MICHEL, Circuit Judge.
This federal contract case concerns the constitutionality of § 1207 of the National Defense Authorization Act of 1987 ("the 1207 program"), Pub.L. No. 99-661, 100 Stat. 3859, 3973 (1986) (as amended), codified at 10 U.S.C. § 2323 (1994), which permits the United States Department of Defense ("DOD") to preferentially select bids submitted by small businesses owned by socially and economically disadvantaged individuals ("SDBs"). The 1207 program operates by increasing the bid of a non-minority-owned firm by up to ten percent via a mechanism called a "price-evaluation" adjustment. Rothe Development Corporation ("Rothe") appeals the April 27, 1999 decision of the United States District Court for the Western District of Texas granting summary judgment in favor of the government that the 1207 program is constitutional, as enacted and as applied in this case in which Rothe lost an Air Force contract to a SDB due to application of the 1207 program. Rothe Dev. Corp. v. United States Dep't of Defense, 49 F.Supp.2d 937, 953 (W.D.Tex.1999) ("Rothe I"). In reviewing the program, the district court applied a deferential standard of review, and relied extensively on evidence post-dating the reauthorization of the 1207 program collected in an amicus brief filed on behalf of the government, and in a 1998 government study. Rothe contends that the 1207 program violates its equal protection rights under the Due Process Clause of the Fifth Amendment to the United States Constitution, because the program lacks the evidentiary foundation required to justify the enactment and application of a race-based classification. In defending the program, the government argues that Congress had sufficient evidence from which to conclude that the DOD had at least been a "passive participant" in perpetuating the lingering effects of past, private discriminatory conduct that significantly handicapped minorities from obtaining defense contracts, such that race-based remedial relief was justified, and moreover, that the 1207 program was narrowly tailored in addressing this remedial need. The government also argues that evidence post-dating the program's last reauthorization in 1992 justified the program even if we find that the pre-reauthorization evidence alone was insufficient. Because we conclude that the district court improperly applied a deferential legal standard rather than "strict scrutiny," and also impermissibly relied on post-reauthorization evidence to support the program's constitutionality as reauthorized, we vacate the judgment of the district court and remand for further proceedings consistent with this opinion.
A. The 1207 Program
1. Purpose and History of the 1207 Program
Congress enacted the 1207 program to "ensure that substantial progress is made in increasing awards of [DOD] contracts to section 1207(a) entities." Pub.L. No. 100-180, § 806(a), 101 Stat. 1019, 1126 (1987). First enacted by Congress for fiscal years 1987 through 1989, § 1207 sets a "goal" that five percent of the total dollar amount obligated for defense contracts and subcontracts for each fiscal year would be awarded to businesses that 1) are "small"; and 2) are "owned and controlled by" socially and economically disadvantaged individuals. 10 U.S.C. § 2323(a)(1)(A). The five percent goal is a department-wide goal that is not segmented by industry categories.
10 U.S.C. § 2323(a)(1)(A). In order to meet the goal, regulations promulgated pursuant to § 1207 authorized the DOD to raise the bids of non-SDB bidders by as much as ten percent above the fair market price per contract.
The 1207 program was initially enacted as a three-year pilot program. In 1989, Congress extended the program from 1990 until 1993, with the hope that the "additional three years [would] provide the [DOD], and the defense industry, with the opportunity to vigorously pursue the program's fundamental objective: to expand the participation of disadvantaged small business concerns ... in the defense marketplace." H.R.Rep. No. 101-331, at 614, reprinted in 1989 U.S.C.C.A.N. 977, 1071; Pub.L. No. 101-189, § 831(b), 103 Stat. 1352, 1507 (1989). Despite the continuation of the program beyond its initial period of authorization, in the first five years of the program, the DOD did not meet the goal of increasing participation by SDBs to five percent of its total dollar amount allocated for contracts and subcontracts. As a result, in 1992, Congress reauthorized the program for seven more years, through
In 1998, Congress amended the 1207 program to require the DOD to suspend the use of the price-evaluation adjustment for one year after any fiscal year in which the DOD awards more than five percent of its eligible contract dollars to SDBs. Pub.L. No. 105-261, § 801, 112 Stat.1920, 2080-81 (1998). Because the DOD met the five percent goal in both fiscal years 1998 and 1999, the DOD suspended the ten percent preference for those last two calendar years. In 1999, Congress reauthorized the 1207 program for three more years. Pub.L. No. 106-65, § 808, 113 Stat. 512, 705 (1999). Without congressional reauthorization, the 1207 program will expire at the end of fiscal year 2003.
