Adarand Constructors, Inc. v. Peņa

115 S.Ct. 2097, 132 L.Ed.2d 158 (1995)

Vote: 5-4

In this case the Court reexamines the controversial issue of affirmative action in the context of the federal governments practice of providing financial incentives to contractors to hire subcontractors controlled by "socially and economically disadvantaged individuals."

Justice O’Connor announced the judgment of the Court....

Petitioner Adarand Constructors, Inc., claims that the Federal Government’s practice of giving general contractors on government projects a financial incentive to hire subcontractors controlled by "socially and economically disadvantaged individuals," and in particular, the Government’s use of race-based presumptions in identifying such individuals, violates the equal protection component of the Fifth Amendment’s Due Process Clause. The Court of Appeals rejected Adarand’s claim. We conclude, however, that courts should analyze cases of this kind under a different standard of review than the one the Court of Appeals applied. We therefore vacate the Court of Appeals’ judgment and remand the case for further proceedings....

In 1989, the Central Federal Lands Highway Division (CFLHD), which is part of the United States Department of Transportation (DOT), awarded the prime contract for a highway construction project in Colorado to Mountain Gravel & Construction Company. Mountain Gravel then solicited bids from subcontractors for the guardrail portion of the contract. Adarand, a Colorado-based highway construction company specializing in guardrail work, submitted the low bid. ... Gonzales Construction Company also submitted a bid.

The prime contract’s terms provide that Mountain Gravel would receive additional compensation if it hired subcontractors certified as small businesses controlled by "socially and economically disadvantaged individuals," ... Gonzales is certified as such a business; Adarand is not. Mountain Gravel awarded the subcontract to Gonzales, despite Adarand’s low bid, and Mountain Gravel’s Chief Estimator has submitted an affidavit stating that Mountain Gravel would have accepted Adarand’s bid, had it not been for the additional payment it received by hiring Gonzales instead. ... Federal law requires that a subcontracting clause similar to the one used here must appear in most federal agency contracts, and it also requires the clause to state that "[t]he contractor shall presume that socially and economically disadvantaged individuals include Black Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, and other minorities, or any other individual found to be disadvantaged by the [Small Business] Administration pursuant to section 8(a) of the Small Business Act." ... Adarand claims that the presumption set forth in that statute discriminates on the basis of race in violation of the Federal Government’s Fifth Amendment obligation not to deny anyone equal protection of the laws....

The Government urges that "[t]he Subcontracting Compensation Clause program is ... a program based on disadvantage, not on race," and thus that it is subject only to "the most relaxed judicial scrutiny." ... To the extent that the statutes and regulations involved in this case are race neutral, we agree. The Government concedes, however, that "the race-based rebuttable presumption used in some certification determinations under the Subcontracting Compensation Clause" is subject to some heightened level of scrutiny. ... The parties disagree as to what that level should be....

...[T]he Court’s cases through [Richmond v. J. A. Croson Co.] had established three general propositions with respect to governmental racial classifications. First, skepticism: "‘[a]ny preference based on racial or ethnic criteria must necessarily receive a most searching examination.’" ... Second, consistency: "the standard of review under the Equal Protection Clause is not dependent on the race of those burdened or benefited by a particular classification." ... And third, congruence: "[e]qual protection analysis in the Fifth Amendment area is the same as that under the Fourteenth Amendment." ... Taken together, these three propositions lead to the conclusion that any person, of whatever race, has the right to demand that any governmental actor subject to the Constitution justify any racial classification subjecting that person to unequal treatment under the strictest judicial scrutiny....

A year later, however, the Court took a surprising turn. Metro Broadcasting, Inc. v. FCC ... (1990) involved a Fifth Amendment challenge to two race-based policies of the Federal Communications Commission. In Metro Broadcasting, the Court repudiated the long-held notion that "it would be unthinkable that the same Constitution would impose a lesser duty on the Federal Government" than it does on a State to afford equal protection of the laws. ... It did so by holding that "benign" federal racial classifications need only satisfy intermediate scrutiny, even though Croson had recently concluded that such classifications enacted by a State must satisfy strict scrutiny. "[B]enign" federal racial classifications, the Court said, "-even if those measures are not ‘remedial’ in the sense of being designed to compensate victims of past governmental or societal discrimination-are constitutionally permissible to the extent that they serve important governmental objectives within the power of Congress and are substantially related to achievement of those objectives." ... The Court did not explain how to tell whether a racial classification should be deemed "benign," other than to express "confiden[ce] that an ‘examination of the legislative scheme and its history’ will separate benign measures from other types of racial classifications." ...

