Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Appealed from: United States District Court for the Western District of Texas Judge Edward C. Prado

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.

Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.

More From ALM

Premium Subscription

With this subscription you will receive unlimited access to high quality, online, on-demand premium content from well-respected faculty in the legal industry. This is perfect for attorneys licensed in multiple jurisdictions or for attorneys that have fulfilled their CLE requirement but need to access resourceful information for their practice areas.
View Now

Team Accounts

Our Team Account subscription service is for legal teams of four or more attorneys. Each attorney is granted unlimited access to high quality, on-demand premium content from well-respected faculty in the legal industry along with administrative access to easily manage CLE for the entire team.
View Now

Bundle Subscriptions

Gain access to some of the most knowledgeable and experienced attorneys with our 2 bundle options! Our Compliance bundles are curated by CLE Counselors and include current legal topics and challenges within the industry. Our second option allows you to build your bundle and strategically select the content that pertains to your needs. Both options are priced the same.
View Now

African Legal Awards (AFLA) 2022

September 02, 2022

The African Legal Awards recognise exceptional achievement within Africa s legal community during a period of rapid change.

Learn More

China Law & Practice Awards (CLPA) 2022

September 08, 2022

The annual China Law & Practice Awards is the jurisdiction's most prestigious legal awards ceremony that applauds China's elite.

Learn More

Texas Legal Awards (TXLA) 2022

September 14, 2022
Dallas, TX

The Texas Lawyer honors attorneys and judges who have made a remarkable difference in the legal profession in Texas.

Learn More

Operations/Human Resources Manager- Houston, Texas

The Offices of Domingo Garcia has an Operations\Human Resources manager position in the Houston office. The ideal candidate will have 5+ y...

Apply Now ›


Casualty Defense/Subrogation - commercial lines. Experienced. Flexible with remote working. Great hands-on complex litigation opportunity, g...

Apply Now ›

Finance/Corporate Trust Lawyer - CT or Remote

We are seeking a lawyer with a minimum of five years of experience in transactional work to join our well-established, nationally renowned C...

Apply Now ›



DEASEY MAHONEY & VALENTINI LTD is proud to announce that Lauren M. Steins and Leanna B. Ruotanen have been named Partners of the firm.

View Announcement ›



Parrett, Porto, Parese & Colwell, P.C. welcomes attorneys Alison L. Broad and Andrew I. Schaffer as principals of the firm.

View Announcement ›



Marshall Dennehey Warner Coleman & Goggin mourns the loss of Robert J. Coleman, the last of its founding name partners.

View Announcement ›