2. Requirements of the 1207 Program
The race-based preference program challenged in this case was established pursuant to § 1207, and incorporated portions of the Small Business Act ("Act"), 15 U.S.C. §§ 637(d) and 644(g) (1994). Section 1207 references § 8(d) of the Act, as amended, 15 U.S.C. § 631 (1994), et seq., to define a SDB according to the racial or ethnic background of the controlling owner. 10 U.S.C. § 2323(a)(1)(A); 15 U.S.C. § 637(d). A business is "small" if it is independently owned and operated, if it is not dominant in its field of operation, and if its number of employees or annual gross receipts fall below predetermined levels. 15 U.S.C. § 632(a)(1) (1994). The Act defines "socially disadvantaged individuals" as "those who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group without regard to their individual qualities." 15 U.S.C. § 637(a)(5). "Economically disadvantaged individuals" are defined as "those socially disadvantaged individuals whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities as compared to others in the same business area who are not socially disadvantaged." 15 U.S.C. § 637(a)(6)(A). Under the Act, five groups (comprising thirty-seven subgroups), including Asian Pacific Americans, are presumed to be socially and economically disadvantaged.
B. The Contract at Issue
Rothe is based in San Antonio, Texas, and is owned by Ms. Suzanne Patenaude, a Caucasian female. Since 1987, Rothe had contracted with the Department of the Air Force to maintain, operate, and repair the computer systems of the Switchboard Operations and Network Control Center ("NCC") at Columbus Air Force Base in Mississippi. Korean-Americans David and Kim Sohn of Baltimore, Maryland, own and operate International Computer and Telecommunications, Inc. ("ICT"), a SDB with annual revenues of approximately $13 million. ICT also performs computer maintenance and repair work and was Rothe's "number one competitor."
In an effort to improve contractor accountability and quality, the Air Force decided to consolidate Rothe's Switchboard/NCC contract with a contract for Base Telecommunications Services ("BTS"). On March 6, 1998, the 38th Engineering Installation Wing at Tinker Air Force Base, Oklahoma, issued a solicitation for competitive bids on the combined contract, and announced that, unlike predecessor contracts, the proposed contract would be let pursuant to the 1207 program. Five contractors submitted bids. Two bidders were SDBs. Rothe, which was not a SDB, bid $5.57 million, and was the lowest bidder. ICT, which was a SDB and thus could participate in the 1207 program, bid $5.75 million. Through application of the price-evaluation adjustment, Rothe's bid was increased to $6.1 million for purposes of the bid selection. On August 20, 1998, the Air Force awarded the contract to ICT, the "fictionally" lowest bidder. According to the district court, the parties agree that Rothe lost the bid only because of application of the price-evaluation adjustment. Rothe I, 49 F.Supp.2d at 941.
The contract in this case was scheduled to expire on September 30, 1999. However, the Air Force exercised an option to extend ICT's contract through September 30, 2001. ICT has not performed any work under the disputed contract since April 30, 1999, however, because first the United States Court of Appeals for the Fifth Circuit and later this court imposed a stay pending resolution of this appeal. As a consequence, the Air Force issued a new solicitation for the work covered by the disputed contract. Thus, the lawfulness of the award of the contract to ICT is not at issue.
C. Procedural History
On November 5, 1998, Rothe brought suit against the DOD and the United States Department of the Air Force, challenging the constitutionality of the 1207 program both as enacted and as applied under the equal protection component of the Fifth Amendment's Due Process Clause. Rothe sought declaratory and injunctive relief barring award of the contract
Rothe filed a timely notice of appeal to the United States Court of Appeals for the Fifth Circuit. The government moved to dismiss for lack of subject matter jurisdiction. Rothe Dev. Corp. v. United States Dep't of Defense, 194 F.3d 622 (5th Cir.1999) ("Rothe II"). On October 27, 1999, the Fifth Circuit granted the government's motion, holding that it lacked jurisdiction over the appeal, but instead of dismissing the appeal, transferred it to this court. Id. at 626. We heard oral argument in this case on November 8, 2000.
A. Standard of Appellate Review
We review a district court's grant of summary judgment de novo. Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In evaluating the grant of a motion for summary judgment, our task is to discern whether "the record taken as a whole could not lead a rational trier of fact to find for the non-moving party." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). In this case, however, the issues are ones of law based on underlying facts that are essentially undisputed. What is sharply disputed are the inferences and conclusions that may properly be drawn from those underlying facts.
