SUPREME COURT OF UNITED STATES

                                                H. Earl FULLILOVE

                                                           Vs.

              Philip M. KLUTZNICK, Secretary of Commerce of the United States, et al.

No. 78-1007.
Argued Nov. 27, 1979.
Decided July 2, 1980.

Mr. CHIEF JUSTICE BURGER, joined by Mr. Justice WHITE and Mr. Justice POWELL,
concluded that the MBE provision of the 1977 Act, on its face, does not violate the Constitution. Pp.
456-492.

(a) Viewed against the legislative and administrative background of the 1977 Act, the legislative
objectives of the MBE provision and of the administrative program thereunder were to ensure--
without mandating the allocation of federal funds according to inflexible percentages solely based
on race or ethnicity--that, to the extent federal funds were granted under the 1977 Act, grantees
who elected to participate would not employ procurement practices that Congress had decided might
result in perpetuation of the effects of prior discrimination which had impaired or foreclosed access
by minority businesses to public contracting opportunities. Pp. 456-472.

(b) In considering the constitutionality of the MBE provision, it first must be determined whether
the objectives of the legislation are within Congress' power. Pp. 472-480.

(i) The 1977 Act as primarily an exercise of Congress' Spending Power under Art. I, § 8, cl. 1, "to
provide for the . . . general Welfare," conditions receipt of federal moneys upon the recipient's
compliance with federal statutory and administrative directives. Since the reach of the Spending
Power is at least as broad as Congress' regulatory powers, if Congress, pursuant to its regulatory
powers, could have achieved the objectives of the MBE program, then it may do so under the
Spending Power. Pp. 473-475.

(ii) Insofar as the MBE program pertains to the actions of private prime contractors, including those
not responsible for any violation of antidiscrimination laws, Congress could have achieved its
objectives under the Commerce Clause. The legislative history shows that there was a rational basis
for Congress to conclude that the subcontracting practices of prime contractors could perpetuate the
prevailing impaired access by minority businesses to public contracting opportunities, and that this
inequity has an effect on interstate commerce. Pp. 475-476.

(iii) Insofar as the MBE program pertains to the actions of state and local grantees, Congress could
have achieved its objectives by use of its power under § 5 of the Fourteenth Amendment "to
enforce, by appropriate legislation" the equal protection guarantee of that Amendment. Congress
had abundant historical basis from which it could conclude that traditional procurement practices,
when applied to minority businesses, could perpetuate the effects of prior discrimination, and that
the prospective elimination of such barriers to minority-firm access to public contracting
opportunities was appropriate to ensure that those businesses were not denied equal opportunity to
participate in federal grants to state and local governments, which is one aspect of the equal
protection of the laws. Cf., e. g., Katzenbach v. Morgan, [1966] USSC 120; 384 U.S. 641, 86 S.Ct.
1717, 16 L.Ed.2d 828; Oregon v. Mitchell, [1970] USSC 207; 400 U.S. 112, 91 S.Ct. 260, 27
L.Ed.2d 272. Pp. 476-478.

(iv) Thus, the objectives of the MBE provision are within the scope of Congress' Spending Power.
Cf., Lau v. Nichols[1974] USSC 14; , 414 U.S. 563, 94 S.Ct. 786, 39 L.Ed.2d 1. Pp. 479-480.

(c) Congress' use here of racial and ethnic criteria as a condition attached to a federal grant is a valid
means to accomplish its constitutional objectives, and the MBE provision on its face does not
violate the equal protection component of the Due Process Clause of the Fifth Amendment. Pp. 480-
492.

(i) In the MBE program's remedial context, there is no requirement that Congress act in a wholly
"color-blind" fashion. Cf., e. g., Swann v. Charlotte-Mecklenberg Board of Education[1971] USSC
121; , 402 U.S. 1, 91 S.Ct. 1267, 28 L.Ed.2d 554; McDaniel v. Barresi, [1971] USSC 74; 402 U.S.
39, 91 S.Ct. 1287, 28 L.Ed.2d 582; North Carolina Board of Education v. Swann, [1971] USSC 76;
402 U.S. 43, 91 S.Ct. 1284, 28 L.Ed.2d 586. Pp. 482-484.

(ii) The MBE program is not constitutionally defective because it may disappoint the expectations
of access to a portion of government contracting opportunities of nonminority firms who may
themselves be innocent of any prior discriminatory actions. When effectuating a limited and
properly tailored remedy to cure the effects of prior discrimination, such "a sharing of the burden"
by innocent parties is not impermissible. Franks v. Bowman Transportation Co., [1976] USSC 46;
424 U.S. 747, 777[1976] USSC 46; , 96 S.Ct. 1251, 1270, 47 L.Ed.2d 444. Pp. 484-485.

(iii) Nor is the MBE program invalid as being underinclusive in that it limits its benefit to specified
minority groups rather than extending its remedial objectives to all businesses whose access to
government contracting is impaired by the effects of disadvantage or discrimination. Congress has
not sought to give select minority groups a preferred standing in the construction industry, but has
embarked on a remedial program to place them on a more equitable footing with respect to public
contracting opportunities, and there has been no showing that Congress inadvertently effected an
invidious discrimination by excluding from coverage an identifiable minority group that has been
the victim of a degree of disadvantage and discrimination equal to or greater than that suffered by
the groups encompassed by the MBE program. Pp. 485-486.

(iv) The contention that the MBE program, on its face, is overinclusive in that it bestows a benefit
on businesses identified by racial or ethnic criteria which cannot be justified on the basis of
competitive criteria or as a remedy for the present effects of identified prior discrimination, is also
without merit. The MBE provision, with due account for its administrative program, provides a
reasonable assurance that application of racial or ethnic criteria will be narrowly limited to
accomplishing Congress' remedial objectives and that misapplications of the program will be
promptly and adequately remedied administratively. In particular, the administrative program
provides waiver and exemption procedures to identify and eliminate from participation MBE's who
are not "bona fide," or who attempt to exploit the remedial aspects of the program by charging an
unreasonable price not attributable to the present effects of past discrimination. Moreover, grantees
may obtain a waiver if they demonstrate that their best efforts will not achieve or have not achieved
the 10% target for minority firm participation within the limitations of the program's remedial
objectives. The MBE provision may be viewed as a pilot project, appropriately limited in extent and
duration and subject to reassessment and re-evaluation by the Congress prior to any extension or re-
enactment. Pp. 486-489.

(d) In the continuing effort to achieve the goal of equality of economic opportunity, Congress has
latitude to try new techniques such as the limited use of racial and ethnic criteria to accomplish
remedial objectives, especially in programs where voluntary cooperation is induced by placing
conditions on federal expenditures. When a program narrowly tailored by Congress to achieve its
objectives comes under judicial review, it should be upheld if the courts are satisfied that the
legislative objectives and projected administration of the program give reasonable assurance that the
program will function within constitutional limitations. Pp. 490-492.

Mr. Justice MARSHALL, joined by Mr. Justice BRENNAN and Mr. Justice BLACKMUN,
concurring in the judgment, concluded that the proper inquiry for determining the constitutionality
of racial classifications that provide benefits to minorities for the purpose of remedying the present
effects of past racial discrimination is whether the classifications serve important governmental
objectives and are substantially related to achievement of those objectives, University of California
Regents v. Bakke, [1978] USSC 145; 438 U.S. 265, 359[1978] USSC 145; , 98 S.Ct. 2733,
2783[1978] USSC 145; , 57 L.Ed.2d 750 (opinion of BRENNAN, WHITE, MARSHALL, and
BLACKMUN, JJ., concurring in judgment in part and dissenting in part), and that, judged under
this standard, the 10% minority set-aside provision of the 1977 Act is plainly constitutional, the
racial classifications being substantially related to the achievement of the important and
congressionally articulated goal of remedying the present effects of past racial discrimination. Pp.
517-521.

Robert G. Benisch, New York City, for petitioners Fullilove et al.

Robert J. Hickey, Washington, D. C., for petitioner General Building Contractors of New York
State, Inc.

Drew S. Days III, Washington, D. C., for respondents.

[Amicus Curiae Information from pages 452-453 intentionally omitted]

Mr. CHIEF JUSTICE BURGER announced the judgment of the Court and delivered an opinion, in
which Mr. Justice WHITE and Mr. Justice POWELL joined.

We granted certiorari to consider a facial constitutional challenge to a requirement in a
congressional spending program that, absent an administrative waiver, 10% of the federal funds
granted for local public works projects must be used by the state or local grantee to procure services
or supplies from businesses owned and controlled by members of statutorily identified minority
groups. 441 U.S. 960, 99 S.Ct. 2403, 60 L.Ed.2d 1064 (1979).

* In May 1977, Congress enacted the Public Works Employment Act of 1977, Pub.L. 95-28, 91
Stat. 116, which amended the Local Public Works Capital Development and Investment Act of
1976, Pub.L. 94-369, 90 Stat. 999, 42 U.S.C. § 6701 et seq. The 1977 amendments authorized an
additional $4 billion appropriation for federal grants to be made by the Secretary of Commerce,
acting through the Economic Development Administration (EDA), to state and local governmental
entities for use in local public works projects. Among the changes made was the addition of the
provision that has become the focus of this litigation. Section 103(f)(2) of the 1977 Act, referred to
as the "minority business enterprise" or "MBE" provision, requires that:1

"Except to the extent that the Secretary determines otherwise, no grant shall be made under this Act
for any local public works project unless the applicant gives satisfactory assurance to the Secretary
that at least 10 per centum of the amount of each grant shall be expended for minority business
enterprises. For purposes of this paragraph, the term 'minority business enterprise' means a business
at least 50 per centum of which is owned by minority group members or, in case of a publicly
owned business, at least 51 per centum of the stock of which is owned by minority group members.
For the purposes of the preceding sentence minority group members are citizens of the United States
who are Negroes, Spanish-speaking, Orientals, Indians, Eskimos, and Aleuts."

In late May 1977, the Secretary promulgated regulations governing administration of the grant
program which were amended two months later.2 In August 1977, the EDA issued guidelines
supplementing the statute and regulations with respect to minority business participation in local
public works grants,3 and in October 1977, the EDA issued a technical bulletin promulgating
detailed instructions and information to assist grantees and their contractors in meeting the 10%
MBE requirement.4

On November 30, 1977, petitioners filed a complaint in the United States District Court for the
Southern District of New York seeking declaratory and injunctive relief to enjoin enforcement of the
MBE provision. Named as defendants were the Secretary of Commerce, as the program
administrator, and the State and City of New York, as actual and potential project grantees.
Petitioners are several associations of construction contractors and subcontractors, and a firm
engaged in heating, ventilation, and air conditioning work. Their complaint alleged that they had
sustained economic injury due to enforcement of the 10% MBE requirement and that the MBE
provision on its face violated the Equal Protection Clause of the Fourteenth Amendment, the equal
protection component of the Due Process Clause of the Fifth Amendment, and various statutory
antidiscrimination provisions.5

After a hearing held the day the complaint was filed, the District Court denied a requested
temporary restraining order and scheduled the matter for an expedited hearing on the merits. On
December 19, 1977, the District Court issued a memorandum opinion upholding the validity of the
MBE program and denying the injunctive relief sought. Fullilove v. Kreps, 443 F.Supp. 253 (1977).

The United States Court of Appeals for the Second Circuit affirmed[1978] USCA2 680; , 584 F.2d
600 (1978), holding that "even under the most exacting standard of review the MBE provision
passes constitutional muster." Id., at 603. Considered in the context of many years of governmental
efforts to remedy past racial and ethnic discrimination, the court found it"difficult to imagine" any
purpose for the program other than to remedy such discrimination. Id., at 605. In its view, a number
of factors contributed to the legitimacy of the MBE provision, most significant of which was the
narrowed focus and limited extent of the statutory and administrative program, in size, impact, and
duration, id., at 607-608; the court looked also to the holdings of other Courts of Appeals and
District Courts that the MBE program was constitutional, id., at 608-609.6 It expressly rejected
petitioners' contention that the 10% MBE requirement violated the equal protection guarantees of
the Constitution.7 Id., at 609.
II

A.

The MBE provision was enacted as part of the Public Works Employment Act of 1977, which made
various amendments to Title I of the Local Public Works Capital Development and Investment Act
of 1976. The 1976 Act was intended hort-term measure to alleviate the problem of national
unemployment and to stimulate the national economy by assisting state and local governments to
build needed public facilities.8 To accomplish these objectives, the Congress authorized the
Secretary of Commerce, acting through the EDA, to make grants to state and local governments for
construction, renovation, repair, or other improvement of local public works projects.9 The 1976
Act placed a number of restrictions on project eligibility designed to assure that federal moneys
were targeted to accomplish the legislative purposes.10 It established criteria to determine grant
priorities and to apportion federal funds among political jurisdictions.11 Those criteria directed
grant funds toward areas of high unemployment.12 The statute authorized the appropriation of up to
$2 billion for a period ending in September 1977;13 this appropriation was soon consumed by
grants made under the program.

Early in 1977, Congress began consideration of expanded appropriations and amendments to the
grant program. Under administration of the 1976 appropriation, referred to as "Round I" of the local
public works program, applicants seeking some $25 billion in grants had competed for the $2 billion
in available funds; of nearly 25,000 applications, only some 2,000 were granted.14 The results
provoked widespread concern for the fairness of the allocation process.15 Because the 1977 Act
would authorize the appropriation of an additional $4 billion to fund "Round II" of the grant
program,16 the congressional hearings and debates concerning the amendments focused primarily
on the politically sensitive problems of priority and geographic distribution of grants under the
supplemental appropriation.17 The result of this attention was inclusion in the 1977 Act of
provisions revising the allocation criteria of the 1976 legislation. Those provisions, however,
retained the underlying objective to direct funds into areas of high unemployment.18 The 1977 Act
also added new restrictions on applicants seeking to qualify for federal grants;19 among these was
the MBE provision.

The origin of the provision was an amendment to the House version of the 1977 Act, H.R. 11,
offered on the floor of the House on February 23, 1977, by Representative Mitchell of Maryland.20
As offered, the amendment provided:

"Notwithstanding any other provision of law, no grant shall be made under this Act for any local
public works project unless at least 10 per centum of the articles, materials, and supplies which will
be used in such project are procured from minority business enterprises. For purposes of this
paragraph, the term 'minority business enterprise' means a business at least 50 percent of which is
owned by minority group members or, in case of publicly owned businesses, at least 51 percent of
the stock of which is owned by minority group members. For the purposes of the preceding
sentence, minority group members are citizens of the United States who are Negroes, Spanish-
speaking, Orientals, Indians, Eskimos, and Aleuts."

The sponsor stated that the objective of the amendment was to direct funds into the minority
business community, a sector of the economy sorely in need of economic stimulus but which, on the
basis of past experience with Government procurement programs, could not be expected to benefit
significantly from the public works program as then formulated.22 He cited the marked statistical
disparity that in fiscal year 1976 less than 1% of all federal procurement was concluded with
minority business enterprises, although minorities comprised 15-18% of the population.23 When the
amendment was put forward during debate on H.R. 11,24 Representative Mitchell reiterated the
need to ensure that minority firms would obtain a fair opportunity to share in the benefits of this
Government program.

The amendment was put forward not as a new concept, but rather one building upon prior
administrative practice. In his introductory remarks, the sponsor rested his proposal squarely on the
ongoing program under § 8(a) of the Small Business Act, Pub.L. 85-536, § 2, 72 Stat. 389, which,
as will become evident, served as a model for the administrative program developed to enforce the
MBE provision:

"The first point in opposition will be that you cannot have a set-aside. Well, Madam Chairman, we
have been doing this for the last 10 years in Government. The 8-A set-aside under SBA has been
tested in the courts more than 30 times and has been found to be legitimate and bona fide. We are
doing it in this bill."

Although the proposed MBE provision on its face appeared mandatory, requiring compliance with
the 10% minority participation requirement "[n]otwithstanding any other provision of law," its
sponsor gave assurances that existing administrative practice would ensure flexibility in
administration if, with respect to a particular project, compliance with the 10% requirement proved
infeasible.27

Representative Roe of New Jersey then suggested a change of language expressing the twin
intentions (1) that the federal administrator would have discretion to waive the 10% requirement
where its application was not feasible, and (2) that the grantee would be mandated to achieve at least
10% participation by minority businesses unless infeasibility was demonstrated.28 He proposed as a
substitute for the first sentence of the amendment the language that eventually was enacted:

"Except to the extent that the Secretary determines otherwise, no grant shall be made under this Act
for any local public works project unless the applicant gives satisfactory assurance to the Secretary
that at least 10 percent of the amount of each grant shall be expended for minority business
enterprises."

The sponsor fully accepted the suggested clarification because it retained the directive that the initial
burden of compliance would fall on the grantee. That allocation of burden was necessary because,
as he put it, "every agency of the Government has tried to figure out a way to avoid doing this very
thing. Believe me, these bureaucracies can come up with 10,000 ways to avoid doing it."

Other supporters of the MBE amendment echoed the sponsor's concern that a number of factors,
difficult to isolate or quantify, seemed to impair access by minority businesses to public contracting
opportunities. Representative Conyers of Michigan spoke of the frustration of the existing situation,
in which, due to the intricacies of the bidding process and through no fault of their own, minority
contractors and businessmen were unable to gain access to government contracting opportunities.

Representative Biaggi of New York then spoke to the need for the amendment to "promote a sense
of economic equality in this Nation." He expressed the view that without the amendment, "this
legislation may be potentially inequitable to minority businesses and workers" in that it would
perpetuate the historic practices that have precluded minority businesses from effective participation
in public contracting opportunities.32 The amendment was accepted by the House.

Two weeks later, the senate considered S. 427, its package of amendments to the Local Public
Works Capital Development and Investment Act of 1976. At that time Senator Brooke of
Massachusetts introduced an MBE amendment, worded somewhat differently than the House
version, but aimed at achieving the same objectives.34 His statement in support of the 10%
requirement reiterated and summarized the various expressions on the House side that the
amendment was necessary to ensure that minority businesses were not deprived of access to the
government contracting opportunities generated by the public works program.

