The NAACP Legal Defense and Educational Fund, Inc. (LDF) has filed an amicus curiae brief in Rothe Development, Inc. v. United States Department of Defense and United States Small Business Administration, a case challenging the constitutionality of the Small Business Administration’s Section 8(a) Program. The U.S. Court of Appeals for the District of Columbia Circuit will hear oral arguments on this case on March 10, 2016.
The Section 8(a) Program was enacted by Congress in 1978 to combat the long-standing barriers faced by minority business owners in forming, sustaining, and expanding their companies due to a well-documented legacy of social, political, and economic discrimination. Such discrimination has created pervasive and ongoing societal and marketplace impediments to the success of minority-owned businesses. The Section 8(a) program is designed to help small businesses that are owned and operated by socially and economically disadvantaged individuals—often minority entrepreneurs, including African Americans, Hispanics, Native Americans, and Asian Americans—gain access to, and assistance in, securing government contracts. It establishes a flexible, government-wide goal of awarding at least 5 percent of the total value of all prime federal government contracts and subcontracts to those individuals each fiscal year.
“Minority entrepreneurs have long been subject to systemic, exclusionary policies and practices that have inhibited the growth of their businesses. They have been denied access to the necessary credit, capital, and insurance to jumpstart their operations, for example, and blocked from participating in important employment opportunities, professional networks, and training,” said Sherrilyn Ifill, LDF’s President and Director-Counsel. “Regrettably, many of the most enduring barriers faced by minority businesses result from discrimination that was sponsored or sanctioned by the federal government. The Section 8(a) Program must remain a tool for ensuring that racial minorities have a fair and meaningful chance to participate in the economic life of this country.”
Rothe Development, Inc., a San-Antonio-based company that derives the majority of its revenue from Department of Defense (DOD) contracts, previously challenged the Section 8(a) Program in 2012 in D.C.’s federal district court, which upheld the program’s constitutionality. Rothe also attempted an earlier challenge to the program before the U.S. Court of Appeals for the District of Columbia Circuit. The company originally filed its complaint against the Section 8(a) Program in 1998, when the DOD awarded a contract to an Asian American-owned business.
“Given the breadth of evidence demonstrating that minority-owned businesses faced significant discriminatory barriers, Congress was wholly justified in enacting the Section 8(a) Program,” said Coty Montag, LDF’s Deputy Director of Litigation. “Moreover, minority entrepreneurs face ongoing discrimination in obtaining access to fair credit and securing public contracts, which validates the government’s continued endorsement of the program. The Section 8(a) Program is necessary to remedy both the historical and current public and private discrimination faced by minority business enterprises and should be upheld.”
The race-conscious provisions of the Section 8(a) Program are necessary to achieve the government’s compelling interest in eliminating discriminatory barriers faced by minority-owned businesses. Further, the lack of alternative, race-neutral remedies and the program’s careful design—emphasizing flexibility and minimizing the burden on non-minorities—all demonstrate that the Section 8(a) Program is narrowly tailored to achieve the government’s compelling interest.