Under 28 U.S.C. § 1295(a)(2) (1994), this court has exclusive jurisdiction to hear appeals and decide all issues raised in cases in which the district court's subject matter jurisdiction is "based, in whole or in part," on the Tucker Act, 28 U.S.C. § 1346(a)(2) (1994) (emphasis added). The Tucker Act confers on district courts original jurisdiction, concurrent with that of the United States Court of Federal Claims, over "[a]ny ... civil action or claim against the United States, not exceeding $10,000 in amount, founded either upon the Constitution, or any Act of Congress, or any regulation of an executive department, or upon any express or implied contract with the United States, or for liquidated or unliquidated damages in cases not sounding in tort." Id. Under the Tucker Act, an unsuccessful bidder can recover its bid preparation costs from the government on the theory that failure to evaluate a "bid honestly and fairly" breaches an implied-in-fact contract of fair dealing. Coflexip & Servs., Inc. v. United States, 961 F.2d 951, 952-53 (Fed.Cir.1992). As a suit to recover its bid preparation costs, Rothe's complaint invoked the Tucker Act. Thus, this court has exclusive jurisdiction over all issues Rothe raises in this appeal. Therefore, we will not return the appeal to the Fifth Circuit and will address all issues properly raised.
C. Burden of Proof
As a preliminary matter, we must address whether the district court correctly allocated the burden of proof. Rothe argues that the district court erred in placing the burden on Rothe to prove that the price-evaluation adjustment was unconstitutional. Citing Adarand Constructors, Inc. v. Pena, 515 U.S. 200, 115 S.Ct. 2097, 132 L.Ed.2d 158 (1995) ("Adarand III"), Rothe contends that it is the governmental actor that must justify its use of an affirmative action program. Rothe I, 49 F.Supp.2d at 945.
We believe the district court correctly placed the burden of proof on Rothe to demonstrate that the program was unconstitutional. Before a court can assess whether a plaintiff has met his or her burden of proof, however, the court must review the government's evidentiary support to determine whether the legislative body had a "strong basis in evidence" to believe that remedial action based on race was necessary. Wygant v. Jackson Bd. of Ed., Inc., 476 U.S. 267, 277, 106 S.Ct. 1842, 90 L.Ed.2d 260 (1986) (plurality op.). Thus, the government bears the burden to produce evidence, i.e., the burden of going forward with evidence. The challengers, however, "continue to bear the ultimate burden of persuading the court that the [entity's] evidence did not support an inference of prior discrimination and thus a remedial purpose, or that the plan instituted on the basis of this evidence was not sufficiently `narrowly tailored.'" Id. at 293, 106 S.Ct. 1842 (O'Connor, J., concurring).
D. Legal Standard for Reviewing Federal Race Based Classifications
1. Congress' Authority to Enact Race Based Classifications
Congress' authority to enact race-based classifications flows from either of two distinct sources of congressional power. Under Article I of the United States Constitution, Congress can attach race-based conditions when it appropriates for a federal program. When it enacts legislation pursuant to Article I, it is free to attach any race-based condition so long as it does so without violating the equal protection component of the Fifth Amendment's Due Process Clause.
Additionally, § 5 of the Fourteenth Amendment gives Congress a separate and distinct source of authority to enact remedial racial classifications.
The 1207 program was enacted pursuant to Congress' Article I powers to appropriate funds for the Armed Forces, and is a program that affects private firms that submit bids to contract with the DOD. See Metro Broadcasting Inc. v. FCC, 497 U.S. 547, 605-06, 110 S.Ct. 2997, 111 L.Ed.2d 445 (1990) (O'Connor, J., dissenting) (rejecting the argument that § 5 applies to federal programs administered by federal officials). Thus, in determining whether the 1207 program is constitutional, we must review the governing case law to determine the limits the Fifth Amendment places on congressional power to enact racial classifications under Article I. We do not, and need not, decide the proper analysis for cases involving Congress' power under § 5 of the Fourteenth Amendment.
2. The Fifth Amendment as a Limit on Congressional Power to Enact Race-Based Classifications
Prior to 1995, the Supreme Court applied a different standard of review depending upon the constitutional basis for enacting the classification. If the program was enacted by a state or municipality, and thus subject to the limits of § 1 of the Fourteenth Amendment, the Court applied the highest level of review — "strict scrutiny." City of Richmond v. J.A. Croson Co., 488 U.S. 469, 494, 109 S.Ct. 706, 102 L.Ed.2d 854 (1989).
Initially, however, the Supreme Court construed the limits placed on federal programs under the Fifth Amendment (and thus applicable to federal programs enacted under Article I) to be different than those under the Fourteenth Amendment (applicable to states and municipalities). Until 1995, race-based classifications enacted by the federal government were subject to middle-tier scrutiny — "intermediate scrutiny" — whereby the classification would satisfy constitutional requirements if it was "substantially related" to an "important" governmental objective. Metro Broadcasting, 497 U.S. at 565-66, 110 S.Ct. 2997.
