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Adarand Constructors, Inc. v. Pena (1995)

No. 93-1841.

Argued January 17, 1995

Decided June 12, 1995

Most federal agency contracts must contain a subcontractor compensation clause, which gives a prime contractor a financial incentive to hire subcontractors certified as small businesses controlled by socially and economically disadvantaged individuals, and requires the contractor to presume that such individuals include minorities or any other individuals found to be disadvantaged by the Small Business Administration (SBA). The prime contractor under a federal highway construction contract containing such a clause awarded a subcontract to a company that was certified as a small disadvantaged business. The record does not reveal how the company obtained its certification, but it could have been by any one of three routes: under one of two SBA programs - known as the 8(a) and 8(d) programs - or by a state agency under relevant Department of Transportation regulations. Petitioner Adarand Constructors, Inc., which submitted the low bid on the subcontract but was not a certified business, filed suit against respondent federal officials, claiming that the race-based presumptions used in subcontractor compensation clauses violate the equal protection component of the Fifth Amendment"s Due Process Clause. The District Court granted respondents summary judgment. In affirming, the Court of Appeals assessed the constitutionality of the federal race-based action under a lenient standard, resembling intermediate scrutiny, which it determined was required by Fullilove v. Klutznick, 448 U.S. 448 , and Metro Broadcasting, Inc. v. FCC, 497 U.S. 547 .

Held:

The judgment is vacated, and the case is remanded.

16 F.3d 1537, vacated and remanded.

JUSTICE O"CONNOR delivered an opinion with respect to Parts I, Page II II, III-A, III-B, III-D, and IV, which was for the Court except insofar as it might be inconsistent with the views expressed in JUSTICE SCALIA"S concurrence, concluding that:

1. Adarand has standing to seek forward-looking relief. It has met the

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