis of 
identified past discrimination but only upon find­
ings of severe minority underrepresentation.

-82-



In South Carolina v. Katzenbach, 383 
U.S. 301 (1966), South Carolina challenged 
§4 of the Act on the ground that there 
had been no unlawful or unconstitutional 
voting discrimination in the state and on 
the ground that there was an insufficient 
nexus between any past violations and the 
formula used to determine current coverage 
by the Act. The Court conceded that only 
in three states had the "federal courts... 
repeatedly found substantial voting dis­
crimination," 383 U.S. at 329 (footnote 
omitted), and that the inclusion of South 
Carolina was based only upon "fragmentary 
evidence of recent voting discrimination 
mainly adduced by the Justice Department 
and the Civil Rights Commission," 383 U.S. 
at 329-330 (footnote omitted). Nonethe­
less, the presence or absence of past 
constitutional violations was not crucial. 
"In identifying most evils, Congress 
obviously may avail itself of information 
from any probative source." 383 U.S. at 
330. Additionally, application of that 
formula to South Carolina and to other 
jurisdictions was proper "at least in the 
absence of proof that they have been free

-83-



of substantial voting discrimination in 
recent years." Id.

The Court in Katzenbach v.Morgan,
384 U.S. 641 (1966) , addressed a similar 
issue: whether §4(e) of the Voting Rights 
Act, which had the effect of invalidating 
a New York law requiring English literacy 
as a prerequisite to voting, was consti­
tutional. New York argued that Congress 
was without power to invalidate the 
English literacy requirement, because the 
law had not been judicially determined 
to be in violation of the Fourteenth 
Amendment. The Court rejected this argu­
ment, holding that neither judicial nor 
legislative findings of unconstitutional 
discrimination were necessary to sustain 
the remedial race conscious provisions of 
the Act.

Justice Powell's approval in Bakke 
of Contractors Association, Altshuler and 
the Katzenbach cases indicates that he 
would not apply strict scrutiny review to 
benign race conscious programs premised 
upon administrative or legislative find­
ings of severe minority underrepresenta­
tion. Regents of the University of Cali-

-84-



fornia v. Bakke, 438 U.S. 265, 301-303 
(1978).

Here, of course, there is no doubt 
that the MBE ten percent set aside is 
premised both upon administrative find­
ings and on legislative findings of 
chronic minority underrepresentation in 
government contracting.

In its report to Congress, the U.S. 
Commission on Civil Rights stated that 
fewer than 1% of all federal procurement 
contracts and fewer than 1% of all state 
and local government contracts were awarded 
to minority business enterprises.^
Congress' watchdog, the Government 
Accounting Office, made nearly identical 
findings and reported that the SBA's 
Section 8(a) Program was inadequate to

7remedy the chronic underrepresentation.
Similar findings were used by 

Congress to support the need for the MBE 
ten percent set aside. Representative 
Barren Mitchell, author of the set aside, 6 7

6. U.S. Commission on Civil Rights, Minority and 
Women as Government Contractors, at vii (May 1975).
7. GAO Report to Congress: Questionable Effective­
ness of the 8(a) Procurement Program at 4 (April 1975).

-85-



stressed on the floor of the House that 
the "average percentage of minority 
contracts, of all government contracts, 
in any given fiscal year, is 1 percent—
1 percent. That is all we give them."
123 Cong.Rec. H. 1437 (daily ed. Feb. 24, 
1977) .8

Given the administrative and legis­
lative findings here~-findings which were 
absent in Bakke— it would be inappropriate 
to review the benign MBE ten percent set 
aside under the strict scrutiny standard 
of review. The appropriate standard is 
the intermediate standard already adopted 
by Justices Brennan, White, Marshall and 
Blackmun.

8. Representative Mario Biaggi supplemented 
this record:

"This Nation's record with respect to pro­
viding opportunities for minority businesses 
is a sorry one. Unemployment among minority 
groups is running as high as 35 percent. 
Approximately 20 percent of minority busi­
nesses have been disolved |=ic] in a period 
of economic recession. The consequences 
have been felt in millions of minority 
homes across the Nation.

"k "k ie"Fiscal year 1976 figures indicate that less 
than 1 percent of all Federal procurement 
contracts went to minority business enter­
prises. This is a situation which must be 
[r/emedied." 123 Cong. Rec. H. 1440 (daily 
ed. Feb. 24, 1977).