Applying this test, the Court first noted that the FCC policies at issue did not serve as a remedy for past discrimination. ... Proceeding on the assumption that the policies were nonetheless "benign," it concluded that they served the "important governmental objective" of "enhancing broadcast diversity," ... and that they were "substantially related" to that objective. ... It therefore upheld the policies.

By adopting intermediate scrutiny as the standard of review for congressionally mandated "benign" racial classifications, Metro Broadcasting departed from prior cases in two significant respects. First, it turned its back on Croson’s explanation of why strict scrutiny of all governmental racial classifications is essential....

Second, Metro Broadcasting squarely rejected one of the three propositions established by the Court’s earlier equal protection cases, namely, congruence between the standards applicable to federal and state racial classifications, and in so doing also undermined the other two-skepticism of all racial classifications, and consistency of treatment irrespective of the race of the burdened or benefited group. ... Under Metro Broadcasting, certain racial classifications ("benign" ones enacted by the Federal Government) should be treated less skeptically than others; and the race of the benefited group is critical to the determination of which standard of review to apply. Metro Broadcasting was thus a significant departure from much of what had come before it.

The three propositions undermined by Metro Broadcasting all derive from the basic principle that the Fifth and Fourteenth Amendments to the Constitution protect persons, not groups. It follows from that principle that all governmental action based on race-a group classification long recognized as "in most circumstances irrelevant and therefore prohibited," ... should be subjected to detailed judicial inquiry to ensure that the personal right to equal protection of the laws has not been infringed. These ideas have long been central to this Court’s understanding of equal protection, and holding "benign" state and federal racial classifications to different standards does not square with them. "[A] free people whose institutions are founded upon the doctrine of equality," ibid., should tolerate no retreat from the principle that government may treat people differently because of their race only for the most compelling reasons. Accordingly, we hold today that all racial classifications, imposed by whatever federal, state, or local governmental actor, must be analyzed by a reviewing court under strict scrutiny. In other words, such classifications are constitutional only if they are narrowly tailored measures that further compelling governmental interests. To the extent that Metro Broadcasting is inconsistent with that holding, it is overruled....

"Although adherence to precedent is not rigidly required in constitutional cases, any departure from the doctrine of stare decisis demands special justification." ... In deciding whether this case presents such justification, we recall Justice Frankfurter’s admonition that "stare decisis is a principle of policy and not a mechanical formula of adherence to the latest decision, however recent and questionable, when such adherence involves collision with a prior doctrine more embracing in its scope, intrinsically sounder, and verified by experience." ... Remaining true to an "intrinsically sounder" doctrine established in prior cases better serves the values of stare decisis than would following a more recently decided case inconsistent with the decisions that came before it; the latter course would simply compound the recent error and would likely make the unjustified break from previously established doctrine complete. In such a situation, "special justification" exists to depart from the recently decided case.

As we have explained, Metro Broadcasting undermined important principles of this Court’s equal protection jurisprudence, established in a line of cases stretching back over fifty years. ... Those principles together stood for an "embracing" and "intrinsically soun[d]" understanding of equal protection "verified by experience," namely, that the Constitution imposes upon federal, state, and local governmental actors the same obligation to respect the personal right to equal protection of the laws....

Some have questioned the importance of debating the proper standard of review of race-based legislation. ... But we agree ... that, "[b]ecause racial characteristics so seldom provide a relevant basis for disparate treatment, and because classifications based on race are potentially so harmful to the entire body politic, it is especially important that the reasons for any such classification be clearly identified and unquestionably legitimate," and that "[r]acial classifications are simply too pernicious to permit any but the most exact connection between justification and classification." ... We think that requiring strict scrutiny is the best way to ensure that courts will consistently give racial classifications that kind of detailed examination, both as to ends and as to means.... Any retreat from the most searching judicial inquiry can only increase the risk of another such error occurring in the future.

