Rothe Development Corporation v. Department of Defense: The Constitutionality of Federal Contracting Programs for Minority-Owned and Other Small Business

摘要

This report discusses Rothe Development Corporation v. Department of Defense, a case involving a constitutional challenge to a minority contracting program authorized under Section 1207 of the Department of Defense (DOD) Authorization Act of 1987. This program allowed DOD to take 10% off the price of bids or offers submitted by 'small disadvantaged businesses' in determining which bid or offer had the lowest price or represented the best value for the government. Section 1207 also incorporated a presumption that minorities are socially and economically disadvantaged. In Rothe, the U.S. Court of Appeals for the Federal Circuit struck down the DOD preference program, holding that Section 1207 was facially unconstitutional because Congress did not have sufficient evidence to conclude that there was racial discrimination in defense contracting when it reauthorized the program in 2006. This report examines the Rothe decision in detail; describes existing contracting programs for minority- owned and women-owned small businesses; and analyzes Rothe's potential effect on these programs, including the Business Development Program under Section 8(a) of the Small Business Act.