Minority Contracts Threatened as U.S.
Court Limits Preferences
By: Alex Brown
Today,my inbox had an article that I simply did not expect. Bloomberg wrote
an article (By Nick
Taborek, Kathleen Miller and Danielle Ivory) about a court case filed in
1995 involving DynaLantic Corporation, a company that makes flight simulators
and other military training equipment. The article states that DynaLantic contested
a Navy plan to award a contract for a flight simulator through the preference
program. Seventeen years later, on August 15th of this year, a ruling was made
that barred the Pentagon from favoring disadvantaged companies for work on
military simulators. This clearly sets an important precedent – Joe Hornyak of
Holland & Knight LLP states, “For the first time, a federal court is declaring
an important program unconstitutional as applied to certain types of
procurements."
How does this affect us? Essentially, companies that are not eligible for a
program may seek to overturn awards by filing lawsuits. The Pentagon is on
record saying that it is too early to say whether this will affect its
policies. While it is true that this was a specific case for specific products
and services, there is nothing in this case that limits the decision from
moving to other lines of business and federal agencies. As in the old fable,
you cannot close Pandora’s box once it is open.