In 1995, in Adarand III,
E. Analysis of the Legal Standard Applied by the District Court
Although acknowledging that strict scrutiny must be applied in reviewing a federal racial classification, the district court in this case opined that Congress, unlike states or municipalities, should be given deference both "in articulating a compelling purpose ... [and in showing] that its action is narrowly tailored to that purpose." Rothe I, 49 F.Supp.2d at 949; see also id. (noting that "[i]f Congress is to be allowed a broad vision of the nation's problems, it seems only logical that it be allowed some measure of deference in addressing those problems"); id. at 950 (noting that "deference should be given to congressional findings that discrimination has continued and must be addressed"). In applying this deferential scrutiny, the district court expressly declined to conduct a Croson-like analysis of the 1207 program. Id. at 949 (stating that federal racial classifications should not be "rigidly held to the standards set forth in Croson"); see also id. (noting that the narrow tailoring factors discussed in Croson should not be "applied in lockstep conformity with Croson"); id. at 953 (arguing that "Croson's mandate that a local government make specific findings regarding specific minorities in specific industries" should not be applied "without alteration, to the acts of Congress") (emphasis in original).
The district court supported its approach by relying exclusively on language in two Supreme Court plurality opinions, both discussing Congress' remedial powers under § 5 of the Fourteenth Amendment, not the limits imposed by the Fifth Amendment on the exercise of its Article I appropriating powers. Id. at 943-44. The district court noted that in both the Fullilove and Croson plurality opinions, certain members of the Court had indicated that since Congress enjoyed a "more comprehensive remedial power" than other governmental bodies with which to enforce equal protection guarantees, its findings would be entitled to greater deference than those of a state or municipal legislative body.
We hold that the district court erred in concluding that federal racial classifications should be reviewed under a deferential analysis that is not applicable to state or municipal classifications. Indeed, as Justice O'Connor noted in Adarand III, creating a distinction between state and federal racial classifications "lacks support" in Supreme Court precedent and "undermines the fundamental principle of equal protection as a personal right." Adarand III, 515 U.S. at 235, 115 S.Ct. 2097 (plurality op., O'Connor, J.). In effect, the district court appears to have discerned in the plurality and dissenting opinions a basis to apply to federal programs a watered-down version of strict scrutiny as articulated in Croson. We reject the notion of lesser scrutiny, which seems suspiciously like the middle-tier scrutiny of Metro Broadcasting. While the district court may be correct that Congress may be owed deference when it legislates pursuant to § 5, that issue is not before us today. The 1207 program was enacted pursuant to Article I, and so, as set forth in Adarand III, Congress isentitled to no deference in determining whether Congress had a compelling interest in enacting the racial classification, and that the classification was narrowly tailored in fulfillment of that interest.
F. Pre Reauthorization Evidence
The district court admittedly engaged in only a cursory analysis of the evidence before Congress at the time of the reauthorization of the 1207 program, choosing instead to focus primarily on post-reauthorization evidence. Because the reauthorization of the 1207 program in 1992 constitutes a new statute, the district court need only have considered whether there was a compelling interest in reauthorizing the 1207 program in 1992; it is irrelevant for purposes of this case whether the original statute fails for want of a sufficient factual predicate.
Under Croson, in order to determine whether a racial classification is constitutional, a reviewing court must be satisfied that a "strong basis in evidence" supports the legislature's conclusion that discrimination persisted and remedial action was needed. Croson, 488 U.S. at 500, 109 S.Ct. 706 (citing Wygant, 476 U.S. at
In the present appeal, the mere listing of pre-reauthorization references by the district court fails, we hold, to provide adequate findings on which to conclude that Congress had a "strong basis in evidence" for reauthorizing the 1207 program. Under Croson, a race-based classification may be enacted to remedy only identified systematic discrimination. Accordingly, generalized assertions of legislative purpose or statements generally alleging societal discrimination or an individual's anecdotal accounts of discriminatory conduct would have little or no probative value in supporting enactment of a race-conscious measure. See Croson, 488 U.S. at 498, 109 S.Ct. 706 ("[A] generalized assertion that there has been past discrimination in an entire industry provides no guidance for a legislative body to determine the precise scope of the injury it seeks to remedy."); Wygant, 476 U.S. at 276, 106 S.Ct. 1842 ("Societal discrimination, without more, is too amorphous a basis for imposing a racially classified remedy."). The pre-reauthorization evidence cited by the district court does not show that the 1207 program was designed to address a remedial need, nor does it provide any indication that the 1207 program was enacted in response to systematic discrimination against Asian Pacific Americans or the lingering effects thereof. Moreover, while the SBA's findings support a conclusion that Congress believed there was sufficient evidence upon which to include Asian Pacific Americans in the SBA presumption, such a conclusion, made in 1980, seven years before the initial enactment of the 1207 program and almost twelve years before the time of the reenactment, does not necessarily support a conclusion that Congress had a "strong basis in evidence" for including (and, after 1992, for continuing to include) the presumption in the DOD program.