-86-



C. The MBE Ten Percent Set Aside Is
Necessary To Remedy Substantial and 
Chronic Minority Underrepresentation 
in Government Construction Contract­
ing and It Does Not Stigmatize Any 
Group
Both elements of the intermediate 

standard of review are met by the MBE ten 
percent set aside. It is premised upon 
an important, articulated purpose. And 
it does not stigmatize any group.

In Regents of the University of 
California v. Bakke, 438 U.S. 265 (1978), 
four members of this Court held that the 
University's sixteen percent set aside 
satisfied the first prong of the inter­
mediate review test. As summarized by 
Justice Brennan, the University's 
"articulated purpose of remedying the 
effects of past societal discrimination 
is, under our cases, sufficiently impor­
tant to justify the use of race-conscious 
admissions programs where there is a 
sound basis for concluding that minority 
underrepresentation is substantial and 
chronic, and that the handicap of past 
discrimination is impeding access of 
minorities..,." 438 U.S. at 362 (opinion

-87-



of Brennan, J., with White, Marshall and 
Blackmun, JJ.). Here, as in Bakke, the 
race conscious program serves the impor­
tant, articulated purpose of remedying 
past societal discrimination.

The continuing effects of past 
societal discrimination are undeniable 
in a society in which "during most of the 
past 200 years, the Constitution as 
interpreted by this Court did not prohi­
bit the most ingenious and pervasive 
forms of discrimination." 438 U.S. at 
387 (opinion of Marshall, J.). See also, 
Sedler, "Beyond Bakke: The Constitution 
and Redressing the Social History of 
Racism," 14 Harv.Civ, Rights— Civ.Lib.L . 
Rev. 133 (1979). The history of extreme 
discrimination in the skilled building 
trades— the training ground for future 
contractors— is especially well documented. 
In fact, "[jjudicial findings of exclusion 
from crafts on racial grounds are so 
numerous as to make exclusion a proper 
subject for judicial notice." United 
Steelworkers of America v . Weber, 61 
L .Ed.2d 480, 486 n.l (1979).

As a result of societal discrimina-

-88-



tion within the construction industry in 
particular, minority contractors have had 
an especially difficult time getting 
their feet in the door. As Representative 
John Conyers stated during the debates on 
the MBE ten percent set aside,

"minority contractors and businessmen who 
are trying to enter in on the bidding 
process...get the 'works' almost every time. 
The sad fact of the matter is that minority 
enterprises usually lose out.... [T]hrough 
no fault of their own, [they] simply have 
not been able to get their foot in the 
door." 123 Cong.Rec. H. 1440 (daily ed.
Feb. 24, 1977).

Governments at all levels--federal, 
state, county, municipal— have done little 
to alter the pervasive effects of this 
discrimination and exclusion. For the 
most part, they have subsidized and en­
trenched past exclusionary patterns.

-89-



Recognizing the exclusionary prac­
tices of past contracting methods and 
the perpetuation of past discrimination, 
Congress also recognized the opportunity 
presented to alter the record of substan­
tial and chronic exclusion. "In the 
present legislation before us, it seems 
to me that we have an excellent opportu­
nity to begin to remedy this situation." 
Rep.. Mitchell, 123 Cong.Rec. H.1437 
(daily ed. Feb. 24, 1977). Representative 
Biaggi echoed the need: "This is a situ­
ation that must be [r]emedied." Id. at 
1440. He added, in view of the past, 
that the ten percent figure was "not an 
unreasonable [percentage]— in fact it is 
quite modest." Id.

The modest MBE ten percent set aside 
also satisfied the second part of the 
test in the intermediate standard in that 
it neither "stigmatizes any group [n]or 
...singles out those least well represented 
in the political process to bear the 
brunt of [the] benign program." 438 U.S.

-90-



at 361 (opinion of Brennan, J., with 
White, Marshall and Blackmun, JJ.).

In Bakke, four members of this 
Court recognized that this "second prong 
of our test" was "clearly satisfied" by 
the sixteen percent set aside. In this 
regard the MBE ten percent set aside is 
identical.

