Set Asides Set Aside?

A federal court decision last week that tossed out federal requirements for set-aside contracts at the Pentagon for disadvantaged businesses could undermine one of the government's key contracting goals: to help small businesses thrive.

That's according to a story by Elizabeth Newell in

"The ruling by the U.S. Court of Appeals in Rothe Development Corp. v. Department of Defense and Department of the Air Force stated that the government did not have sufficient evidence of 'pervasive, nationwide racial discrimination' by Defense to justify a race-based contracting preference program. Procurement and legal analysts argued that the rationale could be applied to minority contracting programs and the women's procurement program governmentwide.

"'The decision itself is limited, but I definitely think there will be future cases that quote this case as precedent where they try to make the argument that it applies in a broader way,'" said Robert Burton, former deputy administrator of the Office of Federal Procurement Policy and now a partner at the Washington law firm Venable. "'I think it's pretty clear the case will be cited as precedent for striking down other preference categories.'"

At issue is a 1986 legislative provision that established the 5 percent set-aside target for defense spending. The appeals court said the provision violates equal protection guarantees in the Fifth Amendment.

This could be a big deal. Stay tuned for more.

By Robert O'Harrow |  November 13, 2008; 5:47 AM ET
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Please email us to report offensive comments.

Small, woman-owned businesses are the ones being hurt by set-asides since there are no woman-owned set-asides. We have woman-owned goals so let's make things fair across the board.

Posted by: simonsaid | November 13, 2008 8:25 AM

Despite the opening sentence of this post, the court decision here need have no effect on whether small businesses can thrive or not; the decision is about discrimination on the basis of race and ethnicity. All the federal government has to do is change the program so that small companies, regardless of the skin color of their owners, can participate.

Posted by: rclegg1 | November 17, 2008 11:01 AM

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