Statistical evidence is particularly important to justify race-based legislation. See Croson, 488 U.S. at 509, 109 S.Ct. 706 (plurality op., O'Connor, J.) (noting that a prima facie case of discrimination can arise "[w]here there is a significant statistical disparity between the number of qualified minority contractors willing and able to perform a particular service and the number of such contractors actually engaged by the locality or the locality's prime contractors"). Indeed, nearly every court of appeals upholding the constitutionality of a race-based classification has relied in whole or in part on
There may be other evidence in the reports cited by the district court that could suffice to uphold the constitutionality of the 1207 program. However, we believe that it is the province of the district court to make express findings as to whether other evidence that was before Congress at the time of the reauthorization of the 1207 program is sufficient to support its constitutionality. We thus conclude that the pre-reauthorization evidence (at least insofar as it is relied on by the district court) is insufficient to satisfy the "strong basis in evidence" requirement in Croson for determining that there was a compelling interest for reauthorization of the 1207 program.
G. Post Enactment Evidence
The district court relied heavily on two sources of post-enactment evidence in upholding the constitutionality of the 1207 program. First, the court relied on the post-enactment evidence cited in the brief of its amicus curiae, the Asian American Legal Defense and Education Fund ("AALDEF"), to "bolster" its conclusion that Asian Pacific Americans had been discriminated against. Rothe I, 49 F.Supp.2d at 946 ("Congress has made findings specific
The circuit courts seem to be in substantial agreement that there are at least several permissible uses for post-enactment evidence. Evidence gathered after the initial enactment of a racial classification but before the reauthorization or reenactment of the program may certainly be considered to determine whether the program is constitutional as reenacted. See Concrete Works of Colo., Inc. v. Denver, 36 F.3d 1513, 1521 (10th Cir. 1994) (noting that post-enactment evidence may be considered when the legislative body modified and expanded the scope of a racial classification since the initial enactment). Moreover, post-enactment evidence may certainly be considered in determining whether a racial classification is constitutional as applied. It is for this reason that some circuit courts have considered post-enactment evidence in determining whether to issue injunctive relief, or in determining whether a race-based program is still narrowly tailored. See Contractors Ass'n of E. Penn., Inc. v. City of Phila., 6 F.3d 990, 1004 (3d Cir. 1993) ("Contractors Ass'n I") ("Consideration of post-enactment evidence is especially appropriate ... where the principal relief sought ... was an injunction."); Concrete Works, 36 F.3d at 1521 (holding that "post-enactment evidence, if carefully scrutinized for its accuracy, will often prove quite useful in evaluating the remedial effects or shortcomings of the race-conscious program").
The use of post-enactment evidence to justify the constitutionality of a program, as enacted, presents a more difficult question. The Supreme Court has consistently held that once an affirmative action program is challenged in litigation, the program can only be upheld if there is a "strong basis in evidence" that it is remedial in nature. Wygant, 476 U.S. at 277, 106 S.Ct. 1842; Croson, 488 U.S. at 500, 109 S.Ct. 706. Whether a legislature similarly must have a "strong basis in evidence" of discrimination at the time it first enacts a racial classification, or whether it may satisfy the "strong basis in evidence" standard in litigation by relying on additional post-enactment evidence is a question of which the circuit courts have expressed different views.