The Senate adopted the amendment without debate.36 The Conference Committee, called to resolve
differences between the House and Senate versions of the Public Works Employment Act of 1977,
adopted the language approved by the House for the MBE provision.37 The Conference Reports
added only the comment: "This provision shall be dependent on the availability of minority business
enterprises located in the project area."
The device of a 10% MBE participation requirement, subject to administrative waiver, was thought
to be required to assure minority business participation; otherwise it was thought that repetition of
the prior experience could be ex pected, with participation by minority business accounting for an
inordinately small percentage of government contracting. The causes of this disparity were
perceived as involving the longstanding existence and maintenance of barriers impairing access by
minority enterprises to public contracting opportunities, or sometimes as involving more direct
discrimination, but not as relating to lack--as Senator Brooke put it--"of capable and qualified
minority enterprises who are ready and willing to work."39 In the words of its sponsor, the MBE
provision was "designed to begin to redress this grievance that has been extant for so long."

B

The legislative objectives of the MBE provision must be considered against the background of
ongoing efforts directed toward deliverance of the century-old promise of equality of economic
opportunity. The sponsors of the MBE provision in the House and the Senate expressly linked the
provision to the existing administrative programs promoting minority opportunity in government
procurement, particularly those related to § 8(a) of the Small Business Act of 1953.41 Section 8(a)
delegates to the Small Business Administration (SBA) an authority and an obligation "whenever it
determines such action is necessary" to enter into contracts with any procurement agency of the
Federal Government to furnish required goods or services, and, in turn, to enter into subcontracts
with small businesses for the performance of such contracts. This authority lay dormant for a
decade. Commencing in 1968, however, the SBA was directed by the President42 to develop a
program pursuant to its § 8(a) authority to assist small business concerns owned and controlled by
"socially or economically disadvantaged" persons to achieve a competitive position in the economy.

At the time the MBE provision was enacted, the regulations governing the § 8(a) program defined
"social or economic disadvantage" as follows:

"An applicant concern must be owned and controlled by one or more persons who have been
deprived of the opportunity to develop and maintain a competitive position in the economy because
of social or economic disadvantage. Such disadvantage may arise from cultural, social, chronic
economic circumstances or background, or other similar cause. Such persons include, but are not
limited to, black Americans, American Indians, Spanish-Americans, oriental Americans, Eskimos,
and Aleuts. . . ."

The guidelines accompanying these regulations provided that a minority business could not be
maintained in the program, even when owned and controlled by members of the identified minority
groups, if it appeared that the business had not been deprived of the opportunity to develop and
maintain a competitive position in the economy because of social or economic disadvantage.
As the Congress began consideration of the Public Works Employment Act of 1977, the House
Committee on Small Business issued a lengthy Report summarizing its activities, including its
evaluation of the ongoing § 8(a) program.45 One chapter of the Report, entitled "Minority
Enterprises and Allied Problems of Small Business," summarized a 1975 Committee Report of the
same title dealing with this subject matter.46 The original Report, prepared by the House
Subcommittee on SBA Oversight and Minority Enterprise, observed:

"The subcommittee is acutely aware that the economic policies of this Nation must function within
and be guided by our constitutional system which guarantees 'equal protection of the laws.' The
effects of past inequities stemming from racial prejudice have not remained in the past. The
Congress has recognized the reality that past discriminatory practices have, to some degree,
adversely affected our present economic system.

"While minority persons comprise about 16 percent of the Nation's population, of the 13 million
businesses in the United States, only 382,000, or approximately 3.0 percent, are owned by minority
individuals. The most recent data from the Department of Commerce also indicates that the gross
receipts of all businesses in this country totals about $2,540.8 billion, and of this amount only $16.6
billion, or about 0.65 percent was realized by minority business concerns.

"These statistics are not the result of random chance. The presumption must be made that past
discriminatory systems have resulted in present economic inequities. In order to right this situation
the Congress has formulated certain remedial programs designed to uplift those socially or
economically disadvantaged persons to a level where they may effectively participate in the business
mainstream of our economy.*

"* For the purposes of this report the term 'minority' shall include only such minority individuals as
are considered to be economically or socially disadvantaged."

The 1975 Report gave particular attention to the § 8(a) program, expressing disappointment with its
limited effectiveness.49 With specific reference to Government construction contracting, the Report
concluded, "there are substantial § 8(a) opportunities in the area of Federal construction, but . . . the
practices of some agencies preclude the realization of this potential."50 The Subcommittee took
"full notice . . . as evidence for its consideration" of reports submitted to the Congress by the
General Accounting Office and by the U. S. Commission on Civil Rights, which reflected a similar
dissatisfaction with the effectiveness of the § 8(a) program.51 The Civil Rights Commission report
discussed at some length the barriers encountered by minority businesses in gaining access to
government contracting opportunities at the federal, state, and local levels.52 Among the major
difficulties confronting minority businesses were deficiencies in working capital, inability to meet
bonding requirements, disabilities caused by an inadequate "track record," lack of awareness of
bidding opportunities, unfamiliarity with bidding procedures, preselection before the formal
advertising process, and the exercise of discretion by government procurement officers to disfavor
minority businesses.

The Subcommittee Report also gave consideration to the operations of the Office of Minority
Business Enterprise, an agency of the Department of Commerce organized pursuant to Executive
Orders54 to formulate and coordinate federal efforts to assist the development of minority
businesses. The Report concluded that OMBE efforts were "totally inadequate" to achieve its policy
of increasing opportunities for subcontracting by minority businesses on public contracts. OMBE
efforts were hampered by a "glaring lack of specific objectives which each prime contractor should
be required to achieve," by a "lack of enforcement provisions," and by a "lack of any meaningful
monitoring system."55

Against this backdrop of legislative and administrative programs, it is inconceivable that Members
of both Houses were not fully aware of the objectives of the MBE provision and of the reasons
prompting its enactment.
C

Although the statutory MBE provision itself outlines only the bare bones of the federal program, it
makes a number of critical determinations: the decision to initiate a limited racial and ethnic
preference; the specification of a minimum level for minority business participation; the
identification of the minority groups that are to be encompassed by the program; and the provision
for an administrative waiver where application of the program is not feasible. Congress relied on the
administrative agency to flesh out this skeleton, pursuant to delegated rulemaking authority, and to
develop an administrative operation consistent with legislative intentions and objectives.

As required by the Public Works Employment Act of 1977, the Secretary of Commerce
promulgated regulations to set into motion "Round II" of the federal grant program.56 The
regulations require that construction projects funded under the legislation must be performed under
contracts awarded by competitive bidding, unless the federal administrator has made a
determination that in the circumstances relating to a particular project some other method is in the
public interest. Where competitive bidding is employed, the regulations echo the statute's
requirement that contracts are to be awarded on the basis of the "lowest responsive bid submitted by
a bidder meeting established criteria of responsibility," and they also restate the MBE requirement.

EDA also has published guidelines devoted entirely to the administration of the MBE provision.
The guidelines outline the obligations of the grantee to seek out all available, qualified, bona fide
MBE's to provide technical assistance as needed, to lower or waive bonding requirements where
feasible, to solicit the aid of the Office of Minority Business Enterprise, the SBA, or other sources
for assisting MBE's in obtaining required working capital, and to give guidance through the
intricacies of the bidding process.

EDA regulations contemplate that, as anticipated by Congress, most local public works projects will
entail the award of a predominant prime contract, with the prime contractor assuming the above
grantee obligations for fulfilling the 10% MBE requirement.59 The EDA guidelines specify that
when prime contractors are selected through competitive bidding, bids for the prime contract "shall
be considered by the Grantee to be responsive only if at least 10 percent of the contract funds are to
be expended for MBE's."60 The administrative program envisions that competitive incentive will
motivate aspirant prime contractors to perform their obligations under the MBE provision so as to
qualify as "responsive" bidders. And, since the contract is to be awarded to the lowest responsive
bidder, the same incentive is expected to motivate prime contractors to seek out the most
competitive of the available, qualified, bona fide minority firms. This too is consistent with the
legislative intention.

The EDA guidelines also outline the projected administration of applications for waiver of the 10%
MBE requirement, which may be sought by the grantee either before or during the bidding
process.62 The Technical Bulletin issued by EDA discusses in greater detail the processing of
waiver requests, clarifying certain issues left open by the guidelines. It specifies that waivers may be
total or partial, depending on the circumstances,63 and it illustrates the projected operation of the
waiver procedure by posing hypothetical questions with projected administrative responses. One
such hypothetical is of particular interest, for it indicates the limitations on the scope of the racial or
ethnic preference contemplated by the federal program when a grantee or its prime contractor is
confronted with an available, qualified, bona fide minority business enterprise who is not the lowest
competitive bidder. The hypothetical provides:

"Question : Should a request for waiver of the 10% requirement based on an unreasonable price
asked by an MBE ever be granted?

"Answer : It is possible to imagine situations where an MBE might ask a price for its product or
services that is unreasonable and where, therefore, a waiver is justified. However, before a waiver
request will be honored, the following determinations will be made:

"a) The MBE's quote is unreasonably priced. This determination should be based on the nature of
the product or service of the subcontractor, the geographic location of the site and of the
subcontractor, prices of similar products or services in the relevant market area, and general
business conditions in the market area. Furthermore, a subcontractor's price should not be
considered unreasonable if he is merely trying to cover his costs because the price results from
disadvantage which affects the MBE's cost of doing business or results from discrimination.

"b) The contractor has contacted under the MBEs and has no meaningful choice but to accept an
unreasonably high price."

This announced policy makes clear the administrative understanding that a waiver or partial waiver
is justified (and will be granted) to avoid subcontracting with a minority business enterprise at an
"unreasonable" price, i. e., a price above competitive levels which cannot be attributed to the
minority firm's attempt to cover costs inflated by the present effects of disadvantage or
discrimination.

This administrative approach is consistent with the legislative intention. It will be recalled that in
the Report of the House Subcommittee on SBA Oversight and Minority Enterprise the
Subcommittee took special care to note that when using the term "minority" it intended to include
"only such minority individuals as are considered to be economically or socially disadvantaged."65
The Subcommittee also was cognizant of existing administrative regulations designed to ensure that
firms maintained on the lists of bona fide minority business enterprises be those whose competitive
position is impaired by the effects of disadvantage and discrimination. In its Report, the
Subcommittee expressed its intention that these criteria continue to govern administration of the
SBA's § 8(a) program.66 The sponsors of the MBE provision, in their reliance on prior
administrative practice, intended that the term "minority business enterprise" would be given that
same limited application; this even found expression in the legislative debates, where Representative
Roe made the point:

"[W]hen we are talking bout companies held by minority groups . . . [c]ertainly people of a variety
of backgrounds are included in that. That is not really a measurement. They are talking about people
in the minority and deprived."

The EDA Technical Bulletin provides other elaboration of the MBE provision. It clarifies the
definition of "minority group members."68 It also indicates EDA's intention "to allow credit for
utilization of MBEs only for those contracts in which involvement constitutes a basis for
strengthening the long-term and continuing participation of the MBE in the construction and related
industries."69 Finally, the Bulletin outlines a procedure for the processing of complaints of "unjust
participation by an enterprise or individuals in the MBE program," or of improper administration of
the MBE requirement.70

III

When we are required to pass on the constitutionality of an Act of Congress, we assume "the gravest
and most delicate duty that this Court is called on to perform." Blodgett v. Holden, [1928] USSC 22;
275 U.S. 142, 148[1928] USSC 22; , 48 S.Ct. 105, 107[1928] USSC 22; , 72 L.Ed. 206 (1927)
(opinion of Holmes, J.). A program that employs racial or ethnic criteria, even in a remedial context,
calls for close examination; yet we are bound 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. Art. I, § 8, cl. 1; Amdt. 14, § 5. In Columbia
Broadcasting System, Inc. v. Democratic National Committee, [1973] USSC 114; 412 U.S. 94,
102[1973] USSC 114; , 93 S.Ct. 2080, 2086[1973] USSC 114; , 36 L.Ed.2d 772 (1973), we
accorded "great weight to the decisions of Congress" even though the legislation implicated
fundamental constitutional rights guaranteed by the First Amendment. The rule is not different
when a congressional program raises equal protection concerns. See,e. g., Cleland v. National
College of Business[1978] USSC 38; , 435 U.S. 213, 98 S.Ct. 1024, 55 L.Ed.2d 225 (1978);
Mathews v. De Castro, [1976] USSC 212; 429 U.S. 181, 97 S.Ct. 431, 50 L.Ed.2d 389 (1976).

Here we pass, not on a choice made by a single judge or a school board, but on a considered
decision of the Congress and the President. However, in no sense does that render it immune from
judicial scrutiny, and it "is not to say we 'defer' to the judgment of the Congress . . . on a
constitutional question," or that we would hesitate to invoke the Constitution should we determine
that Congress has overstepped the bounds of its constitutional power. Columbia Broadcasting,
supra, at 103, 93 S.Ct., at 2087.

The clear objective of the MBE provision is disclosed by our necessarily extended review of its
legislative and administrative background. The program was designed to ensure that, to the extent
federal funds were granted under the Public Works Employment Act of 1977, grantees who elect to
participate would not employ procurement practices that Congress had decided might result in
perpetuation of the effects of prior discrimination which had impaired or foreclosed access by
minority businesses to public contracting opportunities. The MBE program does not mandate the
allocation of federal funds according to inflexible percentages solely based on race or ethnicity.

Our analysis proceeds in two steps. At the outset, we must inquire whether the objectives of this
legislation are within the power of Congress. If so, we must go on to decide whether the limited use
of racial and ethnic criteria, in the context presented, is a constitutionally permissible means for
achieving the congressional objectives and does not violate the equal protection component of the
Due Process Clause of the Fifth Amendment.
A.

(1)

In enacting the MBE provision, it is clear that Congress employed an amalgam of its specifically
delegated powers. The Public Works Employment Act of 1977, by its very nature, is primarily an
exercise of the Spending Power. U.S. Const., Art. I, § 8, cl. 1. This Court has recognized that the
power to "provide for the . . . general Welfare" is an independent grant of legislative authority,
distinct from other broad congressional powers. Buckley v. Valeo, [1976] USSC 24; 424 U.S. 1, 90-
91[1976] USSC 24; , 96 S.Ct. 612, 668-669[1976] USSC 24; , 46 L.Ed.2d 659 (1976); United
States v. Butler, [1936] USSC 11; 297 U.S. 1, 65-66[1936] USSC 11; , 56 S.Ct. 312, 319[1936]
USSC 11; , 80 L.Ed. 477 (1936). Congress has frequently employed the Spending Power to further
broad policy objectives by conditioning receipt of federal moneys upon compliance by the recipient
with federal statutory and administrative directives. This Court has repeatedly upheld against
constitutional challenge the use of this technique to induce governments and private parties to
cooperate voluntarily with federal policy. E. g., California Bankers Assn. v. Shultz, [1974] USSC
63; 416 U.S. 21, 94 S.Ct. 1494, 39 L.Ed.2d 812 (1974); Lau v. Nichols, [1974] USSC 14; 414 U.S.
563, 94 S.Ct. 786, 39 L.Ed.2d 1 (1974); Oklahoma v. CSC, [1947] USSC 22; 330 U.S. 127, 67 S.Ct.
544, 91 L.Ed. 794 (1947); Helvering v. Davis, [1937] USSC 118; 301 U.S. 619, 57 S.Ct. 904, 81
L.Ed. 1307 (1937); Steward Machine Co. v. Davis, [1937] USSC 113; 301 U.S. 548, 57 S.Ct. 883,
81 L.Ed. 1279 (1937).

The MBE program is structured within this familiar legislative pattern. The program conditions
receipt of public works grants upon agreement by the state or local governmental grantee that at
least 10% of the federal funds will be devoted to contracts with minority businesses, to the extent
this can be accomplished by overcoming barriers to access and by awarding contracts to bona fide
MBE's. It is further conditioned to require that MBE bids on these contracts are competitively
priced, or might have been competitively priced but for the present effects of prior discrimination.
Admittedly, the problems of administering this program with respect to these conditions may be
formidable. Although the primary responsibility for ensuring minority participation falls upon the
grantee, when the procurement practices of the grantee involve the award of a prime contract to a
general or prime contractor, the obligations to assure minority participation devolve upon the private
contracting party; this is a contractual condition of eligibility for award of the prime contract.

Here we need not explore the outermost limitations on the objectives attainable through such an
application of the Spending Power. The reach of the Spending Power, within its sphere, is at least as
broad as the regulatory powers of Congress. If, pursuant to its regulatory powers, Congress could
have achieved the objectives of the MBE program, then it may do so under the Spending Power.
And we have no difficulty perceiving a basis for accomplishing the objectives of the MBE program
through the Commerce Power insofar as the program objectives pertain to the action of private
contracting parties, and through the power to enforce the equal protection guarantees of the
Fourteenth Amendment insofar as the program objectives pertain to the action of state and local
grantees.

(2)

We turn first to the Commerce Power. U.S.Const., Art. I, § 8, cl. 3. Had Congress chosen to do so, it
could have drawn on the Commerce Clause to regulate the practices of prime contractors on
federally funded public works projects. Katzenbach v. McClung, [1964] USSC 231; 379 U.S. 294,
85 S.Ct. 377, 13 L.Ed.2d 290 (1964); Heart of Atlanta Motel, Inc. v. United States, [1964] USSC
230; 379 U.S. 241, 85 S.Ct. 348, 13 L.Ed.2d 258 (1964). The legislative history of the MBE
provision shows that there was a rational basis for Congress to conclude that the subcontracting
practices of prime contractors could perpetuate the prevailing impaired access by minority
businesses to public contracting opportunities, and that this inequity has an effect on interstate
commerce. Thus Congress could take necessary and proper action to remedy the situation. Ibid.

