Fullilove v. Klutznick

Syllabus

SUPREME COURT OF THE UNITED STATES

448 U.S. 448

Fullilove v. Klutznick

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

No. 78-1007 Argued: November 27, 1979 --- Decided: July 2, 1980
The "minority business enterprise" (MBE) provision of the Public Works Employment Act of 1977 (1977 Act) requires that, absent an administrative waiver, at least 10% of federal funds granted for local public works projects must be used by the state or local grantee to procure services or supplies from businesses owned by minority group members, defined as United States citizens "who are Negroes, Spanish-speaking, Orientals, Indians, Eskimos, and Aleuts." Under implementing regulations and guidelines, grantees and their private prime contractors are required, to the extent feasible, in fulfilling the 10% MBE requirement, to seek out all available, qualified, bona fide MBE's, to provide technical assistance as needed, to lower or waive bonding requirements where feasible, to solicit the aid of the Office of Minority Business Enterprise, the Small Business Administration, or other sources for assisting MBE's in obtaining required working capital, and to give guidance through the intricacies of the bidding process. The administrative program, which recognizes that contracts will be awarded to bona fide MBE's even though they are not the lowest bidders if their bids reflect merely attempts to cover costs inflated by the present effects of prior disadvantage and discrimination, provides for handling grantee applications for administrative waiver of the 10% MBE requirement on a case-by-case basis if infeasibility is demonstrated by a showing that, despite affirmative efforts, such level of participation cannot be achieved without departing from the program's objectives. The program also provides an administrative mechanism to ensure that only bona fide MBE's are encompassed by the program, and to prevent unjust participation by minority firms whose access to public contracting opportunities is not impaired by the effects of prior discrimination.

Petitioners, several associations of construction contractors and subcontractors and a firm engaged in heating, ventilation, and air conditioning work, filed suit for declaratory and injunctive relief in Federal District Court, alleging that they had sustained economic injury due to enforcement of the MBE requirement, and that the MBE provision, on its face, violated, inter alia, the Equal Protection Clause of the Fourteenth [p449] Amendment and the equal protection component of the Due Process Clause of the Fifth Amendment. The District Court upheld the validity of the MBE program, and the Court of Appeals affirmed.

Held: The judgment is affirmed. Pp. 456-492; 517-522.

584 F.2d 600, affirmed.

MR. CHIEF .JUSTICE BURGER, joined by MR. JUSTICE WHITE and MR. JUSTICE POWELL, concluded that the MBE provision of the 1977 Act, on its face, does not violate the Constitution. Pp. 456-492.

(a) Viewed against the legislative and administrative background of the 1977 Act, the legislative objectives of the MBE provision and of the administrative program thereunder were to ensure -- without mandating the allocation of federal funds according to inflexible percentages solely based on race or ethnicity -- that, to the extent federal funds were granted under the 1977 Act, grantees who elected to participate would not employ procurement practices that Congress had decided might result in perpetuation of the effects of prior discrimination which had impaired or foreclosed access by minority businesses to public contracting opportunities. Pp. 456-472.

(b) In considering the constitutionality of the MBE provision, it first must be determined whether the objectives of the legislation are within Congress' power. Pp. 472-480.

(i) The 1977 Act, as primarily an exercise of Congress' Spending Power under Art. I, § 8, cl. 1, "to provide for the . . . general Welfare," conditions receipt of federal moneys upon the receipt's compliance with federal statutory and administrative directives. Since the reach of the Spending Power is at least as broad as Congress' regulatory powers, if Congress, pursuant to its regulatory powers, could have achieved the objectives of the MBE program, then it may do so under the Spending Power. Pp. 473-475

(ii) Insofar as the MBE program pertains to the actions of private prime contractors, including those not responsible for any violation of antidiscrimination laws, Congress could have achieved its objectives under the Commerce Clause. The legislative history shows that there was a rational basis for Congress to conclude that the subcontracting practices of prime contractors could perpetuate the prevailing impaired access by minority businesses to public contracting opportunities, and that this inequity has an effect on interstate commerce. Pp. 475-476.

(iii) Insofar as the MBE program pertains to the actions of state and local grantees, Congress could have achieved its objectives by use of its power under § 5 of the Fourteenth Amendment "to enforce, by appropriate legislation" the equal protection guarantee of that Amendment. Congress had abundant historical basis from which it could conclude [p450] that traditional procurement practices, when applied to minority businesses, could perpetuate the effects of prior discrimination, and that the prospective elimination of such barriers to minority-firm access to public contracting opportunities was appropriate to ensure that those businesses were not denied equal opportunity to participate in federal grants to state and local governments, which is one aspect of the equal protection of the laws. Cf., e.g., Katzenbach v. Morgan, 384 U.S. 641"]384 U.S. 641; 384 U.S. 641; Oregon v. Mitchell, 400 U.S. 112. Pp. 476-478.

(iv) Thus, the objectives of the MBE provision are within the scope of Congress' Spending Power. Cf. Lau v. Nichols, 414 U.S. 563. Pp. 479-480.

(c) Congress' use here of racial and ethnic criteria as a condition attached to a federal grant is a valid means to accomplish its constitutional objectives, and the MBE provision, on its face, does not violate the equal protection component of the Due Process Clause of the Fifth Amendment. Pp. 480-492.

(i) In the MBE program's remedial context, there is no requirement that Congress act in a wholly "color-blind" fashion. Cf., e.g., Swann v. Charlotte-Mecklenberg Board of Education, 402 U.S. l; McDaniel v. Barresi, 402 U.S. 39; North Carolina Board of Education v. Swann, 402 U.S. 43. Pp. 482-484.

(ii) The MBE program is not constitutionally defective because it may disappoint the expectations of access to a portion of government contracting opportunities of nonminority firms who may themselves be innocent of any prior discriminatory actions. When effectuating a limited and properly tailored remedy to cure the effects of prior discrimination, such "a sharing of the burden" by innocent parties is not impermissible. Franks v. Bowman Transportation Co., 424 U.S. 747, 777. Pp. 484-485.

(iii) Nor is the MBE program invalid as being underinclusive in that it limits its benefit to specified minority groups, rather than extending its remedial objectives to all businesses whose access to government contracting is impaired by the effects of disadvantage or discrimination. Congress has not sought to give select minority groups a preferred standing in the construction industry, but has embarked on a remedial program to place them on a more equitable footing with respect to public contracting opportunities, and there has been no showing that Congress inadvertently effected an invidious discrimination by excluding from coverage an identifiable minority group that has been the victim of a degree of disadvantage and discrimination equal to or greater than that suffered by the groups encompassed by the MBE program. Pp. 485-486. [p451]

(iv) The contention that the MBE program, on its face, is overinclusive in that it bestows a benefit on businesses identified by racial or ethnic criteria which cannot be justified on the basis of competitive criteria or as a remedy for the present effects of identified prior discrimination is also without merit. The MBE provision, with due account for its administrative program, provides a reasonable assurance that application of racial or ethnic criteria will be narrowly limited to accomplishing Congress' remedial objectives, and that misapplications of the program will be promptly and adequately remedied administratively. In particular, the administrative program provides waiver and exemption procedures to identify and eliminate from participation MBE's who are not "bona fide," or who attempt to exploit the remedial aspects of the program by charging an unreasonable price not attributable to the present effects of past discrimination. Moreover, grantees may obtain a waiver if they demonstrate that their best efforts will not achieve or have not achieved the 10% target for minority firm participation within the limitations of the program's remedial objectives. The MBE provision may be viewed as a pilot project, appropriately limited in extent and duration and subject to reassessment and reevaluation by the Congress prior to any extension or reenactment. Pp. 486-489.

(d) In the continuing effort to achieve the goal of equality of economic opportunity, Congress has latitude to try new techniques such as the limited use of racial and ethnic criteria to accomplish remedial objectives, especially in programs where voluntary cooperation is induced by placing conditions on federal expenditures. When a program narrowly tailored by Congress to achieve its objectives comes under judicial review, it should be upheld if the courts are satisfied that the legislative objectives and projected administration of the program give reasonable assurance that the program will function within constitutional limitations. Pp. 490-492.

MR. JUSTICE MARSHALL, joined by MR. JUSTICE BRENNAN and MR. JUSTICE BLACKMUN, concurring in the judgment, concluded that the proper inquiry for determining the constitutionality of racial classifications that provide benefits to minorities for the purpose of remedying the present effects of past racial discrimination is whether the classifications serve important governmental objectives and are substantially related to achievement of those objectives, University of California Regents v. Bakke, 438 U.S. 265, 359 (opinion of BRENNAN, WHITE, MARSHALL, and BLACKMUN, JJ., concurring in judgment in part and dissenting in part), and that, judged under this standard, the 10% minority set-aside provision of the 1977 Act is plainly constitutional, the racial classifications being substantially related to the achievement of the important and [p452] congressionally articulated goal of remedying the present effects of past racial discrimination. Pp. 517-521.

BURGER, C.J., announced the judgment of the Court and delivered an opinion, in which WHITE and POWELL, JJ., joined. POWELL, J., filed a concurring opinion, post, p. 495. MARSHALL, J., filed an opinion concurring in the judgment, in which BRENNAN and BLACKMUN, J.J., joined, post p. 517. STEWART, J., filed a dissenting opinion, in which REHNQUIST, J., joined, post, p. 522. STEVENS, J., filed a dissenting opinion, post, p. 532. [p453]



 448 u.s. 448 (1980)

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

No. 78-1007 Argued: November 27, 1979 --- Decided: July 2, 1980
MR. CHIEF JUSTICE BURGER announced the judgment of the Court and delivered an opinion, in which MR. JUSTICE WHITE and MR. JUSTICE POWELL joined.