It is clear from the Supreme Court opinions that a legislative body must have some evidence of discrimination before it in order to constitutionally enact a race-based program. See id. at 509, 109 S.Ct. 706 (plurality op.) ("If the city of Richmond had evidence before it that nonminority contractors were systematically excluding minority businesses from subcontracting opportunities it could take action to end the discriminatory exclusion.") (emphasis added); Wygant, 476 U.S. at 277, 106 S.Ct. 1842 ("[A] public employer
While there is no question that a legislature must have some evidence of discrimination before it may constitutionally enact an affirmative action program, there has been arguable ambiguity as to whether legislatures may only act upon the same "strong basis in evidence" standard that ultimately must be demonstrated during litigation. Statements in Croson and Wygant arguably can be interpreted to suggest that the evidentiary burden faced by a legislature when it enacts a program is substantially less than when such a program is ultimately challenged in court. For example, in Croson, the Court noted that "[w]hile the States and their subdivisions may take remedial action when they possess evidence that their own spending practices are exacerbating a pattern of prior discrimination, they must identify that discrimination ... with some specificity before they may use race-conscious relief." Croson, 488 U.S. at 504, 109 S.Ct. 706 (emphasis added). Similarly, Justice Powell's plurality opinion in Wygant states that "the Court has insisted upon some showing of prior discrimination by the governmental unit involved before allowing limited use of racial classifications in order to remedy such discrimination." Wygant, 476 U.S. at 274, 106 S.Ct. 1842 (emphasis added). Some circuit courts have read these statements and others to support a holding that the evidentiary requirement imposed on legislatures is significantly lower than the "strong basis in evidence" requirement imposed when the program is challenged in litigation. See, e.g., Coral Constr., 941 F.2d at 921 ("[W]here a state has a good faith reason to believe that systematic discrimination has occurred, and is continuing to occur, in a local industry, we will not strike down the program for inadequacy of the record if subsequent factfinding bears out the need for the program."); Ensley Branch N.A.A.C.P. v. Seibels, 31 F.3d 1548, 1568 (11th Cir.1994) ("It is not necessary ... for the City and Board to show that, when they approved the decrees, they already had strong evidence of ... discrimination."); Contractors Ass'n of E. Penn., Inc. v. City of Phila., 91 F.3d 586, 591 n. 21 (3d Cir.1996) ("Contractors Ass'n II") (noting that "it is appropriate to consider any evidence, pre- or post-enactment, relevant to the issue of whether such discrimination, or the effects thereof, existed prior to 1982 [the date the challenged ordinance was first enacted]").
More recent Supreme Court cases clarify, however, that there is no difference in the evidentiary burden that must be faced during litigation (i.e., a "strong basis in evidence") and the evidence that a legislature must have before it when it enacts a racial classification. In Shaw v. Hunt, 517 U.S. 899, 116 S.Ct. 1894, 135 L.Ed.2d 207 (1996), the Court considered whether the State of North Carolina's congressional redistricting plan contained impermissible racial gerrymandering.
Moreover, in Bush v. Vera, 517 U.S. 952, 116 S.Ct. 1941, 135 L.Ed.2d 248 (1996), an opinion issued the same day as Shaw in which the court said that the results of the 1992 election could not be used to support a redistricting plan approved in 1991, Justice O'Connor, writing for a plurality, again quoted the "strong basis in evidence" test from Shaw and emphasized the word "before." Bush, 517 U.S. at 982, 116 S.Ct. 1941 (noting that the legislature "must have had a `strong basis in evidence' to conclude that remedial action was necessary, `before it embarks on an affirmative action program,'" quoting Shaw, 517 U.S. at 910, 116 S.Ct. 1894) (emphasis in original).
Thus, Shaw makes clear that the quantum of evidence that is ultimately necessary to uphold racial classifications must have actually been before the legislature at the time of enactment. In light of Shaw, we conclude that if the pre-reauthorization evidence is insufficient to maintain the program when the program is
Having identified what we believe to be the permissible uses of post-enactment evidence, we now turn to the district court's opinion. The district court explicitly stated that in reviewing whether Congress had established a compelling interest for enacting a racial classification, it relied on the post-enactment evidence presented by the AALDEF.
We hold that the district court impermissibly used post-enactment evidence to justify its conclusion that Congress acted with a compelling interest when it reauthorized the 1207 program in 1987 and 1992. On remand, the district court must reevaluate the constitutional sufficiency of the 1207 program as reauthorized by reliance only on the pre-reauthorization evidence. The district court, of course, may rely on post-enactment evidence for other purposes. Post-enactment evidence would be particularly relevant in determining whether the 1207 program was constitutional as applied (i.e., whether or not there still exists a compelling need for the program and whether the program is still narrowly tailored).
H. Factors for the District Court to Consider on Remand
We remand for a determination of the constitutionality of the 1207 program under a strict scrutiny standard, particularly in accordance with the principles set forth in Croson and Adarand III. As set forth above, Congress' decision to enact race-based legislation must be reviewed under the same, non-deferential analysis that applies to state or municipal racial classifications. The constitutionality of the 1207 program must be assessed as reauthorized in 1992, as applied to Rothe's bid in 1998, and at present, to the extent that declaratory or injunctive relief is still sought. Following are general principles to be considered on remand.