It is not necessary that these prime contractors be shown responsible for any violation of
antidiscrimination laws. Our cases dealing with application of Title VII of the Civil Rights Act of
1964, 78 Stat. 253, as amended, express no doubt of the congressional authority to prohibit practices
"challenged as perpetuating the effects of [not unlawful] discrimination occurring prior to the
effective date of the Act." Franks v. Bowman Transportation Co., [1976] USSC 46; 424 U.S. 747,
761[1976] USSC 46; , 96 S.Ct. 1251, 1263, 47 L.Ed.2d 444 (1976); see California Brewers Assn. v.
Bryant, [1980] USSC 56; 444 U.S. 598, 100 S.Ct. 814, 63 L.Ed.2d 55 (1980); Teamsters v. United
States, [1977] USSC 90; 431 U.S. 324, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977); Albemarle Paper Co.
v. Moody, [1975] USSC 134; 422 U.S. 405, 95 S.Ct. 2362, 45 L.Ed.2d 280 (1975); Griggs v. Duke
Power Co., [1971] USSC 46; 401 U.S. 424, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971). Insofar as the
MBE program pertains to the actions of private prime contractors, the Congress could have
achieved its objectives under the Commerce Clause. We conclude that in this respect the objectives
of the MBE provision are within the scope of the Spending Power.

(3)

In certain contexts, there are limitations on the reach of the Commerce Power to regulate the actions
of state and local governments. National League of Cities v. Usery, [1976] USSC 136; 426 U.S.
833, 96 S.Ct. 2465, 49 L.Ed.2d 245 (1976). To avoid such complications, we look to § 5 of the
Fourteenth Amendment for the power to regulate the procurement practices of state and local
grantees of federal funds. Fitzpatrick v. Bitzer, [1976] USSC 149; 427 U.S. 445, 96 S.Ct. 2666, 49
L.Ed.2d 614 (1976). A review of our cases persuades us that the objectives of the MBE program are
within the power of Congress under § 5 "to enforce, by appropriate legislation," the equal protection
guarantees of the Fourteenth Amendment.

In Katzenbach v. Morgan, [1966] USSC 120; 384 U.S. 641, 86 S.Ct. 1717, 16 L.Ed.2d 828 (1966),
we equated the scope of this authority with the broad powers expressed in the Necessary and Proper
Clause, U.S.Const., Art. I, § 8, cl. 18. "Correctly viewed, § 5 is a positive grant of legislative power
authorizing Congress to exercise its discretion in determining whether and what legislation is
needed to secure the guarantees of the Fourteenth Amendment." 384 U.S., at 651, 86 S.Ct., at 1723-
24. In Katzenbach, the Court upheld § 4(e) of the Voting Rights Act of 1965, 79 Stat. 439, 42
U.S.C. § 1973b(e), which prohibited application of state English-language literacy requirements to
otherwise qualified voters who had completed the sixth grade in an accredited American school in
which a language other than English was the predominant medium of instruction. To uphold this
exercise of congressional authority, the Court found no prerequisite that application of a literacy
requirement violate the Equal Protection Clause. 384 U.S., at 648-649, 86 S.Ct., at 1722. It was
enough that the Court could perceive a basis upon which Congress could reasonably predicate a
judgment that application of literacy qualifications within the compass of § 4(e) would discriminate
in terms of access to the ballot and consequently in terms of access to the provision or
administration of governmental programs. Id., at 652-653, 86 S.Ct., at 1724.

Four years later, in Oregon v. Mitchell, [1970] USSC 207; 400 U.S. 112, 91 S.Ct. 260, 27 L.Ed.2d
272 (1970), we upheld § 201 of the Voting Rights Act Amendments of 1970, 84 Stat. 315, which
imposed a 5-year nationwide prohibition on the use of various voter-qualification tests and devices
in federal, state, and local elections. The Court was unanimous, albeit in separate opinions, in
concluding that Congress was within its authority to prohibit the use of such voter qualifications;
Congress could reasonably determine that its legislation was an appropriate method of attacking the
perpetuation of prior purposeful discrimination, even though the use of these tests or devices might
have discriminatory effects only. See City of Rome v. United States, [1980] USSC 104; 446 U.S.
156, 176-177[1980] USSC 104; , 100 S.Ct. 1548, 1561-1562, 64 L.Ed.2d 119 (1980). Our cases
reviewing the parallel power of Congress to enforce the provisions of the Fifteenth Amendment,
U.S.Const., Amdt. 15, § 2, confirm that congressional authority extends beyond the prohibition of
purposeful discrimination to encompass state action that has discriminatory impact perpetuating the
effects of past discrimination. South Carolina v. Katzenbach, [1966] USSC 46; 383 U.S. 301, 86
S.Ct. 803, 15 L.Ed.2d 769 (1966); cf. City of Rome, supra.

With respect to the MBE provision, Congress had abundant evidence from which it could conclude
that minority businesses have been denied effective participation in public contracting opportunities
by procurement practices that perpetuated the effects of prior discrimination. Congress, of course,
may legislate without compiling the kind of "record" appropriate with respect to judicial or
administrative proceedings. Congress had before it, among other data, evidence of a long history of
marked disparity in the percentage of public contracts awarded to minority business enterprises.
This disparity was considered to result not from any lack of capable and qualified minority
businesses, but from the existence and maintenance of barriers to competitive access which had their
roots in racial and ethnic discrimination, and which continue today, even absent any intentional
discrimination or other unlawful conduct. Although much of this history related to the experience of
minority businesses in the area of federal procurement, there was direct evidence before the
Congress that this pattern of disadvantage and discrimination existed with respect to state and local
construction contracting as well. In relation to the MBE provision, Congress acted within its
competence to determine that the problem was national in scope.

Although the Act recites no preambulary "findings" on the subject, we are satisfied that Congress
had abundant historical basis from which it could conclude that traditional procurement practices,
when applied to minority businesses, could perpetuate the effects of prior discrimination.
Accordingly, Congress reasonably determined that the prospective elimination of these barriers to
minority firm access to public contracting opportunities generated by the 1977 Act was appropriate
to ensure that those businesses were not denied equal opportunity to participate in federal grants to
state and local governments, which is one aspect of the equal protection of the laws. Insofar as the
MBE program pertains to the actions of state and local grantees, Congress could have achieved its
objectives by use of its power under § 5 of the Fourteenth Amendment. We conclude that in this
respect the objectives of the MBE provision are within the scope of the Spending Power.
(4)

There are relevant similarities between the MBE program and the federal spending program
reviewed in Lau v. Nichols, [1974] USSC 14; 414 U.S. 563, 94 S.Ct. 786, 39 L.Ed.2d 1 (1974). In
Lau, a language barrier "effectively foreclosed" non-English-speaking Chinese pupils from access to
the educational opportunities offered by the San Francisco public school system. Id., at 564-566, 94
S.Ct., at 787-788. It had not been shown that this had resulted from any discrimination, purposeful
or otherwise, or from other unlawful acts. Nevertheless, we upheld the constitutionality of a federal
regulation applicable to public school systems receiving federal funds that prohibited the utilization
of "criteria or methods of administration which have the effect . . . of defeating or substantially
impairing accomplishment of the objectives of the [educational] program as respect individuals of a
particular race, color, or national origin." Id., at 568, 94 S.Ct., at 789 (emphasis added). Moreover,
we upheld application to the San Francisco school system, as a recipient of federal funds, of a
requirement that "[w]here inability to speak and understand the English language excludes national
origin-minority group children from effective participation in the educational program offered by a
school district, the district must take affirmative steps to rectify the language deficiency in order to
open its instructional program to these students." Ibid.

It is true that the MBE provision differs from the program approved in Lau in that the MBE
program directly employs racial and ethnic criteria as a means to accomplish congressional
objectives; however, these objectives are essentially the same as those approved in Lau. Our holding
in Lau is instructive on the exercise of congressional authority by way of the MBE provision. The
MBE program, like the federal regulations reviewed in Lau, primarily regulates state action in the
use of federal funds voluntarily sought and accepted by the grantees subject to statutory and
administrative conditions. The MBE participation requirement is directed at the utilization of
criteria, methods, or practices thought by Congress to have the effect of defeating, or substantially
impairing, access by the minority business community to public funds made available by
congressional appropriations.

B

We now turn to the question whether, as a means to accomplish these plainly constitutional
objectives, Congress may use racial and ethnic criteria, in this limited way, as a condition attached
to a federal grant. We are mindful that "[i]n no matter should we pay more deference to the opinion
of Congress than in its choice of instrumentalities to perform a function that is within its power,"
National Mutual Insurance Co. v. Tidewater Transfer Co., [1949] USSC 83; 337 U.S. 582,
603[1949] USSC 83; , 69 S.Ct. 1173, 1183[1949] USSC 83; , 93 L.Ed. 1556 (1949) (opinion of
Jackson, J.). However, Congress may employ racial or ethnic classifications in exercising its
Spending or other legislative powers only if those classifications do not violate the equal protection
component of the Due Process Clause of the Fifth Amendment. We recognize the need for careful
judicial evaluation to assure that any congressional program that employs racial or ethnic criteria to
accomplish the objective of remedying the present effects of past discrimination is narrowly tailored
to the achievement of that goal.
Again, we stress the limited scope of our inquiry. Here we are not dealing with a remedial decree of
a court but with the legislative authority of Congress. Furthermore, petitioners have challenged the
constitutionality of the MBE provision on its face; they have not sought damages or other specific
relief for injury allegedly flowing from specific applications of the program; nor have they
attempted to show that as applied in identified situations the MBE provision violated the
constitutional or statutory rights of any party to this case.71 In these circumstances, given a
reasonable construction and in light of its projected administration, if we find the MBE program on
its face to be free of constitutional defects, it must be upheld as within congressional power. Parker
v. Levy, [1974] USSC 137; 417 U.S. 733, 760[1974] USSC 137; , 94 S.Ct. 2547, 2563[1974] USSC
137; , 41 L.Ed.2d 439 (1974); Fortson v. Dorsey, [1965] USSC 7; 379 U.S. 433, 438-439[1965]
USSC 7; , 85 S.Ct. 498, 501[1965] USSC 7; , 13 L.Ed.2d 401 (1965); Aptheker v. Secretary of
State, [1964] USSC 142; 378 U.S. 500, 515[1964] USSC 142; , 84 S.Ct. 1659, 1668, 12 L.Ed.2d
992 (1964); see United States v. Raines, [1936] USSC 36; 362 U.S. 17, 20-24[1936] USSC 36; , 80
S.Ct. 519, 522-524[1936] USSC 36; , 4 L.Ed.2d 524 (1960).

Our review of the regulations and guidelines governing administration of the MBE provision reveals
that Congress enacted the program as a strictly remedial measure; moreover, it is a remedy that
functions prospectively, in the manner of an injunctive decree. Pursuant to the administrative
program, grantees and their prime contractors are required to seek out all available, qualified, bona
fide MBE's; they are required to provide technical assistance as needed, to lower or waive bonding
requirements where feasible, to solicit the aid of the Office of Minority Business Enterprise, the
SBA, or other sources for assisting MBE's to obtain required working capital, and to give guidance
through the intricacies of the bidding process. Supra, at 468-469. The program assumes that
grantees who undertake these efforts in good faith will obtain at least 10% participation by minority
business enterprises. It is recognized that, to achieve this target, contracts will be awarded to
available, qualified, bona fide MBE's even though they are not the lowest competitive bidders, so
long as their higher bids, when challenged, are found to reflect merely attempts to cover costs
inflated by the present effects of prior disadvantage and discrimination. Supra, at 470-471. There is
available to the grantee a provision authorized by Congress for administrative waiver on a case-by-
case basis should there be a demonstration that, despite affirmative efforts, this level of participation
cannot be achieved without departing from the objectives of the program. Supra, at 469-470. There
is also an administrative mechanism, including a complaint procedure, to ensure that only bona fide
MBE's are encompassed by the remedial program, and to prevent unjust participation in the program
by those minority firms whose access to public contracting opportunities is not impaired by the
effects of prior discrimination. Supra, at 471-472.

(1)

As a threshold matter, we reject the contention that in the remedial context the Congress must act in
a wholly "color-blind" fashion. In Swann v. Charlotte-Mecklenburg Board of Education, [1971]
USSC 121; 402 U.S. 1, 18-21[1971] USSC 121; , 91 S.Ct. 1267, 1277-1278, 28 L.Ed.2d 554
(1971), we rejected this argument in considering a court-formulated school desegregation remedy on
the basis that examination of the racial composition of student bodies was an unavoidable starting
point and that racially based attendance assignments were permissible so long as no absolute racial
balance of each school was required. In McDaniel v. Barresi, [1971] USSC 74; 402 U.S. 39,
41[1971] USSC 74; , 91 S.Ct. 1287, 1289, 28 L.Ed.2d 582 (1971), citing Swann, we observed: "In
this remedial process, steps will almost invariably require that students be assigned 'differently
because of their race.' Any other approach would freeze the status quo that is the very target of all
desegregation processes." (Citations omitted.) And in North Carolina Board of Education v. Swann,
[1971] USSC 76; 402 U.S. 43, 91 S.Ct. 1284, 28 L.Ed.2d 586 (1971), we invalidated a state law
that absolutely forbade assignment of any student on account of race because it foreclosed
implementation of desegregation plans that were designed to remedy constitutional violations. We
held that "[j]ust as the race of students must be considered in determining whether a constitutional
violation has occurred, so also must race be considered in formulating a remedy." Id., at 46, 91
S.Ct., at 1286.

In these school desegregation cases we dealt with the authority of a federal court to formulate a
remedy for unconstitutional racial discrimination. However, the authority of a court to incorporate
racial criteria into a remedial decree also extends to statutory violations. Where federal
antidiscrimination laws have been violated, an equitable remedy may in the appropriate case include
a racial or ethnic factor. Franks v. Bowman Transportation Co., [1976] USSC 46; 424 U.S. 747, 96
S.Ct. 1251, 47 L.Ed.2d 444 (1976); see Teamsters v. United States, [1977] USSC 90; 431 U.S. 324,
97 S.Ct. 1843, 52 L.Ed.2d 396 (1977); Albemarle Paper Co. v. Moody, [1975] USSC 134; 422 U.S.
405, 95 S.Ct. 2362, 45 L.Ed.2d 280 (1975). In another setting, we have held that a state may
employ racial criteria that are reasonably necessary to assure compliance with federal voting rights
legislation, even though the state action does not entail the remedy of a constitutional violation.
United Jewish Organizations of Williamsburgh, Inc. v. Carey, [1977] USSC 34; 430 U.S. 144, 147-
165[1977] USSC 34; , 97 S.Ct. 996, 1000-1009[1977] USSC 34; , 51 L.Ed.2d 229 (1977) (opinion
of WHITE, J., joined by BRENNAN, BLACKMUN, and STEVENS, JJ.); id., at 180-187, 97 S.Ct.,
at 1017-1020 (BURGER, C. J., dissenting on other grounds).

When we have discussed the remedial powers of a federal court, we have been alert to the limitation
that "[t]he power of the federal courts to restructure the operation of local and state governmental
entities 'is not plenary. . . .' [A] federal court is required to tailor 'the scope of the remedy' to fit the
nature and extent of the . . . violation." Dayton Board of Education v. Brinkman, [1977] USSC 142;
433 U.S. 406, 419-420[1977] USSC 142; , 97 S.Ct. 2766, 2775[1977] USSC 142; , 53 L.Ed.2d 851
(1977) (quoting Milliken v. Bradley, [1974] USSC 162; 418 U.S. 717, 738[1974] USSC 162; , 94
S.Ct. 3112, 3124[1974] USSC 162; , 41 L.Ed.2d 1069 (1974), and Swann v. Charlotte-Mecklenburg
Board of Education, supra, at 16, 91 S.Ct., at 1276).

Here we deal, as we noted earlier, not with the limited remedial powers of a federal court, for
example, but with the broad remedial powers of Congress. It is fundamental that in no organ of
government, state or federal, does there repose a more comprehensive remedial power than in the
Congress, expressly charged by the Constitution with competence and authority to enforce equal
protection guarantees. Congress not only may induce voluntary action to assure compliance with
existing federal statutory or constitutional antidiscrimination provisions, but also, where Congress
has authority to declare certain conduct unlawful, it may, as here, authorize and induce state action
to avoid such conduct. Supra, at 473-480.

(2)

A more specific challenge to the MBE program is the charge that it impermissibly deprives
nonminority businesses of access to at least some portion of the government contracting
opportunities generated by the Act. It must be conceded that by its objective of remedying the
historical impairment of access, the MBE provision can have the effect of awarding some contracts
to MBE's which otherwise might be awarded to other businesses, who may themselves be innocent
of any prior discriminatory actions. Failure of nonminority firms to receive certain contracts is, of
course, an incidental consequence of the program, not part of its objective; similarly, past
impairment of minority-firm access to public contracting opportunities may have been an incidental
consequence of "business as usual" by public contracting agencies and among prime contractors.

It is not a constitutional defect in this program that it may disappoint the expectations of
nonminority firms. When effectuating a limited and properly tailored remedy to cure the effects of
prior discrimination, such "a sharing of the burden" by innocent parties is not impermissible.
Franks, supra, 424 U.S., at 777, 96 S.Ct., at 1270; see Albermarle Paper Co., supra; United Jewish
Organizations, supra. The actual "burden" shouldered by nonminority firms is relatively light in this
connection when we consider the scope of this public works program as compared with overall
construction contracting opportunities.72 Moreover, although we may assume that the complaining
parties are innocent of any discriminatory conduct, it was within congressional power to act on the
assumption that in the past some nonminority businesses may have reaped competitive benefit over
the years from the virtual exclusion of minority firms from these contracting opportunities.

(3)

Another challenge to the validity of the MBE program is the assertion that it is underinclusive--that
it limits its benefit to specified minority groups rather than extending its remedial objectives to all
businesses whose access to government contracting is impaired by the effects of disadvantage or
discrimination. Such an extension would, of course, be appropriate for Congress to provide; it is not
a function for the courts.

