Roger Clegg: No reason for 'preferences' in contracting

The recent controversy over the awarding of a particular contract by the Philadelphia School District raises an obvious question: Why, in 2011, should a government agency be awarding contracts with a preferential eye on race, ethnicity, and sex? And the answer is: It shouldn’t.

Such discrimination — the balance of this essay will speak only of racial discrimination, but it’s talking about ethnicity and sex, too — is wrong as a matter of broad principle, but let’s focus on it just in the contracting area. That’s because, even if you think that affirmative action is justified in, say, college admissions, it makes no sense in contracting.

By the way, the phrase affirmative action can mean both racial preferences (which are bad) and taking positive steps to ensure nondiscrimination against anyone (the original meaning). Nobody has any objection to the latter, and the former — which includes not only set-asides, but also “targets” and “goals,” since they inevitably lead to quotas — is the focus here.

The purported justification for preferences in contracting is much narrower than in university admissions. There is no “diversity” justification for them, since there is no African American vs. Latino vs. white perspective on how to repave a school parking lot. The only justification is remedial — that is, a claim that we have to use racial preferences to remedy racial discrimination.

But, as Chief Justice of the United States John G. Roberts Jr. wrote recently, “the way to stop discrimination on the basis of race is to stop discriminating on the basis of race.”

The costs of such discrimination are great. People’s livelihoods are at stake, in addition to its being unfair and divisive.

There are other costs, too. Any system that awards contracts to those other than the lowest qualified bidder will cost the taxpayers money. Corruption is inevitable in government contracting, but historically, it always seems to get worse once racial preferences are added to the mix. “Front” companies are a persistent problem, and frequently, the companies that benefit the most, and benefit over and over again, are hardly “disadvantaged.”

Using such classifications and preferences will invite costly litigation challenging the constitutionality of the program — litigation the government will almost certainly lose.

Sometimes, it is urged that expensive “disparity studies” be commissioned to justify contracting preferences. Of course, claims of racial disparities, particularly when presented by those who stand to gain monetarily if contracting preferences are used, must be viewed with an appropriate degree of skepticism. Besides, a disparity is not necessarily evidence of discrimination, let alone proof of discrimination.

These disparity studies often lead to counterintuitive results. For example, California’s Department of Transportation — with the blessing of the U.S. Transportation Department — now discriminates against whites, Latinos, and some Asian ethnicities in its contracting, and in favor of blacks, <NO1>Native<NO>American Indians, and some other Asian ethnicities.

But here’s the most fundamental response to those who would justify racial preferences as a response to racial discrimination: To the extent that racial groups face discrimination in contracting programs, there are effective responses that do not require racial classifications or preferences.

At every step of the contracting (and subcontracting) process, it is clear that there are better tailored remedies than using racial preferences.

If companies are being excluded from bidding because of unrealistic or irrational bonding or bundling requirements, then those requirements should be changed for all companies, regardless of the race of the owner.

If companies who could submit bids are not doing so, then the publication and other procedures used in soliciting bids should be opened up — but, again, to all potential bidders (regardless of race), not just some.

And, finally, if it can be shown that bids are being denied to the lowest bidder because of that bidder’s race, then there should be put in place safeguards to detect discrimination and sanctions to punish it — but, again, those safeguards and sanctions should protect all companies from race discrimination, not just some.

Contracts are not like university admissions or even employment hiring and promotion, where there is an irreducible and significant amount of subjectivity in the decision-making. Contracting is an area that can be made transparent, and this transparency should make it much easier to detect and correct discrimination.

Even if there could still, in theory, be a few cases of discrimination that go unremedied in the absence of racial classifications, there will be many more cases of discrimination that will result from the institutionalization of racial preferences.

So clear is the constitutional case law in this area that, more and more, when programs are struck down in court, the officials who voted to adopt them are being held personally liable.

In the event of a legal challenge, the government will have to pay its lawyers and expert witnesses; moreover, if it loses (and it will), it will also have to pay the other side’s lawyers and expert witnesses. My organization and Pacific Legal Foundation have recently written a model brief that can be used in challenging these programs, which is posted on the PLF’s website.

Legality aside, why should we want to use something as divisive and unfair as racial classifications and preferences — and why should we want to waste the taxpayers’ money by awarding contracts to other than the lowest qualified bidder?

Roger Clegg is president and general counsel of the Center for Equal Opportunity. Contact him via