1. Compelling Interest
Croson provides that race-based classifications are "strictly reserved for remedial settings." Croson, 488 U.S. at 493, 109 S.Ct. 706 (plurality op., O'Connor, J.). Accordingly, the 1207 program cannot be constitutional unless it was indeed enacted as a remedial measure. In order to ensure that the motive for the 1207 program was legitimate (and not merely the product of "illegitimate racial prejudice or stereotype" or enacted in response to non-racial factors hindering minority participation), the district court must "define both the scope of the injury and the extent of the remedy necessary to cure its effects." Id. at 510, 109 S.Ct. 706. If the court determines that the 1207 program is remedial in nature, it should specify whether it is a remedy to correct present discrimination, or only to counter lingering effects of past discrimination. If the case is best characterized as a lingering effects case, the district court would need to make an assessment as to whether the evidence is still probative, i.e., whether the effects of past discrimination have attenuated over time, or if in determining the constitutionality of the 1207 program as applied, whether the lingering effects are still present or were present in 1998 when the 1207 program was applied to Rothe's and ICT's bids. Moreover, the district court should also specify whether the government's involvement in the discrimination or lingering effects is so pervasive such that the government (and in particular, the DOD) became a "passive participant" in perpetuating it. See id. at 492, 109 S.Ct. 706 ("[I]f the city could show that it had essentially become a `passive participant' in a system of racial exclusion practiced by elements of the local construction industry ... the city could take affirmative steps to dismantle such a system.").
The district court properly determined that there are important differences between the 1207 program and the program at issue in Croson, particularly as to geographic scope. As noted above, these factual differences do not influence the standard of review, which is necessarily strict scrutiny. However, for purposes of determining whether Congress had a "strong basis in evidence" for enacting the 1207 program, and whether the program is narrowly tailored, the district court is certainly correct that Congress had a "broader brush" than municipalities for remedying discrimination. Rothe I, 49 F.Supp.2d at 944. Whereas municipalities must necessarily identify discrimination in the immediate locality to justify a race-based program, we do not think that Congress needs to have had evidence before it of discrimination in all fifty states in order to justify the 1207 program. See Adarand VII, 228 F.3d at 1165 ("The fact that Congress's enactments must serve a compelling interest does not necessitate the conclusion that the scope of that interest must be as geographically limited as that of a
Furthermore, the district court should determine whether evidence of discrimination is sufficiently pervasive across racial lines to justify granting a preference to all five purportedly disadvantaged racial groups included under the 1207 program. As noted by the Croson Court, Congress may not justify a racial preference that benefits all minorities merely by identifying discrimination as to one racial group. In finding the racial preference in Croson "grossly overinclusive," the Supreme Court noted that the Richmond City Council had only identified instances of discrimination against blacks, with "absolutely no evidence of past discrimination against Spanish-speaking, Oriental, Indian, Eskimo, or Aleut persons in any aspect of the Richmond construction industry." Croson, 488 U.S. at 506, 109 S.Ct. 706. A racial preference cannot be "remedial" when a disadvantaged minority member must share his or her remedial relief with other minorities that have never been the victim of discrimination. Id. Accordingly, Congress must have identified a pattern of discrimination that broadly affected all the minorities who receive a preference under the 1207 program. This is not to say that there must have been particular findings (either express or implied) as to each racial subclass in order to justify the program. Rather than identify instances of discrimination against each particular Asian subgroup (i.e., Korean Americans, Chinese Americans), the district court might properly determine that Congress had before it evidence of discrimination against Asian Pacific Americans in general. Adarand VII, 228 F.3d at 1176 n. 18 (rejecting contention that "Congress must make specific findings regarding discrimination against every single sub-category of individuals within the broad racial and ethnic categories designated ...").
In addition to reviewing whether there was evidence of discrimination (or the lingering effects thereof) against each minority group included in the 1207 program, the district court must also determine whether discriminatory conduct or effects were experienced in the specific industry. A reviewing court must not "blindly" defer to the government's definition of the affected industry. See Croson, 488 U.S. at 501, 109 S.Ct. 706 ("The history of racial classifications in this country suggests that blind judicial deference to legislative or executive pronouncements of necessity has no place in equal protection analysis."). In this case, the government argues that the industry grouping "business services" in all federal procurement as defined by the Benchmark Study is the appropriate industry; Rothe, in contrast, argues that the industry grouping should be limited to computer maintenance and repair services in the defense industry. We decline to define the relevant industry, because we think that it is incumbent for the district court to review the evidence on which it relied and make findings as to (1) what the relevant industry is; and (2) whether there was sufficient evidence of discrimination in which to justify application of a racial preference in that industry, both in 1992, in 1998, and at the present time (to the extent Rothe still seeks injunctive relief).
Furthermore, the district court should determine whether the evidence before it is sufficiently timely and sufficiently substantive (i.e., not merely anecdotal) to properly support the program's constitutionality. We note that much of the evidence referenced by the district court was more than a decade old by the time of the 1207 program's reauthorization in 1992.
