The Adarand aftermath: cracks in the dam of racial set-asides.

The Supreme Court's decision last year in Adarand v. Pena decreed that states and localities must apply a standard of "strict scrutiny" to their racial set-aside programs. While this did not mean the instant collapse of state-sponsored affirmative action, the decision is already having consequences.

In Las Cruces, New Mexico, McCrossan Construction challenged Defense Department set-asides and won. Its threatened lawsuits against Defense Department job-bidding procedures giving special advantages to "small, disadvantaged business" caused the Pentagon to give in and offer the challenged bids unrestricted, McCrossan vice president Charles Gaasland says. Now DOD has announced a permanent end to its set-aside rule, which dictated that no white-owned firms could bid if two qualified minority or disadvantaged firms could do the work.

George LaNoue, a professor at University of Maryland at Baltimore who studies affirmative action law, says that the DOD's abandonment of its set-aside policy has potential ramifications for all federal set-aside programs. "If the government didn't think the program was defensible in this case, I don't know why most other federal set-aside programs would be any different."

Meanwhile, the Los Angeles County Metropolitan Transit Authority's minority contracting set-aside program was recently overturned in Los Angeles Superior Court. Michael Cornelius, formerly a vice president of a San Diego construction company, claimed to have lost work unfairly because of the MTA's demand that its contractors always hire at least 29 percent minority subcontractors. He sued and won. The MTA has been granted a temporary reprieve on ending the program while the agency waits for its appeal to be settled.

Also in California, a lawsuit by contractor Bonadiman-McCain Inc. against the city of San Bernardino's minority set-aside program has led the city to drop the program in exchange for dropping the lawsuit.

Rob Corry, a lawyer from the Pacific Legal Foundation who represented both Michael Cornelius and Bonadiman-McCain, prefers fighting it out in court to having the government give in. "We're concerned with establishing legal precedent, so we need appeals court decisions," he says.