Finally, we wish to dispel the notion that strict scrutiny is "strict in theory, but fatal in fact." ... The unhappy persistence of both the practice and the lingering effects of racial discrimination against minority groups in this country is an unfortunate reality, and government is not disqualified from acting in response to it. As recently as 1987, for example, every Justice of this Court agreed that the Alabama Department of Public Safety’s "pervasive, systematic, and obstinate discriminatory conduct" justified a narrowly tailored race-based remedy. ... When race-based action is necessary to further a compelling interest, such action is within constitutional constraints if it satisfies the "narrow tailoring" test this Court has set out in previous cases....

Because our decision today alters the playing field in some important respects, we think it best to remand the case to the lower courts for further consideration in light of the principles we have announced. The Court of Appeals, following Metro Broadcasting and Fullilove, analyzed the case in terms of intermediate scrutiny. It upheld the challenged statutes and regulations because it found them to be "narrowly tailored to achieve [their] significant governmental purpose of providing subcontracting opportunities for small disadvantaged business enterprises." ... The Court of Appeals did not decide the question whether the interests served by the use of subcontractor compensation clauses are properly described as "compelling." It also did not address the question of narrow tailoring in terms of our strict scrutiny cases, by asking, for example, whether there was "any consideration of the use of race-neutral means to increase minority business participation" in government contracting, ... whether the program was appropriately limited such that it "will not last longer than the discriminatory effects it is designed to eliminate." ...

Moreover, unresolved questions remain concerning the details of the complex regulatory regimes implicated by the use of subcontractor compensation clauses.... The question whether any of the ways in which the Government uses subcontractor compensation clauses can survive strict scrutiny, and any relevance distinctions such as these may have to that question, should be addressed in the first instance by the lower courts.

Accordingly, the judgment of the Court of Appeals is vacated, and the case is remanded for further proceedings consistent with this opinion....

Justice Scalia, concurring in part and concurring in the judgment.

I join the opinion of the Court, except ... insofar as it may be inconsistent with the following: In my view, government can never have a "compelling interest" in discriminating on the basis of race in order to "make up" for past racial discrimination in the opposite direction. ... Individuals who have been wronged by unlawful racial discrimination should be made whole; but under our Constitution there can be no such thing as either a creditor or a debtor race. That concept is alien to the Constitution’s focus upon the individual ... and its rejection of dispositions based on race. ... To pursue the concept of racial entitlement-even for the most admirable and benign of purposes-is to reinforce and preserve for future mischief the way of thinking that produced race slavery, race privilege and race hatred. In the eyes of government, we are just one race here. It is American.

It is unlikely, if not impossible, that the challenged program would survive under this understanding of strict scrutiny, but I am content to leave that to be decided on remand.

Justice Thomas, concurring in part and concurring in the judgment.

I agree with the majority’s conclusion that strict scrutiny applies to all government classifications based on race. I write separately, however, to express my disagreement with the premise underlying Justice Stevens’ and Justice Ginsburg’s dissents: that there is a racial paternalism exception to the principle of equal protection. I believe that there is a "moral [and] constitutional equivalence" ... between laws designed to subjugate a race and those that distribute benefits on the basis of race in order to foster some current notion of equality. Government cannot make us equal; it can only recognize, respect, and protect us as equal before the law.

That these programs may have been motivated, in part, by good intentions cannot provide refuge from the principle that under our Constitution, the government may not make distinctions on the basis of race. As far as the Constitution is concerned, it is irrelevant whether a government’s racial classifications are drawn by those who wish to oppress a race or by those who have a sincere desire to help those thought to be disadvantaged. There can be no doubt that the paternalism that appears to lie at the heart of this program is at war with the principle of inherent equality that underlies and infuses our Constitution. ...

These programs not only raise grave constitutional questions, they also undermine the moral basis of the equal protection principle. Purchased at the price of immeasurable human suffering, the equal protection principle reflects our Nation’s understanding that such classifications ultimately have a destructive impact on the individual and our society. Unquestionably, "[i]nvidious [racial] discrimination is an engine of oppression." ... It is also true that "[r]emedial" racial preferences may reflect "a desire to foster equality in society." ... But there can be no doubt that racial paternalism and its unintended consequences can be as poisonous and pernicious as any other form of discrimination. So-called "benign" discrimination teaches many that because of chronic and apparently immutable handicaps, minorities cannot compete with them without their patronizing indulgence. Inevitably, such programs engender attitudes of superiority or, alternatively, provoke resentment among those who believe that they have been wronged by the government’s use of race. These programs stamp minorities with a badge of inferiority and may cause them to develop dependencies or to adopt an attitude that they are "entitled" to preferences....

