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Minority Set Asides
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Check My Assignment!Richmond, Virginia, the former capital of the Confederacy, is not the sort of place one would normally associate with controversial efforts at affirmative action. But aware of its legacy of racial discrimination and wanting to do something about it, the Richmond City Council adopted what it called the Minority Business Utilization Plan—a plan that eventually brought it before the U.S. Supreme Court.
The plan, which the council adopted by a 5-to-2 vote after a public hearing, required contractors to whom the city awarded construction contracts to subcontract at least 30 percent of the dollar amount of their contracts to Minority Business Enterprises (MBEs). A business was defined as an MBE if minority group members controlled at least 51 percent of it, and a minority-owned business from anywhere in the United States could qualify as an MBE subcontractor. (The 30 percent set-aside did not apply to construction contracts awarded to minority contractors in the first place.)
Proponents of the set-aside provision relied on a study that indicated that whereas the general population of Richmond was 50 percent African American, only 0.67 percent of the city’s construction contracts had been awarded to minority businesses.
Opponents questioned both the wisdom and the legality of the ordinance. They argued that the disparity between minorities in the population of Richmond and the low number of contracts awarded to MBEs did not prove racial discrimination in the construction industry. They also questioned whether there were enough MBEs in the Richmond area to satisfy the 30 percent requirement.
The city’s plan was in effect for five years. During that time, it was challenged in the courts. A federal district court upheld the set-aside ordinance, stating that the city council’s “findings [were] sufficient to ensure that, in adopting the Plan, it was remedying the present effects of past discrimination in the construction industry.” However, the case was appealed to the Supreme Court, which ruled in City of Richmond v. Croson that the Richmond plan was in violation of the equal protection clause of the Fourteenth Amendment. In delivering the opinion of the majority of the Court, Justice Sandra Day O’Connor argued that Richmond had not supported its plan with sufficient evidence of past discrimination in the city’s construction industry.
QUESTION: In light of the fact that no federal statute specifically bars racial discrimination in private domestic commercial transactions between two business firms, and given the evidence that racism is an obstacle to African-American business success, what obligation, if any, does state, local, or federal government have to assist minority-owned companies?