Even in this context, the well-established concept that a legislature may take one step at a time to
remedy only part of a broader problem is not without relevance. See Dandridge v. Williams, [1970]
USSC 108; 397 U.S. 471, 90 S.Ct. 1153, 25 L.Ed.2d 491 (1970); Williamson v. Lee Optical Co.,
[1955] USSC 46; 348 U.S. 483, 75 S.Ct. 461, 99 L.Ed. 563 (1955). We are not reviewing a federal
program that seeks to confer a preferred status upon a nondisadvantaged minority or to give special
assistance to only one of several groups established to be similarly disadvantaged minorities. Even
in such a setting, the Congress is not without a certain authority. See, e. g., Personnel Administrator
of Massachusetts v. Feeney[1979] USSC 113; , 442 U.S. 256, 99 S.Ct. 2282, 60 L.Ed.2d 870
(1979); Califano v. Webster, [1977] USSC 41; 430 U.S. 313, 97 S.Ct. 1192, 51 L.Ed.2d 360 (1977);
Morton v. Mancari, [1974] USSC 132; 417 U.S. 535, 94 S.Ct. 2474, 41 L.Ed.2d 290 (1974).

The Congress has not sought to give select minority groups a preferred standing in the construction
industry, but has embarked on a remedial program to place them on a more equitable footing with
respect to public contracting opportunities. There has been no showing in this case that Congress
has inadvertently effected an invidious discrimination by excluding from coverage an identifiable
minority group that has been the victim of a degree of disadvantage and discrimination equal to or
greater than that suffered by the groups encompassed by the MBE program. It is not inconceivable
that on very special facts a case might be made to challenge the congressional decision to limit MBE
eligibility to the particular minority groups identified in the Act. See Vance v. Bradley, [1979]
USSC 30; 440 U.S. 93, 109-112[1979] USSC 30; , 99 S.Ct. 939, 949-950[1979] USSC 30; , 59
L.Ed.2d 171 (1979); Oregon v. Mitchell, 400 U.S., at 240, 91 S.Ct., at 322 (opinion of BRENNAN,
WHITE, and MARSHALL, JJ.). But on this record we find no basis to hold that Congress is without
authority to undertake the kind of limited remedial effort represented by the MBE program.
Congress, not the courts, has the heavy burden of dealing with a host of intractable economic and
social problems.

(4)

It is also contended that the MBE program is overinclusive that it bestows a benefit on businesses
identified by racial or ethnic criteria which cannot be justified on the basis of competitive criteria or
as a remedy for the present effects of identified prior discrimination. It is conceivable that a
particular application of the program may have this effect; however, the peculiarities of specific
applications are not before us in this case. We are not presented here with a challenge involving a
specific award of a construction contract or the denial of a waiver request; such questions of specific
application must await future cases.

This does not mean that the claim of overinclusiveness is entitled to no consideration in the present
case. The history of governmental tolerance of practices using racial or ethnic criteria for the
purpose or with the effect of imposing an invidious discrimination must alert us to the deleterious
effects of even benign racial or ethnic classifications when they stray from narrow remedial
justifications. Even in the context of a facial challenge such as is presented in this case, the MBE
provision cannot pass muster unless, with due account for its administrative program, it provides a
reasonable assurance that application of racial or ethnic criteria will be limited to accomplishing the
remedial objectives of Congress and that misapplications of the program will be promptly and
adequately remedied administratively.

It is significant that the administrative scheme provides for waiver and exemption. Two fundamental
congressional assumptions underlie the MBE program: (1) that the present effects of past
discrimination have impaired the competitive position of businesses owned and controlled by
members of minority groups; and (2) that affirmative efforts to eliminate barriers to minority-firm
access, and to evaluate bids with adjustment for the present effects of past discrimination, would
assure that at least 10% of the federal funds granted under the Public Works Employment Act of
1977 would be accounted for by contracts with available, qualified, bona fide minority business
enterprises. Each of these assumptions may be rebutted in the administrative process.

The administrative program contains measures to effectuate the congressional objective of assuring
legitimate participation by disadvantaged MBE's. Administrative definition has tightened some less
definite aspects of the statutory identification of the minority groups encompassed by the
program.73 There is administrative scrutiny to identify and eliminate from participation in the
program MBE's who are not "bona fide" within the regulations and guidelines; for example,
spurious minority-front entities can be exposed. A significant aspect of this surveillance is the
complaint procedure available for reporting "unjust participation by an enterprise or individuals in
the MBE program." Supra, at 472. And even as to specific contract awards, waiver is available to
avoid dealing with an MBE who is attempting to exploit the remedial aspects of the program by
charging an unreasonable price, i. e., a price not attributable to the present effects of past
discrimination. Supra, at 469-471. We must assume that Congress intended close scrutiny of false
claims and prompt action on them.

Grantees are given the opportunity to demonstrate that their best efforts will not succeed or have not
succeeded in achieving the statutory 10% target for minority firm participation within the
limitations of the program's remedial objectives. In these circumstances a waiver or partial waiver is
available once compliance has been demonstrated. A waiver may be sought and granted at any time
during the contracting process, or even prior to letting contracts if the facts warrant.

Nor is the program defective because a waiver may be sought only by the grantee and not by prime
contractors who may experience difficulty in fulfilling contract obligations to assure minority
participation. It may be administratively cumbersome, but the wisdom of concentrating
responsibility at the grantee level is not for us to evaluate; the purpose is to allow the EDA to
maintain close supervision of the operation of the MBE provision. The administrative complaint
mechanism allows for grievances of prime contractors who assert that a grantee has failed to seek a
waiver in an appropriate case. Finally, we note that where private parties, as opposed to
governmental entities, transgress the limitations inherent in the MBE program, the possibility of
constitutional violation is more removed. See Steelworkers v. Weber, [1979] USSC 144; 443 U.S.
193, 200[1979] USSC 144; , 99 S.Ct. 2721, 2726[1979] USSC 144; , 61 L.Ed.2d 480 (1979).

That the use of racial and ethnic criteria is premised on assumptions rebuttable in the administrative
process gives reasonable assurance that application of the MBE program will be limited to
accomplishing the remedial objectives contemplated by Congress and that misapplications of the
racial and ethnic criteria can be remedied. In dealing with this facial challenge to the statute, doubts
must be resolved in support of the congressional judgment that this limited program is a necessary
step to effectuate the constitutional mandate for equality of economic opportunity. The MBE
provision may be viewed as a pilot project, appropriately limited in extent and duration, and subject
to reassessment and reevaluation by the Congress prior to any extension or re-enactment.74
Miscarriages of administration could have only a transitory economic impact on businesses not
encompassed by the program, and would not be irremediable.
IV

Congress, after due consideration, perceived a pressing need to move forward with new approaches
in the continuing effort to achieve the goal of equality of economic opportunity. In this effort,
Congress has necessary latitude to try new techniques such as the limited use of racial and ethnic
criteria to accomplish remedial objectives; this is especially so in programs where voluntary
cooperation with remedial measures is induced by placing conditions on federal expenditures. That
the program may press the outer limits of congressional authority affords no basis for striking it
down.

Petitioners have mounted a facial challenge to a program developed by the politically responsive
branches of Government. For its part, the Congress must proceed only with programs narrowly
tailored to achieve its objectives, subject to continuing evaluation and reassessment; administration
of the programs must be vigilant and flexible; and, when such a program comes under judicial
review, courts must be satisfied that the legislative objectives and projected administration give
reasonable assurance that the program will function within constitutional limitations. But as Mr.
Justice Jackson admonished in a different context in 1941:

"The Supreme Court can maintain itself and succeed in its tasks only if the counsels of self-restraint
urged most earnestly by members of the Court itself are humbly and faithfully heeded. After the
forces of conservatism and liberalism, of radicalism and reaction, of emotion and of self-interest are
all caught up in the legislative process and averaged and come to rest in some compromise measure
such as the Missouri Compromise, the N.R.A., the A.A.A., a minimum-wage law, or some other
legislative policy, a decision striking it down closes an area of compromise in which conflicts have
actually, if only temporarily, been composed. Each such decision takes away from our democratic
federalism another of its defenses against domestic disorder and violence. The vice of judicial
supremacy, as exerted for ninety years in the field of policy, has been its progressive closing of the
avenues to peaceful and democratic conciliation of our social and economic conflicts."

Mr. Justice Jackson reiterated these thoughts shortly before his death in what was to be the last of
his Godkin Lectures:

"I have said that in these matters the Court must respect the limitations on its own powers because
judicial usurpation is to me no more justifiable and no more promising of permanent good to the
country than any other kind. So I presuppose a Court that will not depart from the judicial process,
will not go beyond resolving cases and controversies brought to it in conventional form, and will
not consciously encroach upon the functions of its coordinate branches."

In a different context to be sure, that is, in discussing the latitude which should be allowed to states
in trying to meet social and economic problems, Mr. Justice Brandeis had this to say:

"To stay experimentation in things social and economic is a grave responsibility. Denial of the right
to experiment may be fraught with serious consequences to the Nation." New State Ice Co. v.
Liebmann, [1932] USSC 65; 285 U.S. 262, 311, 52 S.Ct. 371, 386[1932] USSC 65; , 76 L.Ed. 747
(1932) (dissenting opinion).

Any preference based on racial or ethnic criteria must necessarily receive a most searching
examination to make sure that it does not conflict with constitutional guarantees. This case is one
which requires, and which has received, that kind of examination. This opinion does not adopt,
either expressly or implicitly, the formulas of analysis articulated in such cases as University of
California Regents v. Bakke, [1978] USSC 145; 438 U.S. 265, 98 S.Ct. 2733, 57 L.Ed.2d 750
(1978). However, our analysis demonstrates that the MBE provision would survive judicial review
under either "test" articulated in the several Bakke opinions. The MBE provision of the Public
Works Employment Act of 1977 does not violate the Constitution.

Affirmed.

APPENDIX TO OPINION OF BURGER, C. J.

¶ 1. The EDA Guidelines, at 2-7, provide in relevant part:

"The primary obligation for carrying out the 10% MBE participation requirement rests with EDA
Grantees. . . . The Grantee and those of its contractors which will make subcontracts or purchase
substantial supplies from other firms (hereinafter referred to as 'prime contractors') must seek out all
available bona fide MBE's and make every effort to use as many of them as possible on the project.

"An MBE is bona fide if the minority group ownership interests are real and continuing and not
created solely to meet 10% MBE requirements. For example, the minority group owners or
stockholders should possess control over management, interest in capital and interest in earnings
commensurate with the percentage of ownership on which the claim of minority ownership status is
based. . . .
"An MBE is available if the project is located in the market area of the MBE and the MBE can
perform project services or supply project materials at the time they are needed. The relevant market
area depends on the kind of services or supplies which are needed. . . . EDA will require that
Grantees and prime contractors engage MBE's from as wide a market area as is economically
feasible.

"An MBE is qualified if it can perform the services or supply the materials that are needed. Grantees
and prime contractors will be expected to use MBE's with less experience than available
nonminority enterprises and should expect to provide technical assistance to MBE's as needed.
Inability to obtain bonding will ordinarily not disqualify an MBE. Grantees and prime contractors
are expected to help MBE's obtain bonding, to include MBE's in any overall bond or to waive
bonding where feasible. The Small Business Administration (SBA) is prepared to provide a 90%
guarantee for the bond of any MBE participating in an LPW [local public works] project. Lack of
working capital will not ordinarily disqualify an MBE. SBA is prepared to provide working capital
assistance to any MBE participating in an LPW project. Grantees and prime contractors are
expected to assist MBE's in obtaining working capital through SBA or otherwise.

" . . . [E]very Grantee should make sure that it knows the names, addresses and qualifications of all
relevant MBE's which would include the project location in their market areas. . . . Grantees should
also hold prebid conferences to which they invite interested contractors and representatives of . . .
MBE support organizations.

"Arrangements have been made through the Office of Minority Business Enterprise . . . to provide
assistance to Grantees and prime contractors in fulfilling the 10% MBE requirement. . . .

"Grantees and prime contractors should also be aware of other support which is available from the
Small Business Administration. . . .

" . . . [T]he Grantee must monitor the performance of its prime contractors to make sure that their
commitments to expend funds for MBE's are being fulfilled. . . . Grantees should administer every
project tightly. . . . "

¶ 2. The EDA guidelines, at 13-15, provide in relevant part:

"Although a provision for waiver is included under this section of the Act, EDA will only approve a
waiver under exceptional circumstances. The Grantee must demonstrate that there are not sufficient,
relevant, qualified minority business enterprises whose market areas include the project location to
justify a waiver. The Grantee must detail in its waiver request the efforts the Grantee and potential
contractors have exerted to locate and enlist MBE's. The request must indicate the specific MBE's
which were contacted and the reason each MBE was not used. . . .

*****

"Only the Grantee can request a waiver. . . . Such a waiver request would ordinarily be made after
the initial bidding or negotiation procedures proved unsuccessful. . . .

*****
"[A] Grantee situated in an area where the minority population is very small may apply for a waiver
before requesting bids on its project or projects. . . . "

¶ 3. The EDA Technical Bulletin, at 1, provides the following definitions:

"a) Negro--An individual of the black race of African origin.

"b) Spanish-speaking--An individual of a Spanish-speaking culture and origin or parentage.

"c) Oriental--An individual of a culture, origin or parentage traceable to the areas south of the
Soviet Union, East of Iran, inclusive of islands adjacent thereto, and out to the Pacific including but
not limited to Indonesia, Indochina, Malaysia, Hawaii and the Philippines.

"d) Indian--An individual having origins in any of the original people of North America and who is
recognized as an Indian by either a tribe, tribal organization or a suitable authority in the
community. (A suitable authority in the community may be: educational institutions, religious
organizations, or state agencies.)

"e) Eskimo--An individual having origins in any of the original peoples of Alaska.

"f) Aleut--An individual having origins in any of the original peoples of the Aleutian Islands."

¶ 4. The EDA Technical Bulletin, at 19, provides in relevant part:

"Any person or organization with information indicating unjust participation by an enterprise or
individuals in the MBE program or who believes that the MBE participation requirement is being
improperly applied should contact the appropriate EDA grantee and provide a detailed statement of
the basis for the complaint.

"Upon receipt of a complaint, the grantee should attempt to resolve the issues in dispute. In the
event the grantee requires assistance in reaching a determination, the grantee should contact the
Civil Rights Specialist in the appropriate Regional Office.

"If the complainant believes that the grantee has not satisfactorily resolved the issues raised in his
complaint, he may personally contact the EDA Regional Office."

Mr. Justice POWELL, concurring.

Although I would place greater emphasis than THE CHIEF JUSTICE on the need to articulate
judicial standards of review in conventional terms, I view his opinion announcing the judgment as
substantially in accord with my own views. Accordingly, I join that opinion and write separately to
apply the analysis set forth by my opinion in University of California Regents v. Bakke, [1978]
USSC 145; 438 U.S. 265, 98 S.Ct. 2733, 57 L.Ed.2d 750 (1978) (hereinafter Bakke ).

The question in this case is whether Congress may enact the requirement in § 103(f)(2) of the Public
Works Employment Act of 1977 (PWEA), that 10% of federal grants for local public work projects
funded by the Act be set aside for minority business enterprises. Section 103(f)(2) employs a racial
classification that is constitutionally prohibited unless it is a necessary means of advancing a
compelling governmental interest. Bakke, supra, at 299, 305, 98 S.Ct., at 2756; see In re
Griffiths[1973] USSC 174; , 413 U.S. 717, 721-722[1973] USSC 174; , 93 S.Ct. 2851, 2854-
2855[1973] USSC 174; , 37 L.Ed.2d 910 (1973); Loving v. Virginia, [1967] USSC 168; 388 U.S. 1,
11[1967] USSC 168; , 87 S.Ct. 1817, 1823, 18 L.Ed.2d 1010 (1967); McLaughlin v. Florida, [1964]
USSC 223; 379 U.S. 184, 196[1964] USSC 223; , 85 S.Ct. 283, 290[1964] USSC 223; , 13 L.Ed.2d
222 (1964). For the reasons stated in myBakke opinion, I consider adherence to this standard as
important and consistent with precedent.

The Equal Protection Clause, and the equal protection component of the Due Process Clause of the
Fifth Amendment, demand that any governmental distinction among groups must be justifiable.
Different standards of review applied to different sorts of classifications simply illustrate the
principle that some classifications are less likely to be legitimate than others. Racial classifications
must be assessed under the most stringent level of review because immutable characteristics, which
bear no relation to individual merit or need, are irrelevant to almost every governmental decision.
See, e. g., Anderson v. Martin[1964] USSC 11; , 375 U.S. 399, 402-404[1964] USSC 11; , 84 S.Ct.
454, 455-456[1964] USSC 11; , 11 L.Ed.2d 430 (1964). In this case, however, I believe that §
103(f)(2) is justified as a remedy that serves the compelling governmental interest in eradicating the
continuing effects of past discrimination identified by Congress.

* Racial preference never can constitute a compelling state interest. " 'Distinctions between citizens
solely because of their ancestry' [are] 'odious to a free people whose institutions are founded upon
the doctrine of equality.' " Loving v. Virginia, supra, 388 U.S., at 11, 87 S.Ct., at 1823, quoting
Hirabayashi v. United States, [1943] USSC 134; 320 U.S. 81, 100[1943] USSC 134; , 63 S.Ct.
1375, 1385, 87 L.Ed. 1774 (1943). Thus, if the set-aside merely expresses a congressional desire to
prefer one racial or ethnic group over another, § 103(f)(2) violates the equal protection component
in the Due Process Clause of the Fifth Amendment. See Bolling v. Sharpe, [1954] USSC 41; 347
U.S. 497, 499[1954] USSC 41; , 74 S.Ct. 693, 694[1954] USSC 41; , 98 L.Ed. 884 (1954).

