Also known as: mandatory set-asides · mandatory set aside · mandatory set-aside · set-asides · mandatory set-aside programs
Written by attorneys · grounded in primary & secondary sources — see below
A fixed percentage of government contracts or opportunities reserved for businesses owned by members of designated racial minority groups. Such programs trigger strict scrutiny under the Equal Protection Clause and must rest on a strong evidentiary basis of specific past discrimination by the government in the relevant industry and jurisdiction. General societal discrimination or bare statistical disparities are insufficient, and the set-aside must be narrowly tailored to the identified discrimination.
The Metro Finance Authority enacts a rule reserving thirty percent of municipal bond underwriting contracts for minority-owned firms after noting that most prior awards went to a handful of large nonminority firms. Apex Securities, a nonminority firm, loses a contract under the rule and sues. The court applies strict scrutiny and invalidates the set-aside because the authority produced no findings of specific discriminatory acts in its own contracting process.
The Green Valley Housing Authority reserves twenty-five percent of property management contracts for minority-owned firms, citing only regional patterns of housing segregation. Apex Communities, a nonminority developer, is denied a contract and sues. The court strikes down the policy because the authority failed to identify discrimination in its own contracting market and the rigid percentage lacks narrow tailoring.
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The government must demonstrate a strong basis in evidence of its own specific past or present discrimination in the relevant industry and jurisdiction. General societal discrimination or statistical underrepresentation alone does not suffice.
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No. Statistical disparities may be probative but are insufficient without particularized findings of identified discriminatory acts or exclusionary practices by the government or in the local contracting market.
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The program must be flexible rather than a rigid quota, consider race-neutral alternatives, avoid undue burden on innocent parties, and be limited in scope and duration to the identified discrimination.
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No. The government must tie the set-aside to evidence of discrimination in its own jurisdiction and contracting practices. National or regional figures reflecting societal conditions are inadequate.
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