The set aside obviously does not 
stigmatize whites. "Unlike discrimina­
tion against racial minorities, the use 
of racial preferences for remedial 
purposes does not inflict a pervasive 
injury upon individual whites in the 
sense that wherever they go or whatever 
they do there is a significant likelihood 
that they will be treated as second class 
citizens because of their color." 438 
U.S. at 375 (opinion of Brennan, J., with 
White, Marshall and Blackmun, JJ.) (em­
phasis added). And there, of course, is 
no stigma attributable to the minority 
beneficiaries of the program especially 
since there is no question whatsoever 
about the qualifications of the minority 
business enterprises. Moreover, there 
is no stigma associated with the program

-91-



since it merely assures access to govern­
ment contracts; as in Bakke, the "program 
does not establish a quota in the invidi­
ous sense of a ceiling on the number of 
minority applicants to be admitted." Id. 
Even the petitioners here, it would seem, 
would admit that receipt of government 
contracts involves no stigma but rather 
enhances economic viability.

Finally, the MBE ten percent set 
aside does not single out any identified 
group which is underrepresented in the 
political process to bear the brunt of 
this benign program. In fact, with this 
program, as with the sixteen percent set 
aside in Bakke, it cannot be "even 
claimed that [the] program in any way 
operates to...single out any discrete 
and insular, or even any identifiable, 
nonminority group." 438 U.S. at 374 
(opinion of Brennan, J., with White, 
Marshall and Blackmun, JJ.).

Like the sixteen percent set aside 
in Bakke, the MBE ten percent set aside 
herein fully satisfies both prongs of 
the intermediate standard of review 
applicable to benign race conscious

-92-



programs. As such, the MBE ten percent 
set aside is constitutional.

-93-



IV. EVEN IF THE STRICT SCRUTINY
STANDARD OF REVIEW WERE APPLICABLE, 
THE MBE TEN PERCENT SET ASIDE 
STILL WOULD BE CONSTITUTIONAL

Although the intermediate standard 
of review is applicable to benign racial 
classifications, and although the MBE ten 
percent set aside satisfies the interme­
diate standard of review, the MBE ten 
percent set aside also would be consti­
tutional under the strict scrutiny 
standard of review.

A. Under the Standards Applied by
Justice Powell in Bakke, Congress 
Is Both Authorized and Competent 
To Find Minority Underrepresenta­
tion in Government Contracting 
and To Devise a Remedy for that 
Underrepresentation

In his opinion in Regents of the 
University of California v. Bakke, 438 
U.S. 265 (1978), Justice Powell indicated 
that the strict scrutiny standard of 
review was not necessarily applicable to 
benign racial classifications premised 
upon judicial, legislative or adminis­
trative findings of past discrimination

-94-



or severe minority underrepresentation. 
See pp.73 “86, supra. Nevertheless, even 
where strict scrutiny is applicable, 
Justice Powell also stated that the 
strict standard could be satisfied by a 
classification designed to remedy past 
practices--for a government "certainly 
has a legitimate and substantial inter­
est in ameliorating, or eliminating 
where feasible, the disabling effects of 
identified discrimination." 438 U.S. at 
307 (opinion of Powell, J.). Again, 
however, Justice Powell referred to the 
necessity of appropriate governmental 
"findings", and he added the condition 
that the government body must be author­
ized and competent to make such findings:

"[The University] does not purport to have 
made, and is in no position to make, such 
findings. Its broad mission is education, 
not the formulation of any legislative policy 
or the adjudication of particular claims of 
illegality. For reasons similar to those 
stated in Part III of this opinion, isolated 
segments of our vast governmental structures 
are not competent to make those decisions, 
at least in the absence of legislative mandates 
and legislatively determined criteria. Cf. 
Hampton v. Mow Sun Wong, 426 U.S. 88 (1976); 
n .41, supra. Before relying upon these sorts

-95-



of findings in establishing a racial 
classification, a governmental body must 
have the authority and capability to 
establish, in the record, that the class­
ification is responsive to identified 
discrimination. See, B.g., Califano v. 
Webster, 430 U.S. at 316-321." 438 U.S.
at 309 (opinion of Powell, J.) (footnote 
omitted; emphasis added) .

Justice Powell's views leave no 
question that Congress--as a matter of 
constitutional authority--is authorized, 
capable and competent to make not only- 
findings but also far reaching policy 
decisions. Mow Sun Wong stands for 
precisely this proposition. And Webster 
illustrates the minimal legislative 
findings necessary to support such policy 
decisions.

