8(a) Program Faces Another Day in Court

Opponents and supporters await the decision of a court challenge to the $4.8 billion 8(a) program

P> The 8(a) program faces another court test, March 8, in D.C. District Court in an anti-8(a) case brought by Dynalantic Corp., Deer Park, N.J.

Following the Adarand decision last summer, Dynalantic sued the Defense Department in an attempt to prevent the set-aside of a helicopter training device contract for an 8(a) company. The court will decide whether to stop the contract's set-aside. This hearing is only the first step, and there are several similar cases pending. Together, these decisions will decide the fate of the program.

The Justice Department's defense is supported by amicus briefs from outside groups, including the National Federation of 8(a) Companies, based in the Centech Group Inc., Arlington, Va.

The federation's Washington-based lawyers, Piliero, Mazza & Pargament, provided the argument for the 8(a) program, and Dynalantic's lawyers summarized their pending case.

WT presents both arguments.

Argument by National Federation of 8(a) companies

Although Adarand applied "strict scrutiny" to federal classifications based on race, the court dispelled the notion that "strict scrutiny is strict in theory, but fatal in fact." In noting the "unhappy persistence" of discrimination in this country, the court stated that the federal government is not disqualified from acting in response to it.

The 8(a) program serves a compelling government interest because it is supported by congressional finding of discrimination in public contracting ... [and] congressionally mandated remedial programs are entitled to greater deference [from the courts] than state and local programs.

The 8(a) program is also "narrowly tailored" to eradicate the effects of past discrimination in many respects. First, unlike other remedial programs that have been criticized, 8(a) program entry is based on an individualized eligibility determination, which uses many race-neutral criteria.

Second, the 8(a) program is open to non-minorities (e.g. white individuals) if they can prove that they have been victimized by racial or cultural bias.

Third, the "presumption" of "social disadvantage" may be rebutted by clear and convincing evidence that the applicant has not suffered from discrimination. Fourth, program participation is for a limited duration. Fifth, the 8(a) program is subject to continuous review by Congress and the SBA. Sixth, Congress enacted the 8(a) statute only after race-neutral alternatives (e.g. small business set-asides) had failed.

Finally, the 8(a) program imposes a minimal burden on non-minorities. Non-minority firms are not automatically excluded, and the small percentage of federal prime contract dollars that have gone to the 8(a) program (3.4 percent in 1994) has left the vast majority of federal contract dollars available for non-minority firms.

Argument by Dynalantic Corp.

[In] Adarand v. Pena, the United States Supreme Court ruled that whenever the government bases a program [on race, it].... must have a compelling interest to use race as a limiting criterion for the award of a contract, and the program must be narrowly tailored to redress the past discrimination.

The government's response to [Dynalantic's] constitutional challenge has been to argue that it does not need to produce the same quality of evidence of past discrimination required in similar challenges because the court should "defer" to Congress' special powers under Section 5 of the 14th Amendment. This provision gives Congress the power to create legislation that prevents discrimination by the states. The 8(a) program, however, is strictly a federal program and does not implicate in any way state action, and therefore, is not within the purview of Section 5 of the 14th Amendment. Also, the government's [written] argument completely ignores the Supreme Court's ruling in Adarand.

With respect to actual evidence of past discrimination, the government has been unable to muster anything more than anecdotal evidence of discrimination in society, mathematical disparities between the number of minority businesses and contract dollars awarded to minority businesses, and broad generic statements by certain congressmen and senators that discrimination in society continues to persist. The government's evidence of past discrimination fails to satisfy the standards set by the Supreme Court in similar cases. If the 8(a) program has any chance of ever surviving, detailed disparity studies must be carried out by the government to find evidence of past discrimination. Finally, before the Supreme Court will allow any race-based program such as the 8(a) program to survive, it must be shown to be narrowly tailored to address past discrimination. The 8(a) program...is overly broad insofar as it applies to virtually every category of goods and services bought by the federal government.

Although racism and racial intolerance are an unfortunate past of our country's history and probably continue to be so, the 8(a) program is not a constitutionally permissible way for the government to respond.

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