We granted certiorari to consider a facial constitutional challenge to a requirement in a congressional spending program that, absent an administrative waiver, 10% of the federal funds granted for local public works projects must be used by the state or local grantee to procure services or supplies from businesses owned and controlled by members of statutorily identified minority groups. 441 U.S. 960 (1979).

I

In May, 1977, Congress enacted the Public Works Employment Act of 1977, Pub.L. 928, 91 Stat. 116, which amended the Local Public Works Capital Development and Investment Act of 1976, Pub.L. 9369, 90 Stat. 999, 42 U.S.C. § 6701 et seq. The 1977 amendments authorized an additional $4 billion appropriation for federal grants to be made by the Secretary of Commerce, acting through the Economic Development Administration (EDA), to state and local governmental entities for use in local public works projects. Among the changes made was the addition of the provision that has [p454] become the focus of this litigation. Section 103(f)(2) of the 1977 Act, referred to as the "minority business enterprise" or "MBE" provision, requires that: [n1]

Except to the extent that the Secretary determines otherwise, no grant shall be made under this Act for any local public works project unless the applicant gives satisfactory assurance to the Secretary that at least 10 per centum of the amount of each grant shall be expended for minority business enterprises. For purposes of this paragraph, the term "minority business enterprise" means a business at least 50 per centum of which is owned by minority group members or, in case of a publicly owned business, at least 51 per centum of the stock of which is owned by minority group members. For the purposes of the preceding sentence, minority group members are citizens of the United States who are Negroes, Spanish-speaking, Orientals, Indians, Eskimos, and Aleuts.

In late May, 1977, the Secretary promulgated regulations governing administration of the grant program which were amended two months later. [n2] In August, 1977, the EDA issued guidelines supplementing the statute and regulations with respect to minority business participation in local public works grants, [n3] and in October, 1977, the EDA issued a technical bulletin promulgating detailed instructions and information to assist grantees and their contractors in meeting the 10% MBE requirement. [n4] [p455]

On November 30, 1977, petitioners filed a complaint in the United States District Court for the Southern District of New York seeking declaratory and injunctive relief to enjoin enforcement of the MBE provision. Named as defendants were the Secretary of Commerce, as the program administrator, and the State and City of New York, as actual and potential project grantees. Petitioners are several associations of construction contractors and subcontractors, and a firm engaged in heating, ventilation, and air conditioning work. Their complaint alleged that they had sustained economic injury due to enforcement of the 10% MBE requirement, and that the MBE provision, on its face, violated the Equal Protection Clause of the Fourteenth Amendment, the equal protection component of the Due Process Clause of the Fifth Amendment, and various statutory antidiscrimination provisions. [n5]

After a hearing held the day the complaint was filed, the District Court denied a requested temporary restraining order and scheduled the matter for an expedited hearing on the merits. On December 19, 1977, the District Court issued a memorandum opinion upholding the validity of the MBE program and denying the injunctive relief sought. Fullilove v. Kreps, 443 F.Supp. 253 (1977).

The United States Court of Appeals for the Second Circuit affirmed, 584 F.2d 600 (1978), holding that, "even under the most exacting standard of review, the MBE provision passes constitutional muster." Id. at 603. Considered in the context of many years of governmental efforts to remedy past racial and ethnic discrimination, the court found it [p456] "difficult to imagine" any purpose for the program other than to remedy such discrimination. Id. at 605. In its view, a number of factors contributed to the legitimacy of the MBE provision, most significant of which was the narrowed focus and limited extent of the statutory and administrative program, in size, impact, and duration, id. at 607-608; the court looked also to the holdings of other Courts of Appeals and District Courts that the MBE program was constitutional, id. at 608-609. [n6] It expressly rejected petitioners' contention that the 10% MBE requirement violated the equal protection guarantees of the Constitution. [n7] Id. at 609.

II

A

The MBE provision was enacted as part of the Public Works Employment Act of 1977, which made various amendments to Title I of the Local Public Works Capital Development and Investment Act of 1976. The 1976 Act was intended [p457] as a short-term measure to alleviate the problem of national unemployment and to stimulate the national economy by assisting state and local governments to build needed public facilities. [n8] To accomplish these objectives, the Congress authorized the Secretary of Commerce, acting through the EDA, to make grants to state and local governments for construction, renovation, repair, or other improvement of local public works projects. [n9] The 1976 Act placed a number of restrictions on project eligibility designed to assure that federal moneys were targeted to accomplish the legislative purposes. [n10] It established criteria to determine grant priorities and to apportion federal funds among political jurisdictions. [n11] Those criteria directed grant funds toward areas of high unemployment. [n12] The statute authorized the appropriation of up to $2 billion for a period ending in September, 1977; [n13] this appropriation was soon consumed by grants made under the program.

Early in 1977, Congress began consideration of expanded appropriations and amendments to the grant program. Under administration of the 1976 appropriation, referred to as "Round I" of the local public works program, applicants seeking some $25 billion in grants had competed for the $2 billion in available funds; of nearly 25,000 applications, only some 2,000 were granted. [n14] The results provoked widespread [p458] concern for the fairness of the allocation process. [n15] Because the 1977 Act would authorize the appropriation of an additional $4 billion to fund "Round II" of the grant program, [n16] the congressional hearings and debates concerning the amendment focused primarily on the politically sensitive problems of priority and geographic distribution of grants under the supplemental appropriation. [n17] The result of this attention was inclusion in the 1977 Act of provisions revising the allocation criteria of the 1976 legislation. Those provisions, however, retained the underlying objective to direct funds into areas of high unemployment. [n18] The 1977 Act also added new restrictions on applicants seeking to qualify for federal grants; [n19] among these was the MBE provision.

The origin of the provision was an amendment to the House version of the 1977 Act, H.R. 11, offered on the floor of the House on February 23, 1977, by Representative Mitchell of Maryland. [n20] As offered, the amendment provided: [n21]

Notwithstanding any other provision of law, no grant shall be made under this Act for any local public works project unless at least 10 per centum of the articles, materials, and supplies which will be used in such project are procured from minority business enterprises. For purposes of this paragraph, the term "minority business [p459] enterprise" means a business at least 50 percent of which is owned by minority group members or, in case of publicly owned businesses, at least 51 percent of the stock of which is owned by minority group members. For the purposes of the preceding sentence, minority group members are citizens of the United States who are Negroes, Spanish-speaking, Orientals, Indians, Eskimos, and Aleuts.

The sponsor stated that the objective of the amendment was to direct funds into the minority business community, a sector of the economy sorely in need of economic stimulus but which, on the basis of past experience with Government procurement programs, could not be expected to benefit significantly from the public works program as then formulated. [n22] He cited the marked statistical disparity that, in fiscal year 1976 less than 1% of all federal procurement was concluded with minority business enterprises, although minorities comprised 15-18% of the population. [n23] When the amendment was put forward during debate on H.R. 11, [n24] Representative Mitchell reiterated the need to ensure that minority firms would obtain a fair opportunity to share in the benefits of this Government program. [n25]

The amendment was put forward not as a new concept, but rather one building upon prior administrative practice. [p460] In his introductory remarks, the sponsor rested his proposal squarely on the ongoing program under § 8(a) of the Small Business Act, Pub.L. 85-536, § 2, 72 Stat. 389, which, as will become evident, served as a model for the administrative program developed to enforce the MBE provision: [n26]

The first point in opposition will be that you cannot have a set-aside. Well, Madam Chairman, we have been doing this for the last 10 years in Government. The 8-A set-aside under SBA has been tested in the courts more than 30 times and has been found to be legitimate and bona fide. We are doing it in this bill.

Although the proposed MBE provision, on its face, appeared mandatory, requiring compliance with the 10% minority participation requirement "[n]otwithstanding any other provision of law," its sponsor gave assurances that existing administrative practice would ensure flexibility in administration if, with respect to a particular project, compliance with the 10% requirement proved infeasible. [n27]

Representative Roe of New Jersey then suggested a change of language expressing the twin intentions (1) that the federal administrator would have discretion to waive the 10% requirement where its application was not feasible, and (2) that the grantee would be mandated to achieve at least 10% participation by minority businesses unless infeasibility was demonstrated. [n28] He proposed as a substitute for the first sentence of the amendment the language that eventually was enacted: [n29]

Except to the extent that the Secretary determines otherwise, no grant shall be made under this Act for any local public works project unless the applicant gives satisfactory assurance to the Secretary that at least 10 percent [p461] of the amount of each grant shall be expended for minority business enterprises.