In Hampton v. Mow Sion Wong, 426 
U.S. 88 (197 6) , this Court struck down a 
rule of the United States Civil Service 
Commission which denied aliens permanent 
employment in the competitive service.
The Court's decision was based in part 
upon the role of the Commission. This 
occurred because the Commission had 
defended its discriminatory rule on 
numerous grounds relating to its pur-

-96-



ported role in foreign affairs and in 
immigration and naturalization. The 
Court rejected these proffered ration­
ales since neither the President nor the 
Congress had authorized such a role for 
the Commission.1 As the Court made 
clear, the Commission's role is quite 
limited and specific:

"It]he Commission performs a limited and 
specific function.

The only concern of the Civil Service 
Commission is the promotion of an efficient 
federal service. In general it is fair to 
assume that its goals would be best served 
by removing unnecessary restrictions on 
the eligibility of qualified applicants 
for employment." 426 U.S. at 114, 115 
(footnote omitted).

1. The Court stated:
"It is the business of the Civil Service 
Commission to adopt and enforce regulations 
which will best promote the efficiency of 
the federal civil service. That agency has 
no responsibility for foreign affairs, for 
treaty negotiations, for establishing immi­
gration quotas or conditions of entry, or 
for naturalization policies. Indeed, it 
is not even within the responsibility of 
the Commission to be concerned with the 
economic consequences of permitting or pro­
hibiting the participation by aliens in 
employment opportunities in different parts 
of the national market." 426 U.S. at 114.

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The fact that the Commission's asserted 
interests for its discriminatory rule 
exceeded its legislatively authorized 
role was crucial. Indeed, the Court 
intimated that its result would have 
been different if the Commission's rule 
had been directly related to its inter­
ests, or if the President or the 
Congress had mandated the rule:

"When the Federal Government asserts an 
overriding national interest as justifica­
tion for a discriminatory rule which would 
violate the Equal Protection Clause if 
adopted by a State, due process requires 
that there be a legitimate basis for pre­
suming that the rule was actually intended 
to serve that interest. If the agency 
which promulgates the rule has direct res­
ponsibility for fostering or protecting 
that interest, it may reasonably be presumed 
that the asserted interest was the actual 
predicate for the rule. That presumption 
would, of course, be fortified by an appro­
priate statement of reasons identifying the 
relevant interest. Alternatively, if the 
rule were expressly mandated by the Congress 
or by the President, we might presume that 
any interest which might rationally be served 
by the rule did in fact give rise to its 
adoption." 426 U.S. at 103 (emphasis added).

Here, of course, the Court is not 
faced with a mere rule promulgated by, 
for example, the Economic Development 
Administration or by the Small Business

-98-



Administration. Instead, as Justice 
Powell indicated was necessary in Bakke, 
438 U.S. at 309 (opinion of Powell, J.), 
the MBE ten percent set aside is a 
"legislative mandate [with] legislatively 
defined criteria. Cf. Hampton v. Mow 
Sun Wong, 426 U.S. 88 (1976)."

Justice Powell's reliance on 
Califano v. Webster, 430 U.S. 313 (1977), 
as noted, illustrates the minimal .legis­
lative findings necessary to support a 
legislative mandate such as the MBE ten 
percent set aside. At issue in Webster 
was a provision of the Social Security 
Act which allowed a female wage earner, 
for social security benefit computation 
purposes, to "exclude from the computa­
tion of her 'average monthly wage' three 
more lower earning years than a similarly 
situated male wage earner could exclude." 
430 U.S. at 315-316. Assuming that the 
female and the male had earned precisely 
the same amount of wages in the past, 
the differential computation "would 
result in a slightly higher 'average 
monthly wage' and a correspondingly 
higher level of old-age benefits for

-99-



the retired female wage earner." 430
U.S. at 316.

In Webster, this Court unanimously- 
upheld the challenged provision on the 
basis of its legislative history, In 
the Court's view, the legislative history 
of the challenged provision "revealled] 
that Congress directly addressed the 
justification for differing treatment of 
men aid women...and purposefully enacted 
the more favorable treatment for female 
wage earners to compensate for past 
employment discrimination against women." 
430 U.S. at 318. But the legislative 
history relied on by the majority to 
find that the challenged provision had 
been enacted "to remedy discrimination 
against women in the job market," 430 
U.S. at 319, was a slim reed indeed. 
First, referring to the legislative 
history not of the challenged provision 
enacted in 1961, but of an analogous 
statutory differential enacted six years 
earlier, the Court cited a House Report 
which in turn cited a study by the 
United States Employment Service in the 
Department of Labor which "showed that