The Government does have a legitimate interest in ameliorating the disabling effects of identified
discrimination. Bakke, supra, at 307, 98 S.Ct., at 2757; see, e. g., Keyes v. School District No. 1,
Denver, Colo.[1973] USSC 189; , 413 U.S. 189, 236[1973] USSC 189; , 93 S.Ct. 2686, 2711[1973]
USSC 189; , 37 L.Ed.2d 548 (1973) (POWELL, J., concurring in part and dissenting in part);
McDaniel v. Barresi, [1971] USSC 74; 402 U.S. 39, 41[1971] USSC 74; , 91 S.Ct. 1287, 1288, 28
L.Ed.2d 582 (1971); North Carolina Board of Education v. Swann, [1971] USSC 76; 402 U.S. 43,
45-46[1971] USSC 76; , 91 S.Ct. 1284, 1285-1286, 28 L.Ed.2d 586 (1971); Green v. County School
Board, [1968] USSC 103; 391 U.S. 430, 437-438[1968] USSC 103; , 88 S.Ct. 1689, 1693-1694, 20
L.Ed.2d 716 (1968). The existence of illegal discrimination justifies the imposition of a remedy that
will "make persons whole for injuries suffered on account of unlawful . . . discrimination."
Albemarle Paper Co. v. Moody, [1975] USSC 134; 422 U.S. 405, 418[1975] USSC 134; , 95 S.Ct.
2362, 2372[1975] USSC 134; , 45 L.Ed.2d 280 (1975). A critical inquiry, therefore, is whether §
103(f)(2) was enacted as a means of redressing such discrimination. But this Court has never
approved race-conscious remedies absent judicial, administrative, or legislative findings of
constitutional or statutory violations. Bakke, supra, at 307, 98 S.Ct., at 2757; see e. g., Teamsters v.
United States, [1977] USSC 90; 431 U.S. 324, 367-376[1977] USSC 90; , 97 S.Ct. 1843, 1870-
1875, 52 L.Ed.2d 396 (1977); United Jewish Organizations v. Carey, [1977] USSC 34; 430 U.S.
144, 155-159[1977] USSC 34; , 97 S.Ct. 996, 1004-1006[1977] USSC 34; , 51 L.Ed.2d 229 (1977)
(opinion of WHITE, J.); South Carolina v. Katzenbach, [1966] USSC 46; 383 U.S. 301, 308-
315[1966] USSC 46; , 86 S.Ct. 803, 808-811[1966] USSC 46; , 15 L.Ed.2d 769 (1966).

Because the distinction between permissible remedial action and impermissible racial preference
rests on the existence of a constitutional or statutory violation, the legitimate interest in creating a
race-conscious remedy is not compelling unless an appropriate governmental authority has found
that such a violation has occurred. In other words, two requirements must be met. First, the
governmental body that attempts to impose a race-conscious remedy must have the authority to act
in response to identified discrimination. Cf. Hampton v. Mow Sun Wong, [1976] USSC 93; 426 U.S.
88, 103[1976] USSC 93; , 96 S.Ct. 1895, 1905, 48 L.Ed.2d 495 (1976). Second, the governmental
body must make findings that demonstrate the existence of illegal discrimination. In Bakke, the
Regents failed both requirements. They were entrusted only with educational functions, and they
made no findings of past discrimination. Thus, no compelling governmental interest was present to
justify the use of a racial quota in medical school admissions. Bakke, supra, at 309-310, 98 S.Ct., at
2758-2759.

Our past cases also establish that even if the government proffers a compelling interest to support
reliance upon a suspect classification, the means selected must be narrowly drawn to fulfill the
governmental purpose. In re Griffiths, supra, at 721-722, 93 S.Ct., at 2854-2855. In Bakke, for
example, the state university did have a compelling interest in the attainment of a diverse student
body. But the method selected to achieve that end, the use of a fixed admissions quota, was not
appropriate. The Regents' quota system eliminated some nonminority applicants from all
consideration for a specified number of seats in the entering class, although it allowed minority
applicants to compete for all available seats. 438 U.S., at 275-276, 98 S.Ct., at 2740-2741. In
contrast, an admissions program that recognizes race as a factor, but not the sole factor, in assessing
an applicant's qualifications serves the university's interest in diversity while ensuring that each
applicant receives fair and competitive consideration. Id., at 317-318, 98 S.Ct., at 2762-2763.

In reviewing the constitutionality of § 103(f)(2), we must decide: (i) whether Congress is competent
to make findings of unlawful discrimination; (ii) if so, whether sufficient findings have been made
to establish that unlawful discrimination has affected adversely minority business enterprises, and
(iii) whether the 10% set-aside is a permissible means for redressing identifiable past discrimination.
None of these questions may be answered without explicit recognition that we are reviewing an Act
of Congress.

II

The history of this Court's review of congressional action demonstrates beyond question that the
National Legislature is competent to find constitutional and statutory violations. Unlike the Regents
of the University of California, Congress properly may and indeed must--address directly the
problems of discrimination in our society. See Heart of Atlanta Motel, Inc. v. United States, [1964]
USSC 230; 379 U.S. 241, 257[1964] USSC 230; , 85 S.Ct. 348, 357[1964] USSC 230; , 13 L.Ed.2d
258 (1964). In Katzenbach v. McClung, [1964] USSC 231; 379 U.S. 294, 304[1964] USSC 231; ,
85 S.Ct. 377, 384[1964] USSC 231; , 13 L.Ed.2d 290 (1964), for example, this Court held that
Congress had the power under the Commerce Clause to prohibit racial discrimination in public
restaurants on the basis of its "finding[s] that [such discrimination] had a direct and adverse effect
on the free flow of interstate commerce."

Similarly, after hearing "overwhelming" evidence of private employment discrimination, see
H.R.Rep.No.914, 88th Cong., 1st Sess., pt. 2, p. 26 (1963), Congress enacted Title VII of the Civil
Rights Act of 1964 in order "to assure equality of employment opportunities and to eliminate those
discriminatory practices and devices which have fostered racially stratified job environments to the
disadvantage of minority citizens." McDonnell Douglas Corp. v. Green, [1973] USSC 103; 411 U.S.
792, 800[1973] USSC 103; , 93 S.Ct. 1817, 1823, 36 L.Ed.2d 668 (1973). Acting to further the
purposes of Title VII, Congress vested in the federal courts broad equitable discretion to ensure that
" 'persons aggrieved by the consequences and effects of the unlawful employment practice be, so far
as possible, restored to a position where they would have been were it not for the unlawful
discrimination.' " Franks v. Bowman Transportation Co., [1976] USSC 46; 424 U.S. 747, 764[1976]
USSC 46; , 96 S.Ct. 1251, 1264, 47 L.Ed.2d 444 (1976), quoting Section-by-Section Analysis of
H.R. 1746, accompanying the Equal Employment Opportunity Act of 1972 Conference Report, 118
Cong.Rec. 7166, 7168 (1972).

In addition, Congress has been given the unique constitutional power of legislating to enforce the
provisions of the Thirteenth, Fourteenth, and Fifteenth Amendments.2 At an early date, the Court
stated that "[i]t is the power of Congress which has been enlarged" by the enforcement provisions of
the post-Civil War Amendments. Ex parte Virginia, [1879] USSC 52; 100 U.S. 339, 345[1879]
USSC 52; , 25 L.Ed. 676 (1880). In Jones v. Alfred H. Mayer & Co., [1968] USSC 159; 392 U.S.
409, 441-443[1968] USSC 159; , 88 S.Ct. 2186, 2204-2205[1968] USSC 159; , 20 L.Ed.2d 1189
(1968), the Court recognized Congress' competence to determine that private action inhibiting the
right to acquire and convey real property was racial discrimination forbidden by the Thirteenth
Amendment. Subsequently, we held that Congress' enactment of 42 U.S.C. § 1981 pursuant to its
powers under the Thirteenth Amendment, see Runyon v. McCrary, [1976] USSC 146; 427 U.S. 160,
168-170, 179[1976] USSC 146; , 96 S.Ct. 2586, 2593-2594, 2598[1976] USSC 146; , 49 L.Ed.2d
415 (1976), provides to all persons a federal remedy for racial discrimination in private
employment. See McDonald v. Sante Fe Transportation Co., [1976] USSC 142; 427 U.S. 273, 295-
296[1976] USSC 142; , 96 S.Ct. 2574, 2585-2586[1976] USSC 142; , 49 L.Ed.2d 493 (1976);
Johnson v. Railway Express Agency, Inc., [1975] USSC 90; 421 U.S. 454, 459-460[1975] USSC 90;
, 95 S.Ct. 1716, 1719-1720, 44 L.Ed.2d 295 (1975).

In Katzenbach v. Morgan, [1966] USSC 120; 384 U.S. 641, 86 S.Ct. 1717, 16 L.Ed.2d 828 (1966),
the Court considered whether § 5 of the Fourteenth Amendment gave Congress the power to enact §
4(e) of the Voting Rights Act of 1965, 42 U.S.C. § 1973b(e). Section 4(e) provides that no person
educated in Puerto Rico may be denied the right to vote in any election for failure to read or write
the English language. The Court held that Congress was empowered to enact § 4(e) as a remedy for
discrimination against the Puerto Rican community. 384 U.S., at 652-653, 86 S.Ct., at 1724.
Implicit in its holding was the Court's belief that Congress had the authority to find, and had found,
that members of this minority group had suffered governmental discrimination.

Congress' authority to find and provide for the redress of constitutional violations also has been
confirmed in cases construing the Enforcement Clause of the Fifteenth Amendment. In South
Carolina v. Katzenbach, 383 U.S., at 308, 86 S.Ct., at 808, for example, the Court upheld the Voting
Rights Act of 1965, 42 U.S.C. § 1973 et seq., as an appropriate remedy for violations of the
Fifteenth Amendment. It noted that Congress had found "insidious and pervasive" discrimination
demanding "ster[n] and . . . elaborate" measures. 383 U.S., at 309, 86 S.Ct., at 808. Most relevant to
our present inquiry was the Court's express approval of Congress' decision to "prescrib[e] remedies
for voting discrimination which go into effect without the need for prior adjudication." Id., at 327-
328, 86 S.Ct., at 818.3

It is beyond question, therefore, that Congress has the authority to identify unlawful discriminatory
practices, to prohibit those practices, and to prescribe remedies to eradicate their continuing effects.
The next inquiry is whether Congress has made findings adequate to support its determination that
minority contractors have suffered extensive discrimination.

III
A.

The petitioners contend that the legislative history of § 103(f)(2) reflects no congressional finding of
statutory or constitutional violations. Crucial to that contention is the assertion that a reviewing
court may not look beyond the legislative history of the PWEA itself for evidence that Congress
believed it was combating invidious discrimination. But petitioners' theory would erect an artificial
barrier to full understanding of the legislative process.

Congress is not an adjudicatory body called upon to resolve specific disputes between competing
adversaries. Its constitutional role is to be representative rather than impartial, to make policy rather
than to apply settled principles of law. The petitioners' contention that this Court should treat the
debates on § 103(f)(2) as the complete "record" of congressional decisionmaking underlying that
statute is essentially a plea that we treat Congress as it it were a lower federal court. But Congress is
not expected to act as though it were duty bound to find facts and make conclusions of law. The
creation of national rules for the governance of our society simply does not entail the same concept
of recordmaking that is appropriate to a judicial or administrative proceeding. Congress has no
responsibility to confine its vision to the facts and evidence adduced by particular parties. Instead,
its special attribute as a legislative body lies in its broader mission to investigate and consider all
facts and opinions that may be relevant to the resolution of an issue. One appropriate source is the
information and expertise that Congress acquires in the consideration and enactment of earlier
legislation. After Congress has legislated repeatedly in an area of national concern, its Members
gain experience that may reduce the need for fresh hearings or prolonged debate when Congress
again considers action in that area.

Acceptance of petitioners' argument would force Congress to make specific factual findings with
respect to each legislative action. Such a requirement would mark an unprecedented imposition of
adjudicatory procedures upon a coordinate branch of Government. Neither the Constitution nor our
democratic tradition warrants such a constraint on the legislative process. I therefore conclude that
we are not confined in this case to an examination of the legislative history of § 103(f)(2) alone.
Rather, we properly may examine the total contemporary record of congressional action dealing
with the problems of racial discrimination against minority business enterprises.

B

In my view, the legislative history of § 103(f)(2) demonstrates that Congress reasonably concluded
that private and governmental discrimination had contributed to the negligible percentage of public
contracts awarded minority contractors.4 The opinion of THE CHIEF JUSTICE provides a careful
overview of the relevant legislative history, see ante, at 456-457, to which only a few words need be
added.

Section 103(f)(2) originated in an amendment introduced on the floor of the House of
Representatives by Representative Mitchell. Congressman Mitchell noted that the Federal
Government was already operating a set-aside program under § 8(a) of the Small Business Act, 15
U.S.C. § 637(a). He described his proposal as "the only sensible way for us to begin to develop a
viable economic system for minorities in this country, with the ultimate result being that we are
going to eventually be able to . . . end certain programs which are merely support survival programs
for people which do not contribute to the economy." 123 Cong.Rec. 5327 (1977).5 Senator Brooke,
who introduced a similar measure in the Senate, reminded the Senate of the special provisions
previously enacted into § 8(a) of the Small Business Act and the Railroad Revitalization and
Regulatory Reform Act of 1976, 90 Stat. 149, 49 U.S.C. § 1657a, which, he stated, demonstrated
the validity of his amendment. 123 Cong.Rec. 7155-7156 (1977).

Section 8(a) of the Small Business Act provides that the Small Business Administration may enter
into contracts with the Federal Government and subcontract them out to small businesses. The
Small Business Administration has been directed by Executive Order to employ § 8(a) to aid
socially and economically disadvantaged persons. Ante, at 463-464.6 The operation of the § 8(a)
program was reviewed by congressional Committees between 1972 and 1977. In 1972, the House
Subcommittee on Minority Small Business Enterprise found that minority businessmen face
economic difficulties that "are the result of past social standards which linger as characteristics of
minorities as a group." H.R.Rep.No.92-1615, p. 3 (1972). In 1975, the House Subcommittee on
SBA Oversight and Minority Enterprise concluded that "[t]he effect of past inequities stemming
from racial prejudice have not remained in the past," and that low participation by minorities in the
economy was the result of "past discriminatory practices." H.R.Rep.No.94-468, pp. 1-2 (1975). In
1977, the House Committee on Small Business found that

"over the years, there has developed a business system which has traditionally excluded measurable
minority participation. In the past more than the present, this system of conducting business
transactions overtly precluded minority input. Currently, we more often encounter a business system
which is racially neutral on its face, but because of past overt social and economic discrimination is
presently operating, in effect, to perpetuate these past inequities." H.R.Rep.No.94-1791, p. 182
(1977).

The Committee's Report, was issued on January 3, 1977, less than two months before
Representative Mitchell introduced § 103(f)(2) into the House of Representatives.

In light of these legislative materials and the discussion of legislative history contained in THE
CHIEF JUSTICE's opinion, I believe that a court must accept as established the conclusion that
purposeful discrimination contributed significantly to the small percentage of federal contracting
funds that minority business enterprises have received. Refusals to sub-contract work to minority
contractors may, depending upon the identity of the discriminating party, violate Title VI of the
Civil Rights Act of 1964, 42 U.S.C. § 2000d et seq., or 42 U.S.C. § 1981, or the Fourteenth
Amendment. Although the discriminatory activities were not identified with the exactitude expected
in judicial or administrative adjudication, it must be remembered that "Congress may paint with a
much broader brush than may this Court . . . ." Oregon v. Mitchell, [1970] USSC 207; 400 U.S. 112,
284[1970] USSC 207; , 91 S.Ct. 260, 344[1970] USSC 207; , 27 L.Ed.2d 272 (1970) (STEWART,
J., concurring in part and dissenting in part).

IV

Under this Court's established doctrine, a racial classification is suspect and subject to strict judicial
scrutiny. As noted in Part I, the government may employ such a classification only when necessary
to accomplish a compelling governmental purpose. See Bakke, 438 U.S., at 305, 98 S.Ct., at 2756.
The conclusion that Congress found a compelling governmental interest in redressing identified
discrimination against minority contractors therefore leads to the inquiry whether use of a 10% set-
aside is a constitutionally appropriate means of serving that interest. In the past, this "means" test
has been virtually impossible to satisfy. Only two of this Court's modern cases have held the use of
racial classifications to be constitutional. See Korematsu v. United States, [1945] USSC 43; 323
U.S. 214, 65 S.Ct. 193, 89 L.Ed. 194 (1944); Hirabayshi v. United States, [1943] USSC 134; 320
U.S. 81, 63 S.Ct. 1375, 87 L.Ed. 1774 (1943). Indeed, the failure of legislative action to survive
strict scrutiny has led some to wonder whether our review of racial classifications has been strict in
theory, but fatal in fact. See Gunther, The Supreme Court, 1971 Term--Foreword: In Search of
Evolving Doctrine on a Changing Court: A Model for a Newer Equal Protection, 86 Harv.L.Rev. 1,
8 (1972).

A.

Application of the "means" test necessarily demands an understanding of the type of congressional
action at issue. This is not a case in which Congress has employed a racial classification solely as a
means to confer a racial preference. Such a purpose plainly would be unconstitutional. Supra, at
497. Nor has Congress sought to employ a racially conscious means to further a nonracial goal. In
such instances, a non-racial means should be available to further the legitimate governmental
purpose. See Bakke, supra, at 310-311, 98 S.Ct., at 2759.

Enactment of the set-aside is designed to serve the compelling governmental interest in redressing
racial discrimination. As this Court has recognized, the implementation of any affirmative remedy
for redress of racial discrimination is likely to affect persons differently depending upon their race.
See, e. g., North Carolina Board of Education v. Swann, 402 U.S., at 45-46, 91 S.Ct., at 1285-1286.
Although federal courts may not order or approve remedies that exceed the scope of a constitutional
violation, see Milliken v. Bradley, [1977] USSC 146; 433 U.S. 267, 280-281[1977] USSC 146; , 97
S.Ct. 2749, 2757[1977] USSC 146; , 53 L.Ed.2d 745 (1977); Dayton Board of Education v.
Brinkman, [1977] USSC 142; 433 U.S. 406, 97 S.Ct. 2766, 53 L.Ed.2d 851 (1977); Austin
Independent School District v. United States, 429 U.S. 990, 991, 97 S.Ct. 517, 50 L.Ed.2d 603
(1976) (POWELL, J., concurring), this Court has not required remedial plans to be limited to the
least restrictive means of implementation. We have recognized that the choice of remedies to redress
racial discrimination is "a balancing process left, within appropriate constitutional or statutory
limits, to the sound discretion of the trial court." Franks v. Bowman Transportation Co., 424 U.S., at
794, 96 S.Ct., at 1278 (POWELL, J., concurring in part and dissenting in part).