The sponsor fully accepted the suggested clarification because it retained the directive that the initial burden of compliance would fall on the grantee. That allocation of burden was necessary because, as he put it,

every agency of the Government has tried to figure out a way to avoid doing this very thing. Believe me, these bureaucracies can come up with 10,000 ways to avoid doing it. [n30]

Other supporters of the MBE amendment echoed the sponsor's concern that a number of factors, difficult to isolate or quantify, seemed to impair access by minority businesses to public contracting opportunities. Representative Conyers of Michigan spoke of the frustration of the existing situation, in which, due to the intricacies of the bidding process and through no fault of their own, minority contractors and businessmen were unable to gain access to government contracting opportunities. [n31]

Representative Biaggi of New York then spoke to the need for the amendment to "promote a sense of economic equality in this Nation." He expressed the view that, without the amendment, "this legislation may be potentially inequitable to minority businesses and workers" in that it would perpetuate the historic practices that have precluded minority businesses from effective participation in public contracting opportunities. [n32] The amendment was accepted by the House. [n33]

Two weeks later, the Senate considered S. 427, its package of amendments to the Local Public Works Capital Development and Investment Act of 1976. At that time Senator Brooke of Massachusetts introduced an MBE amendment, [p462] worded somewhat differently than the House version, but aimed at achieving the same objectives. [n34] His statement in support of the 10% requirement reiterated and summarized the various expressions on the House side that the amendment was necessary to ensure that minority businesses were not deprived of access to the government contracting opportunities generated by the public works program. [n35]

The Senate adopted the amendment without debate. [n36] The Conference Committee, called to resolve differences between the House and Senate versions of the Public Works Employment Act of 1977, adopted the language approved by the House for the MBE provision. [n37] The Conference Reports added only the comment: "This provision shall be dependent on the availability of minority business enterprises located in the project area." [n38]

The device of a 10% MBE participation requirement, subject to administrative waiver, was thought to be required to assure minority business participation; otherwise, it was thought that repetition of the prior experience could be expected, [p463] with participation by minority business accounting for an inordinately small percentage of government contracting. The causes of this disparity were perceived as involving the longstanding existence and maintenance of barriers impairing access by minority enterprises to public contracting opportunities, or sometimes as involving more direct discrimination, but not as relating to lack -- as Senator Brooke put it -- "of capable and qualified minority enterprises who are ready and willing to work." [n39] In the words of its sponsor, the MBE provision was "designed to begin to redress this grievance that has been extant for so long." [n40]

B

The legislative objectives of the MBE provision must be considered against the background of ongoing efforts directed toward deliverance of the century-old promise of equality of economic opportunity. The sponsors of the MBE provision in the House and the Senate expressly linked the provision to the existing administrative programs promoting minority opportunity in government procurement, particularly those related to § 8(a) of the Small Business Act of 1953. [n41] Section 8(a) delegates to the Small Business Administration (SBA) an authority and an obligation "whenever it determines such action is necessary" to enter into contracts with any procurement agency of the Federal Government to furnish required goods or services, and, in turn, to enter into subcontracts with small businesses for the performance of such contracts. This authority lay dormant for a decade. Commencing in 1968, however, the SBA was directed by the President [n42] to develop a program pursuant to its § 8(a) authority to assist small [p464] business concerns owned and controlled by "socially or economically disadvantaged" persons to achieve a competitive position in the economy.

At the time the MBE provision was enacted, the regulations governing the § 8(a) program defined "social or economic disadvantage" as follows: [n43]

An applicant concern must be owned and controlled by one or more persons who have been deprived of the opportunity to develop and maintain a competitive position in the economy because of social or economic disadvantage. Such disadvantage may arise from cultural, social, chronic economic circumstances or background, or other similar cause. Such persons include, but are not limited to, black Americans, American Indians, Spanish-Americans, oriental Americans, Eskimos, and Aleuts. . . .

The guidelines accompanying these regulations provided that a minority business could not be maintained in the program, even when owned and controlled by members of the identified minority groups, if it appeared that the business had not been deprived of the opportunity to develop and maintain a competitive position in the economy because of social or economic disadvantage. [n44] [p465]

As the Congress began consideration of the Public Works Employment Act of 1977, the House Committee on Small Business issued a lengthy Report summarizing its activities, including its evaluation of the ongoing § 8(a) program. [n45] One chapter of the Report, entitled "Minority Enterprises and Allied Problems of Small Business," summarized a 1975 Committee Report of the same title dealing with this subject matter. [n46] The original Report, prepared by the House Subcommittee on SBA Oversight and Minority Enterprise, observed: [n47]

The subcommittee is acutely aware that the economic policies of this Nation must function within and be guided by our constitutional system which guarantees "equal protection of the laws." The effects of past inequities stemming from racial prejudice have not remained in the past. The Congress has recognized the reality that past discriminatory practices have, to some degree, adversely affected our present economic system.

While minority persons comprise about 16 percent of the Nation's population, of the 13 million businesses in the United States, only 382,000, or approximately 3.0 percent, are owned by minority individuals. The most recent data from the Department of Commerce also indicates that the gross receipts of all businesses in this country totals about $2,540.8 billion, and, of this amount, only $16.6 billion, or about 0.65 percent was realized by minority business concerns.

These statistics are not the result of random chance. The presumption must be made that past discriminatory systems have resulted in present economic inequities. In order to right this situation, the Congress has formulated certain remedial programs designed to uplift those socially [p466] or economically disadvantaged persons to a level where they may effectively participate in the business mainstream of our economy.*

* For the purposes of this report, the term "minority" shall include only such minority individuals as are considered to be economically or socially disadvantaged. [n48]

The 1975 Report gave particular attention to the § 8(a) program, expressing disappointment with its limited effectiveness. [n49] With specific reference to Government construction contracting, the Report concluded,

there are substantial § 8(a) opportunities in the area of Federal construction, but . . . the practices of some agencies preclude the realization of this potential. [n50]

The Subcommittee took "full notice . . . as evidence for its consideration" of reports submitted to the Congress by the General Accounting Office and by the U.S. Commission on Civil Rights, which reflected a similar dissatisfaction with the effectiveness of the § 8(a) program. [n51] The [p467] Civil Rights Commission report discussed at some length the barriers encountered by minority businesses in gaining access to government contracting opportunities at the federal, state, and local levels. [n52] Among the major difficulties confronting minority businesses were deficiencies in working capital, inability to meet bonding requirements, disabilities caused by an inadequate "track record," lack of awareness of bidding opportunities, unfamiliarity with bidding procedures, preselection before the formal advertising process, and the exercise of discretion by government procurement officers to disfavor minority businesses. [n53]

The Subcommittee Report also gave consideration to the operations of the Office of Minority Business Enterprise, an agency of the Department of Commerce organized pursuant to Executive Orders [n54] to formulate and coordinate federal efforts to assist the development of minority businesses. The Report concluded that OMBE efforts were "totally inadequate" to achieve its policy of increasing opportunities for subcontracting by minority businesses on public contracts. OMBE efforts were hampered by a "glaring lack of specific objectives which each prime contractor should be required to achieve," by a "lack of enforcement provisions," and by a "lack of any meaningful monitoring system." [n55]

Against this backdrop of legislative and administrative programs, it is inconceivable that Members of both Houses were not fully aware of the objectives of the MBE provision and of the reasons prompting its enactment. [p468]

C

Although the statutory MBE provision itself outlines only the bare bones of the federal program, it makes a number of critical determinations: the decision to initiate a limited racial and ethnic preference; the specification of a minimum level for minority business participation; the identification of the minority groups that are to be encompassed by the program; and the provision for an administrative waiver where application of the program is not feasible. Congress relied on the administrative agency to flesh out this skeleton, pursuant to delegated rulemaking authority, and to develop an administrative operation consistent with legislative intentions and objectives.

As required by the Public Works Employment Act of 1977, the Secretary of Commerce promulgated regulations to set into motion "Round II" of the federal grant program. [n56] The regulations require that construction projects funded under the legislation must be performed under contracts awarded by competitive bidding, unless the federal administrator has made a determination that, in the circumstances relating to a particular project, some other method is in the public interest. Where competitive bidding is employed, the regulations echo the statute's requirement that contracts are to be awarded on the basis of the "lowest responsive bid submitted by a bidder meeting established criteria of responsibility," and they also restate the MBE requirement. [n57]

EDA also has published guidelines devoted entirely to the administration of the MBE provision. The guidelines outline the obligations of the grantee to seek out all available, qualified, bona fide MBE's, to provide technical assistance as needed, to lower or waive bonding requirements where [p469] feasible, to solicit the aid of the Office of Minority Business Enterprise, the SBA, or other sources for assisting MBE's in obtaining required working capital, and to give guidance through the intricacies of the bidding process. [n58]

EDA regulations contemplate that, as anticipated by Congress, most local public works projects will entail the award of a predominant prime contract, with the prime contractor assuming the above grantee obligations for fulfilling the 10% MBE requirement. [n59] The EDA guidelines specify that, when prime contractors are selected through competitive bidding, bids for the prime contract "shall be considered by the Grantee to be responsive only if at least 10 percent of the contract funds are to be expended for MBE's." [n60] The administrative program envisions that competitive incentive will motivate aspirant prime contractors to perform their obligations under the MBE provision so as to qualify as "responsive" bidders. And, since the contract is to be awarded to the lowest responsive bidder, the same incentive is expected to motivate prime contractors to seek out the most competitive of the available, qualified, bona fide minority firms. This too is consistent with the legislative intention. [n61]

The EDA guidelines also outline the projected administration of applications for waiver of the 10% MBE requirement, which may be sought by the grantee either before or during the bidding process. [n62] The Technical Bulletin issued by EDA discusses in greater detail the processing of waiver requests, clarifying certain issues left open by the guidelines. It specifies that waivers may be total or partial, depending on [p470] the circumstances, [n63] and it illustrates the projected operation of the waiver procedure by posing hypothetical questions with projected administrative responses. One such hypothetical is of particular interest, for it indicates the limitations on the scope of the racial or ethnic preference contemplated by the federal program when a grantee or its prime contractor is confronted with an available, qualified, bona fide minority business enterprise who is not the lowest competitive bidder. The hypothetical provides: [n64]

Question: Should a request for waiver of the 10% requirement based on an unreasonable price asked by an MBE ever be granted?

Answer: It is possible to imagine situations where an MBE might ask a price for its product or services that is unreasonable and where, therefore, a waiver is justified. However, before a waiver request will be honored, the following determinations will be made:

a) The MBE's quote is unreasonably priced. This determination should be based on the nature of the product or service of the subcontractor, the geographic location of the site and of the subcontractor, prices of similar products or services in the relevant market area, and general business conditions in the market area. Furthermore, a subcontractor's price should not be considered unreasonable if he is merely trying to cover his costs because the price results from disadvantage which affects the MBE's cost of doing business or results from discrimination.

b) The contractor has contacted other MBEs and has no meaningful choice but to accept an unreasonably high price.

This announced policy makes clear the administrative understanding that a waiver or partial waiver is justified (and will [p471] be granted) to avoid subcontracting with a minority business enterprise at an "unreasonable" price, i.e., a price above competitive levels which cannot be attributed to the minority firm's attempt to cover costs inflated by the present effects of disadvantage or discrimination.

