CBCF Forum Focuses on Challenges to Minority Business Programs

On Nov. 4, 2008, the day the nation elected its first black president, the U.S. Court of Appeals for the Federal Circuit decided the case Rothe Development Corp. v. Department of Defense, ruling unconstitutional a minority contracting program authorized under Section 1207 of the Department of Defense Authorization Act of 1987. The impact of the decision on future minority contracting programs was the topic of a Congressional Black Congress Foundation brain trust session on Thursday, during which experts discussed strategies to prevent future such decisions.

Under the program, DOD could apply a 10% price evaluation adjustment to bids or offers from socially and economically disadvantaged businesses (SDBs) to help further the department’s goal of awarding five percent of its contract dollars to SDBs and similar businesses.

The court decided that Congress didn’t have sufficient

evidence to conclude that there was racial discrimination in defense contracting when the program was reauthorized in 2006. In addition, the department had to discontinue programs that the same statute allowed it to fund grants to Historically Black Colleges and Universities and minority serving institutions for math, science and research initiatives, because Rothe cleverly argued that they too, were unconstitutional. It’s is an isolated situation, but is still a reason for great concern, said moderator Anthony Robinson, who heads the Minority Business Legal Defense and Educational Fund (MBELDEF).

“The economy is growing increasingly dependent on research and technology development. Our young folks at these institutions aren’t getting exposure to technologies as they get developed, which is impairing them as they get into the workforce,” Robinson noted at the CBCF’s 39th Annual Legistlative Conference.

Although

the court ruled against a major program for minorities, explained civil rights attorney Sarah von der Lippe, it’s important to remember that it also made clear that these programs are still constitutional when there is appropriate evidence available to defend them.

But, she added, it would be perilous for minority businesses to act as though there won’t be future challenges to other SDB programs.

To fight these kinds of decisions and win in the future, von der Lippe said, minority businesses and their advocates “are going to have to do is get comfortable again talking about the D word–discrimination.” People have gotten messaged into a corner, using terms like barriers and disparities instead so white people don’t get nervous, which she says is a bad move.

“We have to start talking about discrimination because, frankly,

it’s the only thing courts are going to listen to,” von der Lippe explained. And it’s extremely important to build record of evidence that can be used as a defense against challenges to minority contracting programs.

Michael Jones-Bey, executive director of the Division of Minority and Women’s Business Development for the State of New York, said that he has had great difficulty finding people to testify or submit accounts of discrimination.

“I don’t understand that because if you’re not getting the business anyway, what are you afraid of?” he asked. “We can’t provide the necessary predicate if we can’t get real-life stories.”

Major Clark, III, assistant general counsel for procurement policy for the Small Business Administration’s Office of Advocacy, has experienced similar problems. When he sees proposed regulations promulgated that could adversely affect minority businesses,

his office tries to get entrepreneurs to submit comment detailing how they will be impacted. But getting them to “provide those comments to agencies so they can formalized and presented in a cohesive manner to attack the regulations is a big problem,” lamented Clark.

The Office of Advocacy also seeks research papers through which businesses can offer critical input on a broad range of issues. Although, for example, it recently put out a call for white papers on what businesses would like done in the area of procurement, he hasn’t seen any that take a look on the impact of procurement on minority business.

“I know the talent is there, but someone has to do that so we have that information going forward. We need proactive folks to do things to help us,” Clark said.