I believe that the Enforcement Clauses of the Thirteenth and Fourteenth Amendments give Congress
a similar measure of discretion to choose a suitable remedy for the redress of racial discrimination.
The legislative history of § 5 of the Fourteenth Amendment is particularly instructive. Senator
Howard, the member of the Joint Committee on Reconstruction who introduced the Amendment
into the Senate, described § 5 as "a direct affirmative delegation of power to Congress to carry out
all the principles of all [the] guarantees" of § 1 of the Amendment. Cong.Globe, 39th Cong., 1st
Sess., 2766 (1866). Furthermore, he stated that § "casts upon the Congress the responsibility of
seeing to it, for the future, that all the sections of the amendment are carried out in good faith, and
that no State infringes the rights of persons or property. I look upon this clause as indispensable for
the reason that it thus imposes upon the Congress this power and this duty." Id., at 2768.
Senator Howard's emphasis on the importance of congressional action to effectuate the goals of the
Fourteenth Amendment was echoed by other Members of Congress. Representative Stevens, also a
member of the Reconstruction Committee, said that the Fourteenth Amendment "allows Congress to
correct the unjust legislation of the States," id., at 2459, and Senator Poland wished to leave no
doubt "as to the power of Congress to enforce principles lying at the very foundation of all
republican government. . . . " Id., at 2961. See id., at 2512-2513 (remarks of Rep. Raymond); id., at
2511 (Rep. Eliot); Ex parte Virginia, 100 U.S., at 345[1879] USSC 52; , 25 L.Ed. 676.

Although the Framers of the Fourteenth Amendment may have contemplated that Congress, rather
than the federal courts, would be the prime force behind enforcement of the Fourteenth
Amendment, see 6 C. Fairman, History of the Supreme Court of the United States: Reconstruction
and Reunion, Part 1, pp. 1295, 1296 (1971), they did not believe that congressional action would be
unreviewable by this Court. Several Members of Congress emphasized that a primary purpose of the
Fourteenth Amendment was to place the provisions of the Civil Rights Act of 1866 "in the eternal
firmament of the Constitution." Cong.Globe, 39th Cong., 1st Sess., 2462 (1866) (remarks of Rep.
Garfield). See id., at 2459 (remarks of Rep. Stevens); id., at 2465 (remarks of Rep. Thayer); id., at
2498 (remarks of Rep. Broomall). By 1866, Members of Congress fully understood that judicial
review was the means by which action of the Legislative and Executive Branches would be required
to conform to the Constitution. See, e. g., Marbury v. Madison[1803] USSC 16; , 1 Cranch 137, 2
L.Ed. 60 (1803).

I conclude, therefore, that the Enforcement Clauses of the Thirteenth and Fourteenth Amendments
confer upon Congress the authority to select reasonable remedies to advance the compelling state
interest in repairing the effects of discrimination. But that authority must be exercised in a manner
that does not erode the guarantees of these Amendments. The Judicial Branch has the special
responsibility to make a searching inquiry into the justification for employing a race-conscious
remedy. Courts must be sensitive to the possibility that less intrusive means might serve the
compelling state interest equally as well. I believe that Congress' choice of a remedy should be
upheld, however, if the means selected are equitable and reasonably necessary to the redress of
identified discrimination. Such a test allows the Congress to exercise necessary discretion but
preserves the essential safeguard of judicial review of racial classifications.

B

When reviewing the selection by Congress of a race-conscious remedy, it is instructive to note the
factors upon which the Courts of Appeals have relied in a closely analogous area. Courts reviewing
the proper scope of race-conscious hiring remedies have considered (i) the efficacy of alternative
remedies, NAACP v. Allen, [1974] USCA5 638; 493 F.2d 614, 619 (CA5 1974); Vulcan Society Inc.
v. Civil Service Comm'n, [1973] USCA2 691; 490 F.2d 387, 398 (CA2 1973), (ii) the planned
duration of the remedy, id., at 399; United States v. Wood, Wire & Metal Lathers Local 46[1973]
USCA2 5; , 471 F.2d 408, 414, n. 12 (CA2), cert. denied, 412 U.S. 939, 93 S.Ct. 2773, 37 L.Ed.2d
398 (1973), (iii) the relationship between the percentage of minority workers to be employed and
the percentage of minority group members in the relevant population or work force, Association
Against Discrimination v. Bridgeport, [1979] USCA2 129; 594 F.2d 306, 311 (CA2 1979); Boston
Chapter NAACP v. Beecher, [1974] USCA1 217; 504 F.2d 1017, 1026-1027 (CA1 1974), cert.
denied, 421 U.S. 910, 95 S.Ct. 1561, 43 L.Ed.2d 775 (1975); Bridgeport Guardians, Inc. v.
Bridgeport Civil Service Comm'n, [1973] USCA2 462; 482 F.2d 1333, 1341 (CA2 1973), cert.
denied, 421 U.S. 991, 95 S.Ct. 1997, 44 L.Ed.2d 481 (1975); Carter v. Gallagher, [1972] USCA8 9;
452 F.2d 315, 331 (CA8) (en banc), cert. denied, 406 U.S. 950, 92 S.Ct. 2045, 32 L.Ed.2d 338
(1972), and (iv) the availability of waiver provisions if the hiring plan could not be met, Associated
General Contractors, Inc. v. Altshuler, [1974] USCA1 105; 490 F.2d 9, 18-19 (CA1 1973), cert.
denied, 416 U.S. 957, 94 S.Ct. 1971, 40 L.Ed.2d 307 (1974).

By the time Congress enacted § 103(f)(2) in 1977, it knew that other remedies had failed to
ameliorate the effects of racial discrimination in the construction industry. Although the problem
had been addressed by antidiscrimination legislation, executive action to remedy employment
discrimination in the construction industry, and federal aid to minority businesses, the fact remained
that minority contractors were receiving less than 1% of federal contracts. See 123 Cong.Rec. 7156
(1977) (remarks of Sen. Brooke). Congress also knew that economic recession threatened the
construction industry as a whole. Section 103(f)(2) was enacted as part of a bill designed to
stimulate the economy by appropriating $4 billion in federal funds for new public construction.
Since the emergency public construction funds were to be distributed quickly,10 any remedial
provision designed to prevent those funds from perpetuating past discrimination also had to be
effective promptly. Moreover, Congress understood that any effective remedial program had to
provide minority contractors the experience necessary for continued success without federal
assistance.11 And Congress knew that the ability of minority group members to gain experience had
been frustrated by the difficulty of entering the construction trades.12 The set-aside program
adopted as part of this emergency legislation serves each of these concerns because it takes effect as
soon as funds are expended under PWEA and because it provides minority contractors with
experience that could enable them to compete without governmental assistance.

The § 103(f)(2) set-aside is not a permanent part of federal contracting requirements. As soon as the
PWEA program concludes, this set-aside program ends. The temporary nature of this remedy
ensures that a race-conscious program will not last longer than the discriminatory effects it is
designed to eliminate. It will be necessary for Congress to re-examine the need for a race-conscious
remedy before it extends or re-enacts § 103(f)(2).

The percentage chosen for the set-aside is within the scope of congressional discretion. The Courts
of Appeals have approved temporary hiring remedies insuring that the percentage of minority group
workers in a business or governmental agency will be reasonably related to the percentage of
minority group members in the relevant population. Boston Chapter NAACP v. Beecher, 504 F.2d,
at 1027; Bridgeport Guardians, Inc. v. Bridgeport, 482 F.2d, at 1341; Carter v. Gallagher, 452 F.2d,
at 331. Only 4% of contractors are members of minority groups, see Fullilove v. Kreps, [1978]
USCA2 680; 584 F.2d 600, 608 (CA2 1978), although minority group members constitute about
17% of the national population, see Constructors Association of Western Pennsylvania v. Kreps, 441
F.Supp. 936, 951 (WD Pa.1977), aff'd[1978] USCA3 212; , 573 F.2d 811 (CA3 1978). The choice
of a 10% set-aside thus falls roughly halfway between the present percentage of minority
contractors and the percentage of minority group members in the Nation.

Although the set-aside is pegged at a reasonable figure, its effect might be unfair if it were applied
rigidly in areas of the country where minority group members constitute a small percentage of the
population. To meet this concern, Congress enacted a waiver provision into § 103(f)(2). The factors
governing issuance of a waiver include the availability of qualified minority contractors in a
particular geographic area, the size of the locale's minority population, and the efforts made to find
minority contractors. U.S. Dept. of Commerce, Local Public Works Program, Round II, Guidelines
for 10% Minority Business Participation LPW Grants (1977); App. 165a-167a. We have been told
that 1,261 waivers had been granted by September 9, 1979. Brief for Secretary of Commerce 62, n.
37.

C

A race-conscious remedy should not be approved without consideration of an additional crucial
factor--the effect of the set-aside upon innocent third parties. See Teamsters v. United States, 431
U.S., at 374-375, 97 S.Ct., at 1874. In this case, the petitioners contend with some force that they
have been asked to bear the burden of the set-aside even though they are innocent of wrongdoing. I
do not believe, however, that their burden is so great that the set-aside must be disapproved. As
noted above, Congress knew that minority contractors were receiving only 1% of federal contracts
at the time the set-aside was enacted. The PWEA appropriated $4 billion for public work projects,
of which it could be expected that approximately $400 million would go to minority contractors.
The Court of Appeals calculated that the set-aside would reserve about 0.25% of all the funds
expended yearly on construction work in the United States for approximately 4% of the Nation's
contractors who are members of a minority group. 584 F.2d., at 607-608. The set-aside would have
no effect on the ability of the remaining 96% of contractors to compete for 99.75% of construction
funds. In my view, the effect of the set-aside is limited and so widely dispersed that its use is
consistent with fundamental fairness.13

Consideration of these factors persuades me that the set-aside is a reasonably necessary means of
furthering the compelling governmental interest in redressing the discrimination that affects
minority contractors. Any marginal unfairness to innocent nonminority contractors is not
sufficiently significant or sufficiently identifiable--to outweigh the governmental interest served by
§ 103(f)(2). When Congress acts to remedy identified discrimination, it may exercise discretion in
choosing a remedy that is reasonably necessary to accomplish its purpose. Whatever the exact
breadth of that discretion, I believe that it encompasses the selection of the set-aside in this case.
V

In the history of this Court and this country, few questions have been more divisive than those
arising from governmental action taken on the basis of race. Indeed, our own decisions played no
small part in the tragic legacy of government-sanctioned discrimination. See Plessy v. Ferguson,
[1896] USSC 151; 163 U.S. 537, 16 S.Ct. 1138, 41 L.Ed. 256 (1896); Dred Scott v. Sandford,
[1856] USSC 9; 19 How. 393, 15 L.Ed. 691 (1857). At least since the decision in Brown v. Board of
Education, [1954] USSC 42; 347 U.S. 483, 74 S.Ct. 686, 98 L.Ed. 873 (1954), the Court has been
resolute in its dedication to the principle that the Constitution envisions a Nation where race is
irrelevant. The time cannot come too soon when no governmental decision will be based upon
immutable characteristics of pigmentation or origin. But in our quest to achieve a society free from
racial classification, we cannot ignore the claims of those who still suffer from the effects of
identifiable discrimination.

Distinguishing the rights of all citizens to be free from racial classifications from the rights of some
citizens to be made whole is a perplexing, but necessary, judicial task. When we first confronted
such an issue in Bakke, I concluded that the Regents of the University of California were not
competent to make, and had not made, findings sufficient to uphold the use of the race-conscious
remedy they adopted. As my opinion made clear, I believe that the use of racial classifications,
which are fundamentally at odds with the ideals of a democratic society implicit in the Due Process
and Equal Protection Clauses, cannot be imposed simply to serve transient social or political goals,
however worthy they may be. But the issue here turns on the scope of congressional power, and
Congress has been given a unique constitutional role in the enforcement of the post-Civil War
Amendments. In this case, where Congress determined that minority contractors were victims of
purposeful discrimination and where Congress chose a reasonably necessary means to effectuate its
purpose, I find no constitutional reason to invalidate § 103(f)(2).15

Mr. Justice MARSHALL, with whom Mr. Justice BRENNAN and Mr. Justice BLACKMUN join,
concurring in the judgment.

My resolution of the constitutional issue in this case is governed by the separate opinion I
coauthored in University of California Regents v. Bakke, [1978] USSC 145; 438 U.S. 265, 324-
379[1978] USSC 145; , 98 S.Ct. 2733, 2766-2794[1978] USSC 145; , 57 L.Ed.2d 750 (1978). In
my view, the 10% minority set-aside provision of the Public Works Employment Act of 1977 passes
constitutional muster under the standard announced in that opinion.1

* In Bakke, I joined my Brothers BRENNAN, WHITE, and BLACKMUN in articulating the view
that "racial classifications are not per se invalid under [the Equal Protection Clause of] the
Fourteenth Amendment." Id., at 356, 98 S.Ct., at 2782 (opinion concurring in judgment in part and
dissenting in part) (hereinafter cited as joint separate opinion).2 We acknowledged that "a
government practice or statute which . . . contains 'suspect classifications' is to be subjected to 'strict
scrutiny' and can be justified only if it furthers a compelling government purpose and, even then,
only if no less restrictive alternative is available." Id., at 357, 98 S.Ct., at 2782. Thus, we reiterated
the traditional view that racial classifications are prohibited if they are irrelevant. Ibid. In addition,
we firmly adhered to "the cardinal principle that racial classifications that stigmatize--because they
are drawn on the presumption that one race is inferior to another or because they put the weight of
government behind racial hatred and separatism--are invalid without more." Id., at 357-358, 98
S.Ct., at 2783.
We recognized, however, that these principles outlawing the irrelevant or pernicious use of race
were inapposite to racial classifications that provide benefits to minorities for the purpose of
remedying the present effects of past racial discrimination.3 Such classifications may disadvantage
some whites, but whites as a class lack the " 'traditional indicia of suspectness: the class is not
saddled with such disabilities, or subjected to such a history of purposeful unequal treatment, or
relegated to such a position of political powerlessness as to command extraordinary protection from
the majoritarian political process.' " Id., at 357, 98 S.Ct., at 2783 (quoting San Antonio Independent
School District v. Rodriguez, [1973] USSC 83; 411 U.S. 1, 28[1973] USSC 83; , 93 S.Ct. 1278,
1293, 36 L.Ed.2d 16 (1973)). See also United States v. Carolene Products Co., [1938] USSC 104;
304 U.S. 144, 152, n. 4[1938] USSC 104; , 58 S.Ct. 778, 783[1938] USSC 104; , 82 L.Ed. 1234
(1938). Because the consideration of race is relevant to remedying the continuing effects of past
racial discrimination, and because governmental programs employing racial classifications for
remedial purposes can be crafted to avoid stigmatization, we concluded that such programs should
not be subjected to conventional "strict scrutiny" scrutiny that is strict in theory, but fatal in fact.
Bakke, supra, 438 U.S., at 362, 98 S.Ct., at 2785 (joint separate opinion).

Nor did we determine that such programs should be analyzed under the minimally rigorous rational-
basis standard of review. 438 U.S., at 358, 98 S.Ct., at 2783. We recognized that race has often been
used to stigmatize politically powerless segments of society, and that efforts to ameliorate the effects
of past discrimination could be based on paternalistic stereotyping, not on a careful consideration of
modern social conditions. In addition, we acknowledged that governmental classification on the
immutable characteristic of race runs counter to the deep national belief that state-sanctioned
benefits and burdens should bear some relationship to individual merit and responsibility. Id., at
360-361, 98 S.Ct., at 2784.

We concluded, therefore, that because a racial classification ostensibly designed for remedial
purposes is susceptible to misuse, it may be justified only by showing "an important and articulated
purpose for its use." Id., at 361, 98 S.Ct., at 2785. "In addition any statute must be stricken that
stigmatizes any group or that singles out those least well represented in the political process to bear
the brunt of a benign program." Ibid. In our view, then, the proper inquiry is whether racial
classifications designed to further remedial purposes serve important governmental objectives and
are substantially related to achievement of those objectives. Id., at 359, 98 S.Ct., at 2784.

II

Judged under this standard, the 10% minority set-aside provision at issue in this case is plainly
constitutional. Indeed, the question is not even a close one.

As Mr. Chief Justice BURGER demonstrates, see ante, at 456-467, it is indisputable that Congress'
articulated purpose for enacting the set-aside provision was to remedy the present effects of past
racial discrimination. See also the concurring opinion of my Brother POWELL, ante, at 503-506.
Congress had a sound basis for concluding that minority-owned construction enterprises, though
capable, qualified, and ready and willing to work, have received a disproportionately small amount
of public contracting business because of the continuing effects of past discrimination. Here, as in
Bakke, 438 U.S., at 362, 98 S.Ct., at 2785 (joint separate opinion), "minority underrepresentation is
substantial and chronic, and . . . the handicap of past discrimination is impeding access of minorities
to" the benefits of the governmental program. In these circumstances remedying these present
effects of past racial discrimination is a sufficiently important governmental interest to justify the
use of racial classifications. Ibid. See generally id., at 362-373, 98 S.Ct., at 2785-2790.4

Because the means chosen by Congress to implement the set-aside provision are substantially
related to the achievement of its remedial purpose, the provision also meets the second prong of our
Bakke test. Congress reasonably determined that race-conscious means were necessary to break
down the barriers confronting participation by minority enterprises in federally funded public works
projects. That the set-aside creates a quota in favor of qualified and available minority business
enterprises does not necessarily indicate that it stigmatizes. As our opinion stated in Bakke "[f]or
purposes of constitutional adjudication, there is no difference between" setting aside "a
predetermined number of places for qualified minority applicants rather than using minority status
as a positive factor to be considered in evaluating the applications of disadvantaged minority
applicants." Id., at 378, 98 S.Ct., at 2793. The set-aside, as enacted by Congress and implemented
by the Secretary of Commerce, is carefully tailored to remedy racial discrimination while at the
same time avoiding stigmatization and penalizing those least able to protect themselves in the
political process. See ante, at 480-489. Cf. the concurring opinion of my Brother POWELL, ante, at
508-515. Since under the set-aside provision a contract may be awarded to a minority enterprise
only if it is qualified to do the work, the provision stigmatizes as inferior neither a minority firm
that benefits from it nor a nonminority firm that is burdened by it. Nor does the set-aside "establish
a quota in the invidious sense of a ceiling," Bakke, supra, at 375, 98 S.Ct., at 2792 (joint separate
opinion), on the number of minority firms that can be awarded public works contracts. In addition,
the set-aside affects only a miniscule amount of the funds annually expended in the United States for
construction work. See ante, at 484-485, n. 72.

