US Court Rules Against Minority Set Asides in Federal Contracting

A three judge panel of the US Court of Appeals ruled that the Department of Defense's policy of setting aside 5% of contracts for disadvantage, minority owned companies was unconstitutional. Newsday.com reports here that the court stated the Department failed to prove discrimination against these minority contractors. The lawsuit had been brought by a company that was the low bidder but lost to such disadvantaged businesses.
The Defense Department is reviewing the ruling but is sure to appeal first to the full panel of the court, and then to the Supreme Court if necessary. The program has channeled millions of dollars to women and minority owned companies over the years. Most major contracts awarded by DoD require a portion of the funds to go to these businesses as sub-contractors. More to come on this as I am sure Congress will also weigh in.

Matthew Potter

Matthew Potter is a resident of Huntsville, Ala., where he works supporting U.S. Army aviation programs. After serving in the U.S. Navy, he began work as a defense contractor in Washington D.C. specializing in program management and budget development and execution. In the last 15 years Matthew has worked for several companies, large and small, involved in all aspects of government contracting and procurement. He holds two degrees in history as well as studying at the Defense Acquisition University. He has written for Seeking Alpha and at his own website, DefenseProcurementNews.com.

More from CBS News