In my mind, government-sponsored racial discrimination based on benign prejudice is just as noxious as discrimination inspired by malicious prejudice. In each instance, it is racial discrimination, plain and simple.

Justice Stevens, with whom Justice Ginsburg joins, dissenting:

Instead of deciding this case in accordance with controlling precedent, the Court today delivers a disconcerting lecture about the evils of governmental racial classifications. For its text the Court has selected three propositions, represented by the bywords "skepticism," "consistency," and "congruence." ... I shall comment on each of these propositions, then add a few words about stare decisis, and finally explain why I believe this Court has a duty to affirm the judgment of the Court of Appeals....

The Court’s concept of skepticism is, at least in principle, a good statement of law and of common sense. Undoubtedly, a court should be wary of a governmental decision that relies upon a racial classification. "Because racial characteristics so seldom provide a relevant basis for disparate treatment, and because classifications based on race are potentially so harmful to the entire body politic," a reviewing court must satisfy itself that the reasons for any such classification are "clearly identified and unquestionably legitimate." ... I welcome its renewed endorsement by the Court today. But ... substantial agreement on the standard to be applied in deciding difficult cases does not necessarily lead to agreement on how those cases actually should or will be resolved. In my judgment, because uniform standards are often anything but uniform, we should evaluate the Court’s comments on "consistency," "congruence," and stare decisis with the same type of skepticism that the Court advocates for the underlying issue....

The Court’s concept of "consistency" assumes that there is no significant difference between a decision by the majority to impose a special burden on the members of a minority race and a decision by the majority to provide a benefit to certain members of that minority notwithstanding its incidental burden on some members of the majority. In my opinion that assumption is untenable. There is no moral or constitutional equivalence between a policy that is designed to perpetuate a caste system and one that seeks to eradicate racial subordination. Invidious discrimination is an engine of oppression, subjugating a disfavored group to enhance or maintain the power of the majority. Remedial race-based preferences reflect the opposite impulse: a desire to foster equality in society. No sensible conception of the Government’s constitutional obligation to "govern impartially," ... should ignore this distinction....

The consistency that the Court espouses would disregard the difference between a "No Trespassing" sign and a welcome mat. It would treat a Dixiecrat Senator’s decision to vote against Thurgood Marshall’s confirmation in order to keep African Americans off the Supreme Court as on a par with President Johnson’s evaluation of his nominee’s race as a positive factor. It would equate a law that made black citizens ineligible for military service with a program aimed at recruiting black soldiers. An attempt by the majority to exclude members of a minority race from a regulated market is fundamentally different from a subsidy that enables a relatively small group of newcomers to enter that market. An interest in "consistency" does not justify treating differences as though they were similarities....

The Court’s explanation for treating dissimilar race-based decisions as though they were equally objectionable is a supposed inability to differentiate between "invidious" and "benign" discrimination. ... But the term "affirmative action" is common and well understood. Its presence in everyday parlance shows that people understand the difference between good intentions and bad. As with any legal concept, some cases may be difficult to classify, but our equal protection jurisprudence has identified a critical difference between state action that imposes burdens on a disfavored few and state action that benefits the few "in spite of" its adverse effects on the many. ...

Indeed, our jurisprudence has made the standard to be applied in cases of invidious discrimination turn on whether the discrimination is "intentional," or whether, by contrast, it merely has a discriminatory "effect." ... Surely this distinction is at least as subtle, and at least as difficult to apply, ... as the usually obvious distinction between a measure intended to benefit members of a particular minority race and a measure intended to burden a minority race. A state actor inclined to subvert the Constitution might easily hide bad intentions in the guise of unintended "effects"; but I should think it far more difficult to enact a law intending to preserve the majority’s hegemony while casting it plausibly in the guise of affirmative action for minorities.

Nothing is inherently wrong with applying a single standard to fundamentally different situations, as long as that standard takes relevant differences into account. For example, if the Court in all equal protection cases were to insist that differential treatment be justified by relevant characteristics of the members of the favored and disfavored classes that provide a legitimate basis for disparate treatment, such a standard would treat dissimilar cases differently while still recognizing that there is, after all, only one Equal Protection Clause. ... Under such a standard, subsidies for disadvantaged businesses may be constitutional though special taxes on such businesses would be invalid. ... But a single standard that purports to equate remedial preferences with invidious discrimination cannot be defended in the name of "equal protection."