-100-



age limits are applied more frequently to 
job openings for women than for men and 
that age limits applied are lower." Id. 
Second, referring to subsequent legisla­
tive history in 1961 which related to 
the reason for the 1955 statutory dif­
ferential, the Court cited a statement 
made by a legislator at a hearing which 
justified the earlier statutory differ­
ential on "the theory... that a woman at 
that age [62] was less apt to have 
employment opportunities than a man."
Id. Based upon this legislative history 
— and none other--the Court concluded 
that "the legislative history is clear 
that the differing treatment of men and 
women" was not accidental, "but rather 
was deliberately enacted to compensate 
for particular economic disabilities 
suffered by women." 430 U.S. at 320.

The legislative history here sup­
porting the MBE ten percent set aside of 
course is considerably more substantial 
than the two oblique references relied 
on by the Court to uphold the statutory 
preference in Webster. During the 
debates on the MBE ten percent set aside,

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Members of Congress repeatedly referred
to the need to remedy the high minority2unemployment rate and the need to remedy
the government's exclusionary history of
awarding less than 1% of all government
contracts to minority business enter- 

3prises. Both of these findings are 
reiterated in reports made to Congress

4by agencies authorized to do so. More­
over, Congress presumably was aware of 
its own failed efforts to enhance the 
availability of federal contracts to 
minority business enterprises through 
the SBA's Office of Minority Business 
Enterprises and presumably was aware of 
the similar efforts of President Nixon 
through Executive Orders 11458, 11518 
and 11625. Moreover, Congress, like the

2. 123 Cong.Rec. H.1440 (daily ed. Feb. 24, 
1977) (remarks of Rep. Biaggi); 123 Cong.Rec. 
S.3910 (daily ed. March 10, 1977) (remarks of 
Sen. Brooke).

3. Id. at 1436-37 (remarks of Rep. Mitchell).

4. See, e.gr., GAO Report to Congress: Question­
able Effectiveness of 8(a) Procurement Program 32 
(April 1975).

-102-



judiciary,could take appropriate notice
of the extensive discrimination against
minorities in the skilled building trades
— the training ground for future construc-

5tlon contractors.
That Congress is authorized, capable 

and competent to make the findings that 
it made and to try to remedy— minimally—  
some of that severe underrepresentation 
and past discrimination is unquestioned. 
Beyond a shadow of a doubt, Congress' 
enactment of the MBE ten percent set 
aside satisfies, the criteria deemed 
necessary by Justice Powell in Bakke.
The set aside is, therefore, constitu­
tional.

B . The MBE Ten Percent Set Aside
Furthers a Compelling Governmental 
Purpose and No Less Restrictive 
Alternative Is Available

Aside from the fact that Congress is 
authorized, capable and competent to 
remedy minority underrepresentation or

5. 123 Cong.Rec. H.1440 (daily ed. Feb. 24,
1977) (remarks of Rep. Conyers) .

-103-



past discrimination, the MBE ten percent 
set aside also is constitutional under 
strict judicial scrutiny for it meets 
all the necessary criteria.

As Justice Powell summarized in 
Regents of the University of California 
v. Bakke, 438 U.S. 265 (1978) , for a 
classification to pass strict scrutiny, 
the government "'must show that [1 & 2] 
its purpose or interest is both consti­
tutionally permissible and substantial, 
and that 13] its use of the classifica­
tion is "necessary. . . to the accomplish­
ment" of its purpose or the safeguarding 
of its interest.'" 438 U.S. at 305 
(opinion of Powell, J.) (citations 
omitted) (ellipsis in original). Addi­
tionally, as Justice Brennan pointed out 
in Bakke, a suspect classification can 
be justified "even then, 14] only if no 
less restrictive alternative is avail­
able." 438 U.S. at 357 (opinion of 
Brennan, J., with White, Marshall and 
Blackmun, JJ.) (footnote omitted). The 
MBE ten percent set aside meets all of 
these criteria.

-104-



1. The Purpose is Constitutionally 
Permiss ible

As discussed at pp.94-103, supra, 
there is no question that Congress has 
the power to enact race conscious reme­
dial legislation. Katzenbach v. Morgan, 
384 U.S. 641 (1966); South Carolina v. 
Katzenbach, 383 U.S. 301 (1966); see 
also, Jones v. Alfred H. Mayer Co., 392 
U.S. 409 (1968); Heart of Atlanta Motel 
v. United States, 379 U.S. 241 (1964). 
Moreover, it has been firmly settled 
that Congress has the "power to fix the 
terms on which its money allotments to 
the [States] shall be disbursed." Lau 
v. Nichols, 414 U.S. 563, 569 (1974).