In sum, it is clear to me that the racial classifications employed in the set-aside provision are
substantially related to the achievement of the important and congressionally articulated goal of
remedying the present effects of past racial discrimination. The provision, therefore, passes muster
under the equal protection standard I adopted in Bakke.
III

In my separate opinion in Bakke, 438 U.S., at 387-396, 98 S.Ct., at 2798, I recounted the "ingenious
and pervasive forms of discrimination against the Negro" long condoned under the Constitution and
concluded that "[t]he position of the Negro today in America is the tragic but inevitable
consequence of centuries of unequal treatment." Id., at 387, 395, 98 S.Ct., at 2802. I there stated:

"It is because of a legacy of unequal treatment that we now must permit the institutions of this
society to give consideration to race in making decisions about who will hold the positions of
influence, affluence, and prestige in America. For far too long, the doors to those positions have
been shut to Negroes. If we are ever to become a fully integrated society, one in which the color of a
person's skin will not determine the opportunities available to him or her, we must be willing to take
steps to open those doors." Id., at 401, 98 S.Ct., at 2805.

Those doors cannot be fully opened without the acceptance of race-conscious remedies. As my
Brother BLACKMUN observed in Bakke : "In order to get beyond racism, we must first take
account of race. There is no other way." Id., at 407, 98 S.Ct., at 2808 (separate opinion).

Congress recognized these realities when it enacted the minority set-aside provision at issue in this
case. Today, by upholding this race-conscious remedy, the Court accords Congress the authority
necessary to undertake the task of moving our society toward a state of meaningful equality of
opportunity, not an abstract version of equality in which the effects of past discrimination would be
forever frozen into our social fabric. I applaud this result. Accordingly, I concur in the judgment of
the Court.

Mr. Justice STEWART, with whom Mr. Justice REHNQUIST joins, dissenting.

"Our Constitution is color-blind, and neither knows nor tolerates classes among citizens. . . . The
law regards man as man, and takes no account of his surroundings or of his color . . . ." Those words
were written by a Member of this Court 84 years ago. Plessy v. Ferguson, [1896] USSC 151; 163
U.S. 537, 559[1896] USSC 151; , 16 S.Ct. 1138, 1146[1896] USSC 151; , 41 L.Ed. 256 (Harlan, J.,
dissenting). His colleagues disagreed with him, and held that a statute that required the separation of
people on the basis of their race was constitutionally valid because it was a "reasonable" exercise of
legislative power and had been "enacted in good faith for the promotion [of] the public good . . . ."
Id., at 550, 16 S.Ct., at 1143. Today, the Court upholds a statute that accords a preference to citizens
who are "Negroes, Spanish-speaking, Orientals, Indians, Eskimos, and Aleuts," for much the same
reasons. I think today's decision is wrong for the same reason that Plessy v. Ferguson was wrong,
and I respectfully dissent.
A.

The equal protection standard of the Constitution has one clear and central meaning--it absolutely
prohibits invidious discrimination by government. That standard must be met by every State under
the Equal Protection Clause of the Fourteenth Amendment. Loving v. Virginia, [1967] USSC 168;
388 U.S. 1, 10[1967] USSC 168; , 87 S.Ct. 1817, 1822, 18 L.Ed.2d 1010; Hill v. Texas, [1942]
USSC 126; 316 U.S. 400, 62 S.Ct. 1159, 86 L.Ed. 1559; Strauder v. West Virginia, [1879] USSC
165; 100 U.S. 303, 307-308[1879] USSC 165; , 25 L.Ed. 664; Slaughter-House Cases[1872] USSC
142; , 16 Wall. 36, 71-72[1872] USSC 142; , 21 L.Ed. 394. And that standard must be met by the
United States itself under the Due Process Clause of the Fifth Amendment. Washington v. Davis,
[1976] USSC 107; 426 U.S. 229, 239[1976] USSC 107; , 96 S.Ct. 2040, 2047, 48 L.Ed.2d 597;
Bolling v. Sharpe, [1954] USSC 41; 347 U.S. 497, 74 S.Ct. 693, 98 L.Ed. 884.1 Under our
Constitution, any official action that treats a person differently on account of his race or ethnic
origin is inherently suspect and presumptively invalid. McLaughlin v. Florida, [1964] USSC 223;
379 U.S. 184, 192[1964] USSC 223; , 85 S.Ct. 283, 288[1964] USSC 223; , 13 L.Ed.2d 222;
Bolling v. Sharpe, supra, 347 U.S., at 499, 74 S.Ct., at 694; Korematsu v. United States, [1945]
USSC 43; 323 U.S. 214, 216[1945] USSC 43; , 65 S.Ct. 193, 194[1945] USSC 43; , 89 L.Ed. 194.2

The hostility of the Constitution to racial classifications by government has been manifested in
many cases decided by this Court. See, e. g., Loving v. Virginia, supra; McLaughlin v. Florida,
supra; Brown v. Board of Education[1954] USSC 42; , 347 U.S. 483, 74 S.Ct. 686, 98 L.Ed. 873;
Missouri ex rel. Gaines v. Canada, [1938] USSC 190; 305 U.S. 337, 59 S.Ct. 232, 83 L.Ed. 208.
And our cases have made clear that the Constitution is wholly neutral in forbidding such racial
discrimination, whatever the race may be of those who are its victims. In Anderson v. Martin,
[1964] USSC 11; 375 U.S. 399, 84 S.Ct. 454, 11 L.Ed.2d 430, for instance, the Court dealt with a
state law that required that the race of each candidate for election to public office be designated on
the nomination papers and ballots. Although the law applied equally to candidates of whatever race,
the Court held that it nonetheless violated the constitutional standard of equal protection. "We see no
relevance," the Court said, "in the State's pointing up the race of the candidate as bearing upon his
qualifications for office." Id., at 403, 84 S.Ct., at 456 (emphasis added). Similarly, in Loving v.
Virginia, supra, and McLaughlin v. Florida, supra, the Court held that statutes outlawing
miscegenation and interracial cohabitation were constitutionally invalid, even though the laws
penalized all violators equally. The laws were unconstitutional for the simple reason that they
penalized individuals solely because of their race, whatever their race might be. See also Goss v.
Board of Education, [1963] USSC 118; 373 U.S. 683, 83 S.Ct. 1405, 10 L.Ed.2d 632; Buchanan v.
Warley, [1916] USSC 116; 245 U.S. 60, 38 S.Ct. 16, 62 L.Ed. 149.

This history contains one clear lesson. Under our Constitution, the government may never act to the
detriment of a person solely because of that person's race.4 The color of a person's skin and the
country of his origin are immutable facts that bear no relation to ability, disadvantage, moral
culpability, or any other characteristics of constitutionally permissible interest to government.
"Distinctions between citizens solely because of their ancestry are by their very nature odious to a
free people whose institutions are founded upon the doctrine of equality." Hirabayashi v. United
States, [1943] USSC 134; 320 U.S. 81, 100[1943] USSC 134; , 63 S.Ct. 1375, 1385, 87 L.Ed. 1774,
quoted in Loving v. Virginia, supra, at 11, 87 S.Ct., at 1823.5 In short, racial discrimination is by
definition invidious discrimination.

The rule cannot be any different when the persons injured by a racially biased law are not members
of a racial minority. The guarantee of equal protection is "universal in [its] application, to all
persons . . . without regard to any differences of race, of color, or of nationality." Yick Wo v.
Hopkins, [1886] USSC 197; 118 U.S. 356, 369, 6 S.Ct. 1064, 1070[1886] USSC 197; , 30 L.Ed.
220. See In re Griffiths[1973] USSC 174; , 413 U.S. 717, 93 S.Ct. 2851, 37 L.Ed.2d 910;
Hernandez v. Texas, [1954] USSC 39; 347 U.S. 475, 74 S.Ct. 667, 98 L.Ed. 866; Truax v. Raich,
[1915] USSC 229; 239 U.S. 33, 39-43[1915] USSC 229; , 36 S.Ct. 7, 9-11[1915] USSC 229; , 60
L.Ed. 131; Strauder v. West Virginia, 100 U.S., at 308. The command of the equal protection
guarantee is simple but unequivocal: In the words of the Fourteenth Amendment: "No State shall . .
. deny to any person . . . the equal protection of the laws." Nothing in this language singles out some
"persons" for more "equal" treatment than others. Rather, as the Court made clear in Shelley v.
Kraemer, [1948] USSC 63; 334 U.S. 1, 22[1948] USSC 63; , 68 S.Ct. 836, 846[1948] USSC 63; ,
92 L.Ed. 1161 the benefits afforded by the Equal Protection Clause "are, by its terms, guaranteed to
the individual. [They] are personal rights." From the perspective of a person detrimentally affected
by a racially discriminatory law, the arbitrariness and unfairness is entirely the same, whatever his
skin color and whatever the law's purpose, be it purportedly "for the promotion of the public good"
or otherwise.

No one disputes the self-evident proposition that Congress has broad discretion under its spending
power to disburse the revenues of the United States as it deems best and to set conditions on the
receipt of the funds disbursed. No one disputes that Congress has the authority under the Commerce
Clause to regulate contracting practices on federally funded public works projects, or that it enjoys
broad powers under § 5 of the Fourteenth Amendment "to enforce by appropriate legislation" the
provisions of that Amendment. But these self-evident truisms do not begin to answer the question
before us in this case. For in the exercise of its powers, Congress must obey the Constitution just as
the legislatures of all the States must obey the Constitution in the exercise of their powers. If a law
is unconstitutional, it is no less unconstitutional just because it is a product of the Congress of the
United States.

B
On its face, the minority business enterprise (MBE) provision at issue in this case denies the equal
protection of the law. The Public Works Employment Act of 1977 directs that all project
construction shall be performed by those private contractors who submit the lowest competitive bids
and who meet established criteria of responsibility. 42 U.S.C. § 6705(e)(1) (1976 ed., Supp. II). One
class of contracting firms--defined solely according to the racial and ethnic attributes of their
owners--is, however, excepted from the full rigor of these requirements with respect to a
percentage of each federal grant. The statute, on its face and in effect, thus bars a class to which the
petitioners belong from having the opportunity to receive a government benefit, and bars the
members of that class solely on the basis of their race or ethnic background. This is precisely the
kind of law that the guarantee of equal protection forbids.

The Court's attempt to characterize the law as a proper remedial measure to counteract the effects of
past or present racial discrimination is remarkably unconvincing. The Legislative Branch of
government is not a court of equity. It has neither the dispassionate objectivity nor the flexibility
that are needed to mold a race-conscious remedy around the single objective of eliminating the
effects of past or present discrimination.

But even assuming that Congress has the power, under § 5 of the Fourteenth Amendment or some
other constitutional provision, to remedy previous illegal racial discrimination, there is no evidence
that Congress has in the past engaged in racial discrimination in its disbursement of federal
contracting funds. The MBE provision thus pushes the limits of any such justification far beyond
the equal protection standard of the Constitution. Certainly, nothing in the Constitution gives
Congress any greater authority to impose detriments on the basis of race than is afforded the Judicial
Branch.7 And a judicial decree that imposes burdens on the basis of race can be upheld only where
its sole purpose is to eradicate the actual effects of illegal race discrimination. See Pasadena City
Board of Education v. Spangler, [1976] USSC 152; 427 U.S. 424, 96 S.Ct. 2697, 49 L.Ed.2d 599.

The provision at issue here does not satisfy this condition. Its legislative history suggests that it had
at least two other objectives in addition to that of counteracting the effects of past or present racial
discrimination in the public works construction industry.8 One such purpose appears to have been to
assure to minority contractors a certain percentage of federally funded public works contracts.9 But,
since the guarantee of equal protection immunizes from capricious governmental treatment
"persons"--not "races"--it can never countenance laws that seek racial balance as a goal in and of
itself. "Preferring members of any one group for no reason other than race or ethnic origin is
discrimination for its own sake. This the Constitution forbids." University of California Regents v.
Bakke, [1978] USSC 145; 438 U.S. 265, 307[1978] USSC 145; , 98 S.Ct. 2733, 2757[1978] USSC
145; , 57 L.Ed.2d 750 (opinion of POWELL, J.). Second, there are indications that the MBE
provision may have been enacted to compensate for the effects of social, educational, and economic
"disadvantage."10 No race, however, has a monopoly on social, educational, or economic
disadvantage,11 and any law that indulges in such a presumption clearly violates the constitutional
guarantee of equal protection. Since the MBE provision was in whole or in part designed to
effectuate objectives other than the elimination of the effects of racial discrimination, it cannot stand
as a remedy that comports with the strictures of equal protection, even if it otherwise could.
C
The Fourteenth Amendment was adopted to ensure that every person must be treated equally by
each State regardless of the color of his skin. The Amendment promised to carry to its necessary
conclusion a fundamental principle upon which this Nation had been founded--that the law would
honor no preference based on lineage.13 Tragically, the promise of 1868 was not immediately
fulfilled, and decades passed before the States and the Federal Government were finally directed to
eliminate detrimental classifications based on race. Today, the Court derails this achievement and
places its imprimatur on the creation once again by government of privileges based on birth.

The Court, moreover, takes this drastic step without, in my opinion, seriously considering the
ramifications of its decision. Laws that operate on the basis of race require definitions of race.
Because of the Court's decision today, our statute books will once again have to contain laws that
reflect the odious practice of delineating the qualities that make one person a Negro and make
another white.14 Moreover, racial discrimination, even "good faith" racial discrimination, is
inevitably a two-edged sword. "[P]referential programs may only reinforce common stereotypes
holding that certain groups are unable to achieve success without special protection based on a
factor having no relationship to individual worth." University of California Regents v. Bakke, supra,
at 298, 98 S.Ct., at 2753 (opinion of POWELL, J.). Most importantly, by making race a relevant
criterion once again in its own affairs, the Government implicitly teaches the public that the
apportionment of rewards and penalties can legitimately be made according to race--rather than
according to merit or ability--and that people can, and perhaps should, view themselves and others
in terms of their racial characteristics. Notions of "racial entitlement" will be fostered, and private
discrimination will necessarily be encouraged.15 See Hughes v. Superior Court, [1950] USSC 47;
339 U.S. 460, 463-464[1950] USSC 47; , 70 S.Ct. 718, 720[1950] USSC 47; , 94 L.Ed. 985; T.
Eastland & W. Bennett, Counting by Race 139-170 (1979); Van Alstyne, Rites of Passage: Race, the
Supreme Court, and the Constitution, 46 U.Chi.L.Rev. 775 (1979).

There are those who think that we need a new Constitution, and their views may someday prevail.
But under the Constitution we have, one practice in which government may never engage is the
practice of racism--not even "temporarily" and not even as an "experiment."

For these reasons, I would reverse the judgment of the Court of Appeals.

Mr. Justice STEVENS, dissenting.

The 10% set-aside contained in the Public Works Employment Act of 1977 (Act), 91 Stat. 116,
creates monopoly privileges in a $400 million market for a class of investors defined solely by
racial characteristics. The direct beneficiaries of these monopoly privileges are the relatively small
number of persons within the racial classification who represent the entrepreneurial subclass--those
who have, or can borrow, working capital.

History teaches us that the costs associated with a sovereign's grant of exclusive privileges often
encompass more than the high prices and shoddy workmanship that are familiar handmaidens of
monopoly; they engender animosity and discontent as well. The economic consequences of using
noble birth as a basis for classification in 18th-century France, though disastrous, were nothing as
compared with the terror that was engendered in the name of "egalite" and "fraternite." Grants of
privilege on the basis of characteristics acquired at birth are far from an unmixed blessing.
Our historic aversion to titles of nobility1 is only one aspect of our commitment to the proposition
that the sovereign has a fundamental duty to govern impartially.2 When government accords
different treatment to different persons, there must be a reason for the difference.3 Because racial
characteristics so seldom provide a relevant basis for disparate treatment,4 and because
classifications based on race are potentially so harmful to the entire body politic,5 it is especially
important that the reasons for any such classification be clearly identified and unquestionably
legitimate.

The statutory definition of the preferred class includes "citizens of the United States who are
Negroes, Spanish-speaking, Orientals, Indians, Eskimos, and Aleuts." All aliens and all
nonmembers of the racial class are excluded. No economic, social, geographical, or historical
criteria are relevant for exclusion or inclusion. There is not one word in the remainder of the Act or
in the legislative history that explains why any Congressman or Senator favored this particular
definition over any other or that identifies the common characteristics that every member of the
preferred class was believed to share.6 Nor does the Act or its history explain why 10% of the total
appropriation was the proper amount to set aside for investors in each of the six racial subclasses.

Four different, though somewhat interrelated, justifications for the racial classification in this Act
have been advanced: first, that the 10% set-aside is a form of reparation for past injuries to the
entire membership of the class; second, that it is an appropriate remedy for past discrimination
against minority business enterprises that have been denied access to public contracts; third, that the
members of the favored class have a special entitlement to "a piece of the action" when government
is distributing benefits; and, fourth, that the program is an appropriate method of fostering greater
minority participation in a competitive economy. Each of these asserted justifications merits
separate scrutiny.

