Business Utilization Plan requiring prime contractors awarded city construction contracts to subcontract at least 30 percent of the dollar amount of each contract to one or more Minority Business...

Business Utilization Plan requiring prime contractors awarded city construction contracts to subcontract at least 30 percent of the dollar amount of each contract to one or more Minority Business Enterprises (MBEs). The plan defined an MBE to include a business from anywhere in the United States that is at least 51 percent owned and controlled by African American, Spanish speaking, Asian, Native American, Eskimo, or Aleut citizens. Although the plan declared that it was “remedial” in nature, it was adopted after a public hearing at which no direct evidence was presented that the City had discriminated on the basis of race in letting contracts or that its prime contractors had discriminated against minority subcontractors. The evidence introduced in support of the plan included a statistical study indicating that although the City’s population was 50 percent African American, less than 1 percent of its prime construction contracts had been awarded to minority businesses in recent years. Additional evidence showed that a variety of local contractors’ trade associations had virtually no MBE members. J. A. Croson Co., the sole bidder on a city contract, was denied a waiver and lost its contract because of the plan. Discuss the legality of the plan.