This administrative approach is consistent with the legislative intention. It will be recalled that, in the Report of the House Subcommittee on SBA Oversight and Minority Enterprise, the Subcommittee took special care to note that, when using the term "minority," it intended to include "only such minority individuals as are considered to be economically or socially disadvantaged." [n65] The Subcommittee also was cognizant of existing administrative regulations designed to ensure that firms maintained on the lists of bona fide minority business enterprises be those whose competitive position is impaired by the effects of disadvantage and discrimination. In its Report, the Subcommittee expressed its intention that these criteria continue to govern administration of the SBA's § 8(a) program. [n66] The sponsors of the MBE provision, in their reliance on prior administrative practice, intended that the term "minority business enterprise" would be given that same limited application; this even found expression in the legislative debates, where Representative Roe made the point: [n67]

[W]hen we are talking about companies held by minority groups . . . [c]ertainly people of a variety of backgrounds are included in that. That is not really a measurement. They are talking about people in the minority and deprived.

The EDA Technical Bulletin provides other elaboration of the MBE provision. It clarifies the definition of "minority [p472] group members." [n68] It also indicates EDA's intention

to allow credit for utilization of MBEs only for those contracts in which involvement constitutes a basis for strengthening the long-term and continuing participation of the MBE in the construction and related industries. [n69]

Finally, the Bulletin outlines a procedure for the processing of complaints of "unjust participation by an enterprise or individuals in the MBE program," or of improper administration of the MBE requirement. [n70]

III

When we are required to pass on the constitutionality of an Act of Congress, we assume "the gravest and most delicate duty that this Court is called on to perform." Blodgett v. Holden, 275 U.S. 142, 148 (1927) (opinion of Holmes, J.). A program that employs racial or ethnic criteria, even in a remedial context, calls for close examination; yet we are bound to approach our task with appropriate deference to the Congress, a coequal branch charged by the Constitution with the power to "provide for the . . . general Welfare of the United States" and "to enforce, by appropriate legislation," the equal protection guarantees of the Fourteenth Amendment. Art. I, § 8, cl. 1; Amdt. 14, § 5. In Columbia Broadcasting System, Inc. v. Democratic National Committee, 412 U.S. 94, 102 (1973), we accorded "great weight to the decisions of Congress" even though the legislation implicated fundamental constitutional rights guaranteed by the First Amendment. The rule is not different when a congressional program raises equal protection concerns. See, e.g., Cleland v. National College of Business, 435 U.S. 213 (1978); Mathews v. De Castro, 429 U.S. 181 (1976). [p473]

Here we pass, not on a choice made by a single judge or a school board, but on a considered decision of the Congress and the President. However, in no sense does that render it immune from judicial scrutiny, and it "is not to say we ‘defer' to the judgment of the Congress . . . on a constitutional question," or that we would hesitate to invoke the Constitution should we determine that Congress has overstepped the bounds of its constitutional power. Columbia Broadcasting, supra at 103.

The clear objective of the MBE provision is disclosed by our necessarily extended review of its legislative and administrative background. The program was designed to ensure that, to the extent federal funds were granted under the Public Works Employment Act of 1977, grantees who elect to participate would not employ procurement practices that Congress had decided might result in perpetuation of the effects of prior discrimination which had impaired or foreclosed access by minority businesses to public contracting opportunities. The MBE program does not mandate the allocation of federal funds according to inflexible percentages solely based on race or ethnicity.

Our analysis proceeds in two steps. At the outset, we must inquire whether the objectives of this legislation are within the power of Congress. If so, we must go on to decide whether the limited use of racial and ethnic criteria, in the context presented, is a constitutionally permissible means for achieving the congressional objectives and does not violate the equal protection component of the Due Process Clause of the Fifth Amendment.

A

(1)
In enacting the MBE provision, it is clear that Congress employed an amalgam of its specifically delegated powers. The Public Works Employment Act of 1977, by its very nature, is primarily an exercise of the Spending Power. U.S. [p474] Const., Art. I, 8, cl. 1. This Court has recognized that the power to "provide for the . . . general Welfare" is an independent grant of legislative authority, distinct from other broad congressional powers. Buckley v. Valeo, 424 U.S. 1, 90-91 (1976); United States v. Butler, 297 U.S. 1, 65-66 (1936). Congress has frequently employed the Spending Power to further broad policy objectives by conditioning receipt of federal moneys upon compliance by the recipient with federal statutory and administrative directives. This Court has repeatedly upheld against constitutional challenge the use of this technique to induce governments and private parties to cooperate voluntarily with federal policy. E.g., California Bankers Assn. v. Shultz, 416 U.S. 21 (1974); Lau v. Nichols, 414 U.S. 563 (1974); Oklahoma v. CSC, 330 U.S. 127 (1947); Helvering v. Davis, 301 U.S. 619 (1937); Steward Machine Co. v. Davis, 301 U.S. 548 (1937).

The MBE program is structured within this familiar legislative pattern. The program conditions receipt of public works grants upon agreement by the state or local governmental grantee that at least 10% of the federal funds will be devoted to contracts with minority businesses, to the extent this can be accomplished by overcoming barriers to access and by awarding contracts to bona fide MBE's. It is further conditioned to require that MBE bids on these contracts are competitively priced, or might have been competitively priced but for the present effects of prior discrimination. Admittedly, the problems of administering this program with respect to these conditions may be formidable. Although the primary responsibility for ensuring minority participation falls upon the grantee, when the procurement practices of the grantee involve the award of a prime contract to a general or prime contractor, the obligations to assure minority participation devolve upon the private contracting party; this is a contractual condition of eligibility for award of the prime contract. [p475]

Here we need not explore the outermost limitations on the objectives attainable through such an application of the Spending Power. The reach of the Spending Power, within its sphere, is at least as broad as the regulatory powers of Congress. If, pursuant to its regulatory powers, Congress could have achieved the objectives of the MBE program, then it may do so under the Spending Power. And we have no difficulty perceiving a basis for accomplishing the objectives of the MBE program through the Commerce Power insofar as the program objectives pertain to the action of private contracting parties, and through the power to enforce the equal protection guarantees of the Fourteenth Amendment insofar as the program objectives pertain to the action of state and local grantees.

(2)
We turn first to the Commerce Power. U.S.Const., Art. I, § 8, cl. 3. Had Congress chosen to do so, it could have drawn on the Commerce Clause to regulate the practices of prime contractors on federally funded public works projects. Katzenbach v. McClung, 379 U.S. 294 (1964); Heart of Atlanta Motel, Inc. v. United States, 379 U.S. 241 (1964). The legislative history of the MBE provision shows that there was a rational basis for Congress to conclude that the subcontracting practices of prime contractors could perpetuate the prevailing impaired access by minority businesses to public contracting opportunities, and that this inequity has an effect on interstate commerce. Thus, Congress could take necessary and proper action to remedy the situation. Ibid.

It is not necessary that these prime contractors be shown responsible for any violation of antidiscrimination laws. Our cases dealing with application of Title VII of the Civil Rights Act of 1964, 78 Stat. 253, as amended, express no doubt of the congressional authority to prohibit practices "challenged as perpetuating the effects of [not unlawful] discrimination occurring prior to the effective date of the Act." Franks v. [p476] Bowman Transportation Co., 424 U.S. 747, 761 (1976); see California Brewers Assn. v. Bryant, 444 U.S. 598 (1980); Teamsters v. United States, 431 U.S. 324 (1977); Albemarle Paper Co. v. Moody, 422 U.S. 405 (1975); Griggs v. Duke Power Co., 401 U.S. 424 (1971). Insofar as the MBE program pertains to the actions of private prime contractors, the Congress could have achieved its objectives under the Commerce Clause. We conclude that, in this respect, the objectives of the MBE provision are within the scope of the Spending Power.

(3)
In certain contexts, there are limitations on the reach of the Commerce Power to regulate the actions of state and local governments. National League of Cities v. Usery, 426 U.S. 833 (1976). To avoid such complications, we look to § 5 of the Fourteenth Amendment for the power to regulate the procurement practices of state and local grantees of federal funds. Fitzpatrick v. Bitzer, 427 U.S. 445 (1976). A review of our cases persuades us that the objectives of the MBE program are within the power of Congress under § 5 "to enforce, by appropriate legislation," the equal protection guarantees of the Fourteenth Amendment.

In Katzenbach v. Morgan, 384 U.S. 641 (1966), we equated the scope of this authority with the broad powers expressed in the Necessary and Proper Clause, U.S.Const., Art. I, § 8, cl. 18.

Correctly viewed, § 5 is a positive grant of legislative power authorizing Congress to exercise its discretion in determining whether and what legislation is needed to secure the guarantees of the Fourteenth Amendment.

384 U.S. at 651. In Katzenbach, the Court upheld § 4(e) of the Voting Rights Act of 1965, 79 Stat. 439, 42 U.S.C. 1973b(e), which prohibited application of state English language literacy requirements to otherwise qualified voters who had completed the sixth grade in an accredited American school in [p477] which a language other than English was the predominant medium of instruction. To uphold this exercise of congressional authority, the Court found no prerequisite that application of a literacy requirement violate the Equal Protection Clause. 384 U.S. at 648-649. It was enough that the Court could perceive a basis upon which Congress could reasonably predicate a judgment that application of literacy qualifications within the compass of § 4(e) would discriminate in terms of access to the ballot and consequently in terms of access to the provision or administration of governmental programs. Id. at 652-653.