Congress' purpose in enacting the 
MBE ten percent set aside was, inter 
alia, to "begin to remedy" the exclusion 
of minority contractors from government 
contracts. 123 Cong.Rec. H. 1436-37 
(daily ed. Feb. 24, 1977) (remarks of 
Rep. Mitchell). That purpose is undis- 
putedly permissible.

2. The Purpose Is Substantial

As Justice Marshall stated in Bakke,

-105-



the position of racial minorities in 
American society today "is the tragic 
but inevitable consequence of centuries 
of unequal treatment." 438 U.S. at 395 
(opinion of Marshall, J.). "it is 
because of a legacy of unequal treatment 
that we now must permit the institutions 
of this society to give consideration to 
race in making decisions about who will 
hold the positions of influence, afflu­
ence and prestige in America." 438 U.S. 
at 401 (opinion of Marshall, J.). "And 
in order to get beyond racism, we must 
first take account of race." 438 U.S. 
at 407 (opinion of Blackmun, J.).

The MBE ten percent set aside amend­
ment, of course, was directed at the 
admirable purpose of remedying the exclu­
sion of minority contractors from lucra­
tive government contracting. See pp. 26-37 
55/ 89-92, supra. But the underlying
purposes are even more substantial. As 
summarized by Representative Mitchell:

"We cannot continue to hand out survival 
support programs for the poor in this country 
We cannot continue that forever. The only 
way we can put an end to that kind of a program 
is through building a viable minority busi­
ness system." 123 Cong.Rec. H.1436-37 
Idaily ed. Feb. 24, 1977) .

-106-



Representative Biaggi offered similar 
reasoning:

"This Nation's record with respect to pro­
viding opportunities for minority businesses 
is a sorry one. Unemployment among minority 
groups is running as high as 35 percent. 
Approximately 20 percent of minority busi­
nesses have been disolved [sic] in a period 
of economic recession. The consequences 
have been felt in millions of minority homes 
across the Nation.

*  *  *

"This amendment will go a long way toward 
helping to achieve [economic] parity and more 
importantly to promote a sense of economic 
equality in this Nation." Id. at 1440.

On the Senate side, the reasoning was 
virtually identical. As Senator Brooke 
explained to that chamber, "minority 
businesses' work forces are principally 
drawn from communities with severe and 
chronic unemployment.... Only with a 
healthy, vital minority business sector 
can we hope to make dramatic strides in 
our fight against the massive and chronic 
unemployment which plagues minority com­
munities throughout this country." 123 
Cong.Rec. S.3910 (daily ed. March 10,
1977) .

Thus, as these legislators recog-

-107-



nized, it is clear that the purposes of 
the MBE ten percent set aside are not 
only substantial, they are of overwhelm­
ing importance.

3. The MBE Ten Percent Set Aside 
Is Necessary to the Accomplish­
ment of Congress' Purposes

Year after year after year, govern­
ments have awarded fewer than one percent 
of all procurement contracts to minority 
business enterprises. This pattern was 
not about to change unless Congress made 
it change. The MBE ten percent set aside 
was absolutely necessary in order "to 
begin to remedy this situation." 123 
Cong.Rec. H. 1436-37 (daily ed. Feb. 24, 
1977) (remarks of Rep. Mitchell). The 
remedy of course was not very extensive. 
The ten percent figure "in fact is quite 
modest." Id. at 1440 (remarks of Rep. 
Biaggi). Nonetheless, the ten percent 
figure was absolutely necessary to begin 
to accomplish Congress' purposes.

4. There Is No Less Restrictive 
Alternative Available

In enacting the MBE ten percent set

-108-



aside, Congress was not making its first 
attempt to remedy the exclusion of minor­
ity businesses from government contracting. 
Rather, for a decade Congress had been 
pouring money into the Small Business 
Administration and into the SBA's Office 
of Minority Business Enterprise. By the 
mid-1970s, it became clear that the SBA's 
efforts were too insubstantial and too 
ineffectual to remedy the government's 
past patterns.