2. Narrow Tailoring
On remand, the district court must also reassess whether the 1207 program is narrowly tailored, both as reauthorized and as applied, under a non-deferential version of strict scrutiny. There are six factors commonly considered in the narrow tailoring analysis: (1) the necessity of relief; (2) the efficacy of alternative, race-neutral remedies; (3) the flexibility of relief, including the availability of waiver provisions; (4) the relationship of the stated numerical goals to the relevant labor market; (5) the impact of relief on the rights of third parties; and (6) the overinclusiveness or underinclusiveness of the racial classification. United States v. Paradise, 480 U.S. 149, 171, 107 S.Ct. 1053, 94 L.Ed.2d 203 (1987); Croson, 488 U.S. at 506, 109 S.Ct. 706 (including over- and under-inclusiveness in the narrow tailoring factors); Adarand III, 515 U.S. at 238-39, 115 S.Ct. 2097 (noting that the lower court on remand should consider whether the legislative body had tried race-neutral alternatives and whether the program was limited in duration). In this case, the district court thoroughly analyzed and correctly concluded that the 1207 program was flexible in application, limited in duration, and that it did not unduly impact on the rights of third parties. Rothe I, 49 F.Supp.2d at 951-53. The district court, however, did not properly analyze three of the other narrow tailoring factors.
a. Examining the Efficacy of Race Neutral Alternatives.
In this case, the district court considered whether Congress had attempted race-neutral measures before enacting the 1207 program. Because it applied a deferential analysis, however, it did not strictly scrutinize whether Congress found these race-neutral alternatives ineffective. Id. at 950 (noting that "deference should be given to congressional findings that discrimination has continued and must be addressed, as evidenced by the repeated renewal of the preference program at issue in this case"). On remand, the district court should conduct a probing analysis of the efficacy of race-neutral alternatives, for instance, by inquiring into any attempts at the application or success of race-neutral alternatives prior to the reauthorization of the 1207 program. The Supreme Court has also suggested that the legislative body make findings that pre-existing antidiscrimination provisions have been enforced but unsuccessfully. See Croson, 488 U.S. at 502 n. 3, 109 S.Ct. 706 ("The complete silence of the record concerning enforcement of the city's own antidiscrimination ordinance flies in the face of the dissent's vision of a `tight-knit industry' which has prevented blacks from obtaining the experience necessary to participate in construction contracting.").
b. Evidence Detailing the Relationship Between the Stated Numerical Goal of Five Percent and the Relevant Market
The district court relied exclusively on the Benchmark Study in assessing whether the five percent goal was proportionate to the number of qualified, willing, and able SDBs in the relevant industry group. Rothe I, 49 F.Supp.2d at 952. Because the Benchmark Study was conducted after the 1992 reauthorization, it is not relevant to determining, whether, at the time of the program's reauthorization, a relationship was shown between the stated numerical
c. Over- and Under-Inclusiveness
The district court here deferred to Congress' conclusion that the 1207 program was not overinclusive. Id. at 953 ("Obviously, Congress must have a basis for acting to remedy discrimination, and obviously, its acts must be aimed at that discrimination."); id. (finding sufficient the finding that since all of the minorities included in the 1207 program live in the United States and have been discriminated against, the program is not overinclusive.). On remand, the district court must strictly scrutinize whether the 1207 program was overinclusive, by determining whether each of the five minority groups presumptively included in the 1207 program suffered from the lingering effects of discrimination so as to justify inclusion in a racial preference program extending to the defense industry.
Moreover, since the 1207 program incorporates its presumption of social and economic disadvantage from § 8(d), any constitutional defects in enactment of § 8(d) are relevant to the court's analysis. The United States Court of Appeals for the Tenth Circuit held in Adarand VII that to be narrowly tailored, there must be an individualized showing of economic disadvantage for each minority in the § 8(d) program. Adarand VII, 228 F.3d at 1184 ("[W]e must conclude, under Croson, that the § 8(d) method of certification ... is not narrowly tailored insofar as it obviates an individualized inquiry into economic disadvantage."). The court said that to require "a separate showing of [economic and social] disadvantage [such as a short narrative statement of economic disadvantage faced] would help address the Court's concern in Croson that a government entity undertake the necessary administrative effort `to tailor remedial relief to those who truly have suffered from the effects of prior discrimination.'" Id. (citing Croson, 488 U.S. at 508, 109 S.Ct. 706).
Because the district court failed to analyze the constitutionality of the 1207 program under the strict scrutiny analysis required by the Supreme Court in Croson and Adarand, and relied on post-reauthorization evidence to determine the constitutionality of the 1207 program as reauthorized, we vacate the district court's judgment and remand for the requisite findings to be made.
VACATED AND REMANDED.