Will the high court end federal set-asides? The Supreme Court is set to hear case that challenges set-asides.

The Supreme Court is set to hear case that challenges set-asides

How will your business respond if the U.S. Supreme Court rules that federal set-asides for minority companies are unconstitutional? That ruling hasn't come down yet, but one can discern from looking at the docket of cases that will be argued before the Court in its new term that the color line is still a factor in American life and law. Any ruling that tightens or eliminates federal set-asides would have an expensive impact on minority- and women-owned companies.

In fact, high court validation of Adarand Constructors v. Pena would have some impact on minorities doing business with the federal government. Remember City of Richmond v. Croson? Opportunities on the local government level dwindled when the Court threw out municipal set-asides there.

In the current case, a Colorado construction company is challenging a federal law, the Small Business Act, which uses race as a consideration when federal contracts are awarded. Businesses owned by African-Americans, Hispanics, Asian-Americans and Native Americans are generally considered "disadvantaged" under this law.

However, the presumption falls away in individual cases if the company's owners are not considered economically or socially disadvantaged.

Adarand Constructors, a white-owned company, contends that its constitutional right to equal protection was violated. Its low bid on a highway project, financed by the Department of Transportation, was rejected in favor of a higher bid from a company owned by Hispanics. The white-owned company has already lost at the Federal District Court and 10th U.S. Court of Appeals levels. In selecting the case, the Supreme Court ignored a Clinton administration plea to refuse a hearing.

The Court's composition has changed since the last such case was heard. In 1990, a five-justice majority said Congress' preferential consideration in rewarding minorities with broadcasting licenses was constitutional. Since then, four justices have retired. Presidents Bush and Clinton have each appointed two justices, and there are indications that the Court will demand tighter guidelines if race-based preferences are going to be established.

There will be ramifications if the Court validates Adarand's argument. Each federal agency has its own set-aside guidelines. While it's unlikely that the Clinton administration will rush to tell agencies to throw out the guidelines, white-owned firms may flood lower courts with similar cases, saying that they suffer reverse discrimination in federal contracting. The time and expense involved in fighting these cases could cripple government agencies.

The problem could worsen if Clinton loses in 1996. A Republican administration will swiftly overturn preferential rules. Then, women- and minority-owned firms that prospered under the set-asides will find out if a solid track record and bidding prowess are really all that's needed to win government contracts. They probably won't hold their breath.

CHECKPOINTS

BLACK COMPANY

SAVES EMERGE

Metters Industries Inc., (No. 4) on BE's 1994 INDUSTRIAL/SERVICE 100), has made an undisclosed investment in Emerge magazine. At press time, Debra Lee, a spokeswoman for BET (which owns Emerge) confirmed the investment, but couldn't release details. Earlier this year, the publisher of BET Holdings announced that Emerge needed an investor willing to commit $4 million to $5 million over the next four years. In June, BET President Robert Johnson announced that Emerge would fold if a new investor wasn't found. Emerge, which targets middle-class blacks, is in its fifth year. "Thanks to our birthday gift from [Samuel] Metters and Johnson, Emerge will be able to continue practicing its award-winning journalism," Emerge editor George Curry wrote recently.

BLACK CHAMBER

OF COMMERCE

MOVES TO D.C.

The National Black Chamber of Commerce has moved its offices to Washington, D.C., from Indianapolis. The NBCC, founded in 1993, encourages black entrepreneurship, spending money in black communities and forming lending pools to help black-owned businesses. It also provides information about venture capital funds and other nontraditional funding sources. According to NBCC founder and CEO Harry Alford, "Washington, D.C., is the power center of his nation. NBCC's move to this power site says to the world that we intend to play some serious hardball to achieved the economic liberation of all [black people]." The new offices are located at 2001 L St. N.W., Suite 200, Washington, DC 20036. Or call 202-416-1622.