Moreover, the Court may find that its new "consistency" approach to race-based classifications is difficult to square with its insistence upon rigidly separate categories for discrimination against different classes of individuals. For example, as the law currently stands, the Court will apply "intermediate scrutiny" to cases of invidious gender discrimination and "strict scrutiny" to cases of invidious race discrimination, while applying the same standard for benign classifications as for invidious ones. If this remains the law, then today’s lecture about "consistency" will produce the anomalous result that the Government can more easily enact affirmative-action programs to remedy discrimination against women than it can enact affirmative-action programs to remedy discrimination against African Americans-even though the primary purpose of the Equal Protection Clause was to end discrimination against the former slaves. ... When a court becomes preoccupied with abstract standards, it risks sacrificing common sense at the altar of formal consistency.

As a matter of constitutional and democratic principle, a decision by representatives of the majority to discriminate against the members of a minority race is fundamentally different from those same representatives’ decision to impose incidental costs on the majority of their constituents in order to provide a benefit to a disadvantaged minority. Indeed, as I have previously argued, the former is virtually always repugnant to the principles of a free and democratic society, whereas the latter is, in some circumstances, entirely consistent with the ideal of equality. ... By insisting on a doctrinaire notion of "consistency" in the standard applicable to all race-based governmental actions, the Court obscures this essential dichotomy....

The Court’s concept of "congruence" assumes that there is no significant difference between a decision by the Congress of the United States to adopt an affirmative-action program and such a decision by a State or a municipality. In my opinion that assumption is untenable. It ignores important practical and legal differences between federal and state or local decision makers.

These differences have been identified repeatedly and consistently both in opinions of the Court and in separate opinions authored by members of today’s majority. Thus, in Metro Broadcasting, ... in which we upheld a federal program designed to foster racial diversity in broadcasting, we identified the special "institutional competence" of our National Legislature. ... "It is of overriding significance in these cases," we were careful to emphasize, "that the FCC’s minority ownership programs have been specifically approved-indeed, mandated-by Congress." ... We recalled the several opinions in Fullilove that admonished this Court to "‘approach our task with appropriate deference to the Congress, a co-equal branch charged by the Constitution with the power to "provide for the ... general Welfare of the United States" and "to enforce, by appropriate legislation," the equal protection guarantees of the Fourteenth Amendment. ... We recalled that the opinions of Chief Justice Burger and Justice Powell in Fullilove had "explained that deference was appropriate in light of Congress’ institutional competence as the National Legislature, as well as Congress’ powers under the Commerce Clause, the Spending Clause, and the Civil War Amendments." ...

The majority in Metro Broadcasting and the plurality in Fullilove were not alone in relying upon a critical distinction between federal and state programs. In his separate opinion in Richmond v. J. A. Croson Co. ... Justice Scalia discussed the basis for this distinction. He observed that "it is one thing to permit racially based conduct by the Federal Government-whose legislative powers concerning matters of race were explicitly enhanced by the Fourteenth Amendment, ... and quite another to permit it by the precise entities against whose conduct in matters of race that Amendment was specifically directed....

An additional reason for giving greater deference to the National Legislature than to a local law-making body is that federal affirmative action programs represent the will of our entire Nation’s elected representatives, whereas a state or local program may have an impact on nonresident entities who played no part in the decision to enact it. Thus, in the state or local context, individuals who were unable to vote for the local representatives who enacted a race-conscious program may nonetheless feel the effects of that program. This difference recalls the goals of the Commerce Clause, ... which permits Congress to legislate on certain matters of national importance while denying power to the States in this area for fear of undue impact upon out-of-state residents. ...

Ironically, after all of the time, effort, and paper this Court has expended in differentiating between federal and state affirmative action, the majority today virtually ignores the issue. ... It provides not a word of direct explanation for its sudden and enormous departure from the reasoning in past cases. Such silence, however, cannot erase the difference between Congress’ institutional competence and constitutional authority to overcome historic racial subjugation and the States’ lesser power to do so.