Four years later, in Oregon v. Mitchell, 400 U.S. 112 (1970), we upheld § 201 of the Voting Rights Act Amendments of 1970, 84 Stat. 315, which imposed a 5-year nationwide prohibition on the use of various voter-qualification tests and devices in federal, state, and local elections. The Court was unanimous, albeit in separate opinions, in concluding that Congress was within its authority to prohibit the use of such voter qualifications; Congress could reasonably determine that its legislation was an appropriate method of attacking the perpetuation of prior purposeful discrimination, even though the use of these tests or devices might have discriminatory effects only. See City of Rome v. United States, 446 U.S. 156, 176-177 (1980). Our cases reviewing the parallel power of Congress to enforce the provisions of the Fifteenth Amendment, U.S.Const., Amdt. 15, § 2, confirm that congressional authority extends beyond the prohibition of purposeful discrimination to encompass state action that has discriminatory impact perpetuating the effects of past discrimination. South Carolina v. Katzenbach, 383 U.S. 301 (1966); cf. City of Rome, supra.

With respect to the MBE provision, Congress had abundant evidence from which it could conclude that minority businesses have been denied effective participation in public contracting opportunities by procurement practices that perpetuated [p478] the effects of prior discrimination. Congress, of course, may legislate without compiling the kind of "record" appropriate with respect to judicial or administrative proceedings. Congress had before it, among other data, evidence of a long history of marked disparity in the percentage of public contracts awarded to minority business enterprises. This disparity was considered to result not from any lack of capable and qualified minority businesses, but from the existence and maintenance of barriers to competitive access which had their roots in racial and ethnic discrimination, and which continue today, even absent any intentional discrimination or other unlawful conduct. Although much of this history related to the experience of minority businesses in the area of federal procurement, there was direct evidence before the Congress that this pattern of disadvantage and discrimination existed with respect to state and local construction contracting as well. In relation to the MBE provision, Congress acted within its competence to determine that the problem was national in scope.

Although the Act recites no preambulary "findings" on the subject, we are satisfied that Congress had abundant historical basis from which it could conclude that traditional procurement practices, when applied to minority businesses, could perpetuate the effects of prior discrimination. Accordingly, Congress reasonably determined that the prospective elimination of these barriers to minority firm access to public contracting opportunities generated by the 1977 Act was appropriate to ensure that those businesses were not denied equal opportunity to participate in federal grants to state and local governments, which is one aspect of the equal protection of the laws. Insofar as the MBE program pertains to the actions of state and local grantees, Congress could have achieved its objectives by use of its power under § 5 of the Fourteenth Amendment. We conclude that, in this respect, the objectives of the MBE provision are within the scope of the Spending Power. [p479]

(4)
There are relevant similarities between the MBE program and the federal spending program reviewed in Lau v. Nichols, 414 U.S. 563 (1974). In Lau, a language barrier "effectively foreclosed" non-English-speaking Chinese pupils from access to the educational opportunities offered by the San Francisco public school system. Id. at 564-566. It had not been shown that this had resulted from any discrimination, purposeful or otherwise, or from other unlawful acts. Nevertheless, we upheld the constitutionality of a federal regulation applicable to public school systems receiving federal funds that prohibited the utilization of

criteria or methods of administration which have the effect . . . of defeating or substantially impairing accomplishment of the objectives of the [educational] program as respect individuals of a particular race, color, or national origin.

Id. at 568 (emphasis added). Moreover, we upheld application to the San Francisco school system, as a recipient of federal funds, of a requirement that,

[w]here inability to speak and understand the English language excludes national origin minority group children from effective participation in the educational program offered by a school district, the district must take affirmative steps to rectify the language deficiency in order to open its instructional program to these students.

Ibid.

It is true that the MBE provision differs from the program approved in Lau in that the MBE program directly employs racial and ethnic criteria as a means to accomplish congressional objectives; however, these objectives are essentially the same as those approved in Lau. Our holding in Lau is instructive on the exercise of congressional authority by way of the MBE provision. The MBE program, like the federal regulations reviewed in Lau, primarily regulates state action in the use of federal funds voluntarily sought and accepted by the grantees subject to statutory and administrative conditions. The MBE participation requirement is directed at [p480] the utilization of criteria, methods, or practices thought by Congress to have the effect of defeating, or substantially impairing, access by the minority business community to public funds made available by congressional appropriations.

B

We now turn to the question whether, as a means to accomplish these plainly constitutional objectives, Congress may use racial and ethnic criteria, in this limited way, as a condition attached to a federal grant. We are mindful that

[i]n no matter should we pay more deference to the opinion of Congress than in its choice of instrumentalities to perform a function that is within its power,

National Mutual Insurance Co. v. Tidewater Transfer Co., 337 U.S. 582, 603 (1949) (opinion of Jackson, J.). However, Congress may employ racial or ethnic classifications in exercising its Spending or other legislative powers only if those classifications do not violate the equal protection component of the Due Process Clause of the Fifth Amendment. We recognize the need for careful judicial evaluation to assure that any congressional program that employs racial or ethnic criteria to accomplish the objective of remedying the present effects of past discrimination is narrowly tailored to the achievement of that goal.

Again, we stress the limited scope of our inquiry. Here we are not dealing with a remedial decree of a court, but with the legislative authority of Congress. Furthermore, petitioners have challenged the constitutionality of the MBE provision on its face; they have not sought damages or other specific relief for injury allegedly flowing from specific applications of the program; nor have they attempted to show that, as applied in identified situations, the MBE provision violated the constitutional or statutory rights of any party to this case. [n71] In [p481] these circumstances, given a reasonable construction and in light of its projected administration, if we find the MBE program, on its face, to be free of constitutional defects, it must be upheld as within congressional power. Parker v. Levy, 417 U.S. 733, 760 (1974); Fortson v. Dorsey, 379 U.S. 433, 438-439 (1965); Aptheker v. Secretary of State, 378 U.S. 500, 515 (1964); see United States v. Raines, 362 U.S. 17, 20-24 (1960).

Our review of the regulations and guidelines governing administration of the MBE provision reveals that Congress enacted the program as a strictly remedial measure; moreover, it is a remedy that functions prospectively, in the manner of an injunctive decree. Pursuant to the administrative program, grantees and their prime contractors are required to seek out all available, qualified, bona fide MBE's; they are required to provide technical assistance as needed, to lower or waive bonding requirements where feasible, to solicit the aid of the Office of Minority Business Enterprise, the SBA, or other sources for assisting MBE's to obtain required working capital, and to give guidance through the intricacies of the bidding process. Supra at 468-469. The program assumes that grantees who undertake these efforts in good faith will obtain at least 10% participation by minority business enterprises. It is recognized that, to achieve this target, contracts will be awarded to available qualified bona fide MBE's even though they are not the lowest competitive bidders, so long as their higher bids, when challenged, are found to reflect merely attempts to cover costs inflated by the present effects of prior disadvantage and discrimination. Supra at 470-471. There is available to the grantee a provision authorized by Congress for administrative waiver on [p482] a case-by-case basis should there be a demonstration that, despite affirmative efforts, this level of participation cannot be achieved without departing from the objectives of the program. Supra at 469-470. There is also an administrative mechanism, including a complaint procedure, to ensure that only bona fide MBE's are encompassed by the remedial program, and to prevent unjust participation in the program by those minority firms whose access to public contracting opportunities is not impaired by the effects of prior discrimination. Supra at 471-472.

(1)
As a threshold matter, we reject the contention that, in the remedial context, the Congress must act in a wholly "color-blind" fashion. In Swann v. Charlotte-Mecklenburg Board of Education, 402 U.S. 1, 18-21 (1971), we rejected this argument in considering a court-formulated school desegregation remedy on the basis that examination of the racial composition of student bodies was an unavoidable starting point, and that racially based attendance assignments were permissible so long as no absolute racial balance of each school was required. In McDaniel v. Barresi, 402 U.S. 39, 41 (1971), citing Swann, we observed:

In this remedial process, steps will almost invariably require that students be assigned "differently because of their race." Any other approach would freeze the status quo that is the very target of all desegregation processes.

(Citations omitted.) And in North Carolina Board of Education v. Swann, 402 U.S. 43 (1971), we invalidated a state law that absolutely forbade assignment of any student on account of race, because it foreclosed implementation of desegregation plans that were designed to remedy constitutional violations. We held that

[j]ust as the race of students must be considered in determining whether a constitutional violation has occurred, so also must race be considered in formulating a remedy.

Id. at 46. [p483]

In these school desegregation cases we dealt with the authority of a federal court to formulate a remedy for unconstitutional racial discrimination. However, the authority of a court to incorporate racial criteria into a remedial decree also extends to statutory violations. Where federal antidiscrimination laws have been violated, an equitable remedy may, in the appropriate case, include a racial or ethnic factor. Franks v. Bowman Transportation Co., 424 U.S. 747 (1976); see Teamsters v. United States, 431 U.S. 324 (1977); Albemarle Paper Co. v. Moody, 422 U.S. 405 (1975). In another setting, we have held that a state may employ racial criteria that are reasonably necessary to assure compliance with federal voting rights legislation, even though the state action does not entail the remedy of a constitutional violation. United Jewish Organizations of Williamsburgh, Inc. v. Carey, 430 U.S. 144, 147-165 (1977) (opinion of WHITE, J., joined by BRENNAN, BLACKMUN, and STEVENS, JJ.); id. at 180-187 (BURGER, C.J., dissenting on other grounds).

When we have discussed the remedial powers of a federal court, we have been alert to the limitation that

[t]he power of the federal courts to restructure the operation of local and state governmental entities "is not plenary. . . ." [A] federal court is required to tailor "the scope of the remedy" to fit the nature and extent of the . . . violation.

Dayton Board of Education v. Brinkman, 433 U.S. 406, 419-420 (1977) (quoting Milliken v. Bradley, 418 U.S. 717, 738 (1974), and Swann v. Charlotte-Mecklenburg Board of Education, supra at 16).

