^®: CRE Regulatory Action of the Week

Public Comments of the CRE in Opposition to Renewal of Control Number 9000-0150 Pertaining to Small Disadvantage Business Procurement Credits

The Center for Regulatory Effectiveness ("CRE") takes the position that it would be highly inappropriate for OMB to issue a renewal of the above-referenced control number for the reasons set forth below. Rather than renew control number 9000-0150, OMB could grant an interim approval of not more than six months, during which time the Department of Defense, the General Services Administration, and the National Aeronautics and Space Administration (hereinafter collectively referred to as "GSA") could correct the infirmities set forth below.

INFIRMITIES IN THE MARCH 15, 2000 FEDERAL REGISTER NOTICE

1. The stated purpose of the "small disadvantaged business procurement credits" provisions which are the subject of this OMB review proceeding is to implement the decision of the U.S. Supreme Court in Adarand Constructors, Inc. v. Pena, 515 U.S. 200, 115 S.Ct. 2097 (1995).
   • Since the time of GSA's original proposal, for which renewal is now sought, the Adarand decision has been construed, interpreted and elaborated upon by approximately 100 federal courts. It is clear from the Federal Register notice that GSA has not reviewed these subsequent decisions; nor has GSA considered the extent to which these decisions have modified the legal terrain with respect to preferences in connection with federal procurement. Some of these decisions place in question the validity of self-certifications and group-based mechanisms for attaining "disadvantaged" status. GSA should not be allowed to continue its use of such mechanisms until it has demonstrated the constitutionality of the same in light of the important body of federal case law that has grown out of the Adarand decision since 1995.
2. In addition to the new body of federal case law, the Adarand decision itself has been the subject of elaboration on remand. Once again, it would be highly inappropriate for OMB to grant renewal of the preference system established by GSA three years ago when GSA has failed to consider the constitutionality of this system under present law.
3. GSA's preference program is based on a legal analysis published the Department of Justice ("DOJ") in "proposal" (i.e., not final) form in 1996, i.e., shortly after the initial Adarand decision. See 61 Fed. Reg. 26,042 (May 23, 1996). It does not appear that DOJ ever issued this analysis as DOJ's final position on the constitutionality of the kinds of preference mechanisms as to which GSA now seeks renewal. In light of the fact that the DOJ analysis: (a) may no longer reflect DOJ's position; and (b) may no longer be valid in light of post-Adarand decisions, OMB should not grant final approval at this time.

CRE will submit additional comments elaborating the above points during the coming weeks. In light of GSA's failure to consider the relevant law, no final renewal should be granted at the present time. At most, an interim approval of not more than six months might be appropriate, provided that GSA agrees to: (a) work with DOJ to determine what DOJ's present position is; (b) review post-Adarand federal decisions; and (c) reconsider its preference program in light of (a) and (b), including renewed public comment.

CRE invites all interested parties to submit comments on these issues to CRE's Interactive Public Docket.

Please click below to submit comments regarding the CRE's comments on OMB Control No. 9000-0150.
CRE's comments on OMB Control No. 9000-0150: Interactive Public Docket

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