The administrative and fiscal impacts of the Supreme Court decision in 'City of Richmond v. J. A. Croson Co.', on minority business enterprise programs in Baltimore, Maryland and Richmond, Virginia

Minority Business Enterprise (MBE) programs create special opportunities for minority businesses to participate in federal, state, and local government contracting. These programs are considered to be 'race-conscious', and routinely specify the racial groups that are to be the beneficiaries. It is the pattern of these programs to also establish specific goals toward which the efforts of identifying and utilizing minority business enterprises (MBEs) in procurement activities are directed.;Racial classifications in state and local government programs experienced a major judicial challenge in 1989 in City of Richmond v. J.A. Croson Co., (Croson). The Supreme Court, applying a strict scrutiny (heaviest burden of proof) review, ruled the Richmond, Virginia MBE program unconstitutional because it violated the Equal Protection Clause of the 14th Amendment. Justice Sandra O'Connor, in writing the plurality opinion in Croson, outlined race-neutral alternatives for how these programs could be administered, that provided numerous implications for those responsible for the administration of the programs in the post-Croson period.;Employing a multiple case-study method, this research identified and examined the bureaucratic/administrative response of two jurisdictions to the Croson decision. Specifically the research studied each city's response in terms of how operational policy changes were made, and the resulting fiscal impact of those changes on the number and amount of awards made to minority businesses.;The research showed that both cities developed programs, administratively, that were consistent with the Croson standard. However, the fiscal findings indicated that neither program was able to increase the amount and the number of contracts to minority businesses. In both Baltimore and Richmond, subcontracting dollars to minority businesses decreased over the period studied, while the number of subcontracts awarded to these businesses remained stable.;Now that administrative sufficiency has been established, and while legal justification is still at the center of the debate, the goal of these programs must remain to increase the amount and the number of contracts awarded to minority businesses. If minority business enterprise programs are to increase their fiscal as well as administrative credibility, new strategies for accomplishing economic parity for all Americans will have to be developed.