Here we deal, as we noted earlier, not with the limited remedial powers of a federal court, for example, but with the broad remedial powers of Congress. It is fundamental that in no organ of government, state or federal, does there repose a more comprehensive remedial power than in the Congress, expressly charged by the Constitution with competence and authority to enforce equal protection guarantees. Congress not only may induce voluntary action to assure compliance [p484] with existing federal statutory or constitutional antidiscrimination provisions, but also where Congress has authority to declare certain conduct unlawful, it may, as here, authorize and induce state action to avoid such conduct. Supra at 473-480.

(2)
A more specific challenge to the MBE program is the charge that it impermissibly deprives nonminority businesses of access to at least some portion of the government contracting opportunities generated by the Act. It must be conceded that, by its objective of remedying the historical impairment of access, the MBE provision can have the effect of awarding some contracts to MBE's which otherwise might be awarded to other businesses, who may themselves be innocent of any prior discriminatory actions. Failure of nonminority firms to receive certain contracts is, of course, an incidental consequence of the program, not part of its objective; similarly, past impairment of minority-firm access to public contracting opportunities may have been an incidental consequence of "business as usual" by public contracting agencies and among prime contractors.

It is not a constitutional defect in this program that it may disappoint the expectations of nonminority firms. When effectuating a limited and properly tailored remedy to cure the effects of prior discrimination, such "a sharing of the burden" by innocent parties is not impermissible. Franks, supra at 777; see Albemarle Paper Co., supra; United Jewish Organizations, supra. The actual "burden" shouldered by nonminority firms is relatively light in this connection when we consider the scope of this public works program as compared with overall construction contracting opportunities. [n72] Moreover, although we may assume that the complaining [p485] parties are innocent of any discriminatory conduct, it was within congressional power to act on the assumption that in the past some nonminority businesses may have reaped competitive benefit over the years from the virtual exclusion of minority firms from these contracting opportunities.

(3)
Another challenge to the validity of the MBE program is the assertion that it is underinclusive -- that it limits its benefit to specified minority groups, rather than extending its remedial objectives to all businesses whose access to government contracting is impaired by the effects of disadvantage or discrimination. Such an extension would, of course, be appropriate for Congress to provide; it is not a function for the courts.

Even in this context, the well established concept that a legislature may take one step at a time to remedy only part of a broader problem is not without relevance. See Dandridge v. Williams, 397 U.S. 471 (1970); Williamson v. Lee Optical Co., 348 U.S. 483 (1955). We are not reviewing a federal program that seeks to confer a preferred status upon a nondisadvantaged minority or to give special assistance to only one of several groups established to be similarly disadvantaged minorities. Even in such a setting, the Congress is not without a certain authority. See, e.g., Personnel Administrator of Massachusetts v. Feeney, 442 U.S. 256 (1979); Califano v. Webster, 430 U.S. 313 (1977); Morton v Mancari, 417 U.S. 535 (1974).

The Congress has not sought to give select minority groups a preferred standing in the construction industry, but has [p486] embarked on a remedial program to place them on a more equitable footing with respect to public contracting opportunities. There has been no showing in this case that Congress has inadvertently effected an invidious discrimination by excluding from coverage an identifiable minority group that has been the victim of a degree of disadvantage and discrimination equal to or greater than that suffered by the groups encompassed by the MBE program. It is not inconceivable that, on very special facts, a case might be made to challenge the congressional decision to limit MBE eligibility to the particular minority groups identified in the Act. See Vance v. Bradley, 440 U.S. 93, 109-112 (1979); Oregon v. Mitchell, 400 U.S. at 240 (opinion of BRENNAN, WHITE, and MARSHALL, JJ.). But on this record, we find no basis to hold that Congress is without authority to undertake the kind of limited remedial effort represented by the MBE program. Congress, not the courts, has the heavy burden of dealing with a host of intractable economic and social problems

(4)
It is also contended that the MBE program is overinclusive -- that it bestows a benefit on businesses identified by racial or ethnic criteria which cannot be justified on the basis of competitive criteria or as a remedy for the present effects of identified prior discrimination. It is conceivable that a particular application of the program may have this effect; however, the peculiarities of specific applications are not before us in this case. We are not presented here with a challenge involving a specific award of a construction contract or the denial of a waiver request; such questions of specific application must await future cases.

This does not mean that the claim of overinclusiveness is entitled to no consideration in the present case. The history of governmental tolerance of practices using racial or ethnic criteria for the purpose or with the effect of imposing an invidious discrimination must alert us to the deleterious [p487] effects of even benign racial or ethnic classifications when they stray from narrow remedial justifications. Even in the context of a facial challenge such as is presented in this case, the MBE provision cannot pass muster unless, with due account for its administrative program, it provides a reasonable assurance that application of racial or ethnic criteria will be limited to accomplishing the remedial objectives of Congress, and that misapplications of the program will be promptly and adequately remedied administratively.

It is significant that the administrative scheme provides for waiver and exemption. Two fundamental congressional assumptions underlie the MBE program: (1) that the present effects of past discrimination have impaired the competitive position of businesses owned and controlled by members of minority groups; and (2) that affirmative efforts to eliminate barriers to minority firm access, and to evaluate bids with adjustment for the present effects of past discrimination, would assure that at least 10% of the federal funds granted under the Public Works Employment Act of 1977 would be accounted for by contracts with available, qualified, bona fide minority business enterprises. Each of these assumptions may be rebutted in the administrative process.

The administrative program contains measures to effectuate the congressional objective of assuring legitimate participation by disadvantaged MBE's. Administrative definition has tightened some less definite aspects of the statutory identification of the minority groups encompassed by the program. [n73] There is administrative scrutiny to identify and [p488] eliminate from participation in the program MBE's who are not "bona fide" within the regulations and guidelines; for example, spurious minority-front entities can be exposed. A significant aspect of this surveillance is the complaint procedure available for reporting "unjust participation by an enterprise or individuals in the MBE program." Supra at 472. And even as to specific contract awards, waiver is available to avoid dealing with an MBE who is attempting to exploit the remedial aspects of the program by charging an unreasonable price, i.e., a price not attributable to the present effects of past discrimination. Supra at 469-471. We must assume that Congress intended close scrutiny of false claims and prompt action on them.

Grantees are given the opportunity to demonstrate that their best efforts will not succeed or have not succeeded in achieving the statutory 10% target for minority firm participation within the limitations of the program's remedial objectives. In these circumstances, a waiver or partial waiver is available once compliance has been demonstrated. A waiver may be sought and granted at any time during the contracting process, or even prior to letting contracts, if the facts warrant. [p489]

Nor is the program defective because a waiver may be sought only by the grantee, and not by prime contractors who may experience difficulty in fulfilling contract obligations to assure minority participation. It may be administratively cumbersome, but the wisdom of concentrating responsibility at the grantee level is not for us to evaluate; the purpose is to allow the EDA to maintain close supervision of the operation of the MBE provision. The administrative complaint mechanism allows for grievances of prime contractors who assert that a grantee has failed to seek a waiver in an appropriate case. Finally, we note that, where private parties, as opposed to governmental entities, transgress the limitations inherent in the MBE program, the possibility of constitutional violation is more removed. See Steelworkers v. Weber, 443 U.S. 193, (1979).

That the use of racial and ethnic criteria is premised on assumptions rebuttable in the administrative process gives reasonable assurance that application of the MBE program will be limited to accomplishing the remedial objectives contemplated by Congress, and that misapplications of the racial and ethnic criteria can be remedied. In dealing with this facial challenge to the statute, doubts must be resolved in support of the congressional judgment that this limited program is a necessary step to effectuate the constitutional mandate for equality of economic opportunity. The MBE provision may be viewed as a pilot project, appropriately limited in extent and duration, and subject to reassessment and reevaluation by the Congress prior to any extension or reenactment. [n74] Miscarriages of administration could have only a transitory economic impact on businesses not encompassed by the program, and would not be irremediable. [p490]

IV

Congress, after due consideration, perceived a pressing need to move forward with new approaches in the continuing effort to achieve the goal of equality of economic opportunity. In this effort, Congress has necessary latitude to try new techniques such as the limited use of racial and ethnic criteria to accomplish remedial objectives; this is especially so in programs where voluntary cooperation with remedial measures is induced by placing conditions on federal expenditures. That the program may press the outer limits of congressional authority affords no basis for striking it down.

Petitioners have mounted a facial challenge to a program developed by the politically responsive branches of Government. For its part, the Congress must proceed only with programs narrowly tailored to achieve its objectives, subject to continuing evaluation and reassessment; administration of the programs must be vigilant and flexible; and, when such a program comes under judicial review, courts must be satisfied that the legislative objectives and projected administration give reasonable assurance that the program will function within constitutional limitations. But as Mr. Justice Jackson admonished in a different context in 1941: [n75]

The Supreme Court can maintain itself and succeed in its tasks only if the counsels of self-restraint urged most earnestly by members of the Court itself are humbly and faithfully heeded. After the forces of conservatism and liberalism, of radicalism and reaction, of emotion and of self-interest are all caught up in the legislative process and averaged and come to rest in some compromise measure such as the Missouri Compromise, the N.R.A. the A.A.A., a minimum wage law, or some other legislative policy, a decision striking it down closes an area of compromise in which conflicts have actually, if only [p491] temporarily, been composed. Each such decision takes away from our democratic federalism another of its defenses against domestic disorder and violence. The vice of judicial supremacy, as exerted for ninety years in the field of policy, has been its progressive closing of the avenues to peaceful and democratic conciliation of our social and economic conflicts.

Mr. Justice Jackson reiterated these thoughts shortly before his death in what was to be the last of his Godkin Lectures: [n76]

I have said that, in these matters, the Court must respect the limitations on its own powers, because judicial usurpation is to me no more justifiable and no more promising of permanent good to the country than any other kind. So I presuppose a Court that will not depart from the judicial process, will not go beyond resolving cases and controversies brought to it in conventional form, and will not consciously encroach upon the functions of its coordinate branches.

