Tuesday, June 17, 2014

Race Preferences for Federal Contracts Coming to an End?

June 17, 2014 by Ian Smith
 
One case coming up to D.C.’s District Court could strike a serious blow to the government’s controversial use of racial preferences in federal contracting. Through several agencies and covering many industries, the federal government since the late seventies has administered a host of programs which set aside contracts specifically for minority-owned businesses. In 2008, after a 10-year long fight in the courts, Rothe Development Inc., a federal contractor from Texas, scored a big victory in D.C.’s Federal Circuit court forcing a key set-aside program to be declared wholly unconstitutional. Now, thanks to a new complaint from the company, the days of the government allocating federal contracts on the basis of race may be numbered.

The program at issue in Rothe’s 2008 victory was the “Small Disadvantaged Business program” (SDB), which had allowed the Department of Defense (DoD) and other agencies to take 10 percent off the price of bids submitted by so-called “small disadvantaged businesses” giving them an artificial boost in the bidding process. Although more competitive, Rothe, a white-owned business, was denied a contract to build a switchboard system for an army base in Mississippi. A “competing” bid from a Korean-owned business was given a “10 percent price evaluation adjustment” and as a result, Rothe was denied the bid…..To Read More…..

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