Report: Agencies fail to review race-based procurement programs

Federal agencies are failing to consider race-neutral procurement policies, as mandated by a 1995 Supreme Court decision, according to a new report by the U.S. Commission on Civil Rights.

In the decade following the high court's ruling in Adarand Constructors Inc. v. Pena, agencies have continued to rely heavily on Small Business Administration programs aimed at boosting business with minority-owned companies and have neglected to explore race-neutral alternatives, the commission reported.

The Adarand decision requires agencies to review race-conscious procurement programs to ensure that they are effective and that there are no other options. But agencies generally have not evaluated race-conscious programs, commissioners said in the report. When they have, they've relied on "congressional findings and outdated benchmark data rather than their own studies, which should be tailored to their individual acquisition needs," the report stated.

The commission, created in 1957 to investigate discrimination complaints, based its conclusions on a review of acquisition policies at seven agencies: the Defense, Transportation, Education, Energy, Housing and Urban Development, and State departments, and the Small Business Administration.

The "goal should be to eliminate reliance on race-conscious programs," the commissioners said. SBA's 8(a) Business Development Program, which "presumes that designated minority groups are socially disadvantaged," and SBA's program to certify companies as "small disadvantaged businesses" fall into the race-conscious category, according to the report.

The commission said race-neutral options for awarding more contracts to minority-owned businesses include: outreach through Internet postings, searchable databases, conferences and workshops, loans or other financial assistance to businesses that want to compete for contracts, and an expansion of the number of opportunities available to small businesses in general.

Agencies are failing to look at these and other alternatives in part because the Justice Department and the White House haven't provided them with appropriate guidance, the commission concluded. Justice should develop guidelines outlining "the circumstances under which agencies must seriously consider race-neutral alternatives and establishing a solid framework for how agencies must comport with the Supreme Court's instructions," the commission recommended.

The White House should appoint a task force to figure out what "data Congress, the Justice Department and agencies need to properly . . . assess whether race-conscious programs are still necessary and the extent to which race-neutral alternatives are effective," the commissioners added.

Justice officials are "studying the report," said Eric Holland, a department spokesman. The Office of Federal Procurement Policy is also "in the process of reviewing the report" said Scott Milburn, an Office of Management and Budget spokesman.

While OFPP has "statutory responsibility to provide overall direction and leadership in governmentwide acquisition policy," it would be inappropriate to comment further [on the commission's recommendations] until . . . stakeholders have had an opportunity to carefully deliberate the issues presented," OFPP Administrator David Safavian said.

Along with its recommendations on following the Adarand ruling, the commission asked Congress to enact legislation that prohibits race discrimination in federal contracting and establishes "effective enforcement procedures."