In a different context, to be sure, that is, in discussing the latitude which should be allowed to states in trying to meet social and economic problems, Mr. Justice Brandeis had this to say:

To stay experimentation in things social and economic is a grave responsibility. Denial of the right to experiment may be fraught with serious consequences to the Nation.

New State Ice Co. v. Liebmann, 285 U.S. 262, 311 (1932) (dissenting opinion).

Any preference based on racial or ethnic criteria must necessarily receive a most searching examination to make sure that it does not conflict with constitutional guarantees. This case is one which requires, and which has received, that kind [p492] of examination. This opinion does not adopt, either expressly or implicitly, the formulas of analysis articulated in such cases as University of California Regents v. Bakke, 438 U.S. 265 (1978). However, our analysis demonstrates that the MBE provision would survive judicial review under either "test" articulated in the several Bakke opinions. The MBE provision of the Public Works Employment Act of 1977 does not violate the Constitution. [n77]

Affirmed.

APPENDIX TO OPINION OF BURGER, C.J.
¶ 1. The EDA Guidelines, at 2-7, provide in relevant part:

The primary obligation for carrying out the 10% MBE participation requirement rests with EDA Grantees. . . . The Grantee and those of its contractors which will make subcontracts or purchase substantial supplies from other firms (hereinafter referred to as "prime contractors") must seek out all available bon fide MBE's and make every effort to use as many of them as possible on the project.

An MBE is bona fide if the minority group ownership interests are real and continuing, and not created solely to meet 10% MBE requirements. For example, the minority group owners or stockholders should possess control over management, interest in capital and interest in earnings commensurate with the percentage of ownership [p493] on which the claim of minority ownership status is based. . . .

An MBE is available if the project is located in the market area of the MBE and the MBE can perform project services or supply project materials at the time they are needed. The relevant market area depends on the kind of services or supplies which are needed. . . . EDA will require that Grantees and prime contractors engage MBE's from as wide a market area as is economically feasible.

An MBE is qualified if it can perform the services or supply the materials that are needed. Grantees and prime contractors will be expected to use MBE's with less experience than available nonminority enterprises, and should expect to provide technical assistance to MBE's as needed. Inability to obtain bonding will ordinarily not disqualify an MBE. Grantees and prime contractors are expected to help MBE's obtain bonding, to include MBE's in any overall bond or to waive bonding where feasible. The Small Business Administration (SBA) is prepared to provide a 90% guarantee for the bond of any MBE participating in an LPW [local public works] project. Lack of working capital will not ordinarily disqualify an MBE. SBA is prepared to provide working capital assistance to any MBE participating in an LPW project. Grantees and prime contractors are expected to assist MBE's in obtaining working capital through SBA or otherwise.

. . . [E]very Grantee should make sure that it knows the names, addresses and qualifications of all relevant MBE's which would include the project location in their market areas. . . . Grantees should also hold prebid conferences to which they invite interested contractors and representatives of . . . MBE support organizations.

Arrangements have been made through the Office of Minority Business Enterprise . . . to provide assistance [p494] to Grantees and prime contractors in fulfilling the 10% MBE requirement. . . .

Grantees and prime contractors should also be aware of other support which is available from the Small Business Administration. . . .

. . . [T]he Grantee must monitor the performance of its prime contractors to make sure that their commitments to expend funds for MBE's are being fulfilled. . . . Grantees should administer every project tightly. . . .

¶ 2. The EDA guidelines, at 13-15, provide in relevant part:

Although a provision for waiver is included under this section of the Act, EDA will only approve a waiver under exceptional circumstances. The Grantee must demonstrate that there are not sufficient, relevant, qualified minority business enterprises whose market areas include the project location to justify a waiver. The Grantee must detail in its waiver request the efforts the Grantee and potential contractors have exerted to locate and enlist MBE's. The request must indicate the specific MBE's which were contacted and the reason each MBE was not used. . . .

* * * *
Only the Grantee can request a waiver. . . . Such a waiver request would ordinarily be made after the initial bidding or negotiation procedures proved unsuccessful. . . .

* * * *
[A] Grantee situated in an area where the minority population is very small may apply for a waiver before requesting bids on its project or projects. . . .

¶ 3. The EDA Technical Bulletin, at 1, provides the following definitions:

a) Negro -- An individual of the black race of African origin.

b) Spanish-speaking -- An individual of a Spanish-speaking culture and origin or parentage. [p495]

c) Oriental -- An individual of a culture, origin or parentage traceable to the areas south of the Soviet Union, East of Iran, inclusive of islands adjacent thereto, and out to the Pacific including but not limited to Indonesia, Indochina, Malaysia, Hawaii and the Philippines.

d) Indian -- An individual having origins in any of the original people of North America and who is recognized as an Indian by either a tribe, tribal organization or a suitable authority in the community. (A suitable authority in the community may be: educational institutions, religious organizations, or state agencies.)

e) Eskimo -- An individual having origins in any of the original peoples of Alaska.

f) Aleut -- An individual having origins in any of the original peoples of the Aleutian Islands.

¶ 4. The EDA Technical Bulletin, at 19, provides in relevant part:

Any person or organization with information indicating unjust participation by an enterprise or individuals in the MBE program or who believes that the MBE participation requirement is being improperly applied should contact the appropriate EDA grantee and provide a detailed statement of the basis for the complaint.

Upon receipt of a complaint, the grantee should attempt to resolve the issues in dispute. In the event the grantee requires assistance in reaching a determination, the grantee should contact the Civil Rights Specialist in the appropriate Regional Office.

If the complainant believes that the grantee has not satisfactorily resolved the issues raised in his complaint, he may personally contact the EDA Regional Office.

1. 91 Stat. 116, 42 U.S.C. § 6705(f)(2) (1976 ed., Supp. II).

2. 42 Fed.Reg. 27432 (1977), as amended by 42 Fed.Reg. 35822 (1977); 13 CFR Part 317 (1978).

3. U.S. Dept. of Commerce, Economic Development Administration, Local Public Works Program, Round II, Guidelines For 10% Minority Business Participation In LPW Grants (1977) (hereinafter Guidelines); App. 156a-167a.

4. U.S. Dept. of Commerce, Economic Development Administration, EDA Minority Business Enterprise (MBE) Technical Bulletin (Additional Assistance and Information Available to Grantees and Their Contractors In Meeting The 10% MBE Requirement) (1977) (hereinafter Technical Bulletin); App. 129a-155a.

5. 42 U.S.C. §§ 1981 1983, 1985; Title VI, § 601 of the Civil Rights Act of 1964, 78 Stat. 252, 42 U.S.C. § 2000d; Title VII, § 701 et seq. of the Civil Rights Act of 1964, 78 Stat. 253, as amended, 42 U.S.C. § 2000e et seq.

6. Ohio Contractors Assn. v. Economic Development Administration, 580 F.2d 213 (CA6 1978); Constructors Assn. v. Kreps, 573 F.2d 811 (CA3 1978); Rhode Island Chapter, Associated General Contractors v. Kreps, 450 F.Supp. 338 (RI 1978); Associated General Contractors v. Secretary of Commerce, No. 77-4218 (Kan. Feb. 9, 1978); Carolinas Branch, Associated General Contractors v. Kreps, 442 F.Supp. 392 (SC 1977); Ohio Contractors Assn. v. Economic Development Administration, 452 F.Supp. 1013 (SD Ohio 1977); Montana Contractors' Assn. v. Secretary of Commerce, 439 F.Supp. 1331 (Mont.1977); Florida East Coast Chapter v. Secretary of Commerce, No. 77-8351 (SD Fla. Nov. 3, 1977); but see Associated General Contractors v. Secretary of Commerce, 441 F.Supp. 955 (CD Cal.1977), vacated and remanded for consideration of mootness, 438 U.S. 909 (1978), on remand, 459 F.Supp. 766 (CD Cal.), vacated and remanded sub nom. Armistead v. Associated General Contractors of California, post, p. 908.

7. Both the Court of Appeals and the District Court rejected petitioners' various statutory arguments without extended discussion. 584 F.2d at 608, n. 15; 443 F.Supp. at 262.

8. H.R.Rep. No. 91077, p. 2 (1976). The bill discussed in this Report was accepted by the Conference Committee in preference to the Senate version. S.Conf.Rep. No. 94-939, p. 1 (1976); H.R.Conf. Rep. No. 94-1260, p. 1 (1976).

9. 90 Stat. 999, 42 U.S.C. § 6702.

10. 90 Stat. 1000, 42 U.S.C. § 6705.

11. 90 Stat. 1000, 42 U.S.C. § 6707.

12. 90 Stat. 1001, 42 U.S.C. § 6707(c).

13. 90 Stat. 1002, 42 U.S.C. § 6710. The actual appropriation of the full amount authorized was made several weeks later. Pub.L. 94-447, 90 Stat. 1497.

14. 123 Cong.Rec. 2136 (1977) (remarks of Sen. Randolph).

15. See, e.g., Hearings on H.R. 11 and Related Bills before the Subcommittee on Economic Development of the House Committee on Public Works and Transportation, 95th Cong., 1st Sess. (1977); H.R.Rep. No. 95-20 (1977); S.Rep. No. 95-38 (1977).

16. 91 Stat. 119, 42 U.S.C. § 6710 (1976 ed., Supp. II). The actual appropriation of the full authorized amount was made the same day. Pub.L. 95-29, 91 Stat. 123.

17. E.g., Hearings, supra, n. 15; 123 Cong.Rec. 5290-5353 (1977); id. at 7097-7176.

18. 91 Stat. 117, 42 U.S.C. § 6707 (1976 ed., Supp. II).

19. 91 Stat. 116, 42 U.S.C. § 6705 (1976 ed., Supp. II).

20. 123 Cong.Rec. 5097 (1977) (remarks of Rep. Mitchell).

