Adarand Construction Inc. V. Pena (1995)

Procedure: It was upheld in the District Court and the Circuit Court of Appeals but was overturned by the Supreme Court.

Facts: Adarand, a contractor specializing in highway guardrail work, submitted the lowest bid as a subcontractor for part of a project funded by the United States Department of Transportation. Most federal agency contracts must contain a subcontractor compensation clause, which gives a prime contractor a financial incentive to hire subcontractors certified as small businesses controlled by socially and economically disadvantaged individuals, and requires the contractor to presume that such individuals include minorities or any other individuals found to be disadvantaged by the Small Business Administration (SBA). Adarand was not a certified business as a small disadvantage business.

Issue: Adarand filed suit against respondent federal officials, claiming that the race-based presumptions used in subcontractor compensation clauses violate the equal protection component of the Fifth Amendment's Due Process Clause.

Decision: The Court held