* Racial characteristics may serve to define a group of persons who have suffered a special wrong
and who, therefore, are entitled to special reparations. Congress has recognized, for example, that
the United States has treated some Indian tribes unjustly and has created procedures for allowing
members of the injured classes to obtain classwide relief. See, e. g., Delaware Tribal Business
Committee v. Weeks[1977] USSC 28; , 430 U.S. 73, 97 S.Ct. 911, 51 L.Ed.2d 173. But as I have
formerly suggested, if Congress is to authorize a recovery for a class of similarly situated victims of
a past wrong, it has an obligation to distribute that recovery among the members of the injured class
in an evenhanded way. See id., at 97-98, 97 S.Ct., at 925 (STEVENS, J., dissenting). Moreover, in
such a case the amount of the award should bear some rational relationship to the extent of the harm
it is intended to cure.

In his eloquent separate opinion in University of California Regents v. Bakke, [1978] USSC 145;
438 U.S. 265, 387[1978] USSC 145; , 98 S.Ct. 2733, 2798[1978] USSC 145; , 57 L.Ed.2d 750, Mr.
Justice MARSHALL recounted the tragic class-based discrimination against Negroes that is an
indelible part of America's history. I assume that the wrong committed against the Negro class is
both so serious and so pervasive that it would constitutionally justify an appropriate classwide
recovery measured by a sum certain for every member of the injured class. Whether our resources
are adequate to support a fair remedy of that character is a policy question I have neither the
authority nor the wisdom to address. But that serious classwide wrong cannot in itself justify the
particular classification Congress has made in this Act. Racial classifications are simply too
pernicious to permit any but the most exact connection between justification and classification.
Quite obviously, the history of discrimination against black citizens in America cannot justify a
grant of privileges to Eskimos or Indians.

Even if we assume that each of the six racial subclasses has suffered its own special injury at some
time in our history, surely it does not necessarily follow that each of those subclasses suffered harm
of identical magnitude. Although "the Negro was dragged to this country in chains to be sold in
slavery," Bakke, supra, at 387, 98 S.Ct. at 2798 (opinion of MARSHALL, J.), the "Spanish-
speaking" subclass came voluntarily, frequently without invitation, and the Indians, the Eskimos and
the Aleuts had an opportunity to exploit America's resources before the ancestors of most American
citizens arrived. There is no reason to assume, and nothing in the legislative history suggests, much
less demonstrates, that each of these subclasses is equally entitled to reparations from the United
States Government.

At best, the statutory preference is a somewhat perverse form of reparation for the members of the
injured classes. For those who are the most disadvantaged within each class are the least likely to
receive any benefit from the special privilege even though they are the persons most likely still to be
suffering the consequences of the past wrong.9 A random distribution to a favored few is a poor
form of compensation for an injury shared by many.

My principal objection to the reparation justification for this legislation, however, cuts more deeply
than my concern about its inequitable character. We can never either erase or ignore the history that
Mr. Justice MARSHALL has recounted. But if that history can justify such a random distribution of
benefits on racial lines as that embodied in this statutory scheme it will serve not merely as a basis
for remedial legislation, but rather as a permanent source of justification for grants of special
privileges. For if there is no duty to attempt either to measure the recovery by the wrong or to
distribute that recovery within the injured class in an evenhanded way, our history will adequately
support a legislative preference for almost any ethnic, religious, or racial group with the political
strength to negotiate "a piece of the action" for its members.

Although I do not dispute the validity of the assumption that each of the subclasses identified in the
Act has suffered a severe wrong at some time in the past, I cannot accept this slapdash statute as a
legitimate method of providing classwide relief.

II

The Act may also be viewed as a much narrower remedial measure--one designed to grant relief to
the specific minority business enterprises that have been denied access to public contracts by
discriminatory practices.

The legislative history of the Act does not tell us when, or how often, any minority business
enterprise was denied such access. Nevertheless, it is reasonable to infer that the number of such
incidents has been relatively small in recent years. For, as noted by the Solicitor General, in the last
20 years Congress has enacted numerous statutes designed to eliminate discrimination and its effects
from federally funded programs.10 Title VI of the Civil Rights Act of 1964 unequivocally and
comprehensively prohibits discrimination on the basis of race in any program or activity receiving
federal financial assistance. In view of the scarcity of litigated claims on behalf of minority business
enterprises during this period, and the lack of any contrary evidence in the legislative record, it is
appropriate to presume that the law has generally been obeyed.

Assuming, however, that some firms have been denied public business for racial reasons, the instant
statutory remedy is nevertheless demonstrably much broader than is necessary to right any such past
wrong. For the statute grants the special preference to a class that includes (1) those minority-owned
firms that have successfully obtained business in the past on a free competitive basis and
undoubtedly are capable of doing so in the future as well; (2) firms that have never attempted to
obtain any public business in the past; (3) firms that were initially formed after the Act was passed,
including those that may have been organized simply to take advantage of its provisions;11 (4) firms
that have tried to obtain public business but were unsuccessful for reasons that are unrelated to the
racial characteristics of their stockholders; and (5) those firms that have been victimized by racial
discrimination.

Since there is no reason to believe that any of the firms in the first four categories had been
wrongfully excluded from the market for public contracts, the statutory preference for those firms
cannot be justified as a remedial measure. And since a judicial remedy was already available for the
firms in the fifth category,12 it seems inappropriate to regard the preference as a remedy designed to
redress any specific wrongs.13 In any event, since it is highly unlikely that the composition of the
fifth category is at all representative of the entire class of firms to which the statute grants a valuable
preference, it is ill-fitting to characterize this as a "narrowly tailored" remedial measure.

III

The legislative history of the Act discloses that there is a group of legislators in Congress identified
as the "Black Caucus" and that members of that group argued that if the Federal Government was
going to provide $4 billion of new public contract business, their constituents were entitled to "a
piece of the action."

It is neither unusual nor reprehensible for Congressmen to promote the authorization of public
construction in their districts. The flow of capital and employment into a district inevitably has both
direct and indirect consequences that are beneficial. As Mr. Justice BRENNAN noted in Elrod v.
Burns, [1976] USSC 148; 427 U.S. 347, 96 S.Ct. 2673, 49 L.Ed.2d 547, however, the award of such
contracts may become a form of political patronage that is dispensed by the party in power.15
Although the practice of awarding such contracts to political allies may be as much a part of our
history as the employment practices condemned in Elrod, it would surely be unconstitutional for the
legislature to specify that all, or a certain portion, of the contracts authorized by a specific statute
must be given to businesses controlled by members of one political party or another. That would be
true even if the legislative majority was convinced that a grossly disproportionate share had been
awarded to members of the opposite party in previous years.

In the short run our political processes might benefit from legislation that enhanced the ability of
representatives of minority groups to disseminate patronage to their political backers. But in the
long run any rule that authorized the award of public business on a racial basis would be just as
objectionable as one that awarded such business on a purely partisan basis.
The legislators' interest in providing their constituents with favored access to benefits distributed by
the Federal Government is, in my opinion, a plainly impermissible justification for this racial
classification.

IV

The interest in facilitating and encouraging the participation by minority business enterprises in the
economy is unquestionably legitimate. Any barrier to such entry and growth whether grounded in
the law or in irrational prejudice--should be vigorously and thoroughly removed. Equality of
economic and investment opportunity is a goal of no less importance than equality of employment
opportunity. This statute, however, is not designed to remove any barriers to entry. Nor does its
sparse legislative history detail any insuperable or even significant obstacles to entry into the
competitive market.

Three difficulties encountered by minority business enterprises in seeking governmental business on
a competitive basis are identified in the legislative history. There were references to (1)
unfamiliarity with bidding procedures followed by procurement officers, (2) difficulties in obtaining
financing, and (3) past discrimination in the construction industry.

The first concern is no doubt a real problem for all businesses seeking access to the public contract
market for the first time. It justifies a thorough review of bidding practices to make sure that they
are intelligible and accessible to all. It by no means justifies an assumption that minority business
enterprises are any less able to prepare and submit bids in proper form than are any other
businessmen. Consequently, that concern does not justify a statutory classification on racial grounds.

The second concern would justify legislation prohibiting private discrimination in lending practices
or authorizing special public financing for firms that have been or are unable to borrow money for
reasons unrelated to their credit rating. It would not be an adequate justification for a requirement
that a fixed percentage of all loans made by national banks be made to Eskimos or Orientals
regardless of their ability to repay the loans. Nor, it seems to me, does it provide a sufficient
justification for granting a preference to a broad class that includes, at one extreme, firms that have
no credit problem16 and at the other extreme, firms whose unsatisfactory credit rating will prevent
them from taking advantage of the statutory preference even though they are otherwise qualified to
do the work. At best, the preference for minority business enterprises is a crude and inadequate
response to the evils that flow from discriminatory lending practices.

The question whether the history of past discrimination has created barriers that can only be
overcome by an unusual measure of this kind is more difficult to evaluate. In analyzing this
question, I think it is essential to draw a distinction between obstacles placed in the path of minority
business enterprises by others and characteristics of those firms that may impair their ability to
compete.

It is unfortunately but unquestionably true that irrational racial prejudice persists today and
continues to obstruct minority participation in a variety of economic pursuits, presumably including
the construction industry. But there are two reasons why this legislation will not eliminate, or even
tend to eliminate, such prejudice. First, prejudice is less likely to be a significant factor in the public
sector of the economy than in the private sector because both federal and state laws have prohibited
discrimination in the award of public contracts for many years. Second, and of greater importance,
an absolute preference that is unrelated to a minority firm's ability to perform a contract inevitably
will engender resentment on the part of competitors excluded from the market for a purely racial
reason and skepticism on the part of customers and suppliers aware of the statutory classification. It
thus seems clear to me that this Act cannot be defended as an appropriate method of reducing racial
prejudice.

The argument that our history of discrimination has left the entire membership of each of the six
racial classes identified in the Act less able to compete in a free market than others is more easily
stated than proved. The reduction in prejudice that has occurred during the last generation has
accomplished much less than was anticipated; it nevertheless remains true that increased
opportunities have produced an ever-increasing number of demonstrations that members of
disadvantaged races are entirely capable not merely of competing on an equal basis, but also of
excelling in the most demanding professions. But, even though it is not the actual predicate for this
legislation, a statute of this kind inevitably is perceived by many as resting on an assumption that
those who are granted this special preference are less qualified in some respect that is identified
purely by their race.17 Because that perception--especially when fostered by the Congress of the
United States--can only exacerbate rather than reduce racial prejudice, it will delay the time when
race will become a truly irrelevant, or at least insignificant, factor. Unless Congress clearly
articulates the need and basis for a racial classification, and also tailors the classification to its
justification, the Court should not uphold this kind of statute.

This Act has a character that is fundamentally different from a carefully drafted remedial measure
like the Voting Rights Act of 1965. A consideration of some of the dramatic differences between
these two legislative responses to racial injustice reveals not merely a difference in legislative
craftsmanship but a difference of constitutional significance. Whereas the enactment of the Voting
Rights Act was preceded by exhaustive hearings and debates concerning discriminatory denial of
access to the electoral process, and became effective in specific States only after specific findings
were made, this statute authorizes an automatic nationwide preference for all members of a diverse
racial class regardless of their possible interest in the particular geographic areas where the public
contracts are to be performed. Just why a wealthy Negro or Spanish-speaking investor should have a
preferred status in bidding on a construction contract in Alaska--or a citizen of Eskimo ancestry
should have a preference in Miami or Detroit--is difficult to understand in light of either the
asserted remedial character of the set-aside or the more basic purposes of the public works
legislation.

The Voting Rights Act addressed the problem of denial of access to the electoral process. By
outlawing specific practices, such as poll taxes and special tests, the statute removed old barriers to
equal access; by requiring preclearance of changes in voting practices in covered States, it precluded
the erection of new barriers. The Act before us today does not outlaw any existing barriers to access
to the economic market and does nothing to prevent the erection of new barriers. On the contrary, it
adopts the fundamentally different approach of creating a new set of barriers of its own.

A comparable approach in the electoral context would support a rule requiring that at least 10% of
the candidates elected to the legislature be members of specified racial minorities. Surely that would
be an effective way of ensuring black citizens the representation that has long been their due. Quite
obviously, however, such a measure would merely create the kind of inequality that an impartial
sovereign cannot tolerate. Yet that is precisely the kind of "remedy" that this Act authorizes. In both
political and economic contexts, we have a legitimate interest in seeing that those who were
disadvantaged in the past may succeed in the future. But neither an election nor a market can be
equally accessible to all if race provides a basis for placing a special value on votes or dollars.

The ultimate goal must be to eliminate entirely from governmental decisionmaking such irrelevant
factors as a human being's race. The removal of barriers to access to political and economic
processes serves that goal.18 But the creation of new barriers can only frustrate true progress. For as
Mr. Justice POWELL19 and Mr. Justice Douglas20 have perceptively observed, such protective
barriers reinforce habitual ways of thinking in terms of classes instead of individuals. Preferences
based on characteristics acquired at birth foster intolerance and antagonism against the entire
membership of the favored classes.21 For this reason, I am firmly convinced that this "temporary
measure" will disserve the goal of equal opportunity.

V

A judge's opinion that a statute reflects a profoundly unwise policy determination is an insufficient
reason for concluding that it is unconstitutional. Congress has broad power to spend money to
provide for the "general Welfare of the United States," to "regulate Commerce . . . among the
several States," to enforce the Civil War Amendments, and to discriminate between aliens and
citizens. See Hampton v. Mow Sun Wong, [1976] USSC 93; 426 U.S. 88, 101-102, n. 21[1976]
USSC 93; , 96 S.Ct. 1895, 1904, n. 21[1976] USSC 93; , 48 L.Ed.2d 495.22 But the exercise of
these broad powers is subject to the constraints imposed by the Due Process Clause of the Fifth
Amendment. That Clause has both substantive and procedural components; it performs the office of
both the Due Process and Equal Protection Clauses of the Fourteenth Amendment in requiring that
the federal sovereign act impartially.

Unlike Mr. Justice STEWART and Mr. Justice REHNQUIST, however, I am not convinced that the
Clause contains an absolute prohibition against any statutory classification based on race. I am
nonetheless persuaded that it does impose a special obligation to scrutinize any governmental
decisionmaking process that draws nationwide distinctions between citizens on the basis of their
race and incidentally also discriminates against noncitizens in the preferred racial classes.23 For just
as procedural safeguards are necessary to guarantee impartial decisionmaking in the judicial
process, so can they play a vital part in preserving the impartial character of the legislative process.

In both its substantive and procedural aspects this Act is markedly different from the normal product
of the legislative decisionmaking process. The very fact that Congress for the first time in the
Nation's history has created a broad legislative classification for entitlement to benefits based solely
on racial characteristics identifies a dramatic difference between this Act and the thousands of
statutes that preceded it. This dramatic point of departure is not even mentioned in the statement of
purpose of the Act or in the Reports of either the House or the Senate Committee that processed the
legislation,25 and was not the subject of any testimony or inquiry in any legislative hearing on the
bill that was enacted. It is true that there was a brief discussion on the floor of the House as well as
in the Senate on two different days, but only a handful of legislators spoke and there was virtually
no debate. This kind of perfunctory consideration of an unprecedented policy decision of profound
constitutional importance to the Nation is comparable to the accidental malfunction of the
legislative process that led to what I regarded as a totally unjustified discrimination in Delaware
Tribal Business Committee v. Weeks, 430 U.S., at 97, 97 S.Ct., at 925.
Although it is traditional for judges to accord the same presumption of regularity to the legislative
process no matter how obvious it may be that a busy Congress has acted precipitately, I see no
reason why the character of their procedures may not be considered relevant to the decision whether
the legislative product has caused a deprivation of liberty or property without due process of law.26
Whenever Congress creates a classification that would be subject to strict scrutiny under the Equal
Protection Clause of the Fourteenth Amendment if it had been fashioned by a state legislature, it
seems to me that judicial review should include a consideration of the procedural character of the
decisionmaking process.27 A holding that the classification was not adequately preceded by a
consideration of less drastic alternatives or adequately explained by a statement of legislative
purpose would be far less intrusive than a final determination that the substance of the decision is
not "narrowly tailored to the achievement of that goal."28 Cf. THE CHIEF JUSTICE's opinion,
ante, at 480; Mr. Justice MARSHALL's opinion concurring in the judgment, ante, at 521. If the
general language of the Due Process Clause of the Fifth Amendment authorizes this Court to review
Acts of Congress under the standards of the Equal Protection Clause of the Fourteenth
Amendment--a clause that cannot be found in the Fifth Amendment there can be no separation-of-
powers objection to a more tentative holding of unconstitutionality based on a failure to follow
procedures that guarantee the kind of deliberation that a fundamental constitutional issue of this
kind obviously merits.

In all events, rather than take the substantive position expressed in Mr. Justice STEWART's
dissenting opinion, I would hold this statute unconstitutional on a narrower ground. It cannot fairly
be characterized as a "narrowly tailored" racial classification because it simply raises too many
serious questions that Congress failed to answer or even to address in a responsible way.30 The risk
that habitual attitudes toward classes of persons, rather than analysis of the relevant characteristics
of the class, will serve as a basis for a legislative classification is present when benefits are
distributed as well as when burdens are imposed. In the past, traditional attitudes too often provided
the only explanation for discrimination against women, aliens, illegitimates, and black citizens.
Today there is a danger that awareness of past injustice will lead to automatic acceptance of new
classifications that are not in fact justified by attributes characteristic of the class as a whole.

When Congress creates a special preference, or a special disability, for a class of persons, it should
identify the characteristic that justifies the special treatment.31 When the classification is defined in
racial terms, I believe that such particular identification is imperative.

In this case, only two conceivable bases for differentiating the preferred classes from society as a
whole have occurred to me: (1) that they were the victims of unfair treatment in the past and (2) that
they are less able to compete in the future. Although the first of these factors would justify an
appropriate remedy for past wrongs, for reasons that I have already stated, this statute is not such a
remedial measure. The second factor is simply not true. Nothing in the record of this case, the
legislative history of the Act, or experience that we may notice judicially provides any support for
such a proposition. It is up to Congress to demonstrate that its unique statutory preference is
justified by a relevant characteristic that is shared by the members of the preferred class. In my
opinion, because it has failed to make that demonstration, it has also failed to discharge its duty to
govern impartially embodied in the Fifth Amendment to the United States Constitution.
I respectfully dissent.