21. Id. at 5098.

22. Id. at 5097-5098

23. Id. at 5098.

24. Id. at 5327. As reintroduced, the first sentence of the amendment was modified to provide:

Notwithstanding any other provision of law, no grant shall be made under this Act for any local public works project unless at least 10 per centum of the dollar volume of each contract shall be set aside for minority business enterprise and, or, unless at least 10 per centum of the articles, materials, and supplies which will be used in such project are procured from minority business enterprises.

25. Id. at 5327-5328.

26. Id. at 5327.

27. Id. at 5327-5328

28. Id. at 5328 (remarks of Rep. Roe)

29. Ibid.

30. Id. at 5329 (remarks of Rep. Mitchell).

31. Id. at 5330 (remarks of Rep. Conyers).

32. Id. at 5331 (remarks of Rep. Biaggi).

33. Id. at 5332.

34. Id. at 7155-7156 (remarks of Sen. Brooke). The first paragraph of Senator Brooke's formulation was identical to the version originally offered by Representative Mitchell, quoted in the text, supra at 458-459. A second paragraph of Senator Brooke's amendment provided:

This section shall not be interpreted to defund projects with less than 10 percent minority participation in areas with minority population of less than 5 percent. In that event, the correct level of minority participation will be predetermined by the Secretary in consultation with EDA and based upon its lists of qualified minority contractors and its solicitation of competitive bids from all minority firms on those lists,

123 Cong.Rec. 7156 (1977).

35. Ibid.

36. Ibid.

37. S.Conf.Rep. No. 95-110, P. 11 (1977); H.R.Conf.Rep. No. 95230, p. 11 (1977).

38. Ibid. The Conference Committee bill was agreed to by the Senate, 123 Cong.Rec. 12941-12942 (1977), and by the House, id., at 13242-13257, and was signed into law on May 13, 1977.

39. Id. at 7156 (remarks of Sen. Broke).

40. Id. at 5330 (remarks of Rep. Mitchell).

41. Id. at 5327; id. at 7156 (remarks of Sen. Brooke).

42. Exec.Order No. 11375, 3 CFR 684 (1966-1970 Comp.); Exec.Order No. 11518, 3 CFR 907 (1966-1970 Comp.).

43. 13 CFR § 124.8-1(c)(1) (1977).

44. U.S. Small Business Administration, Office of Business Development, Section 8(a) Program, Standard Operating Procedure 15-16 (1976); see H.R.Rep. No. 94-468, p. 30 (1975) ("[T]he relevant rules and regulations require such applicant to identify with the disadvantages of his or her racial group generally, and that such disadvantages must have personally affected the applicant's ability to enter into the mainstream of the business system"); U.S. Small Business Administration, Office of Minority Small Business and Capital Ownership Development, MSB & COD Programs, Standard Operating Procedure 20 (1979) ("The social disadvantage of individuals, including those within the above-named [racial and ethnic] groups, shall be determined by SBA on a case-by-case basis. Membership alone in any group is not conclusive that an individual is socially disadvantaged") .

45. H.R.Rep. No. 94-1791 (1977).

46. Id. at 124-149

47. H.R.Rep. No. 94-468, pp. 1-2 (1975) (emphasis added).

48. Another chapter of the 1977 Report of the House Committee on Small Business summarized a review of the SBA's Security Bond Guarantee Program, making specific reference to minority business participation in the construction industry:

The very basic problem disclosed by the testimony is that, over the years, there has developed a business system which has traditionally excluded measurable minority participation. In the past, more than the present, this system of conducting business transactions overtly precluded minority input. Currently, we more often encounter a business system which is racially neutral on its face, but, because of past overt social and economic discrimination, is presently operating, in effect, to perpetuate these past inequities. Minorities, until recently, have not participated to any measurable extent, in our total business system generally, or in the construction industry, in particular.

H.R.Rep. No. 94-1791, p. 182 (1977), summarizing H.R.Rep. No. 94-840, p. 17 (1976).

49. H.R.Rep. No. 94-468, pp. 28-30 (1975).

50. Id. at 29.

51. Id. at 11; U.S. General Accounting Office, Questionable Effectiveness of the § 8(a) Procurement Program, GGD-75-57 (1975); U.S. Comm'n on Civil Rights, Minorities and Women as Government Contractors (May 1975).

52. Id. at 16-28, 86-88.

53. Ibid.

54. Exec.Order No. 11458, 3 CFR 779 (1966-1970 Comp.); Exec.Order No. 11625, 3 CFR 616 (1971-1975 Comp.).

55. H.R.Rep. No. 94-468, p. 32 (1975). For other congressional observations with respect to the effect of past discrimination on current business opportunities for minorities, see, e.g., H.R.Rep. No. 92-1615, p. 3 (1972); H.R.Rep. No. 95-949, p. 8 (1978); S.Rep. No. 95-1070, pp. 1415 (1978); S.Rep. No. 96-31, pp. 107, 123-124 (1979); see also, e.g., H.R.Doc. No. 92-169, p. 4 (1971); H.R.Doc. No. 92-194, p. 1 (1972).

56. 91 Stat. 117, 42 U.S.C. § 6706 (1976 ed., Supp. II); 3 CFR Part 317 (1978).

57. 91 Stat. 116, 42 U.S.C. § 6705(e)(1) (1976 ed., Supp. II); 13 CFR § 317.19 (1978).

58. Guidelines 2-7; App. l57a-160a. The relevant portions of the Guidelines are set out in the Appendix to this opinion, ¶ 1.

59. Guidelines 2; App. 157a; see 123 Cong.Rec. 5327-5328 (1977) (remarks of Rep. Mitchell and Rep. Roe).

60. Guidelines 8; App. 161a.

61. See 123 Cong.Rec. 5327-5328 (1977) (remarks of Rep. Mitchell and Rep. Roe).

62. Guidelines 13-16; App. 165a-167a. The relevant portions Of the Guidelines are set out in the Appendix to this opinion, ¶ 2.

63. Technical Bulletin 5; App. 136a.

64. Technical Bulletin 9-10; App. 143a.

65. Text accompanying n. 48, supra.

66. H.R.Rep. No. 94-468, p. 30 (1975).

67. 123 Cong.Rec. 5330 (1977) (remarks of Rep. Roe).

68. Technical Bulletin 1; App. 131a-132a. These definitions are set out in the Appendix to this opinion, ¶ 3.

69. Technical Bulletin 3; App. 135a.

70. Technical Bulletin 19; App. 155a. The relevant portions of the Technical Bulletin are set out in the Appendix to this opinion, ¶ 4.

71. In their complaint, in order to establish standing to challenge the validity of the program, petitioners alleged as "[s]pecific examples" of economic injury three instances where one of their number assertedly would have been awarded a public works contract but for enforcement of the MBE provision. Petitioners requested only declaratory and injunctive relief against continued enforcement of the MBE provision; they did not seek any remedy for these specific instances of assertedly unlawful discrimination. App. 12a-13a, 17a-19a.

72. The Court of Appeals relied upon Department of Commerce statistics to calculate that the $4.2 billion in federal grants conditioned upon compliance with the MBE provision amounted to about 2.5% of the total of nearly $170 billion spent on construction in the United States during 1977. Thus, the 10% minimum minority business participation contemplated by this program would account for only 0.25% of the annual expenditure for construction work in the United States. Fullilove v. Kreps, 584 F.2d at 607.

73. The MBE provision, 42 U.S.C. § 6705(f)(2) (1976 ed., Supp. II), classifies as a minority business enterprise any

business at least 50 per centum of which is owned by minority group members or, in the case of a publicly owned business, at least 51 per centum of the stock of which is owned by minority group members.

Minority group members are defined as "citizens of the United States who are Negroes, Spanish-speaking, Orientals, Indians, Eskimos and Aleuts." The administrative definitions are set out in the Appendix to this opinion, ¶ 3. These categories also are classified as minorities in the regulations implementing the nondiscrimination requirements of the Railroad Revitalization and Regulatory Reform Act of 1976, 45 U.S.C. § 803 see 49 CFR § 265.5(j) (1978), on which Congress relied as precedent for the MBE provision. See 123 Cong.Rec. 7156 (1977) (remarks of Sen. Brooke). The House Subcommittee on SBA Oversight and Minority Enterprise, whose activities played a significant part in the legislative history of the MBE provision, also recognized that these categories were included within the Federal Government's definition of "minority business enterprise." H.R.Rep. No. 94-468, pp. 20-21 (1975). The specific inclusion of these groups in the MBE provision demonstrates that Congress concluded they were victims of discrimination. Petitioners did not press any challenge to Congress' classification categories in the Court of Appeals; there is no reason for this Court to pass upon the issue at this time.

74. Cf. GAO, Report to the Congress, Minority Firms on Local Public Works Projects -- Mixed Results, CED-79-9 (Jan. 16, 1979); U.S. Dept. of Commerce, Economic Development Administration, Local Public Works Program Interim Report on 10 Percent Minority Business Enterprise Requirement (Sept. 1978).

75. R. Jackson, The Struggle for Judicial Supremacy 321 (1941).

76. R. Jackson, The Supreme Court in the American System of Government 61-62 (1955).

77. Although the complaint alleged that the MBE program violated several federal statutes, n. 5, supra, the only statutory argument urged upon us is that the MBE provision is inconsistent with Title VI of the Civil Rights Act of 1964. We perceive no inconsistency between the requirements of Title VI and those of the MBE provision. To the extent any statutory inconsistencies might be asserted, the MBE provision -- the later, more specific enactment -- must be deemed to control. See, e.g., Morton v. Mancari, 417 U.S. 535, 550-551 (1974); Preiser v. Rodriguez, 411 U.S. 475, 489-490 (1973); Bulova Watch Co. v. United States, 365 U.S. 753, 758 (1961); United States v. Borden Co., 308 U.S. 188, 198-202 (1939)
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