## Facts

- Adarand Constructors, Inc., a Colorado guardrail subcontractor, submitted the lowest bid on a federal highway project subcontract.
- The prime contract provided additional compensation to the prime contractor if it hired subcontractors certified as small businesses controlled by “socially and economically disadvantaged individuals.”
- Federal regulations directed the prime contractor to presume that certain racial minorities were “socially and economically disadvantaged” for certification purposes.
- The subcontract was awarded to Gonzales Construction Company, which held the relevant certification, despite Adarand’s lower bid.
- The prime contractor stated it would have accepted Adarand’s bid but for the financial incentive tied to hiring the certified subcontractor.
- Adarand sued federal officials, alleging unconstitutional race-based discrimination under the equal protection component of the Fifth Amendment’s Due Process Clause.
- Adarand also sought forward-looking relief, alleging it was likely to bid again on federal contracts using similar incentives.

## Issues

1. Whether Adarand had standing to seek prospective relief challenging the federal subcontracting incentive program.
2. What level of constitutional scrutiny applies to federal governmental racial classifications under the Fifth Amendment.
3. Whether federal race-based presumptions used to confer contracting advantages may be evaluated under a standard less demanding than strict scrutiny because they are characterized as remedial or “benign.”

## Decision

- The Supreme Court held that Adarand had standing based on the loss of a specific subcontract and a credible likelihood of encountering the same program in future bidding.
- The Court ruled that all racial classifications imposed by any government actor—federal, state, or local—must be reviewed under strict scrutiny.
- The Court vacated the judgment applying a more deferential standard and remanded for application of strict scrutiny to the challenged program.
- The Court rejected the approach that “benign” federal racial classifications may receive intermediate scrutiny, displacing contrary precedent.

## Legal Principles

- Governmental use of racial classifications triggers strict scrutiny: the measure must serve a compelling governmental interest and be narrowly tailored to further that interest.
- Equal protection constraints apply to the federal government through the Fifth Amendment’s Due Process Clause, and the analytical standard matches Fourteenth Amendment equal protection review.
- The standard of review does not depend on whether the racial classification burdens or benefits a particular racial group; remedial intent does not lower the level of scrutiny.
- Strict scrutiny is not necessarily dispositive against the government, but the government must justify race-conscious measures with a compelling aim and narrow tailoring.
- Programs genuinely based on disadvantage rather than race may be subject to less demanding review, but race used as a presumptive proxy for disadvantage is treated as a racial classification.

## Conclusion

The Court required strict scrutiny for federal racial classifications, vacating and remanding because the lower courts applied a more deferential standard, and reaffirmed that the Fifth Amendment binds the federal government to the same equal protection analysis applied to the states.


Adarand Constructors, Inc. v. Peña, 515 U.S. 200 (1995)