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Ruling On DOD Program Has AMAC Rallying Membership

A federal Court of Appeals decision striking down a Department of Defense program that provided contracting preferences to minority-owned businesses has sprung the Airport Minority Advisory Council to action.

  The U.S. Court of Appeals for the Federal Circuit ruled Nov. 4 that the Defense Department could not operate such a program unless it was in place to correct previous discrimination against minority-owned businesses, according to FederalTimes.com, a publication aimed at government executives.

  Rothe Development Corp. v. Defense Department, first filed in 1998, was brought by a business owned by a white woman who claimed the Defense Department violated the equal protection clause of the Constitution when the U.S. Air Force awarded a contract to International Computer Telecommunications Inc., an Asian-owned small business, despite Rothe’s bid being $180,000 lower.

  The department had claimed it could accept higher bids from “socially and economically disadvantaged” minority-owned businesses under a program meant to help the department achieve a mandated 5% goal as long as the bids were not more than 10% higher than competitors’ bids.

  Rothe’s bid had been $5.57M and International Computer’s had been $5.75M, according to Federal Times.

  AMAC is less concerned about the decision than the impact it could have on mobilizing opponents of such programs, says Don O’Bannon, vice president of small and emerging business department at Dallas-Fort Worth International (DFW) and current AMAC chairman.

  In an early November memo, he told AMAC members the decision didn’t deal with any merits or lack thereof of the U.S. Department of Transportation’s DBE program and thus did not affect airport-related activities. It also dealt with a Department of Defense program that has largely been shut down.

  “It’s narrowly tailored,” O’Bannon told Airport Revenue News.

  Minority contracting programs continue to be considered constitutional when enacted properly and supported by proper evidence, he says.

  But O’Bannon is concerned that the decision could embolden opponents of such programs to further action. In the memo, he informed members of details of the case, acknowledged the difficult economic conditions of the day, and asked members to step up and provide support and financial assistance for defending the DBE program.

  He told ARN he hopes to raise $100,000 to assist in congressional lobbying activities for the upcoming year. He wants to ensure congressional hearings on ongoing discrimination issues in the airport industry.

  Response from members was good through the first week after his update.

  “We have gotten some good support,” he says. “I’m following up with calls to turn that support into dollars.”

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