Affirmative Action in Contracting Faces Legal Peril

San Francisco lawmakers declared themselves guilty of discrimination so they could discriminate more.

By Judge Glock. Mr. Glock is director of research at the Manhattan Institute. Excerpts:

"Minority contracting requirements have had deleterious effects on almost every aspect of government for decades. They have cost taxpayers countless billions, degraded government services, and deepened racial divisions. Almost a tenth of the American economy goes through government contracts, which involve everything from building submarines to installing software. Federal, state and local governments have set goals for percentages of these contracts that should be awarded to minority-owned businesses. To hit the goals, government officials can “set aside” contracts for minority firms, offer no-bid deals to minority contractors, or select minority contractors with higher bids than competitors."

"A 2009 study looked at highway costs after California voters banned consideration of race in government programs in the 1990s. It found that costs fell 5.6% relative to federally funded projects, in which racial contracting goals still applied. Other research shows these requirements increase cost overruns and delays.

Minority contracts also encourage fraud. White contractors often use minority “front companies” to win contracts, then pay a small fee to the purported owner. Minority contractors often use bribes to keep getting special government solicitude. There is a steady drumbeat of indictments based on these programs.

In Richmond v. Croson (1989) and Adarand Constructors v. Pena (1995), the Supreme Court said that government could use minority contracting programs only under rare circumstances and to remedy past discrimination. Instead of adhering to these rulings, governments have fostered an industry of “disparity studies” firms. Governments pay these contractors—themselves often minority-owned—hundreds of thousands of dollars to tell them they’ve been discriminating against minorities in contracting.

Governments then use disparity studies’ findings to show courts why they must discriminate in novel ways."

"the City of San Francisco issued legislative findings that it was still “actively discriminating against women and minority groups in its contracting.” Rather than simply stop discriminating, the city claimed it was justified in discriminating in favor of women and minority groups."

"Today, minority contracting engages in explicit racial balancing. New York City’s code demands that Hispanics get 8.99% of professional-services contracts and Native Americans get 0.65%. It is difficult to claim these programs are necessary to remedy past discrimination when they have been going on for decades. They still have no “logical end point.”"