In reports made to Congress by the 
U.S. Commission on Civil Rights and by

•7the Government Accounting Office, the 
virtually total ineffectiveness of the 
SBA programs and of similar programs was 
thoroughly documented. Similar findings 
were made in late 1976 by the House of 
Representatives Committee on Small Busi-

g
ness. It became evident to Congress

6. U.S. Commission on Civil Rights, Minorities 
and Women as Government Contractors (May 1975) .

7. See note 4 supra.

8. House Comm, on Small Business, Summary of 
Activities, H.R. No. 94-1791, 94th Cong., 2d 
Sess. (1977) .

-109-



that a more substantial program of 
direct government contracts through a 
minority set aside was the only feasible 
means of accomplishing Congress’ purpose.

When Representative Parren Mitchell 
introduced the ten percent set aside 
amendment, he capsulized the problems 
faced by minority contractors even with 
the assistance of the SBA/OMBE programs:

"Let me tell the Members how ridiculous it 
is not to target for minority enterprises.
We spend a great deal of Federal money 
under the SBA program creating, strength­
ening and supporting minority businesses 
and yet when it comes down to giving those 
minority businesses a piece of the action, 
the Federal Government is absolutely re­
miss. All it does is say that, 'We will 
create you on the one hand and, on the 
other hand, we will deny you.' That denial 
is made absolutely clear when one looks at 
the amounts of contracts let in any given 
fiscal year and then one looks at the per­
centage of minority contracts. - The average 
percentage of minority contracts, of all 
Government contracts, in any given fiscal 
year, is 1 percent— 1 percent. That is 
all we give them. On the other hand we 
approve a budget for OMBE, we approve a 
budget for the SBA and we approve other 
budgets, to run those minority enterprises, 
to make them become viable entities in our 
system but then on the other hand we say 
no, they are cut off from contracts." 123 
Cong.Rec. 1436-37 (daily ed. Feb. 24, 1977).

-110-



Senator Brooke was equally emphatic 
about the absolute need, based on past 
experience, for the ten percent set aside. 
It is "necessary because minority busi­
nesses have received only 1 percent of 
the Federal contract dollar, despite re­
peated legislation, Executive Orders and 
regulations mandating affirmative efforts 
to include minority contractors in the 
Federal contracts pool," 123 Cong.Rec. 
S.3910 (daily ed. March 10, 1977).

To Congress, which enacted the ten 
percent set aside without dissent, there 
was no less restrictive alternative 
available to accomplish its purpose.
The MBE ten percent set aside "is the 
only way we are going to get the minority 
enterprises into our system." Id. 
(emphasis added). It is, therefore, 
constitutional.

- I l l -



CONCLUSION

Racial minorities have traditionally 
been excluded from benefitting directly 
from government procurement programs 
through a complex network of events, 
ranging from overt racial discrimination 
to more subtle forms of exclusion trace­
able to discrimination in access to 
educational facilities and to adequate 
financial backing. The short-term result 
of excluding more than fifteen percent 
of our population from the procurement 
pie has been to create a substantial 
competitive advantage for white-owned 
firms seeking to profit from government 
procurement. Instead of a market share 
established by competition, white owned 
businesses have enjoyed a monopoly of 
the procurement trade attributable not 
to superior economic efficiency, but to 
the artificial exclusion of minority 
business enterprises as prospective 
competitors. Congress, in enacting the 
MBE set aside, sought merely to recon­
struct the competitive picture as it 
would have existed but for the historic

-112-



exclusion of minorities from government 
procurement programs. In recognizing 
and declining to perpetuate a skewed 
competitive picture attributable to 
past racism, Congress was engaged in 
seeking to eliminate the current effect 
of past racially discriminatory procure­
ment practices. Since petitioners have 
neither a moral nor a legal claim to a 
status quo built on racial exclusion, 
the decision of the Court of Appeals for 
the Second Circuit should be affirmed.

Dated: October 8, 1979

Respectfully submitted,

E. RICHARD LARSON 
EDNA D. WELLS 
BURT NEUBORNE 
BRUCE J. ENNIS 
American Civil Liberties 

Union Foundation 
22 East 40th Street 
New York, New York 10016
FRANK ASKIN
Rutgers University Law 

School
Newark, New Jersey 07102
ROBERT SEDLER 
Wayne State University 

Law School
Detroit, Michigan 48202 

Attorneys* for Amici Curiae

*We wish to express our appreciation to Alyse 
Gray of the Columbia University School of Law 
for her work on this Brief.

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