Derailing Affirmative Action

Randy Pech says the government's disadvantaged business programs discriminated against his company. This fall, the U.S. Supreme Court will decide if he's right.

The Supreme Court eventually scuttled the Richmond program, and in doing so it created a tough standard, known as "strict scrutiny," that future state and local programs would have to meet.

For programs to comply with strict scrutiny, the government must show that they meet a compelling state interest. Anecdotal accounts of discrimination can satisfy that standard, but the City of Richmond was unable to demonstrate that it had discriminated against minority contractors in awarding contracts. Strict scrutiny also requires that the program in question be narrowly tailored to address only those individuals harmed by past discrimination. The court found that Richmond's 30 percent requirement was too broadly focused.

A pivotal factor involved the total number of qualified DBEs in a particular industry versus the number getting work: The more those numbers differed, the easier it was to prove that a disparity existed. But according to Anthony Robinson, president of the Washington, D.C.-based Minority Business Enterprise Legal Defense and Education Fund, relying on the number of qualified firms as a baseline figure doesn't acknowledge discrimination's effects on a firm's ability to become qualified. "If your premise is you have fewer firms because of discrimination," he says, "then you lock them into that depressed number."

Brett Amole
Val Pech urged her husband to protest the unfair nature of affirmative-action programs.
Brett Amole
Val Pech urged her husband to protest the unfair nature of affirmative-action programs.

Croson's impact on Adarand's case wasn't felt immediately, though. In 1992, the U.S. District Court for Colorado ruled against Adarand, determining that federal DBE programs were constitutional. On appeal, the Tenth Circuit Court addressed the SCC program specifically and still upheld the district court's ruling. The Pechs appealed to the U.S. Supreme Court.

In 1995, six years after the initial contract had been bid, Adarand's fortunes shifted dramatically. In a landmark decision, the U.S. Supreme Court reversed the lower courts' rulings and declared, 5-4, that federal affirmative-action programs must meet the same "strict scrutiny" standard required of state programs.

Opponents of "strict scrutiny" thought the courts should continue to give the federal government greater leeway in remedial programs. Proponents argued that subjecting a program to strict scrutiny was the only way to make sure it was constitutional. In practical terms, however, even after the 1995 Adarand ruling, the Clinton Administration tried to change federal affirmative action programs as little as possible. "Mend it, don't end it," was the administration's slogan.

Attorney Rob Corry, who's behind a movement to place an anti-affirmative action measure before Colorado voters, says Clinton's "slogan was probably better stated as 'Defend it, don't mend it.' It was really just business as usual."

Adarand's case was sent back to the U.S. District Court to be considered under this new standard. "I was told we won, but we were going back to court," Randy Pech recalls. "I was absolutely as baffled as I could get."

Things would get even more baffling.

Of the five major guardrail companies in Colorado, four have spent long periods classified as disadvantaged. C&K of Fountain and Gonzales Construction are currently on the list. Cruz Construction and Ideal Fencing dropped off in recent years when their eligibility ended. All of these companies have been in business for at least fifteen years. All are unimpressed with Adarand's legal fight.

"The difference between me and Adarand," says Ken Lacey, who owns C&K, "is I am not trying to feather my nest."

Last summer, Lacey claims, Adarand tried to underbid him after he had already signed a contract to install guardrail for the state transportation department. Sometimes Colorado contracts are expanded while they're being completed, and another bid request is put out for the new work. Adarand "had the gall to step in during an ongoing contract," Lacey says. Adarand's after-the-fact lower bid cast doubt on C&K's original bid, he claims.

Pech points out that C&K's bid for the same work was twice as high as Adarand's. And while he says he doesn't blame Lacey for being angry, he notes that C&K eventually got the second contract -- even though its bid was still 25 percent higher than Adarand's. Because C&K was a DBE, says Pech, the state "didn't want to ruffle his feathers."

Joe Cruz, president of Cruz Construction, is also unhappy with Pech. The same week in 1995 that the Supreme Court ruled in Adarand's favor, Cruz bid for a subcontractor job in Gunnison County. After learning that Elam Construction was the low prime contractor, Cruz called Elam and asked what subcontractors had been selected. Elam told Cruz that Adarand had submitted the lowest bid. Yet other contractors who'd lost the prime bid later told Cruz that his bid was lowest, by exactly $912.50. When Cruz confronted Elam, he says he was told that Adarand had been selected because Elam owed Pech's company a favor: Adarand had once bailed out a DBE that couldn't finish a job in Eagle County.

"If that's not being prejudiced, what the hell is it?" Cruz asks. "That's the same thing Adarand went to court for."

There's a difference, Pech insists: Working relationships, familiarity with a company -- these are acceptable ways to choose a subcontractor, even when it doesn't submit the low bid. The absolutes of race and gender, on the other hand, are unacceptable, he says.

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