On June 21, the Center for Individual Rights filed a motion for summary judgment in Ultima Services v. U.S. Department of Agriculture, asking the district court to declare a significant federal racial preference unconstitutional. Ultima challenges the Section 8(a) program, through which the Small Business Administration authorizes federal agencies to award government contracts to “socially and economically disadvantaged” small businesses – a category that is largely determined by the race of the small business owner.
CIR argues that Section 8(a)’s arbitrary racial classifications violate the equal protection component of the Fifth Amendment. Although courts afford the government some limited leeway to consider race in order to redress specific acts of past government discrimination, the 8(a) program’s extensive use of racial classifications without evidence of government discrimination is the kind of racial policymaking that the Constitution forbids.
Far from proving any specific government discrimination, the SBA presumes that small business owners from certain racial backgrounds are “socially disadvantaged” and are thus candidates to participate in the 8(a) program. These presumptions are based on more-than-40-year-old data that the SBA neither updates nor reviews. Furthermore, the SBA authorizes federal agencies to award 8(a) contracts without demonstrating that they have historically participated in racial discrimination in the relevant industry.
The result is that small businesses lose the right to compete for contracts solely because of their race. In this case, the U.S. Department of Agriculture decided to award contracts through Section 8(a). Now, Ultima Services can no longer compete for contracts that it had serviced for over a decade.
Defendants have filed their own motion for summary judgment.