Presumably, the majority is now satisfied that its theory of "congruence" between the substantive rights provided by the Fifth and Fourteenth Amendments disposes of the objection based upon divided constitutional powers. But it is one thing to say (as no one seems to dispute) that the Fifth Amendment encompasses a general guarantee of equal protection as broad as that contained within the Fourteenth Amendment. It is another thing entirely to say that Congress’ institutional competence and constitutional authority entitles it to no greater deference when it enacts a program designed to foster equality than the deference due a State legislature. The latter is an extraordinary proposition; and, as the foregoing discussion demonstrates, our precedents have rejected it explicitly and repeatedly. ...

Our opinion in Metro Broadcasting relied on several constitutional provisions to justify the greater deference we owe to Congress when it acts with respect to private individuals. ... In the programs challenged in this case, Congress has acted both with respect to private individuals and, as in Fullilove, with respect to the States themselves. When Congress does this, it draws its power directly from Section 5 of the Fourteenth Amendment.... The Fourteenth Amendment directly empowers Congress at the same time it expressly limits the States. This is no accident. It represents our Nation’s consensus, achieved after hard experience throughout our sorry history of race relations, that the Federal Government must be the primary defender of racial minorities against the States, some of which may be inclined to oppress such minorities. A rule of "congruence" that ignores a purposeful "incongruity" so fundamental to our system of government is unacceptable.

In my judgment, the Court’s novel doctrine of "congruence" is seriously misguided. Congressional deliberations about a matter as important as affirmative action should be accorded far greater deference than those of a State or municipality....

The Court’s concept of stare decisis treats some of the language we have used in explaining our decisions as though it were more important than our actual holdings. In my opinion that treatment is incorrect.

This is the third time in the Court’s entire history that it has considered the constitutionality of a federal affirmative-action program. On each of the two prior occasions, the first in 1980, ... and the second in 1990, ... the Court upheld the program. Today the Court explicitly overrules Metro Broadcasting ... and undermines Fullilove [v. Klutznick (1980)] by recasting the standard on which it rested and by calling even its holding into question. ... By way of explanation, Justice O’Connor advises the federal agencies and private parties that have made countless decisions in reliance on those cases that "we do not depart from the fabric of the law; we restore it." A skeptical observer might ask whether this pronouncement is a faithful application of the doctrine of stare decisis....

The Court’s holding in Fullilove surely governs the result in this case. The Public Works Employment Act of 1977 ... which this Court upheld in Fullilove, is different in several critical respects from the portions of the Small Business Act (SBA) ... and the Surface Transportation and Uniform Relocation Assistance Act of 1987 (STURAA) ... challenged in this case. Each of those differences makes the current program designed to provide assistance to disadvantaged business enterprises (DBE’s) significantly less objectionable than the 1977 categorical grant of $400 million in exchange for a 10% set-aside in public contracts to "a class of investors defined solely by racial characteristics." ... In no meaningful respect is the current scheme more objectionable than the 1977 Act. Thus, if the 1977 Act was constitutional, then so must be the SBA and STURAA. Indeed, even if my dissenting views in Fullilove had prevailed, this program would be valid.

Unlike the 1977 Act, the present statutory scheme does not make race the sole criterion of eligibility for participation in the program. Race does give rise to a rebuttable presumption of social disadvantage which, at least under STURAA, gives rise to a second rebuttable presumption of economic disadvantage. ... But a small business may qualify as a DBE, by showing that it is both socially and economically disadvantaged, even if it receives neither of these presumptions. ... Thus, the current preference is more inclusive than the 1977 Act because it does not make race a necessary qualification.

More importantly, race is not a sufficient qualification. Whereas a millionaire with a long history of financial successes, who was a member of numerous social clubs and trade associations, would have qualified for a preference under the 1977 Act merely because he was an Asian American or an African American, ... neither the SBA nor STURAA creates any such anomaly. The DBE program excludes members of minority races who are not, in fact, socially or economically disadvantaged. ... The presumption of social disadvantage reflects the unfortunate fact that irrational racial prejudice-along with its lingering effects-still survives. The presumption of economic disadvantage embodies a recognition that success in the private sector of the economy is often attributable, in part, to social skills and relationships. Unlike the 1977 set-asides, the current preference is designed to overcome the social and economic disadvantages that are often associated with racial characteristics. If, in a particular case, these disadvantages are not present, the presumptions can be rebutted. ... The program is thus designed to allow race to play a part in the decisional process only when there is a meaningful basis for assuming its relevance....

The current program contains another forward-looking component that the 1977 set-asides did not share. Section 8(a) of the SBA provides for periodic review of the status of DBE’s, ... and DBE status can be challenged by a competitor at any time under any of the routes to certification. ... Such review prevents ineligible firms from taking part in the program solely because of their minority ownership, even when those firms were once disadvantaged but have since become successful. The emphasis on review also indicates the Administration’s anticipation that after their presumed disadvantages have been overcome, firms will "graduate" into a status in which they will be able to compete for business, including prime contracts, on an equal basis. ... As with other phases of the statutory policy of encouraging the formation and growth of small business enterprises, this program is intended to facilitate entry and increase competition in the free market.

Significantly, the current program, unlike the 1977 set-aside, does not establish any requirement-numerical or otherwise-that a general contractor must hire DBE subcontractors. The program we upheld in Fullilove required that 10% of the federal grant for every federally funded project be expended on minority business enterprises. In contrast, the current program contains no quota. Although it provides monetary incentives to general contractors to hire DBE subcontractors, it does not require them to hire DBE’s, and they do not lose their contracts if they fail to do so. The importance of this incentive to general contractors (who always seek to offer the lowest bid) should not be underestimated; but the preference here is far less rigid, and thus more narrowly tailored, than the 1977 Act. ...

Finally, the record shows a dramatic contrast between the sparse deliberations that preceded the 1977 Act, ... and the extensive hearings conducted in several Congresses before the current program was developed. However we might evaluate the benefits and costs-both fiscal and social-of this or any other affirmative-action program, our obligation to give deference to Congress’ policy choices is much more demanding in this case than it was in Fullilove. If the 1977 program of race-based set-asides satisfied the strict scrutiny dictated by Justice Powell’s vision of the Constitution-a vision the Court expressly endorses today-it must follow as night follows the day that the Court of Appeals’ judgment upholding this more carefully crafted program should be affirmed....

My skeptical scrutiny of the Court’s opinion leaves me in dissent. The majority’s concept of "consistency" ignores a difference, fundamental to the idea of equal protection, between oppression and assistance. The majority’s concept of "congruence" ignores a difference, fundamental to our constitutional system, between the Federal Government and the States. And the majority’s concept of stare decisis ignores the force of binding precedent. I would affirm the judgment of the Court of Appeals.

Justice Souter, with whom Justice Ginsburg and Justice Breyer join, dissenting....

Justice Ginsburg, with whom Justice Breyer joins, dissenting.

...The statutes and regulations at issue, as the Court indicates, were adopted by the political branches in response to an "unfortunate reality": "[t]he unhappy persistence of both the practice and the lingering effects of racial discrimination against minority groups in this country." ... The United States suffers from those lingering effects because, for most of our Nation’s history, the idea that "we are just one race" ... was not embraced. For generations, our lawmakers and judges were unprepared to say that there is in this land no superior race, no race inferior to any other....

Not until Loving v. Virginia ... (1967), which held unconstitutional Virginia’s ban on interracial marriages, could one say with security that the Constitution and this Court would abide no measure "designed to maintain White Supremacy." ...

The divisions in this difficult case should not obscure the Court’s recognition of the persistence of racial inequality and a majority’s acknowledgment of Congress’ authority to act affirmatively, not only to end discrimination, but also to counteract discrimination’s lingering effects. ... Those effects, reflective of a system of racial caste only recently ended, are evident in our workplaces, markets, and neighborhoods. Job applicants with identical resumes, qualifications, and interview styles still experience different receptions, depending on their race. White and African-American consumers still encounter different deals. People of color looking for housing still face discriminatory treatment by landlords, real estate agents, and mortgage lenders. Minority entrepreneurs sometimes fail to gain contracts though they are the low bidders, and they are sometimes refused work even after winning contracts. Bias both conscious and unconscious, reflecting traditional and unexamined habits of thought, keeps up barriers that must come down if equal opportunity and nondiscrimination are ever genuinely to become this country’s law and practice.

Given this history and its practical consequences, Congress surely can conclude that a carefully designed affirmative action program may help to realize, finally, the "equal protection of the laws" the Fourteenth Amendment has promised since 1868....

While I would not disturb the programs challenged in this case, and would leave their improvement to the political branches, I see today’s decision as one that allows our precedent to evolve, still to be informed by and responsive to changing conditions.